Fifth Third Bancorp (NASDAQ:FITB) reported first-quarter results on Friday that topped analyst expectations, but its shares declined more than 2% in premarket trading as investors focused on the impact of merger-related expenses tied to its recent acquisition of Comerica.
The Cincinnati-based lender posted adjusted earnings per share of $0.15, outperforming the consensus estimate of -$0.10.
However, reported results were weighed down by a net negative impact of $0.68 per share stemming from merger-related charges and other items. Revenue totaled $2.83 billion on a fully taxable-equivalent basis, representing a 33% year-on-year increase, largely driven by the Comerica deal completed on February 1.
Net interest income rose 34% year-on-year to $1.94 billion, while the net interest margin expanded by 27 basis points to 3.30% compared with the prior year.
The acquisition of Comerica added $86 billion in assets, $51 billion in loans, and $65 billion in deposits at closing. Average loan balances increased 30% year-on-year to $158 billion, while average deposits climbed 28% to $209 billion.
“The first quarter reflected continued momentum across Fifth Third,” said Tim Spence. “We delivered strong loan and deposit growth, driven by new commercial relationships and continued household expansion. We closed the acquisition of Comerica on February 1st, and early financial benefits are already showing up, including strong net interest margin expansion and tangible book value per share growth.”
Credit quality remained stable, with net charge-offs at 37 basis points, the lowest level since the fourth quarter of 2023. The nonperforming asset ratio improved to 0.57%, down from 0.81% a year earlier.
Noninterest expenses totaled $2.40 billion, up 84% year-on-year, reflecting $635 million in pre-tax merger-related charges during the quarter—roughly half of the expected full-year integration costs. Excluding certain items, adjusted noninterest expenses were $1.77 billion.
The bank’s Common Equity Tier 1 (CET1) ratio stood at 9.96%, down from 10.43% a year earlier, primarily due to the capital impact of the Comerica acquisition.