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Fifth Third Bancorp Reports Second Quarter 2024 Diluted Earnings Per Share of $0.81
Resilient balance sheet and disciplined expense management leads to strong and stable returns
Reported results included a negative $0.05 impact from certain items on page 2
Key Financial Data | Key Highlights | |||||||||||||||||||||||||||||||
$ in millions for all balance sheet and income statement items | ||||||||||||||||||||||||||||||||
2Q24 | 1Q24 | 2Q23 | Stability: •Continued repricing benefit on fixed rate loan portfolio and moderating deposit costs drove increased net interest income and net interest margin compared to prior quarter •Strong profitability resulted in CET1 increasing to 10.60% while also executing $125 million share repurchase •Fifth consecutive quarter of CRE NCO ratio below 1 bp Profitability: •Strong fee performance in wealth and asset management revenue (up 11%) and commercial payments revenue (up 12%) compared to 2Q23 •Interest-bearing core deposit costs up only 4 bps compared to 1Q24 •Disciplined expense management; expenses decreased 1% compared to 2Q23 Growth: •Generated consumer household growth of 3% compared to 2Q23, including 6% in the Southeast •Fifth Third Wealth Advisors grew assets under management over 50% to $1.7 billion | |||||||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||||||||||
Net income available to common shareholders | $561 | $480 | $562 | |||||||||||||||||||||||||||||
Net interest income (U.S. GAAP) | 1,387 | 1,384 | 1,457 | |||||||||||||||||||||||||||||
Net interest income (FTE)(a) | 1,393 | 1,390 | 1,463 | |||||||||||||||||||||||||||||
Noninterest income | 695 | 710 | 726 | |||||||||||||||||||||||||||||
Noninterest expense | 1,221 | 1,342 | 1,231 | |||||||||||||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||||||||||
Earnings per share, basic | $0.82 | $0.70 | $0.82 | |||||||||||||||||||||||||||||
Earnings per share, diluted | 0.81 | 0.70 | 0.82 | |||||||||||||||||||||||||||||
Book value per share | 25.13 | 24.72 | 23.05 | |||||||||||||||||||||||||||||
Tangible book value per share(a) | 17.75 | 17.35 | 15.61 | |||||||||||||||||||||||||||||
Balance Sheet & Credit Quality | ||||||||||||||||||||||||||||||||
Average portfolio loans and leases | $116,891 | $117,334 | $123,327 | |||||||||||||||||||||||||||||
Average deposits | 167,194 | 168,122 | 160,857 | |||||||||||||||||||||||||||||
Accumulated other comprehensive loss | (4,901) | (4,888) | (5,166) | |||||||||||||||||||||||||||||
Net charge-off ratio(b) | 0.49 | % | 0.38 | % | 0.29 | % | ||||||||||||||||||||||||||
Nonperforming asset ratio(c) | 0.55 | 0.64 | 0.54 | |||||||||||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||
Return on average assets | 1.14 | % | 0.98 | % | 1.17 | % | ||||||||||||||||||||||||||
Return on average common equity | 13.6 | 11.6 | 13.9 | |||||||||||||||||||||||||||||
Return on average tangible common equity(a) | 19.8 | 17.0 | 20.5 | |||||||||||||||||||||||||||||
CET1 capital(d)(e) | 10.60 | 10.47 | 9.49 | |||||||||||||||||||||||||||||
Net interest margin(a) | 2.88 | 2.86 | 3.10 | |||||||||||||||||||||||||||||
Efficiency(a) | 58.5 | 63.9 | 56.2 | |||||||||||||||||||||||||||||
Other than the Quarterly Financial Review tables beginning on page 14, commentary is on a fully taxable-equivalent (FTE) basis unless otherwise noted. Consistent with SEC guidance in Regulation S-K that contemplates the calculation of tax-exempt income on a taxable-equivalent basis, net interest income, net interest margin, net interest rate spread, total revenue and the efficiency ratio are provided on an FTE basis. | ||||||||||||||||||||||||||||||||
From Tim Spence, Fifth Third Chairman, CEO and President: |
Fifth Third’s financial results once again demonstrated our resilient profitability, well-managed liquidity, and diversified revenue streams.
Our core deposit funded balance sheet generated improved net interest income and margin. Our strong liquidity position continues to provide flexibility to navigate through uncertain economic and regulatory environments. Our net charge-offs were as expected for the quarter and our nonperforming assets decreased.
We continue to invest in our Southeast expansion, Commercial Payments, and Wealth and Asset Management businesses, leading to continued strong acquisition of new quality relationships in commercial and consumer households. We remain disciplined in managing expenses, which were well managed from the prior year.
Our strong and stable returns resulted in achieving our capital targets during the second quarter, which enabled us to execute a $125 million share repurchase in June while continuing to grow our capital.
We remain well-positioned to respond to a range of economic outcomes and will continue to adhere to our guiding principles of stability, profitability, and growth - in that order.
Investor contact: Matt Curoe (513) 534-2345 | Media contact: Jennifer Hendricks Sullivan (614) 744-7693 July 19, 2024
Income Statement Highlights | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except per share data) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Condensed Statements of Income | ||||||||||||||||||||||||||||||||||||||||||||
Net interest income (NII)(a) | $1,393 | $1,390 | $1,463 | — | (5)% | |||||||||||||||||||||||||||||||||||||||
Provision for credit losses | 97 | 94 | 177 | 3% | (45)% | |||||||||||||||||||||||||||||||||||||||
Noninterest income | 695 | 710 | 726 | (2)% | (4)% | |||||||||||||||||||||||||||||||||||||||
Noninterest expense | 1,221 | 1,342 | 1,231 | (9)% | (1)% | |||||||||||||||||||||||||||||||||||||||
Income before income taxes(a) | $770 | $664 | $781 | 16% | (1)% | |||||||||||||||||||||||||||||||||||||||
Taxable equivalent adjustment | $6 | $6 | $6 | — | — | |||||||||||||||||||||||||||||||||||||||
Applicable income tax expense | 163 | 138 | 174 | 18% | (6)% | |||||||||||||||||||||||||||||||||||||||
Net income | $601 | $520 | $601 | 16% | — | |||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | 40 | 40 | 39 | — | 3% | |||||||||||||||||||||||||||||||||||||||
Net income available to common shareholders | $561 | $480 | $562 | 17% | — | |||||||||||||||||||||||||||||||||||||||
Earnings per share, diluted | $0.81 | $0.70 | $0.82 | 16% | (1)% | |||||||||||||||||||||||||||||||||||||||
Fifth Third Bancorp (NASDAQ®: FITB) today reported second quarter 2024 net income of $601 million compared to net income of $520 million in the prior quarter and $601 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $561 million, or $0.81 per diluted share, compared to $480 million, or $0.70 per diluted share, in the prior quarter and $562 million, or $0.82 per diluted share, in the year-ago quarter.
Diluted earnings per share impact of certain item(s) - 2Q24 | |||||||||||||||||
(after-tax impact(f); $ in millions, except per share data) | |||||||||||||||||
Valuation of Visa total return swap | $(18) | ||||||||||||||||
Legal settlements and remediations | (14) | ||||||||||||||||
Update to the FDIC special assessment | (5) | ||||||||||||||||
After-tax impact(f) of certain items | $(37) | ||||||||||||||||
Diluted earnings per share impact of certain item(s)1 | $(0.05) | ||||||||||||||||
Totals may not foot due to rounding; 1Diluted earnings per share impact reflects 691.083 million average diluted shares outstanding Items above decreased net interest income by $5 million and noninterest income by $25 million and increased noninterest expense by $17 million | |||||||||||||||||
2
Net Interest Income | ||||||||||||||||||||||||||||||||||||||||||||
(FTE; $ in millions)(a) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Interest Income | ||||||||||||||||||||||||||||||||||||||||||||
Interest income | $2,626 | $2,614 | $2,376 | — | 11% | |||||||||||||||||||||||||||||||||||||||
Interest expense | 1,233 | 1,224 | 913 | 1% | 35% | |||||||||||||||||||||||||||||||||||||||
Net interest income (NII) | $1,393 | $1,390 | $1,463 | — | (5)% | |||||||||||||||||||||||||||||||||||||||
NII excluding certain items(a) | $1,398 | $1,390 | $1,463 | 1% | (4)% | |||||||||||||||||||||||||||||||||||||||
Average Yield/Rate Analysis | bps Change | |||||||||||||||||||||||||||||||||||||||||||
Yield on interest-earning assets | 5.43 | % | 5.38 | % | 5.04 | % | 5 | 39 | ||||||||||||||||||||||||||||||||||||
Rate paid on interest-bearing liabilities | 3.39 | % | 3.36 | % | 2.72 | % | 3 | 67 | ||||||||||||||||||||||||||||||||||||
Ratios | ||||||||||||||||||||||||||||||||||||||||||||
Net interest rate spread | 2.04 | % | 2.02 | % | 2.32 | % | 2 | (28) | ||||||||||||||||||||||||||||||||||||
Net interest margin (NIM) | 2.88 | % | 2.86 | % | 3.10 | % | 2 | (22) | ||||||||||||||||||||||||||||||||||||
NIM excluding certain items(a) | 2.89 | % | 2.86 | % | 3.10 | % | 3 | (21) | ||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, NII increased $3 million. Excluding the $5 million reduction related to the customer remediations, NII was up $8 million, or 1%, primarily reflecting the increased yields on new production of fixed-rate consumer loans and higher C&I loan yields, partially offset by lower average commercial loan balances and continued, but slowing, mix shift from demand deposits to interest-bearing accounts. Compared to the prior quarter, NIM increased 2 bps. Excluding the aforementioned customer remediations, NIM increased 3 bps, primarily reflecting the net benefit of higher market rates and higher loan yields, partially offset by commercial demand deposit runoff. NIM results continue to be impacted by the decision to carry elevated liquidity given the environment, with the combination of cash and other short-term investments of approximately $24 billion at quarter-end.
Compared to the year-ago quarter, NII decreased $70 million, or 5%. Excluding the aforementioned customer remediations, NII decreased $65 million, or 4%, reflecting the impact of higher funding costs and deposit mix shift from demand to interest-bearing accounts, partially offset by higher loan yields. Compared to the year-ago quarter, NIM decreased 22 bps. Excluding the aforementioned customer remediations, NIM decreased 21 bps, reflecting the impact of higher market rates and their effects on deposit pricing and the decision to carry additional cash, partially offset by higher loan yields.
3
Noninterest Income | |||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | |||||||||||||||||||||||||||||||||
June | March | June | |||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | |||||||||||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||||||||||
Service charges on deposits | $156 | $151 | $144 | 3% | 8% | ||||||||||||||||||||||||||||||
Commercial banking revenue | 144 | 143 | 146 | 1% | (1)% | ||||||||||||||||||||||||||||||
Mortgage banking net revenue | 50 | 54 | 59 | (7)% | (15)% | ||||||||||||||||||||||||||||||
Wealth and asset management revenue | 159 | 161 | 143 | (1)% | 11% | ||||||||||||||||||||||||||||||
Card and processing revenue | 108 | 102 | 106 | 6% | 2% | ||||||||||||||||||||||||||||||
Leasing business revenue | 38 | 39 | 47 | (3)% | (19)% | ||||||||||||||||||||||||||||||
Other noninterest income | 37 | 50 | 74 | (26)% | (50)% | ||||||||||||||||||||||||||||||
Securities gains, net | 3 | 10 | 7 | (70)% | (57)% | ||||||||||||||||||||||||||||||
Total noninterest income | $695 | $710 | $726 | (2)% | (4)% | ||||||||||||||||||||||||||||||
Reported noninterest income decreased $15 million, or 2%, from the prior quarter, and decreased $31 million, or 4%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below, including securities gains/losses which incorporate mark-to-market impacts from securities associated with non-qualified deferred compensation plans.
Noninterest Income excluding certain items | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
June | March | June | % Change | |||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Noninterest Income excluding certain items | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest income (U.S. GAAP) | $695 | $710 | $726 | |||||||||||||||||||||||||||||||||||||||||
Valuation of Visa total return swap | 23 | 17 | 30 | |||||||||||||||||||||||||||||||||||||||||
Legal settlements and remediations | 2 | — | — | |||||||||||||||||||||||||||||||||||||||||
Securities (gains) losses, net | (3) | (10) | (7) | |||||||||||||||||||||||||||||||||||||||||
Noninterest income excluding certain items(a) | $717 | $717 | $749 | — | (4)% | |||||||||||||||||||||||||||||||||||||||
Noninterest income excluding certain items was stable compared to the prior quarter, and decreased $32 million, or 4%, from the year-ago quarter.
Compared to the prior quarter, service charges on deposits increased $5 million, or 3%, primarily reflecting an increase in commercial payments revenue. Commercial banking revenue increased $1 million, or 1%, primarily reflecting increases in client financial risk management revenue and M&A advisory revenue, partially offset by a decrease in loan syndication revenue. Mortgage banking net revenue decreased $4 million, or 7%, primarily reflecting an increase in MSR asset decay, partially offset by an increase in origination fees and gains on loan sales. Wealth and asset management revenue decreased $2 million, or 1%, primarily driven by strong tax season-related revenue in the prior quarter, partially offset by an increase in personal asset management revenue. Card and processing revenue increased $6 million, or 6%, driven by an increase in interchange revenue.
Compared to the year-ago quarter, service charges on deposits increased $12 million, or 8%, primarily reflecting an increase in commercial payments revenue. Commercial banking revenue decreased $2 million, or 1%, primarily reflecting decreases in client financial risk management revenue and loan syndication revenue, partially offset by an increase in corporate bond fees. Mortgage banking net revenue decreased $9 million, or 15%, primarily reflecting decreases in origination fees and gains on loan sales and MSR net valuation adjustments. Wealth and asset management revenue increased $16 million, or 11%, primarily reflecting increases in personal asset management revenue and brokerage fees. Leasing business revenue decreased $9 million, or 19%, reflecting a decrease in operating lease revenue. Other noninterest income decreased $37 million, or 50%, due to equity fund and direct investment gains in 2023.
4
Noninterest Expense | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||||||||||||||||||||||
Compensation and benefits | $656 | $753 | $650 | (13)% | 1% | |||||||||||||||||||||||||||||||||||||||
Net occupancy expense | 83 | 87 | 83 | (5)% | — | |||||||||||||||||||||||||||||||||||||||
Technology and communications | 114 | 117 | 114 | (3)% | — | |||||||||||||||||||||||||||||||||||||||
Equipment expense | 38 | 37 | 36 | 3% | 6% | |||||||||||||||||||||||||||||||||||||||
Card and processing expense | 21 | 20 | 20 | 5% | 5% | |||||||||||||||||||||||||||||||||||||||
Leasing business expense | 22 | 25 | 31 | (12)% | (29)% | |||||||||||||||||||||||||||||||||||||||
Marketing expense | 34 | 32 | 31 | 6% | 10% | |||||||||||||||||||||||||||||||||||||||
Other noninterest expense | 253 | 271 | 266 | (7)% | (5)% | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | $1,221 | $1,342 | $1,231 | (9)% | (1)% | |||||||||||||||||||||||||||||||||||||||
Reported noninterest expense decreased $121 million, or 9%, from the prior quarter, and decreased $10 million, or 1%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below.
Noninterest Expense excluding certain item(s) | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||||||||
Noninterest Expense excluding certain item(s) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest expense (U.S. GAAP) | $1,221 | $1,342 | $1,231 | |||||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and remediations | (11) | (19) | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
FDIC special assessment | (6) | (33) | — | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring severance expense | — | — | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Noninterest expense excluding certain item(s)(a) | $1,204 | $1,290 | $1,207 | (7)% | — | |||||||||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, noninterest expense excluding certain items decreased $86 million, or 7%, primarily reflecting a seasonal decrease in compensation and benefits expense. Noninterest expense in the current quarter included a $4 million expense related to the impact of non-qualified deferred compensation mark-to-market compared to a $15 million expense in the prior quarter, both of which were largely offset in net securities gains through noninterest income.
