Fifth Third Bancorp
01/23/2025 | Press release | Distributed by Public on 01/23/2025 07:20
Material Event (Form 8-K)
| Key Financial Data | ||||||
| $ in millions for all balance sheet and income statement items | ||||||
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4Q24
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3Q24
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4Q23
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| Income Statement Data | ||||||
| Net income available to common shareholders | $582 | $532 | $492 | |||
| Net interest income (U.S. GAAP) | 1,437 | 1,421 | 1,416 | |||
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Net interest income (FTE)(a)
|
1,443 | 1,427 | 1,423 | |||
| Noninterest income | 732 | 711 | 744 | |||
| Noninterest expense | 1,226 | 1,244 | 1,455 | |||
| Per Share Data | ||||||
| Earnings per share, basic | $0.86 | $0.78 | $0.72 | |||
| Earnings per share, diluted | 0.85 | 0.78 | 0.72 | |||
| Book value per share | 26.17 | 27.60 | 25.04 | |||
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Tangible book value per share(a)
|
18.69 | 20.20 | 17.64 | |||
| Balance Sheet & Credit Quality | ||||||
| Average portfolio loans and leases | $117,860 | $116,826 | $118,858 | |||
| Average deposits | 167,237 | 167,196 | 169,447 | |||
| Accumulated other comprehensive loss | (4,636) | (3,446) | (4,487) | |||
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Net charge-off ratio(b)
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0.46 | % | 0.48 | % | 0.32 | % |
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Nonperforming asset ratio(c)
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0.71 | 0.62 | 0.59 | |||
| Financial Ratios | ||||||
| Return on average assets | 1.17 | % | 1.06 | % | 0.98 | % |
| Return on average common equity | 13.0 | 11.7 | 12.9 | |||
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Return on average tangible common equity(a)
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18.4 | 16.3 | 19.8 | |||
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CET1 capital(d)(e)
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10.51 | 10.75 | 10.29 | |||
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Net interest margin(a)
|
2.97 | 2.90 | 2.85 | |||
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Efficiency(a)
|
56.4 | 58.2 | 67.2 | |||
| Other than the Quarterly Financial Review tables, commentary is on a fully taxable-equivalent (FTE) basis unless otherwise noted. Consistent with SEC guidance in Regulation S-K that contemplates the calculation of tax-exempt income on a taxable-equivalent basis, net interest income, net interest margin, net interest rate spread, total revenue and the efficiency ratio are provided on an FTE basis. | ||||||
| Income Statement Highlights | |||||
| ($ in millions, except per share data) | For the Three Months Ended | % Change | |||
| December | September | December | |||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | |
| Condensed Statements of Income | |||||
|
Net interest income (NII)(a)
|
$1,443 | $1,427 | $1,423 | 1% | 1% |
| Provision for credit losses | 179 | 160 | 55 | 12% | 225% |
| Noninterest income | 732 | 711 | 744 | 3% | (2)% |
| Noninterest expense | 1,226 | 1,244 | 1,455 | (1)% | (16)% |
|
Income before income taxes(a)
|
$770 | $734 | $657 | 5% | 17% |
| Taxable equivalent adjustment | $6 | $6 | $7 | - | (14)% |
| Applicable income tax expense | 144 | 155 | 120 | (7)% | 20% |
| Net income | $620 | $573 | $530 | 8% | 17% |
| Dividends on preferred stock | 38 | 41 | 38 | (7)% | - |
| Net income available to common shareholders | $582 | $532 | $492 | 9% | 18% |
| Earnings per share, diluted | $0.85 | $0.78 | $0.72 | 9% | 18% |
Fifth Third Bancorp (NASDAQ®: FITB) today reported fourth quarter 2024 net income available to common shareholders of $582 million, or $0.85 per diluted share, compared to $532 million, or $0.78 per diluted share, in the prior quarter and $492 million, or $0.72 per diluted share, in the year-ago quarter.
1
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Diluted earnings per share impact of certain item(s) - 4Q24
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|
| (after-tax impact; $ in millions, except per share data) | |
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Interchange litigation matters(f)2
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$(42) |
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Fifth Third Foundation contribution (noninterest expense)(f)
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(12) |
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Update to the FDIC special assessment (noninterest expense)(f)
|
8 |
| Benefit related to the resolution of certain state income tax matters | 15 |
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After-tax impact(f) of certain items
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$(31) |
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Diluted earnings per share impact of certain item(s)1
|
$(0.05) |
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Totals may not foot due to rounding; 1Diluted earnings per share impact reflects 681.456 million average diluted shares outstanding
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|
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2Interchange litigation matters decreased noninterest income by $51 million and increased noninterest expense by $4 million
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Full year 2024 net income available to common shareholders was $2.2 billion, or $3.14 per diluted share, compared to 2023 full year net income available to common shareholders of $2.2 billion, or $3.22 per diluted share.
2
| Net Interest Income | ||||||||
|
(FTE; $ in millions)(a)
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For the Three Months Ended | % Change | ||||||
| December | September | December | ||||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||||
| Interest Income | ||||||||
| Interest income | $2,534 | $2,675 | $2,655 | (5)% | (5)% | |||
| Interest expense | 1,091 | 1,248 | 1,232 | (13)% | (11)% | |||
| Net interest income (NII) | $1,443 | $1,427 | $1,423 | 1% | 1% | |||
| Average Yield/Rate Analysis | bps Change | |||||||
| Yield on interest-earning assets | 5.21 | % | 5.43 | % | 5.31 | % | (22) | (10) |
| Rate paid on interest-bearing liabilities | 3.00 | % | 3.38 | % | 3.34 | % | (38) | (34) |
| Ratios | ||||||||
| Net interest rate spread | 2.21 | % | 2.05 | % | 1.97 | % | 16 | 24 |
| Net interest margin (NIM) | 2.97 | % | 2.90 | % | 2.85 | % | 7 | 12 |
Compared to the prior quarter, NII increased $16 million, or 1%, primarily reflecting higher loan balances and decreased cost of interest bearing deposits, partially offset by lower loan yields due to the impact of market rates on floating rate loans. These same factors drove the 7 bps increase in NIM. NIM continues to be impacted by the decision to carry elevated liquidity given the environment, with average other short-term investments (including interest-bearing cash) of $18 billion in the current quarter.
Compared to the year-ago quarter, NII increased $20 million, or 1%, and NIM increased 12 bps. This year-over-year improvement was due to the benefits from proactive deposit and wholesale funding management decreasing interest-bearing liabilities costs by 34 bps, which more than offset the combined impact of the 10 bps decrease in interest-earning assets yield and the $4.7 billion reduction in interest-earning assets.
3
| Noninterest Income | |||||
| ($ in millions) | For the Three Months Ended | % Change | |||
| December | September | December | |||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | |
| Noninterest Income | |||||
| Wealth and asset management revenue | $163 | $163 | $147 | - | 11% |
| Commercial payments revenue | 155 | 154 | 145 | 1% | 7% |
| Consumer banking revenue | 137 | 143 | 135 | (4)% | 1% |
| Capital markets fees | 123 | 111 | 106 | 11% | 16% |
| Commercial banking revenue | 109 | 93 | 101 | 17% | 8% |
| Mortgage banking net revenue | 57 | 50 | 66 | 14% | (14)% |
| Other noninterest (loss) income | (4) | (13) | 28 | NM | NM |
| Securities (losses) gains, net | (8) | 10 | 16 | NM | NM |
| Total noninterest income | $732 | $711 | $744 | 3% | (2)% |
|
During the fourth quarter of 2024, certain noninterest income line items were reclassified to better align disclosures to business activities. These reclassifications resulted in three new line items to describe noninterest income, including commercial payments revenue, consumer banking revenue and capital markets fees. Commercial banking revenue and other noninterest income were also affected by the reclassifications. These reclassifications did not affect total noninterest income and were retrospectively applied to all prior periods presented.
