Exhibit 99.1
Fifth Third Announces Second Quarter 2019 Results
Reported diluted earnings per share of $0.57
Reported results included a negative $0.14 impact from certain items on page 2 including merger-related expenses
Quarterly comparisons are impacted by significant Worldpay gains from the prior quarter and year-ago quarter
Key Financial Data
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Key Highlights
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$ millions for all balance sheet and income statement items |
2Q19 | 1Q19 | 2Q18 |
● Successful integration of MB Financial
● Remain on-track to achieve MB expense savings by
● Noninterest expense, noninterest income, and net
● NIM(a) up 16 bps compared to 2Q18 (up 11 bps excl.
● Period end loan to core deposit ratio decreased 2%
● ROTCE(a) of 12.3% (adjusted 15.1%, or 15.8% excl.
● Named “Best Regional Bank” for second consecutive | ||||||||||||||||
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Income Statement Data | ||||||||||||||||||||
Net income available to common shareholders
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| $427
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| $760
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| $579
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Net interest income (U.S. GAAP)
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| 1,245
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| 1,082
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| 1,020
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Net interest income (FTE)(a)
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| 1,250
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| 1,086
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| 1,024
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Noninterest income
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| 660
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| 1,101
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| 743
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Noninterest expense
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| 1,243
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| 1,097
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| 1,001
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Per Share Data |
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Earnings per share, basic
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| $0.57
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| $1.14
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| $0.84
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Earnings per share, diluted
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| 0.57
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| 1.12
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| 0.82
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Book value per share
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| 26.17
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| 24.77
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| 21.75
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Tangible book value per share(a)
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| 20.03
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| 18.64
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| 18.08
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Balance Sheet & Credit Quality |
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Average portfolio loans and leases
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| $110,095
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| $97,773
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| $92,557
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Average deposits
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| 124,345
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| 109,591
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| 103,945
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Net charge-off ratio(b)
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| 0.29
| %
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| 0.32
| %
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| 0.41
| %
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Nonperforming asset ratio(c)
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| 0.51
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| 0.45
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| 0.52
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Financial Ratios |
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Return on average assets
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| 1.08
| %
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| 2.11
| %
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| 1.71
| %
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Return on average common equity
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| 9.1
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| 19.6
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| 15.9
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Return on average tangible common equity(a)
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| 12.3
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| 23.9
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| 19.2
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CET1 capital(d)(e)
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| 9.58
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| 9.60
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| 10.91
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Net interest margin(a)
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| 3.37
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| 3.28
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| 3.21
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Efficiency(a) | 65.1 | 50.2 | 56.7 | |||||||||||||||||
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 Industry Guide 3 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. |
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CEO Commentary
“Our second quarter performance reflected continued positive momentum throughout our businesses as well as the impact of integrating MB Financial. Excluding merger-related expenses, second quarter financial results exceeded our prior expectations, reflecting diligent expense management throughout the Company and strong net interest income growth. The netcharge-off ratio also improved both sequentially and year-over-year, reflecting the generally stable macroeconomic environment during the quarter.
During the quarter, we completed the conversion of substantially all systems associated with our acquisition of MB Financial. We remain on track to achieve the previously stated financial synergies from the transaction, which will meaningfully improve our key profitability metrics.
With a clearly defined set of strategic priorities, we remain confident in our ability to generate revenue growth, achieve positive operating leverage, and create significant value for our shareholders.”
-Greg D. Carmichael, Chairman, President and CEO
Investor contact: Chris Doll (513) 534–2345 | Media contact: Gary Rhodes (513) 534–4225 | July 23, 2019 |
Income Statement Highlights | ||||||||||||||||||||
($ in millions, except per share data) | For the Three Months Ended | % Change | ||||||||||||||||||
June | March | June | ||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||||
Condensed Statements of Income | ||||||||||||||||||||
Net interest income (NII)(a) | $1,250 | $1,086 | $1,024 | 15% | 22% | |||||||||||||||
Provision for credit losses | 85 | 90 | 14 | (6%) | 507% | |||||||||||||||
Noninterest income | 660 | 1,101 | 743 | (40%) | (11%) | |||||||||||||||
Noninterest expense | 1,243 | 1,097 | 1,001 | 13% | 24% | |||||||||||||||
Income before income taxes(a) | $582 | $1,000 | $752 | (42%) | (23%) | |||||||||||||||
Taxable equivalent adjustment | 5 | 4 | 4 | 25% | 25% | |||||||||||||||
Applicable income tax expense | 124 | 221 | 146 | (44%) | (15%) | |||||||||||||||
Net income | $453 | $775 | $602 | (42%) | (25%) | |||||||||||||||
Less: Net income attributable to noncontrolling interests | - | - | - | NM | NM | |||||||||||||||
Net income attributable to Bancorp | $453 | $775 | $602 | (42%) | (25%) | |||||||||||||||
Dividends on preferred stock | 26 | 15 | 23 | 73% | 13% | |||||||||||||||
Net income available to common shareholders | $427 | $760 | $579 | (44%) | (26%) | |||||||||||||||
Earnings per share, diluted | $0.57 | $1.12 | $0.82 | (49%) | (30%) |
Fifth Third Bancorp (Nasdaq: FITB) today reported second quarter 2019 net income of $453 million compared to net income of $602 million in theyear-ago quarter. Net income available to common shareholders was $427 million, or $0.57 per diluted share, compared to $579 million, or $0.82 per diluted share in theyear-ago quarter. Prior quarter net income was $775 million and net income available to common shareholders was $760 million, or $1.12 per diluted share.
Diluted earnings per share impact of certain items | ||||
(after-tax impacts(f); $ in millions, except per share data) | ||||
Merger-related expenses | ($84 | ) | ||
Valuation of Visa total return swap | ($17 | ) | ||
After-tax impact(f)of certain items | ($101 | ) | ||
Average diluted common shares outstanding (thousands) | 747,750 | |||
Diluted earnings per share impact | ($0.14 | ) | ||
2
Net Interest Income | ||||||||||||||||||||
(FTE; $ in millions)(a) | For the Three Months Ended | % Change | ||||||||||||||||||
June | March | June | ||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||||
Interest Income | ||||||||||||||||||||
Interest income | $1,641 | $1,437 | $1,273 | 14% | 29% | |||||||||||||||
Interest expense | 391 | 351 | 249 | 11% | 57% | |||||||||||||||
Net interest income (NII) | $1,250 | $1,086 | $1,024 | 15% | 22% | |||||||||||||||
Adjusted NII(a) | $1,234 | $1,085 | $1,024 | 14% | 21% | |||||||||||||||
Average Yield/Rate Analysis | bps Change | |||||||||||||||||||
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Yield on interest-earning assets | 4.42% | 4.33% | 3.98% | 9 | 44 | |||||||||||||||
Rate paid on interest-bearing liabilities | 1.47% | 1.46% | 1.12% | 1 | 35 | |||||||||||||||
Ratios | ||||||||||||||||||||
Net interest rate spread | 2.95% | 2.87% | 2.86% | 8 | 9 | |||||||||||||||
Net interest margin (NIM) | 3.37% | 3.28% | 3.21% | 9 | 16 | |||||||||||||||
Adjusted NIM(a) | 3.32% | 3.28% | 3.21% | 4 | 11 |
Compared to theyear-ago quarter, NII increased $226 million, or 22%. Purchase accounting accretion associated with thenon-purchase credit impaired loan portfolio from the MB Financial acquisition was $16 million in the second quarter of 2019. Excluding the purchase accounting accretion, adjusted NII increased $210 million, or 21%, primarily driven by the impact of the earning assets from the MB Financial acquisition and higher short-term market rates. Compared to theyear-ago quarter, NIM increased 16 bps, or 11 bps, excluding the purchase accounting accretion. Performance was driven by higher short-term market rates, partially offset by higher funding costs and a continued migration from demand deposits into interest-bearing deposits.
Compared to the prior quarter, NII increased $164 million, or 15%. Excluding the purchase accounting accretion, adjusted NII increased $149 million, or 14%, primarily reflecting the full-quarter impact of the acquired earning assets from the MB Financial acquisition and a higher day count, partially offset by lower short-term market rates and a slight increase in funding costs. Compared to the prior quarter, NIM increased 9 bps. Excluding the purchase accounting accretion, adjusted NIM increased 4 bps, primarily reflecting the full-quarter impact of the acquired earning assets from the MB Financial acquisition, partially offset by lower short-term market rates and a higher day count.
3
Noninterest Income | ||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||
June | March | June | ||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||
Noninterest Income | ||||||||||||||||||
Service charges on deposits | $143 | $131 | $137 | 9% | 4% | |||||||||||||
Corporate banking revenue | 137 | 112 | 120 | 22% | 14% | |||||||||||||
Mortgage banking net revenue | 63 | 56 | 53 | 13% | 19% | |||||||||||||
Wealth and asset management revenue | 122 | 112 | 108 | 9% | 13% | |||||||||||||
Card and processing revenue | 92 | 79 | 84 | 16% | 10% | |||||||||||||
Other noninterest income | 93 | 592 | 250 | (84%) | (63%) | |||||||||||||
Securities gains (losses), net | 8 | 16 | (5 | ) | (50%) | NM | ||||||||||||
Securities gains (losses), net -non-qualifying | 2 | 3 | (4 | ) | (33%) | NM | ||||||||||||
Total noninterest income | $660 | $1,101 | $743 | (40%) | (11%) | |||||||||||||
Reported noninterest income decreased $83 million, or 11%, from theyear-ago quarter, and decreased $441 million, or 40%, from the prior quarter. The reported results reflect the full-quarter impact of the MB Financial acquisition on March 22, 2019, and the impact of certain items in the table below including significant Worldpay gains in both the prior quarter andyear-ago quarter. | ||||||||||||||||||
Noninterest Income excluding certain items | ||||||||||||||||||
($ in millions) | For the Three Months Ended | |||||||||||||||||
June | March | June | ||||||||||||||||
2019 | 2019 | 2018 | ||||||||||||||||
Noninterest Income excluding certain items | ||||||||||||||||||
Noninterest income (U.S. GAAP) | $660 | $1,101 | $743 | |||||||||||||||
Valuation of Visa total return swap | 22 | 31 | 10 | |||||||||||||||
Merger-related branch network impairment charge | - | 13 | - | |||||||||||||||
Gain on sale of Worldpay shares | - | (562) | (205) | |||||||||||||||
Branch network impairment charge | - | - | 30 | |||||||||||||||
Gain from GreenSky IPO | - | - | (16) | |||||||||||||||
GreenSky equity securities (gains) / losses | - | (9) | - | |||||||||||||||
Securities (gains) / losses, net (excluding GreenSky) | (8) | (7) | 5 | |||||||||||||||
Noninterest income excluding certain items(a) | $674 | $567 | $567 |
Compared to theyear-ago quarter, service charges on deposits increased $6 million, or 4%, primarily driven by higher commercial deposit fees, partially offset by lower consumer deposit fees. Corporate banking revenue increased $17 million, or 14%, primarily driven by business solutions revenue resulting from the MB Financial acquisition. Mortgage banking net revenue increased $10 million, or 19%, primarily driven by higher mortgage originations of $2.9 billion, an increase of 36%. Wealth and asset management revenue increased $14 million, or 13%, primarily driven by higher personal asset management revenue and institutional trust fees. Card and processing revenue increased $8 million, or 10%, reflecting increases in credit and debit transaction volumes, partially offset by higher rewards.
4
Compared to the prior quarter, service charges on deposits increased $12 million, or 9%, primarily driven by higher commercial deposit fees, partially offset by lower consumer deposit fees. Corporate banking revenue increased $25 million, or 22%, primarily driven by business solutions revenue resulting from the MB Financial acquisition. Mortgage banking net revenue increased $7 million, or 13%, primarily driven by a 76% increase in origination volumes. Wealth and asset management revenue increased $10 million, or 9%, primarily driven by higher personal asset management revenue and institutional trust fees, partially offset by seasonally strongtax-related private client service revenue in the prior quarter. Card and processing revenue increased $13 million, or 16%, reflecting increases in credit and debit transaction volumes, partially offset by higher rewards.
Compared to both theyear-ago quarter and prior quarter, noninterest income excluding the items in the table above increased $107 million, or 19%, reflecting the full-quarter impact of the MB Financial acquisition.
Other noninterest income results on a reported basis in the current and previous quarters were impacted by the Visa total return swap valuation adjustments, branch network impairment charges, Worldpay-related gains, and GreenSky IPO gain. Excluding these items, other noninterest income of $115 million increased $46 million, or 67%, compared to theyear-ago quarter, primarily driven by other noninterest income from MB Financial. Compared to the prior quarter, other noninterest income excluding these items increased $41 million, or 55%, primarily driven by other noninterest income from MB Financial.
Noninterest Expense | ||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||
June | March | June | ||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||
Noninterest Expense | ||||||||||||||||||
Compensation and benefits | $641 | $610 | $549 | 5% | 17% | |||||||||||||
Net occupancy expense | 88 | 75 | 74 | 17% | 19% | |||||||||||||
Technology and communications | 136 | 83 | 67 | 64% | 103% | |||||||||||||
Equipment expense | 33 | 30 | 30 | 10% | 10% | |||||||||||||
Card and processing expense | 34 | 31 | 30 | 10% | 13% | |||||||||||||
Intangible amortization expense | 14 | 3 | 1 | NM | NM | |||||||||||||
Other noninterest expense | 297 | 265 | 250 | 12% | 19% | |||||||||||||
Total noninterest expense | $1,243 | $1,097 | $1,001 | 13% | 24% | |||||||||||||
Impacts of Merger-Related Expenses | ||||||||||||||||||
($ in millions) | For the Three Months Ended | |||||||||||||||||
June | March | June | ||||||||||||||||
2019 | 2019 | 2018 | ||||||||||||||||
Merger-Related Expenses | ||||||||||||||||||
Compensation and benefits | $41 | $35 | $- | |||||||||||||||
Net occupancy expense | 6 | - | - | |||||||||||||||
Technology and communications | 49 | 11 | - | |||||||||||||||
Equipment expense | 1 | - | - | |||||||||||||||
Card and processing expense | 1 | - | - | |||||||||||||||
Intangible amortization expense | - | - | - | |||||||||||||||
Other noninterest expense | 11 | 30 | 2 | |||||||||||||||
Total merger-related expenses | $109 | $76 | $2 |
5
Noninterest Expense excluding Merger-Related Expenses(a) | ||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||
June | March | June | ||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||||
Noninterest Expense excluding Merger-Related Expenses | ||||||||||||||||||||
Compensation and benefits | $600 | $575 | $549 | 4% | 9% | |||||||||||||||
Net occupancy expense | 82 | 75 | 74 | 9% | 11% | |||||||||||||||
Technology and communications | 87 | 72 | 67 | 21% | 30% | |||||||||||||||
Equipment expense | 32 | 30 | 30 | 7% | 7% | |||||||||||||||
Card and processing expense | 33 | 31 | 30 | 6% | 10% | |||||||||||||||
Intangible amortization expense | 14 | 3 | 1 | NM | NM | |||||||||||||||
Other noninterest expense | 286 | 235 | 248 | 22% | 15% | |||||||||||||||
Total noninterest expense excluding merger-related expenses | $1,134 | $1,021 | $999 | 11% | 14% |
Compared to theyear-ago quarter, reported noninterest expense increased $242 million, or 24%, impacted by merger-related expenses and the full quarter impact of ongoing expenses from the MB Financial acquisition. Excluding the merger-related expenses noted in the table above and intangible amortization expense, noninterest expense increased $122 million, or 12%, driven by higher other noninterest expense from the MB Financial acquisition (primarily operating lease expense), higher compensation and benefits as well as continued technology investments. The growth was partially offset by a decrease in incentive based payments and the elimination of the FDIC surcharge. Noninterest expense from theyear-ago quarter included the impact of compensation expense primarily related to a staffing review as well as a contribution to the Fifth Third Foundation.
