Fifth Third Q3 2026 Earnings: Comerica Drives Revenue While Integration Costs Weigh on EPS

Fifth Third Bancorp (NYSE: FITB) reported Q3 2026 fully taxable-equivalent revenue of approximately $3.28 billion, up about 42% from $2.31 billion a year earlier, while diluted EPS edged down 1% to $0.90 from $0.91. Net income available to common shareholders rose 36% to $828 million, but $211 million of after-tax merger-related and other items reduced EPS by $0.23; adjusted EPS was $1.13. The Comerica acquisition drove much of the year-over-year expansion, while net interest income and core deposits both increased 3% sequentially.

Core Earnings Data

The combined company produced substantially more net interest and fee income than Fifth Third reported a year ago. However, the annual comparison includes Comerica, making sequential trends and adjusted figures important for evaluating underlying performance.

Net interest income increased from the second quarter, adjusted expenses declined, and the provision for credit losses fell year over year. Reported diluted EPS nevertheless remained slightly below the prior-year level despite higher common net income.

FTE revenue is calculated as FTE net interest income plus noninterest income. Fifth Third also reported adjusted EPS of $1.13, adjusted return on tangible common equity of 20.6%, and adjusted return on assets of 1.41%.

Business and Balance-Sheet Performance

Net interest income rose 3% sequentially to $2.28 billion. Higher market rates, fixed-rate asset repricing, investment portfolio management, and loan growth contributed to the increase, partly offset by higher deposit costs and the movement of former Comerica investment sweep balances into interest-bearing deposits. Net interest margin declined two basis points sequentially to 3.34% as the rate paid on interest-bearing liabilities increased six basis points.

Reported noninterest income declined 5% from the second quarter to $1.01 billion, but increased 29% year over year. Excluding specified items, noninterest income rose 1% sequentially to $1.05 billion. Mortgage banking revenue increased 21% from the prior quarter, while commercial banking and wealth and asset management revenue also advanced. Capital markets fees declined 5% as late-quarter volatility slowed merger advisory and loan syndication activity.

Average portfolio loans and leases reached $179.24 billion, up 1% sequentially and 45% year over year. Sequential growth came primarily from approximately $1.5 billion of additional commercial loans and leases, while consumer balances were broadly stable. Period-end commercial growth was led by construction and commercial-and-industrial originations, partly offset by elevated payoffs.

Average core deposits increased 3% sequentially to $235.64 billion. Operational deposit growth, a Southwest retail campaign, and the migration of Comerica sweep balances supported the increase. Deposit growth modestly outpaced loan growth, improving the period-end portfolio loan-to-core deposit ratio to 76% from 77%. Average wholesale funding fell 10% sequentially to $23.25 billion, including lower long-term debt and Federal Home Loan Bank advances.

Profitability, Credit, and Capital

Reported noninterest expense was $2.05 billion, down 3% sequentially but up 62% year over year. Excluding specified items and non-qualified deferred compensation, expense declined 2% sequentially to $1.82 billion. Fifth Third reported 8% sequential growth in adjusted pre-provision net revenue and 450 basis points of positive operating leverage. The FTE efficiency ratio improved from 64.3% in the second quarter to 62.4%.

Credit performance remained broadly stable. Net charge-offs were $139 million, equal to 0.31% of average portfolio loans, compared with 0.30% in the previous quarter. The year-over-year decline from 1.09% partly reflected a $178 million asset-backed finance charge-off in Q3 2025; excluding that credit, the prior-year ratio was 0.52%.

The allowance for credit losses was $3.13 billion, or 1.74% of portfolio loans and leases, compared with 1.76% one quarter earlier. Nonperforming assets equaled 0.64% of portfolio assets, up from 0.60% sequentially but close to 0.65% a year ago.

Fifth Third’s CET1 ratio increased to 10.02% from 9.93% in the second quarter. However, accumulated other comprehensive loss widened to $4.92 billion from $3.29 billion, and tangible common equity including AOCI declined to 6.88% from 7.29%.

Comerica Expanded the Balance Sheet While Integration Costs Distorted Reported Profitability

The Comerica acquisition was the principal driver of Fifth Third’s year-over-year increases in net interest income, loans, deposits, and several fee categories. It also brought significant integration expenses that affected the comparison between reported and adjusted results.

Merger-related charges increased pretax noninterest expense by $215 million and reduced noninterest income by $10 million during the quarter. Interchange litigation matters added $5 million of expense and reduced noninterest income by $29 million, while technology-related asset impairments added another $19 million of expense. Together, specified items had a $211 million after-tax impact, equivalent to $0.23 per diluted share.

Merger-related expenses recognized in noninterest expense totaled approximately $1.04 billion for the first nine months of 2026. The completed systems conversion reduces one major execution step, but the remaining pace of integration spending and expense savings will remain important to the combined company’s profitability.

Management’s View

Chairman, CEO, and President Tim Spence said Fifth Third completed the Comerica systems conversion with strong client and banker retention. Management also pointed to deposit share gains in the Southeast and in Comerica’s Michigan, Texas, and California markets.

Commercial new quality relationships increased 70% from Q3 2025. Consumer household growth reached 7% in the Southeast and 8% in the Southwest. At the same time, management acknowledged that competition for deposits is increasing and emphasized the importance of Fifth Third’s low-cost deposit sources across different interest-rate environments.

Recent Insider Transactions

The supplied six-month insider summary showed 89,362 shares acquired across 19 purchase transactions and 123,515 shares sold across three sales, resulting in net sales of 34,153 shares. Total insider holdings were reported at approximately 3.39 million shares; the transactions alone do not establish insiders’ outlook for the company.

The latest reported records included two derivative-security conversions, one sale, one stock gift, and six director stock awards. All were classified as direct transactions.

Risks Investors Need to Monitor

• Deposit pricing pressure: The cost of interest-bearing liabilities increased sequentially, contributing to a two-basis-point decline in net interest margin even as net interest income grew.
• Integration spending: Merger-related expenses remained substantial, with approximately $1.04 billion recognized through the first nine months of 2026. Continued costs could limit the conversion of revenue growth into reported EPS growth.
• Market-sensitive fee income: Capital markets fees declined as volatility slowed advisory and syndication activity, while reported noninterest income fell 5% sequentially.
• Nonperforming assets and real estate: The nonperforming asset ratio increased to 0.64% from 0.60% sequentially. Other real estate owned rose to $81 million, including $74 million of branch-related property no longer intended for banking use.
• AOCI pressure: The accumulated other comprehensive loss widened during the quarter, lowering tangible common equity including AOCI despite a sequential improvement in the CET1 ratio.

Summary

Fifth Third’s Q3 2026 results reflected a much larger company following the Comerica acquisition, with higher net interest income, deposits, loans, and common net income. Sequentially, deposit growth, lower adjusted expenses, stable credit, and improved regulatory capital provided support, while integration charges, rising deposit costs, fee-market volatility, and a larger AOCI loss remain the main areas to track.