Core Viewpoint - The signing of the GENIUS Act by President Trump is paving the way for the issuance and regulation of stablecoins in the U.S., which may disrupt traditional banking systems in the next 2 to 3 years [1][2]. Legislative Developments - The GENIUS Act establishes a preliminary framework for stablecoin issuance and regulation, while the CLARITY Act aims to clarify the jurisdiction of the SEC and CFTC over the crypto market [1]. - These legislative advancements signify a shift in focus from policy debates to the actual construction of infrastructure in the digital asset market [2]. Market Growth Projections - The stablecoin market is expected to see moderate growth of approximately $25 billion to $75 billion in the short term, which will likely increase demand for U.S. Treasury securities, particularly short-term bills [2]. Banking Sector Response - U.S. banks are preparing for the stablecoin era, with management expressing readiness to offer stablecoin solutions, although there are concerns regarding specific use cases, especially in domestic payment scenarios [3]. - Major banks like JPMorgan and Citigroup are exploring stablecoin capabilities, with JPMorgan launching its deposit token (JPMD) and Citigroup investing in digital asset services [6][7]. Cross-Border Payment Opportunities - Despite skepticism about domestic applications, bank executives see viable use cases for stablecoins in cross-border payments, with some banks viewing this as a "greenfield" market [4]. Short-Term Impact on Domestic Payments - Most banks anticipate minimal short-term impact on their core domestic payment businesses from stablecoins, although competition in cash management services may intensify [5]. Bank Comments on Stablecoins - JPMorgan is actively entering the stablecoin and digital asset space, while Bank of America acknowledges small cross-border payments as a realistic application [6]. - Citigroup is focusing on tokenized services, despite high transaction costs for converting between fiat and stablecoins [6][7]. Digital Asset Applications - Banks are exploring four main application scenarios for digital assets: reserve management and custody services for stablecoins, transaction services, issuing their own stablecoins, and tokenized deposits [7][8]. Future Outlook - Various banks, including PNC and M&T, are developing digital asset services and assessing the feasibility of stablecoins as payment mechanisms, indicating a growing interest in the sector [9].

一纸法案的签署，正在为美国数字资产市场开启新的篇章，并可能重塑传统银行业的未来格局。 据追风交易台消息，美银美林的一份最新研究报告显示，随着美国为稳定币发行铺平监管道路，这一数字资产将在未来2至3年内，对传统银行的存款基础 和支付体系构成清晰可见的颠覆性影响。 最新的进展是，美国总统特朗普已正式签署《GENIUS法案》，为稳定币的发行和监管设定了初步框架。与此同时，旨在划分美国证券交易委员会 （SEC）和商品期货交易委员会（CFTC）对加密市场管辖权的《CLARITY法案》也已在众议院获得通过，目前这两项法案均已移交参议院审议。 这一系列立法进展标志着监管的破冰，市场焦点正迅速从政策博弈转向基础设施的实际建设。据美银全球研究利率策略团队预测，短期内稳定币市场将迎 来约250亿至750亿美元的温和增长，这一增量资金预计将提振对美国国债的需求，尤其是短期国库券。 报告强调，真正的变革将在中期显现。随着稳定币的整合与普及，其对现有金融体系的冲击将愈发明显，届时银行将直面来自数字货币的竞争压力。而随 着美国稳定币监管框架初步落地，银行业正处于积极布局与谨慎观望的十字路口。 银行积极布局，但对用例仍存疑虑 美国银行业已 ...

Core Insights - Fifth Third Bancorp (FITB) reported second-quarter 2025 adjusted earnings per share (EPS) of 9 cents, which was below the Zacks Consensus Estimate of 87 cents and down from 86 cents in the prior-year quarter [1][2][8] - The results were positively impacted by an increase in net interest income (NII), fee income, and loan balances, but faced challenges from higher expenses and deteriorating asset quality [1][8] Financial Performance - Total quarterly revenues reached $2.25 billion, marking a 7.7% year-over-year increase and surpassing the Zacks Consensus Estimate by 1.8% [3] - NII (on a fully taxable equivalent basis) was $1.5 billion, up 7.6% year over year, exceeding the estimate of $1.48 billion [3] - The net interest margin (on an FTE basis) improved to 3.12% from 2.88% year over year, surpassing the estimate of 3.05% [3] - Non-interest income rose 7.9% year over year to $750 million, driven by increases in wealth and asset management revenues and consumer banking fees, exceeding the estimate of $721.6 million [4] - Non-interest expenses increased 3.5% year over year to $1.26 billion, primarily due to rising costs across all components except occupancy and other non-interest income, slightly below the estimate of $1.27 billion [4] Credit Quality - The provision for credit losses was reported at $173 million, a significant increase of 78% from the previous year, exceeding the estimate of $149.1 million [5] - Total non-performing portfolio loans and leases rose to $886 million, up 37.8% year over year [5] - Net charge-offs increased to $139 million or 0.45% of average loans and leases on an annualized basis, down from $144 million or 0.49% in the prior-year quarter, slightly below the estimate of $145.3 million [6] - The total allowance for credit losses increased by 5.5% to $2.56 billion year over year, surpassing the estimate of $2.53 billion [6] Capital Position - The Tier 1 risk-based capital ratio was reported at 11.83%, down from 11.93% in the prior-year quarter [7] - The CET1 capital ratio decreased to 10.56% from 10.62% year over year [7] - The leverage ratio improved to 9.42% compared to 9.07% in the year-ago quarter [7] Strategic Outlook - The rise in NII, driven by loan growth, deposit rate management, and fixed-rate asset repricing, supported top-line growth [9] - Strategic acquisitions have diversified Fifth Third's revenue sources, which is expected to aid future top-line growth [9] - However, higher expenses and weak asset quality remain concerns in the near term [9]

Core Insights - The article discusses the background and expertise of a financial analyst named Harrison, who has been active on Seeking Alpha since 2018 and has over a decade of market experience [1]. Group 1: Analyst Background - Harrison has professional experience in private equity, real estate, and economic research [1]. - He possesses an academic background in financial econometrics, economic forecasting, and global monetary economics [1].

