Fifth Third Net Interest Income Rises 48% on Comerica Integration
Net interest margin expanded 24 basis points year-over-year to 3.36% as the bank integrated its latest acquisition.
Net interest income for Fifth Third Bancorp (FITB) rose 48% year-over-year to $2.220 billion. The regional lender's net interest margin expanded 24 bps year-over-year to 3.36%, a result driven by the full-quarter addition of Comerica, higher yields on earning assets, and improved deposit pricing.
Loan growth mirrored the scale of the merger. Average portfolio loans and leases grew 44% year-over-year to $177.6 billion. The commercial portfolio led this expansion, increasing 65% over the prior year. Average deposits rose 42% year-over-year to $231.5 billion.
Deposit costs trended lower as the bank shifted its funding mix. Interest-bearing deposit costs decreased 2 bps sequentially to 2.13%. This decline was supported by a $4.6 billion increase in consumer deposits and a move toward a more granular deposit base.
Noninterest income rose 41% year-over-year to $1.059 billion. Growth was concentrated in commercial payments, which increased 67% year-over-year, and wealth and asset management, which rose 54% over the same period.
Credit quality improved as the net charge-off ratio fell 15 bps year-over-year to 0.30%, marking the lowest level since the second quarter of 2023. The provision for credit losses decreased 25% year-over-year to $129 million. The prior quarter's provision had included an $83 million Day 1 allowance build related to the Comerica acquisition.
The CET1 capital ratio stood at 9.93%, an increase of 4 bps sequentially. The ratio declined 65 bps year-over-year due to the capital impacts of the Comerica transaction.
Noninterest expense, excluding certain items and non-qualified deferred compensation, rose 5% sequentially to $1.861 billion. The increase reflected the full-quarter contribution from Comerica alongside spending on integration-related marketing and technology. The adjusted efficiency ratio improved 480 bps sequentially to 57.1%.