Compared to the year-ago quarter, noninterest expense excluding certain items was flat, primarily reflecting decreases in leasing business expense and other noninterest expense (excluding the aforementioned certain items), offset by increases in compensation and benefits expense and marketing expense. The year-ago quarter included a $10 million expense related to the impact of non-qualified deferred compensation mark-to-market, which was largely offset in net securities gains through noninterest income.
5
Average Interest-Earning Assets | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Average Portfolio Loans and Leases | ||||||||||||||||||||||||||||||||||||||||||||
Commercial loans and leases: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial loans | $52,357 | $53,183 | $58,137 | (2)% | (10)% | |||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | 11,352 | 11,339 | 11,373 | — | — | |||||||||||||||||||||||||||||||||||||||
Commercial construction loans | 5,917 | 5,732 | 5,535 | 3% | 7% | |||||||||||||||||||||||||||||||||||||||
Commercial leases | 2,575 | 2,542 | 2,700 | 1% | (5)% | |||||||||||||||||||||||||||||||||||||||
Total commercial loans and leases | $72,201 | $72,796 | $77,745 | (1)% | (7)% | |||||||||||||||||||||||||||||||||||||||
Consumer loans: | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | $17,004 | $16,977 | $17,517 | — | (3)% | |||||||||||||||||||||||||||||||||||||||
Home equity | 3,929 | 3,933 | 3,937 | — | — | |||||||||||||||||||||||||||||||||||||||
Indirect secured consumer loans | 15,373 | 15,172 | 16,281 | 1% | (6)% | |||||||||||||||||||||||||||||||||||||||
Credit card | 1,728 | 1,773 | 1,783 | (3)% | (3)% | |||||||||||||||||||||||||||||||||||||||
Solar energy installation loans | 3,916 | 3,794 | 2,787 | 3% | 41% | |||||||||||||||||||||||||||||||||||||||
Other consumer loans | 2,740 | 2,889 | 3,277 | (5)% | (16)% | |||||||||||||||||||||||||||||||||||||||
Total consumer loans | $44,690 | $44,538 | $45,582 | — | (2)% | |||||||||||||||||||||||||||||||||||||||
Total average portfolio loans and leases | $116,891 | $117,334 | $123,327 | — | (5)% | |||||||||||||||||||||||||||||||||||||||
Average Loans and Leases Held for Sale | ||||||||||||||||||||||||||||||||||||||||||||
Commercial loans and leases held for sale | $33 | $74 | $19 | (55)% | 74% | |||||||||||||||||||||||||||||||||||||||
Consumer loans held for sale | 359 | 291 | 641 | 23% | (44)% | |||||||||||||||||||||||||||||||||||||||
Total average loans and leases held for sale | $392 | $365 | $660 | 7% | (41)% | |||||||||||||||||||||||||||||||||||||||
Total average loans and leases | $117,283 | $117,699 | $123,987 | — | (5)% | |||||||||||||||||||||||||||||||||||||||
Securities (taxable and tax-exempt) | $56,607 | $56,456 | $57,267 | — | (1)% | |||||||||||||||||||||||||||||||||||||||
Other short-term investments | 20,609 | 21,194 | 7,806 | (3)% | 164% | |||||||||||||||||||||||||||||||||||||||
Total average interest-earning assets | $194,499 | $195,349 | $189,060 | — | 3% | |||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, total average portfolio loans and leases were stable. Average commercial portfolio loans and leases decreased 1%, primarily reflecting a decrease in C&I loan balances due to lower demand from corporate borrowers. Average consumer portfolio loans were stable, primarily reflecting an increase in indirect consumer loan balances, offset by a decrease in other consumer loan balances.
Compared to the year-ago quarter, total average portfolio loans and leases decreased 5%, reflecting decreases in both the commercial and consumer portfolios. Average commercial portfolio loans and leases decreased 7%, primarily reflecting a decrease in C&I loan balances. Average consumer portfolio loans decreased 2%, primarily reflecting decreases in indirect secured consumer loan balances, residential mortgage loan balances, and other consumer loan balances, partially offset by an increase in solar energy installation loan balances.
Average securities (taxable and tax-exempt; amortized cost) of $57 billion in the current quarter were stable compared to the prior quarter and decreased 1% compared to the year-ago quarter. Average other short-term investments (including interest-bearing cash) of $21 billion in the current quarter decreased 3% compared to the prior quarter and increased 164% compared to the year-ago quarter.
6
Period-end commercial portfolio loans and leases of $72 billion were stable compared to the prior quarter, primarily reflecting increases in commercial lease balances and commercial mortgage loan balances, offset by a decrease in C&I loan balances. Compared to the year-ago quarter, period-end commercial portfolio loans and leases decreased 6%, primarily reflecting a decrease in C&I loan balances. Period-end commercial revolving line utilization was 36%, compared to 36% in the prior quarter and 35% in the year-ago quarter.
Period-end consumer portfolio loans of $45 billion increased 1% compared to the prior quarter, reflecting increases in indirect secured consumer loan balances and home equity loan balances, partially offset by a decrease in other consumer loan balances. Compared to the year-ago quarter, period-end consumer portfolio loans decreased 2%, reflecting decreases in indirect secured consumer loan balances and other consumer loan balances, partially offset by an increase in solar energy installation loan balances.
Total period-end securities (taxable and tax-exempt; amortized cost) of $57 billion in the current quarter were stable compared to the prior quarter and the year-ago quarter. Period-end other short-term investments of approximately $21 billion decreased 8% compared to the prior quarter, and increased 93% compared to the year-ago quarter.
7
Average Deposits | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Average Deposits | ||||||||||||||||||||||||||||||||||||||||||||
Demand | $40,266 | $40,839 | $46,520 | (1)% | (13)% | |||||||||||||||||||||||||||||||||||||||
Interest checking | 57,999 | 58,677 | 50,472 | (1)% | 15% | |||||||||||||||||||||||||||||||||||||||
Savings | 17,747 | 18,107 | 21,675 | (2)% | (18)% | |||||||||||||||||||||||||||||||||||||||
Money market | 35,511 | 34,589 | 28,913 | 3% | 23% | |||||||||||||||||||||||||||||||||||||||
Foreign office(g) | 157 | 145 | 143 | 8% | 10% | |||||||||||||||||||||||||||||||||||||||
Total transaction deposits | $151,680 | $152,357 | $147,723 | — | 3% | |||||||||||||||||||||||||||||||||||||||
CDs $250,000 or less | 10,767 | 10,244 | 7,759 | 5% | 39% | |||||||||||||||||||||||||||||||||||||||
Total core deposits | $162,447 | $162,601 | $155,482 | — | 4% | |||||||||||||||||||||||||||||||||||||||
CDs over $250,000 | 4,747 | 5,521 | 5,375 | (14)% | (12)% | |||||||||||||||||||||||||||||||||||||||
Total average deposits | $167,194 | $168,122 | $160,857 | (1)% | 4% | |||||||||||||||||||||||||||||||||||||||
CDs over $250,000 includes $3.8BN, $4.7BN, and $4.9BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 6/30/24, 3/31/24, and 6/30/23, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, total average deposits decreased 1%, primarily reflecting the seasonal impact of tax payments, partially offset by an increase in money market balances. Average demand deposits represented 25% of total core deposits in the current quarter, consistent with the prior quarter. Compared to the prior quarter, average consumer segment deposits increased 2%, average commercial segment deposits decreased 2%, and average wealth & asset management segment deposits decreased 2%. Period-end total deposits decreased 2% compared to the prior quarter.
Compared to the year-ago quarter, total average deposits increased 4%, primarily reflecting increases in interest checking and money market balances, partially offset by decreases in demand account balances and savings balances. Period-end total deposits increased 2% compared to the year-ago quarter.
The period-end portfolio loan-to-core deposit ratio was 72% in the current quarter, compared to 71% in the prior quarter and 77% in the year-ago quarter. Estimated uninsured deposits were approximately $72 billion, or 43% of total deposits, as of quarter end.
Average Wholesale Funding | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Average Wholesale Funding | ||||||||||||||||||||||||||||||||||||||||||||
CDs over $250,000 | $4,747 | $5,521 | $5,375 | (14)% | (12)% | |||||||||||||||||||||||||||||||||||||||
Federal funds purchased | 230 | 201 | 376 | 14% | (39)% | |||||||||||||||||||||||||||||||||||||||
Securities sold under repurchase agreements | 373 | 366 | 361 | 2% | 3% | |||||||||||||||||||||||||||||||||||||||
FHLB advances | 3,165 | 3,111 | 6,589 | 2% | (52)% | |||||||||||||||||||||||||||||||||||||||
Derivative collateral and other secured borrowings | 54 | 57 | 79 | (5)% | (32)% | |||||||||||||||||||||||||||||||||||||||
Long-term debt | 15,611 | 15,515 | 12,848 | 1% | 22% | |||||||||||||||||||||||||||||||||||||||
Total average wholesale funding | $24,180 | $24,771 | $25,628 | (2)% | (6)% | |||||||||||||||||||||||||||||||||||||||
CDs over $250,000 includes $3.8BN, $4.7BN, and $4.9BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 6/30/24, 3/31/24, and 6/30/23, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, average wholesale funding decreased 2%, primarily reflecting a decrease in CDs over $250,000. Compared to the year-ago quarter, average wholesale funding decreased 6%, primarily reflecting a decrease in FHLB advances, partially offset by an increase in long-term debt.
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Credit Quality Summary | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | As of and For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||||||||||||||
Total nonaccrual portfolio loans and leases (NPLs) | $606 | $708 | $649 | $570 | $629 | |||||||||||||||||||||||||||||||||||||||
Repossessed property | 9 | 8 | 10 | 11 | 8 | |||||||||||||||||||||||||||||||||||||||
OREO | 28 | 27 | 29 | 31 | 24 | |||||||||||||||||||||||||||||||||||||||
Total nonperforming portfolio loans and leases and OREO (NPAs) | $643 | $743 | $688 | $612 | $661 | |||||||||||||||||||||||||||||||||||||||
NPL ratio(h) | 0.52 | % | 0.61 | % | 0.55 | % | 0.47 | % | 0.52 | % | ||||||||||||||||||||||||||||||||||
NPA ratio(c) | 0.55 | % | 0.64 | % | 0.59 | % | 0.51 | % | 0.54 | % | ||||||||||||||||||||||||||||||||||
Portfolio loans and leases 30-89 days past due (accrual) | $302 | $342 | $359 | $316 | $339 | |||||||||||||||||||||||||||||||||||||||
Portfolio loans and leases 90 days past due (accrual) | 33 | 35 | 36 | 29 | 51 | |||||||||||||||||||||||||||||||||||||||
30-89 days past due as a % of portfolio loans and leases | 0.26 | % | 0.29 | % | 0.31 | % | 0.26 | % | 0.28 | % | ||||||||||||||||||||||||||||||||||
90 days past due as a % of portfolio loans and leases | 0.03 | % | 0.03 | % | 0.03 | % | 0.02 | % | 0.04 | % | ||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses (ALLL), beginning | $2,318 | $2,322 | $2,340 | $2,327 | $2,215 | |||||||||||||||||||||||||||||||||||||||
Total net losses charged-off | (144) | (110) | (96) | (124) | (90) | |||||||||||||||||||||||||||||||||||||||
Provision for loan and lease losses | 114 | 106 | 78 | 137 | 202 | |||||||||||||||||||||||||||||||||||||||
ALLL, ending | $2,288 | $2,318 | $2,322 | $2,340 | $2,327 | |||||||||||||||||||||||||||||||||||||||
Reserve for unfunded commitments, beginning | $154 | $166 | $189 | $207 | $232 | |||||||||||||||||||||||||||||||||||||||
Benefit from the reserve for unfunded commitments | (17) | (12) | (23) | (18) | (25) | |||||||||||||||||||||||||||||||||||||||
Reserve for unfunded commitments, ending | $137 | $154 | $166 | $189 | $207 | |||||||||||||||||||||||||||||||||||||||
Total allowance for credit losses (ACL) | $2,425 | $2,472 | $2,488 | $2,529 | $2,534 | |||||||||||||||||||||||||||||||||||||||
ACL ratios: | ||||||||||||||||||||||||||||||||||||||||||||
As a % of portfolio loans and leases | 2.08 | % | 2.12 | % | 2.12 | % | 2.11 | % | 2.08 | % | ||||||||||||||||||||||||||||||||||
As a % of nonperforming portfolio loans and leases | 400 | % | 349 | % | 383 | % | 443 | % | 403 | % | ||||||||||||||||||||||||||||||||||
As a % of nonperforming portfolio assets | 377 | % | 333 | % | 362 | % | 413 | % | 383 | % | ||||||||||||||||||||||||||||||||||
ALLL as a % of portfolio loans and leases | 1.96 | % | 1.99 | % | 1.98 | % | 1.95 | % | 1.91 | % | ||||||||||||||||||||||||||||||||||
Total losses charged-off | $(182) | $(146) | $(133) | $(158) | $(121) | |||||||||||||||||||||||||||||||||||||||
Total recoveries of losses previously charged-off | 38 | 36 | 37 | 34 | 31 | |||||||||||||||||||||||||||||||||||||||
Total net losses charged-off | $(144) | $(110) | $(96) | $(124) | $(90) | |||||||||||||||||||||||||||||||||||||||
Net charge-off ratio (NCO ratio)(b) | 0.49 | % | 0.38 | % | 0.32 | % | 0.41 | % | 0.29 | % | ||||||||||||||||||||||||||||||||||
Commercial NCO ratio | 0.45 | % | 0.19 | % | 0.13 | % | 0.34 | % | 0.16 | % | ||||||||||||||||||||||||||||||||||
Consumer NCO ratio | 0.57 | % | 0.67 | % | 0.64 | % | 0.53 | % | 0.50 | % | ||||||||||||||||||||||||||||||||||
Nonperforming portfolio loans and leases were $606 million in the current quarter, with the resulting NPL ratio of 0.52%. Compared to the prior quarter, NPLs decreased $102 million with the NPL ratio decreasing 9 bps. Compared to the year-ago quarter, NPLs decreased $23 million with the NPL ratio remaining flat.
Nonperforming portfolio assets were $643 million in the current quarter, with the resulting NPA ratio of 0.55%. Compared to the prior quarter, NPAs decreased $100 million with the NPA ratio decreasing 9 bps. Compared to the year-ago quarter, NPAs decreased $18 million with the NPA ratio increasing 1 bp.
The provision for credit losses totaled $97 million in the current quarter. The allowance for credit loss ratio represented 2.08% of total portfolio loans and leases at quarter end, compared with 2.12% for the prior quarter end and 2.08% for the
9
year-ago quarter end. In the current quarter, the allowance for credit losses represented 400% of nonperforming portfolio loans and leases and 377% of nonperforming portfolio assets.
Net charge-offs were $144 million in the current quarter, resulting in an NCO ratio of 0.49%. Compared to the prior quarter, net charge-offs increased $34 million and the NCO ratio increased 11 bps. Commercial net charge-offs were $80 million, resulting in a commercial NCO ratio of 0.45%, which increased 26 bps compared to the prior quarter. Consumer net charge-offs were $64 million, resulting in a consumer NCO ratio of 0.57%, which decreased 10 bps compared to the prior quarter.
Compared to the year-ago quarter, net charge-offs increased $54 million and the NCO ratio increased 20 bps, reflecting an increase from near-historically low net charge-offs in the year-ago quarter. The commercial NCO ratio increased 29 bps compared to the prior year, and the consumer NCO ratio increased 7 bps compared to the prior year.