Compared to the prior quarter, reported noninterest expense increased $146 million, or 13%, and was impacted by merger-related expenses and elevated other noninterest expense. Excluding the merger-related expenses and the aforementioned intangible amortization expense, noninterest expense increased $102 million, or 10%, driven by higher other noninterest expense from the MB Financial acquisition (primarily operating lease expense), and an increase in technology and communications expense.
6
Average Interest-Earning Assets | ||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||
June | March | June | ||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||
Average Portfolio Loans and Leases | ||||||||||||||||||
Commercial loans and leases: | ||||||||||||||||||
Commercial and industrial loans | $52,078 | $46,011 | $42,292 | 13% | 23% | |||||||||||||
Commercial mortgage loans | 10,632 | 7,414 | 6,514 | 43% | 63% | |||||||||||||
Commercial construction loans | 5,248 | 4,838 | 4,743 | 8% | 11% | |||||||||||||
Commercial leases | 3,809 | 3,555 | 3,847 | 7% | (1%) | |||||||||||||
Total commercial loans and leases | $71,767 | $61,818 | $57,396 | 16% | 25% | |||||||||||||
Consumer loans: | ||||||||||||||||||
Residential mortgage loans | $16,804 | $15,624 | $15,581 | 8% | 8% | |||||||||||||
Home equity | 6,376 | 6,355 | 6,672 | - | (4%) | |||||||||||||
Indirect secured consumer loans | 10,190 | 9,176 | 8,968 | 11% | 14% | |||||||||||||
Credit card | 2,408 | 2,396 | 2,221 | 1% | 8% | |||||||||||||
Other consumer loans | 2,550 | 2,404 | 1,719 | 6% | 48% | |||||||||||||
Total consumer loans | $38,328 | $35,955 | $35,161 | 7% | 9% | |||||||||||||
Portfolio loans and leases | $110,095 | $97,773 | $92,557 | 13% | 19% | |||||||||||||
Loans held for sale | 898 | 589 | 675 | 52% | 33% | |||||||||||||
Securities and other short-term investments | 37,797 | 36,101 | 34,935 | 5% | 8% | |||||||||||||
Total average interest-earning assets | $148,790 | $134,463 | $128,167 | 11% | 16% |
Compared to theyear-ago quarter, average total portfolio loans and leases increased 19%, reflecting the impact of the MB Financial acquisition near the end of the first quarter of 2019. Average commercial portfolio loans and leases increased 25%, reflecting the impact of MB Financial as well as higher commercial and industrial (C&I) and commercial mortgage loans, partially offset by a decline in commercial leases. Average consumer portfolio loans increased 9%, reflecting the impact of MB Financial as well as growth in other consumer loans and indirect secured consumer loans.
Compared to the prior quarter, average total portfolio loans and leases increased 13%, reflecting the full-quarter impact of MB Financial. Average commercial portfolio loans and leases increased 16%, reflecting the full-quarter impact of MB Financial, partially offset by a decline in commercial leases. Average consumer portfolio loans increased 7%, reflecting the full-quarter impact of MB Financial as well as growth in indirect secured consumer loans and other consumer loans.
Period end commercial line utilization was 37%, compared to 35% in theyear-ago quarter and 38% in the prior quarter.
Average securities and other short-term investments were $37.8 billion compared to $34.9 billion in theyear-ago quarter and $36.1 billion in the prior quarter. Growth in the portfolio reflected both the impact from MB Financial and an increase in other short-term investments driven by strong deposit growth in excess of loan growth. Averageavailable-for-sale debt and other securities of $34.7 billion increased 6% compared to theyear-ago quarter increased 3% compared to the prior quarter.
7
Average Deposits | ||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||
June | March | June | ||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||||
Average Deposits | ||||||||||||||||||||
Demand | $35,818 | $30,557 | $32,834 | 17% | 9% | |||||||||||||||
Interest checking | 36,514 | 33,697 | 28,715 | 8% | 27% | |||||||||||||||
Savings | 14,418 | 13,052 | 13,618 | 10% | 6% | |||||||||||||||
Money market | 25,934 | 23,133 | 22,036 | 12% | 18% | |||||||||||||||
Foreign office(g) | 163 | 208 | 371 | (22%) | (56%) | |||||||||||||||
Total transaction deposits | $112,847 | $100,647 | $97,574 | 12% | 16% | |||||||||||||||
Other time | 5,678 | 4,860 | 4,018 | 17% | 41% | |||||||||||||||
Total core deposits | $118,525 | $105,507 | $101,592 | 12% | 17% | |||||||||||||||
Certificates - $100,000 and over | 5,780 | 3,358 | 2,155 | 72% | 168% | |||||||||||||||
Other deposits | 40 | 726 | 198 | (94%) | (80%) | |||||||||||||||
Total average deposits | $124,345 | $109,591 | $103,945 | 13% | 20% |
Compared to theyear-ago quarter, average core deposits increased 17%, primarily driven by higher interest checking deposits, money market deposits, and demand deposits, reflecting the impact of MB Financial. The increases were partially offset by lower deposits in foreign offices. Compared to the prior quarter, average core deposits increased 12%, primarily driven by higher demand deposits, interest checking deposits, and money market deposits. Average demand deposits represented 30% of total core deposits in the second quarter of 2019, up from 29% in the prior quarter.
Average Wholesale Funding | ||||||||||||||||||||
($ in millions) | For the Three Months Ended | % Change | ||||||||||||||||||
June | March | June | ||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||||
Average Wholesale Funding | ||||||||||||||||||||
Certificates - $100,000 and over | $5,780 | $3,358 | $2,155 | 72% | 168% | |||||||||||||||
Other deposits | 40 | 726 | 198 | (94%) | (80%) | |||||||||||||||
Federal funds purchased | 1,151 | 2,019 | 1,080 | (43%) | 7% | |||||||||||||||
Other short-term borrowings | 1,119 | 646 | 2,452 | 73% | (54%) | |||||||||||||||
Long-term debt | 15,543 | 15,438 | 14,579 | 1% | 7% | |||||||||||||||
Total average wholesale funding | $23,633 | $22,187 | $20,464 | 7% | 15% |
Compared to theyear-ago quarter, average wholesale funding increased 15% driven by growth in jumbo CD balances and long-term debt, partially offset by a decrease in other short-term borrowings. Compared to the prior quarter, average wholesale funding increased 7% reflecting an increase in jumbo CD balances and other short-term borrowings, partially offset by a decrease in federal funds borrowings and other deposits.
8
Credit Quality Summary | ||||||||||||||||||||
($ in millions) | For the Three Months Ended | |||||||||||||||||||
June | March | December | September | June | ||||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Total nonaccrual portfolio loans and leases (NPLs) | $521 | $450 | $348 | $403 | $437 | |||||||||||||||
Repossessed property | 8 | 11 | 10 | 8 | 7 | |||||||||||||||
OREO | 31 | 37 | 37 | 37 | 36 | |||||||||||||||
Total nonperforming portfolio assets (NPAs) | $560 | $498 | $395 | $448 | $480 | |||||||||||||||
NPL ratio(h) | 0.48% | 0.41% | 0.37% | 0.43% | 0.47% | |||||||||||||||
NPA ratio(c) | 0.51% | 0.45% | 0.41% | 0.48% | 0.52% | |||||||||||||||
Total loans and leases30-89 days past due (accrual) | 383 | 322 | 297 | 270 | 217 | |||||||||||||||
Total loans and leases 90 days past due (accrual) | 128 | 132 | 93 | 87 | 89 | |||||||||||||||
Allowance for loan and lease losses, beginning | $1,115 | $1,103 | $1,091 | $1,077 | $1,138 | |||||||||||||||
Total net lossescharged-off | (78) | (77) | (83) | (72) | (94) | |||||||||||||||
Provision for loan and lease losses | 78 | 89 | 95 | 86 | 33 | |||||||||||||||
Allowance for loan and lease losses, ending | $1,115 | $1,115 | $1,103 | $1,091 | $1,077 | |||||||||||||||
Reserve for unfunded commitments, beginning | $133 | $131 | $129 | $131 | $151 | |||||||||||||||
Reserve for acquired commitments | 7 | 1 | - | - | - | |||||||||||||||
Provision for (benefit from) the reserve for unfunded commitments | 7 | 1 | 2 | (2) | (20) | |||||||||||||||
Reserve for unfunded commitments, ending | $147 | $133 | $131 | $129 | $131 | |||||||||||||||
Total allowance for credit losses | $1,262 | $1,248 | $1,234 | $1,220 | $1,208 | |||||||||||||||
Allowance for loan and lease losses ratios | ||||||||||||||||||||
As a percent of portfolio loans and leases | 1.02% | 1.02% | 1.16% | 1.17% | 1.17% | |||||||||||||||
As a percent of nonperforming portfolio loans and leases | 214% | 248% | 317% | 270% | 247% | |||||||||||||||
As a percent of nonperforming portfolio assets | 199% | 224% | 279% | 243% | 224% | |||||||||||||||
Total lossescharged-off | $(119) | $(108) | $(116) | $(112) | $(118) | |||||||||||||||
Total recoveries of losses previouslycharged-off | 41 | 31 | 33 | 40 | 24 | |||||||||||||||
Total net lossescharged-off | $(78) | $(77) | $(83) | $(72) | $(94) | |||||||||||||||
Netcharge-off ratio (NCO ratio)(b) | 0.29% | 0.32% | 0.35% | 0.30% | 0.41% | |||||||||||||||
Commercial NCO ratio | 0.13% | 0.11% | 0.19% | 0.19% | 0.34% | |||||||||||||||
Consumer NCO ratio | 0.59% | 0.68% | 0.61% | 0.50% | 0.52% |
Compared to theyear-ago quarter, NPLs increased $84 million, or 19%, with the resulting NPL ratio of 0.48% increasing 1 bp. NPAs increased $80 million, or 17%, with the resulting NPA ratio of 0.51% decreasing 1 bp. Compared to the prior quarter, NPLs increased $71 million, or 16%, with the resulting NPL ratio increasing 7 bps. NPAs increased $62 million, or 12%, with the resulting NPA ratio increasing 6 bps.
The provision for loan and lease losses totaled $78 million in the current quarter compared to $33 million in theyear-ago quarter and $89 million in the prior quarter. The resulting allowance for loan and lease losses ratio represented 1.02% of total portfolio loans and leases outstanding in the current quarter, compared with 1.17% in theyear-ago quarter and 1.02% in the prior quarter. The allowance for loan and lease losses represented 214% of nonperforming portfolio loans and leases and 199% of nonperforming portfolio assets in the current quarter.
9
Net charge-offs totaled $78 million in the current quarter compared to $94 million in theyear-ago quarter and $77 million in the prior quarter. The resulting NCO ratio of 0.29% in the current quarter decreased 12 bps compared to theyear-ago quarter and decreased 3 bps compared to the prior quarter.
Capital and Liquidity Position | ||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Capital Position | ||||||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 12.02% | 11.43% | 10.95% | 11.29% | 11.28% | |||||||||||||||
Tangible equity(a) | 9.09% | 9.03% | 9.63% | 9.97% | 10.19% | |||||||||||||||
Tangible common equity (excluding unrealized gains/losses)(a) | 8.27% | 8.21% | 8.71% | 9.02% | 9.23% | |||||||||||||||
Tangible common equity (including unrealized gains/losses)(a) | 8.91% | 8.44% | 8.64% | 8.53% | 8.88% | |||||||||||||||
Regulatory Capital and Liquidity Ratios(e) | ||||||||||||||||||||
CET1 capital(d) | 9.58% | 9.60% | 10.24% | 10.67% | 10.91% | |||||||||||||||
Tier I risk-based capital(d) | 10.64% | 10.67% | 11.32% | 11.78% | 12.02% | |||||||||||||||
Total risk-based capital(d) | 13.55% | 13.57% | 14.48% | 14.94% | 15.21% | |||||||||||||||
Tier I leverage | 9.24% | 10.32% | 9.72% | 10.10% | 10.24% | |||||||||||||||
Modified liquidity coverage ratio (LCR) | 119% | 113% | 128% | 119% | 116% |
Capital ratios remained strong during the quarter. The CET1 capital ratio was 9.58%, the tangible common equity to tangible assets ratio was 8.27% excluding unrealized gains/losses, and 8.91% including unrealized gains/losses. The Tier I risk-based capital ratio was 10.64%, the Total risk-based capital ratio was 13.55%, and the Tier I leverage ratio was 9.24%.
Fifth Third entered into or completed multiple share repurchases during the quarter. Below is a summary of those share repurchases.
● | On April 29, 2019, Fifth Third initially settled a share repurchase agreement whereby Fifth Third would purchase $200 million of its outstanding stock in two $100 million tranches. The initial settlement reduced second quarter common shares outstanding by 6.0 million shares. On May 23, 2019, and May 24, 2019, Fifth Third settled both tranches from the forward contract. An additional 1.2 million shares were repurchased in connection with the completion of this agreement. |
● | On June 28, 2019, Fifth Third settled the forward contract related to the March 2019 $913 million share repurchase agreement. An additional 2.0 million shares were repurchased in connection with the completion of this agreement. |
Based on the transactions noted above, common shares outstanding decreased by approximately 9.2 million shares in the second quarter of 2019 from the first quarter.
On June 27, 2019, Fifth Third announced its capital distribution projections for July 1, 2019 through June 30, 2020 reflecting the ability to distribute approximately $2 billion in capital, which include common share repurchases as well as increased common stock dividends. Capital distribution projections include repurchases related to common share issuances under employee benefit plans (approximately $75 million) and excludes any potential additional repurchases of common shares related toafter-tax gains from the previous sale of Worldpay, Inc. common stock.
10
Tax Rate
The effective tax rate was 21.5% compared with 19.6% in theyear-ago quarter and 22.2% in the prior quarter.
Other
In April 2019, Fifth Third exchanged its remaining Class B units of GreenSky Holdings, LLC for Class A common stock of GreenSky, Inc., and subsequently sold all of the stock. Fifth Third recognized a minimalpre-tax gain as a result of this transaction.
On May 30, 2019, Fifth Third filed an application with the Office of the Comptroller of the Currency (“OCC”) to convert from an Ohio state-chartered bank to a national bank.
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 atwww.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. Additionally, a telephone replay of the conference call will be available after the conference call until approximately August 6, 2019 by dialing800-585-8367 for domestic access or404-537-3406 for international access (passcode 2784479#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of June 30, 2019, the Company had $169 billion in assets and operates 1,207 full-service Banking Centers, and 2,551 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. In total, Fifth Third provides its customers with access to approximately 53,000fee-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, 2019, had $399 billion in assets under care, of which it managed $46 billion for individuals, corporations andnot-for-profit organizations through its Trust and Registered Investment Advisory businesses.Investor information andpress releases can be viewed atwww.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 ofnon-GAAP and Reg. G reconciliation beginning on page 26. |
(b) | Net lossescharged-off as a percent of average portfolio loans and leases. |
(c) | Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO. |
(d) | Under the U.S. banking agencies’ Basel III Final Rule, assets and credit equivalent amounts ofoff-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets. |
(e) | Current period regulatory capital and liquidity ratios are estimated. |
(f) | Assumes a 23% tax rate, except for merger-related expenses which were impacted by certainnon-deductible items. |
(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 and OREO. |
11
FORWARD-LOOKING STATEMENTS
This release contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance 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 Form10-K as updated by our Quarterly Reports on Form10-Q. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. 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 undertake no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this document.
