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Fifth Third's Q3 Outlook Brightens on Strong NII & Fee Income Trends
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Key Takeaways
Fifth Third expects Q3'26 NII and non-interest income near the high end of prior guidance.
FITB sees NIM in the mid-3.30% range, with room to approach 3.40% as cash moves into earning assets.
Wealth management, commercial payments and capital markets are expanding FITB's fee revenue mix.
Fifth Third Bancorp (FITB - Free Report) is tracking toward a strong third quarter, with management expecting net interest income (NII) and non-interest income at the upper end of its prior guidance ranges, while expenses are trending toward the lower end. At the Barclays 24th Annual Global Financial Services Conference, CFO Bryan Preston said that the quarter was “coming together nicely,” with loan growth tracking as expected and deposit growth coming in stronger than anticipated.
For the third quarter, FITB had guided for NII to increase 2-2.5% sequentially from the second-quarter baseline of $2.22 billion, while non-interest income was expected to rise 1-3% from $1.04 billion. Its non-interest expenses were projected to decline 1-2% from $1.86 billion.
The improved NII outlook reflects continued earning-asset growth, fixed-rate asset repricing and strong deposit generation. Following the Comerica acquisition, FITB deliberately shifted toward a more asset-sensitive balance sheet. Preston described the bank as “fairly well positioned” for a higher-rate environment, while continued growth in earning assets is providing an additional lift to NII. Management expects third-quarter net interest margin (NIM) to remain in the mid-3.30% range, with room to reach nearly 3.40% as cash accumulated during the Comerica conversion is redeployed into earning assets.
Fee income is adding another layer to revenue growth. Management noted that wealth management and commercial payments have reached more than $1 billion in annualized revenue, with both businesses likely to sustain high-single-digit growth in the near term. Capital markets are also generating nearly $600 million on an annualized basis, with an opportunity to grow toward a $1 billion business over time.
With the Comerica conversion largely complete, FITB can focus on acquiring new customers and deepening existing relationships across lending, deposits and capital markets, further diversifying its revenue mix. The strength in these businesses, along with the expected improvement in NII, is likely to drive higher revenue in the third quarter. Reflecting this momentum, the Zacks Consensus Estimate of FITB’s 2026 revenue indicates a year-over-year rise of 42.5%.
Revenue Estimates
Image Source: Zacks Investment Research
Outlook Updates From Other Banks at Barclays Conference
Other banks that updated their outlooks around the same conference include KeyCorp (KEY - Free Report) and Huntington Bancshares (HBAN - Free Report) .
KeyCorp’s outlook has improved, with 2026 revenues now expected to increase approximately 8%, up from the prior guidance of 7-8%. The increase is being driven by higher fee income, with non-interest income now projected to grow 4-5%, compared with the previous 3-4% outlook. KeyCorp continues to expect NII to increase 9-11%, supported by loan growth, deposit trends and the repricing of fixed-rate assets.
In contrast, Huntington Bancshares lowered its 2026 NII growth outlook to approximately 35% from 39-43%, which could weigh on revenue growth amid higher deposit costs, competitive pricing and weaker loan volumes. However, stronger noninterest income is expected to partly offset the NII pressure, with Huntington now projecting fee income growth toward the upper end of its previous 31-33% range.
FITB’s Price Performance & Zacks Rank
In the past six months, Fifth Third’s shares have gained 16.3% compared with the industry’s growth of 18.1%.
View the Zacks #1 Rank List
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Fifth Third's Q3 Outlook Brightens on Strong NII & Fee Income Trends
Key Takeaways
Fifth Third Bancorp (FITB - Free Report) is tracking toward a strong third quarter, with management expecting net interest income (NII) and non-interest income at the upper end of its prior guidance ranges, while expenses are trending toward the lower end. At the Barclays 24th Annual Global Financial Services Conference, CFO Bryan Preston said that the quarter was “coming together nicely,” with loan growth tracking as expected and deposit growth coming in stronger than anticipated.
For the third quarter, FITB had guided for NII to increase 2-2.5% sequentially from the second-quarter baseline of $2.22 billion, while non-interest income was expected to rise 1-3% from $1.04 billion. Its non-interest expenses were projected to decline 1-2% from $1.86 billion.
The improved NII outlook reflects continued earning-asset growth, fixed-rate asset repricing and strong deposit generation. Following the Comerica acquisition, FITB deliberately shifted toward a more asset-sensitive balance sheet. Preston described the bank as “fairly well positioned” for a higher-rate environment, while continued growth in earning assets is providing an additional lift to NII. Management expects third-quarter net interest margin (NIM) to remain in the mid-3.30% range, with room to reach nearly 3.40% as cash accumulated during the Comerica conversion is redeployed into earning assets.
Fee income is adding another layer to revenue growth. Management noted that wealth management and commercial payments have reached more than $1 billion in annualized revenue, with both businesses likely to sustain high-single-digit growth in the near term. Capital markets are also generating nearly $600 million on an annualized basis, with an opportunity to grow toward a $1 billion business over time.
With the Comerica conversion largely complete, FITB can focus on acquiring new customers and deepening existing relationships across lending, deposits and capital markets, further diversifying its revenue mix. The strength in these businesses, along with the expected improvement in NII, is likely to drive higher revenue in the third quarter. Reflecting this momentum, the Zacks Consensus Estimate of FITB’s 2026 revenue indicates a year-over-year rise of 42.5%.
Revenue Estimates
Image Source: Zacks Investment Research
Outlook Updates From Other Banks at Barclays Conference
Other banks that updated their outlooks around the same conference include KeyCorp (KEY - Free Report) and Huntington Bancshares (HBAN - Free Report) .
KeyCorp’s outlook has improved, with 2026 revenues now expected to increase approximately 8%, up from the prior guidance of 7-8%. The increase is being driven by higher fee income, with non-interest income now projected to grow 4-5%, compared with the previous 3-4% outlook. KeyCorp continues to expect NII to increase 9-11%, supported by loan growth, deposit trends and the repricing of fixed-rate assets.
In contrast, Huntington Bancshares lowered its 2026 NII growth outlook to approximately 35% from 39-43%, which could weigh on revenue growth amid higher deposit costs, competitive pricing and weaker loan volumes. However, stronger noninterest income is expected to partly offset the NII pressure, with Huntington now projecting fee income growth toward the upper end of its previous 31-33% range.
FITB’s Price Performance & Zacks Rank
In the past six months, Fifth Third’s shares have gained 16.3% compared with the industry’s growth of 18.1%.
Price Performance
Image Source: Zacks Investment Research
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.