Capital Position | ||||||||||||||||||||||||||||||||||||||||||||||||||
As of and For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Capital Position | ||||||||||||||||||||||||||||||||||||||||||||||||||
Average total Bancorp shareholders' equity as a % of average assets | 8.80% | 8.78% | 8.04% | 8.30% | 8.90 | % | ||||||||||||||||||||||||||||||||||||||||||||
Tangible equity(a) | 8.91% | 8.75% | 8.65% | 8.46% | 8.58 | % | ||||||||||||||||||||||||||||||||||||||||||||
Tangible common equity (excluding AOCI)(a) | 7.92% | 7.77% | 7.67% | 7.49% | 7.57 | % | ||||||||||||||||||||||||||||||||||||||||||||
Tangible common equity (including AOCI)(a) | 5.80% | 5.67% | 5.73% | 4.51% | 5.26 | % | ||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Ratios(d)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||
CET1 capital | 10.60 | % | 10.47% | 10.29% | 9.80% | 9.49 | % | |||||||||||||||||||||||||||||||||||||||||||
Tier 1 risk-based capital | 11.90 | % | 11.77% | 11.59% | 11.06% | 10.73 | % | |||||||||||||||||||||||||||||||||||||||||||
Total risk-based capital | 13.93 | % | 13.81% | 13.72% | 13.13% | 12.83 | % | |||||||||||||||||||||||||||||||||||||||||||
Leverage | 9.07 | % | 8.94% | 8.73% | 8.85% | 8.81 | % | |||||||||||||||||||||||||||||||||||||||||||
The CET1 capital ratio was 10.60%, the Tangible common equity to tangible assets ratio was 7.92% excluding AOCI, and 5.80% including AOCI. The Tier 1 risk-based capital ratio was 11.90%, the Total risk-based capital ratio was 13.93%, and the Leverage ratio was 9.07%.
During the second quarter of 2024, Fifth Third repurchased $125 million of its outstanding stock, which reduced common shares by approximately 3.5 million at quarter end.
On June 28, 2024, Fifth Third released its preliminary stress capital buffer requirement resulting from the Federal Reserve Board's annual stress test, which will be effective October 1, 2024. Fifth Third's preliminary stress capital buffer requirement of 3.2% is based off of the supervisory severely adverse scenario published in February 2024. Fifth Third's CET1 capital ratio on June 30, 2024 of 10.60% significantly exceeds the regulatory minimum of 4.5% plus the stress capital buffer, reflecting strong capital levels.
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Tax Rate
The effective tax rate for the quarter was 21.3% compared with 21.1% in the prior quarter and 22.5% in the year-ago quarter.
Conference Call
Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. This conference call will be webcast live and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on “About Us” then “Investor Relations”). Those unable to listen to the live webcast may access a webcast replay through the Fifth Third Investor Relations website at the same web address, which will be available for 30 days.
Corporate Profile
Fifth Third is a bank that’s as long on innovation as it is on history. Since 1858, we’ve been helping individuals, families, businesses and communities grow through smart financial services that improve lives. Our list of firsts is extensive, and it’s one that continues to expand as we explore the intersection of tech-driven innovation, dedicated people, and focused community impact. Fifth Third is one of the few U.S.-based banks to have been named among Ethisphere's World’s Most Ethical Companies® for several years. With a commitment to taking care of our customers, employees, communities and shareholders, our goal is not only to be the nation’s highest performing regional bank, but to be the bank people most value and trust.
Fifth Third Bank, National Association is a federally chartered institution. Fifth Third Bancorp is the indirect parent company of Fifth Third Bank and its common stock is traded on the NASDAQ® Global Select Market under the symbol “FITB.” Investor information and press releases can be viewed at www.53.com.
Earnings Release End Notes
(a)Non-GAAP measure; see discussion of non-GAAP reconciliation beginning on page 27.
(b)Net losses charged-off as a percent of average portfolio loans and leases presented on an annualized basis.
(c)Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO.
(d)Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
(e)Current period regulatory capital ratios are estimated.
(f)Assumes a 23% tax rate.
(g)Includes commercial customer Eurodollar sweep balances for which the Bank pays rates comparable to other commercial deposit accounts.
(h)Nonperforming portfolio loans and leases as a percent of portfolio loans and leases.
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FORWARD-LOOKING STATEMENTS
This release contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K as updated by our filings with the U.S. Securities and Exchange Commission (“SEC”).
There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) deteriorating credit quality; (2) loan concentration by location or industry of borrowers or collateral; (3) problems encountered by other financial institutions; (4) inadequate sources of funding or liquidity; (5) unfavorable actions of rating agencies; (6) inability to maintain or grow deposits; (7) limitations on the ability to receive dividends from subsidiaries; (8) cyber-security risks; (9) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (10) failures by third-party service providers; (11) inability to manage strategic initiatives and/or organizational changes; (12) inability to implement technology system enhancements; (13) failure of internal controls and other risk management programs; (14) losses related to fraud, theft, misappropriation or violence; (15) inability to attract and retain skilled personnel; (16) adverse impacts of government regulation; (17) governmental or regulatory changes or other actions; (18) failures to meet applicable capital requirements; (19) regulatory objections to Fifth Third’s capital plan; (20) regulation of Fifth Third’s derivatives activities; (21) deposit insurance premiums; (22) assessments for the orderly liquidation fund; (23) weakness in the national or local economies; (24) global political and economic uncertainty or negative actions; (25) changes in interest rates and the effects of inflation; (26) changes and trends in capital markets; (27) fluctuation of Fifth Third’s stock price; (28) volatility in mortgage banking revenue; (29) litigation, investigations, and enforcement proceedings by governmental authorities; (30) breaches of contractual covenants, representations and warranties; (31) competition and changes in the financial services industry; (32) potential impacts of the adoption of real-time payment networks; (33) changing retail distribution strategies, customer preferences and behavior; (34) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (35) potential dilution from future acquisitions; (36) loss of income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (37) results of investments or acquired entities; (38) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (39) inaccuracies or other failures from the use of models; (40) effects of critical accounting policies and judgments or the use of inaccurate estimates; (41) weather-related events, other natural disasters, or health emergencies (including pandemics); (42) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity; (43) changes in law or requirements imposed by Fifth Third’s regulators impacting our capital actions, including dividend payments and stock repurchases; and (44) Fifth Third's ability to meet its environmental and/or social targets, goals and commitments.
You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis to every other instance of such information appearing herein.
# # #
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![a53_logoxhorizontalxfullco.jpg](https://capedge.com/proxy/8-K/0000035527-24-000190/a53_logoxhorizontalxfullco.jpg)
Quarterly Financial Review for June 30, 2024
Table of Contents
Financial Highlights | 14-15 | ||||||||||
Consolidated Statements of Income | 16-17 | ||||||||||
Consolidated Balance Sheets | 18-19 | ||||||||||
Consolidated Statements of Changes in Equity | 20 | ||||||||||
Average Balance Sheets and Yield/Rate Analysis | 21-22 | ||||||||||
Summary of Loans and Leases | 23 | ||||||||||
Regulatory Capital | 24 | ||||||||||
Summary of Credit Loss Experience | 25 | ||||||||||
Asset Quality | 26 | ||||||||||
Non-GAAP Reconciliation | 27-29 | ||||||||||
Segment Presentation | 30 | ||||||||||
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Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||||||||
Financial Highlights | As of and For the Three Months Ended | % / bps | % / bps | ||||||||||||||||||||||||||
$ in millions, except per share data | Change | Year to Date | Change | ||||||||||||||||||||||||||
(unaudited) | June | March | June | June | June | ||||||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | 2024 | 2023 | Yr/Yr | ||||||||||||||||||||||
Income Statement Data | |||||||||||||||||||||||||||||
Net interest income | $1,387 | $1,384 | $1,457 | — | (5%) | $2,771 | $2,974 | (7%) | |||||||||||||||||||||
Net interest income (FTE)(a) | 1,393 | 1,390 | 1,463 | — | (5%) | 2,783 | 2,985 | (7%) | |||||||||||||||||||||
Noninterest income | 695 | 710 | 726 | (2%) | (4%) | 1,406 | 1,422 | (1%) | |||||||||||||||||||||
Total revenue (FTE)(a) | 2,088 | 2,100 | 2,189 | (1%) | (5%) | 4,189 | 4,407 | (5%) | |||||||||||||||||||||
Provision for credit losses | 97 | 94 | 177 | 3% | (45%) | 191 | 341 | (44%) | |||||||||||||||||||||
Noninterest expense | 1,221 | 1,342 | 1,231 | (9%) | (1%) | 2,562 | 2,562 | — | |||||||||||||||||||||
Net income | 601 | 520 | 601 | 16% | — | 1,122 | 1,159 | (3%) | |||||||||||||||||||||
Net income available to common shareholders | 561 | 480 | 562 | 17% | — | 1,041 | 1,097 | (5%) | |||||||||||||||||||||
Earnings Per Share Data | |||||||||||||||||||||||||||||
Net income allocated to common shareholders | $561 | $480 | $562 | 17% | — | $1,041 | $1,097 | (5%) | |||||||||||||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||||||||||||||||
Basic | 686,781 | 685,750 | 684,029 | — | — | 686,265 | 684,023 | — | |||||||||||||||||||||
Diluted | 691,083 | 690,634 | 686,386 | — | 1% | 690,858 | 687,967 | — | |||||||||||||||||||||
Earnings per share, basic | $0.82 | $0.70 | $0.82 | 17% | — | $1.52 | $1.60 | (5%) | |||||||||||||||||||||
Earnings per share, diluted | 0.81 | 0.70 | 0.82 | 16% | (1%) | 1.51 | 1.59 | (5%) | |||||||||||||||||||||
Common Share Data | |||||||||||||||||||||||||||||
Cash dividends per common share | $0.35 | $0.35 | $0.33 | — | 6% | $0.70 | $0.66 | 6% | |||||||||||||||||||||
Book value per share | 25.13 | 24.72 | 23.05 | 2% | 9% | 25.13 | 23.05 | 9% | |||||||||||||||||||||
Market value per share | 36.49 | 37.21 | 26.21 | (2%) | 39% | 36.49 | 26.21 | 39% | |||||||||||||||||||||
Common shares outstanding (in thousands) | 680,789 | 683,812 | 680,850 | — | — | 680,789 | 680,850 | — | |||||||||||||||||||||
Market capitalization | $24,842 | $25,445 | $17,845 | (2%) | 39% | $24,842 | $17,845 | 39% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||
Return on average assets | 1.14 | % | 0.98 | % | 1.17 | % | 16 | (3) | 1.06 | % | 1.14 | % | (8) | ||||||||||||||||
Return on average common equity | 13.6 | % | 11.6 | % | 13.9 | % | 198 | (28) | 12.6 | % | 13.8 | % | (120) | ||||||||||||||||
Return on average tangible common equity(a) | 19.8 | % | 17.0 | % | 20.5 | % | 280 | (73) | 18.3 | % | 20.5 | % | (220) | ||||||||||||||||
Noninterest income as a percent of total revenue(a) | 33 | % | 34 | % | 33 | % | (100) | — | 34 | % | 32 | % | 129 | ||||||||||||||||
Dividend payout | 42.7 | % | 50.0 | % | 40.2 | % | (730) | 250 | 46.1 | % | 41.3 | % | 480 | ||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 8.80 | % | 8.78 | % | 8.90 | % | 2 | (10) | 8.79 | % | 8.83 | % | (4) | ||||||||||||||||
Tangible common equity(a) | 7.92 | % | 7.77 | % | 7.57 | % | 15 | 35 | 7.92 | % | 7.57 | % | 35 | ||||||||||||||||
Net interest margin (FTE)(a) | 2.88 | % | 2.86 | % | 3.10 | % | 2 | (22) | 2.87 | % | 3.20 | % | (33) | ||||||||||||||||
Efficiency (FTE)(a) | 58.5 | % | 63.9 | % | 56.2 | % | (540) | 230 | 61.2 | % | 58.1 | % | 310 | ||||||||||||||||
Effective tax rate | 21.3 | % | 21.1 | % | 22.5 | % | 20 | (120) | 21.2 | % | 22.4 | % | (120) | ||||||||||||||||
Credit Quality | |||||||||||||||||||||||||||||
Net losses charged-off | $144 | $110 | $90 | 31 | % | 60 | % | $254 | $168 | 51 | % | ||||||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.49 | % | 0.38 | % | 0.29 | % | 11 | 20 | 0.44 | % | 0.27 | % | 17 | ||||||||||||||||
ALLL as a percent of portfolio loans and leases | 1.96 | % | 1.99 | % | 1.91 | % | (3) | 5 | 1.96 | % | 1.91 | % | 5 | ||||||||||||||||
ACL as a percent of portfolio loans and leases(g) | 2.08 | % | 2.12 | % | 2.08 | % | (4) | — | 2.08 | % | 2.08 | % | — | ||||||||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.55 | % | 0.64 | % | 0.54 | % | (9) | 1 | 0.55 | % | 0.54 | % | 1 | ||||||||||||||||
Average Balances | |||||||||||||||||||||||||||||
Loans and leases, including held for sale | $117,283 | $117,699 | $123,987 | — | (5%) | $117,491 | $123,802 | (5%) | |||||||||||||||||||||
Securities and other short-term investments | 77,216 | 77,650 | 65,073 | (1%) | 19% | 77,433 | 64,436 | 20% | |||||||||||||||||||||
Assets | 212,475 | 213,203 | 206,079 | — | 3% | 212,839 | 205,584 | 4% | |||||||||||||||||||||
Transaction deposits(b) | 151,680 | 152,357 | 147,723 | — | 3% | 152,018 | 149,414 | 2% | |||||||||||||||||||||
Core deposits(c) | 162,447 | 162,601 | 155,482 | — | 4% | 162,523 | 155,887 | 4% | |||||||||||||||||||||
Wholesale funding(d) | 24,180 | 24,771 | 25,628 | (2%) | (6%) | 24,476 | 24,680 | (1%) | |||||||||||||||||||||
Bancorp shareholders' equity | 18,707 | 18,727 | 18,344 | — | 2% | 18,717 | 18,162 | 3% | |||||||||||||||||||||
Regulatory Capital Ratios(e)(f) | |||||||||||||||||||||||||||||
CET1 capital | 10.60 | % | 10.47 | % | 9.49 | % | 13 | 111 | 10.60 | % | 9.49 | % | 111 | ||||||||||||||||
Tier 1 risk-based capital | 11.90 | % | 11.77 | % | 10.73 | % | 13 | 117 | 11.90 | % | 10.73 | % | 117 | ||||||||||||||||
Total risk-based capital | 13.93 | % | 13.81 | % | 12.83 | % | 12 | 110 | 13.93 | % | 12.83 | % | 110 | ||||||||||||||||
Leverage | 9.07 | % | 8.94 | % | 8.81 | % | 13 | 26 | 9.07 | % | 8.81 | % | 26 | ||||||||||||||||
Additional Metrics | |||||||||||||||||||||||||||||
Banking centers | 1,070 | 1,070 | 1,072 | — | — | 1,070 | 1,072 | — | |||||||||||||||||||||
ATMs | 2,067 | 2,082 | 2,114 | (1%) | (2%) | 2,067 | 2,114 | (2%) | |||||||||||||||||||||
Full-time equivalent employees | 18,607 | 18,657 | 19,225 | — | (3%) | 18,607 | 19,225 | (3%) | |||||||||||||||||||||
Assets under care ($ in billions)(h) | $631 | $634 | $554 | — | 14% | $631 | $554 | 14% | |||||||||||||||||||||
Assets under management ($ in billions)(h) | 65 | 62 | 59 | 5% | 10% | 65 | 59 | 10% |
(a)Non-GAAP measure; see discussion and reconciliation of non-GAAP measures beginning on page 27.
(b)Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers.
(c)Includes transaction deposits plus CDs $250,000 or less.
(d)Includes CDs over $250,000, other deposits, federal funds purchased, other short-term borrowings and long-term debt.
(e)Current period regulatory capital ratios are estimates.
(f)Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
(g)The allowance for credit losses is the sum of the ALLL and the reserve for unfunded commitments.
(h)Assets under management and assets under care include trust and brokerage assets.