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Reported noninterest income increased $21 million, or 3%, from the prior quarter, and decreased $12 million, or 2%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below, including the mark-to-market on the valuation of Visa total return swap and securities gains/losses which incorporate mark-to-market impacts from securities associated with non-qualified deferred compensation plans that are more than offset in noninterest expense.
| Noninterest Income excluding certain items | ||||||||
| ($ in millions) | For the Three Months Ended | |||||||
| December | September | December | % Change | |||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||||
| Noninterest Income excluding certain items | ||||||||
| Noninterest income (U.S. GAAP) | $732 | $711 | $744 | |||||
| Valuation of Visa total return swap | 51 | 47 | 22 | |||||
| Securities (gains) losses, net | 8 | (10) | (16) | |||||
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Noninterest income excluding certain items(a)
|
$791 | $748 | $750 | 6% | 5% | |||
Noninterest income excluding certain items increased $43 million, or 6%, compared to the prior quarter, and increased $41 million, or 5%, from the year-ago quarter.
Compared to the prior quarter, wealth and asset management revenue was flat, due to a decrease in brokerage fee revenue, offset by an increase in personal asset management revenue. Commercial payments revenue increased $1 million, or 1%, primarily driven by an increase in commercial deposit fees. Capital markets fees increased $12 million, or 11%, reflecting increases in syndication fees and M&A advisory fees. Commercial banking revenue increased $16 million, or 17%, primarily reflecting increases in lease syndication and remarketing. Mortgage banking net revenue increased $7 million, or 14%, primarily due to the negative MSR net valuation adjustments in the prior quarter not repeating in the fourth quarter. Other noninterest income results were driven by the recognition of tax receivable agreement revenue of $11 million in the current quarter.
Compared to the year-ago quarter, wealth and asset management revenue increased $16 million, or 11%, primarily reflecting an increase in personal asset management revenue. Commercial payments revenue increased $10 million, or 7%, primarily driven by new customer acquisition, partially offset by a decrease in commercial card revenue. Consumer banking revenue increased $2 million, or 1%, primarily driven by an increase in card and processing revenue. Capital markets fees increased $17 million, or 16%, reflecting an increase in syndication fees, partially offset by a decrease in
4
institutional brokerage revenue. Commercial banking revenue increased $8 million, or 8%, primarily reflecting an increase in lease syndication and remarketing, partially offset by the continued decrease in operating lease revenue. Mortgage banking net revenue decreased $9 million, or 14%, primarily reflecting decreases in servicing fees and origination fees and gains on loan sales. The decrease in other noninterest income was primarily attributable to lower tax receivable agreement revenue.
| Noninterest Expense | |||||
| ($ in millions) | For the Three Months Ended | % Change | |||
| December | September | December | |||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | |
| Noninterest Expense | |||||
| Compensation and benefits | $665 | $690 | $659 | (4)% | 1% |
| Technology and communications | 123 | 121 | 117 | 2% | 5% |
| Net occupancy expense | 88 | 81 | 83 | 9% | 6% |
| Equipment expense | 39 | 38 | 37 | 3% | 5% |
| Loan and lease expense | 36 | 34 | 34 | 6% | 6% |
| Marketing expense | 23 | 26 | 30 | (12)% | (23) |
| Card and processing expense | 21 | 22 | 21 | (5)% | - |
| Other noninterest expense | 231 | 232 | 474 | - | (51)% |
| Total noninterest expense | $1,226 | $1,244 | $1,455 | (1)% | (16)% |
| During the fourth quarter of 2024, certain noninterest expense line items were reclassified to better align disclosures to business activities. These reclassifications resulted in the separate disclosure of loan and lease expense, which was previously a component of other noninterest expense. These reclassifications did not affect total noninterest expense and were retrospectively applied to all prior periods presented. | |||||
Reported noninterest expense decreased $18 million, or 1%, from the prior quarter, and decreased $229 million, or 16%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below.
| Noninterest Expense excluding certain item(s) | |||||||
| ($ in millions) | For the Three Months Ended | % Change | |||||
| December | September | December | |||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | |||
| Noninterest Expense excluding certain item(s) | |||||||
| Noninterest expense (U.S. GAAP) | $1,226 | $1,244 | $1,455 | ||||
| Fifth Third Foundation contribution | (15) | - | (15) | ||||
| Interchange litigation matters | (4) | (10) | - | ||||
| FDIC special assessment | 11 | - | (224) | ||||
| Restructuring severance expense | - | (9) | (5) | ||||
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Noninterest expense excluding certain item(s)(a)
|
$1,218 | $1,225 | $1,211 | (1)% | 1% |
Compared to the prior quarter, noninterest expense excluding certain items decreased $7 million, or 1%, primarily reflecting a decrease in compensation and benefits expense, offset by an increase in net occupancy expense. Noninterest expense in the current quarter included a $7 million benefit related to the mark-to-market impact of non-qualified deferred compensation compared to a $10 million expense in the prior quarter, both of which were largely offset in net securities gains/losses through noninterest income.
Compared to the year-ago quarter, noninterest expense excluding certain items increased $7 million, or 1%, primarily reflecting increases in compensation and benefits expense as well as technology and communications expense, partially offset by a decrease in marketing expense. The year-ago quarter included a $13 million expense related to the mark-to-market impact of non-qualified deferred compensation, which was largely offset in net securities gains through noninterest income.
5
| Average Interest-Earning Assets | ||||||||
| ($ in millions) | For the Three Months Ended | % Change | ||||||
| December | September | December | ||||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||||
| Average Portfolio Loans and Leases | ||||||||
| Commercial loans and leases: | ||||||||
| Commercial and industrial loans | $51,567 | $51,615 | $54,633 | - | (6)% | |||
| Commercial mortgage loans | 11,792 | 11,488 | 11,338 | 3% | 4% | |||
| Commercial construction loans | 5,702 | 5,981 | 5,727 | (5)% | - | |||
| Commercial leases | 2,902 | 2,685 | 2,535 | 8% | 14% | |||
| Total commercial loans and leases | $71,963 | $71,769 | $74,233 | - | (3)% | |||
| Consumer loans: | ||||||||
| Residential mortgage loans | $17,322 | $17,031 | $17,129 | 2% | 1% | |||
| Home equity | 4,125 | 4,018 | 3,905 | 3% | 6% | |||
| Indirect secured consumer loans | 16,100 | 15,680 | 15,129 | 3% | 6% | |||
| Credit card | 1,668 | 1,708 | 1,829 | (2)% | (9)% | |||
| Solar energy installation loans | 4,137 | 3,990 | 3,630 | 4% | 14% | |||
| Other consumer loans | 2,545 | 2,630 | 3,003 | (3)% | (15)% | |||
| Total consumer loans | $45,897 | $45,057 | $44,625 | 2% | 3% | |||
| Total average portfolio loans and leases | $117,860 | $116,826 | $118,858 | 1% | (1)% | |||
| Average Loans and Leases Held for Sale | ||||||||
| Commercial loans and leases held for sale | $48 | $16 | $72 | 200% | (33)% | |||
| Consumer loans held for sale | 584 | 573 | 379 | 2% | 54% | |||
| Total average loans and leases held for sale | $632 | $589 | $451 | 7% | 40% | |||
| Total average loans and leases | $118,492 | $117,415 | $119,309 | 1% | (1)% | |||
| Securities (taxable and tax-exempt) | $56,702 | $56,707 | $57,351 | - | (1)% | |||
| Other short-term investments | 18,319 | 21,714 | 21,506 | (16)% | (15)% | |||
| Total average interest-earning assets | $193,513 | $195,836 | $198,166 | (1)% | (2)% | |||
Compared to the prior quarter, total average portfolio loans and leases increased 1%. Average commercial portfolio loans and leases were stable, primarily reflecting increases in commercial mortgage loans and commercial leases, offset by a decrease in commercial construction loans. Average consumer portfolio loans increased 2%, primarily reflecting increases in indirect secured consumer loans, residential mortgage loans, and solar energy installation loans, partially offset by a decrease in other consumer loans.
