Fifth Third Earnings: Solid Quarter and Mostly Healthy Credit Metrics

Fifth Third reported a solid end to 2023. Fourth-quarter adjusted earnings per share of $0.99 beat the FactSet consensus estimate of $0.77 and revenue of $2.17 billion was slightly ahead of the consensus estimate of $2.16 billion. We attribute the beat to lower provisioning and a lower tax rate. Fifth Third’s provision in the quarter was $55 million, down from $119 million in the third quarter. Given a slowing macroeconomic environment and commercial real estate exposures, many banks have been increasing their provision for loan losses. The firm’s tax rate of 18.4% benefited from a $17 million favorable tax resolution. Overall, the firm’s 2024 revenue outlook was in line with our expectations. As we incorporate fourth-quarter financial results, we do not expect a material change to our $35 per share fair value estimate.