There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) deteriorating credit quality; (2) loan concentration by location or industry of borrowers or collateral; (3) problems encountered by other financial institutions; (4) inadequate sources of funding or liquidity; (5) unfavorable actions of rating agencies; (6) inability to maintain or grow deposits; (7) limitations on the ability to receive dividends from subsidiaries; (8) cyber-security risks; (9) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (10) failures by third-party service providers; (11) inability to manage strategic initiatives and/or organizational changes; (12) inability to implement technology system enhancements; (13) failure of internal controls and other risk management systems; (14) losses related to fraud, theft or violence; (15) inability to attract and retain skilled personnel; (16) adverse impacts of government regulation; (17) governmental or regulatory changes or other actions; (18) failures to meet applicable capital requirements; (19) regulatory objections to Fifth Third’s capital plan; (20) regulation of Fifth Third’s derivatives activities; (21) deposit insurance premiums; (22) assessments for the orderly liquidation fund; (23) replacement of LIBOR; (24) weakness in the national or local economies; (25) global political and economic uncertainty or negative actions; (26) changes in interest rates; (27) changes and trends in capital markets; (28) fluctuation of Fifth Third’s stock price; (29) volatility in mortgage banking revenue; (30) litigation, investigations, and enforcement proceedings by governmental authorities; (31) breaches of contractual covenants, representations and warranties; (32) competition and changes in the financial services industry; (33) changing retail distribution strategies, customer preferences and behavior; (34) risks relating to the merger with MB Financial, Inc. and Fifth Third’s ability to realize anticipated benefits of the merger; (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 or other natural disasters; and (43) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity.
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.
# # #
12
Quarterly Financial Review for June 30, 2019
Table of Contents
Financial Highlights | 14-15 | |||
Consolidated Statements of Income | 16 | |||
Consolidated Balance Sheets | 17-18 | |||
Consolidated Statements of Changes in Equity | 19 | |||
Average Balance Sheet and Yield/Rate Analysis | 20-21 | |||
Summary of Loans and Leases | 22 | |||
Regulatory Capital | 23 | |||
Summary of Credit Loss Experience | 24 | |||
Asset Quality | 25 | |||
Regulation GNon-GAAP Reconciliation | 26-28 | |||
Segment Presentation | 29 | |||
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 | |||||||||||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | 2019 | 2018 | Yr/Yr | |||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||||||||||
Net interest income | $1,245 | $1,082 | $1,020 | 15% | 22% | $2,327 | $2,016 | 15% | ||||||||||||||||||||||||
Net interest income (FTE)(a) | 1,250 | 1,086 | 1,024 | 15% | 22% | 2,336 | 2,023 | 15% | ||||||||||||||||||||||||
Noninterest income | 660 | 1,101 | 743 | (40%) | (11%) | 1,761 | 1,652 | 7% | ||||||||||||||||||||||||
Total revenue (FTE) | 1,910 | 2,187 | 1,767 | (13%) | 8% | 4,097 | 3,675 | 11% | ||||||||||||||||||||||||
Provision for credit losses | 85 | 90 | 14 | (6%) | 507% | 175 | 27 | 548% | ||||||||||||||||||||||||
Noninterest expense | 1,243 | 1,097 | 1,001 | 13% | 24% | 2,341 | 2,011 | 16% | ||||||||||||||||||||||||
Net income attributable to Bancorp | 453 | 775 | 602 | (42%) | (25%) | 1,228 | 1,303 | (6%) | ||||||||||||||||||||||||
Net income available to common shareholders | 427 | 760 | 579 | (44%) | (26%) | 1,187 | 1,265 | (6%) | ||||||||||||||||||||||||
Earnings Per Share Data | ||||||||||||||||||||||||||||||||
Net income allocated to common shareholders | $423 | $752 | $573 | (44%) | (26%) | $1,176 | $1,250 | (6%) | ||||||||||||||||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 738,051 | 661,057 | 683,345 | 12% | 8% | 699,767 | 686,565 | 2% | ||||||||||||||||||||||||
Diluted | 747,750 | 670,685 | 696,210 | 11% | 7% | 709,430 | 700,134 | 1% | ||||||||||||||||||||||||
Earnings per share, basic | $0.57 | $1.14 | $0.84 | (50%) | (32%) | $1.68 | $1.82 | (8%) | ||||||||||||||||||||||||
Earnings per share, diluted | 0.57 | 1.12 | 0.82 | (49%) | (30%) | 1.66 | 1.79 | (7%) | ||||||||||||||||||||||||
Common Share Data | ||||||||||||||||||||||||||||||||
Cash dividends per common share | $0.24 | $0.22 | $0.18 | 9% | 33% | $0.46 | $0.34 | 35% | ||||||||||||||||||||||||
Book value per share | 26.17 | 24.77 | 21.75 | 6% | 20% | 26.17 | 21.75 | 20% | ||||||||||||||||||||||||
Market price per share | 27.90 | 25.22 | 28.70 | 11% | (3%) | 27.90 | 28.70 | (3%) | ||||||||||||||||||||||||
Common shares outstanding (in thousands) | 731,474 | 739,406 | 678,162 | (1%) | 8% | 731,474 | 678,162 | 8% | ||||||||||||||||||||||||
Market capitalization | $20,408 | $18,648 | $19,463 | 9% | 5% | $20,408 | $19,463 | 5% | ||||||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||
Return on average assets | 1.08% | 2.11% | 1.71% | (103) | (63) | 1.56% | 1.86% | (30) | ||||||||||||||||||||||||
Return on average common equity | 9.1% | 19.6% | 15.9% | (1,050) | (680) | 13.9% | 17.3% | (340) | ||||||||||||||||||||||||
Return on average tangible common equity(a) | 12.3% | 23.9% | 19.2% | (1,160) | (690) | 17.8% | 20.9% | (310) | ||||||||||||||||||||||||
Noninterest income as a percent of total revenue(a) | 35% | 50% | 42% | (1,500) | (700) | 43% | 45% | (200) | ||||||||||||||||||||||||
Dividend payout | 42.1% | 19.3% | 21.4% | 2,280 | 2,070 | 27.4% | 18.7% | 870 | ||||||||||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 12.02% | 11.43% | 11.28% | 59 | 74 | 11.74% | 11.34% | 40 | ||||||||||||||||||||||||
Tangible common equity(a) | 8.27% | 8.21% | 9.23% | 6 | (96) | 8.27% | 9.23% | (96) | ||||||||||||||||||||||||
Net interest margin (FTE)(a) | 3.37% | 3.28% | 3.21% | 9 | 16 | 3.33% | 3.19% | 14 | ||||||||||||||||||||||||
Efficiency (FTE)(a) | 65.1% | 50.2% | 56.7% | 1,490 | 840 | 57.1% | 54.7% | 240 | ||||||||||||||||||||||||
Effective tax rate | 21.5% | 22.2% | 19.6% | (70) | 190 | 21.9% | 20.1% | 180 | ||||||||||||||||||||||||
Credit Quality | ||||||||||||||||||||||||||||||||
Net lossescharged-off | $78 | $77 | $94 | 1% | (17%) | $156 | $175 | (11%) | ||||||||||||||||||||||||
Net lossescharged-off as a percent of average portfolio loans and leases | 0.29% | 0.32% | 0.41% | (3) | (12) | 0.30% | 0.38% | (8) | ||||||||||||||||||||||||
ALLL as a percent of portfolio loans and leases | 1.02% | 1.02% | 1.17% | - | (15) | 1.02% | 1.17% | (15) | ||||||||||||||||||||||||
Allowance for credit losses as a percent of portfolio loans and leases(g) | 1.15% | 1.14% | 1.31% | 1 | (16) | 1.15% | 1.31% | (16) | ||||||||||||||||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.51% | 0.45% | 0.52% | 6 | (1) | 0.51% | 0.52% | (1) | ||||||||||||||||||||||||
Average Balances | ||||||||||||||||||||||||||||||||
Loans and leases, including held for sale | $110,993 | $98,362 | $93,232 | 13% | 19% | $104,712 | $93,051 | 13% | ||||||||||||||||||||||||
Securities and other short-term investments | 37,797 | 36,101 | 34,935 | 5% | 8% | 36,953 | 34,806 | 6% | ||||||||||||||||||||||||
Assets | 167,578 | 148,968 | 141,420 | 12% | 18% | 158,324 | 141,433 | 12% | ||||||||||||||||||||||||
Transaction deposits(b) | 112,847 | 100,647 | 97,574 | 12% | 16% | 106,780 | 97,298 | 10% | ||||||||||||||||||||||||
Core deposits(c) | 118,525 | 105,507 | 101,592 | 12% | 17% | 112,051 | 101,235 | 11% | ||||||||||||||||||||||||
Wholesale funding(d) | 23,633 | 22,187 | 20,464 | 7% | 15% | 22,915 | 20,511 | 12% | ||||||||||||||||||||||||
Bancorp shareholders’ equity | 20,135 | 17,025 | 15,947 | 18% | 26% | 18,588 | 16,044 | 16% | ||||||||||||||||||||||||
Regulatory Capital and Liquidity Ratios(e) | ||||||||||||||||||||||||||||||||
CET1 capital(f) | 9.58% | 9.60% | 10.91% | (2) | (133) | 9.58% | 10.91% | (133) | ||||||||||||||||||||||||
Tier I risk-based capital(f) | 10.64% | 10.67% | 12.02% | (3) | (138) | 10.64% | 12.02% | (138) | ||||||||||||||||||||||||
Total risk-based capital(f) | 13.55% | 13.57% | 15.21% | (2) | (166) | 13.55% | 15.21% | (166) | ||||||||||||||||||||||||
Tier I leverage | 9.24% | 10.32% | 10.24% | (108) | (100) | 9.24% | 10.24% | (100) | ||||||||||||||||||||||||
Modified liquidity coverage ratio (LCR) | 119% | 113% | 116% | 5% | 3% | 119% | 116% | 3% | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||
Banking centers | 1,207 | 1,207 | 1,158 | - | 4% | 1,207 | 1,158 | 4% | ||||||||||||||||||||||||
ATMs | 2,551 | 2,559 | 2,458 | - | 4% | 2,551 | 2,458 | 4% | ||||||||||||||||||||||||
Full-time equivalent employees | 19,758 | 20,115 | 18,163 | (2%) | 9% | 19,758 | 18,163 | 9% |
(a) | Non-GAAP measure; see discussion ofnon-GAAP and Reg. G reconciliation beginning on page 26. |
(b) | Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers. |
(c) | Includes transaction deposits plus other time deposits. |
(d) | Includes certificates $100,000 and over, other deposits, federal funds purchased, other short-term borrowings and long-term debt. |
(e) | Current period regulatory capital and liquidity ratios are estimates. |
(f) | Under the U.S. banking agencies’ Basel III Final Rule, assets and credit equivalent amounts ofoff-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets. |
(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 | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Income Statement Data | ||||||||||||||||||||
Net interest income | $1,245 | $1,082 | $1,081 | $1,043 | $1,020 | |||||||||||||||
Net interest income (FTE)(a) | 1,250 | 1,086 | 1,085 | 1,047 | 1,024 | |||||||||||||||
Noninterest income | 660 | 1,101 | 575 | 563 | 743 | |||||||||||||||
Total revenue (FTE) | 1,910 | 2,187 | 1,660 | 1,610 | 1,767 | |||||||||||||||
Provision for credit losses | 85 | 90 | 97 | 84 | 14 | |||||||||||||||
Noninterest expense | 1,243 | 1,097 | 975 | 972 | 1,001 | |||||||||||||||
Net income attributable to Bancorp | 453 | 775 | 455 | 436 | 602 | |||||||||||||||
Net income available to common shareholders | 427 | 760 | 432 | 421 | 579 | |||||||||||||||
Earnings Per Share Data | ||||||||||||||||||||
Net income allocated to common shareholders | $423 | $752 | $427 | $417 | $573 | |||||||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||
Basic | 738,051 | 661,057 | 653,062 | 667,624 | 683,345 | |||||||||||||||
Diluted | 747,750 | 670,685 | 662,966 | 679,199 | 696,210 | |||||||||||||||
Earnings per share, basic | $0.57 | $1.14 | $0.65 | $0.62 | $0.84 | |||||||||||||||
Earnings per share, diluted | 0.57 | 1.12 | 0.64 | 0.61 | 0.82 | |||||||||||||||
Common Share Data | ||||||||||||||||||||
Cash dividends per common share | $0.24 | $0.22 | $0.22 | $0.18 | $0.18 | |||||||||||||||
Book value per share | 26.17 | 24.77 | 23.07 | 21.70 | 21.75 | |||||||||||||||
Market value per share | 27.90 | 25.22 | 23.53 | 27.92 | 28.70 | |||||||||||||||
Common shares outstanding (in thousands) | 731,474 | 739,406 | 646,631 | 661,373 | 678,162 | |||||||||||||||
Market capitalization | $20,408 | $18,648 | $15,215 | $18,466 | $19,463 | |||||||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.08% | 2.11% | 1.25% | 1.22% | 1.71% | |||||||||||||||
Return on average common equity | 9.1% | 19.6% | 11.8% | 11.4% | 15.9% | |||||||||||||||
Return on average tangible common equity(a) | 12.3% | 23.9% | 14.3% | 13.8% | 19.2% | |||||||||||||||
Noninterest income as a percent of total revenue(a) | 35% | 50% | 35% | 35% | 42% | |||||||||||||||
Dividend payout | 42.1% | 19.3% | 33.8% | 29.0% | 21.4% | |||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 12.02% | 11.43% | 10.95% | 11.29% | 11.28% | |||||||||||||||
Tangible common equity(a) | 8.27% | 8.21% | 8.71% | 9.02% | 9.23% | |||||||||||||||