Compared to the year-ago quarter, total average portfolio loans and leases decreased 1%. Average commercial portfolio loans and leases decreased 3%, primarily reflecting a decrease in C&I loans. Average consumer portfolio loans increased 3%, primarily reflecting increases in indirect secured consumer loans, solar energy installation loans, and home equity balances, partially offset by decreases in other consumer loans and credit card 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 $18 billion in the current quarter decreased 16% compared to the prior quarter and decreased 15% compared to the year-ago quarter.
Period-end commercial portfolio loans and leases of $73 billion increased 3% compared to the prior quarter, primarily reflecting increases in C&I loans and commercial mortgage loans, partially offset by a decrease in commercial construction loans. Compared to the year-ago quarter, period-end commercial portfolio loans and leases increased 1%, primarily due to increases in commercial mortgage loans and commercial leases, partially offset by a decrease in C&I loans.
6
Period-end consumer portfolio loans of $46 billion increased 2% compared to the prior quarter, primarily reflecting increases in residential mortgage loans and indirect secured consumer loans. Compared to the year-ago quarter, period-end consumer portfolio loans increased 5%, primarily driven by increases in indirect secured consumer loans, residential mortgage loans, and solar energy installation loans, partially offset by a decrease in other consumer loans.
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 decreased 1% compared to the year-ago quarter. Period-end other short-term investments of approximately $17 billion decreased 21% compared to the prior quarter, and decreased 22% compared to the year-ago quarter.
7
| Average Deposits | ||||||||
| ($ in millions) | For the Three Months Ended | % Change | ||||||
| December | September | December | ||||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||||
| Average Deposits | ||||||||
| Demand | $40,137 | $40,020 | $43,396 | - | (8)% | |||
| Interest checking | 59,277 | 58,441 | 57,114 | 1% | 4% | |||
| Savings | 17,257 | 17,272 | 18,252 | - | (5)% | |||
| Money market | 37,279 | 37,257 | 34,292 | - | 9% | |||
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Foreign office(g)
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164 | 164 | 178 | - | (8)% | |||
| Total transaction deposits | $154,114 | $153,154 | $153,232 | 1% | 1% | |||
| CDs $250,000 or less | 10,592 | 10,543 | 10,556 | - | - | |||
| Total core deposits | $164,706 | $163,697 | $163,788 | 1% | 1% | |||
| CDs over $250,000 | 2,531 | 3,499 | 5,659 | (28)% | (55)% | |||
| Total average deposits | $167,237 | $167,196 | $169,447 | - | (1)% | |||
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CDs over $250,000 includes $1.5BN, $2.6BN, and $4.8BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 12/31/24, 9/30/24, and 12/31/23, respectively.
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Compared to the prior quarter, total average deposits were stable, primarily reflecting increases in interest checking balances and demand deposits, offset by a decline in CDs over $250,000 which consists primarily of retail brokered deposits. Average demand deposits represented 24% of total core deposits in the current quarter. Period-end total deposits decreased 1%.
Compared to the year-ago quarter, total average deposits decreased 1%, primarily due to decreases in demand deposits, the aforementioned decrease in retail brokered deposits, and savings balances, partially offset by increases in money market deposits and interest checking balances. Period-end total deposits decreased 1%.
The period-end portfolio loan-to-core deposit ratio was 73% in the current quarter, compared to 71% in the prior quarter and 72% in the year-ago quarter.
| Average Wholesale Funding | ||||||||
| ($ in millions) | For the Three Months Ended | % Change | ||||||
| December | September | December | ||||||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||||
| Average Wholesale Funding | ||||||||
| CDs over $250,000 | $2,531 | $3,499 | $5,659 | (28)% | (55)% | |||
| Federal funds purchased | 223 | 176 | 191 | 27% | 17% | |||
| Securities sold under repurchase agreements | 313 | 396 | 350 | (21)% | (11)% | |||
| FHLB advances | 1,567 | 2,576 | 3,293 | (39)% | (52)% | |||
| Derivative collateral and other secured borrowings | 76 | 52 | 34 | 46% | 124% | |||
| Long-term debt | 15,492 | 16,716 | 16,588 | (7)% | (7)% | |||
| Total average wholesale funding | $20,202 | $23,415 | $26,115 | (14)% | (23)% | |||
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CDs over $250,000 includes $1.5BN, $2.6BN, and $4.8BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 12/31/24, 9/30/24, and 12/31/23, respectively.
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Compared to the prior quarter, average wholesale funding decreased 14%, primarily driven by decreases in long-term debt, FHLB advances, and CDs over $250,000. The decrease in CDs over $250,000 was primarily driven by a decrease in retail brokered deposits. The same items drove the 23% decrease from the year-ago quarter.
8
| Credit Quality Summary | |||||||||||||||
| ($ in millions) | As of and For the Three Months Ended | ||||||||||||||
| December | September | June | March | December | |||||||||||
| 2024 | 2024 | 2024 | 2024 | 2023 | |||||||||||
| Total nonaccrual portfolio loans and leases (NPLs) | $823 | $686 | $606 | $708 | $649 | ||||||||||
| Repossessed property | 9 | 11 | 9 | 8 | 10 | ||||||||||
| OREO | 21 | 28 | 28 | 27 | 29 | ||||||||||
| Total nonperforming portfolio loans and leases and OREO (NPAs) | $853 | $725 | $643 | $743 | $688 | ||||||||||
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NPL ratio(h)
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0.69 | % | 0.59 | % | 0.52 | % | 0.61 | % | 0.55 | % | |||||
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NPA ratio(c)
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0.71 | % | 0.62 | % | 0.55 | % | 0.64 | % | 0.59 | % | |||||
| Portfolio loans and leases 30-89 days past due (accrual) | $303 | $283 | $302 | $342 | $359 | ||||||||||
| Portfolio loans and leases 90 days past due (accrual) | 32 | 40 | 33 | 35 | 36 | ||||||||||
| 30-89 days past due as a % of portfolio loans and leases | 0.25 | % | 0.24 | % | 0.26 | % | 0.29 | % | 0.31 | % | |||||
| 90 days past due as a % of portfolio loans and leases | 0.03 | % | 0.03 | % | 0.03 | % | 0.03 | % | 0.03 | % | |||||
| Allowance for loan and lease losses (ALLL), beginning | $2,305 | $2,288 | $2,318 | $2,322 | $2,340 | ||||||||||
| Total net losses charged-off | (136) | (142) | (144) | (110) | (96) | ||||||||||
| Provision for loan and lease losses | 183 | 159 | 114 | 106 | 78 | ||||||||||
| ALLL, ending | $2,352 | $2,305 | $2,288 | $2,318 | $2,322 | ||||||||||
| Reserve for unfunded commitments, beginning | $138 | $137 | $154 | $166 | $189 | ||||||||||
| (Benefit from) provision for the reserve for unfunded commitments | (4) | 1 | (17) | (12) | (23) | ||||||||||
| Reserve for unfunded commitments, ending | $134 | $138 | $137 | $154 | $166 | ||||||||||
| Total allowance for credit losses (ACL) | $2,486 | $2,443 | $2,425 | $2,472 | $2,488 | ||||||||||
| ACL ratios: | |||||||||||||||
| As a % of portfolio loans and leases | 2.08 | % | 2.09 | % | 2.08 | % | 2.12 | % | 2.12 | % | |||||
| As a % of nonperforming portfolio loans and leases | 302 | % | 356 | % | 400 | % | 349 | % | 383 | % | |||||
| As a % of nonperforming portfolio assets | 291 | % | 337 | % | 377 | % | 333 | % | 362 | % | |||||
| ALLL as a % of portfolio loans and leases | 1.96 | % | 1.98 | % | 1.96 | % | 1.99 | % | 1.98 | % | |||||
| Total losses charged-off | $(175) | $(183) | $(182) | $(146) | $(133) | ||||||||||
| Total recoveries of losses previously charged-off | 39 | 41 | 38 | 36 | 37 | ||||||||||
| Total net losses charged-off | $(136) | $(142) | $(144) | $(110) | $(96) | ||||||||||
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Net charge-off ratio (NCO ratio)(b)
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0.46 | % | 0.48 | % | 0.49 | % | 0.38 | % | 0.32 | % | |||||
| Commercial NCO ratio | 0.32 | % | 0.40 | % | 0.45 | % | 0.19 | % | 0.13 | % | |||||
| Consumer NCO ratio | 0.68 | % | 0.62 | % | 0.57 | % | 0.67 | % | 0.64 | % | |||||
The provision for credit losses totaled $179 million in the current quarter. The ACL ratio was 2.08% of total portfolio loans and leases at quarter end, compared with 2.09% for the prior quarter end and 2.12% for the year-ago quarter end. In the current quarter, the ACL was 302% of nonperforming portfolio loans and leases and 291% of nonperforming portfolio assets.