Core Insights - Fifth Third Bancorp's investments in tech-enabled products have yielded positive results, with significant revenue growth and increased commercial deposits [1][2] - The company has experienced a shift from legacy ACH to modern instant payment systems, enhancing its service offerings [3] - Loan growth has been robust, reaching its highest level in over two years despite a challenging market environment [4] Financial Performance - The Newline by Fifth Third embedded finance platform for enterprises achieved a 30% year-over-year revenue growth and added over $1 billion in commercial deposits [2] - Average loan growth across diversified origination platforms was reported at 5% year-over-year, with overall loan growth at its highest in two years [4] Digital Services and Innovations - Fifth Third has partnered with Trust & Will to provide free wills to customers, addressing a significant market need [5] - The bank plans to integrate AI-enabled features into its mobile app, aiming to enhance user experience and reduce costs [6] - The share of new consumer deposit accounts with digital originations increased from 22% to 28% over the past year [7] User Engagement - Average active digital users rose from 3.07 million to 3.17 million, while average active mobile users increased from 2.32 million to 2.43 million from Q2 2024 to Q2 2025 [6] - The percentage of mortgage applications that were digitally assisted slightly decreased from 98% to 97% [7]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.88, or $0.90 excluding certain items, exceeding consensus estimates [5] - Adjusted revenues grew by 6% year over year, with net interest income (NII) increasing by 7% [6][19] - Adjusted pre-provision net revenue (PPNR) increased by 10%, with a positive operating leverage of 250 basis points [6][18] - Adjusted return on assets was 1.2%, and return on tangible common equity was 18% [7] - Tangible book value per share increased by 18% year over year and by 5% sequentially [9][18] Business Line Data and Key Metrics Changes - The company achieved average loan growth of 5% year over year across diversified loan origination platforms [9] - Commercial relationship manager headcount increased by 11% year over year, contributing to record production in the Provide platform [10] - Wealth Management in Southeast markets grew assets under management by 16% year over year [12] - Embedded Payments business, New Line, saw fees increase by 30% compared to last year [27] Market Data and Key Metrics Changes - The Southeast regions contributed significantly to middle market loan growth, with North Carolina, South Carolina, Georgia, and Alabama showing the strongest results [11] - The consumer bank grew net new households by 6% year over year in the Southeast [10] - Average cost of consumer and small business deposits in the Southeast was 191 basis points, a 250 basis points spread to Fed funds [11] Company Strategy and Development Direction - The company emphasizes organic growth as its primary capital allocation priority, with a focus on stability, profitability, and growth [14][15] - The company plans to continue expanding its branch network in the Southeast, with 50 branches expected to open this year [25][36] - The company is raising its full-year guidance on NII, expecting record NII in 2025 even without rate cuts [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain economic conditions, highlighting strong profitability and credit trends [5][14] - The company anticipates continued improvement in unrealized losses in its securities portfolio [32] - Management expects full-year adjusted noninterest income to increase by 1% to 2% despite muted capital market trends [33] Other Important Information - The company plans to resume share repurchases in the third quarter [14] - The net charge-off ratio was 45 basis points, at the lower end of expectations, with commercial charge-offs at 38 basis points [29] - The CET1 ratio ended the quarter at 10.6%, consistent with near-term targets [31] Q&A Session Summary Question: Capital allocation and potential M&A - Management emphasized organic growth as the priority, with M&A being a means to achieve strategic outcomes rather than a standalone strategy [44][46] Question: Impact of tax bill on solar residential solar panel industry - Management noted that existing solar portfolios are unaffected, and expects net solar charge-offs to decrease in the coming quarters [51][53] Question: Margin improvement and competitive dynamics - Management highlighted strong DDA performance as a key driver of margin improvement and noted rational competition in both loan and deposit sides [62][65] Question: Expectations for loan growth - Management expressed confidence in consumer loan growth and noted that commercial clients are beginning to make larger investment decisions [71][75] Question: Thoughts on stablecoins and regulatory relief - Management is optimistic about stablecoins' potential use cases, particularly in cross-border payments, and expects regulatory relief to benefit regional banks [83][90]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.88, or $0.90 excluding certain items, exceeding consensus estimates [3][4] - Adjusted revenues grew by 6% year over year, with net interest income (NII) increasing by 7% [4][16] - Adjusted pre-provision net revenue (PPNR) increased by 10%, with a positive operating leverage of 250 basis points [4][14] - Tangible book value per share increased by 18% year over year and by 5% sequentially [5][15] - The adjusted return on assets was 1.2%, and the adjusted return on tangible common equity was 18% [4][5] Business Line Data and Key Metrics Changes - The company