14
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||
$ in millions, except per share data | As of and For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||
Income Statement Data | ||||||||||||||||||||
Net interest income | $1,387 | $1,384 | $1,416 | $1,438 | $1,457 | |||||||||||||||
Net interest income (FTE)(a) | 1,393 | 1,390 | 1,423 | 1,445 | 1,463 | |||||||||||||||
Noninterest income | 695 | 710 | 744 | 715 | 726 | |||||||||||||||
Total revenue (FTE)(a) | 2,088 | 2,100 | 2,167 | 2,160 | 2,189 | |||||||||||||||
Provision for credit losses | 97 | 94 | 55 | 119 | 177 | |||||||||||||||
Noninterest expense | 1,221 | 1,342 | 1,455 | 1,188 | 1,231 | |||||||||||||||
Net income | 601 | 520 | 530 | 660 | 601 | |||||||||||||||
Net income available to common shareholders | 561 | 480 | 492 | 623 | 562 | |||||||||||||||
Earnings Per Share Data | ||||||||||||||||||||
Net income allocated to common shareholders | $561 | $480 | $492 | $623 | $562 | |||||||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||
Basic | 686,781 | 685,750 | 684,413 | 684,224 | 684,029 | |||||||||||||||
Diluted | 691,083 | 690,634 | 687,729 | 687,059 | 686,386 | |||||||||||||||
Earnings per share, basic | $0.82 | $0.70 | $0.72 | $0.91 | $0.82 | |||||||||||||||
Earnings per share, diluted | 0.81 | 0.70 | 0.72 | 0.91 | 0.82 | |||||||||||||||
Common Share Data | ||||||||||||||||||||
Cash dividends per common share | $0.35 | $0.35 | $0.35 | $0.35 | $0.33 | |||||||||||||||
Book value per share | 25.13 | 24.72 | 25.04 | 21.19 | 23.05 | |||||||||||||||
Market value per share | 36.49 | 37.21 | 34.49 | 25.33 | 26.21 | |||||||||||||||
Common shares outstanding (in thousands) | 680,789 | 683,812 | 681,125 | 680,990 | 680,850 | |||||||||||||||
Market capitalization | $24,842 | $25,445 | $23,492 | $17,249 | $17,845 | |||||||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.14 | % | 0.98 | % | 0.98 | % | 1.26 | % | 1.17 | % | ||||||||||
Return on average common equity | 13.6 | % | 11.6 | % | 12.9 | % | 16.3 | % | 13.9 | % | ||||||||||
Return on average tangible common equity(a) | 19.8 | % | 17.0 | % | 19.8 | % | 24.7 | % | 20.5 | % | ||||||||||
Noninterest income as a percent of total revenue(a) | 33 | % | 34 | % | 34 | % | 33 | % | 33 | % | ||||||||||
Dividend payout | 42.7 | % | 50.0 | % | 48.6 | % | 38.5 | % | 40.2 | % | ||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 8.80 | % | 8.78 | % | 8.04 | % | 8.30 | % | 8.90 | % | ||||||||||
Tangible common equity(a) | 7.92 | % | 7.77 | % | 7.67 | % | 7.49 | % | 7.57 | % | ||||||||||
Net interest margin (FTE)(a) | 2.88 | % | 2.86 | % | 2.85 | % | 2.98 | % | 3.10 | % | ||||||||||
Efficiency (FTE)(a) | 58.5 | % | 63.9 | % | 67.2 | % | 55.0 | % | 56.2 | % | ||||||||||
Effective tax rate | 21.3 | % | 21.1 | % | 18.4 | % | 22.0 | % | 22.5 | % | ||||||||||
Credit Quality | ||||||||||||||||||||
Net losses charged-off | $144 | $110 | $96 | $124 | $90 | |||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.49 | % | 0.38 | % | 0.32 | % | 0.41 | % | 0.29 | % | ||||||||||
ALLL as a percent of portfolio loans and leases | 1.96 | % | 1.99 | % | 1.98 | % | 1.95 | % | 1.91 | % | ||||||||||
ACL as a percent of portfolio loans and leases(g) | 2.08 | % | 2.12 | % | 2.12 | % | 2.11 | % | 2.08 | % | ||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.55 | % | 0.64 | % | 0.59 | % | 0.51 | % | 0.54 | % | ||||||||||
Average Balances | ||||||||||||||||||||
Loans and leases, including held for sale | $117,283 | $117,699 | $119,309 | $122,266 | $123,987 | |||||||||||||||
Securities and other short-term investments | 77,216 | 77,650 | 78,857 | 69,950 | 65,073 | |||||||||||||||
Assets | 212,475 | 213,203 | 214,057 | 208,385 | 206,079 | |||||||||||||||
Transaction deposits(b) | 151,680 | 152,357 | 153,232 | 150,088 | 147,723 | |||||||||||||||
Core deposits(c) | 162,447 | 162,601 | 163,788 | 159,718 | 155,482 | |||||||||||||||
Wholesale funding(d) | 24,180 | 24,771 | 26,115 | 24,289 | 25,628 | |||||||||||||||
Bancorp shareholders’ equity | 18,707 | 18,727 | 17,201 | 17,305 | 18,344 | |||||||||||||||
Regulatory Capital Ratios(e)(f) | ||||||||||||||||||||
CET1 capital | 10.60 | % | 10.47 | % | 10.29 | % | 9.80 | % | 9.49 | % | ||||||||||
Tier 1 risk-based capital | 11.90 | % | 11.77 | % | 11.59 | % | 11.06 | % | 10.73 | % | ||||||||||
Total risk-based capital | 13.93 | % | 13.81 | % | 13.72 | % | 13.13 | % | 12.83 | % | ||||||||||
Leverage | 9.07 | % | 8.94 | % | 8.73 | % | 8.85 | % | 8.81 | % | ||||||||||
Additional Metrics | ||||||||||||||||||||
Banking centers | 1,070 | 1,070 | 1,088 | 1,073 | 1,072 | |||||||||||||||
ATMs | 2,067 | 2,082 | 2,104 | 2,101 | 2,114 | |||||||||||||||
Full-time equivalent employees | 18,607 | 18,657 | 18,724 | 18,804 | 19,225 | |||||||||||||||
Assets under care ($ in billions)(h) | $631 | $634 | $574 | $547 | $554 | |||||||||||||||
Assets under management ($ in billions)(h) | 65 | 62 | 59 | 57 | 59 |
(a)Non-GAAP measure; see discussion and reconciliation of non-GAAP measures beginning on page 27.
(b)Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers.
(c)Includes transaction deposits plus CDs $250,000 or less.
(d)Includes CDs over $250,000, other deposits, federal funds purchased, other short-term borrowings and long-term debt.
(e)Current period regulatory capital ratios are estimates.
(f)Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
(g)The allowance for credit losses is the sum of the ALLL and the reserve for unfunded commitments.
(h)Assets under management and assets under care include trust and brokerage assets.
15
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||||
$ in millions | For the Three Months Ended | % Change | Year to Date | % Change | ||||||||||||||||||||||
(unaudited) | June | March | June | June | June | |||||||||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | 2024 | 2023 | Yr/Yr | |||||||||||||||||||
Interest Income | ||||||||||||||||||||||||||
Interest and fees on loans and leases | $1,871 | $1,859 | $1,831 | 1% | 2% | $3,731 | $3,545 | 5% | ||||||||||||||||||
Interest on securities | 458 | 455 | 437 | 1% | 5% | 913 | 876 | 4% | ||||||||||||||||||
Interest on other short-term investments | 291 | 294 | 102 | (1%) | 185% | 584 | 162 | 260% | ||||||||||||||||||
Total interest income | 2,620 | 2,608 | 2,370 | — | 11% | 5,228 | 4,583 | 14% | ||||||||||||||||||
Interest Expense | ||||||||||||||||||||||||||
Interest on deposits | 958 | 954 | 655 | — | 46% | 1,912 | 1,133 | 69% | ||||||||||||||||||
Interest on federal funds purchased | 3 | 3 | 5 | — | (40%) | 6 | 10 | (40%) | ||||||||||||||||||
Interest on other short-term borrowings | 48 | 47 | 90 | 2% | (47%) | 95 | 147 | (35%) | ||||||||||||||||||
Interest on long-term debt | 224 | 220 | 163 | 2% | 37% | 444 | 319 | 39% | ||||||||||||||||||
Total interest expense | 1,233 | 1,224 | 913 | 1% | 35% | 2,457 | 1,609 | 53% | ||||||||||||||||||
Net Interest Income | 1,387 | 1,384 | 1,457 | — | (5%) | 2,771 | 2,974 | (7%) | ||||||||||||||||||
Provision for credit losses | 97 | 94 | 177 | 3% | (45%) | 191 | 341 | (44%) | ||||||||||||||||||
Net Interest Income After Provision for Credit Losses | 1,290 | 1,290 | 1,280 | — | 1% | 2,580 | 2,633 | (2%) | ||||||||||||||||||
Noninterest Income | ||||||||||||||||||||||||||
Service charges on deposits | 156 | 151 | 144 | 3% | 8% | 306 | 281 | 9% | ||||||||||||||||||
Commercial banking revenue | 144 | 143 | 146 | 1% | (1%) | 288 | 307 | (6%) | ||||||||||||||||||
Mortgage banking net revenue | 50 | 54 | 59 | (7%) | (15%) | 104 | 127 | (18%) | ||||||||||||||||||
Wealth and asset management revenue | 159 | 161 | 143 | (1%) | 11% | 320 | 289 | 11% | ||||||||||||||||||
Card and processing revenue | 108 | 102 | 106 | 6% | 2% | 210 | 206 | 2% | ||||||||||||||||||
Leasing business revenue | 38 | 39 | 47 | (3%) | (19%) | 77 | 104 | (26%) | ||||||||||||||||||
Other noninterest income | 37 | 50 | 74 | (26%) | (50%) | 88 | 97 | (9%) | ||||||||||||||||||
Securities gains, net | 3 | 10 | 7 | (70%) | (57%) | 13 | 11 | 18% | ||||||||||||||||||
Total noninterest income | 695 | 710 | 726 | (2%) | (4%) | 1,406 | 1,422 | (1%) | ||||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||||
Compensation and benefits | 656 | 753 | 650 | (13%) | 1% | 1,409 | 1,407 | — | ||||||||||||||||||
Net occupancy expense | 83 | 87 | 83 | (5%) | — | 170 | 164 | 4% | ||||||||||||||||||
Technology and communications | 114 | 117 | 114 | (3%) | — | 231 | 232 | — | ||||||||||||||||||
Equipment expense | 38 | 37 | 36 | 3% | 6% | 76 | 73 | 4% | ||||||||||||||||||
Card and processing expense | 21 | 20 | 20 | 5% | 5% | 41 | 42 | (2%) | ||||||||||||||||||
Leasing business expense | 22 | 25 | 31 | (12%) | (29%) | 48 | 65 | (26%) | ||||||||||||||||||
Marketing expense | 34 | 32 | 31 | 6% | 10% | 66 | 60 | 10% | ||||||||||||||||||
Other noninterest expense | 253 | 271 | 266 | (7%) | (5%) | 521 | 519 | — | ||||||||||||||||||
Total noninterest expense | 1,221 | 1,342 | 1,231 | (9%) | (1%) | 2,562 | 2,562 | — | ||||||||||||||||||
Income Before Income Taxes | 764 | 658 | 775 | 16% | (1%) | 1,424 | 1,493 | (5%) | ||||||||||||||||||
Applicable income tax expense | 163 | 138 | 174 | 18% | (6%) | 302 | 334 | (10%) | ||||||||||||||||||
Net Income | 601 | 520 | 601 | 16% | — | 1,122 | 1,159 | (3%) | ||||||||||||||||||
Dividends on preferred stock | 40 | 40 | 39 | — | 3% | 81 | 62 | 31% | ||||||||||||||||||
Net Income Available to Common Shareholders | $561 | $480 | $562 | 17% | — | $1,041 | $1,097 | (5%) |
16
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||
Interest Income | |||||||||||||||||
Interest and fees on loans and leases | $1,871 | $1,859 | $1,889 | $1,899 | $1,831 | ||||||||||||
Interest on securities | 458 | 455 | 451 | 444 | 437 | ||||||||||||
Interest on other short-term investments | 291 | 294 | 308 | 186 | 102 | ||||||||||||
Total interest income | 2,620 | 2,608 | 2,648 | 2,529 | 2,370 | ||||||||||||
Interest Expense | |||||||||||||||||
Interest on deposits | 958 | 954 | 952 | 844 | 655 | ||||||||||||
Interest on federal funds purchased | 3 | 3 | 3 | 2 | 5 | ||||||||||||
Interest on other short-term borrowings | 48 | 47 | 49 | 52 | 90 | ||||||||||||
Interest on long-term debt | 224 | 220 | 228 | 193 | 163 | ||||||||||||
Total interest expense | 1,233 | 1,224 | 1,232 | 1,091 | 913 | ||||||||||||
Net Interest Income | 1,387 | 1,384 | 1,416 | 1,438 | 1,457 | ||||||||||||
Provision for credit losses | 97 | 94 | 55 | 119 | 177 | ||||||||||||
Net Interest Income After Provision for Credit Losses | 1,290 | 1,290 | 1,361 | 1,319 | 1,280 | ||||||||||||
Noninterest Income | |||||||||||||||||
Service charges on deposits | 156 | 151 | 146 | 149 | 144 | ||||||||||||
Commercial banking revenue | 144 | 143 | 163 | 154 | 146 | ||||||||||||
Mortgage banking net revenue | 50 | 54 | 66 | 57 | 59 | ||||||||||||
Wealth and asset management revenue | 159 | 161 | 147 | 145 | 143 | ||||||||||||
Card and processing revenue | 108 | 102 | 106 | 104 | 106 | ||||||||||||
Leasing business revenue | 38 | 39 | 46 | 58 | 47 | ||||||||||||
Other noninterest income | 37 | 50 | 54 | 55 | 74 | ||||||||||||
Securities gains (losses), net | 3 | 10 | 15 | (7) | 7 | ||||||||||||
Securities gains, net - non-qualifying hedges on mortgage servicing rights | — | — | 1 | — | — | ||||||||||||
Total noninterest income | 695 | 710 | 744 | 715 | 726 | ||||||||||||
Noninterest Expense | |||||||||||||||||
Compensation and benefits | 656 | 753 | 659 | 629 | 650 | ||||||||||||
Net occupancy expense | 83 | 87 | 83 | 84 | 83 | ||||||||||||
Technology and communications | 114 | 117 | 117 | 115 | 114 | ||||||||||||
Equipment expense | 38 | 37 | 37 | 37 | 36 | ||||||||||||
Card and processing expense | 21 | 20 | 21 | 21 | 20 | ||||||||||||
Leasing business expense | 22 | 25 | 27 | 29 | 31 | ||||||||||||
Marketing expense | 34 | 32 | 30 | 35 | 31 | ||||||||||||
Other noninterest expense | 253 | 271 | 481 | 238 | 266 | ||||||||||||
Total noninterest expense | 1,221 | 1,342 | 1,455 | 1,188 | 1,231 | ||||||||||||
Income Before Income Taxes | 764 | 658 | 650 | 846 | 775 | ||||||||||||
Applicable income tax expense | 163 | 138 | 120 | 186 | 174 | ||||||||||||
Net Income | 601 | 520 | 530 | 660 | 601 | ||||||||||||
Dividends on preferred stock | 40 | 40 | 38 | 37 | 39 | ||||||||||||
Net Income Available to Common Shareholders | $561 | $480 | $492 | $623 | $562 |
17
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||
$ in millions, except per share data | As of | % Change | |||||||||||||||
(unaudited) | June | March | June | ||||||||||||||
2024 | 2024 | 2023 | Seq | Yr/Yr | |||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $2,837 | $2,796 | $2,594 | 1% | 9% | ||||||||||||
Other short-term investments | 21,085 | 22,840 | 10,943 | (8%) | 93% | ||||||||||||