Net charge-offs were $136 million in the current quarter, resulting in an NCO ratio of 0.46%. Compared to the prior quarter, net charge-offs decreased $6 million and the NCO ratio decreased 2 bps. Commercial net charge-offs were $57 million, resulting in a commercial NCO ratio of 0.32%, which decreased 8 bps compared to the prior quarter. Consumer net charge-offs were $79 million, resulting in a consumer NCO ratio of 0.68%, which increased 6 bps compared to the prior quarter.
9
Compared to the year-ago quarter, net charge-offs increased $40 million and the NCO ratio increased 14 bps. The commercial NCO ratio increased 19 bps compared to the prior year, and the consumer NCO ratio increased 4 bps compared to the prior year.
Nonperforming portfolio loans and leases were $823 million in the current quarter, with the resulting NPL ratio of 0.69%. Compared to the prior quarter, NPLs increased $137 million with the NPL ratio increasing 10 bps. Compared to the year-ago quarter, NPLs increased $174 million with the NPL ratio increasing 14 bps.
Nonperforming portfolio assets were $853 million in the current quarter, with the resulting NPA ratio of 0.71%. Compared to the prior quarter, NPAs increased $128 million with the NPA ratio increasing 9 bps. Compared to the year-ago quarter, NPAs increased $165 million with the NPA ratio increasing 12 bps.
| Capital Position | ||||||||||
| As of and For the Three Months Ended | ||||||||||
| December | September | June | March | December | ||||||
| 2024 | 2024 | 2024 | 2024 | 2023 | ||||||
| Capital Position | ||||||||||
|
Average total Bancorp shareholders' equity as a % of average assets
|
9.40 | % | 9.47 | % | 8.80 | % | 8.78 | % | 8.04 | % |
|
Tangible equity(a)
|
9.02 | % | 8.99 | % | 8.91 | % | 8.75 | % | 8.65 | % |
|
Tangible common equity (excluding AOCI)(a)
|
8.03 | % | 8.00 | % | 7.92 | % | 7.77 | % | 7.67 | % |
|
Tangible common equity (including AOCI)(a)
|
6.02 | % | 6.52 | % | 5.80 | % | 5.67 | % | 5.73 | % |
|
Regulatory Capital Ratios(d)(e)
|
||||||||||
|
CET1 capital
|
10.51 | % | 10.75 | % | 10.62 | % | 10.47 | % | 10.29 | % |
|
Tier 1 risk-based capital
|
11.80 | % | 12.07 | % | 11.93 | % | 11.77 | % | 11.59 | % |
|
Total risk-based capital
|
13.80 | % | 14.13 | % | 13.95 | % | 13.81 | % | 13.72 | % |
| Leverage | 9.22 | % | 9.11 | % | 9.07 | % | 8.94 | % | 8.73 | % |
CET1 capital ratio of 10.51% decreased 24 bps sequentially due to loan growth during the quarter driving an increase in risk-weighted assets. During the fourth quarter of 2024, Fifth Third repurchased $300 million of its common stock, which reduced shares outstanding by approximately 6.7 million at quarter end.
10
Tax Rate
The effective tax rate for the quarter was 18.8% compared with 21.3% in the prior quarter and 18.4% in the year-ago quarter. The tax rate in the fourth quarter reflects a favorable adjustment of $15 million associated with statutes of limitations expiration.
Corporate Profile
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.
(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.
(i)During the fourth quarter of 2024, certain noninterest income line items were reclassified to better align disclosures to business activities. These reclassifications resulted in three new line items to describe noninterest income, including commercial payments revenue, consumer banking revenue and capital markets fees. Commercial banking revenue and other noninterest income were also affected by the reclassifications. These reclassifications did not affect total noninterest income and were retrospectively applied to all prior periods presented.
11
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.
# # #
12
| Fifth Third Bancorp and Subsidiaries | ||||||||
| Consolidated Statements of Income | ||||||||
| $ in millions | For the Three Months Ended | % Change | Year to Date | % Change | ||||
| (unaudited) | December | September | December | December | December | |||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | 2024 | 2023 | Yr/Yr | |
| Interest Income | ||||||||
| Interest and fees on loans and leases | $1,836 | $1,910 | $1,889 | (4%) | (3%) | $7,477 | $7,334 | 2% |
| Interest on securities | 464 | 461 | 451 | 1% | 3% | 1,839 | 1,770 | 4% |
| Interest on other short-term investments | 228 | 298 | 308 | (23%) | (26%) | 1,110 | 656 | 69% |
| Total interest income | 2,528 | 2,669 | 2,648 | (5%) | (5%) | 10,426 | 9,760 | 7% |
| Interest Expense | ||||||||
| Interest on deposits | 856 | 968 | 952 | (12%) | (10%) | 3,736 | 2,929 | 28% |
| Interest on federal funds purchased | 3 | 2 | 3 | 50% | - | 11 | 15 | (27%) |
| Interest on other short-term borrowings | 22 | 40 | 49 | (45%) | (55%) | 157 | 247 | (36%) |
| Interest on long-term debt | 210 | 238 | 228 | (12%) | (8%) | 892 | 742 | 20% |
| Total interest expense | 1,091 | 1,248 | 1,232 | (13%) | (11%) | 4,796 | 3,933 | 22% |
| Net Interest Income | 1,437 | 1,421 | 1,416 | 1% | 1% | 5,630 | 5,827 | (3%) |
| Provision for credit losses | 179 | 160 | 55 | 12% | 225% | 530 | 515 | 3% |
| Net Interest Income After Provision for Credit Losses | 1,258 | 1,261 | 1,361 | - | (8%) | 5,100 | 5,312 | (4%) |
|
Noninterest Income(a)
|
||||||||
| Wealth and asset management revenue | 163 | 163 | 147 | - | 11% | 647 | 581 | 11% |
| Commercial payments revenue | 155 | 154 | 145 | 1% | 7% | 608 | 564 | 8% |
| Consumer banking revenue | 137 | 143 | 135 | (4%) | 1% | 555 | 546 | 2% |
| Capital markets fees | 123 | 111 | 106 | 11% | 16% | 424 | 422 | - |
| Commercial banking revenue | 109 | 93 | 101 | 17% | 8% | 377 | 409 | (8%) |
| Mortgage banking net revenue | 57 | 50 | 66 | 14% | (14%) | 211 | 250 | (16%) |
| Other noninterest income (loss) | (4) | (13) | 28 | NM | NM | 12 | 91 | (87%) |