Net interest margin (FTE)(a) | 3.37% | 3.28% | 3.29% | 3.23% | 3.21% | |||||||||||||||
Efficiency (FTE)(a) | 65.1% | 50.2% | 58.7% | 60.4% | 56.7% | |||||||||||||||
Effective tax rate | 21.5% | 22.2% | 22.4% | 20.7% | 19.6% | |||||||||||||||
Credit Quality | ||||||||||||||||||||
Net lossescharged-off | $78 | $77 | $83 | $72 | $94 | |||||||||||||||
Net lossescharged-off as a percent of average portfolio loans and leases | 0.29% | 0.32% | 0.35% | 0.30% | 0.41% | |||||||||||||||
ALLL as a percent of portfolio loans and leases | 1.02% | 1.02% | 1.16% | 1.17% | 1.17% | |||||||||||||||
Allowance for credit losses as a percent of portfolio loans and leases(g) | 1.15% | 1.14% | 1.30% | 1.31% | 1.31% | |||||||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.51% | 0.45% | 0.41% | 0.48% | 0.52% | |||||||||||||||
Average Balances | ||||||||||||||||||||
Loans and leases, including held for sale | $110,993 | $98,362 | $95,398 | $93,977 | $93,232 | |||||||||||||||
Securities and other short-term investments | 37,797 | 36,101 | 35,674 | 34,822 | 34,935 | |||||||||||||||
Assets | 167,578 | 148,968 | 144,185 | 141,654 | 141,420 | |||||||||||||||
Transaction deposits(b) | 112,847 | 100,647 | 99,721 | 97,315 | 97,574 | |||||||||||||||
Core deposits(c) | 118,525 | 105,507 | 104,087 | 101,492 | 101,592 | |||||||||||||||
Wholesale funding(d) | 23,633 | 22,187 | 20,660 | 20,613 | 20,464 | |||||||||||||||
Bancorp shareholders’ equity | 20,135 | 17,025 | 15,794 | 15,994 | 15,947 | |||||||||||||||
Regulatory Capital and Liquidity Ratios(e) | ||||||||||||||||||||
CET1 capital(f) | 9.58% | 9.60% | 10.24% | 10.67% | 10.91% | |||||||||||||||
Tier I risk-based capital(f) | 10.64% | 10.67% | 11.32% | 11.78% | 12.02% | |||||||||||||||
Total risk-based capital(f) | 13.55% | 13.57% | 14.48% | 14.94% | 15.21% | |||||||||||||||
Tier I leverage | 9.24% | 10.32% | 9.72% | 10.10% | 10.24% | |||||||||||||||
Modified liquidity coverage ratio (LCR) | 119% | 113% | 128% | 119% | 116% | |||||||||||||||
Operations | ||||||||||||||||||||
Banking centers | 1,207 | 1,207 | 1,121 | 1,152 | 1,158 | |||||||||||||||
ATMs | 2,551 | 2,559 | 2,419 | 2,443 | 2,458 | |||||||||||||||
Full-time equivalent employees | 19,758 | 20,115 | 17,437 | 17,512 | 18,163 |
(a) | Non-GAAP measure; see discussion ofnon-GAAP and Reg. G reconciliation beginning on page 26. |
(b) | Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers. |
(c) | Includes transaction deposits plus other time deposits. |
(d) | Includes certificates $100,000 and over, other deposits, federal funds purchased, other short-term borrowings and long-term debt. |
(e) | Current period regulatory capital and liquidity ratios are estimates. |
(f) | Under the U.S. banking agencies’ Basel III Final Rule, assets and credit equivalent amounts ofoff-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets. |
(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 | |||||||||||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | 2019 | 2018 | Yr/Yr | |||||||||||||||||||||||||
Interest Income | ||||||||||||||||||||||||||||||||
Interest and fees on loans and leases | $1,336 | $1,143 | $996 | 17% | 34% | $2,479 | $1,933 | 28% | ||||||||||||||||||||||||
Interest on securities | 290 | 281 | 267 | 3% | 9% | 571 | 530 | 8% | ||||||||||||||||||||||||
Interest on other short-term investments | 10 | 9 | 6 | 11% | 67% | 19 | 11 | 73% | ||||||||||||||||||||||||
Total interest income | 1,636 | 1,433 | 1,269 | 14% | 29% | 3,069 | 2,474 | 24% | ||||||||||||||||||||||||
Interest Expense | ||||||||||||||||||||||||||||||||
Interest on deposits | 243 | 205 | 119 | 19% | 104% | 449 | 215 | 109% | ||||||||||||||||||||||||
Interest on federal funds purchased | 8 | 12 | 5 | (33%) | 60% | 20 | 7 | 186% | ||||||||||||||||||||||||
Interest on other short-term borrowings | 9 | 6 | 11 | 50% | (18%) | 14 | 19 | (26%) | ||||||||||||||||||||||||
Interest on long-term debt | 131 | 128 | 114 | 2% | 15% | 259 | 217 | 19% | ||||||||||||||||||||||||
Total interest expense | 391 | 351 | 249 | 11% | 57% | 742 | 458 | 62% | ||||||||||||||||||||||||
Net Interest Income | 1,245 | 1,082 | 1,020 | 15% | 22% | 2,327 | 2,016 | 15% | ||||||||||||||||||||||||
Provision for credit losses | 85 | 90 | 14 | (6%) | 507% | 175 | 27 | 548% | ||||||||||||||||||||||||
Net Interest Income After Provision for Credit Losses | 1,160 | 992 | 1,006 | 17% | 15% | 2,152 | 1,989 | 8% | ||||||||||||||||||||||||
Noninterest Income | ||||||||||||||||||||||||||||||||
Service charges on deposits | 143 | 131 | 137 | 9% | 4% | 274 | 275 | - | ||||||||||||||||||||||||
Corporate banking revenue | 137 | 112 | 120 | 22% | 14% | 249 | 208 | 20% | ||||||||||||||||||||||||
Mortgage banking net revenue | 63 | 56 | 53 | 13% | 19% | 119 | 109 | 9% | ||||||||||||||||||||||||
Wealth and asset management revenue | 122 | 112 | 108 | 9% | 13% | 234 | 221 | 6% | ||||||||||||||||||||||||
Card and processing revenue | 92 | 79 | 84 | 16% | 10% | 171 | 163 | 5% | ||||||||||||||||||||||||
Other noninterest income | 93 | 592 | 250 | (84%) | (63%) | 684 | 708 | (3%) | ||||||||||||||||||||||||
Securities gains (losses), net | 8 | 16 | (5 | ) | (50%) | NM | 25 | (15 | ) | NM | ||||||||||||||||||||||
Securities gains (losses), net -non-qualifying hedges on mortgage servicing rights | 2 | 3 | (4 | ) | (33%) | NM | 5 | (17 | ) | NM | ||||||||||||||||||||||
Total noninterest income | 660 | 1,101 | 743 | (40%) | (11%) | 1,761 | 1,652 | 7% | ||||||||||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||||||||||
Compensation and benefits | 641 | 610 | 549 | 5% | 17% | 1,251 | 1,106 | 13% | ||||||||||||||||||||||||
Net occupancy expense | 88 | 75 | 74 | 17% | 19% | 164 | 149 | 10% | ||||||||||||||||||||||||
Technology and communications | 136 | 83 | 67 | 64% | 103% | 219 | 135 | 62% | ||||||||||||||||||||||||
Equipment expense | 33 | 30 | 30 | 10% | 10% | 63 | 61 | 3% | ||||||||||||||||||||||||
Card and processing expense | 34 | 31 | 30 | 10% | 13% | 64 | 60 | 7% | ||||||||||||||||||||||||
Other noninterest expense | 311 | 268 | 251 | 16% | 24% | 580 | 500 | 16% | ||||||||||||||||||||||||
Total noninterest expense | 1,243 | 1,097 | 1,001 | 13% | 24% | 2,341 | 2,011 | 16% | ||||||||||||||||||||||||
Income Before Income Taxes | 577 | 996 | 748 | (42%) | (23%) | 1,572 | 1,630 | (4%) | ||||||||||||||||||||||||
Applicable income tax expense | 124 | 221 | 146 | (44%) | (15%) | 344 | 327 | 5% | ||||||||||||||||||||||||
Net Income | 453 | 775 | 602 | (42%) | (25%) | 1,228 | 1,303 | (6%) | ||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | - | - | - | NM | NM | - | - | NM | ||||||||||||||||||||||||
Net Income Attributable to Bancorp | 453 | 775 | 602 | (42%) | (25%) | 1,228 | 1,303 | (6%) | ||||||||||||||||||||||||
Dividends on preferred stock | 26 | 15 | 23 | 73% | 13% | 41 | 38 | 8% | ||||||||||||||||||||||||
Net Income Available to Common Shareholders | $427 | $760 | $579 | (44%) | (26%) | $1,187 | $1,265 | (6%) |
16
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||
$ in millions, except per share data | As of | % Change | ||||||||||||||||
(unaudited) | June | March | June | |||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | ||||||||||||||
Assets | ||||||||||||||||||
Cash and due from banks | $2,764 | $2,749 | $2,052 | 1% | 35% | |||||||||||||
Other short-term investments | 3,357 | 3,556 | 1,636 | (6%) | 105% | |||||||||||||
Available-for-sale debt and other securities(a) | 35,753 | 35,048 | 31,961 | 2% | 12% | |||||||||||||
Held-to-maturity securities(b) | 21 | 21 | 19 | - | 11% | |||||||||||||
Trading debt securities | 322 | 325 | 280 | (1%) | 15% | |||||||||||||
Equity securities | 485 | 426 | 475 | 14% | 2% | |||||||||||||
Loans and leases held for sale | 1,205 | 692 | 783 | 74% | 54% | |||||||||||||
Portfolio loans and leases: | ||||||||||||||||||
Commercial and industrial loans | 51,104 | 51,862 | 41,403 | (1%) | 23% | |||||||||||||
Commercial mortgage loans | 10,717 | 10,686 | 6,625 | - | 62% | |||||||||||||
Commercial construction loans | 5,264 | 5,231 | 4,687 | 1% | 12% | |||||||||||||
Commercial leases | 3,677 | 3,909 | 3,788 | (6%) | (3%) | |||||||||||||
Residential mortgage loans | 16,777 | 16,811 | 15,640 | - | 7% | |||||||||||||
Home equity | 6,325 | 6,435 | 6,599 | (2%) | (4%) | |||||||||||||
Indirect secured consumer loans | 10,403 | 10,031 | 8,938 | 4% | 16% | |||||||||||||
Credit card | 2,436 | 2,388 | 2,270 | 2% | 7% | |||||||||||||
Other consumer loans | 2,580 | 2,489 | 1,982 | 4% | 30% | |||||||||||||
Portfolio loans and leases | 109,283 | 109,842 | 91,932 | (1%) | 19% | |||||||||||||
Allowance for loan and lease losses | (1,115 | ) | (1,115 | ) | (1,077 | ) | - | 4% | ||||||||||
Portfolio loans and leases, net | 108,168 | 108,727 | 90,855 | (1%) | 19% | |||||||||||||
Bank premises and equipment | 2,074 | 2,092 | 1,915 | (1%) | 8% | |||||||||||||
Operating lease equipment | 894 | 908 | 606 | (2%) | 48% | |||||||||||||
Goodwill | 4,284 | 4,321 | 2,462 | (1%) | 74% | |||||||||||||
Intangible assets | 215 | 218 | 30 | (1%) | 617% | |||||||||||||
Servicing rights | 1,039 | 1,141 | 959 | (9%) | 8% | |||||||||||||
Other assets | 8,221 | 7,629 | 6,562 | 8% | 25% | |||||||||||||
Total Assets | $168,802 | $167,853 | $140,595 | 1% | 20% | |||||||||||||
Liabilities | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Demand | $35,589 | $35,963 | $32,680 | (1%) | 9% | |||||||||||||
Interest checking | 37,491 | 35,746 | 29,452 | 5% | 27% | |||||||||||||
Savings | 14,484 | 14,451 | 13,455 | - | 8% | |||||||||||||
Money market | 26,465 | 25,942 | 21,593 | 2% | 23% | |||||||||||||
Foreign office | 175 | 154 | 336 | 14% | (48%) | |||||||||||||
Other time | 5,759 | 5,539 | 4,058 | 4% | 42% | |||||||||||||
Certificates $100,000 and over | 5,429 | 5,569 | 2,557 | (3%) | 112% | |||||||||||||
Other deposits | - | 300 | - | NM | NM | |||||||||||||
Total deposits | 125,392 | 123,664 | 104,131 | 1% | 20% | |||||||||||||
Federal funds purchased | 179 | 2,630 | 597 | (93%) | (70%) | |||||||||||||
Other short-term borrowings | 957 | 1,329 | 1,763 | (28%) | (46%) | |||||||||||||
Accrued taxes, interest and expenses | 2,397 | 2,242 | 1,258 | 7% | 91% | |||||||||||||
Other liabilities | 3,422 | 2,661 | 2,425 | 29% | 41% | |||||||||||||
Long-term debt | 15,784 | 15,483 | 14,321 | 2% | 10% | |||||||||||||
Total Liabilities | 148,131 | 148,009 | 124,495 | - | 19% | |||||||||||||
Equity | ||||||||||||||||||
Common stock(c) | 2,051 | 2,051 | 2,051 | - | - | |||||||||||||
Preferred stock | 1,331 | 1,331 | 1,331 | - | - | |||||||||||||
Capital surplus | 3,572 | 3,444 | 2,833 | 4% | 26% | |||||||||||||
Retained earnings | 17,431 | 17,184 | 15,991 | 1% | 9% | |||||||||||||
Accumulated other comprehensive income (loss) | 1,178 | 409 | (552 | ) | 188% | (313%) | ||||||||||||
Treasury stock | (5,089 | ) | (4,772 | ) | (5,574 | ) | 7% | (9%) | ||||||||||
Total Bancorp shareholders’ equity | 20,474 | 19,647 | 16,080 | 4% | 27% | |||||||||||||
Noncontrolling interests | 197 | 197 | 20 | - | 885% | |||||||||||||
Total Equity | 20,671 | 19,844 | 16,100 | 4% | 28% | |||||||||||||
Total Liabilities and Equity | $168,802 | $167,853 | $140,595 | 1% | 20% | |||||||||||||
(a) Amortized cost | $34,731 | $34,784 | $32,589 | - | 7% | |||||||||||||
(b) Market values | 21 | 21 | 19 | - | 11% | |||||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | ||||||||||||||||||
Authorized | 2,000,000 | 2,000,000 | 2,000,000 | - | - | |||||||||||||
Outstanding, excluding treasury | 731,474 | 739,406 | 678,162 | (1%) | 8% | |||||||||||||
Treasury | 192,419 | 184,486 | 245,731 | 4% | (22%) |
17
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||
$ in millions, except per share data | As of | |||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||
Assets | ||||||||||||||||||
Cash and due from banks | $2,764 | $2,749 | $2,681 | $2,100 | $2,052 | |||||||||||||
Other short-term investments | 3,357 | 3,556 | 1,825 | 1,429 | 1,636 | |||||||||||||
