Fifth Third Bancorp reported second-quarter adjusted earnings per share of $1.02, on GAAP EPS of $0.83 and total revenue of $3.28 billion, up 46% year on year, in its first full quarter with Comerica included in the enlarged group.
Net interest income on a fully taxable-equivalent basis surged 48% year on year, while fee income grew 41%, the Cincinnati-based lender said in its earnings release on Friday. The group posted an adjusted return on tangible common equity of 19% and an adjusted efficiency ratio of 57.1%.
COMERICA DEAL RESHAPES THE FRANCHISE
The 48% rise in net interest income primarily reflected the addition of Comerica for a full quarter, with organic loan production, continued fixed-rate asset repricing and disciplined liability management also contributing, the bank said. Within fee income, wealth and asset management revenue rose 54%, commercial payments revenue 67% and capital markets fees 71%, while mortgage banking net revenue fell 30%.
The $0.19 gap between adjusted EPS of $1.02 and GAAP EPS of $0.83 reflects certain items, chiefly $155 million of after-tax merger-related charges, along with securities repositioning losses, technology-related asset impairments, severance expense and interchange litigation matters.
Chairman and chief executive Tim Spence said the Comerica integration remains on track, with the systems conversion scheduled for Labor Day weekend as the final step to unlocking the full run-rate of expected cost synergies.
PROFITABILITY HOLDS UP THROUGH INTEGRATION
Adjusted return on tangible common equity of 19% was 100 bps higher than a year earlier, the bank said. The adjusted efficiency ratio, which excludes merger-related charges, improved 480 bps sequentially to 57.1%.
Net charge-offs fell to 30 bps in the second quarter, the lowest level since the second quarter of 2023.
The second quarter also marked Fifth Third surpassing $300 billion in total assets and formally becoming a Category III institution, the bank said.
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