Fifth Third Bancorp Beats Q4 Estimates: Provision For Credit Losses Down 69%, 19 Branches Opened & More

Fifth Third Bancorp FITB reported fourth-quarter FY23 sales of $2.167 billion, beating the consensus of $2.16 billion.

The Cincinnati-based company reported an interest income increase of 28% Y/Y to $2.655 billion, with a net interest income (NII) of $1.42 billion (down 10% Y/Y).

Fifth Third attributed the NII decline to the deposit mix shift from demand to interest-bearing accounts and continued deposit repricing dynamics.

Compared to the year-ago quarter, the net interest margin (NIM) decreased by 50 bps Y/Y to 2.85%, reflecting the impact of higher market rates on deposit pricing and the decision to carry additional liquidity.

The provision for credit losses totaled $55 million in the current quarter, down 69% Y/Y. The adjusted EPS in Q4 totaled $0.99, beating the analyst consensus of $0.85

The CET1 capital ratio was 10.29%, compared with 9.28% in the year-ago period. Net charge-offs were $96 million in the current quarter, resulting in an NCO ratio of 0.32%.

Compared to the year-ago quarter, net charge-offs increased $28 million, and the NCO ratio increased 10 bps, reflecting a normalization from near-historically low net charge-offs in the year-ago quarter. Total average loans and leases stood at $119.31 billion at the end of the quarter.

Tim Spence, Chairman, President and CEO said, “We generated another quarter of strong deposit growth, with average deposits up 5% compared to the year-ago quarter while the industry declined 3%. Additionally, we maintained full Category 1 LCR compliance during the quarter.”

“We continued to invest for growth by opening 19 branches during the quarter, 18 of which are in our high-growth Southeast markets, and generated consumer household growth of 3% compared to the prior year.”

Price Action: FITB shares are trading higher by 1.27% to $33.66 on the last check Friday.

Photo by Don Sniegowski via Flickr