Regional banking company Fifth Third Bancorp (NASDAQ:FITB) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 8.1% year on year to $2.25 billion. Its GAAP profit of $0.88 per share was 1.5% above analysts’ consensus estimates.
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Fifth Third Bancorp (FITB) Q2 CY2025 Highlights:
- Net Interest Margin: 3.1% vs analyst estimates of 3.1% (24 basis point year-on-year increase, 6.8 bps beat)
- Revenue: $2.25 billion vs analyst estimates of $2.22 billion (8.1% year-on-year growth, 1.2% beat)
- Efficiency Ratio: 56.2% vs analyst estimates of 55.8% (0.4 percentage point miss)
- EPS (GAAP): $0.88 vs analyst estimates of $0.87 (1.5% beat)
- Market Capitalization: $28.74 billion
Company Overview
Named after the merger of Third National Bank and Fifth National Bank in 1908, Fifth Third Bancorp (NASDAQ:FITB) is a financial services company that provides banking, lending, wealth management, and investment services to individuals and businesses across the Midwest and Southeast.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income.
Regrettably, Fifth Third Bancorp’s revenue grew at a tepid 1.7% compounded annual growth rate over the last five years. This was below our standards and is a poor baseline for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Fifth Third Bancorp’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.1% annually. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Fifth Third Bancorp reported year-on-year revenue growth of 8.1%, and its $2.25 billion of revenue exceeded Wall Street’s estimates by 1.2%.
Net interest income made up 64.8% of the company’s total revenue during the last five years, meaning lending operations are Fifth Third Bancorp’s largest source of revenue.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Fifth Third Bancorp’s TBVPS declined at a 1.5% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 15.9% annually over the last two years from $15.61 to $20.98 per share.
Over the next 12 months, Consensus estimates call for Fifth Third Bancorp’s TBVPS to grow by 8.9% to $22.85, decent growth rate.
Key Takeaways from Fifth Third Bancorp’s Q2 Results
It was encouraging to see Fifth Third Bancorp beat analysts’ tangible book value per share expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS was in line. Zooming out, we think this was a decent quarter. The stock remained flat at $43.06 immediately following the results.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.