Available-for-sale debt and other securities(a) | 35,753 | 35,048 | 32,830 | 31,808 | 31,961 | |||||||||||||
Held-to-maturity securities(b) | 21 | 21 | 18 | 18 | 19 | |||||||||||||
Trading debt securities | 322 | 325 | 287 | 269 | 280 | |||||||||||||
Equity securities | 485 | 426 | 452 | 500 | 475 | |||||||||||||
Loans and leases held for sale | 1,205 | 692 | 607 | 663 | 783 | |||||||||||||
Portfolio loans and leases: | ||||||||||||||||||
Commercial and industrial loans | 51,104 | 51,862 | 44,340 | 42,631 | 41,403 | |||||||||||||
Commercial mortgage loans | 10,717 | 10,686 | 6,974 | 6,695 | 6,625 | |||||||||||||
Commercial construction loans | 5,264 | 5,231 | 4,657 | 4,892 | 4,687 | |||||||||||||
Commercial leases | 3,677 | 3,909 | 3,600 | 3,697 | 3,788 | |||||||||||||
Residential mortgage loans | 16,777 | 16,811 | 15,504 | 15,585 | 15,640 | |||||||||||||
Home equity | 6,325 | 6,435 | 6,402 | 6,485 | 6,599 | |||||||||||||
Indirect secured consumer loans | 10,403 | 10,031 | 8,976 | 9,002 | 8,938 | |||||||||||||
Credit card | 2,436 | 2,388 | 2,470 | 2,325 | 2,270 | |||||||||||||
Other consumer loans | 2,580 | 2,489 | 2,342 | 2,131 | 1,982 | |||||||||||||
Portfolio loans and leases | 109,283 | 109,842 | 95,265 | 93,443 | 91,932 | |||||||||||||
Allowance for loan and lease losses | (1,115 | ) | (1,115 | ) | (1,103 | ) | (1,091 | ) | (1,077) | |||||||||
Portfolio loans and leases, net | 108,168 | 108,727 | 94,162 | 92,352 | 90,855 | |||||||||||||
Bank premises and equipment | 2,074 | 2,092 | 1,861 | 1,896 | 1,915 | |||||||||||||
Operating lease equipment | 894 | 908 | 518 | 546 | 606 | |||||||||||||
Goodwill | 4,284 | 4,321 | 2,478 | 2,462 | 2,462 | |||||||||||||
Intangible assets | 215 | 218 | 40 | 28 | 30 | |||||||||||||
Servicing rights | 1,039 | 1,141 | 938 | 1,010 | 959 | |||||||||||||
Other assets | 8,221 | 7,629 | 7,372 | 6,509 | 6,562 | |||||||||||||
Total Assets | $168,802 | $167,853 | $146,069 | $141,590 | $140,595 | |||||||||||||
Liabilities | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Demand | $35,589 | $35,963 | $32,116 | $31,803 | $32,680 | |||||||||||||
Interest checking | 37,491 | 35,746 | 34,058 | 30,288 | 29,452 | |||||||||||||
Savings | 14,484 | 14,451 | 12,907 | 13,027 | 13,455 | |||||||||||||
Money market | 26,465 | 25,942 | 22,597 | 21,977 | 21,593 | |||||||||||||
Foreign office | 175 | 154 | 240 | 298 | 336 | |||||||||||||
Other time | 5,759 | 5,539 | 4,490 | 4,249 | 4,058 | |||||||||||||
Certificates $100,000 and over | 5,429 | 5,569 | 2,427 | 2,700 | 2,557 | |||||||||||||
Other deposits | - | 300 | - | - | - | |||||||||||||
Total deposits | 125,392 | 123,664 | 108,835 | 104,342 | 104,131 | |||||||||||||
Federal funds purchased | 179 | 2,630 | 1,925 | 2,316 | 597 | |||||||||||||
Other short-term borrowings | 957 | 1,329 | 573 | 1,114 | 1,763 | |||||||||||||
Accrued taxes, interest and expenses | 2,397 | 2,242 | 1,562 | 1,209 | 1,258 | |||||||||||||
Other liabilities | 3,422 | 2,661 | 2,498 | 2,448 | 2,425 | |||||||||||||
Long-term debt | 15,784 | 15,483 | 14,426 | 14,460 | 14,321 | |||||||||||||
Total Liabilities | 148,131 | 148,009 | 129,819 | 125,889 | 124,495 | |||||||||||||
Equity | ||||||||||||||||||
Common stock(c) | 2,051 | 2,051 | 2,051 | 2,051 | 2,051 | |||||||||||||
Preferred stock | 1,331 | 1,331 | 1,331 | 1,331 | 1,331 | |||||||||||||
Capital surplus | 3,572 | 3,444 | 2,873 | 2,856 | 2,833 | |||||||||||||
Retained earnings | 17,431 | 17,184 | 16,578 | 16,291 | 15,991 | |||||||||||||
Accumulated other comprehensive income (loss) | 1,178 | 409 | (112 | ) | (775 | ) | (552) | |||||||||||
Treasury stock | (5,089 | ) | (4,772 | ) | (6,471 | ) | (6,073 | ) | (5,574) | |||||||||
Total Bancorp shareholders’ equity | 20,474 | 19,647 | 16,250 | 15,681 | 16,080 | |||||||||||||
Noncontrolling interests | 197 | 197 | - | 20 | 20 | |||||||||||||
Total Equity | 20,671 | 19,844 | 16,250 | 15,701 | 16,100 | |||||||||||||
Total Liabilities and Equity | $168,802 | $167,853 | $146,069 | $141,590 | $140,595 | |||||||||||||
(a) Amortized cost | $34,731 | $34,784 | $33,128 | $32,707 | $32,589 | |||||||||||||
(b) Market values | 21 | 21 | 18 | 18 | 19 | |||||||||||||
(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 | 731,474 | 739,406 | 646,631 | 661,373 | 678,162 | |||||||||||||
Treasury | 192,419 | 184,486 | 277,262 | 262,520 | 245,731 |
18
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||
$ in millions | For the Three Months Ended | Year to Date | ||||||||||||||
(unaudited) | June | June | June | June | ||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Total Equity, Beginning | $19,844 | $16,036 | $16,250 | $16,220 | ||||||||||||
Net income attributable to Bancorp | 453 | 602 | 1,228 | 1,303 | ||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Change in unrealized gains (losses): | ||||||||||||||||
Available-for-sale securities | 577 | (167) | 1,008 | (620) | ||||||||||||
Qualifying cash flow hedges | 191 | 3 | 280 | (5) | ||||||||||||
Change in accumulated other comprehensive income related to employee benefit plans | 1 | 1 | 2 | 2 | ||||||||||||
Comprehensive income | 1,222 | 439 | 2,518 | 680 | ||||||||||||
Cash dividends declared: | ||||||||||||||||
Common stock | (178) | (124) | (343) | (235) | ||||||||||||
Preferred stock | (26) | (23) | (41) | (38) | ||||||||||||
Impact of stock transactions under stock compensation plans, net | 10 | 7 | 35 | 22 | ||||||||||||
Shares acquired for treasury | (200) | (235) | (1,113) | (553) | ||||||||||||
Impact of acquisition | - | - | 3,159 | - | ||||||||||||
Noncontrolling interest | - | - | 197 | - | ||||||||||||
Other | (1) | - | (1) | - | ||||||||||||
Impact of cumulative effect of change in account principles | - | - | 10 | 4 | ||||||||||||
Total Equity, Ending | $20,671 | $16,100 | $20,671 | $16,100 |
19
Fifth Third Bancorp and Subsidiaries |
| |||||||||||||||||||||||||||||||||
Average Balance Sheet and Yield/Rate Analysis |
| |||||||||||||||||||||||||||||||||
$ in millions | For the Three Months Ended | % Change | Year to Date | % Change | ||||||||||||||||||||||||||||||
(unaudited) | June | March | June | June | June | |||||||||||||||||||||||||||||
2019 | 2019 | 2018 | Seq | Yr/Yr | 2019 | 2018 | Yr/Yr | |||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||
Commercial and industrial loans | $52,187 | $46,070 | $42,327 | 13% | 23% | $49,145 | $42,064 | 17% | ||||||||||||||||||||||||||
Commercial mortgage loans | 10,635 | 7,417 | 6,521 | 43% | 63% | 9,035 | 6,555 | 38% | ||||||||||||||||||||||||||
Commercial construction loans | 5,248 | 4,838 | 4,743 | 8% | 11% | 5,044 | 4,707 | 7% | ||||||||||||||||||||||||||
Commercial leases | 3,811 | 3,555 | 3,847 | 7% | (1%) | 3,684 | 3,903 | (6%) | ||||||||||||||||||||||||||
Residential mortgage loans | 17,589 | 16,150 | 16,213 | 9% | 8% | 16,873 | 16,150 | 4% | ||||||||||||||||||||||||||
Home equity | 6,376 | 6,356 | 6,672 | - | (4%) | 6,366 | 6,780 | (6%) | ||||||||||||||||||||||||||
Indirect secured consumer loans | 10,190 | 9,176 | 8,968 | 11% | 14% | 9,686 | 9,016 | 7% | ||||||||||||||||||||||||||
Credit card | 2,408 | 2,396 | 2,221 | 1% | 8% | 2,402 | 2,223 | 8% | ||||||||||||||||||||||||||
Other consumer loans | 2,549 | 2,404 | 1,720 | 6% | 48% | 2,477 | 1,653 | 50% | ||||||||||||||||||||||||||
Taxable securities | 35,467 | 34,320 | 33,380 | 3% | 6% | 34,896 | 33,257 | 5% | ||||||||||||||||||||||||||
Tax exempt securities | 40 | 28 | 81 | 43% | (51%) | 34 | 77 | (56%) | ||||||||||||||||||||||||||
Other short-term investments | 2,290 | 1,753 | 1,474 | 31% | 55% | 2,023 | 1,472 | 37% | ||||||||||||||||||||||||||
Total interest-earning assets | 148,790 | 134,463 | 128,167 | 11% | 16% | 141,665 | 127,857 | 11% | ||||||||||||||||||||||||||
Cash and due from banks | 2,931 | 2,217 | 2,179 | 32% | 35% | 2,576 | 2,177 | 18% | ||||||||||||||||||||||||||
Other assets | 16,972 | 13,391 | 12,211 | 27% | 39% | 15,192 | 12,565 | 21% | ||||||||||||||||||||||||||
Allowance for loan and lease losses | (1,115) | (1,103) | (1,137) | 1% | (2%) | (1,109) | (1,166) | (5%) | ||||||||||||||||||||||||||
Total Assets | $167,578 | $148,968 | $141,420 | 12% | 18% | $158,324 | $141,433 | 12% | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||
Interest checking deposits | $36,514 | $33,697 | $28,715 | 8% | 27% | $35,113 | $28,560 | 23% | ||||||||||||||||||||||||||
Savings deposits | 14,418 | 13,052 | 13,618 | 10% | 6% | 13,739 | 13,582 | 1% | ||||||||||||||||||||||||||
Money market deposits | 25,934 | 23,133 | 22,036 | 12% | 18% | 24,541 | 21,397 | 15% | ||||||||||||||||||||||||||
Foreign office deposits | 163 | 208 | 371 | (22%) | (56%) | 185 | 432 | (57%) | ||||||||||||||||||||||||||
Other time deposits | 5,678 | 4,860 | 4,018 | 17% | 41% | 5,271 | 3,937 | 34% | ||||||||||||||||||||||||||
Total interest-bearing core deposits | 82,707 | 74,950 | 68,758 | 10% | 20% | 78,849 | 67,908 | 16% | ||||||||||||||||||||||||||
Certificates $100,000 and over | 5,780 | 3,358 | 2,155 | 72% | 168% | 4,576 | 2,220 | 106% | ||||||||||||||||||||||||||
Other deposits | 40 | 726 | 198 | (94%) | (80%) | 381 | 288 | 32% | ||||||||||||||||||||||||||
Federal funds purchased | 1,151 | 2,019 | 1,080 | (43%) | 7% | 1,582 | 887 | 78% | ||||||||||||||||||||||||||
Other short-term borrowings | 1,119 | 646 | 2,452 | 73% | (54%) | 884 | 2,438 | (64%) | ||||||||||||||||||||||||||
Long-term debt | 15,543 | 15,438 | 14,579 | 1% | 7% | 15,492 | 14,678 | 6% | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 106,340 | 97,137 | 89,222 | 9% | 19% | 101,764 | 88,419 | 15% | ||||||||||||||||||||||||||
Demand deposits | 35,818 | 30,557 | 32,834 | 17% | 9% | 33,202 | 33,327 | - | ||||||||||||||||||||||||||
Other liabilities | 5,088 | 4,227 | 3,397 | 20% | 50% | 4,659 | 3,622 | 29% | ||||||||||||||||||||||||||
Total Liabilities | 147,246 | 131,921 | 125,453 | 12% | 17% | 139,625 | 125,368 | 11% | ||||||||||||||||||||||||||
Total Equity | 20,332 | 17,047 | 15,967 | 19% | 27% | 18,699 | 16,065 | 16% | ||||||||||||||||||||||||||
Total Liabilities and Equity | $167,578 | $148,968 | $141,420 | 12% | 18% | $158,324 | $141,433 | 12% | ||||||||||||||||||||||||||
For the Three Months Ended | bps Change | Year to Date | bps Change | |||||||||||||||||||||||||||||||
June | March | June | June | June | ||||||||||||||||||||||||||||||
Yield/Rate Analysis | 2019 | 2019 | 2018 | Seq | Yr/Yr | 2019 | 2018 | Yr/Yr | ||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||
Commercial and industrial loans(a) | 4.79% | 4.67% | 4.26% | 12 | 53 | 4.73% | 4.11% | 62 | ||||||||||||||||||||||||||
Commercial mortgage loans(a) | 5.11% | 4.80% | 4.43% | 31 | 68 | 4.98% | 4.32% | 66 | ||||||||||||||||||||||||||
Commercial construction loans(a) | 5.71% | 5.55% | 4.94% | 16 | 77 | 5.63% | 4.77% | 86 | ||||||||||||||||||||||||||
Commercial leases(a) | 3.51% | 3.08% | 2.82% | 43 | 69 | 3.30% | 2.80% | 50 | ||||||||||||||||||||||||||
Residential mortgage loans | 3.70% | 3.71% | 3.56% | (1) | 14 | 3.71% | 3.58% | 13 | ||||||||||||||||||||||||||
Home equity | 5.30% | 5.34% | 4.85% | (4) | 45 | 5.32% | 4.74% | 58 | ||||||||||||||||||||||||||
Indirect secured consumer loans | 4.11% | 3.79% | 3.26% | 32 | 85 | 3.96% | 3.19% | 77 | ||||||||||||||||||||||||||
Credit card | 12.38% | 12.63% | 11.96% | (25) | 42 | 12.50% | 12.16% | 34 | ||||||||||||||||||||||||||
Other consumer loans | 7.58% | 7.49% | 6.75% | 9 | 83 | 7.54% | 6.67% | 87 | ||||||||||||||||||||||||||
Total loans and leases | 4.84% | 4.73% | 4.30% | 11 | 54 | 4.79% | 4.21% | 58 | ||||||||||||||||||||||||||
Taxable securities | 3.28% | 3.32% | 3.20% | (4) | 8 | 3.30% | 3.21% | 9 | ||||||||||||||||||||||||||
Tax exempt securities(a) | 3.50% | 4.80% | 4.03% | (130) | (53) | 4.03% | 2.79% | 124 | ||||||||||||||||||||||||||
Other short-term investments | 1.80% | 1.97% | 1.62% | (17) | 18 | 1.87% | 1.50% | 37 | ||||||||||||||||||||||||||
Total interest-earning assets | 4.42% | 4.33% | 3.98% | 9 | 44 | 4.38% | 3.91% | 47 | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||
