Fifth Third Bancorp (FITB) | Investment Case

1. Company Snapshot

1.a. Company Description

Fifth Third Bancorp operates as a diversified financial services company in the United States.The company's Commercial Banking segment offers credit intermediation, cash management, and financial services; lending and depository products; and cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing, and syndicated finance for business, government, and professional customers.Its Branch Banking segment provides a range of deposit and loan products to individuals and small businesses.

This segment offers checking and savings accounts, home equity loans and lines of credit, credit cards, and loans for automobiles and personal financing needs, as well as cash management services for small businesses.The company's Consumer Lending segment engages in direct lending activities that include origination, retention, and servicing of residential mortgage and home equity loans or lines of credit; and indirect lending activities, including loans to consumers through correspondent lenders and automobile dealers.Fifth Third Bancorp's Wealth & Asset Management segment provides various investment alternatives for individuals, companies, and not-for-profit organizations.

It offers retail brokerage services to individual clients; and broker dealer services to the institutional marketplace.This segment also provides wealth planning, investment management, banking, insurance, and trust and estate services; and advisory services for institutional clients comprising middle market businesses, non-profits, states, and municipalities.As of December 31, 2021, the company operated 1,117 full-service banking centers and 2,322 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina, and South Carolina.

Fifth Third Bancorp was founded in 1858 and is headquartered in Cincinnati, Ohio.

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1.b. Last Insights on FITB

Fifth Third Bancorp's recent performance was positively driven by its Q3 earnings beat, with net interest income (NII) and fee income growth exceeding estimates. The company's commercial and residential loan portfolios remain healthy, with low delinquency rates. A $170-$200M impairment tied to alleged loan fraud pressured credit provisions, but its Series K preferred shares offer an attractive 6% yield. The company also announced a merger with Comerica Incorporated, with Fifth Third shareholders owning approximately 73% of the combined company.

1.c. Company Highlights

Last Price	45.42
Change Percentage	-0.09%
Open	45.35
Previous Close	45.46
Market Cap ( Millions)	30023
Volume	7518662
Year High	47.69
Year Low	32.25
M A 50	42.88
M A 200	41.13

FCF Yield	12.39%
Dividend Yield	3.32%
ROE	11.73%
Debt / Equity	88.85%
Net Debt / EBIDTA	441.34%
Price To Book	1.43
Price Earnings Ratio	12.55
Price To FCF	8.07
Price To sales	2.34
EV / EBITDA	12.77

2. Fifth Third Bancorp's Q3 2025 Earnings: A Strong Performance

Fifth Third Bancorp reported third-quarter 2025 earnings per share of $0.93, excluding certain items, beating estimates of $0.87. The results were driven by a 6% year-over-year increase in average loans, a 7% improvement in net interest income, and 5% growth in fees, resulting in adjusted revenues rising 6%. The company's return on assets (ROA) was 1.25%, and its return on tangible common equity (ROTCE) was 17.7%. The efficiency ratio was 54.1%, indicating a good level of operational efficiency.

Publication Date: Oct -20

                                    📋 Highlights
                                    Tricolor Fraud Impact::
                                                $200M provision expense associated with Tricolor fraud, reducing reported EPS to $0.91 (vs. $0.93 ex-items).
Loan Growth Momentum::
                                                6% YoY average loan growth for the fourth consecutive quarter, with 7% net interest income rise driving adjusted revenue growth.
Merger Synergies::
                                                $3.6B Comerica acquisition progressing well, expected to close by 2026, with revenue/expense synergies and $290B in combined assets.
Operational Efficiency::
                                                330 bps positive operating leverage from adjusted pre-provision net revenue up 11%, with efficiency ratio at 54.1%.
Deposit and ROE Strength::
                                                3% YoY average demand deposit growth, 17.7% ROTCE, and 7% YoY tangible book value per share growth despite $300M buybacks.

                                

Loan Growth and Deposit Trends

Average loans increased 6% year over year, marking the fourth consecutive quarter of accelerated year-over-year loan growth. Average demand deposits were up 3% year over year, led by 6% consumer DDA growth. The company's net interest income is expected to be stable to up 1% from the third quarter, assuming two 25-basis-point rate cuts during the fourth quarter.

Merger with Comerica

The company announced a merger with Comerica, which is expected to create a well-diversified, even more profitable company with better long-term growth. The merger is expected to produce revenue and expense synergies. Fifth Third's tangible book value per share grew 7% year over year and 3% sequentially, despite repurchasing $300 million of stock and raising its common dividend by 8%.

Guidance and Outlook

The company guides for full-year adjusted revenue to be up nearly 5% and pre-provision net revenue to grow 7% to 8%. Fourth-quarter net charge-offs are expected to be around 40 basis points. The company will pause share repurchases until the close of the Comerica acquisition, expected around the end of 2026.

Valuation

With a Price-to-Tangible Book Value (P/TBV) of 1.31, the stock appears reasonably valued. The Dividend Yield is 3.65%, indicating an attractive income stream. Analysts estimate next year's revenue growth at 22.4%, which may lead to a re-rating of the stock.

Operational Highlights

The integration of Comerica is progressing well, with regulators making good progress on the review. The companies expect to complete regulatory filings by the end of the month. The deal is expected to close in the second half of 2026. Fifth Third plans to leverage Comerica's strengths in areas like technology and life sciences, and to deepen relationships in its existing footprint.