| Securities gains (losses), net | (8) | 10 | 16 | NM | NM | 15 | 18 | (17%) |
| Total noninterest income | 732 | 711 | 744 | 3% | (2%) | 2,849 | 2,881 | (1%) |
|
Noninterest Expense(b)
|
||||||||
| Compensation and benefits | 665 | 690 | 659 | (4%) | 1% | 2,763 | 2,694 | 3% |
| Technology and communications | 123 | 121 | 117 | 2% | 5% | 474 | 464 | 2% |
| Net occupancy expense | 88 | 81 | 83 | 9% | 6% | 339 | 331 | 2% |
| Equipment expense | 39 | 38 | 37 | 3% | 5% | 153 | 148 | 3% |
| Loan and lease expense | 36 | 34 | 34 | 6% | 6% | 132 | 133 | (1%) |
| Marketing expense | 23 | 26 | 30 | (12%) | (23%) | 115 | 126 | (9%) |
| Card and processing expense | 21 | 22 | 21 | (5%) | - | 84 | 84 | - |
| Other noninterest expense | 231 | 232 | 474 | - | (51%) | 973 | 1,225 | (21%) |
| Total noninterest expense | 1,226 | 1,244 | 1,455 | (1%) | (16%) | 5,033 | 5,205 | (3%) |
| Income Before Income Taxes | 764 | 728 | 650 | 5% | 18% | 2,916 | 2,988 | (2%) |
| Applicable income tax expense | 144 | 155 | 120 | (7%) | 20% | 602 | 639 | (6%) |
| Net Income | 620 | 573 | 530 | 8% | 17% | 2,314 | 2,349 | (1%) |
| Dividends on preferred stock | 38 | 41 | 38 | (7%) | - | 159 | 137 | 16% |
| Net Income Available to Common Shareholders | $582 | $532 | $492 | 9% | 18% | $2,155 | $2,212 | (3%) |
(a)During the fourth quarter of 2024, certain noninterest income line items were reclassified to better align disclosures to business activities. These reclassifications resulted in three new line items to describe noninterest income, including commercial payments revenue, consumer banking revenue and capital markets fees. Commercial banking revenue and other noninterest income were also affected by the reclassifications. These reclassifications did not affect total noninterest income and were retrospectively applied to all prior periods presented.
(b)During the fourth quarter of 2024, certain noninterest expense line items were reclassified to better align disclosures to business activities. These reclassifications resulted in the separate disclosure of loan and lease expense, which was previously a component of other noninterest expense. These reclassifications did not affect total noninterest expense and were retrospectively applied to all prior periods presented.
13
| Fifth Third Bancorp and Subsidiaries | |||||
| Consolidated Statements of Income | |||||
| $ in millions | For the Three Months Ended | ||||
| (unaudited) | December | September | June | March | December |
| 2024 | 2024 | 2024 | 2024 | 2023 | |
| Interest Income | |||||
| Interest and fees on loans and leases | $1,836 | $1,910 | $1,871 | $1,859 | $1,889 |
| Interest on securities | 464 | 461 | 458 | 455 | 451 |
| Interest on other short-term investments | 228 | 298 | 291 | 294 | 308 |
| Total interest income | 2,528 | 2,669 | 2,620 | 2,608 | 2,648 |
| Interest Expense | |||||
| Interest on deposits | 856 | 968 | 958 | 954 | 952 |
| Interest on federal funds purchased | 3 | 2 | 3 | 3 | 3 |
| Interest on other short-term borrowings | 22 | 40 | 48 | 47 | 49 |
| Interest on long-term debt | 210 | 238 | 224 | 220 | 228 |
| Total interest expense | 1,091 | 1,248 | 1,233 | 1,224 | 1,232 |
| Net Interest Income | 1,437 | 1,421 | 1,387 | 1,384 | 1,416 |
| Provision for credit losses | 179 | 160 | 97 | 94 | 55 |
| Net Interest Income After Provision for Credit Losses | 1,258 | 1,261 | 1,290 | 1,290 | 1,361 |
|
Noninterest Income(a)
|
|||||
| Wealth and asset management revenue | 163 | 163 | 159 | 161 | 147 |
| Commercial payments revenue | 155 | 154 | 154 | 145 | 145 |
| Consumer banking revenue | 137 | 143 | 139 | 135 | 135 |
| Capital markets fees | 123 | 111 | 93 | 97 | 106 |
| Commercial banking revenue | 109 | 93 | 90 | 85 | 101 |
| Mortgage banking net revenue | 57 | 50 | 50 | 54 | 66 |
| Other noninterest (loss) income | (4) | (13) | 7 | 23 | 28 |
| Securities (losses) gains, net | (8) | 10 | 3 | 10 | 16 |
| Total noninterest income | 732 | 711 | 695 | 710 | 744 |
|
Noninterest Expense(b)
|
|||||
| Compensation and benefits | 665 | 690 | 656 | 753 | 659 |
| Technology and communications | 123 | 121 | 114 | 117 | 117 |
| Net occupancy expense | 88 | 81 | 83 | 87 | 83 |
| Equipment expense | 39 | 38 | 38 | 37 | 37 |
| Loan and lease expense | 36 | 34 | 33 | 29 | 34 |
| Marketing expense | 23 | 26 | 34 | 32 | 30 |
| Card and processing expense | 21 | 22 | 21 | 20 | 21 |
| Other noninterest expense | 231 | 232 | 242 | 267 | 474 |
| Total noninterest expense | 1,226 | 1,244 | 1,221 | 1,342 | 1,455 |
| Income Before Income Taxes | 764 | 728 | 764 | 658 | 650 |
| Applicable income tax expense | 144 | 155 | 163 | 138 | 120 |
| Net Income | 620 | 573 | 601 | 520 | 530 |
| Dividends on preferred stock | 38 | 41 | 40 | 40 | 38 |
| Net Income Available to Common Shareholders | $582 | $532 | $561 | $480 | $492 |
(a)During the fourth quarter of 2024, certain noninterest income line items were reclassified to better align disclosures to business activities. These reclassifications resulted in three new line items to describe noninterest income, including commercial payments revenue, consumer banking revenue and capital markets fees. Commercial banking revenue and other noninterest income were also affected by the reclassifications. These reclassifications did not affect total noninterest income and were retrospectively applied to all prior periods presented.
(b)During the fourth quarter of 2024, certain noninterest expense line items were reclassified to better align disclosures to business activities. These reclassifications resulted in the separate disclosure of loan and lease expense, which was previously a component of other noninterest expense. These reclassifications did not affect total noninterest expense and were retrospectively applied to all prior periods presented.
14
| Fifth Third Bancorp and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| $ in millions, except per share data | As of | % Change | ||||
| (unaudited) | December | September | December | |||
| 2024 | 2024 | 2023 | Seq | Yr/Yr | ||
| Assets | ||||||
| Cash and due from banks | $3,014 | $3,215 | $3,142 | (6%) | (4%) | |
| Other short-term investments | 17,120 | 21,729 | 22,082 | (21%) | (22%) | |
|
Available-for-sale debt and other securities(a)
|
39,547 | 40,396 | 50,419 | (2%) | (22%) | |
|
Held-to-maturity securities(b)
|
11,278 | 11,358 | 2 | (1%) | NM | |
| Trading debt securities | 1,185 | 1,176 | 899 | 1% | 32% | |
| Equity securities | 341 | 428 | 613 | (20%) | (44%) | |
| Loans and leases held for sale | 640 | 612 | 378 | 5% | 69% | |
| Portfolio loans and leases: | ||||||
| Commercial and industrial loans | 52,271 | 50,916 | 53,270 | 3% | (2%) | |
| Commercial mortgage loans | 12,246 | 11,394 | 11,276 | 7% | 9% | |
| Commercial construction loans | 5,588 | 5,947 | 5,621 | (6%) | (1%) | |
| Commercial leases | 3,188 | 2,873 | 2,579 | 11% | 24% | |
| Total commercial loans and leases | 73,293 | 71,130 | 72,746 | 3% | 1% | |
| Residential mortgage loans | 17,543 | 17,166 | 17,026 | 2% | 3% | |
| Home equity | 4,188 | 4,074 | 3,916 | 3% | 7% | |
| Indirect secured consumer loans | 16,313 | 15,942 | 14,965 | 2% | 9% | |
| Credit card | 1,734 | 1,703 | 1,865 | 2% | (7%) | |
| Solar energy installation loans | 4,202 | 4,078 | 3,728 | 3% | 13% | |
| Other consumer loans | 2,518 | 2,575 | 2,988 | (2%) | (16%) | |
| Total consumer loans | 46,498 | 45,538 | 44,488 | 2% | 5% | |
| Portfolio loans and leases | 119,791 | 116,668 | 117,234 | 3% | 2% | |
| Allowance for loan and lease losses | (2,352) | (2,305) | (2,322) | 2% | 1% | |
| Portfolio loans and leases, net | 117,439 | 114,363 | 114,912 | 3% | 2% | |
| Bank premises and equipment | 2,475 | 2,425 | 2,349 | 2% | 5% | |
| Operating lease equipment | 319 | 357 | 459 | (11%) | (31%) | |
| Goodwill | 4,918 | 4,918 | 4,919 | - | - | |
| Intangible assets | 90 | 98 | 125 | (8%) | (28%) | |
| Servicing rights | 1,704 | 1,656 | 1,737 | 3% | (2%) | |
| Other assets | 12,857 | 11,587 | 12,538 | 11% | 3% | |
| Total Assets | $212,927 | $214,318 | $214,574 | (1%) | (1%) | |
| Liabilities | ||||||
| Deposits: | ||||||
| Demand | $41,038 | $41,393 | $43,146 | (1%) | (5%) | |
| Interest checking | 59,159 | 58,572 | 57,257 | 1% | 3% | |
| Savings | 17,147 | 16,990 | 18,215 | 1% | (6%) | |
| Money market | 36,605 | 37,482 | 34,374 | (2%) | 6% | |
| Foreign office | 147 | 155 | 162 | (5%) | (9%) | |
| CDs $250,000 or less | 10,798 | 10,480 | 10,552 | 3% | 2% | |
| CDs over $250,000 | 2,358 | 3,268 | 5,206 | (28%) | (55%) | |
| Total deposits | 167,252 | 168,340 | 168,912 | (1%) | (1%) | |
| Federal funds purchased | 204 | 169 | 193 | 21% | 6% | |
| Other short-term borrowings | 4,450 | 1,424 | 2,861 | 213% | 56% | |
| Accrued taxes, interest and expenses | 2,137 | 2,034 | 2,195 | 5% | (3%) | |
| Other liabilities | 4,902 | 4,471 | 4,861 | 10% | 1% | |
| Long-term debt | 14,337 | 17,096 | 16,380 | (16%) | (12%) | |
| Total Liabilities | 193,282 | 193,534 | 195,402 | - | (1%) | |
| Equity | ||||||
|
Common stock(c)
|
2,051 | 2,051 | 2,051 | - | - | |
| Preferred stock | 2,116 | 2,116 | 2,116 | - | - | |
| Capital surplus | 3,804 | 3,784 | 3,757 | 1% | 1% | |
| Retained earnings | 24,150 | 23,820 | 22,997 | 1% | 5% | |
| Accumulated other comprehensive loss | (4,636) | (3,446) | (4,487) | 35% | 3% | |
| Treasury stock | (7,840) | (7,541) | (7,262) | 4% | 8% | |
| Total Equity | 19,645 | 20,784 | 19,172 | (5%) | 2% | |
| Total Liabilities and Equity | $212,927 | $214,318 | $214,574 | (1%) | (1%) | |
| (a) Amortized cost | $43,878 | $43,754 | $55,789 | - | (21%) | |
| (b) Market values | 10,965 | 11,554 | 2 | (5 | %) | 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 | 669,854 | 676,269 | 681,125 | - | - | |
| Treasury | 254,039 | 247,624 | 242,768 | 3 | % | - |
15
| Fifth Third Bancorp and Subsidiaries | |||||
| Consolidated Balance Sheets | |||||
| $ in millions, except per share data | As of | ||||
| (unaudited) | December | September | June | March | December |
| 2024 | 2024 | 2024 | 2024 | 2023 | |
| Assets | |||||
| Cash and due from banks | $3,014 | $3,215 | $2,837 | $2,796 | $3,142 |
| Other short-term investments | 17,120 | 21,729 | 21,085 | 22,840 | 22,082 |
|
Available-for-sale debt and other securities(a)
|
39,547 | 40,396 | 38,986 | 38,791 | 50,419 |
|
Held-to-maturity securities(b)
|
11,278 | 11,358 | 11,443 | 11,520 | 2 |
| Trading debt securities | 1,185 | 1,176 | 1,132 | 1,151 | 899 |
| Equity securities | 341 | 428 | 476 | 380 | 613 |
| Loans and leases held for sale | 640 | 612 | 537 | 339 | 378 |
| Portfolio loans and leases: | |||||
| Commercial and industrial loans | 52,271 | 50,916 | 51,840 | 52,209 | 53,270 |
| Commercial mortgage loans | 12,246 | 11,394 | 11,429 | 11,346 | 11,276 |
| Commercial construction loans | 5,588 | 5,947 | 5,806 | 5,789 | 5,621 |
| Commercial leases | 3,188 | 2,873 | 2,708 | 2,572 | 2,579 |
| Total commercial loans and leases | 73,293 | 71,130 | 71,783 | 71,916 | 72,746 |
| Residential mortgage loans | 17,543 | 17,166 | 17,040 | 16,995 | 17,026 |
| Home equity | 4,188 | 4,074 | 3,969 | 3,883 | 3,916 |
| Indirect secured consumer loans | 16,313 | 15,942 | 15,442 | 15,306 | 14,965 |
| Credit card | 1,734 | 1,703 | 1,733 | 1,737 | 1,865 |
| Solar energy installation loans | 4,202 | 4,078 | 3,951 | 3,871 | 3,728 |
| Other consumer loans | 2,518 | 2,575 | 2,661 | 2,777 | 2,988 |
