Fifth Third Bancorp (FITB) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted EPS was $0.86, with reported EPS of $0.81, reflecting strong profitability, disciplined expense management, and stable results despite economic uncertainty; results included a negative $0.05 EPS impact from Visa swap, legal settlements, and FDIC assessment.

• Net income available to common shareholders was $561 million for Q2 2024, nearly flat year-over-year and up 17% sequentially; six-month net income was $1.04 billion, down 5% from 2023.

• Strategic investments in Southeast markets, commercial payments, and wealth management drove household and AUM growth, with continued expansion and market share gains.

• Recognized as best superregional bank in the U.S. by Euromoney and best private bank for high-net-worth clients for the third consecutive year.

• CET1 capital ratio increased to 10.60%, with $125 million in share repurchases executed during the quarter.

Financial highlights

• Adjusted return on tangible common equity was 15.1% and adjusted return on assets was 1.22% over the last 12 months; Q2 return on average assets was 1.14% and return on average tangible common equity was 19.8%.

• Adjusted net interest income (NII) was $1.4B, up 1% sequentially but down 5% year-over-year; net interest margin (FTE) was 2.88%, up 2 bps sequentially and down 22 bps year-over-year.

• Adjusted non-interest income decreased 4% year-over-year, mainly due to a prior-year private equity gain and lower mortgage banking; commercial payments and wealth management fees grew double digits.

• Adjusted non-interest expense was flat year-over-year and down 7% sequentially, reflecting expense discipline and automation benefits.

• Net charge-off ratio was 0.49%, up from 0.29% a year ago, driven by two commercial credits with prior reserves; consumer charge-offs improved to 0.57%.

Outlook and guidance

• Full-year 2024 NII expected to decrease 2%-4%, consistent with January guidance, assuming two rate cuts or even with no cuts and no loan growth in H2.

• Full-year average total loans expected to be down 3% vs. 2023; Q4 average loans stable to up 1% year-over-year.

• Full-year adjusted non-interest income expected to be stable to down 1%; adjusted non-interest expense to remain stable to 2023 levels.

• Efficiency ratio projected around 57% for 2024; net charge-off outlook remains 35-45 bps.

• Q3 NII expected up 2% sequentially; Q3 adjusted non-interest income up 1%-2%; Q3 net charge-offs projected at 40-45 bps.