Available-for-sale debt and other securities(a) | 38,986 | 38,791 | 49,329 | 1% | (21%) | ||||||||||||
Held-to-maturity securities(b) | 11,443 | 11,520 | 2 | (1%) | NM | ||||||||||||
Trading debt securities | 1,132 | 1,151 | 1,139 | (2%) | (1%) | ||||||||||||
Equity securities | 476 | 380 | 331 | 25% | 44% | ||||||||||||
Loans and leases held for sale | 537 | 339 | 760 | 58% | (29%) | ||||||||||||
Portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | 51,840 | 52,209 | 56,897 | (1%) | (9%) | ||||||||||||
Commercial mortgage loans | 11,429 | 11,346 | 11,310 | 1% | 1% | ||||||||||||
Commercial construction loans | 5,806 | 5,789 | 5,475 | — | 6% | ||||||||||||
Commercial leases | 2,708 | 2,572 | 2,670 | 5% | 1% | ||||||||||||
Total commercial loans and leases | 71,783 | 71,916 | 76,352 | — | (6%) | ||||||||||||
Residential mortgage loans | 17,040 | 16,995 | 17,503 | — | (3%) | ||||||||||||
Home equity | 3,969 | 3,883 | 3,911 | 2% | 1% | ||||||||||||
Indirect secured consumer loans | 15,442 | 15,306 | 16,097 | 1% | (4%) | ||||||||||||
Credit card | 1,733 | 1,737 | 1,818 | — | (5%) | ||||||||||||
Solar energy installation loans | 3,951 | 3,871 | 2,961 | 2% | 33% | ||||||||||||
Other consumer loans | 2,661 | 2,777 | 3,249 | (4%) | (18%) | ||||||||||||
Total consumer loans | 44,796 | 44,569 | 45,539 | 1% | (2%) | ||||||||||||
Portfolio loans and leases | 116,579 | 116,485 | 121,891 | — | (4%) | ||||||||||||
Allowance for loan and lease losses | (2,288) | (2,318) | (2,327) | (1%) | (2%) | ||||||||||||
Portfolio loans and leases, net | 114,291 | 114,167 | 119,564 | — | (4%) | ||||||||||||
Bank premises and equipment | 2,389 | 2,376 | 2,275 | 1% | 5% | ||||||||||||
Operating lease equipment | 392 | 427 | 537 | (8%) | (27%) | ||||||||||||
Goodwill | 4,918 | 4,918 | 4,919 | — | — | ||||||||||||
Intangible assets | 107 | 115 | 146 | (7%) | (27%) | ||||||||||||
Servicing rights | 1,731 | 1,756 | 1,764 | (1%) | (2%) | ||||||||||||
Other assets | 12,938 | 12,930 | 12,973 | — | — | ||||||||||||
Total Assets | $213,262 | $214,506 | $207,276 | (1%) | 3% | ||||||||||||
Liabilities | |||||||||||||||||
Deposits: | |||||||||||||||||
Demand | $40,617 | $41,849 | $45,264 | (3%) | (10%) | ||||||||||||
Interest checking | 57,390 | 58,809 | 52,743 | (2%) | 9% | ||||||||||||
Savings | 17,419 | 18,229 | 21,342 | (4%) | (18%) | ||||||||||||
Money market | 36,259 | 35,025 | 30,012 | 4% | 21% | ||||||||||||
Foreign office | 119 | 129 | 182 | (8%) | (35%) | ||||||||||||
CDs $250,000 or less | 10,882 | 10,337 | 8,833 | 5% | 23% | ||||||||||||
CDs over $250,000 | 4,082 | 5,209 | 5,752 | (22%) | (29%) | ||||||||||||
Total deposits | 166,768 | 169,587 | 164,128 | (2%) | 2% | ||||||||||||
Federal funds purchased | 194 | 247 | 163 | (21%) | 19% | ||||||||||||
Other short-term borrowings | 3,370 | 2,866 | 5,817 | 18% | (42%) | ||||||||||||
Accrued taxes, interest and expenses | 2,040 | 1,965 | 1,765 | 4% | 16% | ||||||||||||
Other liabilities | 5,371 | 5,379 | 5,316 | — | 1% | ||||||||||||
Long-term debt | 16,293 | 15,444 | 12,278 | 5% | 33% | ||||||||||||
Total Liabilities | 194,036 | 195,488 | 189,467 | (1%) | 2% | ||||||||||||
Equity | |||||||||||||||||
Common stock(c) | 2,051 | 2,051 | 2,051 | — | — | ||||||||||||
Preferred stock | 2,116 | 2,116 | 2,116 | — | — | ||||||||||||
Capital surplus | 3,764 | 3,742 | 3,708 | 1% | 2% | ||||||||||||
Retained earnings | 23,542 | 23,224 | 22,366 | 1% | 5% | ||||||||||||
Accumulated other comprehensive loss | (4,901) | (4,888) | (5,166) | — | (5%) | ||||||||||||
Treasury stock | (7,346) | (7,227) | (7,266) | 2% | 1% | ||||||||||||
Total Equity | 19,226 | 19,018 | 17,809 | 1% | 8% | ||||||||||||
Total Liabilities and Equity | $213,262 | $214,506 | $207,276 | (1%) | 3% | ||||||||||||
(a) Amortized cost | $43,596 | $43,400 | $55,399 | — | (21%) | ||||||||||||
(b) Market values | 11,187 | 11,341 | 2 | (1 | %) | NM | |||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | |||||||||||||||||
Authorized | 2,000,000 | 2,000,000 | 2,000,000 | — | — | ||||||||||||
Outstanding, excluding treasury | 680,789 | 683,812 | 680,850 | — | — | ||||||||||||
Treasury | 243,103 | 240,080 | 243,042 | 1 | % | — | |||||||||||
18
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||
$ in millions, except per share data | As of | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $2,837 | $2,796 | $3,142 | $2,837 | $2,594 | ||||||||||||
Other short-term investments | 21,085 | 22,840 | 22,082 | 18,923 | 10,943 | ||||||||||||
Available-for-sale debt and other securities(a) | 38,986 | 38,791 | 50,419 | 47,893 | 49,329 | ||||||||||||
Held-to-maturity securities(b) | 11,443 | 11,520 | 2 | 2 | 2 | ||||||||||||
Trading debt securities | 1,132 | 1,151 | 899 | 1,222 | 1,139 | ||||||||||||
Equity securities | 476 | 380 | 613 | 250 | 331 | ||||||||||||
Loans and leases held for sale | 537 | 339 | 378 | 614 | 760 | ||||||||||||
Portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | 51,840 | 52,209 | 53,270 | 55,790 | 56,897 | ||||||||||||
Commercial mortgage loans | 11,429 | 11,346 | 11,276 | 11,122 | 11,310 | ||||||||||||
Commercial construction loans | 5,806 | 5,789 | 5,621 | 5,582 | 5,475 | ||||||||||||
Commercial leases | 2,708 | 2,572 | 2,579 | 2,624 | 2,670 | ||||||||||||
Total commercial loans and leases | 71,783 | 71,916 | 72,746 | 75,118 | 76,352 | ||||||||||||
Residential mortgage loans | 17,040 | 16,995 | 17,026 | 17,293 | 17,503 | ||||||||||||
Home equity | 3,969 | 3,883 | 3,916 | 3,898 | 3,911 | ||||||||||||
Indirect secured consumer loans | 15,442 | 15,306 | 14,965 | 15,434 | 16,097 | ||||||||||||
Credit card | 1,733 | 1,737 | 1,865 | 1,817 | 1,818 | ||||||||||||
Solar energy installation loans | 3,951 | 3,871 | 3,728 | 3,383 | 2,961 | ||||||||||||
Other consumer loans | 2,661 | 2,777 | 2,988 | 3,145 | 3,249 | ||||||||||||
Total consumer loans | 44,796 | 44,569 | 44,488 | 44,970 | 45,539 | ||||||||||||
Portfolio loans and leases | 116,579 | 116,485 | 117,234 | 120,088 | 121,891 | ||||||||||||
Allowance for loan and lease losses | (2,288) | (2,318) | (2,322) | (2,340) | (2,327) | ||||||||||||
Portfolio loans and leases, net | 114,291 | 114,167 | 114,912 | 117,748 | 119,564 | ||||||||||||
Bank premises and equipment | 2,389 | 2,376 | 2,349 | 2,303 | 2,275 | ||||||||||||
Operating lease equipment | 392 | 427 | 459 | 480 | 537 | ||||||||||||
Goodwill | 4,918 | 4,918 | 4,919 | 4,919 | 4,919 | ||||||||||||
Intangible assets | 107 | 115 | 125 | 136 | 146 | ||||||||||||
Servicing rights | 1,731 | 1,756 | 1,737 | 1,822 | 1,764 | ||||||||||||
Other assets | 12,938 | 12,930 | 12,538 | 13,818 | 12,973 | ||||||||||||
Total Assets | $213,262 | $214,506 | $214,574 | $212,967 | $207,276 | ||||||||||||
Liabilities | |||||||||||||||||
Deposits: | |||||||||||||||||
Demand | $40,617 | $41,849 | $43,146 | $43,844 | $45,264 | ||||||||||||
Interest checking | 57,390 | 58,809 | 57,257 | 53,421 | 52,743 | ||||||||||||
Savings | 17,419 | 18,229 | 18,215 | 20,195 | 21,342 | ||||||||||||
Money market | 36,259 | 35,025 | 34,374 | 33,492 | 30,012 | ||||||||||||
Foreign office | 119 | 129 | 162 | 168 | 182 | ||||||||||||
CDs $250,000 or less | 10,882 | 10,337 | 10,552 | 10,306 | 8,833 | ||||||||||||
CDs over $250,000 | 4,082 | 5,209 | 5,206 | 6,246 | 5,752 | ||||||||||||
Total deposits | 166,768 | 169,587 | 168,912 | 167,672 | 164,128 | ||||||||||||
Federal funds purchased | 194 | 247 | 193 | 205 | 163 | ||||||||||||
Other short-term borrowings | 3,370 | 2,866 | 2,861 | 4,594 | 5,817 | ||||||||||||
Accrued taxes, interest and expenses | 2,040 | 1,965 | 2,195 | 1,834 | 1,765 | ||||||||||||
Other liabilities | 5,371 | 5,379 | 4,861 | 5,808 | 5,316 | ||||||||||||
Long-term debt | 16,293 | 15,444 | 16,380 | 16,310 | 12,278 | ||||||||||||
Total Liabilities | 194,036 | 195,488 | 195,402 | 196,423 | 189,467 | ||||||||||||
Equity | |||||||||||||||||
Common stock(c) | 2,051 | 2,051 | 2,051 | 2,051 | 2,051 | ||||||||||||
Preferred stock | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | ||||||||||||
Capital surplus | 3,764 | 3,742 | 3,757 | 3,733 | 3,708 | ||||||||||||
Retained earnings | 23,542 | 23,224 | 22,997 | 22,747 | 22,366 | ||||||||||||
Accumulated other comprehensive loss | (4,901) | (4,888) | (4,487) | (6,839) | (5,166) | ||||||||||||
Treasury stock | (7,346) | (7,227) | (7,262) | (7,264) | (7,266) | ||||||||||||
Total Equity | 19,226 | 19,018 | 19,172 | 16,544 | 17,809 | ||||||||||||
Total Liabilities and Equity | $213,262 | $214,506 | $214,574 | $212,967 | $207,276 | ||||||||||||
(a) Amortized cost | $43,596 | $43,400 | $55,789 | $55,557 | $55,399 | ||||||||||||
(b) Market values | 11,187 | 11,341 | 2 | 2 | 2 | ||||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | |||||||||||||||||
Authorized | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | ||||||||||||
Outstanding, excluding treasury | 680,789 | 683,812 | 681,125 | 680,990 | 680,850 | ||||||||||||
Treasury | 243,103 | 240,080 | 242,768 | 242,903 | 243,042 |
19
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||||||
$ in millions | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the Three Months Ended | Year to Date | |||||||||||||||||||
June | June | June | June | |||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||
Total Equity, Beginning | $19,018 | $18,364 | $19,172 | $17,327 | ||||||||||||||||
Impact of cumulative effect of change in accounting principle | — | — | (10) | 37 | ||||||||||||||||
Net income | 601 | 601 | 1,122 | 1,159 | ||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||
Change in unrealized losses: | ||||||||||||||||||||
Available-for-sale debt securities | 2 | (633) | (177) | (33) | ||||||||||||||||
Qualifying cash flow hedges | (40) | (289) | (287) | (24) | ||||||||||||||||
Amortization of unrealized losses on securities transferred to held-to-maturity | 25 | — | 50 | — | ||||||||||||||||
Change in accumulated other comprehensive income related to employee benefit plans | — | 1 | — | 1 | ||||||||||||||||
Comprehensive income (loss) | 588 | (320) | 708 | 1,103 | ||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||
Common stock | (243) | (228) | (486) | (457) | ||||||||||||||||
Preferred stock | (40) | (39) | (81) | (62) | ||||||||||||||||
Impact of stock transactions under stock compensation plans, net | 28 | 32 | 48 | 62 | ||||||||||||||||
Shares acquired for treasury | (125) | — | (125) | (201) | ||||||||||||||||
Total Equity, Ending | $19,226 | $17,809 | $19,226 | $17,809 | ||||||||||||||||
20
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||||||||
Average Balance Sheets and Yield/Rate Analysis | For the Three Months Ended | |||||||||||||||||||||||||
$ in millions | June | March | June | |||||||||||||||||||||||
(unaudited) | 2024 | 2024 | 2023 | |||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||
Balance | Yield/Rate | Balance | Yield/Rate | Balance | Yield/Rate | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||
Loans and leases: | ||||||||||||||||||||||||||
Commercial and industrial loans(a) | $52,389 | 7.13 | % | $53,256 | 7.08 | % | $58,152 | 6.78 | % | |||||||||||||||||
Commercial mortgage loans(a) | 11,353 | 6.26 | % | 11,339 | 6.28 | % | 11,374 | 5.92 | % | |||||||||||||||||
Commercial construction loans(a) | 5,917 | 7.14 | % | 5,732 | 7.20 | % | 5,535 | 6.80 | % | |||||||||||||||||
Commercial leases(a) | 2,576 | 4.33 | % | 2,543 | 4.24 | % | 2,703 | 3.54 | % | |||||||||||||||||
Total commercial loans and leases | 72,235 | 6.90 | % | 72,870 | 6.87 | % | 77,764 | 6.54 | % | |||||||||||||||||
Residential mortgage loans | 17,363 | 3.66 | % | 17,268 | 3.55 | % | 18,158 | 3.39 | % | |||||||||||||||||
Home equity | 3,929 | 8.37 | % | 3,933 | 8.29 | % | 3,937 | 7.39 | % | |||||||||||||||||
Indirect secured consumer loans | 15,373 | 5.18 | % | 15,172 | 4.93 | % | 16,281 | 4.19 | % | |||||||||||||||||
Credit card | 1,728 | 12.86 | % | 1,773 | 13.73 | % | 1,783 | 13.93 | % | |||||||||||||||||
Solar energy installation loans | 3,916 | 8.35 | % | 3,794 | 7.77 | % | 2,787 | 5.59 | % | |||||||||||||||||
Other consumer loans | 2,739 | 9.17 | % | 2,889 | 8.96 | % | 3,277 | 8.60 | % | |||||||||||||||||
Total consumer loans | 45,048 | 5.69 | % | 44,829 | 5.54 | % | 46,223 | 4.92 | % | |||||||||||||||||
Total loans and leases | 117,283 | 6.43 | % | 117,699 | 6.36 | % | 123,987 | 5.94 | % | |||||||||||||||||
Securities: | ||||||||||||||||||||||||||
Taxable securities | 55,241 | 3.27 | % | 55,016 | 3.26 | % | 55,771 | 3.07 | % | |||||||||||||||||
Tax exempt securities(a) | 1,366 | 3.27 | % | 1,440 | 3.27 | % | 1,496 | 3.19 | % | |||||||||||||||||
Other short-term investments | 20,609 | 5.67 | % | 21,194 | 5.58 | % | 7,806 | 5.24 | % | |||||||||||||||||
Total interest-earning assets | 194,499 | 5.43 | % | 195,349 | 5.38 | % | 189,060 | 5.04 | % | |||||||||||||||||