achieved average loan growth of 5% year over year across various segments, including commercial and industrial (C&I), commercial real estate (CRE), leasing, mortgage, home equity, and auto [6][7] - The Home Equity business ranked second in market share within its footprint, with production growth being the third best in the country [7] - The Southeast markets saw a 16% year-over-year growth in assets under management in Wealth Management, reaching nearly $16 billion [9] Market Data and Key Metrics Changes - The Southeast regions contributed significantly to total middle market loan growth, with North Carolina, South Carolina, Georgia, and Alabama showing the strongest results [8] - Average cost of consumer and small business deposits in the Southeast was 191 basis points, providing a 250 basis points spread to Fed funds [8] Company Strategy and Development Direction - The company emphasized organic growth as its primary capital allocation priority, followed by dividends and share repurchases [12][35] - The focus remains on building density in branch locations to drive organic growth, particularly in the Southeast [46][77] - The company plans to continue investing in technology and sales personnel to support growth initiatives [26][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record NII for 2025, even without rate cuts for the remainder of the year [12][30] - The company is positioned to perform well in various economic environments, with a resilient business mix and defensively positioned balance sheet [11][30] - Management noted that while economic uncertainty exists, there are positive indicators for loan growth, particularly in consumer lending [71][96] Other Important Information - The company plans to resume share repurchases in the third quarter [12] - The net charge-off ratio was at the lower end of expectations, with a decrease in nonperforming assets (NPAs) [27][28] - The CET1 ratio was reported at 10.6%, consistent with near-term targets [29] Q&A Session Summary Question: Capital allocation and potential M&A - Management emphasized organic growth as the priority, with M&A being a means to achieve strategic outcomes rather than a standalone strategy [40][42] Question: Impact of tax bill on solar industry exposure - Management indicated that existing solar portfolios are unaffected, and net solar charge-offs are expected to decrease in the coming quarters [49][50] Question: Margin improvement and competitive dynamics - Management noted strong performance in demand deposits and expects continued NIM improvement driven by fixed-rate asset repricing [60][65] Question: Expectations for loan growth - Management expressed confidence in balanced growth across consumer and commercial loans, supported by diverse origination platforms [71][96] Question: Thoughts on stablecoins and regulatory relief - Management is optimistic about stablecoins' potential in cross-border payments and anticipates benefits from expected regulatory relief for regional banks [82][90]

Financial Performance - Fifth Third Bancorp's adjusted PPNR achieved its highest growth rate in 2 years[8] - The adjusted efficiency ratio improved by 130 bps[8] to 55.5%[9, 21] - Adjusted EPS was $0.90[9, 175] - Return on average tangible common equity was 18%[9] - Net interest income increased to $1.5 billion[13] Loan and Deposit Trends - Average consumer loans increased by 7% compared to 2Q24[10] - Average commercial loans increased by 4% compared to 2Q24[10] - Consumer household growth was 2% compared to 2Q24, with 6% growth in the southeast[10] - Non-interest bearing deposits represent 25.3% of total deposits[35] Credit Quality - Non-performing assets decreased by 11% sequentially[8] - Commercial non-performing assets declined by 18%[8] - Net charge-off ratio was 0.45%[37] Outlook - Average loans & leases are expected to increase by approximately 5% for FY2025 compared to FY2024[54] - Net interest income is projected to increase by 5.5% - 6.5% for FY2025 compared to FY2024[54]

Company Performance - Fifth Third Bancorp reported quarterly earnings of $0.9 per share, exceeding the Zacks Consensus Estimate of $0.87 per share, and up from $0.86 per share a year ago, representing an earnings surprise of +3.45% [1] - The company posted revenues of $2.25 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.38%, compared to year-ago revenues of $2.08 billion [2] - Over the last four quarters, Fifth Third Bancorp has surpassed consensus EPS estimates four times, but has only topped consensus revenue estimates once [2] Stock Outlook - The immediate price movement of Fifth Third Bancorp's stock will depend on management's commentary during the earnings call and future earnings expectations [3] - The stock has added about 1.8% since the beginning of the year, underperforming the S&P 500's gain of 6.5% [3] - The current consensus EPS estimate for the coming quarter is $0.93 on revenues of $2.28 billion, and for the current fiscal year, it is $3.53 on revenues of $8.96 billion [7] Industry Context - The Zacks Industry Rank for Banks - Major Regional is currently in the top 6% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

[Second Quarter 2025 Earnings Release Highlights](index=1&type=section&id=Second%20Quarter%202025%20Earnings%20Release%20Highlights) Fifth Third Bancorp reported diluted EPS of $0.88 for Q2 2025, driven by accelerated revenue growth from loan expansion and NIM expansion, demonstrating strong credit metrics, expense management, and capital generation, reaffirming its commitment to stability, profitability, and growth [Overall Performance](index=1&type=section&id=1.1%20Overall%20Performance) Fifth Third Bancorp achieved diluted EPS of $0.88 in Q2 2025, reflecting robust revenue growth from increased loan balances and expanded net interest margin, alongside improved credit quality and strengthened capital position Key Financial Data (2Q25 vs. Prior Periods): | Metric | 2Q25 | 1Q25 | 2Q24 | | :--- | :--- | :--- | :--- | | Diluted EPS | $0.88 | $0.71 | $0.81 | | Net Interest Margin | 3.12% | 3.03% | 2.88% | | Average Loans and Leases ($M) | $123,071 | $121,272 | $116,891 | | CET1 Capital | 10.56% | 10.43% | 10.62% | | Net Charge-Off Ratio | 0.45% | 0.46% | 0.49% | | Nonperforming Assets Ratio | 0.72% | 0.81% | 0.55% | - Net interest margin expanded for the sixth consecutive quarter[1](index=1&type=chunk) - Loan growth increased by **5%** year-over-year, reaching its highest level in over two years[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) CEO Tim Spence highlighted the company's strong balance sheet, diversified revenue streams, and disciplined expense management as key performance drivers, noting NIM expansion, improved credit metrics, and enhanced efficiency, reaffirming a strategic focus on stability, profitability, and growth - "Fifth Third's financial results once again highlight our strong balance sheet, diversified revenue streams, and disciplined expense management"[2](index=2&type=chunk) - "We expanded our net interest margin, improved credit metrics, and enhanced our efficiency ratio"[2](index=2&type=chunk) - By focusing on high-quality deposit generation, diversified loan origination, recurring fee income, and continuous operational scalability improvements, the company expects to continue delivering strong, stable returns for long-term shareholders in a volatile environment[4](index=4&type=chunk) - The company will continue to follow its operating principles of stability, profitability, and growth[5](index=5&type=chunk) [Income Statement Highlights](index=2&type=section&id=1.3%20Income%20Statement%20Highlights) Fifth Third Bancorp reported net income attributable to common shareholders of $591 million in Q2 2025, a 24% sequential increase, primarily driven by a 4% sequential rise in net interest income and an 8% sequential increase in noninterest income, while noninterest expense decreased by 3% sequentially Condensed Income Statement (Selected Items): | Metric | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income (NII) (FTE) | $1,500 | $1,442 | $1,393 | 4% | 8% | | Noninterest Income | $750 | $694 | $695 | 8% | 8% | | Noninterest Expense | $1,264 | $1,304 | $1,221 | (3%) | 4% | | Net Income Attributable to Common Shareholders | $591 | $478 | $561 | 24% | 5% | | Diluted EPS | $0.88 | $0.71 | $0.81 | 24% | 9% | - Reported results include a negative **$0.02** impact on diluted EPS from severance and Visa total return swap valuation[1](index=1&type=chunk)[6](index=6&type=chunk) [Net Interest Income](index=3&type=section&id=1.3.1%20Net%20Interest%20Income) Net interest income (FTE) increased by $58 million (4%) sequentially and $107 million (8%) year-over-year to $1.5 billion, driven by higher average loan balances, repricing of fixed-rate assets, and effective deposit management, which lowered interest-bearing liability costs and expanded NIM to 3.12% Net Interest Income and Net Interest Margin (FTE): | Metric | 2Q25 | 1Q25 | 2Q24 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income (FTE) ($M) | $1,500 | $1,442 | $1,393 | 4% | 8% | | Net Interest Margin (NIM) | 3.12% | 3.03% | 2.88% | 9 bps | 24 bps | | Rate Paid on Interest-Bearing Liabilities | 2.78% | 2.80% | 3.39% | (2) bps | (61) bps | - Net interest income included a **$14 million** benefit this quarter from the repayment of a previously classified nonaccrual, partially charged-off commercial loan[7](index=7&type=chunk) - Net interest margin expanded for the sixth consecutive quarter[1](index=1&type=chunk) [Noninterest Income](index=4&type=section&id=1.3.2%20Noninterest%20Income) Reported noninterest income increased by 8% both sequentially and year-over-year to $750 million, primarily due to a significant rise in "other noninterest income" and securities gains, with healthy growth in consumer banking revenue partially offset by a decline in commercial banking revenue Noninterest Income (Selected Categories): | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Noninterest Income | $750 | $694 | $695 | 8% | 8% | | Consumer Banking Revenue | $147 | $137 | $139 | 7% | 6% | | Other Noninterest Income | $44 | $14 | $7 | 214% | 529% | | Securities Gains (Losses), Net | $16 | $(9) | $3 | NM | 433% | - Consumer banking revenue increased sequentially, driven by card and processing revenue and deposit fees[11](index=11&type=chunk) - Commercial banking revenue decreased by **12%** year-over-year, primarily due to lower commercial loan fees and continued declines in operating lease income[12](index=12&type=chunk) [Noninterest Expense](index=5&type=section&id=1.3.3%20Noninterest%20Expense) Noninterest expense decreased by $40 million (3%) sequentially to $1.264 billion, mainly due to a seasonal decline in compensation and benefits, yet increased by $43 million (4%) compared to the prior year quarter Noninterest Expense (Selected Categories): | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Noninterest Expense | $1,264 | $1,304 | $1,221 | (3%) | 4% | | Compensation and Benefits | $698 | $750 | $656 | (7%) | 6% | | Technology and Communications | $126 | $123 | $114 | 2% | 11% | | Marketing Expense | $43 | $28 | $34 | 54% | 26% | - Noninterest expense, excluding certain items, decreased by **$55 million** (**4%**) sequentially, primarily reflecting a seasonal decline in compensation and benefits expense[14](index=14&type=chunk) - Noninterest expense this quarter included **$16 million** related to the mark-to-market valuation of non-qualified deferred compensation plans, largely offset in net securities gains/losses within noninterest income[14](index=14&type=chunk) [Balance Sheet Highlights](index=6&type=section&id=1.4%20Balance%20Sheet%20Highlights) In Q2 2025, average loans and leases totaled $123.071 billion, growing 1% sequentially and 5% year-over-year, driven by commercial and consumer loan growth, while average total deposits remained stable sequentially but decreased 2% year-over-year, with efforts to improve deposit mix, and average wholesale funding increased sequentially but decreased year-over-year Average Balances (Selected Items): | Metric | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average Total Loans and Leases | $123,071 | $121,272 | $116,891 | 1% | 5% | | Average Total Deposits | $163,575 | $164,157 | $167,194 | — | (2%) | | Average Total Wholesale Funding | $22,423 | $22,262 | $24,180 | 1% | (7%) | [Average Interest-Earning Assets](index=6&type=section&id=1.4.1%20Average%20Interest-Earning%20Assets) Average loans and leases grew in both commercial (1% sequentially, 4% year-over-year) and consumer (2% sequentially, 7% year-over-year) segments, notably, average other short-term investments significantly decreased by 12% sequentially and 38% year-over-year due to strategic liability management and increased lending activity Average Loans and Leases (Selected Categories): | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average Total Loans and Leases | $123,071 | $121,272 | $116,891 | 1% | 5% | | Total Commercial Loans and Leases | $75,415 | $74,676 | $72,201 | 1% | 4% | | Total Consumer Loans | $47,656 | $46,596 | $44,690 | 2% | 7% | | Average Other Short-Term Investments | $12,782 | $14,446 | $20,609 | (12%) | (38%) | - Commercial loan growth was primarily driven by commercial and industrial loans (**1%** sequentially, **3%** year-over-year) and commercial mortgage loans (**9%** year-over-year)[16](index=16&type=chunk)[17](index=17&type=chunk) - Consumer loan growth was primarily driven by indirect secured consumer loans (**5%** sequentially, **12%** year-over-year) and home equity loans (**4%** sequentially, **12%** year-over-year)[16](index=16&type=chunk)[17](index=17&type=chunk) [Average Deposits](index=8&type=section&id=1.4.2%20Average%20Deposits) Average total deposits remained stable sequentially but decreased by 2% year-over-year, primarily due to a reduction in brokered deposits and lower interest-bearing checking balances, however, demand deposits grew 3% sequentially and 2% year-over-year, reflecting successful efforts to improve deposit mix and lower deposit costs Average Deposits (Selected Categories): | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average Total Deposits | $163,575 | $164,157 | $167,194 | — | (2%) | | Demand Deposits | $40,885 | $39,788 | $40,266 | 3% | 2% | | CDs over $250K | $2,200 | $2,346 | $4,747 | (6%) | (54%) | - The growth in demand deposits is a result of the company's focus on improving its deposit mix, leading to a fourth consecutive quarter of declining deposit costs[22](index=22&type=chunk) - The period-end loan-to-core deposit ratio was **76%**, up from **75%** in the prior quarter and **72%** in the prior year quarter[23](index=23&type=chunk) [Average Wholesale Funding](index=8&type=section&id=1.4.3%20Average%20Wholesale%20Funding) Average wholesale funding increased by 1% sequentially to $22.423 billion, driven by higher short-term FHLB advances and securities sold under repurchase agreements, but decreased by 7% year-over-year, primarily due to significant reductions in large denomination CDs and long-term debt Average Wholesale Funding (Selected Categories): | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average Total Wholesale Funding | $22,423 | $22,262 | $24,180 | 1% | (7%) | | FHLB Advances | $4,976 | $4,767 | $3,165 | 4% | 57% | | CDs over $250K | $2,200 | $2,346 | $4,747 | (6%) | (54%) | - The year-over-year decrease was primarily due to lower balances of CDs over **$250K** and long-term debt, partially offset by increased utilization of short-term FHLB advances[24](index=24&type=chunk) [Credit Quality Summary](index=10&type=section&id=1.5%20Credit%20Quality%20Summary) Total provision for credit losses was $173 million in Q2 2025, with the Allowance for Credit Losses (ACL) ratio stable at 2.09% of total loans and leases; net charge-offs (NCOs) slightly increased sequentially to $139 million, but the NCO ratio decreased to 0.45%, and nonperforming assets (NPAs) and nonperforming loans (NPLs) both declined sequentially, indicating improved asset quality Credit Quality Ratios: | Metric | 2Q25 | 1Q25 | 2Q24 | Sequential Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for Credit Losses ($M) | $173 | $174 | $97 | (1%) | 78% | | Net Charge-Off Ratio | 0.45% | 0.46% | 0.49% | (1) bp | (4) bps | | Nonperforming Loans and Leases ($M) | $853 | $966 | $606 | (12%) | 41% | | Nonperforming Assets Ratio | 0.72% | 0.81% | 0.55% | (9) bps | 17 bps | | ACL as a % of Loans and Leases | 2.09% | 2.07% | 2.08% | 2 bps | 1 bp | - ACL covered **300%** of nonperforming loans and leases and **289%** of nonperforming assets[26](index=26&type=chunk) - Commercial net charge-off ratio increased by **3 basis points** sequentially to **0.38%**, while the consumer net charge-off ratio decreased by **7 basis points** sequentially to **0.56%**[27](index=27&type=chunk) [Capital Position](index=11&type=section&id=1.6%20Capital%20Position) Fifth Third Bancorp's CET1 capital ratio increased by 13 basis points sequentially to 10.56% in Q2 2025, driven by strong profitability, and the board approved a new share repurchase authorization of up to 100 million shares, signaling confidence in future capital generation Regulatory Capital Ratios: | Metric | 2Q25 | 1Q25 | 2Q24 | Sequential Change (bps) | Year-over-Year Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | | CET1 Capital | 10.56% | 10.43% | 10.62% | 13 | (6) | | Tier 1 Risk-Based Capital | 11.83% | 11.71% | 11.93% | 12 | (10) | | Total Risk-Based Capital | 13.75% | 13.63% | 13.95% | 12 | (20) | | Leverage Ratio | 9.42% | 9.23% | 9.07% | 19 | 35 | - In June 2025, the Board of Directors approved a new share repurchase authorization of up to **100 million** shares with no expiration date[31](index=31&type=chunk) - Fifth Third did not execute share repurchases during the second quarter of 2025[30](index=30&type=chunk) [Tax Rate](index=12&type=section&id=1.7%20Tax%20Rate) The effective tax rate for Q2 2025 was 22.2%, higher than 21.2% in the prior quarter and 21.3% in the prior year quarter - Effective tax rate: **22.2%** (2Q25), compared to **21.2%** in the prior quarter and **21.3%** in the prior year quarter[32](index=32&type=chunk) [Corporate Profile](index=12&type=section&id=1.8%20Corporate%20Profile) Founded in 1858, Fifth Third Bancorp is a bank committed to innovation and intelligent financial services, aiming to be a highly valued and trusted regional bank recognized for its ethical practices, having been repeatedly named one of the "World's Most Ethical Companies" by Ethisphere - Founded in 1858, focused on providing intelligent financial services to individuals, families, businesses, and communities[34](index=34&type=chunk) - Named one of the "World's Most Ethical Companies" by Ethisphere for multiple years[34](index=34&type=chunk) - Aims to be "not only the best performing regional bank in the country, but also the bank that people value and trust most"[34](index=34&type=chunk) - Common stock trades on the Nasdaq Global Select Market under the symbol "FITB"[35](index=35&type=chunk) [Forward-Looking Statements](index=13&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from projections, with key risk factors including credit quality deterioration, funding issues, regulatory changes, economic conditions, and competition; readers are advised to consult SEC filings for comprehensive risk information, with statements valid as of their release date - Statements are "forward-looking" and subject to risks and uncertainties[37](index=37&type=chunk) - Factors that could cause differences include: credit quality deterioration, loan concentrations, problems encountered by other financial institutions, insufficient funding or liquidity sources, adverse actions by rating agencies, inability to maintain or grow deposits, cybersecurity risks, adverse effects of governmental regulation, and changes in interest rates[38](index=38&type=chunk) - The company expressly disclaims any obligation to publicly update or revise any forward-looking statement, unless required by law[39](index=39&type=chunk) [Quarterly Financial Review for June 30, 2025](index=15&type=section&id=Quarterly%20Financial%20Review%20for%20June%2030%2C%202025) This section provides detailed financial statements and reconciliations for Q2 2025, covering consolidated statements of income, balance sheets, changes in equity, average balance sheets, loan and lease summaries, regulatory capital, credit loss experience, asset quality, non-GAAP reconciliations, and segment performance, offering a comprehensive view of the bank's financial position and operating results [Financial Highlights](index=15&type=section&id=3.1%20Financial%20Highlights) This section summarizes key financial data for Q2 2025 and prior periods, including income statement items, per share data, common stock data, financial ratios, credit quality metrics, average balances, and regulatory capital ratios, providing a quick overview of the company's performance and financial condition Income Statement Data (Year-to-Date): | Metric | YTD 2025 ($M) | YTD 2024 ($M) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income (FTE) | $2,942 | $2,783 | 6% | | Total Revenue (FTE) | $4,386 | $4,189 | 5% | | Net Income Attributable to Common Shareholders | $1,069 | $1,041 | 3% | | Diluted EPS | $1.58 | $1.51 | 5% | Financial Ratios (2Q25 vs. Prior Periods): | Metric | 2Q25 | 1Q25 | 2Q24 | Sequential Change (bps) | Year-over-Year Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | | Return on Average Assets | 1.20% | 0.99% | 1.14% | 21 | 6 | | Return on Average Tangible Common Equity | 17.6% | 15.2% | 19.8% | 240 | (220) | | Net Interest Margin (FTE) | 3.12% | 3.03% | 2.88% | 9 | 24 | | Efficiency (FTE) | 56.2% | 61.0% | 58.5% | (480) | (230) | - Assets under management increased by **12%** year-over-year to **$73 billion**[43](index=43&type=chunk) [Consolidated Statements of Income](index=19&type=section&id=3.2%20Consolidated%20Statements%20of%20Income) The consolidated statements of income detail the company's revenues and expenses for Q2 2025 and prior periods, showing a year-over-year decrease in total interest income, mainly from reduced interest on other short-term investments, while total interest expense significantly declined, leading to an overall increase in net interest income, with changes also observed in noninterest income and expense, collectively impacting net income attributable to common shareholders Consolidated Statements of Income (Selected Items): | Metric | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $2,484 | $2,432 | $2,620 | 2% | (5%) | | Total Interest Expense | $989 | $995 | $1,233 | (1%) | (20%) | | Net Interest Income | $1,495 | $1,437 | $1,387 | 4% | 8% | | Provision for Credit Losses | $173 | $174 | $97 | (1%) | 78% | | Total Noninterest Income | $750 | $694 | $695 | 8% | 8% | | Total Noninterest Expense | $1,264 | $1,304 | $1,221 | (3%) | 4% | | Net Income Attributable to Common Shareholders | $591 | $478 | $561 | 24% | 5% | - Interest on deposits decreased by **24%** year-over-year, contributing to an overall reduction in total interest expense[48](index=48&type=chunk) - Other noninterest income increased by **214%** sequentially and **529%** year-over-year[48](index=48&type=chunk) [Consolidated Balance Sheets](index=21&type=section&id=3.3%20Consolidated%20Balance%20Sheets) The consolidated balance sheets show total assets decreased by 1% sequentially and 2% year-over-year to $209.991 billion, primarily due to reductions in other short-term investments and available-for-sale debt securities; total deposits also declined, while total equity increased by 4% sequentially and 10% year-over-year, driven by higher retained earnings and a reduction in accumulated other comprehensive loss Consolidated Balance Sheets (Selected Items): | Metric | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | $209,991 | $212,669 | $213,262 | (1%) | (2%) | | Other Short-Term Investments | $13,043 | $14,965 | $21,085 | (13%) | (38%) | | Available-for-Sale Debt and Other Securities | $38,270 | $39,747 | $38,986 | (4%) | (2%) | | Loans and Leases | $122,396 | $122,191 | $116,579 | — | 5% | | Total Deposits | $164,207 | $165,505 | $166,768 | (1%) | (2%) | | Total Liabilities | $188,867 | $192,266 | $194,036 | (2%) | (3%) | | Total Equity | $21,124 | $20,403 | $19,226 | 4% | 10% | - Accumulated other comprehensive loss decreased by **9%** sequentially and **28%** year-over-year, positively impacting total equity[50](index=50&type=chunk) - Demand deposits increased by **3%** sequentially and **4%** year-over-year[50](index=50&type=chunk) [Consolidated Statements of Changes in Equity](index=26&type=section&id=3.4%20Consolidated%20Statements%20of%20Changes%20in%20Equity) In Q2 2025, total equity increased to $21.124 billion, primarily driven by net income and positive other comprehensive income, specifically changes in unrealized gains on available-for-sale debt securities and qualifying cash flow hedges, while the company paid cash dividends and repurchased treasury stock Total Equity (Beginning and End of Period): | Metric | 2Q25 ($M) | 2Q24 ($M) | YTD 2025 ($M) | YTD 2024 ($M) | | :--- | :--- | :--- | :--- | :--- | | Total Equity, Beginning of Period | $20,403 | $19,018 | $19,645 | $19,172 | | Net Income | $628 | $601 | $1,142 | $1,122 | | Other Comprehensive Income (Loss), Net of Tax | $349 | $(13) | $1,090 | $(414) | | Total Equity, End of Period | $21,124 | $19,226 | $21,124 | $19,226 | - Changes in unrealized gains (losses) on available-for-sale debt securities were **$179 million**, and changes in unrealized gains on qualifying cash flow hedges were **$148 million**[52](index=52&type=chunk) - Cash dividends on common stock totaled **$250 million** in Q2 2025[52](index=52&type=chunk) [Average Balance Sheets and Yield/Rate Analysis](index=27&type=section&id=3.5%20Average%20Balance%20Sheets%20and%20Yield%2FRate%20Analysis) This section details average balances of assets and liabilities, along with yield and rate analysis, showing that total interest-earning assets remained stable sequentially but decreased year-over-year, while total interest-bearing liabilities decreased both sequentially and year-over-year, resulting in an expanded net interest margin of 3.12% and a net interest spread of 2.40% Average Balances and Yield/Rate (Selected Items): | Metric | 2Q25 ($M) | Yield/Rate | 1Q25 ($M) | Yield/Rate | 2Q24 ($M) | Yield/Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Interest-Earning Assets | $192,682 | 5.18% | $192,808 | 5.13% | $194,499 | 5.43% | | Total Loans and Leases | $123,657 | 6.11% | $121,764 | 6.06% | $117,283 | 6.43% | | Total Interest-Bearing Liabilities | $142,913 | 2.78% | $144,285 | 2.80% | $146,361 | 3.39% | | Net Interest Margin (FTE) | | 3.12% | | 3.03% | | 2.88% | | Net Interest Spread (FTE) | | 2.40% | | 2.33% | | 2.04% | - The yield on total loans and leases increased by **5 basis points** sequentially to **6.11%**, while the rate paid on total interest-bearing liabilities decreased by **2 basis points** sequentially to **2.78%**[53](index=53&type=chunk) - The ratio of interest-bearing liabilities to interest-earning assets was **74.17%**, down from **74.83%** in the prior quarter[53](index=53&type=chunk) [Summary of Loans and Leases](index=30&type=section&id=3.6%20Summary%20of%20Loans%20and%20Leases) This section details average and period-end loan and lease portfolios by commercial and consumer categories, showing that average total loans and leases grew 1% sequentially and 5% year-over-year, with increases in both segments, and period-end loan portfolios exhibited similar trends Average Total Loans and Leases: | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Average Total Loans and Leases | $123,071 | $121,272 | $116,891 | 1% | 5% | | Total Commercial Loans and Leases | $75,415 | $74,676 | $72,201 | 1% | 4% | | Total Consumer Loans | $47,656 | $46,596 | $44,690 | 2% | 7% | Period-End Total Loans and Leases: | Category | 2Q25 ($M) | 1Q25 ($M) | 2Q24 ($M) | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Loans and Leases | $122,396 | $122,191 | $116,579 | — | 5% | | Total Commercial Loans and Leases | $74,152 | $75,137 | $71,783 | (1%) | 3% | | Total Consumer Loans | $48,244 | $47,054 | $44,796 | 3% | 8% | - Total loans and leases serviced for others amounted to **$94.72 billion** in Q2 2025[57](index=57&type=chunk) [Regulatory Capital](index=31&type=section&id=3.7%20Regulatory%20Capital) Fifth Third Bancorp maintained strong