Interest checking deposits | 1.17% | 1.18% | 0.76% | (1) | 41 | 1.17% | 0.70% | 47 | ||||||||||||||||||||||||||
Savings deposits | 0.17% | 0.15% | 0.10% | 2 | 7 | 0.16% | 0.08% | 8 | ||||||||||||||||||||||||||
Money market deposits | 1.14% | 1.03% | 0.71% | 11 | 43 | 1.09% | 0.62% | 47 | ||||||||||||||||||||||||||
Foreign office deposits | 0.53% | 0.60% | 0.45% | (7) | 8 | 0.57% | 0.27% | 30 | ||||||||||||||||||||||||||
Other time deposits | 1.84% | 1.80% | 1.34% | 4 | 50 | 1.82% | 1.30% | 52 | ||||||||||||||||||||||||||
Total interest-bearing core deposits | 1.03% | 0.99% | 0.65% | 4 | 38 | 1.01% | 0.58% | 43 | ||||||||||||||||||||||||||
Certificates $100,000 and over | 2.10% | 2.13% | 1.35% | (3) | 75 | 2.11% | 1.42% | 69 | ||||||||||||||||||||||||||
Other deposits | 2.92% | 2.43% | 1.80% | 49 | 112 | 2.46% | 1.57% | 89 | ||||||||||||||||||||||||||
Federal funds purchased | 2.61% | 2.43% | 1.76% | 18 | 85 | 2.50% | 1.63% | 87 | ||||||||||||||||||||||||||
Other short-term borrowings | 3.08% | 3.62% | 1.84% | (54) | 124 | 3.28% | 1.60% | 168 | ||||||||||||||||||||||||||
Long-term debt | 3.39% | 3.35% | 3.11% | 4 | 28 | 3.37% | 2.98% | 39 | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 1.47% | 1.46% | 1.12% | 1 | 35 | 1.47% | 1.05% | 42 | ||||||||||||||||||||||||||
(a) Presented on an FTE basis. |
|
20
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||
Average Balance Sheet and Yield/Rate Analysis | ||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||
Assets | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Commercial and industrial loans | $52,187 | $46,070 | $43,911 | $42,614 | $42,327 | |||||||||||||
Commercial mortgage loans | 10,635 | 7,417 | 6,868 | 6,664 | 6,521 | |||||||||||||
Commercial construction loans | 5,248 | 4,838 | 4,885 | 4,870 | 4,743 | |||||||||||||
Commercial leases | 3,811 | 3,555 | 3,633 | 3,746 | 3,847 | |||||||||||||
Residential mortgage loans | 17,589 | 16,150 | 16,074 | 16,226 | 16,213 | |||||||||||||
Home equity | 6,376 | 6,356 | 6,438 | 6,529 | 6,672 | |||||||||||||
Indirect secured consumer loans | 10,190 | 9,176 | 8,970 | 8,969 | 8,968 | |||||||||||||
Credit card | 2,408 | 2,396 | 2,373 | 2,299 | 2,221 | |||||||||||||
Other consumer loans | 2,549 | 2,404 | 2,246 | 2,060 | 1,720 | |||||||||||||
Taxable securities | 35,467 | 34,320 | 34,126 | 33,301 | 33,380 | |||||||||||||
Tax exempt securities | 40 | 28 | 40 | 69 | 81 | |||||||||||||
Other short-term investments | 2,290 | 1,753 | 1,508 | 1,452 | 1,474 | |||||||||||||
Total interest-earning assets | 148,790 | 134,463 | 131,072 | 128,799 | 128,167 | |||||||||||||
Cash and due from banks | 2,931 | 2,217 | 2,253 | 2,193 | 2,179 | |||||||||||||
Other assets | 16,972 | 13,391 | 11,952 | 11,739 | 12,211 | |||||||||||||
Allowance for loan and lease losses | (1,115) | (1,103) | (1,092) | (1,077) | (1,137) | |||||||||||||
Total Assets | $167,578 | $148,968 | $144,185 | $141,654 | $141,420 | |||||||||||||
Liabilities | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest checking deposits | $36,514 | $33,697 | $32,428 | $29,681 | $28,715 | |||||||||||||
Savings deposits | 14,418 | 13,052 | 12,933 | 13,231 | 13,618 | |||||||||||||
Money market deposits | 25,934 | 23,133 | 22,517 | 21,753 | 22,036 | |||||||||||||
Foreign office deposits | 163 | 208 | 272 | 317 | 371 | |||||||||||||
Other time deposits | 5,678 | 4,860 | 4,366 | 4,177 | 4,018 | |||||||||||||
Total interest-bearing core deposits | 82,707 | 74,950 | 72,516 | 69,159 | 68,758 | |||||||||||||
Certificates $100,000 and over | 5,780 | 3,358 | 2,662 | 2,596 | 2,155 | |||||||||||||
Other deposits | 40 | 726 | 746 | 578 | 198 | |||||||||||||
Federal funds purchased | 1,151 | 2,019 | 2,254 | 1,987 | 1,080 | |||||||||||||
Other short-term borrowings | 1,119 | 646 | 578 | 1,018 | 2,452 | |||||||||||||
Long-term debt | 15,543 | 15,438 | 14,420 | 14,434 | 14,579 | |||||||||||||
Total interest-bearing liabilities | 106,340 | 97,137 | 93,176 | 89,772 | 89,222 | |||||||||||||
Demand deposits | 35,818 | 30,557 | 31,571 | 32,333 | 32,834 | |||||||||||||
Other liabilities | 5,088 | 4,227 | 3,631 | 3,535 | 3,397 | |||||||||||||
Total Liabilities | 147,246 | 131,921 | 128,378 | 125,640 | 125,453 | |||||||||||||
Total Equity | 20,332 | 17,047 | 15,807 | 16,014 | 15,967 | |||||||||||||
Total Liabilities and Equity | $167,578 | $148,968 | $144,185 | $141,654 | $141,420 | |||||||||||||
Yield/Rate Analysis | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Commercial and industrial loans(a) | 4.79% | 4.67% | 4.56% | 4.32% | 4.26% | |||||||||||||
Commercial mortgage loans(a) | 5.11% | 4.80% | 4.67% | 4.57% | 4.43% | |||||||||||||
Commercial construction loans(a) | 5.71% | 5.55% | 5.33% | 5.14% | 4.94% | |||||||||||||
Commercial leases(a) | 3.51% | 3.08% | 2.89% | 2.85% | 2.82% | |||||||||||||
Residential mortgage loans | 3.70% | 3.71% | 3.63% | 3.58% | 3.56% | |||||||||||||
Home equity | 5.30% | 5.34% | 5.21% | 5.03% | 4.85% | |||||||||||||
Indirect secured consumer loans | 4.11% | 3.79% | 3.64% | 3.47% | 3.26% | |||||||||||||
Credit card | 12.38% | 12.63% | 12.50% | 12.17% | 11.96% | |||||||||||||
Other consumer loans | 7.58% | 7.49% | 7.28% | 6.98% | 6.75% | |||||||||||||
Total loans and leases | 4.84% | 4.73% | 4.61% | 4.41% | 4.30% | |||||||||||||
Taxable securities | 3.28% | 3.32% | 3.27% | 3.20% | 3.20% | |||||||||||||
Tax exempt securities(a) | 3.50% | 4.80% | 3.86% | 4.35% | 4.03% | |||||||||||||
Other short-term investments | 1.80% | 1.97% | 1.96% | 1.74% | 1.62% | |||||||||||||
Total interest-earning assets | 4.42% | 4.33% | 4.23% | 4.07% | 3.98% | |||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest checking deposits | 1.17% | 1.18% | 1.07% | 0.88% | 0.76% | |||||||||||||
Savings deposits | 0.17% | 0.15% | 0.13% | 0.11% | 0.10% | |||||||||||||
Money market deposits | 1.14% | 1.03% | 0.91% | 0.80% | 0.71% | |||||||||||||
Foreign office deposits | 0.53% | 0.60% | 0.54% | 0.33% | 0.45% | |||||||||||||
Other time deposits | 1.84% | 1.80% | 1.65% | 1.48% | 1.34% | |||||||||||||
Total interest-bearing core deposits | 1.03% | 0.99% | 0.88% | 0.74% | 0.65% | |||||||||||||
Certificates $100,000 and over | 2.10% | 2.13% | 1.97% | 1.85% | 1.35% | |||||||||||||
Other deposits | 2.92% | 2.43% | 2.23% | 1.95% | 1.80% | |||||||||||||
Federal funds purchased | 2.61% | 2.43% | 2.25% | 1.96% | 1.76% | |||||||||||||
Other short-term borrowings | 3.08% | 3.62% | 3.01% | 2.22% | 1.84% | |||||||||||||
Long-term debt | 3.39% | 3.35% | 3.18% | 3.09% | 3.11% | |||||||||||||
Total interest-bearing liabilities | 1.47% | 1.46% | 1.33% | 1.20% | 1.12% | |||||||||||||
Ratios: | ||||||||||||||||||
Net interest margin (FTE)(b) | 3.37% | 3.28% | 3.29% | 3.23% | 3.21% | |||||||||||||
Net interest rate spread (FTE)(b) | 2.95% | 2.87% | 2.90% | 2.87% | 2.86% | |||||||||||||
Interest-bearing liabilities to interest-earning assets | 71.47% | 72.24% | 71.09% | 69.70% | 69.61% | |||||||||||||
(a) Presented on an FTE basis. | ||||||||||||||||||
(b) Non-GAAP measure; see discussion ofnon-GAAP and Reg. G reconciliation beginning on page 26. |
21
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||
Summary of Loans and Leases | ||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||
Average Portfolio Loans and Leases | ||||||||||||||||||
Commercial loans and leases: | ||||||||||||||||||
Commercial and industrial loans | $52,078 | $46,011 | $43,829 | $42,494 | $42,292 | |||||||||||||
Commercial mortgage loans | 10,632 | 7,414 | 6,864 | 6,635 | 6,514 | |||||||||||||
Commercial construction loans | 5,248 | 4,838 | 4,885 | 4,870 | 4,743 | |||||||||||||
Commercial leases | 3,809 | 3,555 | 3,632 | 3,738 | 3,847 | |||||||||||||
Total commercial loans and leases | 71,767 | 61,818 | 59,210 | 57,737 | 57,396 | |||||||||||||
Consumer loans: | ||||||||||||||||||
Residential mortgage loans | 16,804 | 15,624 | 15,520 | 15,598 | 15,581 | |||||||||||||
Home equity | 6,376 | 6,355 | 6,438 | 6,529 | 6,672 | |||||||||||||
Indirect secured consumer loans | 10,190 | 9,176 | 8,970 | 8,969 | 8,968 | |||||||||||||
Credit card | 2,408 | 2,396 | 2,373 | 2,299 | 2,221 | |||||||||||||
Other consumer loans | 2,550 | 2,404 | 2,246 | 2,060 | 1,719 | |||||||||||||
Total consumer loans | 38,328 | 35,955 | 35,547 | 35,455 | 35,161 | |||||||||||||
Total average portfolio loans and leases | $110,095 | $97,773 | $94,757 | $93,192 | $92,557 | |||||||||||||
Average loans and leases held for sale | $898 | $589 | $641 | $785 | $675 | |||||||||||||
End of Period Portfolio Loans and Leases | ||||||||||||||||||
Commercial loans and leases: | ||||||||||||||||||
Commercial and industrial loans | $51,104 | $51,862 | $44,340 | $42,631 | $41,403 | |||||||||||||
Commercial mortgage loans | 10,717 | 10,686 | 6,974 | 6,695 | 6,625 | |||||||||||||
Commercial construction loans | 5,264 | 5,231 | 4,657 | 4,892 | 4,687 | |||||||||||||
Commercial leases | 3,677 | 3,909 | 3,600 | 3,697 | 3,788 | |||||||||||||
Total commercial loans and leases | 70,762 | 71,688 | 59,571 | 57,915 | 56,503 | |||||||||||||
Consumer loans: | ||||||||||||||||||
Residential mortgage loans | 16,777 | 16,811 | 15,504 | 15,585 | 15,640 | |||||||||||||
Home equity | 6,325 | 6,435 | 6,402 | 6,485 | 6,599 | |||||||||||||
Indirect secured consumer loans | 10,403 | 10,031 | 8,976 | 9,002 | 8,938 | |||||||||||||
Credit card | 2,436 | 2,388 | 2,470 | 2,325 | 2,270 | |||||||||||||
Other consumer loans | 2,580 | 2,489 | 2,342 | 2,131 | 1,982 | |||||||||||||
Total consumer loans | 38,521 | 38,154 | 35,694 | 35,528 | 35,429 | |||||||||||||
Total portfolio loans and leases | $109,283 | $109,842 | $95,265 | $93,443 | $91,932 | |||||||||||||
Loans and leases held for sale | $1,205 | $692 | $607 | $663 | $783 | |||||||||||||
Operating lease equipment | $894 | $908 | $518 | $546 | $606 | |||||||||||||
Loans and leases serviced for others:(a) | ||||||||||||||||||
Commercial and industrial loans | $977 | $1,024 | $514 | $465 | $421 | |||||||||||||
Commercial mortgage loans | 438 | 467 | 292 | 294 | 263 | |||||||||||||
Commercial construction loans | 323 | 261 | 130 | 108 | 82 | |||||||||||||
Commercial leases | 358 | 216 | 224 | 225 | 222 | |||||||||||||
Residential mortgage loans | 84,597 | 83,900 | 63,154 | 63,996 | 62,247 | |||||||||||||
Other consumer loans | 50 | 50 | 50 | 50 | 50 | |||||||||||||
Total loans and leases serviced for others | 86,743 | 85,918 | 64,364 | 65,138 | 63,285 | |||||||||||||
Total loans and leases serviced | $198,125 | $197,360 | $160,754 | $159,790 | $156,606 | |||||||||||||
(a) Fifth Third sells certain loans and leases and obtains servicing responsibilities. |
22
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Regulatory Capital | ||||||||||||||||||||
$ in millions | As of | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2019(a) | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Regulatory capital: | ||||||||||||||||||||
CET1 capital | $13,532 | $13,430 | $12,534 | $12,809 | $12,986 | |||||||||||||||
Additional tier I capital | 1,493 | 1,493 | 1,330 | 1,331 | 1,331 | |||||||||||||||
Tier I capital | 15,025 | 14,923 | 13,864 | 14,140 | 14,317 | |||||||||||||||
Tier II capital | 4,111 | 4,048 | 3,859 | 3,792 | 3,799 | |||||||||||||||
Total regulatory capital | $19,136 | $18,971 | $17,723 | $17,932 | $18,116 | |||||||||||||||
Risk-weighted assets(b) | $141,192 | $139,844 | $122,432 | $120,002 | $119,073 | |||||||||||||||
Ratios: | ||||||||||||||||||||
Average total Bancorp shareholders’ equity as a percent of average assets | 12.02% | 11.43% | 10.95% | 11.29% | 11.28% | |||||||||||||||
Regulatory Capital Ratios: | ||||||||||||||||||||
Fifth Third Bancorp | ||||||||||||||||||||
CET1 capital(b) | 9.58% | 9.60% | 10.24% | 10.67% | 10.91% | |||||||||||||||
Tier I risk-based capital(b) | 10.64% | 10.67% | 11.32% | 11.78% | 12.02% | |||||||||||||||
Total risk-based capital(b) | 13.55% | 13.57% | 14.48% | 14.94% | 15.21% | |||||||||||||||
Tier I leverage | 9.24% | 10.32% | 9.72% | 10.10% | 10.24% | |||||||||||||||
