Record commercial banking revenue has helped Fifth Third Bank beat Wall Street expectations for both earnings per share and revenue in the first quarter as reported by the bank this morning.
Fifth Third, which still hosts multiple branches and ATM sites across Michigan’s Great Southwest, beat analysts expectations on both fronts when 1st quarter GAAP Earnings Per Share checked in at $0.93, beating Wall Street’s projections by $0.24. The bank’s 1st quarter revenue of $1.93-billion, representing a year-over-year increase of 1.6-percent beat the analyst’s expectations by $20-million.
Fifth Third Bancorp today reported first quarter 2021 net income of $694 million as compared to net income of $604 million in the prior quarter and $46 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $674 million, or $0.93 per diluted share, compared to $569 million, or $0.78 per diluted share, in the prior quarter and $29 million, or $0.04 per diluted share, in the year-ago quarter.
Greg D. Carmichael, Chairman and CEO at Fifth Third, says, “Fifth Third’s quarterly financial performance was once again strong, reflecting record commercial banking revenue, continued momentum generating household growth, a strong underlying net interest margin, and historically low net charge-offs with improvements in both commercial and consumer portfolios.”
Carmichael reports, “Our credit results continue to demonstrate the strength of our balance sheet, as we have maintained our disciplined client selection, adhered to our conservative underwriting, and continued to manage our balance sheet exposures with a focus on a long-term performance horizon. I am optimistic that we will continue to benefit from an improving economic environment, including higher interest rates, as well as a more vibrant economy over the next year within most of our commercial franchise and throughout our retail footprint.”
Fifth Third posted these Key Highlights for the first quarter:
- Returned $180 million to shareholders through repurchases; capacity to repurchase up to $347 million in 2Q21
- ROTCE of 16.8%; adjusted ROTCE of 19.8% excl. AOCI improved 150 bps sequentially
- Produced record commercial banking revenue
- Generated consumer household growth of 3-percent compared to 1Q20
- Historically low NCO ratio reflecting improvements in commercial and consumer
- Benefit to credit losses and resulting reserve coverage reflects improved macroeconomic environment and strong credit results; NPA ratio improved 7 bps sequentially
- NII down 1-percent; reported NIM increased 4 bps, with ~4 bps decline in underlying NIM excl. excess cash and all PPP impacts
- Named one of the “World’s Most Ethical Companies” by Ethisphere
- Exceeded five-year commitment to low-and-moderate income communities by more than $9 billion
Carmichael says, “Despite the overall economic recovery over the past several quarters, I recognize that not everyone in our society has benefited from it. This is why I am very proud that, in addition to producing strong financial results, we have also continued to take deliberate actions to improve the lives of our customers and the well-being of our communities. I am particularly pleased that we exceeded our five-year community commitment to invest in low-and-moderate income communities by more than $9 billion.”
Carmichael concludes, “We were honored to be named one of the world’s most ethical companies by Ethisphere, reflecting our strong corporate culture, compliance program, and ESG actions. We are guided by our core values to work as one bank, be respectful, take accountability, and always act with integrity. We remain committed to generating sustainable long-term value for shareholders and anticipate that we will continue improving our relative performance as a top performing regional bank.”