Risk Management

The company's non-performing assets (NDFI) portfolio makes up 8% of its total portfolio, with a disciplined underwriting framework in place. The Tricolor category, which makes up 9% of total NDFI, is being closely monitored due to its sensitivity to higher interest rates and unemployment.

3. NewsRoom

Fifth Third Accelerates Southeast Expansion, Reaches Milestones

Dec -04

Source: zacks.com

TrueCar Investor Alert By The Former Attorney General Of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of TrueCar, Inc. - TRUE

Dec -03

Source: prnewswire.com

FITB vs. MTB: Which Regional Bank Stock Looks More Attractive Now?

Dec -03

Source: zacks.com

Fifth Third's Southeast Expansion Reaches Major Milestones in Florida and the Carolinas

Dec -03

Source: businesswire.com

5 Banks That Outperform the S&P 500 in Volatile November

Dec -02

Source: zacks.com

Fifth Third Celebrates 20 Years of Exclusive Partnership with the Ohio 529 CollegeAdvantage Plan

Nov -20

Source: businesswire.com

Fifth Third Bancorp to Participate in the Goldman Sachs U.S. Financial Services Conference

Nov -18

Source: businesswire.com

Comerica Investor Demands Details on Fifth Third Deal

Nov -17

Source: pymnts.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.10%)

6. Segments

Consumer and Small Business Banking

Expected Growth: 4.8%

The growth in this segment is slightly lower than the global average due to the competitive nature of consumer banking, but it remains stable due to the essential services provided.

Commercial Banking

Expected Growth: 5.5%

The expected growth is higher than the global average because commercial banking is a key area of focus for Fifth Third Bancorp, with potential for increased business lending and treasury services.

Wealth and Asset Management

Expected Growth: 6.0%

The expected growth is higher than the global average because wealth and asset management services are increasingly in demand as the population seeks professional advice for financial planning and investment.

General Corporate and Other

Expected Growth: None%

None

7. Detailed Products

Commercial Banking

Provides financial solutions to businesses and organizations, including cash management, lending, and treasury management services.

Branch Banking

Offers personal banking services, including checking and savings accounts, credit cards, and loans, through a network of branch locations.

Consumer Lending

Provides loans and credit products to individuals, including mortgages, home equity loans, and auto loans.

Wealth & Asset Management

Offers investment and wealth management services, including brokerage, trust, and insurance services.

Commercial Leasing

Provides equipment financing and leasing solutions to businesses.

Treasury Management

Offers cash management and treasury services to businesses, including account management and payment processing.

Merchant Services

Provides payment processing and merchant services to businesses.

Capital Markets

Offers investment banking and capital markets services, including debt and equity underwriting.

8. Fifth Third Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Fifth Third Bancorp operates in a highly competitive industry, and customers have various alternatives for their banking needs. However, the company's strong brand recognition and extensive branch network help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Fifth Third Bancorp's customers have significant bargaining power due to the availability of alternative banking services. The company must maintain competitive pricing and services to retain customers.

Bargaining Power Of Suppliers

Fifth Third Bancorp has a diverse supplier base, and no single supplier has significant bargaining power. The company's large scale of operations also gives it negotiating power with suppliers.

Threat Of New Entrants

The banking industry has significant barriers to entry, including regulatory requirements and capital requirements. While new entrants may emerge, they are unlikely to pose a significant threat to Fifth Third Bancorp's operations.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Fifth Third Bancorp must continually innovate and improve its services to maintain its competitive position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	50.31%
Debt Cost	6.28%
Equity Weight	49.69%
Equity Cost	10.31%
WACC	8.28%
Leverage	101.26%

11. Quality Control: Fifth Third Bancorp passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

PNC Financial Services Group

A-Score: 6.9/10

Value: 5.8

Growth: 6.0

Quality: 6.6

Yield: 8.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

M&T Bank

A-Score: 6.6/10

Value: 6.6

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

Fifth Third

A-Score: 6.5/10

Value: 6.3

Growth: 5.6

Quality: 5.9

Yield: 8.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

U.S. Bank

A-Score: 6.5/10

Value: 6.6

Growth: 5.6

Quality: 5.6

Yield: 8.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

First Citizens BancShares

A-Score: 4.9/10

Value: 6.1

Growth: 9.8

Quality: 4.9

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-0.98%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.28%

Fifth Third Bancorp - US3167731005

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FITB

1.c. Company Highlights

Strong Momentum

Average Yield

Fairly Valued

Earnings Beats

Revenues Beats

Average Growth

Earnings Miss

Stable Momentum

Revenues Miss

Medium Volatility

Average Quality

2. Fifth Third Bancorp's Q3 2025 Earnings: A Strong Performance

Loan Growth and Deposit Trends

Merger with Comerica

Guidance and Outlook

Valuation

Operational Highlights

Risk Management

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.10%)

6. Segments

Consumer and Small Business Banking

Expected Growth: 4.8%

Commercial Banking

Expected Growth: 5.5%

Wealth and Asset Management

Expected Growth: 6.0%

General Corporate and Other

Expected Growth: None%

7. Detailed Products

Commercial Banking

Branch Banking

Consumer Lending

Wealth & Asset Management

Commercial Leasing

Treasury Management

Merchant Services

Capital Markets

8. Fifth Third Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Fifth Third Bancorp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

45.42$

Current Price

45.42$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA