Fifth Third Announces Second Quarter 2022 Results
Reported diluted earnings per share of $0.76
Reported results included a negative $0.03 impact from certain item(s) on page 2
Key Financial Data | Key Highlights | |||||||||||||||||||||||||
$ millions for all balance sheet and income statement items | ||||||||||||||||||||||||||
2Q22 | 1Q22 | 2Q21 | Select Business Highlights: •Generated consumer household growth of 2% compared to 2Q21 •Announced stress capital buffer requirement of 2.5% (regulatory minimum) •Closed acquisition of Dividend Finance, a national point-of-sale consumer lender •Announced $100 billion environmental and social finance target to be achieved through 2030 Select Financial Highlights: •ROTCE(a) of 17.5%; adjusted ROTCE(a) of 15.2% excl. AOCI •Compared to 2Q21, PPNR(a) increased 13% (adjusted PPNR(a) increased 11%) •Efficiency ratio(a) of 55%, a 4 point improvement from 2Q21 •Net interest income(a) increased 12% compared to 1Q22; NIM(a) up 33 basis points compared to 1Q22 •ACL of 1.85%, an increase of 5 bps from 1Q22 (includes 4 bps from Dividend Finance); Net charge-off ratio of 0.21% and NPA ratio of 0.47% | |||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||||
Net income available to common shareholders | $526 | $474 | $674 | |||||||||||||||||||||||
Net interest income (U.S. GAAP) | 1,339 | 1,195 | 1,208 | |||||||||||||||||||||||
Net interest income (FTE)(a) | 1,342 | 1,198 | 1,211 | |||||||||||||||||||||||
Noninterest income | 676 | 684 | 741 | |||||||||||||||||||||||
Noninterest expense | 1,112 | 1,222 | 1,153 | |||||||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||||
Earnings per share, basic | $0.76 | $0.69 | $0.95 | |||||||||||||||||||||||
Earnings per share, diluted | 0.76 | 0.68 | 0.94 | |||||||||||||||||||||||
Book value per share | 24.56 | 26.33 | 29.57 | |||||||||||||||||||||||
Tangible book value per share(a) | 17.10 | 19.54 | 23.34 | |||||||||||||||||||||||
Balance Sheet & Credit Quality | ||||||||||||||||||||||||||
Average portfolio loans and leases | $117,693 | $113,467 | $108,534 | |||||||||||||||||||||||
Average deposits | 162,890 | 168,662 | 162,619 | |||||||||||||||||||||||
Net charge-off ratio(b) | 0.21 | % | 0.12 | % | 0.16 | % | ||||||||||||||||||||
Nonperforming asset ratio(c) | 0.47 | 0.49 | 0.61 | |||||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||
Return on average assets | 1.09 | % | 0.96 | % | 1.38 | % | ||||||||||||||||||||
Return on average common equity | 12.3 | 10.0 | 13.0 | |||||||||||||||||||||||
Return on average tangible common equity(a) | 17.5 | 13.4 | 16.6 | |||||||||||||||||||||||
CET1 capital(d)(e) | 8.96 | 9.31 | 10.37 | |||||||||||||||||||||||
Net interest margin(a) | 2.92 | 2.59 | 2.63 | |||||||||||||||||||||||
Efficiency(a) | 55.1 | 64.9 | 59.1 | |||||||||||||||||||||||
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. | ||||||||||||||||||||||||||
CEO Commentary |
Fifth Third has been deliberately built to perform well through-the-cycle. Our focus on maintaining discipline across the Company while growing and diversifying our revenues should ultimately result in sustainable outperformance relative to peers regardless of the economic environment. This outcome is evident in our second quarter financial performance. NIM expanded, net interest income increased, and expenses decreased compared to the prior quarter, resulting in an efficiency ratio of 55% despite softer fee revenue due to the macro environment. As a result, PPNR increased 13% compared to the year-ago quarter. We generated broad-based growth of relationships across our businesses. Our key credit quality metrics also remain well-behaved, reflecting our disciplined approach to client selection. Additionally, we added $10 billion in forward-starting swaps during the quarter to provide rate protection over the next decade.
Fifth Third continues to navigate the dynamic environment and generate strong financial results while fully supporting customers, communities, and employees. I am very proud that in addition to consistently producing strong financial results, we have also extended our ESG leadership position. Whether it's the 8 million meals we recently provided to fight hunger or our new $100 billion environmental and social finance target, we continue to live our purpose every day to improve the lives of our customers and the well-being of our communities.
-Tim Spence, President and CEO
Investor contact: Chris Doll (513) 534-2345 | Media contact: Ed Loyd (513) 534-6397 July 21, 2022
Income Statement Highlights | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions, except per share data) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
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Condensed Statements of Income | ||||||||||||||||||||||||||||||||||||||||||||
Net interest income (NII)(a) | $1,342 | $1,198 | $1,211 | 12% | 11% | |||||||||||||||||||||||||||||||||||||||
Provision for (benefit from) credit losses | 179 | 45 | (115) | 298% | NM | |||||||||||||||||||||||||||||||||||||||
Noninterest income | 676 | 684 | 741 | (1)% | (9)% | |||||||||||||||||||||||||||||||||||||||
Noninterest expense | 1,112 | 1,222 | 1,153 | (9)% | (4)% | |||||||||||||||||||||||||||||||||||||||
Income before income taxes(a) | $727 | $615 | $914 | 18% | (20)% | |||||||||||||||||||||||||||||||||||||||
Taxable equivalent adjustment | $3 | $3 | $3 | — | — | |||||||||||||||||||||||||||||||||||||||
Applicable income tax expense | 162 | 118 | 202 | 37% | (20)% | |||||||||||||||||||||||||||||||||||||||
Net income | $562 | $494 | $709 | 14% | (21)% | |||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock | 36 | 20 | 35 | 80% | 3% | |||||||||||||||||||||||||||||||||||||||
Net income available to common shareholders | $526 | $474 | $674 | 11% | (22)% | |||||||||||||||||||||||||||||||||||||||
Earnings per share, diluted | $0.76 | $0.68 | $0.94 | 12% | (19)% | |||||||||||||||||||||||||||||||||||||||
Fifth Third Bancorp (NASDAQ®: FITB) today reported second quarter 2022 net income of $562 million compared to net income of $494 million in the prior quarter and $709 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $526 million, or $0.76 per diluted share, compared to $474 million, or $0.68 per diluted share, in the prior quarter and $674 million, or $0.94 per diluted share, in the year-ago quarter.
Diluted earnings per share impact of certain item(s) - 2Q22 | |||||||||||||||||
(after-tax impact(f); $ in millions, except per share data) | |||||||||||||||||
Valuation of Visa total return swap (noninterest income) | $(14) | ||||||||||||||||
Business disposition charges (noninterest income) | (5) | ||||||||||||||||
After-tax impact(f) of certain items | $(19) | ||||||||||||||||
Diluted earnings per share impact of certain item(s)1 | $(0.03) | ||||||||||||||||
1Diluted earnings per share impact reflects 694.805 million average diluted shares outstanding | |||||||||||||||||
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Net Interest Income | ||||||||||||||||||||||||||||||||||||||||||||
(FTE; $ in millions)(a) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
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Interest Income | ||||||||||||||||||||||||||||||||||||||||||||
Interest income | $1,467 | $1,292 | $1,326 | 14% | 11% | |||||||||||||||||||||||||||||||||||||||
Interest expense | 125 | 94 | 115 | 33% | 9% | |||||||||||||||||||||||||||||||||||||||
Net interest income (NII) | $1,342 | $1,198 | $1,211 | 12% | 11% | |||||||||||||||||||||||||||||||||||||||
Average Yield/Rate Analysis | bps Change | |||||||||||||||||||||||||||||||||||||||||||
Yield on interest-earning assets | 3.19 | % | 2.79 | % | 2.88 | % | 40 | 31 | ||||||||||||||||||||||||||||||||||||
Rate paid on interest-bearing liabilities | 0.43 | % | 0.33 | % | 0.40 | % | 10 | 3 | ||||||||||||||||||||||||||||||||||||
Ratios | ||||||||||||||||||||||||||||||||||||||||||||
Net interest rate spread | 2.76 | % | 2.46 | % | 2.48 | % | 30 | 28 | ||||||||||||||||||||||||||||||||||||
Net interest margin (NIM) | 2.92 | % | 2.59 | % | 2.63 | % | 33 | 29 | ||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, NII increased $144 million, or 12%, primarily reflecting higher market rates, as well as growth in investment portfolio balances and commercial & industrial (C&I) loan balances, partially offset by a reduction in prepayment penalties received in the investment portfolio (approximately $5 million in the current quarter compared to $24 million in the prior quarter) as well as lower interest income from government guaranteed mortgage buyouts. PPP-related income was $12 million in the current quarter compared to $20 million in the prior quarter. Compared to the prior quarter, NIM increased 33 bps, reflecting the benefit of higher market rates as well as a decrease in other short-term investments (primarily interest-bearing cash), partially offset by a reduction in prepayment penalties received in the investment portfolio.
Compared to the year-ago quarter, NII increased $131 million, or 11%, reflecting the recent benefits of higher market rates, as well as growth in investment portfolio balances and C&I loan balances, partially offset by lower PPP-related income and lower interest income from government guaranteed mortgage buyouts. Compared to the year-ago quarter, NIM increased 29 bps, reflecting the benefit of higher market rates as well as a decrease in other short-term investments (primarily interest-bearing cash).
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Noninterest Income | |||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | |||||||||||||||||||||||||||||||||
June | March | June | |||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | |||||||||||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||||||||||
Service charges on deposits | $154 | $152 | $149 | 1% | 3% | ||||||||||||||||||||||||||||||
Commercial banking revenue | 137 | 135 | 160 | 1% | (14)% | ||||||||||||||||||||||||||||||
Mortgage banking net revenue | 31 | 52 | 64 | (40)% | (52)% | ||||||||||||||||||||||||||||||
Wealth and asset management revenue | 140 | 149 | 145 | (6)% | (3)% | ||||||||||||||||||||||||||||||
Card and processing revenue | 105 | 97 | 102 | 8% | 3% | ||||||||||||||||||||||||||||||
Leasing business revenue | 56 | 62 | 61 | (10)% | (8)% | ||||||||||||||||||||||||||||||
Other noninterest income | 85 | 52 | 49 | 63% | 73% | ||||||||||||||||||||||||||||||
Securities (losses) gains, net | (32) | (14) | 10 | 129% | NM | ||||||||||||||||||||||||||||||
Securities (losses) gains, net - non-qualifying hedges | |||||||||||||||||||||||||||||||||||
on mortgage servicing rights | — | (1) | 1 | (100)% | (100)% | ||||||||||||||||||||||||||||||
Total noninterest income | $676 | $684 | $741 | (1)% | (9)% | ||||||||||||||||||||||||||||||
Reported noninterest income decreased $8 million, or 1%, from the prior quarter, and decreased $65 million, or 9%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below. Reported current quarter results included $32 million of net securities losses, which included $26 million in net losses attributable to mark-to-market impacts related to investments supporting non-qualified deferred compensation plans, as well as a $3 million loss attributable to market value changes on Fifth Third's shares of AvidXchange Holdings, Inc.
Noninterest Income excluding certain items | |||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | ||||||||||||||||||||||||||||
June | March | June | |||||||||||||||||||||||||||
2022 | 2022 | 2021 | |||||||||||||||||||||||||||
Noninterest Income excluding certain items | |||||||||||||||||||||||||||||
Noninterest income (U.S. GAAP) | $676 | $684 | $741 | ||||||||||||||||||||||||||
Valuation of Visa total return swap | 18 | 11 | 37 | ||||||||||||||||||||||||||
Business disposition charges | 6 | — | — | ||||||||||||||||||||||||||
Securities losses/(gains), net | 32 | 14 | (10) | ||||||||||||||||||||||||||
Noninterest income excluding certain items(a) | $732 | $709 | $768 | ||||||||||||||||||||||||||
Compared to the prior quarter, noninterest income excluding certain items increased $23 million, or 3%. Compared to the year-ago quarter, noninterest income excluding certain items decreased $36 million, or 5%.
Compared to the prior quarter, service charges on deposits increased $2 million, or 1%, primarily reflecting an increase in consumer deposit fees, as an increase in gross commercial treasury management revenue was offset by earnings credits. Commercial banking revenue increased $2 million, or 1%, primarily driven by M&A advisory revenue and higher customer financial risk management revenue, partially offset by a decrease in corporate bond fees. Mortgage banking net revenue decreased $21 million, or 40%, primarily reflecting a $28 million decrease from MSR net valuation adjustments, partially offset by a $10 million increase in mortgage servicing revenue. Wealth and asset management revenue decreased $9 million, or 6%, driven by the impact of lower market values and seasonally strong tax-related private client service revenue from the prior quarter. Card and processing revenue increased $8 million, or 8%, primarily driven by higher spend volumes, partially offset by higher rewards. Leasing business revenue decreased $6 million, or 10%, reflecting the disposition of LaSalle Solutions. The increase in other noninterest income was primarily attributable to higher private equity income.
Compared to the year-ago quarter, service charges on deposits increased $5 million, or 3%, primarily reflecting an increase in commercial treasury management fees. Commercial banking revenue decreased $23 million, or 14%, primarily
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driven by decreases in corporate bond fees and loan syndication revenue, partially offset by an increase in customer financial risk management revenue. Mortgage banking net revenue decreased $33 million, or 52%, reflecting a $58 million decrease in origination fees and gains on loan sales and a $16 million reduction from MSR net valuation adjustments, partially offset by a $22 million increase in mortgage servicing revenue and a $19 million decrease in MSR asset decay reflecting slower prepayment speeds. Wealth and asset management revenue decreased $5 million, or 3%, reflecting lower personal asset management revenue. Card and processing revenue increased $3 million, or 3%, primarily driven by higher spend volumes, partially offset by higher rewards. Leasing business revenue decreased $5 million, or 8%, reflecting the disposition of LaSalle Solutions, partially offset by an increase in lease syndication revenue. The increase in other noninterest income was primarily attributable to higher private equity income.
Noninterest Expense | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
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Noninterest Expense | ||||||||||||||||||||||||||||||||||||||||||||
Compensation and benefits | $584 | $711 | $638 | (18)% | (8)% | |||||||||||||||||||||||||||||||||||||||
Net occupancy expense | 75 | 77 | 77 | (3)% | (3)% | |||||||||||||||||||||||||||||||||||||||
Technology and communications | 98 | 101 | 94 | (3)% | 4% | |||||||||||||||||||||||||||||||||||||||
Equipment expense | 36 | 36 | 34 | — | 6% | |||||||||||||||||||||||||||||||||||||||
Card and processing expense | 20 | 19 | 20 | 5% | — | |||||||||||||||||||||||||||||||||||||||
Leasing business expense | 31 | 32 | 33 | (3)% | (6)% | |||||||||||||||||||||||||||||||||||||||
Marketing expense | 28 | 24 | 20 | 17% | 40% | |||||||||||||||||||||||||||||||||||||||
Other noninterest expense | 240 | 222 | 237 | 8% | 1% | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | $1,112 | $1,222 | $1,153 | (9)% | (4)% | |||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, noninterest expense decreased $110 million, or 9%, driven by a decrease in compensation and benefits expense, reflecting seasonally-higher compensation in the prior quarter, lower incentive-based compensation due to the current market dynamics, and overall expense discipline throughout the firm. Noninterest expense in the current quarter included a $27 million benefit related to the impact of non-qualified deferred compensation mark-to-market (compared to a $12 million benefit in the prior quarter). Excluding the non-qualified deferred compensation impacts from both periods, total noninterest expense decreased $95 million, or 8%.
Compared to the year-ago quarter, noninterest expense decreased $41 million, or 4%, reflecting a decrease in compensation and benefits expense. This was partially offset by higher marketing expense and an increase in technology and communications expense related to continued modernization investments.
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Average Interest-Earning Assets | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
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Average Portfolio Loans and Leases | ||||||||||||||||||||||||||||||||||||||||||||
Commercial loans and leases: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial loans | $55,460 | $52,554 | $48,773 | 6% | 14% | |||||||||||||||||||||||||||||||||||||||
Commercial mortgage loans | 10,710 | 10,521 | 10,459 | 2% | 2% | |||||||||||||||||||||||||||||||||||||||
Commercial construction loans | 5,356 | 5,371 | 6,043 | — | (11)% | |||||||||||||||||||||||||||||||||||||||
Commercial leases | 2,839 | 2,942 | 3,174 | (4)% | (11)% | |||||||||||||||||||||||||||||||||||||||
Total commercial loans and leases | $74,365 | $71,388 | $68,449 | 4% | 9% | |||||||||||||||||||||||||||||||||||||||
Consumer loans: | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage loans | $17,363 | $16,501 | $15,883 | 5% | 9% | |||||||||||||||||||||||||||||||||||||||
Home equity | 3,895 | 4,009 | 4,674 | (3)% | (17)% | |||||||||||||||||||||||||||||||||||||||
Indirect secured consumer loans | 17,241 | 17,136 | 14,702 | 1% | 17% | |||||||||||||||||||||||||||||||||||||||
Credit card | 1,704 | 1,691 | 1,770 | 1% | (4)% | |||||||||||||||||||||||||||||||||||||||
Other consumer loans | 3,125 | 2,742 | 3,056 | 14% | 2% | |||||||||||||||||||||||||||||||||||||||
Total consumer loans | $43,328 | $42,079 | $40,085 | 3% | 8% | |||||||||||||||||||||||||||||||||||||||
Total average portfolio loans and leases | $117,693 | $113,467 | $108,534 | 4% | 8% | |||||||||||||||||||||||||||||||||||||||
Memo: | ||||||||||||||||||||||||||||||||||||||||||||
Average PPP loans | $549 | $1,012 | $4,810 | (46)% | (89)% | |||||||||||||||||||||||||||||||||||||||
Average portfolio commercial and industrial loans - excl. PPP loans | $54,911 | $51,542 | $43,963 | 7% | 25% | |||||||||||||||||||||||||||||||||||||||
Average Loans and Leases Held for Sale | ||||||||||||||||||||||||||||||||||||||||||||
Commercial loans and leases held for sale | $7 | $18 | $52 | (61)% | (87)% | |||||||||||||||||||||||||||||||||||||||
Consumer loans held for sale | 2,536 | 3,677 | 5,857 | (31)% | (57)% | |||||||||||||||||||||||||||||||||||||||
Total average loans and leases held for sale | $2,543 | $3,695 | $5,909 | (31)% | (57)% | |||||||||||||||||||||||||||||||||||||||
Total average loans and leases | $120,236 | $117,162 | $114,443 | 3% | 5% | |||||||||||||||||||||||||||||||||||||||
Securities (taxable and tax-exempt) | $54,538 | $42,422 | $36,917 | 29% | 48% | |||||||||||||||||||||||||||||||||||||||
Other short-term investments | 9,632 | 28,310 | 33,558 | (66)% | (71)% | |||||||||||||||||||||||||||||||||||||||
Total average interest-earning assets | $184,406 | $187,894 | $184,918 | (2)% | — | |||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, total average portfolio loans and leases increased 4%, reflecting an increase in both commercial and consumer portfolios. Average commercial portfolio loans and leases increased 4%, primarily reflecting C&I loan growth of 6%. Average consumer portfolio loans increased 3%, reflecting higher residential mortgage and other consumer loans (primarily from the Dividend Finance acquisition), partially offset by lower home equity balances.
Compared to the year-ago quarter, total average portfolio loans and leases increased 8%, reflecting an increase in both commercial and consumer portfolios. Average commercial portfolio loans and leases increased 9%, primarily reflecting C&I loan growth of 14%, partially offset by lower commercial construction loans. Average consumer portfolio loans increased 8%, as higher indirect secured consumer and residential mortgage loans were partially offset by lower home equity balances.
Average loans and leases held for sale were $3 billion in the current quarter compared to $4 billion in the prior quarter and $6 billion in the year-ago quarter. Current quarter average loans and leases held for sale were impacted by a decline in residential mortgage balances (primarily from a decline in government guaranteed mortgage buyouts).
Average securities (taxable and tax-exempt) of $55 billion in the current quarter increased $12 billion, or 29%, compared to the prior quarter and increased $18 billion, or 48%, compared to the year-ago quarter. Average other short-term investments (including interest-bearing cash) of $10 billion in the current quarter decreased $19 billion, or 66%, compared to the prior quarter and decreased $24 billion, or 71%, compared to the year-ago quarter.
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Total period-end commercial portfolio loans and leases of $75 billion increased 3% compared to the prior quarter, primarily reflecting C&I loan growth of 4%. Compared to the year-ago quarter, total period-end commercial portfolio loans increased 12%, primarily reflecting C&I loan growth of 18%, partially offset by lower commercial construction loan balances. Period-end commercial revolving line utilization was 37%, compared to 36% in the prior quarter and 31% in the year-ago quarter.
Period-end consumer portfolio loans of $44 billion increased 2% compared to the prior quarter, primarily reflecting higher other consumer loans (primarily from the Dividend Finance acquisition) and residential mortgage loans, partially offset by a decline in indirect secured consumer loan balances. Compared to the year-ago quarter, total period-end consumer portfolio loans increased 8%, reflecting an increase in indirect secured consumer loans and residential mortgage loans, partially offset by lower home equity balances.
Total period-end securities (taxable and tax-exempt; amortized cost) of $57 billion in the current quarter increased $6 billion, or 12%, compared to the prior quarter and increased $20 billion, or 54%, compared to the year-ago quarter. Period-end other short-term investments of $7 billion in the current quarter decreased $13 billion, or 64%, compared to the prior quarter and decreased $25 billion, or 77%, compared to the year-ago quarter.
Average Deposits | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Average Deposits | ||||||||||||||||||||||||||||||||||||||||||||
Demand | $62,555 | $64,212 | $61,994 | (3)% | 1% | |||||||||||||||||||||||||||||||||||||||
Interest checking | 44,349 | 48,659 | 45,307 | (9)% | (2)% | |||||||||||||||||||||||||||||||||||||||
Savings | 23,708 | 22,772 | 20,494 | 4% | 16% | |||||||||||||||||||||||||||||||||||||||
Money market | 29,284 | 30,263 | 30,844 | (3)% | (5)% | |||||||||||||||||||||||||||||||||||||||
Foreign office(g) | 139 | 126 | 140 | 10% | (1)% | |||||||||||||||||||||||||||||||||||||||
Total transaction deposits | $160,035 | $166,032 | $158,779 | (4)% | 1% | |||||||||||||||||||||||||||||||||||||||
CDs $250,000 or less | 2,193 | 2,376 | 3,514 | (8)% | (38)% | |||||||||||||||||||||||||||||||||||||||
Total core deposits | $162,228 | $168,408 | $162,293 | (4)% | — | |||||||||||||||||||||||||||||||||||||||
CDs over $250,000 | 662 | 254 | 326 | 161% | 103% | |||||||||||||||||||||||||||||||||||||||
Total average deposits | $162,890 | $168,662 | $162,619 | (3)% | — | |||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, average core deposits decreased 4% as decreases in interest checking, demand deposit and money market balances (primarily reflecting runoff of excess and higher cost commercial deposits) were partially offset by increases in savings deposit balances. Average demand deposits represented 39% of total core deposits in the current quarter, relatively stable with the prior quarter. Average commercial transaction deposits decreased 8% and average consumer transaction deposits increased 1%.
Compared to the year-ago quarter, average core deposits were flat, as ongoing success in generating consumer household growth was offset by runoff of excess and higher cost commercial deposits. Average commercial transaction deposits decreased 5% and average consumer transaction deposits increased 7%.
The period end portfolio loan-to-core deposit ratio was 75% in the current quarter, compared to 68% in the prior quarter and 67% in the year-ago quarter.
7
Average Wholesale Funding | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||||||||||||||||||||||||||
June | March | June | ||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | ||||||||||||||||||||||||||||||||||||||||
Average Wholesale Funding | ||||||||||||||||||||||||||||||||||||||||||||
CDs over $250,000 | $662 | $254 | $326 | 161% | 103% | |||||||||||||||||||||||||||||||||||||||
Federal funds purchased | 392 | 259 | 346 | 51% | 13% | |||||||||||||||||||||||||||||||||||||||
Other short-term borrowings | 3,571 | 890 | 1,097 | 301% | 226% | |||||||||||||||||||||||||||||||||||||||
Long-term debt | 11,164 | 11,165 | 13,883 | — | (20)% | |||||||||||||||||||||||||||||||||||||||
Total average wholesale funding | $15,789 | $12,568 | $15,652 | 26% | 1% | |||||||||||||||||||||||||||||||||||||||
Compared to the prior quarter, average wholesale funding increased 26%, reflecting increases in other short-term borrowings, jumbo CD balances, and federal funds purchased. During the quarter, $700 million in long-term debt was retired and $1 billion in long-term debt was issued. Compared to the year-ago quarter, average wholesale funding increased 1%, reflecting increases in other short-term borrowings, jumbo CD balances, and federal funds purchased, partially offset by decreases in long-term debt.
8
Credit Quality Summary | ||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | As of and For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||
Total nonaccrual portfolio loans and leases (NPLs) | $539 | $534 | $498 | $528 | $621 | |||||||||||||||||||||||||||||||||||||||
Repossessed property | 6 | 5 | 5 | 4 | 5 | |||||||||||||||||||||||||||||||||||||||
OREO | 14 | 27 | 24 | 27 | 31 | |||||||||||||||||||||||||||||||||||||||
Total nonperforming portfolio loans and leases and OREO (NPAs) | $559 | $566 | $527 | $559 | $657 | |||||||||||||||||||||||||||||||||||||||
NPL ratio(h) | 0.45 | % | 0.46 | % | 0.44 | % | 0.49 | % | 0.58 | % | ||||||||||||||||||||||||||||||||||
NPA ratio(c) | 0.47 | % | 0.49 | % | 0.47 | % | 0.52 | % | 0.61 | % | ||||||||||||||||||||||||||||||||||
Total loans and leases 30-89 days past due (accrual) | $294 | $288 | $254 | $267 | $281 | |||||||||||||||||||||||||||||||||||||||
Total loans and leases 90 days past due (accrual) | 39 | 50 | 117 | 92 | 83 | |||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses (ALLL), beginning | $1,908 | $1,892 | $1,954 | $2,033 | $2,208 | |||||||||||||||||||||||||||||||||||||||
Total net losses charged-off | (62) | (34) | (38) | (21) | (44) | |||||||||||||||||||||||||||||||||||||||
Provision for (benefit from) loan and lease losses | 168 | 50 | (24) | (58) | (131) | |||||||||||||||||||||||||||||||||||||||
ALLL, ending | $2,014 | $1,908 | $1,892 | $1,954 | $2,033 | |||||||||||||||||||||||||||||||||||||||
Reserve for unfunded commitments, beginning | $177 | $182 | $205 | $189 | $173 | |||||||||||||||||||||||||||||||||||||||
Provision for (benefit from) the reserve for unfunded commitments | 11 | (5) | (23) | 16 | 16 | |||||||||||||||||||||||||||||||||||||||
Reserve for unfunded commitments, ending | $188 | $177 | $182 | $205 | $189 | |||||||||||||||||||||||||||||||||||||||
Total allowance for credit losses (ACL) | $2,202 | $2,085 | $2,074 | $2,159 | $2,222 | |||||||||||||||||||||||||||||||||||||||
ACL ratios: | ||||||||||||||||||||||||||||||||||||||||||||
As a % of portfolio loans and leases | 1.85 | % | 1.80 | % | 1.85 | % | 2.00 | % | 2.06 | % | ||||||||||||||||||||||||||||||||||
As a % of nonperforming portfolio loans and leases | 408 | % | 391 | % | 416 | % | 409 | % | 358 | % | ||||||||||||||||||||||||||||||||||
As a % of nonperforming portfolio assets | 394 | % | 369 | % | 394 | % | 386 | % | 338 | % | ||||||||||||||||||||||||||||||||||
ALLL as a % of portfolio loans and leases | 1.70 | % | 1.65 | % | 1.69 | % | 1.81 | % | 1.89 | % | ||||||||||||||||||||||||||||||||||
Total losses charged-off | $(90) | $(64) | $(77) | $(56) | $(103) | |||||||||||||||||||||||||||||||||||||||
Total recoveries of losses previously charged-off | 28 | 30 | 39 | 35 | 59 | |||||||||||||||||||||||||||||||||||||||
Total net losses charged-off | $(62) | $(34) | $(38) | $(21) | $(44) | |||||||||||||||||||||||||||||||||||||||
Net charge-off ratio (NCO ratio)(b) | 0.21 | % | 0.12 | % | 0.14 | % | 0.08 | % | 0.16 | % | ||||||||||||||||||||||||||||||||||
Commercial NCO ratio | 0.19 | % | 0.05 | % | 0.10 | % | 0.03 | % | 0.10 | % | ||||||||||||||||||||||||||||||||||
Consumer NCO ratio | 0.24 | % | 0.25 | % | 0.21 | % | 0.16 | % | 0.26 | % | ||||||||||||||||||||||||||||||||||
Nonperforming portfolio loans and leases were $539 million in the current quarter, with the resulting NPL ratio of 0.45%. Compared to the prior quarter, NPLs increased $5 million with the NPL ratio decreasing 1 bp. Compared to the year-ago quarter, NPLs decreased $82 million with the NPL ratio decreasing 13 bps.
Nonperforming portfolio assets were $559 million in the current quarter, with the resulting NPA ratio of 0.47%. Compared to the prior quarter, NPAs decreased $7 million with the NPA ratio decreasing 2 bps. Compared to the year-ago quarter, NPAs decreased $98 million with the NPA ratio decreasing 14 bps.
The provision for credit losses totaled $179 million in the current quarter, including approximately $53 million for the provision expense for loans and unfunded commitments associated with the Dividend Finance acquisition. The allowance for credit loss ratio represented 1.85% of total portfolio loans and leases at quarter end, compared with 1.80% for the prior
9
quarter end and 2.06% for the year-ago quarter end. In the current quarter, the allowance for credit losses represented 408% of nonperforming portfolio loans and leases and 394% of nonperforming portfolio assets.
Net charge-offs were $62 million in the current quarter, with the resulting NCO ratio of 0.21%. Compared to the prior quarter, net charge-offs increased $28 million and the NCO ratio increased 9 bps, reflecting higher charge-offs in the commercial portfolio. Compared to the year-ago quarter, net charge-offs increased $18 million and the NCO ratio increased 5 bps, reflecting higher commercial net charge-offs, offset by slightly lower consumer net charge-offs.
Capital Position | ||||||||||||||||||||||||||||||||||||||||||||||||||
As of and For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Capital Position | ||||||||||||||||||||||||||||||||||||||||||||||||||
Average total Bancorp shareholders' equity as a % of average assets | 9.35 | % | 10.23 | % | 10.71% | 11.16% | 11.11 | % | ||||||||||||||||||||||||||||||||||||||||||
Tangible equity(a) | 8.05 | % | 7.98 | % | 7.97% | 8.06% | 8.35 | % | ||||||||||||||||||||||||||||||||||||||||||
Tangible common equity (excluding AOCI)(a) | 7.01 | % | 6.96 | % | 6.94% | 7.01% | 7.28 | % | ||||||||||||||||||||||||||||||||||||||||||
Tangible common equity (including AOCI)(a) | 5.82 | % | 6.48 | % | 7.47% | 7.74% | 8.18 | % | ||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Ratios(d)(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||
CET1 capital | 8.96 | % | 9.31 | % | 9.54% | 9.86% | 10.37 | % | ||||||||||||||||||||||||||||||||||||||||||
Tier 1 risk-based capital | 10.24 | % | 10.63 | % | 10.91% | 11.28% | 11.83 | % | ||||||||||||||||||||||||||||||||||||||||||
Total risk-based capital | 12.48 | % | 12.93 | % | 13.42% | 13.94% | 14.60 | % | ||||||||||||||||||||||||||||||||||||||||||
Leverage | 8.30 | % | 8.32 | % | 8.27% | 8.41% | 8.55 | % | ||||||||||||||||||||||||||||||||||||||||||
The CET1 capital ratio was 8.96%, the tangible common equity to tangible assets ratio was 7.01% excluding AOCI, and 5.82% including AOCI. The Tier 1 risk-based capital ratio was 10.24%, the Total risk-based capital ratio was 12.48%, and the Leverage ratio was 8.30%.
On June 27, 2022, Fifth Third released its indicative stress capital buffer requirement resulting from the Federal Reserve
Board’s 2022 annual bank stress test, incorporating the supervisory severely adverse scenario published in February 2022. Fifth Third’s indicative stress capital buffer under this scenario is 2.5%, effective October 1, 2022. The stress capital buffer of 2.5% is the floor under the regulatory capital rules.
10
Tax Rate
The effective tax rate was 22.4% compared with 19.2% in the prior quarter and 22.1% 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 Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. As of June 30, 2022, the Company had $207 billion in assets and operates 1,080 full-service Banking Centers, and 2,153 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. In total, Fifth Third provides its customers with access to approximately 56,000 fee-free ATMs across the United States. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Wealth & Asset Management. Fifth Third is among the largest money managers in the Midwest and, as of June 30, 2022, had $512 billion in assets under care, of which it managed $54 billion for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the NASDAQ® Global Select Market under the symbol “FITB.”
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) effects of the global COVID-19 pandemic; (2) deteriorating credit quality; (3) loan concentration by location or industry of borrowers or collateral; (4) problems encountered by other financial institutions; (5) inadequate sources of funding or liquidity; (6) unfavorable actions of rating agencies; (7) inability to maintain or grow deposits; (8) limitations on the ability to receive dividends from subsidiaries; (9) cyber-security risks; (10) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (11) failures by third-party service providers; (12) inability to manage strategic initiatives and/or organizational changes; (13) inability to implement technology system enhancements; (14) failure of internal controls and other risk management systems; (15) losses related to fraud, theft, misappropriation or violence; (16) inability to attract and retain skilled personnel; (17) adverse impacts of government regulation; (18) governmental or regulatory changes or other actions; (19) failures to meet applicable capital requirements; (20) regulatory objections to Fifth Third’s capital plan; (21) regulation of Fifth Third’s derivatives activities; (22) deposit insurance premiums; (23) assessments for the orderly liquidation fund; (24) replacement of LIBOR; (25) weakness in the national or local economies; (26) global political and economic uncertainty or negative actions; (27) changes in interest rates; (28) changes and trends in capital markets; (29) fluctuation of Fifth Third’s stock price; (30) volatility in mortgage banking revenue; (31) litigation, investigations, and enforcement proceedings by governmental authorities; (32) breaches of contractual covenants, representations and warranties; (33) competition and changes in the financial services industry; (34) changing retail distribution strategies, customer preferences and behavior; (35) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (36) potential dilution from future acquisitions; (37) loss of income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (38) results of investments or acquired entities; (39) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (40) inaccuracies or other failures from the use of models; (41) effects of critical accounting policies and judgments or the use of inaccurate estimates; (42) weather-related events, other natural disasters, or health emergencies (including pandemics); (43) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity; (44) changes in law or requirements imposed by Fifth Third’s regulators impacting our capital actions, including dividend payments and stock repurchases; and (45) Fifth Third's ability to meet its sustainability 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
Quarterly Financial Review for June 30, 2022
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 Sheet and Yield 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 | ||||||||||
13
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||||||||
Financial Highlights | % / bps | % / bps | |||||||||||||||||||||||||||
$ in millions, except per share data | For the Three Months Ended | Change | Year to Date | Change | |||||||||||||||||||||||||
(unaudited) | June | March | June | June | June | ||||||||||||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | 2022 | 2021 | Yr/Yr | ||||||||||||||||||||||
Income Statement Data | |||||||||||||||||||||||||||||
Net interest income | $1,339 | $1,195 | $1,208 | 12% | 11% | $2,534 | $2,385 | 6% | |||||||||||||||||||||
Net interest income (FTE)(a) | 1,342 | 1,198 | 1,211 | 12% | 11% | 2,541 | 2,391 | 6% | |||||||||||||||||||||
Noninterest income | 676 | 684 | 741 | (1%) | (9%) | 1,359 | 1,490 | (9%) | |||||||||||||||||||||
Total revenue (FTE)(a) | 2,018 | 1,882 | 1,952 | 7% | 3% | 3,900 | 3,881 | — | |||||||||||||||||||||
Provision for (benefit from) credit losses | 179 | 45 | (115) | 298% | NM | 224 | (288) | NM | |||||||||||||||||||||
Noninterest expense | 1,112 | 1,222 | 1,153 | (9%) | (4%) | 2,334 | 2,369 | (1%) | |||||||||||||||||||||
Net income | 562 | 494 | 709 | 14% | (21%) | 1,056 | 1,403 | (25%) | |||||||||||||||||||||
Net income available to common shareholders | 526 | 474 | 674 | 11% | (22%) | 1,000 | 1,348 | (26%) | |||||||||||||||||||||
Earnings Per Share Data | |||||||||||||||||||||||||||||
Net income allocated to common shareholders | $525 | $473 | $673 | 11% | (22%) | $999 | $1,344 | (26%) | |||||||||||||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||||||||||||||||
Basic | 689,019 | 687,538 | 708,833 | — | (3%) | 688,282 | 711,617 | (3%) | |||||||||||||||||||||
Diluted | 694,805 | 696,242 | 718,085 | — | (3%) | 695,520 | 720,740 | (3%) | |||||||||||||||||||||
Earnings per share, basic | $0.76 | $0.69 | $0.95 | 10% | (20%) | $1.45 | $1.89 | (23%) | |||||||||||||||||||||
Earnings per share, diluted | 0.76 | 0.68 | 0.94 | 12% | (19%) | 1.44 | 1.87 | (23%) | |||||||||||||||||||||
Common Share Data | |||||||||||||||||||||||||||||
Cash dividends per common share | $0.30 | $0.30 | $0.27 | — | 11% | $0.60 | $0.54 | 11% | |||||||||||||||||||||
Book value per share | 24.56 | 26.33 | 29.57 | (7%) | (17%) | 24.56 | 29.57 | (17%) | |||||||||||||||||||||
Market value per share | 33.60 | 43.04 | 38.23 | (22%) | (12%) | 33.60 | 38.23 | (12%) | |||||||||||||||||||||
Common shares outstanding (in thousands) | 686,152 | 685,905 | 703,740 | — | (2%) | 686,152 | 703,740 | (2%) | |||||||||||||||||||||
Market capitalization | $23,055 | $29,521 | $26,904 | (22%) | (14%) | $23,055 | $26,904 | (14%) | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||
Return on average assets | 1.09 | % | 0.96 | % | 1.38 | % | 13 | (29) | 1.03 | % | 1.38 | % | (35) | ||||||||||||||||
Return on average common equity | 12.3 | % | 10.0 | % | 13.0 | % | 230 | (70) | 11.1 | % | 13.1 | % | (200) | ||||||||||||||||
Return on average tangible common equity(a) | 17.5 | % | 13.4 | % | 16.6 | % | 410 | 90 | 15.3 | % | 16.7 | % | (140) | ||||||||||||||||
Noninterest income as a percent of total revenue(a) | 33 | % | 36 | % | 38 | % | (300) | (500) | 35 | % | 38 | % | (300) | ||||||||||||||||
Dividend payout | 39.5 | % | 43.5 | % | 28.4 | % | (400) | NM | 41.4 | % | 28.6 | % | NM | ||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 9.35 | % | 10.23 | % | 11.11 | % | (88) | (176) | 9.79 | % | 11.18 | % | (139) | ||||||||||||||||
Tangible common equity(a) | 7.01 | % | 6.96 | % | 7.28 | % | 5 | (27) | 7.01 | % | 7.28 | % | (27) | ||||||||||||||||
Net interest margin (FTE)(a) | 2.92 | % | 2.59 | % | 2.63 | % | 33 | 29 | 2.75 | % | 2.62 | % | 13 | ||||||||||||||||
Efficiency (FTE)(a) | 55.1 | % | 64.9 | % | 59.1 | % | (980) | (400) | 59.8 | % | 61.0 | % | (120) | ||||||||||||||||
Effective tax rate | 22.4 | % | 19.2 | % | 22.1 | % | 320 | 30 | 20.9 | % | 21.8 | % | (90) | ||||||||||||||||
Credit Quality | |||||||||||||||||||||||||||||
Net losses charged-off | $62 | $34 | $44 | 82 | % | 41 | % | $96 | $115 | (17 | %) | ||||||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.21 | % | 0.12 | % | 0.16 | % | 9 | 5 | 0.17 | % | 0.21 | % | (4) | ||||||||||||||||
ALLL as a percent of portfolio loans and leases | 1.70 | % | 1.65 | % | 1.89 | % | 5 | (19) | 1.70 | % | 1.89 | % | (19) | ||||||||||||||||
ACL as a percent of portfolio loans and leases(g) | 1.85 | % | 1.80 | % | 2.06 | % | 5 | (21) | 1.85 | % | 2.06 | % | (21) | ||||||||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.47 | % | 0.49 | % | 0.61 | % | (2) | (14) | 0.47 | % | 0.61 | % | (14) | ||||||||||||||||
Average Balances | |||||||||||||||||||||||||||||
Loans and leases, including held for sale | $120,236 | $117,162 | $114,443 | 3% | 5% | $118,708 | $114,074 | 4% | |||||||||||||||||||||
Securities and other short-term investments | 64,170 | 70,732 | 70,475 | (9%) | (9%) | 67,431 | 69,749 | (3%) | |||||||||||||||||||||
Assets | 205,897 | 209,150 | 206,353 | (2%) | — | 207,515 | 205,102 | 1% | |||||||||||||||||||||
Transaction deposits(b) | 160,035 | 166,032 | 158,779 | (4%) | 1% | 163,016 | 156,321 | 4% | |||||||||||||||||||||
Core deposits(c) | 162,228 | 168,408 | 162,293 | (4%) | — | 165,300 | 159,989 | 3% | |||||||||||||||||||||
Wholesale funding(d) | 15,789 | 12,568 | 15,652 | 26% | 1% | 14,188 | 16,626 | (15%) | |||||||||||||||||||||
Bancorp shareholders’ equity | 19,248 | 21,402 | 22,927 | (10%) | (16%) | 20,319 | 22,939 | (11%) | |||||||||||||||||||||
Regulatory Capital Ratios(e)(f) | |||||||||||||||||||||||||||||
CET1 capital | 8.96 | % | 9.31 | % | 10.37 | % | (35) | (141) | 8.96 | % | 10.37 | % | (141) | ||||||||||||||||
Tier 1 risk-based capital | 10.24 | % | 10.63 | % | 11.83 | % | (39) | (159) | 10.24 | % | 11.83 | % | (159) | ||||||||||||||||
Total risk-based capital | 12.48 | % | 12.93 | % | 14.60 | % | (45) | (212) | 12.48 | % | 14.60 | % | (212) | ||||||||||||||||
Leverage | 8.30 | % | 8.32 | % | 8.55 | % | (2) | (25) | 8.30 | % | 8.55 | % | (25) | ||||||||||||||||
Operations | |||||||||||||||||||||||||||||
Banking centers | 1,080 | 1,079 | 1,096 | — | (1%) | 1,080 | 1,096 | (1%) | |||||||||||||||||||||
ATMs | 2,153 | 2,201 | 2,369 | (2%) | (9%) | 2,153 | 2,369 | (9%) | |||||||||||||||||||||
Full-time equivalent employees | 19,119 | 19,247 | 19,402 | (1%) | (1%) | 19,119 | 19,402 | (1%) |
(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.
14
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||
$ in millions, except per share data | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
Income Statement Data | ||||||||||||||||||||
Net interest income | $1,339 | $1,195 | $1,197 | $1,189 | $1,208 | |||||||||||||||
Net interest income (FTE)(a) | 1,342 | 1,198 | 1,200 | 1,192 | 1,211 | |||||||||||||||
Noninterest income | 676 | 684 | 791 | 836 | 741 | |||||||||||||||
Total revenue (FTE)(a) | 2,018 | 1,882 | 1,991 | 2,028 | 1,952 | |||||||||||||||
Provision for (benefit from) credit losses | 179 | 45 | (47) | (42) | (115) | |||||||||||||||
Noninterest expense | 1,112 | 1,222 | 1,206 | 1,172 | 1,153 | |||||||||||||||
Net income | 562 | 494 | 662 | 704 | 709 | |||||||||||||||
Net income available to common shareholders | 526 | 474 | 627 | 684 | 674 | |||||||||||||||
Earnings Per Share Data | ||||||||||||||||||||
Net income allocated to common shareholders | $525 | $473 | $625 | $683 | $673 | |||||||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||
Basic | 689,019 | 687,538 | 688,370 | 697,457 | 708,833 | |||||||||||||||
Diluted | 694,805 | 696,242 | 697,532 | 706,090 | 718,085 | |||||||||||||||
Earnings per share, basic | $0.76 | $0.69 | $0.91 | $0.98 | $0.95 | |||||||||||||||
Earnings per share, diluted | 0.76 | 0.68 | 0.90 | 0.97 | 0.94 | |||||||||||||||
Common Share Data | ||||||||||||||||||||
Cash dividends per common share | $0.30 | $0.30 | $0.30 | $0.30 | $0.27 | |||||||||||||||
Book value per share | 24.56 | 26.33 | 29.43 | 29.59 | 29.57 | |||||||||||||||
Market value per share | 33.60 | 43.04 | 43.55 | 42.44 | 38.23 | |||||||||||||||
Common shares outstanding (in thousands) | 686,152 | 685,905 | 682,778 | 689,790 | 703,740 | |||||||||||||||
Market capitalization | $23,055 | $29,521 | $29,735 | $29,275 | $26,904 | |||||||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.09 | % | 0.96 | % | 1.25 | % | 1.36 | % | 1.38 | % | ||||||||||
Return on average common equity | 12.3 | % | 10.0 | % | 12.2 | % | 13.0 | % | 13.0 | % | ||||||||||
Return on average tangible common equity(a) | 17.5 | % | 13.4 | % | 16.1 | % | 16.9 | % | 16.6 | % | ||||||||||
Noninterest income as a percent of total revenue(a) | 33 | % | 36 | % | 40 | % | 41 | % | 38 | % | ||||||||||
Dividend payout | 39.5 | % | 43.5 | % | 33.0 | % | 30.6 | % | 28.4 | % | ||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 9.35 | % | 10.23 | % | 10.71 | % | 11.16 | % | 11.11 | % | ||||||||||
Tangible common equity(a) | 7.01 | % | 6.96 | % | 6.94 | % | 7.01 | % | 7.28 | % | ||||||||||
Net interest margin (FTE)(a) | 2.92 | % | 2.59 | % | 2.55 | % | 2.59 | % | 2.63 | % | ||||||||||
Efficiency (FTE)(a) | 55.1 | % | 64.9 | % | 60.6 | % | 57.8 | % | 59.1 | % | ||||||||||
Effective tax rate | 22.4 | % | 19.2 | % | 20.1 | % | 21.3 | % | 22.1 | % | ||||||||||
Credit Quality | ||||||||||||||||||||
Net losses charged-off | $62 | $34 | $38 | $21 | $44 | |||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.21 | % | 0.12 | % | 0.14 | % | 0.08 | % | 0.16 | % | ||||||||||
ALLL as a percent of portfolio loans and leases | 1.70 | % | 1.65 | % | 1.69 | % | 1.81 | % | 1.89 | % | ||||||||||
ACL as a percent of portfolio loans and leases(g) | 1.85 | % | 1.80 | % | 1.85 | % | 2.00 | % | 2.06 | % | ||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.47 | % | 0.49 | % | 0.47 | % | 0.52 | % | 0.61 | % | ||||||||||
Average Balances | ||||||||||||||||||||
Loans and leases, including held for sale | $120,236 | $117,162 | $114,790 | $113,528 | $114,443 | |||||||||||||||
Securities and other short-term investments | 64,170 | 70,732 | 72,255 | 69,273 | 70,475 | |||||||||||||||
Assets | 205,897 | 209,150 | 209,604 | 205,449 | 206,353 | |||||||||||||||
Transaction deposits(b) | 160,035 | 166,032 | 164,673 | 159,404 | 158,779 | |||||||||||||||
Core deposits(c) | 162,228 | 168,408 | 167,277 | 162,341 | 162,293 | |||||||||||||||
Wholesale funding(d) | 15,789 | 12,568 | 13,276 | 13,833 | 15,652 | |||||||||||||||
Bancorp shareholders’ equity | 19,248 | 21,402 | 22,449 | 22,927 | 22,927 | |||||||||||||||
Regulatory Capital Ratios(e)(f) | ||||||||||||||||||||
CET1 capital | 8.96 | % | 9.31 | % | 9.54 | % | 9.86 | % | 10.37 | % | ||||||||||
Tier 1 risk-based capital | 10.24 | % | 10.63 | % | 10.91 | % | 11.28 | % | 11.83 | % | ||||||||||
Total risk-based capital | 12.48 | % | 12.93 | % | 13.42 | % | 13.94 | % | 14.60 | % | ||||||||||
Leverage | 8.30 | % | 8.32 | % | 8.27 | % | 8.41 | % | 8.55 | % | ||||||||||
Operations | ||||||||||||||||||||
Banking centers | 1,080 | 1,079 | 1,117 | 1,100 | 1,096 | |||||||||||||||
ATMs | 2,153 | 2,201 | 2,322 | 2,336 | 2,369 | |||||||||||||||
Full-time equivalent employees | 19,119 | 19,247 | 19,112 | 19,171 | 19,402 |
(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.
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 | |||||||||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | 2022 | 2021 | Yr/Yr | |||||||||||||||||||
Interest Income | ||||||||||||||||||||||||||
Interest and fees on loans and leases | $1,081 | $983 | $1,035 | 10% | 4% | $2,062 | $2,064 | — | ||||||||||||||||||
Interest on securities | 369 | 294 | 279 | 26% | 32% | 663 | 543 | 22% | ||||||||||||||||||
Interest on other short-term investments | 14 | 12 | 9 | 17% | 56% | 27 | 17 | 59% | ||||||||||||||||||
Total interest income | 1,464 | 1,289 | 1,323 | 14% | 11% | 2,752 | 2,624 | 5% | ||||||||||||||||||
Interest Expense | ||||||||||||||||||||||||||
Interest on deposits | 25 | 11 | 15 | 127% | 67% | 36 | 36 | — | ||||||||||||||||||
Interest on federal funds purchased | 1 | — | — | NM | NM | 1 | — | NM | ||||||||||||||||||
Interest on other short-term borrowings | 12 | — | — | NM | NM | 13 | 1 | NM | ||||||||||||||||||
Interest on long-term debt | 87 | 83 | 100 | 5% | (13%) | 168 | 202 | (17%) | ||||||||||||||||||
Total interest expense | 125 | 94 | 115 | 33% | 9% | 218 | 239 | (9%) | ||||||||||||||||||
Net Interest Income | 1,339 | 1,195 | 1,208 | 12% | 11% | 2,534 | 2,385 | 6% | ||||||||||||||||||
Provision for (benefit from) credit losses | 179 | 45 | (115) | 298% | NM | 224 | (288) | NM | ||||||||||||||||||
Net Interest Income After Provision for (Benefit from) Credit Losses | 1,160 | 1,150 | 1,323 | 1% | (12%) | 2,310 | 2,673 | (14%) | ||||||||||||||||||
Noninterest Income | ||||||||||||||||||||||||||
Service charges on deposits | 154 | 152 | 149 | 1% | 3% | 306 | 292 | 5% | ||||||||||||||||||
Commercial banking revenue | 137 | 135 | 160 | 1% | (14%) | 272 | 313 | (13%) | ||||||||||||||||||
Mortgage banking net revenue | 31 | 52 | 64 | (40%) | (52%) | 83 | 149 | (44%) | ||||||||||||||||||
Wealth and asset management revenue | 140 | 149 | 145 | (6%) | (3%) | 289 | 288 | — | ||||||||||||||||||
Card and processing revenue | 105 | 97 | 102 | 8% | 3% | 201 | 196 | 3% | ||||||||||||||||||
Leasing business revenue | 56 | 62 | 61 | (10%) | (8%) | 118 | 148 | (20%) | ||||||||||||||||||
Other noninterest income | 85 | 52 | 49 | 63% | 73% | 138 | 92 | 50% | ||||||||||||||||||
Securities (losses) gains, net | (32) | (14) | 10 | 129% | NM | (47) | 13 | NM | ||||||||||||||||||
Securities (losses) gains, net - non-qualifying hedges on mortgage servicing rights | — | (1) | 1 | (100%) | (100%) | (1) | (1) | — | ||||||||||||||||||
Total noninterest income | 676 | 684 | 741 | (1%) | (9%) | 1,359 | 1,490 | (9%) | ||||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||||
Compensation and benefits | 584 | 711 | 638 | (18%) | (8%) | 1,295 | 1,343 | (4%) | ||||||||||||||||||
Net occupancy expense | 75 | 77 | 77 | (3%) | (3%) | 152 | 156 | (3%) | ||||||||||||||||||
Technology and communications | 98 | 101 | 94 | (3%) | 4% | 199 | 187 | 6% | ||||||||||||||||||
Equipment expense | 36 | 36 | 34 | — | 6% | 72 | 68 | 6% | ||||||||||||||||||
Card and processing expense | 20 | 19 | 20 | 5% | — | 38 | 50 | (24%) | ||||||||||||||||||
Leasing business expense | 31 | 32 | 33 | (3%) | (6%) | 63 | 68 | (7%) | ||||||||||||||||||
Marketing expense | 28 | 24 | 20 | 17% | 40% | 52 | 43 | 21% | ||||||||||||||||||
Other noninterest expense | 240 | 222 | 237 | 8% | 1% | 463 | 454 | 2% | ||||||||||||||||||
Total noninterest expense | 1,112 | 1,222 | 1,153 | (9%) | (4%) | 2,334 | 2,369 | (1%) | ||||||||||||||||||
Income Before Income Taxes | 724 | 612 | 911 | 18% | (21%) | 1,335 | 1,794 | (26%) | ||||||||||||||||||
Applicable income tax expense | 162 | 118 | 202 | 37% | (20%) | 279 | 391 | (29%) | ||||||||||||||||||
Net Income | 562 | 494 | 709 | 14% | (21%) | 1,056 | 1,403 | (25%) | ||||||||||||||||||
Dividends on preferred stock | 36 | 20 | 35 | 80% | 3% | 56 | 55 | 2% | ||||||||||||||||||
Net Income Available to Common Shareholders | $526 | $474 | $674 | 11% | (22%) | $1,000 | $1,348 | (26%) |
16
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||
Interest Income | |||||||||||||||||
Interest and fees on loans and leases | $1,081 | $983 | $1,000 | $1,014 | $1,035 | ||||||||||||
Interest on securities | 369 | 294 | 281 | 266 | 279 | ||||||||||||
Interest on other short-term investments | 14 | 12 | 13 | 12 | 9 | ||||||||||||
Total interest income | 1,464 | 1,289 | 1,294 | 1,292 | 1,323 | ||||||||||||
Interest Expense | |||||||||||||||||
Interest on deposits | 25 | 11 | 11 | 12 | 15 | ||||||||||||
Interest on other short-term borrowings | 12 | — | — | — | — | ||||||||||||
Interest on long-term debt | 87 | 83 | 86 | 91 | 100 | ||||||||||||
Total interest expense | 125 | 94 | 97 | 103 | 115 | ||||||||||||
Net Interest Income | 1,339 | 1,195 | 1,197 | 1,189 | 1,208 | ||||||||||||
Provision for (benefit from) credit losses | 179 | 45 | (47) | (42) | (115) | ||||||||||||
Net Interest Income After Provision for (Benefit from) Credit Losses | 1,160 | 1,150 | 1,244 | 1,231 | 1,323 | ||||||||||||
Noninterest Income | |||||||||||||||||
Service charges on deposits | 154 | 152 | 156 | 152 | 149 | ||||||||||||
Commercial banking revenue | 137 | 135 | 171 | 152 | 160 | ||||||||||||
Mortgage banking net revenue | 31 | 52 | 35 | 86 | 64 | ||||||||||||
Wealth and asset management revenue | 140 | 149 | 150 | 147 | 145 | ||||||||||||
Card and processing revenue | 105 | 97 | 104 | 102 | 102 | ||||||||||||
Leasing business revenue | 56 | 62 | 74 | 78 | 61 | ||||||||||||
Other noninterest income | 85 | 52 | 120 | 120 | 49 | ||||||||||||
Securities (losses) gains, net | (32) | (14) | (19) | (1) | 10 | ||||||||||||
Securities (losses) gains, net - non-qualifying hedges on mortgage servicing rights | — | (1) | — | — | 1 | ||||||||||||
Total noninterest income | 676 | 684 | 791 | 836 | 741 | ||||||||||||
Noninterest Expense | |||||||||||||||||
Compensation and benefits | 584 | 711 | 655 | 627 | 638 | ||||||||||||
Net occupancy expense | 75 | 77 | 77 | 79 | 77 | ||||||||||||
Technology and communications | 98 | 101 | 103 | 98 | 94 | ||||||||||||
Equipment expense | 36 | 36 | 36 | 34 | 34 | ||||||||||||
Card and processing expense | 20 | 19 | 19 | 19 | 20 | ||||||||||||
Leasing business expense | 31 | 32 | 36 | 33 | 33 | ||||||||||||
Marketing expense | 28 | 24 | 35 | 29 | 20 | ||||||||||||
Other noninterest expense | 240 | 222 | 245 | 253 | 237 | ||||||||||||
Total noninterest expense | 1,112 | 1,222 | 1,206 | 1,172 | 1,153 | ||||||||||||
Income Before Income Taxes | 724 | 612 | 829 | 895 | 911 | ||||||||||||
Applicable income tax expense | 162 | 118 | 167 | 191 | 202 | ||||||||||||
Net Income | 562 | 494 | 662 | 704 | 709 | ||||||||||||
Dividends on preferred stock | 36 | 20 | 35 | 20 | 35 | ||||||||||||
Net Income Available to Common Shareholders | $526 | $474 | $627 | $684 | $674 |
17
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||
$ in millions, except per share data | As of | % Change | |||||||||||||||
(unaudited) | June | March | June | ||||||||||||||
2022 | 2022 | 2021 | Seq | Yr/Yr | |||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $3,437 | $3,049 | $3,285 | 13% | 5% | ||||||||||||
Other short-term investments | 7,419 | 20,529 | 32,409 | (64%) | (77%) | ||||||||||||
Available-for-sale debt and other securities(a) | 52,837 | 48,832 | 38,012 | 8% | 39% | ||||||||||||
Held-to-maturity securities(b) | 5 | 6 | 10 | (17%) | (50%) | ||||||||||||
Trading debt securities | 293 | 324 | 711 | (10%) | (59%) | ||||||||||||
Equity securities | 326 | 358 | 341 | (9%) | (4%) | ||||||||||||
Loans and leases held for sale | 2,542 | 2,616 | 5,730 | (3%) | (56%) | ||||||||||||
Portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | 56,095 | 53,909 | 47,564 | 4% | 18% | ||||||||||||
Commercial mortgage loans | 10,748 | 10,694 | 10,347 | 1% | 4% | ||||||||||||
Commercial construction loans | 5,357 | 5,420 | 5,871 | (1%) | (9%) | ||||||||||||
Commercial leases | 2,850 | 2,915 | 3,238 | (2%) | (12%) | ||||||||||||
Total commercial loans and leases | 75,050 | 72,938 | 67,020 | 3% | 12% | ||||||||||||
Residential mortgage loans | 17,566 | 17,144 | 16,131 | 2% | 9% | ||||||||||||
Home equity | 3,906 | 3,916 | 4,545 | — | (14%) | ||||||||||||
Indirect secured consumer loans | 17,017 | 17,424 | 15,192 | (2%) | 12% | ||||||||||||
Credit card | 1,763 | 1,690 | 1,793 | 4% | (2%) | ||||||||||||
Other consumer loans | 3,521 | 2,753 | 3,052 | 28% | 15% | ||||||||||||
Total consumer loans | 43,773 | 42,927 | 40,713 | 2% | 8% | ||||||||||||
Portfolio loans and leases | 118,823 | 115,865 | 107,733 | 3% | 10% | ||||||||||||
Allowance for loan and lease losses | (2,014) | (1,908) | (2,033) | 6% | (1%) | ||||||||||||
Portfolio loans and leases, net | 116,809 | 113,957 | 105,700 | 3% | 11% | ||||||||||||
Bank premises and equipment | 2,118 | 2,102 | 2,073 | 1% | 2% | ||||||||||||
Operating lease equipment | 600 | 622 | 715 | (4%) | (16%) | ||||||||||||
Goodwill | 4,926 | 4,514 | 4,259 | 9% | 16% | ||||||||||||
Intangible assets | 194 | 145 | 117 | 34% | 66% | ||||||||||||
Servicing rights | 1,582 | 1,444 | 818 | 10% | 93% | ||||||||||||
Other assets | 13,694 | 12,961 | 11,210 | 6% | 22% | ||||||||||||
Total Assets | $206,782 | $211,459 | $205,390 | (2%) | 1% | ||||||||||||
Liabilities | |||||||||||||||||
Deposits: | |||||||||||||||||
Demand | $60,859 | $65,590 | $62,760 | (7%) | (3%) | ||||||||||||
Interest checking | 43,338 | 48,836 | 44,872 | (11%) | (3%) | ||||||||||||
Savings | 23,748 | 23,622 | 20,667 | 1% | 15% | ||||||||||||
Money market | 28,792 | 29,947 | 30,564 | (4%) | (6%) | ||||||||||||
Foreign office | 177 | 115 | 152 | 54% | 16% | ||||||||||||
CDs $250,000 or less | 2,125 | 2,267 | 2,958 | (6%) | (28%) | ||||||||||||
CDs over $250,000 | 2,135 | 234 | 310 | 812% | 589% | ||||||||||||
Total deposits | 161,174 | 170,611 | 162,283 | (6%) | (1%) | ||||||||||||
Federal funds purchased | 711 | 250 | 338 | 184% | 110% | ||||||||||||
Other short-term borrowings | 7,057 | 872 | 1,130 | 709% | 525% | ||||||||||||
Accrued taxes, interest and expenses | 1,683 | 1,471 | 2,045 | 14% | (18%) | ||||||||||||
Other liabilities | 6,197 | 7,263 | 4,304 | (15%) | 44% | ||||||||||||
Long-term debt | 10,990 | 10,815 | 12,364 | 2% | (11%) | ||||||||||||
Total Liabilities | 187,812 | 191,282 | 182,464 | (2%) | 3% | ||||||||||||
Equity | |||||||||||||||||
Common stock(c) | 2,051 | 2,051 | 2,051 | — | — | ||||||||||||
Preferred stock | 2,116 | 2,116 | 2,116 | — | — | ||||||||||||
Capital surplus | 3,636 | 3,615 | 3,602 | 1% | 1% | ||||||||||||
Retained earnings | 20,818 | 20,501 | 19,343 | 2% | 8% | ||||||||||||
Accumulated other comprehensive (loss) income | (2,644) | (1,096) | 1,974 | 141% | NM | ||||||||||||
Treasury stock | (7,007) | (7,010) | (6,160) | — | 14% | ||||||||||||
Total Equity | 18,970 | 20,177 | 22,926 | (6%) | (17%) | ||||||||||||
Total Liabilities and Equity | $206,782 | $211,459 | $205,390 | (2%) | 1% | ||||||||||||
(a) Amortized cost | $56,140 | $50,171 | $36,081 | 12% | 56% | ||||||||||||
(b) Market values | 5 | 6 | 10 | (17%) | (50%) | ||||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | |||||||||||||||||
Authorized | 2,000,000 | 2,000,000 | 2,000,000 | — | — | ||||||||||||
Outstanding, excluding treasury | 686,152 | 685,905 | 703,740 | — | (2 | %) | |||||||||||
Treasury | 237,741 | 237,987 | 220,153 | — | 8 | % | |||||||||||
18
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||
$ in millions, except per share data | As of | ||||||||||||||||
(unaudited) | June | March | December | September | June | ||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $3,437 | $3,049 | $2,994 | $3,213 | $3,285 | ||||||||||||
Other short-term investments | 7,419 | 20,529 | 34,572 | 34,203 | 32,409 | ||||||||||||
Available-for-sale debt and other securities(a) | 52,837 | 48,832 | 38,110 | 37,870 | 38,012 | ||||||||||||
Held-to-maturity securities(b) | 5 | 6 | 8 | 8 | 10 | ||||||||||||
Trading debt securities | 293 | 324 | 512 | 685 | 711 | ||||||||||||
Equity securities | 326 | 358 | 376 | 329 | 341 | ||||||||||||
Loans and leases held for sale | 2,542 | 2,616 | 4,415 | 5,203 | 5,730 | ||||||||||||
Portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | 56,095 | 53,909 | 51,659 | 47,834 | 47,564 | ||||||||||||
Commercial mortgage loans | 10,748 | 10,694 | 10,316 | 10,300 | 10,347 | ||||||||||||
Commercial construction loans | 5,357 | 5,420 | 5,241 | 5,456 | 5,871 | ||||||||||||
Commercial leases | 2,850 | 2,915 | 3,052 | 3,130 | 3,238 | ||||||||||||
Total commercial loans and leases | 75,050 | 72,938 | 70,268 | 66,720 | 67,020 | ||||||||||||
Residential mortgage loans | 17,566 | 17,144 | 16,397 | 16,158 | 16,131 | ||||||||||||
Home equity | 3,906 | 3,916 | 4,084 | 4,276 | 4,545 | ||||||||||||
Indirect secured consumer loans | 17,017 | 17,424 | 16,783 | 16,004 | 15,192 | ||||||||||||
Credit card | 1,763 | 1,690 | 1,766 | 1,744 | 1,793 | ||||||||||||
Other consumer loans | 3,521 | 2,753 | 2,752 | 3,009 | 3,052 | ||||||||||||
Total consumer loans | 43,773 | 42,927 | 41,782 | 41,191 | 40,713 | ||||||||||||
Portfolio loans and leases | 118,823 | 115,865 | 112,050 | 107,911 | 107,733 | ||||||||||||
Allowance for loan and lease losses | (2,014) | (1,908) | (1,892) | (1,954) | (2,033) | ||||||||||||
Portfolio loans and leases, net | 116,809 | 113,957 | 110,158 | 105,957 | 105,700 | ||||||||||||
Bank premises and equipment | 2,118 | 2,102 | 2,120 | 2,101 | 2,073 | ||||||||||||
Operating lease equipment | 600 | 622 | 616 | 647 | 715 | ||||||||||||
Goodwill | 4,926 | 4,514 | 4,514 | 4,514 | 4,259 | ||||||||||||
Intangible assets | 194 | 145 | 156 | 169 | 117 | ||||||||||||
Servicing rights | 1,582 | 1,444 | 1,121 | 943 | 818 | ||||||||||||
Other assets | 13,694 | 12,961 | 11,444 | 11,889 | 11,210 | ||||||||||||
Total Assets | $206,782 | $211,459 | $211,116 | $207,731 | $205,390 | ||||||||||||
Liabilities | |||||||||||||||||
Deposits: | |||||||||||||||||
Demand | $60,859 | $65,590 | $65,088 | $63,879 | $62,760 | ||||||||||||
Interest checking | 43,338 | 48,836 | 48,870 | 45,964 | 44,872 | ||||||||||||
Savings | 23,748 | 23,622 | 22,227 | 21,423 | 20,667 | ||||||||||||
Money market | 28,792 | 29,947 | 30,263 | 30,652 | 30,564 | ||||||||||||
Foreign office | 177 | 115 | 121 | 202 | 152 | ||||||||||||
CDs $250,000 or less | 2,125 | 2,267 | 2,486 | 2,691 | 2,958 | ||||||||||||
CDs over $250,000 | 2,135 | 234 | 269 | 297 | 310 | ||||||||||||
Total deposits | 161,174 | 170,611 | 169,324 | 165,108 | 162,283 | ||||||||||||
Federal funds purchased | 711 | 250 | 281 | 309 | 338 | ||||||||||||
Other short-term borrowings | 7,057 | 872 | 980 | 949 | 1,130 | ||||||||||||
Accrued taxes, interest and expenses | 1,683 | 1,471 | 2,233 | 2,083 | 2,045 | ||||||||||||
Other liabilities | 6,197 | 7,263 | 4,267 | 5,339 | 4,304 | ||||||||||||
Long-term debt | 10,990 | 10,815 | 11,821 | 11,419 | 12,364 | ||||||||||||
Total Liabilities | 187,812 | 191,282 | 188,906 | 185,207 | 182,464 | ||||||||||||
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 | 3,636 | 3,615 | 3,624 | 3,611 | 3,602 | ||||||||||||
Retained earnings | 20,818 | 20,501 | 20,236 | 19,817 | 19,343 | ||||||||||||
Accumulated other comprehensive (loss) income | (2,644) | (1,096) | 1,207 | 1,637 | 1,974 | ||||||||||||
Treasury stock | (7,007) | (7,010) | (7,024) | (6,708) | (6,160) | ||||||||||||
Total Equity | 18,970 | 20,177 | 22,210 | 22,524 | 22,926 | ||||||||||||
Total Liabilities and Equity | $206,782 | $211,459 | $211,116 | $207,731 | $205,390 | ||||||||||||
(a) Amortized cost | $56,140 | $50,171 | $36,941 | $36,308 | $36,081 | ||||||||||||
(b) Market values | 5 | 6 | 8 | 8 | 10 | ||||||||||||
(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 | 686,152 | 685,905 | 682,778 | 689,790 | 703,740 | ||||||||||||
Treasury | 237,741 | 237,987 | 241,115 | 234,102 | 220,153 |
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 | |||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Total Equity, Beginning | $20,177 | $22,595 | $22,210 | $23,111 | ||||||||||||||||
Net income | 562 | 709 | 1,056 | 1,403 | ||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||
Change in unrealized (losses) gains: | ||||||||||||||||||||
Available-for-sale debt securities | (1,506) | 230 | (3,437) | (459) | ||||||||||||||||
Qualifying cash flow hedges | (43) | (49) | (416) | (170) | ||||||||||||||||
Change in accumulated other comprehensive income related to employee benefit plans | 1 | 1 | 2 | 2 | ||||||||||||||||
Comprehensive income | (986) | 891 | (2,795) | 776 | ||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||
Common stock | (209) | (192) | (418) | (387) | ||||||||||||||||
Preferred stock | (36) | (35) | (56) | (55) | ||||||||||||||||
Impact of stock transactions under stock compensation plans, net | 24 | 15 | 29 | 9 | ||||||||||||||||
Shares acquired for treasury | — | (347) | — | (527) | ||||||||||||||||
Other | — | (1) | — | (1) | ||||||||||||||||
Total Equity, Ending | $18,970 | $22,926 | $18,970 | $22,926 | ||||||||||||||||
20
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||||||||
Average Balance Sheet and Yield/Rate Analysis | For the Three Months Ended | |||||||||||||||||||||||||
$ in millions | June | March | June | |||||||||||||||||||||||
(unaudited) | 2022 | 2022 | 2021 | |||||||||||||||||||||||
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) | $55,466 | 3.59 | % | $52,562 | 3.29 | % | $48,817 | 3.62 | % | |||||||||||||||||
Commercial mortgage loans(a) | 10,710 | 3.34 | % | 10,529 | 3.00 | % | 10,467 | 3.11 | % | |||||||||||||||||
Commercial construction loans(a) | 5,356 | 3.69 | % | 5,371 | 3.29 | % | 6,043 | 3.09 | % | |||||||||||||||||
Commercial leases(a) | 2,840 | 2.93 | % | 2,943 | 2.85 | % | 3,174 | 2.94 | % | |||||||||||||||||
Total commercial loans and leases | 74,372 | 3.54 | % | 71,405 | 3.23 | % | 68,501 | 3.47 | % | |||||||||||||||||
Residential mortgage loans | 19,899 | 3.12 | % | 20,179 | 3.17 | % | 21,740 | 3.29 | % | |||||||||||||||||
Home equity | 3,895 | 3.81 | % | 4,010 | 3.52 | % | 4,674 | 3.60 | % | |||||||||||||||||
Indirect secured consumer loans | 17,241 | 3.17 | % | 17,136 | 3.08 | % | 14,702 | 3.41 | % | |||||||||||||||||
Credit card | 1,704 | 12.29 | % | 1,691 | 12.31 | % | 1,770 | 12.13 | % | |||||||||||||||||
Other consumer loans | 3,125 | 5.99 | % | 2,741 | 6.08 | % | 3,056 | 5.96 | % | |||||||||||||||||
Total consumer loans | 45,864 | 3.73 | % | 45,757 | 3.68 | % | 45,942 | 3.88 | % | |||||||||||||||||
Total loans and leases | 120,236 | 3.61 | % | 117,162 | 3.41 | % | 114,443 | 3.63 | % | |||||||||||||||||
Securities: | ||||||||||||||||||||||||||
Taxable securities | 53,475 | 2.73 | % | 41,412 | 2.84 | % | 36,097 | 3.06 | % | |||||||||||||||||
Tax exempt securities(a) | 1,063 | 2.47 | % | 1,010 | 2.40 | % | 820 | 2.47 | % | |||||||||||||||||
Other short-term investments | 9,632 | 0.60 | % | 28,310 | 0.18 | % | 33,558 | 0.11 | % | |||||||||||||||||
Total interest-earning assets | 184,406 | 3.19 | % | 187,894 | 2.79 | % | 184,918 | 2.88 | % | |||||||||||||||||
Cash and due from banks | 3,118 | 2,962 | 3,033 | |||||||||||||||||||||||
Other assets | 20,282 | 20,186 | 20,608 | |||||||||||||||||||||||
Allowance for loan and lease losses | (1,909) | (1,892) | (2,206) | |||||||||||||||||||||||
Total Assets | $205,897 | $209,150 | $206,353 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Interest checking deposits | $44,349 | 0.15 | % | $48,659 | 0.05 | % | $45,307 | 0.06 | % | |||||||||||||||||
Savings deposits | 23,708 | 0.03 | % | 22,772 | 0.02 | % | 20,494 | 0.02 | % | |||||||||||||||||
Money market deposits | 29,284 | 0.06 | % | 30,263 | 0.03 | % | 30,844 | 0.05 | % | |||||||||||||||||
Foreign office deposits | 139 | 0.13 | % | 126 | 0.04 | % | 140 | 0.03 | % | |||||||||||||||||
CDs $250,000 or less | 2,193 | 0.09 | % | 2,376 | 0.12 | % | 3,514 | 0.30 | % | |||||||||||||||||
Total interest-bearing core deposits | 99,673 | 0.09 | % | 104,196 | 0.04 | % | 100,299 | 0.06 | % | |||||||||||||||||
CDs over $250,000 | 662 | 1.08 | % | 254 | 0.85 | % | 326 | 1.84 | % | |||||||||||||||||
Federal funds purchased | 392 | 0.82 | % | 259 | 0.15 | % | 346 | 0.10 | % | |||||||||||||||||
Securities sold under repurchase agreements | 488 | 0.08 | % | 491 | 0.01 | % | 566 | 0.03 | % | |||||||||||||||||
FHLB advances | 2,743 | 1.41 | % | — | 0.15 | % | — | — | ||||||||||||||||||
Derivative collateral and other secured borrowings | 340 | 3.12 | % | 399 | 0.31 | % | 531 | 0.22 | % | |||||||||||||||||
Long-term debt | 11,164 | 3.09 | % | 11,165 | 3.02 | % | 13,883 | 2.85 | % | |||||||||||||||||
Total interest-bearing liabilities | 115,462 | 0.43 | % | 116,764 | 0.33 | % | 115,951 | 0.40 | % | |||||||||||||||||
Demand deposits | 62,555 | 64,212 | 61,994 | |||||||||||||||||||||||
Other liabilities | 8,632 | 6,772 | 5,481 | |||||||||||||||||||||||
Total Liabilities | 186,649 | 187,748 | 183,426 | |||||||||||||||||||||||
Total Equity | 19,248 | 21,402 | 22,927 | |||||||||||||||||||||||
Total Liabilities and Equity | $205,897 | $209,150 | $206,353 | |||||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||
Net interest margin (FTE)(b) | 2.92 | % | 2.59 | % | 2.63 | % | ||||||||||||||||||||
Net interest rate spread (FTE)(b) | 2.76 | % | 2.46 | % | 2.48 | % | ||||||||||||||||||||
Interest-bearing liabilities to interest-earning assets | 62.61 | % | 62.14 | % | 62.70 | % | ||||||||||||||||||||
(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 Sheet and Yield/Rate Analysis | Year to Date | ||||||||||||||||
$ in millions | June | June | |||||||||||||||
(unaudited) | 2022 | 2021 | |||||||||||||||
Average | Average | Average | Average | ||||||||||||||
Balance | Yield/Rate | Balance | Yield/Rate | ||||||||||||||
Assets | |||||||||||||||||
Interest-earning assets: | |||||||||||||||||
Loans and leases: | |||||||||||||||||
Commercial and industrial loans(a) | $54,022 | 3.45 | % | $49,263 | 3.61 | % | |||||||||||
Commercial mortgage loans(a) | 10,620 | 3.17 | % | 10,500 | 3.09 | % | |||||||||||
Commercial construction loans(a) | 5,364 | 3.49 | % | 6,041 | 3.15 | % | |||||||||||
Commercial leases(a) | 2,891 | 2.89 | % | 3,152 | 3.05 | % | |||||||||||
Total commercial loans and leases | 72,897 | 3.39 | % | 68,956 | 3.46 | % | |||||||||||
Residential mortgage loans | 20,037 | 3.15 | % | 21,095 | 3.32 | % | |||||||||||
Home equity | 3,952 | 3.66 | % | 4,841 | 3.59 | % | |||||||||||
Indirect secured consumer loans | 17,189 | 3.13 | % | 14,331 | 3.49 | % | |||||||||||
Credit card | 1,698 | 12.30 | % | 1,824 | 12.25 | % | |||||||||||
Other consumer loans | 2,935 | 6.03 | % | 3,027 | 6.04 | % | |||||||||||
Total consumer loans | 45,811 | 3.71 | % | 45,118 | 3.95 | % | |||||||||||
Total loans and leases | 118,708 | 3.51 | % | 114,074 | 3.66 | % | |||||||||||
Securities: | |||||||||||||||||
Taxable securities | 47,476 | 2.77 | % | 35,932 | 3.01 | % | |||||||||||
Tax exempt securities(a) | 1,036 | 2.43 | % | 677 | 2.39 | % | |||||||||||
Other short-term investments | 18,919 | 0.28 | % | 33,140 | 0.10 | % | |||||||||||
Total interest-earning assets | 186,139 | 2.99 | % | 183,823 | 2.89 | % | |||||||||||
Cash and due from banks | 3,040 | 3,012 | |||||||||||||||
Other assets | 20,237 | 20,595 | |||||||||||||||
Allowance for loan and lease losses | (1,901) | (2,328) | |||||||||||||||
Total Assets | $207,515 | $205,102 | |||||||||||||||
Liabilities | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||
Interest checking deposits | $46,492 | 0.10 | % | $45,437 | 0.06 | % | |||||||||||
Savings deposits | 23,242 | 0.02 | % | 19,727 | 0.02 | % | |||||||||||
Money market deposits | 29,771 | 0.05 | % | 30,723 | 0.05 | % | |||||||||||
Foreign office deposits | 132 | 0.09 | % | 134 | 0.04 | % | |||||||||||
CDs $250,000 or less | 2,284 | 0.10 | % | 3,668 | 0.40 | % | |||||||||||
Total interest-bearing core deposits | 101,921 | 0.07 | % | 99,689 | 0.06 | % | |||||||||||
CDs over $250,000 | 459 | 1.02 | % | 776 | 1.41 | % | |||||||||||
Federal funds purchased | 326 | 0.56 | % | 335 | 0.11 | % | |||||||||||
Securities sold under repurchase agreements | 489 | 0.05 | % | 615 | 0.03 | % | |||||||||||
FHLB advances | 1,379 | 1.41 | % | — | — | ||||||||||||
Derivative collateral and other secured borrowings | 370 | 1.61 | % | 538 | 0.35 | % | |||||||||||
Long-term debt | 11,165 | 3.05 | % | 14,362 | 2.84 | % | |||||||||||
Total interest-bearing liabilities | 116,109 | 0.38 | % | 116,315 | 0.42 | % | |||||||||||
Demand deposits | 63,379 | 60,300 | |||||||||||||||
Other liabilities | 7,708 | 5,548 | |||||||||||||||
Total Liabilities | 187,196 | 182,163 | |||||||||||||||
Total Equity | 20,319 | 22,939 | |||||||||||||||
Total Liabilities and Equity | $207,515 | $205,102 | |||||||||||||||
Ratios: | |||||||||||||||||
Net interest margin (FTE)(b) | 2.75 | % | 2.62 | % | |||||||||||||
Net interest rate spread (FTE)(b) | 2.61 | % | 2.47 | % | |||||||||||||
Interest-bearing liabilities to interest-earning assets | 62.38 | % | 63.28 | % | |||||||||||||
(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 | ||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||
Average Portfolio Loans and Leases | |||||||||||||||||
Commercial loans and leases: | |||||||||||||||||
Commercial and industrial loans | $55,460 | $52,554 | $49,566 | $47,766 | $48,773 | ||||||||||||
Commercial mortgage loans | 10,710 | 10,521 | 10,247 | 10,317 | 10,459 | ||||||||||||
Commercial construction loans | 5,356 | 5,371 | 5,329 | 5,728 | 6,043 | ||||||||||||
Commercial leases | 2,839 | 2,942 | 3,057 | 3,158 | 3,174 | ||||||||||||
Total commercial loans and leases | 74,365 | 71,388 | 68,199 | 66,969 | 68,449 | ||||||||||||
Consumer loans: | |||||||||||||||||
Residential mortgage loans | 17,363 | 16,501 | 16,188 | 16,223 | 15,883 | ||||||||||||
Home equity | 3,895 | 4,009 | 4,179 | 4,409 | 4,674 | ||||||||||||
Indirect secured consumer loans | 17,241 | 17,136 | 16,345 | 15,590 | 14,702 | ||||||||||||
Credit card | 1,704 | 1,691 | 1,739 | 1,748 | 1,770 | ||||||||||||
Other consumer loans | 3,125 | 2,742 | 2,837 | 3,031 | 3,056 | ||||||||||||
Total consumer loans | 43,328 | 42,079 | 41,288 | 41,001 | 40,085 | ||||||||||||
Total average portfolio loans and leases | $117,693 | $113,467 | $109,487 | $107,970 | $108,534 | ||||||||||||
Average Loans and Leases Held for Sale | |||||||||||||||||
Commercial loans and leases held for sale | $7 | $18 | $5 | $31 | $52 | ||||||||||||
Consumer loans held for sale | 2,536 | 3,677 | 5,298 | 5,527 | 5,857 | ||||||||||||
Average loans and leases held for sale | $2,543 | $3,695 | $5,303 | $5,558 | $5,909 | ||||||||||||
Average PPP loans(a) | $549 | $1,012 | $1,756 | $3,071 | $4,810 | ||||||||||||
Average portfolio commercial and industrial loans - excluding PPP loans | 54,911 | 51,542 | 47,810 | 44,695 | 43,963 | ||||||||||||
Total average portfolio commercial and industrial loans | $55,460 | $52,554 | $49,566 | $47,766 | $48,773 | ||||||||||||
End of Period Portfolio Loans and Leases | |||||||||||||||||
Commercial loans and leases: | |||||||||||||||||
Commercial and industrial loans | $56,095 | $53,909 | $51,659 | $47,834 | $47,564 | ||||||||||||
Commercial mortgage loans | 10,748 | 10,694 | 10,316 | 10,300 | 10,347 | ||||||||||||
Commercial construction loans | 5,357 | 5,420 | 5,241 | 5,456 | 5,871 | ||||||||||||
Commercial leases | 2,850 | 2,915 | 3,052 | 3,130 | 3,238 | ||||||||||||
Total commercial loans and leases | 75,050 | 72,938 | 70,268 | 66,720 | 67,020 | ||||||||||||
Consumer loans: | |||||||||||||||||
Residential mortgage loans | 17,566 | 17,144 | 16,397 | 16,158 | 16,131 | ||||||||||||
Home equity | 3,906 | 3,916 | 4,084 | 4,276 | 4,545 | ||||||||||||
Indirect secured consumer loans | 17,017 | 17,424 | 16,783 | 16,004 | 15,192 | ||||||||||||
Credit card | 1,763 | 1,690 | 1,766 | 1,744 | 1,793 | ||||||||||||
Other consumer loans | 3,521 | 2,753 | 2,752 | 3,009 | 3,052 | ||||||||||||
Total consumer loans | 43,773 | 42,927 | 41,782 | 41,191 | 40,713 | ||||||||||||
Total portfolio loans and leases | $118,823 | $115,865 | $112,050 | $107,911 | $107,733 | ||||||||||||
End of Period Loans and Leases Held for Sale | |||||||||||||||||
Commercial loans and leases held for sale | $4 | $23 | $21 | $2 | $46 | ||||||||||||
Consumer loans held for sale | 2,538 | 2,593 | 4,394 | 5,201 | 5,684 | ||||||||||||
Loans and leases held for sale | $2,542 | $2,616 | $4,415 | $5,203 | $5,730 | ||||||||||||
Operating lease equipment | $600 | $622 | $616 | $647 | $715 | ||||||||||||
Loans and Leases Serviced for Others(b) | |||||||||||||||||
Commercial and industrial loans | $994 | $993 | $923 | $879 | $919 | ||||||||||||
Commercial mortgage loans | 601 | 592 | 610 | 620 | 623 | ||||||||||||
Commercial construction loans | 418 | 502 | 474 | 487 | 528 | ||||||||||||
Commercial leases | 566 | 571 | 589 | 555 | 536 | ||||||||||||
Residential mortgage loans | 100,519 | 97,736 | 89,234 | 77,929 | 71,496 | ||||||||||||
Other consumer loans | — | — | — | 50 | 50 | ||||||||||||
Total loans and leases serviced for others | 103,098 | 100,394 | 91,830 | 80,520 | 74,152 | ||||||||||||
Total loans and leases owned or serviced | $225,063 | $219,497 | $208,911 | $194,281 | $188,330 | ||||||||||||
End of period PPP loans(a) | $371 | $737 | $1,305 | $2,344 | $3,685 | ||||||||||||
End of period portfolio commercial and industrial loans - excluding PPP loans | 55,724 | 53,172 | 50,354 | 45,490 | 43,879 | ||||||||||||
Total end of period portfolio commercial and industrial loans | $56,095 | $53,909 | $51,659 | $47,834 | $47,564 |
(a)Paycheck Protection Program loans are included in commercial and industrial loans in the Condensed Consolidated Balance Sheets.
(b)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 | ||||||||||||||||||
2022(a) | 2022 | 2021 | 2021 | 2021 | |||||||||||||||||||
Regulatory Capital(b) | |||||||||||||||||||||||
CET1 capital | $14,830 | $14,937 | $14,781 | $14,673 | $15,050 | ||||||||||||||||||
Additional tier 1 capital | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | ||||||||||||||||||
Tier 1 capital | 16,946 | 17,053 | 16,897 | 16,789 | 17,166 | ||||||||||||||||||
Tier 2 capital | 3,713 | 3,676 | 3,892 | 3,953 | 4,018 | ||||||||||||||||||
Total regulatory capital | $20,659 | $20,729 | $20,789 | $20,742 | $21,184 | ||||||||||||||||||
Risk-weighted assets | $165,502 | $160,352 | $154,860 | $148,827 | $145,084 | ||||||||||||||||||
Ratios | |||||||||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 9.35 | % | 10.23 | % | 10.71 | % | 11.16 | % | 11.11 | % | |||||||||||||
Regulatory Capital Ratios(b) | |||||||||||||||||||||||
Fifth Third Bancorp | |||||||||||||||||||||||
CET1 capital | 8.96 | % | 9.31 | % | 9.54 | % | 9.86 | % | 10.37 | % | |||||||||||||
Tier 1 risk-based capital | 10.24 | % | 10.63 | % | 10.91 | % | 11.28 | % | 11.83 | % | |||||||||||||
Total risk-based capital | 12.48 | % | 12.93 | % | 13.42 | % | 13.94 | % | 14.60 | % | |||||||||||||
Leverage | 8.30 | % | 8.32 | % | 8.27 | % | 8.41 | % | 8.55 | % | |||||||||||||
Fifth Third Bank, National Association | |||||||||||||||||||||||
Tier 1 risk-based capital | 10.60 | % | 10.85 | % | 10.90 | % | 11.25 | % | 11.67 | % | |||||||||||||
Total risk-based capital | 12.03 | % | 12.24 | % | 12.33 | % | 12.79 | % | 13.27 | % | |||||||||||||
Leverage | 8.62 | % | 8.51 | % | 8.29 | % | 8.43 | % | 8.46 | % |
(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 | ||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | |||||||||||||
Average portfolio loans and leases: | |||||||||||||||||
Commercial and industrial loans | $55,460 | $52,554 | $49,566 | $47,766 | $48,773 | ||||||||||||
Commercial mortgage loans | 10,710 | 10,521 | 10,247 | 10,317 | 10,459 | ||||||||||||
Commercial construction loans | 5,356 | 5,371 | 5,329 | 5,728 | 6,043 | ||||||||||||
Commercial leases | 2,839 | 2,942 | 3,057 | 3,158 | 3,174 | ||||||||||||
Total commercial loans and leases | 74,365 | 71,388 | 68,199 | 66,969 | 68,449 | ||||||||||||
Residential mortgage loans | 17,363 | 16,501 | 16,188 | 16,223 | 15,883 | ||||||||||||
Home equity | 3,895 | 4,009 | 4,179 | 4,409 | 4,674 | ||||||||||||
Indirect secured consumer loans | 17,241 | 17,136 | 16,345 | 15,590 | 14,702 | ||||||||||||
Credit card | 1,704 | 1,691 | 1,739 | 1,748 | 1,770 | ||||||||||||
Other consumer loans | 3,125 | 2,742 | 2,837 | 3,031 | 3,056 | ||||||||||||
Total consumer loans | 43,328 | 42,079 | 41,288 | 41,001 | 40,085 | ||||||||||||
Total average portfolio loans and leases | $117,693 | $113,467 | $109,487 | $107,970 | $108,534 | ||||||||||||
Losses charged-off: | |||||||||||||||||
Commercial and industrial loans | ($34) | ($11) | ($25) | ($10) | ($36) | ||||||||||||
Commercial mortgage loans | — | — | (1) | — | (8) | ||||||||||||
Commercial construction loans | (3) | — | — | — | — | ||||||||||||
Commercial leases | — | — | (2) | — | (1) | ||||||||||||
Total commercial loans and leases | (37) | (11) | (28) | (10) | (45) | ||||||||||||
Residential mortgage loans | — | (1) | — | (1) | (1) | ||||||||||||
Home equity | (3) | (2) | (2) | (2) | (2) | ||||||||||||
Indirect secured consumer loans | (14) | (16) | (13) | (9) | (11) | ||||||||||||
Credit card | (18) | (17) | (17) | (17) | (26) | ||||||||||||
Other consumer loans | (18) | (17) | (17) | (17) | (18) | ||||||||||||
Total consumer loans | (53) | (53) | (49) | (46) | (58) | ||||||||||||
Total losses charged-off | ($90) | ($64) | ($77) | ($56) | ($103) | ||||||||||||
Recoveries of losses previously charged-off: | |||||||||||||||||
Commercial and industrial loans | $1 | $2 | $11 | $5 | $23 | ||||||||||||
Commercial mortgage loans | — | 1 | — | 1 | 2 | ||||||||||||
Commercial construction loans | — | — | — | — | — | ||||||||||||
Commercial leases | — | — | — | — | 3 | ||||||||||||
Total commercial loans and leases | 1 | 3 | 11 | 6 | 28 | ||||||||||||
Residential mortgage loans | 1 | 2 | 3 | 2 | 1 | ||||||||||||
Home equity | 3 | 3 | 4 | 3 | 3 | ||||||||||||
Indirect secured consumer loans | 9 | 9 | 7 | 10 | 11 | ||||||||||||
Credit card | 4 | 4 | 4 | 5 | 6 | ||||||||||||
Other consumer loans | 10 | 9 | 10 | 9 | 10 | ||||||||||||
Total consumer loans | 27 | 27 | 28 | 29 | 31 | ||||||||||||
Total recoveries of losses previously charged-off | $28 | $30 | $39 | $35 | $59 | ||||||||||||
Net losses charged-off: | |||||||||||||||||
Commercial and industrial loans | ($33) | ($9) | ($14) | ($5) | ($13) | ||||||||||||
Commercial mortgage loans | — | 1 | (1) | 1 | (6) | ||||||||||||
Commercial construction loans | (3) | — | — | — | — | ||||||||||||
Commercial leases | — | — | (2) | — | 2 | ||||||||||||
Total commercial loans and leases | (36) | (8) | (17) | (4) | (17) | ||||||||||||
Residential mortgage loans | 1 | 1 | 3 | 1 | — | ||||||||||||
Home equity | — | 1 | 2 | 1 | 1 | ||||||||||||
Indirect secured consumer loans | (5) | (7) | (6) | 1 | — | ||||||||||||
Credit card | (14) | (13) | (13) | (12) | (20) | ||||||||||||
Other consumer loans | (8) | (8) | (7) | (8) | (8) | ||||||||||||
Total consumer loans | (26) | (26) | (21) | (17) | (27) | ||||||||||||
Total net losses charged-off | ($62) | ($34) | ($38) | ($21) | ($44) | ||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized): | |||||||||||||||||
Commercial and industrial loans | 0.24 | % | 0.07 | % | 0.11 | % | 0.04 | % | 0.11 | % | |||||||
Commercial mortgage loans | — | (0.03 | %) | 0.03 | % | (0.03 | %) | 0.22 | % | ||||||||
Commercial construction loans | 0.23 | % | — | (0.01 | %) | — | 0.02 | % | |||||||||
Commercial leases | (0.03 | %) | (0.02 | %) | 0.24 | % | 0.00 | % | (0.21 | %) | |||||||
Total commercial loans and leases | 0.19 | % | 0.05 | % | 0.10 | % | 0.03 | % | 0.10 | % | |||||||
Residential mortgage loans | (0.02 | %) | (0.02 | %) | (0.06 | %) | (0.02 | %) | (0.01 | %) | |||||||
Home equity | (0.06 | %) | (0.07 | %) | (0.18 | %) | (0.13 | %) | (0.09 | %) | |||||||
Indirect secured consumer loans | 0.13 | % | 0.17 | % | 0.14 | % | (0.02 | %) | 0.01 | % | |||||||
Credit card | 3.26 | % | 3.13 | % | 2.90 | % | 2.70 | % | 4.52 | % | |||||||
Other consumer loans | 1.04 | % | 1.07 | % | 1.12 | % | 1.05 | % | 0.91 | % | |||||||
Total consumer loans | 0.24 | % | 0.25 | % | 0.21 | % | 0.16 | % | 0.26 | % | |||||||
Total net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.21 | % | 0.12 | % | 0.14 | % | 0.08 | % | 0.16 | % |
25
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||
Allowance for loan and lease losses, beginning | $1,908 | $1,892 | $1,954 | $2,033 | $2,208 | |||||||||||||||
Total net losses charged-off | (62) | (34) | (38) | (21) | (44) | |||||||||||||||
Provision for (benefit from) loan and lease losses | 168 | 50 | (24) | (58) | (131) | |||||||||||||||
Allowance for loan and lease losses, ending | $2,014 | $1,908 | $1,892 | $1,954 | $2,033 | |||||||||||||||
Reserve for unfunded commitments, beginning | $177 | $182 | $205 | $189 | $173 | |||||||||||||||
Provision for (benefit from) the reserve for unfunded commitments | 11 | (5) | (23) | 16 | 16 | |||||||||||||||
Reserve for unfunded commitments, ending | $188 | $177 | $182 | $205 | $189 | |||||||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan and lease losses | $2,014 | $1,908 | $1,892 | $1,954 | $2,033 | |||||||||||||||
Reserve for unfunded commitments | 188 | 177 | 182 | 205 | 189 | |||||||||||||||
Total allowance for credit losses | $2,202 | $2,085 | $2,074 | $2,159 | $2,222 | |||||||||||||||
As of | ||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||
Nonperforming Assets and Delinquent Loans | ||||||||||||||||||||
Nonaccrual portfolio loans and leases: | ||||||||||||||||||||
Commercial and industrial loans | $89 | $105 | $116 | $172 | $193 | |||||||||||||||
Commercial mortgage loans | 12 | 32 | 42 | 43 | 43 | |||||||||||||||
Commercial construction loans | — | 6 | 6 | — | — | |||||||||||||||
Commercial leases | 2 | 3 | 4 | 6 | 9 | |||||||||||||||
Residential mortgage loans | 49 | 42 | 10 | 13 | 17 | |||||||||||||||
Home equity | 45 | 49 | 47 | 48 | 53 | |||||||||||||||
Indirect secured consumer loans | 5 | 5 | 5 | 5 | 6 | |||||||||||||||
Other consumer loans | 2 | 1 | 1 | 1 | 1 | |||||||||||||||
Total nonaccrual portfolio loans and leases (excludes restructured loans) | 204 | 243 | 231 | 288 | 322 | |||||||||||||||
Nonaccrual restructured portfolio commercial loans | 216 | 177 | 169 | 128 | 164 | |||||||||||||||
Nonaccrual restructured portfolio consumer loans(c) | 119 | 114 | 98 | 112 | 135 | |||||||||||||||
Total nonaccrual portfolio loans and leases | 539 | 534 | 498 | 528 | 621 | |||||||||||||||
Repossessed property | 6 | 5 | 5 | 4 | 5 | |||||||||||||||
OREO | 14 | 27 | 24 | 27 | 31 | |||||||||||||||
Total nonperforming portfolio loans and leases and OREO | 559 | 566 | 527 | 559 | 657 | |||||||||||||||
Nonaccrual loans held for sale | — | — | 15 | — | 13 | |||||||||||||||
Nonaccrual restructured loans held for sale | — | 4 | — | 1 | 27 | |||||||||||||||
Total nonperforming assets | $559 | $570 | $542 | $560 | $697 | |||||||||||||||
Loans and leases 90 days past due (accrual): | ||||||||||||||||||||
Commercial and industrial loans | $6 | $9 | $17 | $4 | $2 | |||||||||||||||
Commercial mortgage loans | — | 2 | 1 | 2 | 4 | |||||||||||||||
Commercial construction loans | — | — | 1 | — | — | |||||||||||||||
Commercial leases | 1 | — | — | 1 | — | |||||||||||||||
Total commercial loans and leases | 7 | 11 | 19 | 7 | 6 | |||||||||||||||
Residential mortgage loans(c) | 8 | 14 | 72 | 61 | 57 | |||||||||||||||
Home equity | 2 | 1 | 1 | 1 | 1 | |||||||||||||||
Indirect secured consumer loans | 8 | 9 | 9 | 8 | 4 | |||||||||||||||
Credit card | 13 | 14 | 15 | 14 | 14 | |||||||||||||||
Other consumer loans | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
Total consumer loans | 32 | 39 | 98 | 85 | 77 | |||||||||||||||
Total loans and leases 90 days past due (accrual)(b) | $39 | $50 | $117 | $92 | $83 | |||||||||||||||
Ratios | ||||||||||||||||||||
Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.21 | % | 0.12 | % | 0.14 | % | 0.08 | % | 0.16 | % | ||||||||||
Allowance for credit losses: | ||||||||||||||||||||
As a percent of portfolio loans and leases | 1.85 | % | 1.80 | % | 1.85 | % | 2.00 | % | 2.06 | % | ||||||||||
As a percent of nonperforming portfolio loans and leases(a) | 408 | % | 391 | % | 416 | % | 409 | % | 358 | % | ||||||||||
As a percent of nonperforming portfolio assets(a) | 394 | % | 369 | % | 394 | % | 386 | % | 338 | % | ||||||||||
Nonperforming portfolio loans and leases as a percent of portfolio loans and leases(a) | 0.45 | % | 0.46 | % | 0.44 | % | 0.49 | % | 0.58 | % | ||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO(a) | 0.47 | % | 0.49 | % | 0.47 | % | 0.52 | % | 0.61 | % | ||||||||||
Nonperforming assets as a percent of total loans and leases, OREO, and repossessed property | 0.46 | % | 0.48 | % | 0.47 | % | 0.49 | % | 0.61 | % | ||||||||||
(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 | |||||||||||||||||||||
2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||||||||||||||
Net interest income | $1,339 | $1,195 | $1,197 | $1,189 | $1,208 | |||||||||||||||||||||
Add: Taxable equivalent adjustment | 3 | 3 | 3 | 3 | 3 | |||||||||||||||||||||
Net interest income (FTE) (a) | 1,342 | 1,198 | 1,200 | 1,192 | 1,211 | |||||||||||||||||||||
Net interest income (annualized) (b) | 5,371 | 4,846 | 4,749 | 4,717 | 4,845 | |||||||||||||||||||||
Net interest income (FTE) (annualized) (c) | 5,383 | 4,859 | 4,761 | 4,729 | 4,857 | |||||||||||||||||||||
Interest income | 1,464 | 1,289 | 1,294 | 1,292 | 1,323 | |||||||||||||||||||||
Add: Taxable equivalent adjustment | 3 | 3 | 3 | 3 | 3 | |||||||||||||||||||||
Interest income (FTE) | 1,467 | 1,292 | 1,297 | 1,295 | 1,326 | |||||||||||||||||||||
Interest income (FTE) (annualized) (d) | 5,884 | 5,240 | 5,146 | 5,138 | 5,319 | |||||||||||||||||||||
Interest expense (annualized) (e) | 501 | 381 | 385 | 409 | 461 | |||||||||||||||||||||
Average interest-earning assets (f) | 184,406 | 187,894 | 187,045 | 182,801 | 184,918 | |||||||||||||||||||||
Average interest-bearing liabilities (g) | 115,462 | 116,764 | 115,725 | 113,548 | 115,951 | |||||||||||||||||||||
Net interest margin (b) / (f) | 2.91 | % | 2.58 | % | 2.54 | % | 2.58 | % | 2.62 | % | ||||||||||||||||
Net interest margin (FTE) (c) / (f) | 2.92 | % | 2.59 | % | 2.55 | % | 2.59 | % | 2.63 | % | ||||||||||||||||
Net interest rate spread (FTE) (d) / (f) - (e) / (g) | 2.76 | % | 2.46 | % | 2.42 | % | 2.45 | % | 2.48 | % | ||||||||||||||||
Income before income taxes | $724 | $612 | $829 | $895 | $911 | |||||||||||||||||||||
Add: Taxable equivalent adjustment | 3 | 3 | 3 | 3 | 3 | |||||||||||||||||||||
Income before income taxes (FTE) | 727 | 615 | 832 | 898 | 914 | |||||||||||||||||||||
Net income available to common shareholders | 526 | 474 | 627 | 684 | 674 | |||||||||||||||||||||
Add: Intangible amortization, net of tax | 9 | 9 | 9 | 9 | 8 | |||||||||||||||||||||
Tangible net income available to common shareholders (h) | 535 | 483 | 636 | 693 | 682 | |||||||||||||||||||||
Tangible net income available to common shareholders (annualized) (i) | 2,146 | 1,959 | 2,523 | 2,749 | 2,735 | |||||||||||||||||||||
Average Bancorp shareholders’ equity | 19,248 | 21,402 | 22,449 | 22,927 | 22,927 | |||||||||||||||||||||
Less: | Average preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | ||||||||||||||||||||
Average goodwill | (4,744) | (4,514) | (4,514) | (4,430) | (4,259) | |||||||||||||||||||||
Average intangible assets | (158) | (150) | (162) | (149) | (122) | |||||||||||||||||||||
Average tangible common equity, including AOCI (j) | 12,230 | 14,622 | 15,657 | 16,232 | 16,430 | |||||||||||||||||||||
Less: | Average AOCI | 2,397 | (129) | (1,382) | (1,980) | (1,968) | ||||||||||||||||||||
Average tangible common equity, excluding AOCI (k) | 14,627 | 14,493 | 14,275 | 14,252 | 14,462 | |||||||||||||||||||||
Total Bancorp shareholders’ equity | 18,970 | 20,177 | 22,210 | 22,524 | 22,926 | |||||||||||||||||||||
Less: | Preferred stock | (2,116) | (2,116) | (2,116) | (2,116) | (2,116) | ||||||||||||||||||||
Goodwill | (4,926) | (4,514) | (4,514) | (4,514) | (4,259) | |||||||||||||||||||||
Intangible assets | (194) | (145) | (156) | (169) | (117) | |||||||||||||||||||||
Tangible common equity, including AOCI (l) | 11,734 | 13,402 | 15,424 | 15,725 | 16,434 | |||||||||||||||||||||
Less: | AOCI | 2,644 | 1,096 | (1,207) | (1,637) | (1,974) | ||||||||||||||||||||
Tangible common equity, excluding AOCI (m) | 14,378 | 14,498 | 14,217 | 14,088 | 14,460 | |||||||||||||||||||||
Add: | Preferred stock | 2,116 | 2,116 | 2,116 | 2,116 | 2,116 | ||||||||||||||||||||
Tangible equity (n) | 16,494 | 16,614 | 16,333 | 16,204 | 16,576 | |||||||||||||||||||||
Total assets | 206,782 | 211,459 | 211,116 | 207,731 | 205,390 | |||||||||||||||||||||
Less: | Goodwill | (4,926) | (4,514) | (4,514) | (4,514) | (4,259) | ||||||||||||||||||||
Intangible assets | (194) | (145) | (156) | (169) | (117) | |||||||||||||||||||||
Tangible assets, including AOCI (o) | 201,662 | 206,800 | 206,446 | 203,048 | 201,014 | |||||||||||||||||||||
Less: | AOCI, before tax | 3,347 | 1,387 | (1,528) | (2,072) | (2,499) | ||||||||||||||||||||
Tangible assets, excluding AOCI (p) | $205,009 | $208,187 | $204,918 | $200,976 | $198,515 | |||||||||||||||||||||
Common shares outstanding (q) | 686 | 686 | 683 | 690 | 704 | |||||||||||||||||||||
Tangible equity (n) / (p) | 8.05 | % | 7.98 | % | 7.97 | % | 8.06 | % | 8.35 | % | ||||||||||||||||
Tangible common equity (excluding AOCI) (m) / (p) | 7.01 | % | 6.96 | % | 6.94 | % | 7.01 | % | 7.28 | % | ||||||||||||||||
Tangible common equity (including AOCI) (l) / (o) | 5.82 | % | 6.48 | % | 7.47 | % | 7.74 | % | 8.18 | % | ||||||||||||||||
Tangible book value per share (including AOCI) (l) / (q) | $17.10 | $19.54 | $22.58 | $22.79 | $23.34 | |||||||||||||||||||||
Tangible book value per share (excluding AOCI) (m) / (q) | $20.96 | $21.13 | $20.82 | $20.42 | $20.54 | |||||||||||||||||||||
28
Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||
Non-GAAP Reconciliation | |||||||||||||||||||||||
$ in millions | For the Three Months Ended | ||||||||||||||||||||||
(unaudited) | June | March | June | ||||||||||||||||||||
2022 | 2022 | 2021 | |||||||||||||||||||||
Net income (r) | $562 | $494 | $709 | ||||||||||||||||||||
Net income (annualized) (s) | 2,254 | 2,003 | 2,844 | ||||||||||||||||||||
Adjustments (pre-tax items) | |||||||||||||||||||||||
Valuation of Visa total return swap | 18 | 11 | 37 | ||||||||||||||||||||
Business disposition charges | 6 | — | — | ||||||||||||||||||||
Adjustments, after-tax (t)(a) | 19 | 8 | 28 | ||||||||||||||||||||
Noninterest income (u) | 676 | 684 | 741 | ||||||||||||||||||||
Valuation of Visa total return swap | 18 | 11 | 37 | ||||||||||||||||||||
Business disposition charges | 6 | — | — | ||||||||||||||||||||
Adjusted noninterest income (v) | 700 | 695 | 778 | ||||||||||||||||||||
Noninterest expense (w) | 1,112 | 1,222 | 1,153 | ||||||||||||||||||||
Adjusted net income (r) + (t) | 581 | 502 | 737 | ||||||||||||||||||||
Adjusted net income (annualized) (x) | 2,330 | 2,036 | 2,956 | ||||||||||||||||||||
Adjusted tangible net income available to common shareholders (h) + (t) | 554 | 491 | 710 | ||||||||||||||||||||
Adjusted tangible net income available to common shareholders (annualized) (y) | 2,222 | 1,991 | 2,848 | ||||||||||||||||||||
Average assets (z) | $205,897 | $209,150 | $206,353 | ||||||||||||||||||||
Return on average tangible common equity (i) / (j) | 17.5 | % | 13.4 | % | 16.6 | % | |||||||||||||||||
Return on average tangible common equity excluding AOCI (i) / (k) | 14.7 | % | 13.5 | % | 18.9 | % | |||||||||||||||||
Adjusted return on average tangible common equity, including AOCI (y) / (j) | 18.2 | % | 13.6 | % | 17.3 | % | |||||||||||||||||
Adjusted return on average tangible common equity, excluding AOCI (y) / (k) | 15.2 | % | 13.7 | % | 19.7 | % | |||||||||||||||||
Return on average assets (s) / (z) | 1.09 | % | 0.96 | % | 1.38 | % | |||||||||||||||||
Adjusted return on average assets (x) / (z) | 1.13 | % | 0.97 | % | 1.43 | % | |||||||||||||||||
Efficiency ratio (FTE) (w) / [(a) + (u)] | 55.1 | % | 64.9 | % | 59.1 | % | |||||||||||||||||
Adjusted efficiency ratio (w) / [(a) + (v)] | 54.5 | % | 64.6 | % | 58.0 | % | |||||||||||||||||
Total revenue (FTE) (a) + (u) | $2,018 | $1,882 | $1,952 | ||||||||||||||||||||
Adjusted total revenue (FTE) (a) + (v) | $2,042 | $1,893 | $1,989 | ||||||||||||||||||||
Pre-provision net revenue (PPNR) (a) + (u) - (w) | $906 | $660 | $799 | ||||||||||||||||||||
Adjusted pre-provision net revenue (PPNR) (a) + (v) - (w) | $930 | $671 | $836 | ||||||||||||||||||||
Totals may not foot due to rounding; (a) Assumes a 23% tax rate | |||||||||||||||||||||||
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Fifth Third Bancorp and Subsidiaries | |||||||||||||||||||||||
Segment Presentation | |||||||||||||||||||||||
$ in millions | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
For the three months ended June 30, 2022 | Commercial Banking | Branch Banking(b) | Consumer Lending(c) | Wealth and Asset Management | Other/ Eliminations | Total | |||||||||||||||||
Net interest income (FTE)(a) | $518 | $554 | $114 | $53 | $103 | $1,342 | |||||||||||||||||
Provision for credit losses | (85) | (20) | (4) | — | (70) | (179) | |||||||||||||||||
Net interest income after provision for credit losses | 433 | 534 | 110 | 53 | 33 | 1,163 | |||||||||||||||||
Noninterest income | 345 | 219 | 33 | 132 | (53) | 676 | |||||||||||||||||
Noninterest expense | (418) | (458) | (146) | (137) | 47 | (1,112) | |||||||||||||||||
Income (loss) before income taxes | 360 | 295 | (3) | 48 | 27 | 727 | |||||||||||||||||
Applicable income tax (expense) benefit(a) | (66) | (62) | 1 | (10) | (28) | (165) | |||||||||||||||||
Net income (loss) | $294 | $233 | $(2) | $38 | $(1) | $562 | |||||||||||||||||
For the three months ended March 31, 2022 | Commercial Banking | Branch Banking(b) | Consumer Lending(c) | Wealth and Asset Management | Other/ Eliminations | Total | |||||||||||||||||
Net interest income (FTE)(a) | $481 | $430 | $131 | $35 | $121 | $1,198 | |||||||||||||||||
(Provision for) benefit from credit losses | 28 | (17) | (6) | — | (50) | (45) | |||||||||||||||||
Net interest income after (provision for) benefit from credit losses | 509 | 413 | 125 | 35 | 71 | 1,153 | |||||||||||||||||
Noninterest income | 327 | 216 | 52 | 144 | (55) | 684 | |||||||||||||||||
Noninterest expense | (446) | (490) | (144) | (142) | — | (1,222) | |||||||||||||||||
Income before income taxes | 390 | 139 | 33 | 37 | 16 | 615 | |||||||||||||||||
Applicable income tax expense(a) | (72) | (30) | (7) | (8) | (4) | (121) | |||||||||||||||||
Net income | $318 | $109 | $26 | $29 | $12 | $494 | |||||||||||||||||
For the three months ended December 31, 2021 | Commercial Banking | Branch Banking(b) | Consumer Lending(c) | Wealth and Asset Management | Other/ Eliminations | Total | |||||||||||||||||
Net interest income (FTE)(a) | $390 | $316 | $147 | $24 | $323 | $1,200 | |||||||||||||||||
Benefit from (provision for) credit losses | 114 | (18) | (3) | — | (46) | 47 | |||||||||||||||||
Net interest income after benefit from (provision for) credit losses | 504 | 298 | 144 | 24 | 277 | 1,247 | |||||||||||||||||
Noninterest income | 372 | 235 | 35 | 145 | 4 | 791 | |||||||||||||||||
Noninterest expense | (431) | (471) | (157) | (139) | (8) | (1,206) | |||||||||||||||||
Income before income taxes | 445 | 62 | 22 | 30 | 273 | 832 | |||||||||||||||||
Applicable income tax expense(a) | (86) | (12) | (5) | (7) | (60) | (170) | |||||||||||||||||
Net income | $359 | $50 | $17 | $23 | $213 | $662 | |||||||||||||||||
For the three months ended September 30, 2021 | Commercial Banking | Branch Banking(b) | Consumer Lending(c) | Wealth and Asset Management | Other/ Eliminations | Total | |||||||||||||||||
Net interest income (FTE)(a) | $371 | $309 | $145 | $22 | $345 | $1,192 | |||||||||||||||||
Benefit from (provision for) credit losses | 242 | (13) | 2 | — | (189) | 42 | |||||||||||||||||
Net interest income after benefit from (provision for) credit losses | 613 | 296 | 147 | 22 | 156 | 1,234 | |||||||||||||||||
Noninterest income | 362 | 229 | 84 | 143 | 18 | 836 | |||||||||||||||||
Noninterest expense | (406) | (463) | (158) | (134) | (11) | (1,172) | |||||||||||||||||
Income before income taxes | 569 | 62 | 73 | 31 | 163 | 898 | |||||||||||||||||
Applicable income tax expense(a) | (112) | (14) | (15) | (7) | (46) | (194) | |||||||||||||||||
Net income | $457 | $48 | $58 | $24 | $117 | $704 | |||||||||||||||||
For the three months ended June 30, 2021 | Commercial Banking | Branch Banking(b) | Consumer Lending(c) | Wealth and Asset Management | Other/ Eliminations | Total | |||||||||||||||||
Net interest income (FTE)(a) | $378 | $301 | $142 | $21 | $369 | $1,211 | |||||||||||||||||
Benefit from (provision for) credit losses | 151 | (25) | — | — | (11) | 115 | |||||||||||||||||
Net interest income after benefit from (provision for) credit losses | 529 | 276 | 142 | 21 | 358 | 1,326 | |||||||||||||||||
Noninterest income | 355 | 224 | 63 | 143 | (44) | 741 | |||||||||||||||||
Noninterest expense | (399) | (450) | (163) | (131) | (10) | (1,153) | |||||||||||||||||
Income before income taxes | 485 | 50 | 42 | 33 | 304 | 914 | |||||||||||||||||
Applicable income tax expense(a) | (92) | (10) | (9) | (7) | (87) | (205) | |||||||||||||||||
Net income | $393 | $40 | $33 | $26 | $217 | $709 | |||||||||||||||||
(a) Includes taxable equivalent adjustments of $3 million for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021. | |||||||||||||||||||||||
(b) Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through full-service banking centers. | |||||||||||||||||||||||
(c) Consumer Lending includes the Bancorp’s residential mortgage, home equity, automobile and other indirect lending activities. |
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