Cash and due from banks | 2,637 | 2,743 | 2,622 | |||||||||||||||||||||||
Other assets | 17,656 | 17,432 | 16,613 | |||||||||||||||||||||||
Allowance for loan and lease losses | (2,317) | (2,321) | (2,216) | |||||||||||||||||||||||
Total Assets | $212,475 | $213,203 | $206,079 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Interest checking deposits | $57,999 | 3.39 | % | $58,677 | 3.38 | % | $50,472 | 2.81 | % | |||||||||||||||||
Savings deposits | 17,747 | 0.67 | % | 18,107 | 0.69 | % | 21,675 | 0.72 | % | |||||||||||||||||
Money market deposits | 35,511 | 3.00 | % | 34,589 | 2.91 | % | 28,913 | 1.86 | % | |||||||||||||||||
Foreign office deposits | 157 | 2.11 | % | 145 | 2.43 | % | 143 | 1.25 | % | |||||||||||||||||
CDs $250,000 or less | 10,767 | 4.22 | % | 10,244 | 4.15 | % | 7,759 | 3.48 | % | |||||||||||||||||
Total interest-bearing core deposits | 122,181 | 2.95 | % | 121,762 | 2.91 | % | 108,962 | 2.19 | % | |||||||||||||||||
CDs over $250,000 | 4,747 | 5.16 | % | 5,521 | 5.22 | % | 5,375 | 4.53 | % | |||||||||||||||||
Total interest-bearing deposits | 126,928 | 3.04 | % | 127,283 | 3.01 | % | 114,337 | 2.30 | % | |||||||||||||||||
Federal funds purchased | 230 | 5.41 | % | 201 | 5.41 | % | 376 | 5.11 | % | |||||||||||||||||
Securities sold under repurchase agreements | 373 | 1.97 | % | 366 | 1.82 | % | 361 | 1.17 | % | |||||||||||||||||
FHLB advances | 3,165 | 5.71 | % | 3,111 | 5.72 | % | 6,589 | 5.23 | % | |||||||||||||||||
Derivative collateral and other secured borrowings | 54 | 6.87 | % | 57 | 7.21 | % | 79 | 15.07 | % | |||||||||||||||||
Long-term debt | 15,611 | 5.78 | % | 15,515 | 5.71 | % | 12,848 | 5.12 | % | |||||||||||||||||
Total interest-bearing liabilities | 146,361 | 3.39 | % | 146,533 | 3.36 | % | 134,590 | 2.72 | % | |||||||||||||||||
Demand deposits | 40,266 | 40,839 | 46,520 | |||||||||||||||||||||||
Other liabilities | 7,141 | 7,104 | 6,625 | |||||||||||||||||||||||
Total Liabilities | 193,768 | 194,476 | 187,735 | |||||||||||||||||||||||
Total Equity | 18,707 | 18,727 | 18,344 | |||||||||||||||||||||||
Total Liabilities and Equity | $212,475 | $213,203 | $206,079 | |||||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||
Net interest margin (FTE)(b) | 2.88 | % | 2.86 | % | 3.10 | % | ||||||||||||||||||||
Net interest rate spread (FTE)(b) | 2.04 | % | 2.02 | % | 2.32 | % | ||||||||||||||||||||
Interest-bearing liabilities to interest-earning assets | 75.25 | % | 75.01 | % | 71.19 | % | ||||||||||||||||||||
(a) Average Yield/Rate of these assets are presented on an FTE basis. | ||||||||||||||||||||||||||
(b) Non-GAAP measure; see discussion and reconciliation of non-GAAP measures beginning on page 27. |
21
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Average Balance Sheets and Yield/Rate Analysis | Year to Date | ||||||||||||||||
$ in millions | June | June | |||||||||||||||
(unaudited) | 2024 | 2023 | |||||||||||||||
Average | Average | Average | Average | ||||||||||||||
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
Assets | |||||||||||||||||
Interest-earning assets: | |||||||||||||||||
Loans and leases: | |||||||||||||||||
Commercial and industrial loans(a) | $52,820 | 7.11 | % | $58,178 | 6.59 | % | |||||||||||
Commercial mortgage loans(a) | 11,346 | 6.27 | % | 11,248 | 5.74 | % | |||||||||||
Commercial construction loans(a) | 5,825 | 7.17 | % | 5,521 | 6.65 | % | |||||||||||
Commercial leases(a) | 2,560 | 4.28 | % | 2,683 | 3.51 | % | |||||||||||
Total commercial loans and leases | 72,551 | 6.88 | % | 77,630 | 6.37 | % | |||||||||||
Residential mortgage loans | 17,316 | 3.60 | % | 18,243 | 3.39 | % | |||||||||||
Home equity | 3,931 | 8.33 | % | 3,971 | 6.93 | % | |||||||||||
Indirect secured consumer loans | 15,273 | 5.06 | % | 16,439 | 4.07 | % | |||||||||||
Credit card | 1,751 | 13.30 | % | 1,781 | 14.04 | % | |||||||||||
Solar energy installation loans | 3,855 | 8.07 | % | 2,478 | 5.17 | % | |||||||||||
Other consumer loans | 2,814 | 9.06 | % | 3,260 | 8.55 | % | |||||||||||
Total consumer loans | 44,940 | 5.61 | % | 46,172 | 4.81 | % | |||||||||||
Total loans and leases | 117,491 | 6.40 | % | 123,802 | 5.78 | % | |||||||||||
Securities: | |||||||||||||||||
Taxable securities | 55,128 | 3.27 | % | 56,437 | 3.07 | % | |||||||||||
Tax exempt securities(a) | 1,403 | 3.27 | % | 1,450 | 3.15 | % | |||||||||||
Other short-term investments | 20,902 | 5.62 | % | 6,549 | 5.00 | % | |||||||||||
Total interest-earning assets | 194,924 | 5.41 | % | 188,238 | 4.92 | % | |||||||||||
Cash and due from banks | 2,690 | 2,878 | |||||||||||||||
Other assets | 17,544 | 16,649 | |||||||||||||||
Allowance for loan and lease losses | (2,319) | (2,181) | |||||||||||||||
Total Assets | $212,839 | $205,584 | |||||||||||||||
Liabilities | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||
Interest checking deposits | $58,338 | 3.39 | % | $49,599 | 2.58 | % | |||||||||||
Savings deposits | 17,927 | 0.68 | % | 22,387 | 0.65 | % | |||||||||||
Money market deposits | 35,050 | 2.96 | % | 28,668 | 1.53 | % | |||||||||||
Foreign office deposits | 151 | 2.26 | % | 143 | 1.57 | % | |||||||||||
CDs $250,000 or less | 10,505 | 4.18 | % | 6,473 | 3.15 | % | |||||||||||
Total interest-bearing core deposits | 121,971 | 2.93 | % | 107,270 | 1.93 | % | |||||||||||
CDs over $250,000 | 5,134 | 5.19 | % | 4,865 | 4.36 | % | |||||||||||
Total interest-bearing deposits | 127,105 | 3.02 | % | 112,135 | 2.00 | % | |||||||||||
Federal funds purchased | 216 | 5.41 | % | 431 | 4.79 | % | |||||||||||
Securities sold under repurchase agreements | 369 | 1.90 | % | 344 | 0.96 | % | |||||||||||
FHLB advances | 3,138 | 5.71 | % | 5,701 | 4.90 | % | |||||||||||
Derivative collateral and other secured borrowings | 56 | 7.05 | % | 161 | 8.14 | % | |||||||||||
Long-term debt | 15,563 | 5.74 | % | 13,178 | 4.90 | % | |||||||||||
Total interest-bearing liabilities | 146,447 | 3.37 | % | 131,950 | 2.46 | % | |||||||||||
Demand deposits | 40,552 | 48,617 | |||||||||||||||
Other liabilities | 7,123 | 6,855 | |||||||||||||||
Total Liabilities | 194,122 | 187,422 | |||||||||||||||
Total Equity | 18,717 | 18,162 | |||||||||||||||
Total Liabilities and Equity | $212,839 | $205,584 | |||||||||||||||
Ratios: | |||||||||||||||||
Net interest margin (FTE)(b) | 2.87 | % | 3.20 | % | |||||||||||||
Net interest rate spread (FTE)(b) | 2.04 | % | 2.46 | % | |||||||||||||
Interest-bearing liabilities to interest-earning assets | 75.13 | % | 70.10 | % | |||||||||||||
(a) Average Yield/Rate of these assets are presented on an FTE basis. | |||||||||||||||||
(b) Non-GAAP measure; see discussion and reconciliation of non-GAAP measures beginning on page 27. | |||||||||||||||||
22
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Summary of Loans and Leases | |||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||
Average Portfolio Loans and Leases | |||||||||||||||||
Commercial loans and leases: | |||||||||||||||||
Commercial and industrial loans | $52,357 | $53,183 | $54,633 | $57,001 | $58,137 | ||||||||||||
Commercial mortgage loans | 11,352 | 11,339 | 11,338 | 11,216 | 11,373 | ||||||||||||
Commercial construction loans | 5,917 | 5,732 | 5,727 | 5,539 | 5,535 | ||||||||||||
Commercial leases | 2,575 | 2,542 | 2,535 | 2,616 | 2,700 | ||||||||||||
Total commercial loans and leases | 72,201 | 72,796 | 74,233 | 76,372 | 77,745 | ||||||||||||
Consumer loans: | |||||||||||||||||
Residential mortgage loans | 17,004 | 16,977 | 17,129 | 17,400 | 17,517 | ||||||||||||
Home equity | 3,929 | 3,933 | 3,905 | 3,897 | 3,937 | ||||||||||||
Indirect secured consumer loans | 15,373 | 15,172 | 15,129 | 15,787 | 16,281 | ||||||||||||
Credit card | 1,728 | 1,773 | 1,829 | 1,808 | 1,783 | ||||||||||||
Solar energy installation loans | 3,916 | 3,794 | 3,630 | 3,245 | 2,787 | ||||||||||||
Other consumer loans | 2,740 | 2,889 | 3,003 | 3,121 | 3,277 | ||||||||||||
Total consumer loans | 44,690 | 44,538 | 44,625 | 45,258 | 45,582 | ||||||||||||
Total average portfolio loans and leases | $116,891 | $117,334 | $118,858 | $121,630 | $123,327 | ||||||||||||
Average Loans and Leases Held for Sale | |||||||||||||||||
Commercial loans and leases held for sale | $33 | $74 | $72 | $17 | $19 | ||||||||||||
Consumer loans held for sale | 359 | 291 | 379 | 619 | 641 | ||||||||||||
Average loans and leases held for sale | $392 | $365 | $451 | $636 | $660 | ||||||||||||
End of Period Portfolio Loans and Leases | |||||||||||||||||
Commercial loans and leases: | |||||||||||||||||
Commercial and industrial loans | $51,840 | $52,209 | $53,270 | $55,790 | $56,897 | ||||||||||||
Commercial mortgage loans | 11,429 | 11,346 | 11,276 | 11,122 | 11,310 | ||||||||||||
Commercial construction loans | 5,806 | 5,789 | 5,621 | 5,582 | 5,475 | ||||||||||||
Commercial leases | 2,708 | 2,572 | 2,579 | 2,624 | 2,670 | ||||||||||||
Total commercial loans and leases | 71,783 | 71,916 | 72,746 | 75,118 | 76,352 | ||||||||||||
Consumer loans: | |||||||||||||||||
Residential mortgage loans | 17,040 | 16,995 | 17,026 | 17,293 | 17,503 | ||||||||||||
Home equity | 3,969 | 3,883 | 3,916 | 3,898 | 3,911 | ||||||||||||
Indirect secured consumer loans | 15,442 | 15,306 | 14,965 | 15,434 | 16,097 | ||||||||||||
Credit card | 1,733 | 1,737 | 1,865 | 1,817 | 1,818 | ||||||||||||
Solar energy installation loans | 3,951 | 3,871 | 3,728 | 3,383 | 2,961 | ||||||||||||
Other consumer loans | 2,661 | 2,777 | 2,988 | 3,145 | 3,249 | ||||||||||||
Total consumer loans | 44,796 | 44,569 | 44,488 | 44,970 | 45,539 | ||||||||||||
Total portfolio loans and leases | $116,579 | $116,485 | $117,234 | $120,088 | $121,891 | ||||||||||||
End of Period Loans and Leases Held for Sale | |||||||||||||||||
Commercial loans and leases held for sale | $25 | $32 | $44 | $81 | $32 | ||||||||||||
Consumer loans held for sale | 512 | 307 | 334 | 533 | 728 | ||||||||||||
Loans and leases held for sale | $537 | $339 | $378 | $614 | $760 | ||||||||||||
Operating lease equipment | $392 | $427 | $459 | $480 | $537 | ||||||||||||
Loans and Leases Serviced for Others(a) | |||||||||||||||||
Commercial and industrial loans | $1,201 | $1,197 | $1,231 | $1,217 | $1,122 | ||||||||||||
Commercial mortgage loans | 616 | 632 | 655 | 711 | 748 | ||||||||||||
Commercial construction loans | 309 | 293 | 283 | 288 | 260 | ||||||||||||
Commercial leases | 730 | 703 | 703 | 721 | 642 | ||||||||||||
Residential mortgage loans | 97,280 | 99,596 | 100,842 | 101,889 | 102,817 | ||||||||||||
Solar energy installation loans | 625 | 641 | 658 | 673 | 691 | ||||||||||||
Other consumer loans | 133 | 139 | 146 | 154 | 162 | ||||||||||||
Total loans and leases serviced for others | 100,894 | 103,201 | 104,518 | 105,653 | 106,442 | ||||||||||||
Total loans and leases owned or serviced | $218,402 | $220,452 | $222,589 | $226,835 | $229,630 |
(a)Fifth Third sells certain loans and leases and obtains servicing responsibilities.
23
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||
Regulatory Capital | |||||||||||||||||||||||
$ in millions | As of | ||||||||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||||||||
2024(a) | 2024 | 2023 | 2023 | 2023 | |||||||||||||||||||
Regulatory Capital(b) | |||||||||||||||||||||||
CET1 capital | $17,161 | $16,931 | $16,800 | $16,510 | $16,100 | ||||||||||||||||||
Additional tier 1 capital | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | ||||||||||||||||||
Tier 1 capital | 19,277 | 19,047 | 18,916 | 18,626 | 18,216 | ||||||||||||||||||
Tier 2 capital | 3,277 | 3,288 | 3,484 | 3,485 | 3,565 | ||||||||||||||||||
Total regulatory capital | $22,554 | $22,335 | $22,400 | $22,111 | $21,781 | ||||||||||||||||||
Risk-weighted assets | $161,967 | $161,769 | $163,223 | $168,433 | $169,720 | ||||||||||||||||||
Ratios | |||||||||||||||||||||||
Average total Bancorp shareholders' equity as a percent of average assets | 8.80 | % | 8.78 | % | 8.04 | % | 8.30 | % | 8.90 | % | |||||||||||||
Regulatory Capital Ratios(b) | |||||||||||||||||||||||
Fifth Third Bancorp | |||||||||||||||||||||||
CET1 capital | 10.60 | % | 10.47 | % | 10.29 | % | 9.80 | % | 9.49 | % | |||||||||||||
Tier 1 risk-based capital | 11.90 | % | 11.77 | % | 11.59 | % | 11.06 | % | 10.73 | % | |||||||||||||
Total risk-based capital | 13.93 | % | 13.81 | % | 13.72 | % | 13.13 | % | 12.83 | % | |||||||||||||
Leverage | 9.07 | % | 8.94 | % | 8.73 | % | 8.85 | % | 8.81 | % | |||||||||||||
Fifth Third Bank, National Association | |||||||||||||||||||||||
Tier 1 risk-based capital | 12.78 | % | 12.65 | % | 12.42 | % | 11.96 | % | 11.25 | % | |||||||||||||
Total risk-based capital | 14.11 | % | 13.99 | % | 13.85 | % | 13.38 | % | 12.67 | % | |||||||||||||
Leverage | 9.76 | % | 9.61 | % | 9.38 | % | 9.59 | % | 9.26 | % |
(a)Current period regulatory capital data and ratios are estimated.
