In a banking landscape shaped by interest-rate shifts and evolving consumer-credit trends, investors are taking a closer look at the resilience of regional lenders. Two such banks — Fifth Third Bancorp FITB and M&T Bank MTB — stand out for their scale, diversified revenue bases, and distinct strategic approaches.
Let’s take a closer look at these regional lenders to reveal important differences in margin strength, capital plan, and growth strategy, and analyze which stock has better growth potential.
The Case for Fifth Third
FITB has expanded over the years through acquisitions and partnerships. In October 2025, Fifth Third entered a definitive merger agreement to acquire Comerica. This transaction will bring together two banking franchises to create the ninth-largest U.S. bank with nearly $288 billion in assets, $224 billion in deposits and $174 billion in loans. Upon closing, the merged entity will rank as the ninth-largest U.S. bank.
In 2025, the company strengthened its commercial payments platform with the acquisition of DTS Connex and broadened its private credit offerings through a partnership with Eldridge, supporting the needs of its Commercial Bank clients.
FITB has also placed a strong emphasis on growing its treasury management, and wealth and asset management businesses, both of which contribute to more stable non-interest income (an increasingly important buffer in a fluctuating rate environment). The bank expects its commercial payments segment alone to evolve into a $1-billion business within five years, reflecting robust demand and continued investment in this area.
Geographic expansion remains a core component of FITB’s long-term strategy. The bank is aggressively building out its branch network in the high-growth Southeast, supported by a multi-year plan announced in late 2024 to open 200 retail locations by 2028, with roughly half located in the Southeast. Over the past two years, Fifth Third has opened 68 branches across the region. As these markets continue to mature, the bank anticipates generating $15-20 billion in deposit growth over the next seven years.
The Federal Reserve has reduced rates twice this year, following a 100-basis-point rate cut in 2024. A further rate cut is expected this month given weakening labor market data and dovish-leaning economic indicators. The relatively lower rates will help FITB to witness a rise in net interest income (NII) as the lending environment improves and funding costs stabilize. Management expects adjusted NII to rise 5.5-6.5% in 2025 from the $5.66 billion reported in 2024.
The Case for M&T Bank
MTB has shown remarkable revenue growth over the past few years. Going forward, higher NII, driven by modest lending demand and the Fed’s rate cuts, will support its revenue growth. The company’s initiatives to strengthen non-interest income will further bolster top-line growth. Management expects 2025 NII (tax equivalent basis) to be $7.05-$7.15 billion, while non-interest income is anticipated between $2.5 billion and $2.6 billion. In 2024, NII was $6.8 billion and non-interest income was $$2.4 billion.
The company has a solid balance sheet position. It has focused on acquiring the best deposit franchise. The company recorded solid loan and deposit growth in the past few years. Growth was supported by the acquisition of People’s United in 2022, which increased M&T Bank’s loans by $36 billion and deposits by $53 billion. Its deposits are well diversified in terms of clients and offerings, which will support growth in the upcoming period.
Additionally, improvements in consumer, commercial and industrial (C&I), and residential mortgage lending will support loan growth. The company expects average loan and lease balances between $135 billion and $137 billion in 2025. Average total deposit balances are anticipated to be $162-$164 billion in 2025. In 2024, total loans and leases amounted to $135 billion, while total deposits were $161 billion.
FITB & MTB: Price Performance, Valuation & Other Comparisons
Over the past six months, shares of FITB and MTB have rallied 13.8% and 6.2%, respectively, compared with the industry’s growth of 17.7%.
Price Performance
In terms of valuation, FITB is currently trading at a 12-month forward price-to-earnings (P/E) of 11.07X. Then again, the MTB stock is currently trading at a 12-month forward P/E of 10.29X.
Price-to-Earnings F12M
Both stocks are trading at a discount compared with the industry average of 11.39X. However, M&T Bank’s stock is cheaper than that of Fifth Third.
FITB and MTB reward their shareholders handsomely. Fifth Third hiked its dividend 8.1% to 40 cents per share in September 2025. It has raised its dividend five times over the past five years, and has a dividend yield of 3.7%. Similarly, M&T Bank hiked quarterly cash dividends on common stock 11.1% to $1.50 per share in August 2025. It has a dividend yield of 3.1% and has raised its dividend four times in the past five years. Based on dividend yield, FITB has an edge over MTB.
Dividend Yield
How Do Estimates Compare for FITB & MTB?
The Zacks Consensus Estimate for FITB’s 2025 and 2026 sales indicates rallies of 6.4% and 4.8%, respectively. The Zacks Consensus Estimate for FITB’s 2025 and 2026 earnings indicates increases of 4.8% and 12.9%, respectively. Earnings estimates for both years have been unchanged over the past week.
Estimate Revision Trend
The Zacks Consensus Estimate for MTB’s 2025 and 2026 sales indicates growth of 4.4% and 3.6%, respectively. The Zacks Consensus Estimate for 2025 and 2026 earnings indicates 12.4% and 11.9% rallies, respectively. Earnings estimates for both years have been unchanged over the past week.
Estimate Revision Trend
MTB or FITB: Which Stock Has Better Potential?
Both Fifth Third and M&T Bank are well-managed regional lenders with strong capital positions, diversified deposit bases and credible strategies to navigate a shifting rate environment. Each bank offers stability, consistent shareholder returns and improving earnings prospects as funding pressures ease and loan demand gradually rebounds.
However, FITB benefits from a clearer multi-year growth narrative, anchored by its Southeast expansion strategy, ongoing branch buildout and targeted acquisitions that strengthen fee-based revenue streams. The Comerica merger adds another layer of upside, positioning FITB as the ninth-largest U.S. bank and enhancing its competitive footprint in key commercial and consumer markets.
While M&T Bank maintains a resilient franchise with steady loan and deposit growth, the near-term catalysts still lean more favorably toward Fifth Third. With a reasonable valuation, a consistent dividend growth record, and solid 2025 and 2026 growth estimates, FITB appears to offer better growth potential for now.
Currently, FITB and MTB carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
This article originally published on Zacks Investment Research (zacks.com).
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