regulatory capital ratios in Q2 2025, with the CET1 capital ratio estimated at 10.56%, an increase of 13 basis points sequentially, and Tier 1 and Total Risk-Based Capital ratios also remained robust, indicating a sound capital position Regulatory Capital Ratios (Fifth Third Bancorp): | Metric | 2Q25 | 1Q25 | 2Q24 | Sequential Change (bps) | Year-over-Year Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | | CET1 Capital | 10.56% | 10.43% | 10.62% | 13 | (6) | | Tier 1 Risk-Based Capital | 11.83% | 11.71% | 11.93% | 12 | (10) | | Total Risk-Based Capital | 13.75% | 13.63% | 13.95% | 12 | (20) | | Leverage Ratio | 9.42% | 9.23% | 9.07% | 19 | 35 | - Risk-weighted assets increased to **$166.81 billion** in Q2 2025[58](index=58&type=chunk) - Fifth Third Bank, National Association also demonstrated strong regulatory capital ratios, with Tier 1 Risk-Based Capital at **12.85%** and a Leverage Ratio of **10.26%**[58](index=58&type=chunk) [Summary of Credit Loss Experience](index=32&type=section&id=3.8%20Summary%20of%20Credit%20Loss%20Experience) This section details net charge-off losses by loan category, showing that total net charge-off losses slightly increased sequentially to $139 million but decreased year-over-year, with a net charge-off ratio of 0.45% for total loans and leases, comprising 0.38% for commercial and 0.56% for consumer Net Charge-Off Losses ($M): | Category | 2Q25 | 1Q25 | 2Q24 | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Net Charge-Off Losses | ($139) | ($136) | ($144) | 2% | (3%) | | Total Commercial Loans and Leases | ($71) | ($64) | ($80) | 11% | (11%) | | Total Consumer Loans | ($68) | ($72) | ($64) | (6%) | 6% | Net Charge-Off Losses as a % of Average Loans and Leases (Annualized): | Category | 2Q25 | 1Q25 | 2Q24 | Sequential Change (bps) | Year-over-Year Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Commercial Loans and Leases | 0.38% | 0.35% | 0.45% | 3 | (7) | | Total Consumer Loans | 0.56% | 0.63% | 0.57% | (7) | (1) | | Net Charge-Off Losses as a % of Average Total Loans and Leases | 0.45% | 0.46% | 0.49% | (1) | (4) | - Commercial and industrial loans accounted for the largest portion of commercial net charge-off losses at **$69 million**[60](index=60&type=chunk) [Asset Quality](index=34&type=section&id=3.9%20Asset%20Quality) This section details asset quality, including Allowance for Credit Losses (ACL), nonperforming assets, and past due loans; total ACL increased to $2.558 billion, while nonaccrual loans and leases decreased sequentially to $853 million, and total nonperforming assets also declined, indicating an improvement in asset quality Allowance for Credit Losses ($M): | Category | 2Q25 | 1Q25 | 2Q24 | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Allowance for Loan and Lease Losses, Period-End | $2,412 | $2,384 | $2,288 | 1% | 5% | | Allowance for Unfunded Commitments, Period-End | $146 | $140 | $137 | 4% | 7% | | Total Allowance for Credit Losses | $2,558 | $2,524 | $2,425 | 1% | 5% | Nonperforming Assets and Past Due Loans ($M): | Category | 2Q25 | 1Q25 | 2Q24 | Sequential Change (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Nonaccrual Loans and Leases | $853 | $966 | $606 | (12%) | 41% | | Total Nonperforming Loans and Leases and OREO | $886 | $996 | $643 | (11%) | 38% | | Total Nonperforming Assets | $913 | $1,017 | $647 | (10%) | 41% | - The percentage of nonperforming assets to loans and leases and OREO decreased from **0.81%** in the prior quarter to **0.72%**[62](index=62&type=chunk) [Non-GAAP Reconciliation](index=36&type=section&id=3.10%20Non-GAAP%20Reconciliation) This section provides detailed reconciliations of various non-GAAP financial measures to their most directly comparable GAAP measures, which management uses to assess performance and provide investors with additional insight into the company's financial results, excluding certain non-recurring or non-operating items - Reconciliations are provided for metrics such as "Net Interest Income (FTE)", "Tangible Net Income Attributable to Common Shareholders", "Tangible Book Value Per Share", and "Adjusted Efficiency Ratio"[36](index=36&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - The FTE basis adjusts for the tax-exempt status of certain loan and securities income[36](index=36&type=chunk)[65](index=65&type=chunk) - Tangible metrics exclude the impact of intangible items for comparability[36](index=36&type=chunk)[66](index=66&type=chunk) - Non-GAAP financial measures should not be considered in isolation or as a substitute for analysis based on GAAP measures[36](index=36&type=chunk)[70](index=70&type=chunk) [Segment Presentation](index=39&type=section&id=3.11%20Segment%20Presentation) This section presents financial performance by business segment for Q2 2025 and prior periods, reflecting an adjustment to the reporting structure in Q1 2025, with the Commercial Banking and Consumer and Small Business Banking segments being the primary drivers of net interest income and pre-tax income - The reporting structure was adjusted in Q1 2025 to reallocate certain commercial banking client relationships from the Commercial Banking segment to the Consumer and Small Business Banking segment[75](index=75&type=chunk) - Prior period results have been adjusted to conform to the current presentation[75](index=75&type=chunk) Pre-Tax Income (FTE) by Segment (2Q25): | Segment | 2Q25 ($M) | | :--- | :--- | | Commercial Banking | $384 | | Consumer and Small Business Banking | $648 | | Wealth and Asset Management | $65 | | General Corporate and Other | $(284) | | Total | $813 | - The Consumer and Small Business Banking segment generated the highest pre-tax income (FTE) in Q2 2025[74](index=74&type=chunk)