(b)Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
24
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Summary of Credit Loss Experience | |||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||
Average portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | $52,357 | $53,183 | $54,633 | $57,001 | $58,137 | ||||||||||||
Commercial mortgage loans | 11,352 | 11,339 | 11,338 | 11,216 | 11,373 | ||||||||||||
Commercial construction loans | 5,917 | 5,732 | 5,727 | 5,539 | 5,535 | ||||||||||||
Commercial leases | 2,575 | 2,542 | 2,535 | 2,616 | 2,700 | ||||||||||||
Total commercial loans and leases | 72,201 | 72,796 | 74,233 | 76,372 | 77,745 | ||||||||||||
Residential mortgage loans | 17,004 | 16,977 | 17,129 | 17,400 | 17,517 | ||||||||||||
Home equity | 3,929 | 3,933 | 3,905 | 3,897 | 3,937 | ||||||||||||
Indirect secured consumer loans | 15,373 | 15,172 | 15,129 | 15,787 | 16,281 | ||||||||||||
Credit card | 1,728 | 1,773 | 1,829 | 1,808 | 1,783 | ||||||||||||
Solar energy installation loans | 3,916 | 3,794 | 3,630 | 3,245 | 2,787 | ||||||||||||
Other consumer loans | 2,740 | 2,889 | 3,003 | 3,121 | 3,277 | ||||||||||||
Total consumer loans | 44,690 | 44,538 | 44,625 | 45,258 | 45,582 | ||||||||||||
Total average portfolio loans and leases | $116,891 | $117,334 | $118,858 | $121,630 | $123,327 | ||||||||||||
Losses charged-off: | |||||||||||||||||
Commercial and industrial loans | ($83) | ($40) | ($30) | ($70) | ($35) | ||||||||||||
Commercial mortgage loans | — | — | — | — | — | ||||||||||||
Commercial construction loans | — | — | — | — | — | ||||||||||||
Commercial leases | — | — | — | — | — | ||||||||||||
Total commercial loans and leases | (83) | (40) | (30) | (70) | (35) | ||||||||||||
Residential mortgage loans | (1) | — | (1) | (1) | (1) | ||||||||||||
Home equity | (1) | (2) | (2) | (2) | (2) | ||||||||||||
Indirect secured consumer loans | (31) | (35) | (35) | (27) | (25) | ||||||||||||
Credit card | (22) | (23) | (22) | (19) | (21) | ||||||||||||
Solar energy installation loans | (14) | (14) | (11) | (8) | (7) | ||||||||||||
Other consumer loans | (30) | (32) | (32) | (31) | (30) | ||||||||||||
Total consumer loans | (99) | (106) | (103) | (88) | (86) | ||||||||||||
Total losses charged-off | ($182) | ($146) | ($133) | ($158) | ($121) | ||||||||||||
Recoveries of losses previously charged-off: | |||||||||||||||||
Commercial and industrial loans | $3 | $5 | $2 | $5 | $3 | ||||||||||||
Commercial mortgage loans | — | — | 3 | — | — | ||||||||||||
Commercial construction loans | — | — | — | — | — | ||||||||||||
Commercial leases | — | — | — | 1 | — | ||||||||||||
Total commercial loans and leases | 3 | 5 | 5 | 6 | 3 | ||||||||||||
Residential mortgage loans | 1 | — | 1 | 1 | 1 | ||||||||||||
Home equity | 2 | 2 | 2 | 2 | 1 | ||||||||||||
Indirect secured consumer loans | 14 | 11 | 10 | 8 | 9 | ||||||||||||
Credit card | 5 | 5 | 4 | 4 | 5 | ||||||||||||
Solar energy installation loans | 2 | 2 | 1 | — | — | ||||||||||||
Other consumer loans | 11 | 11 | 14 | 13 | 12 | ||||||||||||
Total consumer loans | 35 | 31 | 32 | 28 | 28 | ||||||||||||
Total recoveries of losses previously charged-off | $38 | $36 | $37 | $34 | $31 | ||||||||||||
Net losses charged-off: | |||||||||||||||||
Commercial and industrial loans | ($80) | ($35) | ($28) | ($65) | ($32) | ||||||||||||
Commercial mortgage loans | — | — | 3 | — | — | ||||||||||||
Commercial construction loans | — | — | — | — | — | ||||||||||||
Commercial leases | — | — | — | 1 | — | ||||||||||||
Total commercial loans and leases | (80) | (35) | (25) | (64) | (32) | ||||||||||||
Residential mortgage loans | — | — | — | — | — | ||||||||||||
Home equity | 1 | — | — | — | (1) | ||||||||||||
Indirect secured consumer loans | (17) | (24) | (25) | (19) | (16) | ||||||||||||
Credit card | (17) | (18) | (18) | (15) | (16) | ||||||||||||
Solar energy installation loans | (12) | (12) | (10) | (8) | (7) | ||||||||||||
Other consumer loans | (19) | (21) | (18) | (18) | (18) | ||||||||||||
Total consumer loans | (64) | (75) | (71) | (60) | (58) | ||||||||||||
Total net losses charged-off | ($144) | ($110) | ($96) | ($124) | ($90) | ||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized): | |||||||||||||||||
Commercial and industrial loans | 0.61 | % | 0.27 | % | 0.20 | % | 0.45 | % | 0.22 | % | |||||||
Commercial mortgage loans | 0.01 | % | — | (0.10 | %) | — | 0.01 | % | |||||||||
Commercial construction loans | — | — | — | — | (0.01 | %) | |||||||||||
Commercial leases | (0.01 | %) | (0.04 | %) | 0.01 | % | (0.08 | %) | (0.03 | %) | |||||||
Total commercial loans and leases | 0.45 | % | 0.19 | % | 0.13 | % | 0.34 | % | 0.16 | % | |||||||
Residential mortgage loans | (0.01 | %) | (0.01 | %) | (0.01 | %) | — | — | |||||||||
Home equity | (0.05 | %) | 0.03 | % | 0.05 | % | 0.03 | % | 0.06 | % | |||||||
Indirect secured consumer loans | 0.46 | % | 0.64 | % | 0.64 | % | 0.47 | % | 0.38 | % | |||||||
Credit card | 3.98 | % | 4.19 | % | 3.90 | % | 3.25 | % | 3.61 | % | |||||||
Solar energy installation loans | 1.25 | % | 1.31 | % | 1.09 | % | 0.91 | % | 0.95 | % | |||||||
Other consumer loans | 2.61 | % | 2.71 | % | 2.60 | % | 2.46 | % | 2.20 | % | |||||||
Total consumer loans | 0.57 | % | 0.67 | % | 0.64 | % | 0.53 | % | 0.50 | % | |||||||
Total net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.49 | % | 0.38 | % | 0.32 | % | 0.41 | % | 0.29 | % |
25
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||
Allowance for loan and lease losses, beginning | $2,318 | $2,322 | $2,340 | $2,327 | $2,215 | |||||||||||||||
Total net losses charged-off | (144) | (110) | (96) | (124) | (90) | |||||||||||||||
Provision for loan and lease losses | 114 | 106 | 78 | 137 | 202 | |||||||||||||||
Allowance for loan and lease losses, ending | $2,288 | $2,318 | $2,322 | $2,340 | $2,327 | |||||||||||||||
Reserve for unfunded commitments, beginning | $154 | $166 | $189 | $207 | $232 | |||||||||||||||
Benefit from the reserve for unfunded commitments | (17) | (12) | (23) | (18) | (25) | |||||||||||||||
Reserve for unfunded commitments, ending | $137 | $154 | $166 | $189 | $207 | |||||||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan and lease losses | $2,288 | $2,318 | $2,322 | $2,340 | $2,327 | |||||||||||||||
Reserve for unfunded commitments | 137 | 154 | 166 | 189 | 207 | |||||||||||||||
Total allowance for credit losses | $2,425 | $2,472 | $2,488 | $2,529 | $2,534 | |||||||||||||||
As of | ||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||
Nonperforming Assets and Delinquent Loans | ||||||||||||||||||||
Nonaccrual portfolio loans and leases: | ||||||||||||||||||||
Commercial and industrial loans | $234 | $332 | $304 | $262 | $322 | |||||||||||||||
Commercial mortgage loans | 38 | 39 | 20 | 18 | 22 | |||||||||||||||
Commercial construction loans | 1 | 1 | 1 | — | — | |||||||||||||||
Commercial leases | 1 | — | 1 | 1 | 1 | |||||||||||||||
Residential mortgage loans | 129 | 137 | 124 | 127 | 137 | |||||||||||||||
Home equity | 61 | 60 | 57 | 58 | 61 | |||||||||||||||
Indirect secured consumer loans | 36 | 32 | 36 | 31 | 23 | |||||||||||||||
Credit card | 31 | 32 | 34 | 32 | 30 | |||||||||||||||
Solar energy installation loans | 66 | 65 | 60 | 28 | 25 | |||||||||||||||
Other consumer loans | 9 | 10 | 12 | 13 | 8 | |||||||||||||||
Total nonaccrual portfolio loans and leases | 606 | 708 | 649 | 570 | 629 | |||||||||||||||
Repossessed property | 9 | 8 | 10 | 11 | 8 | |||||||||||||||
OREO | 28 | 27 | 29 | 31 | 24 | |||||||||||||||
Total nonperforming portfolio loans and leases and OREO | 643 | 743 | 688 | 612 | 661 | |||||||||||||||
Nonaccrual loans held for sale | 4 | 5 | 1 | 6 | 2 | |||||||||||||||
Total nonperforming assets | $647 | $748 | $689 | $618 | $663 | |||||||||||||||
Loans and leases 90 days past due (accrual): | ||||||||||||||||||||
Commercial and industrial loans | $3 | $9 | $8 | $3 | $6 | |||||||||||||||
Commercial mortgage loans | 1 | — | — | — | 20 | |||||||||||||||
Commercial leases | 4 | 2 | — | — | — | |||||||||||||||
Total commercial loans and leases | 8 | 11 | 8 | 3 | 26 | |||||||||||||||
Residential mortgage loans(c) | 8 | 5 | 7 | 6 | 7 | |||||||||||||||
Home equity | — | — | — | — | 1 | |||||||||||||||
Credit card | 17 | 19 | 21 | 20 | 17 | |||||||||||||||
Other consumer loans | — | — | — | — | — | |||||||||||||||
Total consumer loans | 25 | 24 | 28 | 26 | 25 | |||||||||||||||
Total loans and leases 90 days past due (accrual)(b) | $33 | $35 | $36 | $29 | $51 | |||||||||||||||
Ratios | ||||||||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.49 | % | 0.38 | % | 0.32 | % | 0.41 | % | 0.29 | % | ||||||||||
Allowance for credit losses: | ||||||||||||||||||||
As a percent of portfolio loans and leases | 2.08 | % | 2.12 | % | 2.12 | % | 2.11 | % | 2.08 | % | ||||||||||
As a percent of nonperforming portfolio loans and leases(a) | 400 | % | 349 | % | 383 | % | 443 | % | 403 | % | ||||||||||
As a percent of nonperforming portfolio assets(a) | 377 | % | 333 | % | 362 | % | 413 | % | 383 | % | ||||||||||
Nonperforming portfolio loans and leases as a percent of portfolio loans and leases(a) | 0.52 | % | 0.61 | % | 0.55 | % | 0.47 | % | 0.52 | % | ||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO(a) | 0.55 | % | 0.64 | % | 0.59 | % | 0.51 | % | 0.54 | % | ||||||||||
Nonperforming assets as a percent of total loans and leases, OREO, and repossessed property | 0.55 | % | 0.64 | % | 0.59 | % | 0.51 | % | 0.54 | % | ||||||||||
(a) Excludes nonaccrual loans held for sale. | ||||||||||||||||||||
(b) Excludes loans held for sale. | ||||||||||||||||||||
(c) Excludes government guaranteed residential mortgage loans. |
26
Use of Non-GAAP Financial Measures
In addition to GAAP measures, management considers various non-GAAP measures when evaluating the performance of the business, including: “net interest income (FTE),” “interest income (FTE),” “net interest margin (FTE),” “net interest rate spread (FTE),” “income before income taxes (FTE),” “tangible net income available to common shareholders,” “average tangible common equity,” “return on average tangible common equity,” “tangible common equity (excluding AOCI),” “tangible common equity (including AOCI),” “tangible equity,” “tangible book value per share,” “tangible book value per share (excluding AOCI),” “adjusted noninterest income,” “noninterest income excluding certain items,” “adjusted noninterest expense,” “noninterest expense excluding certain items,” “pre-provision net revenue,” “adjusted efficiency ratio,” “adjusted return on average common equity,” “adjusted return on average tangible common equity,” “adjusted return on average tangible common equity, excluding accumulated other comprehensive income", “adjusted pre-provision net revenue,” “adjusted return on average assets,” “efficiency ratio (FTE),” “total revenue (FTE),” “noninterest income as a percent of total revenue”, and certain ratios derived from these measures. The Bancorp believes these non-GAAP measures provide useful information to investors because these are among the measures used by the Fifth Third management team to evaluate operating performance and to make day-to-day operating decisions.
The FTE basis adjusts for the tax-favored status of income from certain loans and securities held by the Bancorp that are not taxable for federal income tax purposes. The Bancorp believes this presentation to be the preferred industry measurement of net interest income and net interest margin as it provides a relevant comparison between taxable and non-taxable amounts.
The Bancorp believes tangible net income available to common shareholders, average tangible common equity, tangible common equity (excluding AOCI), tangible common equity (including AOCI), tangible equity, tangible book value per share and return on average tangible common equity are important measures for evaluating the performance of the business without the impacts of intangible items, whether acquired or created internally, in a manner comparable to other companies in the industry who present similar measures.
The Bancorp believes noninterest income, noninterest expense, net interest income, net interest margin, pre-provision net revenue, efficiency ratio, noninterest income as a percent of total revenue, return on average common equity, return on average tangible common equity, and return on average assets are important measures that adjust for significant, unusual, or large transactions that may occur in a reporting period which management does not consider indicative of ongoing financial performance and enhances comparability of results with prior periods.
The Bancorp believes noninterest income excluding certain items and noninterest expense excluding certain items are important measures that adjust for certain components that are prone to significant period-to-period changes in order to facilitate the explanation of variances in the noninterest income and noninterest expense line items.
Management considers various measures when evaluating capital utilization and adequacy, including the tangible equity and tangible common equity (including and excluding AOCI), in addition to capital ratios defined by U.S. banking agencies. These calculations are intended to complement the capital ratios defined by U.S. banking agencies for both absolute and comparative purposes. These ratios are not formally defined by U.S. GAAP or codified in the federal banking regulations and, therefore, are considered to be non-GAAP financial measures. Management believes that providing the tangible common equity ratio excluding AOCI on certain assets and liabilities enables investors and others to assess the Bancorp’s use of equity without the effects of changes in AOCI, some of which are uncertain; providing the tangible common equity ratio including AOCI enables investors and others to assess the Bancorp’s use of equity if components of AOCI, such as unrealized gains or losses, were to be monetized.
Please note that although non-GAAP financial measures provide useful insight, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures.
Please see reconciliations of all historical non-GAAP measures used in this release to the most directly comparable GAAP measures, beginning on the following page.
