Fifth Third Bancorp (NASDAQ: FITB) reported Q4 EPS of $0.96, $0.24 better than the analyst estimate of $0.72.

Key Highlights

• Record full year net income of $2.5 billion
• Generated $345 million pre-tax gain in 4Q19 from Worldpay tax receivable agreement (TRA) transaction with FIS
• 4Q19 net interest income, NIM, noninterest income, and expense performance in-line with or better than prior guidance
• Effectively managed interest-bearing core deposit costs better than prior guidance (down 19 bps vs. 3Q19), while continuing to grow core deposits (up 1% vs. 3Q19)
• Generated record capital markets revenue in 4Q19; full year revenue up 12%
• Several credit metrics impacted by conversion to national charter; excluding conversion, total NCO ratio up 1 bp from 3Q19 with consumer NCO ratio flat from 3Q19
• Remain on-track to achieve MB expense savings by the end of 1Q20 ($255 million pre-tax)
• Continue to realize desired MB employee and client outcomes

CEO Commentary

“Our fourth quarter and full year results were strong, reflecting the strength of our diversified revenue streams, our continued expense discipline, and our ability to achieve our targeted financial outcomes from the MB Financial acquisition. Net interest income, noninterest income, and noninterest expense were in-line with or better than our previous guidance. We generated very strong fee revenue, including a new record in capital markets. Additionally, our net interest income results continue to reflect our ability to successfully manage the balance sheet despite the lower rate environment, which led to better than expected NIM performance for the quarter. Also, we continued to diligently manage our expenses, reflecting our ongoing focus on generating efficiencies throughout the Bank while still investing in high priority areas to support revenue growth.”

“We also successfully completed a transaction with FIS that has addressed the future payments related to our TRA. Similar to all the strategic decisions over the past ten years related to this relationship, this agreement has created significant value for our shareholders. We have successfully recognized over $7 billion on a pre-tax basis for shareholders from all sources since the spin-off of our legacy processing business, with another $195 million in TRA cash flows beyond this quarter’s transaction yet to be monetized.”

“From a balance sheet perspective, our loan growth was consistent with our prior guidance, reflective of the generally subdued macroeconomic environment. Also, we again generated strong core deposit growth while also proactively reducing deposit costs more than our previous guidance.”

“We remain on-track to achieve the previously-stated expense and revenue synergy targets related to the MB Financial acquisition. We continue to be pleased with the low client and employee attrition levels.”

“Our clearly defined strategic growth priorities, proactive balance sheet management, and ongoing discipline throughout the Bank position us well for the future. We expect to build on our strong fourth quarter NIM performance and maintain our expense discipline in order to generate positive operating leverage this year while continuing to invest for long-term outperformance.”

-Greg D. Carmichael, Chairman, President and CEO

For earnings history and earnings-related data on Fifth Third Bancorp (FITB) click here.