Fifth Third Bank | ||||||||||||||||||||
Tier I risk-based capital(b) | 11.69% | 12.22% | 11.93% | 12.27% | 12.43% | |||||||||||||||
Total risk-based capital(b) | 13.25% | 13.86% | 13.57% | 13.94% | 14.10% | |||||||||||||||
Tier I leverage | 10.59% | 10.49% | 10.27% | 10.56% | 10.63% |
(a) | Current period regulatory capital data and ratios are estimated. |
(b) | Under the U.S. banking agencies’ Basel III Final Rule, assets and credit equivalent amounts ofoff-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets. |
23
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Summary of Credit Loss Experience | ||||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Average portfolio loans and leases: | ||||||||||||||||||||
Commercial and industrial loans | $52,078 | $46,011 | $43,829 | $42,494 | $42,292 | |||||||||||||||
Commercial mortgage loans | 10,632 | 7,414 | 6,864 | 6,635 | 6,514 | |||||||||||||||
Commercial construction loans | 5,248 | 4,838 | 4,885 | 4,870 | 4,743 | |||||||||||||||
Commercial leases | 3,809 | 3,555 | 3,632 | 3,738 | 3,847 | |||||||||||||||
Residential mortgage loans | 16,804 | 15,624 | 15,520 | 15,598 | 15,581 | |||||||||||||||
Home equity | 6,376 | 6,355 | 6,438 | 6,529 | 6,672 | |||||||||||||||
Indirect secured consumer loans | 10,190 | 9,176 | 8,970 | 8,969 | 8,968 | |||||||||||||||
Credit card | 2,408 | 2,396 | 2,373 | 2,299 | 2,221 | |||||||||||||||
Other consumer loans | 2,550 | 2,404 | 2,246 | 2,060 | 1,719 | |||||||||||||||
Total average portfolio loans and leases | $110,095 | $97,773 | $94,757 | $93,192 | $92,557 | |||||||||||||||
Lossescharged-off: | ||||||||||||||||||||
Commercial and industrial loans | ($30 | ) | ($20 | ) | ($32 | ) | ($36 | ) | ($51 | ) | ||||||||||
Commercial mortgage loans | - | - | (1 | ) | - | (3 | ) | |||||||||||||
Commercial leases | (3 | ) | - | (1 | ) | - | - | |||||||||||||
Residential mortgage loans | (1 | ) | (2 | ) | (3 | ) | (3 | ) | (4 | ) | ||||||||||
Home equity | (6 | ) | (6 | ) | (5 | ) | (6 | ) | (5 | ) | ||||||||||
Indirect secured consumer loans | (15 | ) | (20 | ) | (19 | ) | (15 | ) | (13 | ) | ||||||||||
Credit card | (40 | ) | (38 | ) | (34 | ) | (33 | ) | (29 | ) | ||||||||||
Other consumer loans | (24 | ) | (22 | ) | (21 | ) | (19 | ) | (13 | ) | ||||||||||
Total lossescharged-off | ($119 | ) | ($108 | ) | ($116 | ) | ($112 | ) | ($118 | ) | ||||||||||
Recoveries of losses previouslycharged-off: | ||||||||||||||||||||
Commercial and industrial loans | $10 | $2 | $2 | $8 | $4 | |||||||||||||||
Commercial mortgage loans | - | 1 | 3 | 1 | 1 | |||||||||||||||
Commercial leases | - | - | - | - | - | |||||||||||||||
Residential mortgage loans | 2 | 1 | 2 | 1 | 2 | |||||||||||||||
Home equity | 3 | 3 | 3 | 3 | 3 | |||||||||||||||
Indirect secured consumer loans | 8 | 7 | 6 | 6 | 5 | |||||||||||||||
Credit card | 5 | 5 | 5 | 12 | 3 | |||||||||||||||
Other consumer loans | 13 | 12 | 12 | 9 | 6 | |||||||||||||||
Total recoveries of losses previouslycharged-off | $41 | $31 | $33 | $40 | $24 | |||||||||||||||
Net lossescharged-off: | ||||||||||||||||||||
Commercial and industrial loans | ($20 | ) | ($18 | ) | ($30 | ) | ($28 | ) | ($47 | ) | ||||||||||
Commercial mortgage loans | - | 1 | 2 | 1 | (2 | ) | ||||||||||||||
Commercial leases | (3 | ) | - | (1 | ) | - | - | |||||||||||||
Residential mortgage loans | 1 | (1 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||||||
Home equity | (3 | ) | (3 | ) | (2 | ) | (3 | ) | (2 | ) | ||||||||||
Indirect secured consumer loans | (7 | ) | (13 | ) | (13 | ) | (9 | ) | (8 | ) | ||||||||||
Credit card | (35 | ) | (33 | ) | (29 | ) | (21 | ) | (26 | ) | ||||||||||
Other consumer loans | (11 | ) | (10 | ) | (9 | ) | (10 | ) | (7 | ) | ||||||||||
Total net lossescharged-off | ($78 | ) | ($77 | ) | ($83 | ) | ($72 | ) | ($94 | ) | ||||||||||
Net lossescharged-off as a percent of average portfolio loans and leases: | ||||||||||||||||||||
Commercial and industrial loans | 0.15% | 0.16% | 0.27% | 0.26% | 0.44% | |||||||||||||||
Commercial mortgage loans | 0.00% | (0.05% | ) | (0.15% | ) | (0.03% | ) | 0.11% | ||||||||||||
Commercial leases | 0.32% | 0.02% | 0.12% | 0.00% | 0.00% | |||||||||||||||
Residential mortgage loans | (0.02% | ) | 0.02% | 0.02% | 0.04% | 0.05% | ||||||||||||||
Home equity | 0.18% | 0.20% | 0.15% | 0.16% | 0.12% | |||||||||||||||
Indirect secured consumer loans | 0.33% | 0.57% | 0.54% | 0.41% | 0.33% | |||||||||||||||
Credit card | 5.75% | 5.60% | 4.84% | 3.53% | 4.73% | |||||||||||||||
Other consumer loans | 1.84% | 1.76% | 1.83% | 1.94% | 1.85% | |||||||||||||||
Total net lossescharged-off as a percent of average portfolio loans and leases | 0.29% | 0.32% | 0.35% | 0.30% | 0.41% |
24
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||
$ in millions | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||
Allowance for loan and lease losses, beginning | $1,115 | $1,103 | $1,091 | $1,077 | $1,138 | |||||||||||||||
Total net lossescharged-off | (78 | ) | (77 | ) | (83 | ) | (72 | ) | (94 | ) | ||||||||||
Provision for loan and lease losses | 78 | 89 | 95 | 86 | 33 | |||||||||||||||
Allowance for loan and lease losses, ending | $1,115 | $1,115 | $1,103 | $1,091 | $1,077 | |||||||||||||||
Reserve for unfunded commitments, beginning | $133 | $131 | $129 | $131 | $151 | |||||||||||||||
Reserve for acquired commitments | 7 | 1 | - | - | - | |||||||||||||||
Provision for (benefit from) the reserve for unfunded commitments | 7 | 1 | 2 | (2 | ) | (20 | ) | |||||||||||||
Reserve for unfunded commitments, ending | $147 | $133 | $131 | $129 | $131 | |||||||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan and lease losses | $1,115 | $1,115 | $1,103 | $1,091 | $1,077 | |||||||||||||||
Reserve for unfunded commitments | 147 | 133 | 131 | 129 | 131 | |||||||||||||||
Total allowance for credit losses | $1,262 | $1,248 | $1,234 | $1,220 | $1,208 | |||||||||||||||
As of | ||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Nonperforming Assets and Delinquent Loans | ||||||||||||||||||||
Nonaccrual portfolio loans and leases: | ||||||||||||||||||||
Commercial and industrial loans | $135 | $112 | $54 | $69 | $99 | |||||||||||||||
Commercial mortgage loans | 20 | 24 | 9 | 7 | 8 | |||||||||||||||
Commercial leases | 31 | 18 | 18 | 22 | 25 | |||||||||||||||
Residential mortgage loans | 11 | 15 | 11 | 11 | 13 | |||||||||||||||
Home equity | 61 | 62 | 55 | 58 | 54 | |||||||||||||||
Indirect secured consumer loans | 1 | 2 | - | - | 3 | |||||||||||||||
Other consumer loans | 2 | 2 | 1 | 1 | 1 | |||||||||||||||
Total nonaccrual portfolio loans and leases (excludes restructured loans) | 261 | 235 | 148 | 168 | 203 | |||||||||||||||
Nonaccrual restructured portfolio commercial loans and leases | 204 | 159 | 147 | 180 | 173 | |||||||||||||||
Nonaccrual restructured portfolio consumer loans and leases | 56 | 56 | 53 | 55 | 61 | |||||||||||||||
Total nonaccrual portfolio loans and leases | 521 | 450 | 348 | 403 | 437 | |||||||||||||||
Repossessed property | 8 | 11 | 10 | 8 | 7 | |||||||||||||||
OREO | 31 | 37 | 37 | 37 | 36 | |||||||||||||||
Total nonperforming portfolio assets | 560 | 498 | 395 | 448 | 480 | |||||||||||||||
Nonaccrual loans held for sale | 4 | - | - | 18 | 5 | |||||||||||||||
Nonaccrual restructured loans held for sale | 23 | 14 | 16 | 17 | 18 | |||||||||||||||
Total nonperforming assets | $587 | $512 | $411 | $483 | $503 | |||||||||||||||
Restructured portfolio consumer loans and leases (accrual) | $958 | $950 | $961 | $987 | $1,024 | |||||||||||||||
Restructured portfolio commercial loans and leases (accrual) | $32 | $59 | $60 | $80 | $104 | |||||||||||||||
Loans 90 days past due (accrual): | ||||||||||||||||||||
Commercial and industrial loans | $19 | $15 | $4 | $3 | $4 | |||||||||||||||
Commercial mortgage loans | 11 | 20 | 2 | 1 | - | |||||||||||||||
Commercial construction loans | 1 | - | - | - | - | |||||||||||||||
Total commercial loans | 31 | 35 | 6 | 4 | 4 | |||||||||||||||
Residential mortgage loans | 47 | 48 | 38 | 40 | 44 | |||||||||||||||
Home equity | 1 | 1 | - | - | - | |||||||||||||||
Indirect secured consumer loans | 11 | 9 | 12 | 11 | 10 | |||||||||||||||
Credit card | 37 | 38 | 37 | 32 | 31 | |||||||||||||||
Other consumer loans | 1 | 1 | - | - | - | |||||||||||||||
Total consumer loans | 97 | 97 | 87 | 83 | 85 | |||||||||||||||
Total loans 90 days past due (accrual)(b) | $128 | $132 | $93 | $87 | $89 | |||||||||||||||
Ratios | ||||||||||||||||||||
Net lossescharged-off as a percent of average portfolio loans and leases | 0.29% | 0.32% | 0.35% | 0.30% | 0.41% | |||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||
As a percent of portfolio loans and leases | 1.02% | 1.02% | 1.16% | 1.17% | 1.17% | |||||||||||||||
As a percent of nonperforming portfolio loans and leases(a) | 214% | 248% | 317% | 270% | 247% | |||||||||||||||
As a percent of nonperforming portfolio assets(a) | 199% | 224% | 279% | 243% | 224% | |||||||||||||||
Nonperforming portfolio loans and leases as a percent of portfolio loans and leases and OREO(a) | 0.48% | 0.41% | 0.37% | 0.43% | 0.47% | |||||||||||||||
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO(a) | 0.51% | 0.45% | 0.41% | 0.48% | 0.52% | |||||||||||||||
Nonperforming assets as a percent of total loans and leases, OREO, and repossessed property | 0.53% | 0.46% | 0.43% | 0.51% | 0.54% | |||||||||||||||
(a) Excludes nonaccrual loans held for sale. (b) Excludes loans held for sale. |
|
25
Use ofNon-GAAP Financial Measures
In addition to GAAP measures, management considers variousNon-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 unrealized gains/losses),” “tangible common equity (including unrealized gains/losses),” “tangible equity,” “tangible book value per share,” “adjusted noninterest income,” “adjusted noninterest expense,”“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 net interest margin,” “adjustedpre-provision net revenue,” “adjusted return on average assets,” “efficiency ratio (FTE),” and certain ratios derived from these measures. The Bancorp believes thesenon-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 makeday-to-day operating decisions.
The FTE basis adjusts for thetax-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 they provide a relevant comparison between taxable andnon-taxable amounts.
The Bancorp believes tangible net income available to common shareholders, average tangible common equity, tangible common equity (excluding unrealized gains/losses), tangible common equity (including unrealized gains/losses), 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, compared 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, 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 ofon-going financial performance and enhances comparability of results with prior periods.
Management considers various measures when evaluating capital utilization and adequacy, including the tangible equity and tangible common equity (including and excluding unrealized gains/losses), in addition to capital ratios defined by the U.S. banking agencies. These calculations are intended to complement the capital ratios defined by the 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 beNon-GAAP financial measures. Management believes that providing the tangible common equity ratio excluding unrealized gains/losses on certain assets and liabilities enables investors and others to assess the Bancorp’s use of equity without the effects of gains or losses some of which are uncertain and providing the tangible common equity ratio including unrealized gains/losses enables investors and others to assess the Bancorp’s use of equity if all unrealized gains or losses were to be monetized.
Please note that althoughNon-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 Reg. G reconciliations of all historicalNon-GAAP measures used in this release to the most directly comparable GAAP measures, beginning on the following page.