27
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||
Non-GAAP Reconciliation | |||||||||||||||||||||||
$ and shares in millions | As of and For the Three Months Ended | ||||||||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||||||||
Net interest income | $1,387 | $1,384 | $1,416 | $1,438 | $1,457 | ||||||||||||||||||
Add: Taxable equivalent adjustment | 6 | 6 | 7 | 7 | 6 | ||||||||||||||||||
Net interest income (FTE) (a) | 1,393 | 1,390 | 1,423 | 1,445 | 1,463 | ||||||||||||||||||
Net interest income (annualized) (b) | 5,578 | 5,566 | 5,618 | 5,705 | 5,844 | ||||||||||||||||||
Net interest income (FTE) (annualized) (c) | 5,603 | 5,591 | 5,646 | 5,733 | 5,868 | ||||||||||||||||||
Interest income | 2,620 | 2,608 | 2,648 | 2,529 | 2,370 | ||||||||||||||||||
Add: Taxable equivalent adjustment | 6 | 6 | 7 | 7 | 6 | ||||||||||||||||||
Interest income (FTE) | 2,626 | 2,614 | 2,655 | 2,536 | 2,376 | ||||||||||||||||||
Interest income (FTE) (annualized) (d) | 10,562 | 10,513 | 10,533 | 10,061 | 9,530 | ||||||||||||||||||
Interest expense (annualized) (e) | 4,959 | 4,923 | 4,888 | 4,328 | 3,662 | ||||||||||||||||||
Average interest-earning assets (f) | 194,499 | 195,349 | 198,166 | 192,216 | 189,060 | ||||||||||||||||||
Average interest-bearing liabilities (g) | 146,361 | 146,533 | 146,507 | 139,779 | 134,590 | ||||||||||||||||||
Net interest margin (b) / (f) | 2.87 | % | 2.85 | % | 2.83 | % | 2.97 | % | 3.09 | % | |||||||||||||
Net interest margin (FTE) (c) / (f) | 2.88 | % | 2.86 | % | 2.85 | % | 2.98 | % | 3.10 | % | |||||||||||||
Net interest rate spread (FTE) (d) / (f) - (e) / (g) | 2.04 | % | 2.02 | % | 1.97 | % | 2.13 | % | 2.32 | % | |||||||||||||
Income before income taxes | $764 | $658 | $650 | $846 | $775 | ||||||||||||||||||
Add: Taxable equivalent adjustment | 6 | 6 | 7 | 7 | 6 | ||||||||||||||||||
Income before income taxes (FTE) | 770 | 664 | 657 | 853 | 781 | ||||||||||||||||||
Net income available to common shareholders | 561 | 480 | 492 | 623 | 562 | ||||||||||||||||||
Add: Intangible amortization, net of tax | 7 | 8 | 8 | 8 | 8 | ||||||||||||||||||
Tangible net income available to common shareholders (h) | 568 | 488 | 500 | 631 | 570 | ||||||||||||||||||
Tangible net income available to common shareholders (annualized) (i) | 2,284 | 1,963 | 1,984 | 2,503 | 2,286 | ||||||||||||||||||
Average Bancorp shareholders’ equity | 18,707 | 18,727 | 17,201 | 17,305 | 18,344 | ||||||||||||||||||
Less: | Average preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | |||||||||||||||||
Average goodwill | (4,918) | (4,918) | (4,919) | (4,919) | (4,919) | ||||||||||||||||||
Average intangible assets | (111) | (121) | (130) | (141) | (152) | ||||||||||||||||||
Average tangible common equity, including AOCI (j) | 11,562 | 11,572 | 10,036 | 10,129 | 11,157 | ||||||||||||||||||
Less: | Average AOCI | 5,278 | 4,938 | 6,244 | 5,835 | 4,480 | |||||||||||||||||
Average tangible common equity, excluding AOCI (k) | 16,840 | 16,510 | 16,280 | 15,964 | 15,637 | ||||||||||||||||||
Total Bancorp shareholders’ equity | 19,226 | 19,018 | 19,172 | 16,544 | 17,809 | ||||||||||||||||||
Less: | Preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | |||||||||||||||||
Goodwill | (4,918) | (4,918) | (4,919) | (4,919) | (4,919) | ||||||||||||||||||
Intangible assets | (107) | (115) | (125) | (136) | (146) | ||||||||||||||||||
Tangible common equity, including AOCI (l) | 12,085 | 11,869 | 12,012 | 9,373 | 10,628 | ||||||||||||||||||
Less: | AOCI | 4,901 | 4,888 | 4,487 | 6,839 | 5,166 | |||||||||||||||||
Tangible common equity, excluding AOCI (m) | 16,986 | 16,757 | 16,499 | 16,212 | 15,794 | ||||||||||||||||||
Add: | Preferred stock | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | |||||||||||||||||
Tangible equity (n) | 19,102 | 18,873 | 18,615 | 18,328 | 17,910 | ||||||||||||||||||
Total assets | 213,262 | 214,506 | 214,574 | 212,967 | 207,276 | ||||||||||||||||||
Less: | Goodwill | (4,918) | (4,918) | (4,919) | (4,919) | (4,919) | |||||||||||||||||
Intangible assets | (107) | (115) | (125) | (136) | (146) | ||||||||||||||||||
Tangible assets, including AOCI (o) | 208,237 | 209,473 | 209,530 | 207,912 | 202,211 | ||||||||||||||||||
Less: | AOCI, before tax | 6,204 | 6,187 | 5,680 | 8,657 | 6,539 | |||||||||||||||||
Tangible assets, excluding AOCI (p) | $214,441 | $215,660 | $215,210 | $216,569 | $208,750 | ||||||||||||||||||
Common shares outstanding (q) | 681 | 684 | 681 | 681 | 681 | ||||||||||||||||||
Tangible equity (n) / (p) | 8.91 | % | 8.75 | % | 8.65 | % | 8.46 | % | 8.58 | % | |||||||||||||
Tangible common equity (excluding AOCI) (m) / (p) | 7.92 | % | 7.77 | % | 7.67 | % | 7.49 | % | 7.57 | % | |||||||||||||
Tangible common equity (including AOCI) (l) / (o) | 5.80 | % | 5.67 | % | 5.73 | % | 4.51 | % | 5.26 | % | |||||||||||||
Tangible book value per share (including AOCI) (l) / (q) | $17.75 | $17.35 | $17.64 | $13.76 | $15.61 | ||||||||||||||||||
Tangible book value per share (excluding AOCI) (m) / (q) | $24.94 | $24.50 | $24.23 | $23.81 | $23.19 | ||||||||||||||||||
28
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||
Non-GAAP Reconciliation | |||||||||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||||||||
(unaudited) | June | March | June | ||||||||||||||||||||
2024 | 2024 | 2023 | |||||||||||||||||||||
Net income (r) | $601 | $520 | $601 | ||||||||||||||||||||
Net income (annualized) (s) | 2,417 | 2,091 | 2,411 | ||||||||||||||||||||
Adjustments (pre-tax items) | |||||||||||||||||||||||
Valuation of Visa total return swap | 23 | 17 | 30 | ||||||||||||||||||||
Legal settlements and remediations | 18 | 19 | 12 | ||||||||||||||||||||
FDIC special assessment | 6 | 33 | — | ||||||||||||||||||||
Restructuring severance expense | — | — | 12 | ||||||||||||||||||||
Adjustments, after-tax (t)(a) (b) | 37 | 55 | 43 | ||||||||||||||||||||
Net interest income (FTE) (u) | 1,393 | 1,390 | 1,463 | ||||||||||||||||||||
Legal settlements and remediations | 5 | — | — | ||||||||||||||||||||
Adjusted net interest income (FTE) (v) | 1,398 | 1,390 | 1,463 | ||||||||||||||||||||
Adjusted net interest income (FTE) (annualized) (w) | 5,623 | 5,591 | 5,868 | ||||||||||||||||||||
Noninterest income (x) | 695 | 710 | 726 | ||||||||||||||||||||
Valuation of Visa total return swap | 23 | 17 | 30 | ||||||||||||||||||||
Legal settlements and remediations | 2 | — | — | ||||||||||||||||||||
Adjusted noninterest income (y) | 720 | 727 | 756 | ||||||||||||||||||||
Noninterest expense (z) | 1,221 | 1,342 | 1,231 | ||||||||||||||||||||
Legal settlements and remediations | (11) | (19) | (12) | ||||||||||||||||||||
FDIC special assessment | (6) | (33) | — | ||||||||||||||||||||
Restructuring severance expense | — | — | (12) | ||||||||||||||||||||
Adjusted noninterest expense (aa) | 1,204 | 1,290 | 1,207 | ||||||||||||||||||||
Adjusted net income (r) + (t) | 638 | 575 | 644 | ||||||||||||||||||||
Adjusted net income (annualized) (ab) | 2,566 | 2,313 | 2,583 | ||||||||||||||||||||
Adjusted tangible net income available to common shareholders (h) + (t) | 605 | 543 | 613 | ||||||||||||||||||||
Adjusted tangible net income available to common shareholders (annualized) (ac) | 2,433 | 2,184 | 2,459 | ||||||||||||||||||||
Average assets (ad) | $212,475 | $213,203 | $206,079 | ||||||||||||||||||||
Return on average tangible common equity (i) / (j) | 19.8 | % | 17.0 | % | 20.5 | % | |||||||||||||||||
Return on average tangible common equity excluding AOCI (i) / (k) | 13.6 | % | 11.9 | % | 14.6 | % | |||||||||||||||||
Adjusted return on average tangible common equity, including AOCI (ac) / (j) | 21.0 | % | 18.9 | % | 22.0 | % | |||||||||||||||||
Adjusted return on average tangible common equity, excluding AOCI (ac) / (k) | 14.4 | % | 13.2 | % | 15.7 | % | |||||||||||||||||
Return on average assets (s) / (ad) | 1.14 | % | 0.98 | % | 1.17 | % | |||||||||||||||||
Adjusted return on average assets (ab) / (ad) | 1.21 | % | 1.08 | % | 1.25 | % | |||||||||||||||||
Efficiency ratio (FTE) (z) / [(u) + (x)] | 58.5 | % | 63.9 | % | 56.2 | % | |||||||||||||||||
Adjusted efficiency ratio (aa) / [(v) + (y)] | 56.8 | % | 60.9 | % | 54.4 | % | |||||||||||||||||
Net interest margin (FTE) (c) / (f) | 2.88 | % | 2.86 | % | 3.10 | % | |||||||||||||||||
Adjusted net interest margin (FTE) (w) / (f) | 2.89 | % | 2.86 | % | 3.10 | % | |||||||||||||||||
Total revenue (FTE) (u) + (x) | $2,088 | $2,100 | $2,189 | ||||||||||||||||||||
Adjusted total revenue (FTE) (v) + (y) | $2,118 | $2,117 | $2,219 | ||||||||||||||||||||
Pre-provision net revenue (PPNR) (u) + (x) - (z) | $867 | $758 | $958 | ||||||||||||||||||||
Adjusted pre-provision net revenue (PPNR) (v) + (y) - (aa) | $914 | $827 | $1,012 | ||||||||||||||||||||
Totals may not foot due to rounding. | |||||||||||||||||||||||
(a) Assumes a 23% tax rate. | |||||||||||||||||||||||
(b) A portion of the adjustments related to legal settlements and remediations are not tax-deductible. | |||||||||||||||||||||||
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Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Segment Presentation(b) | ||||||||||||||||||||
$ in millions | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the three months ended June 30, 2024 | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | |||||||||||||||
Net interest income (FTE)(a) | $660 | $1,055 | $54 | $(376) | $1,393 | |||||||||||||||
(Provision for) benefit from credit losses | (137) | (70) | — | 110 | (97) | |||||||||||||||
Net interest income after (provision for) benefit from credit losses | 523 | 985 | 54 | (266) | 1,296 | |||||||||||||||
Noninterest income | 323 | 272 | 98 | 2 | 695 | |||||||||||||||
Noninterest expense | (457) | (626) | (93) | (45) | (1,221) | |||||||||||||||
Income (loss) before income taxes | 389 | 631 | 59 | (309) | 770 | |||||||||||||||
Applicable income tax (expense) benefit(a) | (69) | (132) | (12) | 44 | (169) | |||||||||||||||
Net income (loss) | $320 | $499 | $47 | $(265) | $601 | |||||||||||||||
For the three months ended March 31, 2024 | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | |||||||||||||||
Net interest income (FTE)(a) | $690 | $1,125 | $59 | $(484) | $1,390 | |||||||||||||||
(Provision for) benefit from credit losses | (71) | (84) | — | 61 | (94) | |||||||||||||||
Net interest income after (provision for) benefit from credit losses | 619 | 1,041 | 59 | (423) | 1,296 | |||||||||||||||
Noninterest income | 326 | 266 | 102 | 16 | 710 | |||||||||||||||
Noninterest expense | (501) | (639) | (103) | (99) | (1,342) | |||||||||||||||
Income (loss) before income taxes | 444 | 668 | 58 | (506) | 664 | |||||||||||||||
Applicable income tax (expense) benefit(a) | (75) | (141) | (12) | 84 | (144) | |||||||||||||||
Net income (loss) | $369 | $527 | $46 | $(422) | $520 | |||||||||||||||
For the three months ended December 31, 2023 | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | |||||||||||||||
Net interest income (FTE)(a) | $812 | $1,190 | $66 | $(645) | $1,423 | |||||||||||||||
(Provision for) benefit from credit losses | 25 | (81) | — | 1 | (55) | |||||||||||||||
Net interest income after (provision for) benefit from credit losses | 837 | 1,109 | 66 | (644) | 1,368 | |||||||||||||||
Noninterest income | 332 | 284 | 91 | 37 | 744 | |||||||||||||||
Noninterest expense | (488) | (614) | (90) | (263) | (1,455) | |||||||||||||||
Income (loss) before income taxes | 681 | 779 | 67 | (870) | 657 | |||||||||||||||
Applicable income tax (expense) benefit(a) | (129) | (164) | (15) | 181 | (127) | |||||||||||||||
Net income (loss) | $552 | $615 | $52 | $(689) | $530 | |||||||||||||||
For the three months ended September 30, 2023 | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | |||||||||||||||
Net interest income (FTE)(a) | $1,012 | $1,390 | $98 | $(1,055) | $1,445 | |||||||||||||||
Provision for credit losses | — | (105) | (1) | (13) | (119) | |||||||||||||||
Net interest income after provision for credit losses | 1,012 | 1,285 | 97 | (1,068) | 1,326 | |||||||||||||||
Noninterest income | 353 | 274 | 94 | (6) | 715 | |||||||||||||||
Noninterest expense | (478) | (624) | (90) | 4 | (1,188) | |||||||||||||||
Income (loss) before income taxes | 887 | 935 | 101 | (1,070) | 853 | |||||||||||||||
Applicable income tax (expense) benefit(a) | (169) | (196) | (22) | 194 | (193) | |||||||||||||||
Net income (loss) | $718 | $739 | $79 | $(876) | $660 | |||||||||||||||
For the three months ended June 30, 2023 | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | |||||||||||||||
Net interest income (FTE)(a) | $1,025 | $1,370 | $95 | $(1,027) | $1,463 | |||||||||||||||
(Provision for) benefit from for credit losses | 9 | (65) | — | (121) | (177) | |||||||||||||||
Net interest income after (provision for) benefit from credit losses | 1,034 | 1,305 | 95 | (1,148) | 1,286 | |||||||||||||||
Noninterest income | 336 | 271 | 91 | 28 | 726 | |||||||||||||||
Noninterest expense | (486) | (632) | (93) | (20) | (1,231) | |||||||||||||||
Income (loss) before income taxes | 884 | 944 | 93 | (1,140) | 781 | |||||||||||||||
Applicable income tax (expense) benefit(a) | (173) | (198) | (20) | 211 | (180) | |||||||||||||||
Net income (loss) | $711 | $746 | $73 | $(929) | $601 | |||||||||||||||
(a) Includes taxable equivalent adjustments of $6 million for the three months ended June 30, 2024 and March 31, 2024, $7 million for the three months ended December 31, 2023 and September 30, 2023 and $6 million for the three months ended June 30, 2023. | ||||||||||||||||||||
(b) During the first quarter of 2024, the Bancorp eliminated certain revenue sharing agreements between Wealth and Asset Management and Consumer and Small Business Banking. Prior period results have been adjusted to reflect current presentation. |
30