| Total consumer loans | 46,498 | 45,538 | 44,796 | 44,569 | 44,488 |
| Portfolio loans and leases | 119,791 | 116,668 | 116,579 | 116,485 | 117,234 |
| Allowance for loan and lease losses | (2,352) | (2,305) | (2,288) | (2,318) | (2,322) |
| Portfolio loans and leases, net | 117,439 | 114,363 | 114,291 | 114,167 | 114,912 |
| Bank premises and equipment | 2,475 | 2,425 | 2,389 | 2,376 | 2,349 |
| Operating lease equipment | 319 | 357 | 392 | 427 | 459 |
| Goodwill | 4,918 | 4,918 | 4,918 | 4,918 | 4,919 |
| Intangible assets | 90 | 98 | 107 | 115 | 125 |
| Servicing rights | 1,704 | 1,656 | 1,731 | 1,756 | 1,737 |
| Other assets | 12,857 | 11,587 | 12,938 | 12,930 | 12,538 |
| Total Assets | $212,927 | $214,318 | $213,262 | $214,506 | $214,574 |
| Liabilities | |||||
| Deposits: | |||||
| Demand | $41,038 | $41,393 | $40,617 | $41,849 | $43,146 |
| Interest checking | 59,159 | 58,572 | 57,390 | 58,809 | 57,257 |
| Savings | 17,147 | 16,990 | 17,419 | 18,229 | 18,215 |
| Money market | 36,605 | 37,482 | 36,259 | 35,025 | 34,374 |
| Foreign office | 147 | 155 | 119 | 129 | 162 |
| CDs $250,000 or less | 10,798 | 10,480 | 10,882 | 10,337 | 10,552 |
| CDs over $250,000 | 2,358 | 3,268 | 4,082 | 5,209 | 5,206 |
| Total deposits | 167,252 | 168,340 | 166,768 | 169,587 | 168,912 |
| Federal funds purchased | 204 | 169 | 194 | 247 | 193 |
| Other short-term borrowings | 4,450 | 1,424 | 3,370 | 2,866 | 2,861 |
| Accrued taxes, interest and expenses | 2,137 | 2,034 | 2,040 | 1,965 | 2,195 |
| Other liabilities | 4,902 | 4,471 | 5,371 | 5,379 | 4,861 |
| Long-term debt | 14,337 | 17,096 | 16,293 | 15,444 | 16,380 |
| Total Liabilities | 193,282 | 193,534 | 194,036 | 195,488 | 195,402 |
| 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 | 3,804 | 3,784 | 3,764 | 3,742 | 3,757 |
| Retained earnings | 24,150 | 23,820 | 23,542 | 23,224 | 22,997 |
| Accumulated other comprehensive loss | (4,636) | (3,446) | (4,901) | (4,888) | (4,487) |
| Treasury stock | (7,840) | (7,541) | (7,346) | (7,227) | (7,262) |
| Total Equity | 19,645 | 20,784 | 19,226 | 19,018 | 19,172 |
| Total Liabilities and Equity | $212,927 | $214,318 | $213,262 | $214,506 | $214,574 |
| (a) Amortized cost | $43,878 | $43,754 | $43,596 | $43,400 | $55,789 |
| (b) Market values | 10,965 | 11,554 | 11,187 | 11,341 | 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 | 669,854 | 676,269 | 680,789 | 683,812 | 681,125 |
| Treasury | 254,039 | 247,624 | 243,103 | 240,080 | 242,768 |
16
| Fifth Third Bancorp and Subsidiaries | ||||
| Consolidated Statements of Changes in Equity | ||||
| $ in millions | ||||
| (unaudited) | ||||
| For the Three Months Ended | Year to Date | |||
| December | December | December | December | |
| 2024 | 2023 | 2024 | 2023 | |
| Total Equity, Beginning | $20,784 | $16,544 | $19,172 | $17,327 |
| Impact of cumulative effect of change in accounting principle | - | - | (10) | 37 |
| Net income | 620 | 530 | 2,314 | 2,349 |
| Other comprehensive income (loss), net of tax: | ||||
| Change in unrealized losses: | ||||
| Available-for-sale debt securities | (747) | 1,746 | 29 | 495 |
| Qualifying cash flow hedges | (468) | 605 | (282) | 126 |
| Amortization of unrealized losses on securities transferred to held-to-maturity | 25 | - | 101 | - |
| Change in accumulated other comprehensive income related to employee benefit plans | - | 1 | 1 | 2 |
| Other | - | - | 2 | - |
| Comprehensive income (loss) | (570) | 2,882 | 2,165 | 2,972 |
| Cash dividends declared: | ||||
| Common stock | (252) | (242) | (992) | (941) |
| Preferred stock | (38) | (38) | (159) | (137) |
| Impact of stock transactions under stock compensation plans, net | 24 | 26 | 99 | 115 |
| Shares acquired for treasury | (303) | - | (630) | (201) |
| Total Equity, Ending | $19,645 | $19,172 | $19,645 | $19,172 |
17
| Fifth Third Bancorp and Subsidiaries | ||||||||||
| Regulatory Capital | ||||||||||
| $ in millions | As of | |||||||||
| (unaudited) | December | September | June | March | December | |||||
|
2024(a)
|
2024 | 2024 | 2024 | 2023 | ||||||
|
Regulatory Capital(b)
|
||||||||||
| CET1 capital | $17,328 | $17,272 | $17,160 | $16,931 | $16,800 | |||||
| Additional tier 1 capital | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | |||||
| Tier 1 capital | 19,444 | 19,388 | 19,276 | 19,047 | 18,916 | |||||
| Tier 2 capital | 3,299 | 3,303 | 3,275 | 3,288 | 3,484 | |||||
| Total regulatory capital | $22,743 | $22,691 | $22,551 | $22,335 | $22,400 | |||||
|
Risk-weighted assets
|
$164,824 | $160,604 | $161,636 | $161,769 | $163,223 | |||||
| Ratios | ||||||||||
|
Average total Bancorp shareholders' equity as a percent of average assets
|
9.40 | % | 9.47 | % | 8.80 | % | 8.78 | % | 8.04 | % |
|
Regulatory Capital Ratios(b)
|
||||||||||
| Fifth Third Bancorp | ||||||||||
|
CET1 capital
|
10.51 | % | 10.75 | % | 10.62 | % | 10.47 | % | 10.29 | % |
|
Tier 1 risk-based capital
|
11.80 | % | 12.07 | % | 11.93 | % | 11.77 | % | 11.59 | % |
|
Total risk-based capital
|
13.80 | % | 14.13 | % | 13.95 | % | 13.81 | % | 13.72 | % |
| Leverage | 9.22 | % | 9.11 | % | 9.07 | % | 8.94 | % | 8.73 | % |
| Fifth Third Bank, National Association | ||||||||||
|
Tier 1 risk-based capital
|
12.79 | % | 12.99 | % | 12.81 | % | 12.65 | % | 12.42 | % |
|
Total risk-based capital
|
14.12 | % | 14.32 | % | 14.14 | % | 13.99 | % | 13.85 | % |
| Leverage | 10.01 | % | 9.82 | % | 9.76 | % | 9.61 | % | 9.38 | % |
(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.
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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.