26
Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||
Regulation GNon-GAAP Reconciliation | ||||||||||||||||||||
$ and shares in millions | For the Three Months Ended | |||||||||||||||||||
(unaudited) | June | March | December | September | June | |||||||||||||||
2019 | 2019 | 2018 | 2018 | 2018 | ||||||||||||||||
Net interest income | $1,245 | $1,082 | $1,081 | $1,043 | $1,020 | |||||||||||||||
Add: Taxable equivalent adjustment | 5 | 4 | 4 | 4 | 4 | |||||||||||||||
Net interest income (FTE) (a) | 1,250 | 1,086 | 1,085 | 1,047 | 1,024 | |||||||||||||||
Net interest income (annualized) (b) | 4,994 | 4,388 | 4,289 | 4,138 | 4,091 | |||||||||||||||
Net interest income (FTE) (annualized) (c) | 5,014 | 4,404 | 4,305 | 4,154 | 4,107 | |||||||||||||||
Net interest income (FTE) | 1,250 | 1,086 | 1,085 | 1,047 | 1,024 | |||||||||||||||
Less: Net interest income impact from purchase accounting accretion | 16 | 1 | - | - | - | |||||||||||||||
Adjusted net interest income (FTE) (d) | 1,234 | 1,085 | 1,085 | 1,047 | 1,024 | |||||||||||||||
Adjusted net interest income (FTE) (annualized) (e) | 4,950 | 4,400 | 4,305 | 4,154 | 4,107 | |||||||||||||||
Interest income | 1,636 | 1,433 | 1,393 | 1,315 | 1,269 | |||||||||||||||
Add: Taxable equivalent adjustment | 5 | 4 | 4 | 4 | 4 | |||||||||||||||
Interest income (FTE) | 1,641 | 1,437 | 1,397 | 1,319 | 1,273 | |||||||||||||||
Interest income (FTE) (annualized) (f) | 6,582 | 5,828 | 5,542 | 5,233 | 5,106 | |||||||||||||||
Interest expense (annualized) (g) | 1,568 | 1,424 | 1,238 | 1,079 | 999 | |||||||||||||||
Average interest-earning assets (h) | 148,790 | 134,463 | 131,072 | 128,799 | 128,167 | |||||||||||||||
Average interest-bearing liabilities (i) | 106,340 | 97,137 | 93,176 | 89,772 | 89,222 | |||||||||||||||
Net interest margin (b) / (h) | 3.36% | 3.26% | 3.27% | 3.21% | 3.19% | |||||||||||||||
Net interest margin (FTE) (c) / (h) | 3.37% | 3.28% | 3.29% | 3.23% | 3.21% | |||||||||||||||
Adjusted net interest margin (e) / (h) | 3.32% | 3.28% | 3.29% | 3.23% | 3.21% | |||||||||||||||
Net interest rate spread (FTE) (f) / (h) - (g) / (i) | 2.95% | 2.87% | 2.90% | 2.87% | 2.86% | |||||||||||||||
Income before income taxes | $577 | $996 | $584 | $550 | $748 | |||||||||||||||
Add: Taxable equivalent adjustment | 5 | 4 | 4 | 4 | 4 | |||||||||||||||
Income before income taxes (FTE) | $582 | $1,000 | $588 | $554 | $752 | |||||||||||||||
Net income available to common shareholders | $427 | $760 | $432 | $421 | $579 | |||||||||||||||
Add: Intangible amortization, net of tax | 11 | 2 | 1 | 1 | 1 | |||||||||||||||
Tangible net income available to common shareholders (j) | 438 | 762 | 433 | 422 | 580 | |||||||||||||||
Tangible net income available to common shareholders (annualized) (k) | 1,757 | 3,090 | 1,718 | 1,674 | 2,326 | |||||||||||||||
Average Bancorp shareholders’ equity | 20,135 | 17,025 | 15,794 | 15,994 | 15,947 | |||||||||||||||
Less: Average preferred stock | (1,331 | ) | (1,331 | ) | (1,331 | ) | (1,331 | ) | (1,331 | ) | ||||||||||
Average goodwill | (4,301 | ) | (2,682 | ) | (2,468 | ) | (2,462 | ) | (2,462 | ) | ||||||||||
Average intangible assets | (215 | ) | (58 | ) | (32 | ) | (29 | ) | (30 | ) | ||||||||||
Average tangible common equity, including accumulated other comprehensive income (“AOCI”) (l) | 14,288 | 12,954 | 11,963 | 12,172 | 12,124 | |||||||||||||||
Less: Average AOCI | (619) | - | 719 | 610 | 619 | |||||||||||||||
Average tangible common equity, excluding AOCI (m) | 13,669 | 12,954 | 12,682 | 12,782 | 12,743 | |||||||||||||||
Total Bancorp shareholders’ equity | 20,474 | 19,647 | 16,250 | 15,681 | 16,080 | |||||||||||||||
Less: Preferred stock | (1,331 | ) | (1,331 | ) | (1,331 | ) | (1,331 | ) | (1,331 | ) | ||||||||||
Goodwill | (4,284 | ) | (4,321 | ) | (2,478 | ) | (2,462 | ) | (2,462 | ) | ||||||||||
Intangible assets | (215 | ) | (218 | ) | (40 | ) | (28 | ) | (30 | ) | ||||||||||
Tangible common equity, including AOCI (n) | 14,644 | 13,777 | 12,401 | 11,860 | 12,257 | |||||||||||||||
Less: AOCI | (1,178) | (409) | 112 | 775 | 552 | |||||||||||||||
Tangible common equity, excluding AOCI (o) | 13,466 | 13,368 | 12,513 | 12,635 | 12,809 | |||||||||||||||
Add: Preferred stock | 1,331 | 1,331 | 1,331 | 1,331 | 1,331 | |||||||||||||||
Tangible equity (p) | 14,797 | 14,699 | 13,844 | 13,966 | 14,140 | |||||||||||||||
Total assets | 168,802 | 167,853 | 146,069 | 141,590 | 140,595 | |||||||||||||||
Less: Goodwill | (4,284 | ) | (4,321 | ) | (2,478 | ) | (2,462 | ) | (2,462 | ) | ||||||||||
Intangible assets | (215 | ) | (218 | ) | (40 | ) | (28 | ) | (30 | ) | ||||||||||
Tangible assets, including AOCI (q) | 164,303 | 163,314 | 143,551 | 139,100 | 138,103 | |||||||||||||||
Less: AOCI, before tax | (1,491) | (518) | 142 | 981 | 699 | |||||||||||||||
Tangible assets, excluding AOCI (r) | $162,812 | $162,796 | $143,693 | $140,081 | $138,802 | |||||||||||||||
Common shares outstanding (s) | 731 | 739 | 647 | 661 | 678 | |||||||||||||||
Tangible equity (p) / (r) | 9.09% | 9.03% | 9.63% | 9.97% | 10.19% | |||||||||||||||
Tangible common equity (excluding AOCI) (o) / (r) | 8.27% | 8.21% | 8.71% | 9.02% | 9.23% | |||||||||||||||
Tangible common equity (including AOCI) (n) / (q) | 8.91% | 8.44% | 8.64% | 8.53% | 8.88% | |||||||||||||||
Tangible book value per share (n) / (s) | $20.03 | $18.64 | $19.17 | $17.94 | $18.08 |
27
Fifth Third Bancorp and Subsidiaries | ||||||||||||
Regulation GNon-GAAP Reconciliation | ||||||||||||
$ in millions | For the Three Months Ended | |||||||||||
(unaudited) | June | March | June | |||||||||
2019 | 2019 | 2018 | ||||||||||
Net income attributable to Bancorp (t) | $453 | $775 | $602 | |||||||||
Net income attributable to Bancorp (annualized) (u) | 1,817 | 3,143 | 2,415 | |||||||||
Adjustments(pre-tax items) | ||||||||||||
Merger-related expense | 109 | 76 | 2 | |||||||||
Valuation of Visa total return swap | 22 | 31 | 10 | |||||||||
Merger-related branch network impairment charge | - | 13 | - | |||||||||
Compensation expense primarily related to staffing review | - | - | 19 | |||||||||
Branch network impairment charge | - | - | 30 | |||||||||
Fifth Third Foundation contribution | - | - | 10 | |||||||||
GreenSky IPO gain | - | - | (16 | ) | ||||||||
GreenSky securities losses (gains) | - | (9 | ) | - | ||||||||
Gain on sale of Vantiv/Worldpay shares | - | (562 | ) | (205 | ) | |||||||
Adjustments,after-tax (v)(a) | 101 | (341 | ) | (116 | ) | |||||||
Adjustments (tax related items) | ||||||||||||
Acquisition impact on state deferred taxes | - | 9 | - | |||||||||
Adjustments, tax related (w) | - | 9 | - | |||||||||
Noninterest income (x) | 660 | 1,101 | 743 | |||||||||
Merger-related branch network impairment charge | - | 13 | - | |||||||||
Valuation of Visa total return swap | 22 | 31 | 10 | |||||||||
Gain on sale of Vantiv/Worldpay shares | - | (562 | ) | (205 | ) | |||||||
GreenSky securities losses (gains) | - | (9 | ) | - | ||||||||
Branch network impairment charge | - | - | 30 | |||||||||
GreenSky IPO gain | - | - | (16 | ) | ||||||||
Adjusted noninterest income (y) | 682 | 574 | 562 | |||||||||
Noninterest expense (z) | 1,243 | 1,097 | 1,001 | |||||||||
Merger-related expense | (109 | ) | (76 | ) | (2 | ) | ||||||
Compensation expense primarily related to staffing review | - | - | (19 | ) | ||||||||
Fifth Third Foundation contribution | - | - | (10 | ) | ||||||||
Adjusted noninterest expense (aa) | 1,134 | 1,021 | 970 | |||||||||
Intangible amortization expense | 14 | 3 | 1 | |||||||||
Adjusted noninterest expense excluding intangible amortization expense (ab) | 1,120 | 1,018 | 969 | |||||||||
Adjusted net income attributable to Bancorp (t) + (v) + (w) | 554 | 443 | 486 | |||||||||
Adjusted net income attributable to Bancorp (annualized) (ac) | 2,222 | 1,797 | 1,949 | |||||||||
Adjusted tangible net income available to common shareholders (j) + (v) + (w) | 539 | 430 | 464 | |||||||||
Adjusted tangible net income available to common shareholders (annualized) (ad) | 2,162 | 1,744 | 1,861 | |||||||||
Average assets (ae)
|
| $167,578
|
|
| $148,968
|
|
| $141,420
|
| |||
Return on average tangible common equity (k) / (l) | 12.3% | 23.9% | 19.2% | |||||||||
Adjusted return on average tangible common equity, including AOCI (ad) / (l) | 15.1% | 13.5% | 15.3% | |||||||||
Adjusted return on average tangible common equity, excluding AOCI (ad) / (m) | 15.8% | 13.5% | 14.6% | |||||||||
Return on average assets (u) / (ae) |
|
1.08% |
|
|
2.11% |
|
|
1.71% |
| |||
Adjusted return on average assets (ac) / (ae) | 1.33% | 1.21% | 1.38% | |||||||||
Efficiency ratio (z) / [(a) + (x)] | 65.1% | 50.2% | 56.7% | |||||||||
Adjusted efficiency ratio (ab) / [(d) + (y)] | 58.5% | 61.4% | 61.1% | |||||||||
Pre-provision net revenue (PPNR) (a) + (x) - (z) | $667 | $1,090 | $766 | |||||||||
Adjustedpre-provision net revenue (PPNR) (d) + (y) - (ab) | $796 | $641 | $617 |
(a) | Assumes a 23% tax rate, except for merger-related expenses impacted by certain non-deductible items. |
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Fifth Third Bancorp and Subsidiaries | ||||||||||||||||||||||||
Segment Presentation | ||||||||||||||||||||||||
$ in millions | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended June 30, 2019 | | Commercial Banking |
| | Branch Banking(b) |
| | Consumer Lending(c) | | | Wealth and Asset | | | Other/ Eliminations |
| Total | ||||||||
Net interest income (FTE)(a) | $634 | $620 | $83 | $48 | ($135 | ) | $1,250 | |||||||||||||||||
(Provision for) benefit from credit losses | (25 | ) | (55 | ) | (7 | ) | — | 2 | (85 | ) | ||||||||||||||
Net interest income after provision for credit losses | 609 | 565 | 76 | 48 | (133 | ) | 1,165 | |||||||||||||||||
Noninterest income | 301 | 202 | 67 | 118 | (28 | ) | 660 | |||||||||||||||||
Noninterest expense | (420 | ) | (467 | ) | (118 | ) | (135 | ) | (103 | ) | (1,243 | ) | ||||||||||||
Income (loss) before income taxes | 490 | 300 | 25 | 31 | (264 | ) | 582 | |||||||||||||||||
Applicable income tax (expense) benefit(a) | (95 | ) | (63 | ) | (5 | ) | (7 | ) | 41 | (129 | ) | |||||||||||||
Net income (loss) | 395 | 237 | 20 | 24 | (223 | ) | 453 | |||||||||||||||||
For the three months ended March 31, 2019 | | Commercial Banking | | | Branch Banking(b) |
| | Consumer Lending(c) | | | Wealth and Asset | | | Other/ Eliminations |
| Total | ||||||||
Net interest income (FTE)(a) | $513 | $584 | $63 | $49 | ($123 | ) | $1,086 | |||||||||||||||||
Provision for credit losses | (20 | ) | (52 | ) | (13 | ) | — | (5 | ) | (90 | ) | |||||||||||||
Net interest income after provision for credit losses | 493 | 532 | 50 | 49 | (128 | ) | 996 | |||||||||||||||||
Noninterest income | 227 | 183 | 61 | 114 | 516 | 1,101 | ||||||||||||||||||
Noninterest expense | (356 | ) | (440 | ) | (101 | ) | (130 | ) | (70 | ) | (1,097 | ) | ||||||||||||
Income before income taxes | 364 | 275 | 10 | 33 | 318 | 1,000 | ||||||||||||||||||
Applicable income tax expense(a) | (70 | ) | (58 | ) | (2 | ) | (7 | ) | (88 | ) | (225 | ) | ||||||||||||
Net income | 294 | 217 | 8 | 26 | 230 | 775 | ||||||||||||||||||
For the three months ended December 31, 2018 | | Commercial Banking | | | Branch Banking(b) |
| | Consumer Lending(c) | | | Wealth and Asset | | | Other/ Eliminations |
| Total | ||||||||
Net interest income (FTE)(a) | $444 | $544 | $60 | $48 | ($11 | ) | $1,085 | |||||||||||||||||
Provision for credit losses(d) | (15 | ) | (47 | ) | (12 | ) | (5 | ) | (18 | ) | (97 | ) | ||||||||||||
Net interest income after provision for credit losses | 429 | 497 | 48 | 43 | (29 | ) | 988 | |||||||||||||||||
Noninterest income | 237 | 196 | 58 | 110 | (26 | ) | 575 | |||||||||||||||||
Noninterest expense(d) | (317 | ) | (424 | ) | (93 | ) | (122 | ) | (19 | ) | (975 | ) | ||||||||||||
Income (loss) before income taxes | 349 | 269 | 13 | 31 | (74 | ) | 588 | |||||||||||||||||
Applicable income tax (expense) benefit(a) | (80 | ) | (56 | ) | (3 | ) | (7 | ) | 13 | (133 | ) | |||||||||||||
Net income (loss) | 269 | 213 | 10 | 24 | (61 | ) | 455 | |||||||||||||||||
For the three months ended September 30, 2018 | | Commercial Banking | | | Branch Banking(b) |
| | Consumer Lending(c) | | | Wealth and Asset | | | Other/ Eliminations |
| Total | ||||||||
Net interest income (FTE)(a) | $431 | $525 | $60 | $46 | ($15 | ) | $1,047 | |||||||||||||||||
(Provision for) benefit from credit losses(d) | 11 | (34 | ) | (10 | ) | (3 | ) | (48 | ) | (84 | ) | |||||||||||||
Net interest income after provision for credit losses | 442 | 491 | 50 | 43 | (63 | ) | 963 | |||||||||||||||||
Noninterest income | 235 | 204 | 50 | 115 | (41 | ) | 563 | |||||||||||||||||
Noninterest expense(d) | (307 | ) | (433 | ) | (100 | ) | (126 | ) | (6 | ) | (972 | ) | ||||||||||||
Income (loss) before income taxes | 370 | 262 | - | 32 | (110 | ) | 554 | |||||||||||||||||
Applicable income tax (expense) benefit(a) | (69 | ) | (55 | ) | - | (7 | ) | 13 | (118 | ) | ||||||||||||||
Net income (loss) | 301 | 207 | - | 25 | (97 | ) | 436 | |||||||||||||||||
For the three months ended June 30, 2018 | | Commercial Banking | | | Branch Banking(b) |
| | Consumer Lending(c) | | | Wealth and Asset | | | Other/ Eliminations |
| Total | ||||||||
Net interest income (FTE)(a) | $431 | $499 | $59 | $45 | ($10 | ) | $1,024 | |||||||||||||||||
(Provision for) benefit from credit losses(d) | 10 | (47 | ) | (8 | ) | 11 | 20 | (14 | ) | |||||||||||||||
Net interest income after provision for credit losses | 441 | 452 | 51 | 56 | 10 | 1,010 | ||||||||||||||||||
Noninterest income | 229 | 167 | 52 | 109 | 186 | 743 | ||||||||||||||||||
Noninterest expense(d) | (303 | ) | (432 | ) | (107 | ) | (123 | ) | (36 | ) | (1,001 | ) | ||||||||||||
Income (loss) before income taxes | 367 | 187 | (4 | ) | 42 | 160 | 752 | |||||||||||||||||
Applicable income tax (expense) benefit(a) | (62 | ) | (40 | ) | 1 | (9 | ) | (40 | ) | (150 | ) | |||||||||||||
Net income (loss) | 305 | 147 | (3 | ) | 33 | 120 | 602 |
(a) | Includes taxable equivalent adjustments of $5 million, $4 million, $4 million, $4 million and $4 million for the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018, respectively. |
(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. |
(d) | Certain prior period data has been reclassified to conform to current period presentation. |
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