Fifth Third revenue reached $3.28 billion on a fully taxable-equivalent basis in the third quarter of 2026, as higher net interest income offset a decline in noninterest income. Announcing results on October 19, the bank said it had completed Comerica’s systems conversion with strong client and banker retention. Net income available to common shareholders rose to $828 million from $763 million in the preceding quarter.
Key Takeaways
- Higher net interest income largely offset weaker reported fee and other noninterest income.
- Comerica’s systems conversion was completed, while merger-related charges continued to affect earnings.
- Deposit growth reduced reliance on wholesale funding, although some credit measures edged higher.
Table of Contents
- Fifth Third revenue reflects offsetting income trends
- Conversion milestone comes with continuing merger costs
- Deposits strengthen funding as credit signals remain mixed
- Conclusion
Fifth Third revenue reflects offsetting income trends
Fifth Third’s third-quarter 2026 earnings release showed fully taxable-equivalent net interest income of $2.276 billion and noninterest income of $1.008 billion. Together, those figures produced $3.284 billion in revenue, little changed from $3.279 billion in the second quarter. The taxable-equivalent presentation adjusts tax-exempt income to make it comparable with taxable income.
Net interest income increased 3% sequentially, supported by higher market rates, fixed-rate asset repricing, investment portfolio management and loan growth. Higher deposit costs partly offset those benefits. Net interest margin narrowed to 3.34% from 3.36%, showing that income growth did not translate into a wider lending and investment margin.
Reported noninterest income declined 5% from the second quarter to $1.008 billion. Excluding specified items, including interchange litigation matters, merger charges and securities gains or losses, it increased 1% to $1.052 billion. The distinction separates the reported decline from the bank’s adjusted operating performance.
| Item | Details |
|---|---|
| Average portfolio loans and leases | $179.244 billion in Q3 2026, versus $177.572 billion in Q2. |
| Common equity tier 1 capital ratio | 10.02%, versus 9.93% in Q2. |
| Book value per share | $34.31, versus $35.63 in Q2. |
| Return on average assets | 1.14%, versus 1.08% in Q2. |
Conversion milestone comes with continuing merger costs
Chairman, CEO and President Tim Spence said the systems conversion was completed less than a year after the Comerica acquisition announcement. He also cited deposit-share gains in the Southeast and in Comerica’s Michigan, Texas and California markets.
Diluted earnings were $0.90 per share, up from $0.83 in the second quarter but slightly below $0.91 a year earlier. Adjusted earnings were $1.13 per share, excluding $0.23 per share of specified items. Those exclusions included $171 million in after-tax merger-related charges, $26 million for interchange litigation matters and $14 million in technology-related asset impairments.
Reported noninterest expense fell 3% sequentially to $2.049 billion, primarily because of lower compensation and benefits expense. Nevertheless, merger-related charges recognized in noninterest expense totaled approximately $1.04 billion through the first nine months of 2026. Completion of the systems conversion therefore did not mean the quarter was free of integration costs.
Deposits strengthen funding as credit signals remain mixed
Average deposits increased 3% from the second quarter to $238.344 billion. Growth reflected operational deposits, a Southwest retail campaign and the movement of former off-balance-sheet Comerica investment sweep balances onto the balance sheet. Not all of that increase represented newly won customer funds.
The stronger deposit base supported a 10% sequential reduction in average wholesale funding to $23.252 billion. The period-end loan-to-core deposit ratio improved to 76% from 77%.
Credit performance was broadly stable rather than uniformly improving. The net charge-off ratio edged up to 0.31% from 0.30%, while the nonperforming asset ratio increased to 0.64% from 0.60%. Provision for credit losses declined to $122 million from $129 million.
Conclusion
With Comerica’s systems conversion complete, the next operating test is whether Fifth Third can sustain deposit growth and lower expenses while containing credit losses. The third-quarter results establish progress on funding and quarterly profitability, but still include substantial merger costs.
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