19
| Fifth Third Bancorp and Subsidiaries | ||||||||||
| Non-GAAP Reconciliation | ||||||||||
| $ and shares in millions | As of and For the Three Months Ended | |||||||||
| (unaudited) | December | September | June | March | December | |||||
| 2024 | 2024 | 2024 | 2024 | 2023 | ||||||
| Net interest income | $1,437 | $1,421 | $1,387 | $1,384 | $1,416 | |||||
| Add: Taxable equivalent adjustment | 6 | 6 | 6 | 6 | 7 | |||||
| Net interest income (FTE) (a) | 1,443 | 1,427 | 1,393 | 1,390 | 1,423 | |||||
| Net interest income (annualized) (b) | 5,717 | 5,653 | 5,578 | 5,566 | 5,618 | |||||
| Net interest income (FTE) (annualized) (c) | 5,741 | 5,677 | 5,603 | 5,591 | 5,646 | |||||
| Interest income | 2,528 | 2,669 | 2,620 | 2,608 | 2,648 | |||||
| Add: Taxable equivalent adjustment | 6 | 6 | 6 | 6 | 7 | |||||
| Interest income (FTE) | 2,534 | 2,675 | 2,626 | 2,614 | 2,655 | |||||
| Interest income (FTE) (annualized) (d) | 10,081 | 10,642 | 10,562 | 10,513 | 10,533 | |||||
| Interest expense (annualized) (e) | 4,340 | 4,965 | 4,959 | 4,923 | 4,888 | |||||
| Average interest-earning assets (f) | 193,513 | 195,836 | 194,499 | 195,349 | 198,166 | |||||
| Average interest-bearing liabilities (g) | 144,771 | 147,092 | 146,361 | 146,533 | 146,507 | |||||
| Net interest margin (b) / (f) | 2.95 | % | 2.89 | % | 2.87 | % | 2.85 | % | 2.83 | % |
| Net interest margin (FTE) (c) / (f) | 2.97 | % | 2.90 | % | 2.88 | % | 2.86 | % | 2.85 | % |
| Net interest rate spread (FTE) (d) / (f) - (e) / (g) | 2.21 | % | 2.05 | % | 2.04 | % | 2.02 | % | 1.97 | % |
| Income before income taxes | $764 | $728 | $764 | $658 | $650 | |||||
| Add: Taxable equivalent adjustment | 6 | 6 | 6 | 6 | 7 | |||||
| Income before income taxes (FTE) | 770 | 734 | 770 | 664 | 657 | |||||
| Net income available to common shareholders | 582 | 532 | 561 | 480 | 492 | |||||
| Add: Intangible amortization, net of tax | 7 | 7 | 7 | 8 | 8 | |||||
| Tangible net income available to common shareholders (h) | 589 | 539 | 568 | 488 | 500 | |||||
| Tangible net income available to common shareholders (annualized) (i) | 2,343 | 2,144 | 2,284 | 1,963 | 1,984 | |||||
|
Average Bancorp shareholders' equity
|
19,893 | 20,251 | 18,707 | 18,727 | 17,201 | |||||
| Less: | Average preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | ||||
| Average goodwill | (4,918) | (4,918) | (4,918) | (4,918) | (4,919) | |||||
| Average intangible assets | (94) | (103) | (111) | (121) | (130) | |||||
| Average tangible common equity, including AOCI (j) | 12,765 | 13,114 | 11,562 | 11,572 | 10,036 | |||||
| Less: | Average AOCI | 4,292 | 3,914 | 5,278 | 4,938 | 6,244 | ||||
| Average tangible common equity, excluding AOCI (k) | 17,057 | 17,028 | 16,840 | 16,510 | 16,280 | |||||
|
Total Bancorp shareholders' equity
|
19,645 | 20,784 | 19,226 | 19,018 | 19,172 | |||||
| Less: | Preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | ||||
| Goodwill | (4,918) | (4,918) | (4,918) | (4,918) | (4,919) | |||||
| Intangible assets | (90) | (98) | (107) | (115) | (125) | |||||
| Tangible common equity, including AOCI (l) | 12,521 | 13,652 | 12,085 | 11,869 | 12,012 | |||||
| Less: | AOCI | 4,636 | 3,446 | 4,901 | 4,888 | 4,487 | ||||
| Tangible common equity, excluding AOCI (m) | 17,157 | 17,098 | 16,986 | 16,757 | 16,499 | |||||
| Add: | Preferred stock | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | ||||
| Tangible equity (n) | 19,273 | 19,214 | 19,102 | 18,873 | 18,615 | |||||
| Total assets | 212,927 | 214,318 | 213,262 | 214,506 | 214,574 | |||||
| Less: | Goodwill | (4,918) | (4,918) | (4,918) | (4,918) | (4,919) | ||||
| Intangible assets | (90) | (98) | (107) | (115) | (125) | |||||
| Tangible assets, including AOCI (o) | 207,919 | 209,302 | 208,237 | 209,473 | 209,530 | |||||
| Less: | AOCI, before tax | 5,868 | 4,362 | 6,204 | 6,187 | 5,680 | ||||
| Tangible assets, excluding AOCI (p) | $213,787 | $213,664 | $214,441 | $215,660 | $215,210 | |||||
| Common shares outstanding (q) | 670 | 676 | 681 | 684 | 681 | |||||
| Tangible equity (n) / (p) | 9.02 | % | 8.99 | % | 8.91 | % | 8.75 | % | 8.65 | % |
| Tangible common equity (excluding AOCI) (m) / (p) | 8.03 | % | 8.00 | % | 7.92 | % | 7.77 | % | 7.67 | % |
| Tangible common equity (including AOCI) (l) / (o) | 6.02 | % | 6.52 | % | 5.80 | % | 5.67 | % | 5.73 | % |
| Tangible book value per share (including AOCI) (l) / (q) | $18.69 | $20.20 | $17.75 | $17.35 | $17.64 | |||||
| Tangible book value per share (excluding AOCI) (m) / (q) | $25.61 | $25.29 | $24.94 | $24.50 | $24.23 | |||||
20
| Fifth Third Bancorp and Subsidiaries | ||||||
| Non-GAAP Reconciliation | ||||||
| $ in millions | For the Three Months Ended | |||||
| (unaudited) | December | September | December | |||
| 2024 | 2024 | 2023 | ||||
| Net income (r) | $620 | $573 | $530 | |||
| Net income (annualized) (s) | 2,467 | 2,280 | 2,103 | |||
| Adjustments (pre-tax items) | ||||||
| Valuation of Visa total return swap | 51 | 47 | 22 | |||
| Fifth Third Foundation contribution | 15 | - | 15 | |||
| Mastercard litigation | 4 | 10 | - | |||
| FDIC special assessment | (11) | - | 224 | |||
| Restructuring severance expense | - | 9 | 5 | |||
|
Adjustments, after-tax (t)(a) (b)
|
45 | 51 | 205 | |||
| Adjustments (tax related items) | ||||||
| Benefit related to the resolution of certain state income tax matters | (15) | - | (17) | |||
| Adjustments (tax related items) (u) | (15) | - | (17) | |||
| Noninterest income (v) | 732 | 711 | 744 | |||
| Valuation of Visa total return swap | 51 | 47 | 22 | |||
| Adjusted noninterest income (w) | 783 | 758 | 766 | |||
| Noninterest expense (x) | 1,226 | 1,244 | 1,455 | |||
| Fifth Third Foundation contribution | (15) | - | (15) | |||
| Mastercard litigation | (4) | (10) | - | |||
| FDIC special assessment | 11 | - | (224) | |||
| Restructuring severance expense | - | (9) | (5) | |||
| Adjusted noninterest expense (y) | 1,218 | 1,225 | 1,211 | |||
| Adjusted net income (r) + (t) + (u) | 650 | 624 | 718 | |||
| Adjusted net income (annualized) (z) | 2,586 | 2,482 | 2,849 | |||
| Adjusted tangible net income available to common shareholders (h) + (t) + (u) | 619 | 590 | 688 | |||
| Adjusted tangible net income available to common shareholders (annualized) (aa) | 2,463 | 2,347 | 2,730 | |||
| Average assets (ab) | $211,709 | $213,838 | $214,057 | |||
| Return on average tangible common equity (i) / (j) | 18.4 | % | 16.3 | % | 19.8 | % |
| Return on average tangible common equity excluding AOCI (i) / (k) | 13.7 | % | 12.6 | % | 12.2 | % |
| Adjusted return on average tangible common equity, including AOCI (aa) / (j) | 19.3 | % | 17.9 | % | 27.2 | % |
| Adjusted return on average tangible common equity, excluding AOCI (aa) / (k) | 14.4 | % | 13.8 | % | 16.8 | % |
| Return on average assets (s) / (ab) | 1.17 | % | 1.06 | % | 0.98 | % |
| Adjusted return on average assets (z) / (ab) | 1.22 | % | 1.16 | % | 1.33 | % |
| Efficiency ratio (FTE) (x) / [(a) + (v)] | 56.4 | % | 58.2 | % | 67.2 | % |
| Adjusted efficiency ratio (y) / [(a) + (w)] | 54.7 | % | 56.1 | % | 55.3 | % |
| Total revenue (FTE) (a) + (v) | $2,175 | $2,138 | $2,167 | |||
| Adjusted total revenue (FTE) (a) + (w) | $2,226 | $2,185 | $2,189 | |||
| Pre-provision net revenue (PPNR) (a) + (v) - (x) | $949 | $894 | $712 | |||
| Adjusted pre-provision net revenue (PPNR) (a) + (w) - (y) | $1,008 | $960 | $978 | |||
| 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. |
21