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)

Core Viewpoint - Fifth Third Bancorp (FITB) is expected to report year-over-year growth in earnings and revenues for the second quarter of 2025, with key drivers being net interest income (NII) and loan balances, despite challenges in fee income and asset quality [1][10]. Financial Performance - The bank's earnings have consistently beaten estimates, with an average surprise of 3.45% over the last four quarters [2]. - Total average loans and leases are projected to increase by 1% from the previous quarter, estimated at $123 billion, supporting interest-earning assets [3]. - The Zacks Consensus Estimate for average interest-earning assets is $194.7 billion, indicating nearly 1% growth from the prior quarter [4]. Interest Income - Adjusted NII is expected to rise by 2-3% compared to the first quarter of 2025, with the Zacks Consensus Estimate for NII at $1.48 billion, reflecting a 3% sequential increase [5]. Non-Interest Revenues - Advisory revenues are anticipated to improve due to increased M&A activity, with commercial banking revenues estimated at $90.7 million, a 13.3% sequential rise [7]. - Mortgage banking income is expected to reach $59.7 million, suggesting a 4.7% increase from the previous quarter [8]. - Wealth and asset management revenues are projected at $171.2 million, indicating a slight decline from the prior quarter [9]. Expense Management - FITB expects adjusted non-interest expenses to decline by 5% sequentially, reflecting disciplined expense management [12]. Asset Quality - The bank is likely to maintain a modest reserve for potential delinquent loans, with the Zacks Consensus Estimate for non-performing assets at $920.7 million, a 9.5% decline from the previous quarter [13]. Earnings Estimates - The consensus estimate for earnings in the upcoming quarter is 87 cents, representing a 1.2% rise from the prior-year quarter, while revenues are expected to be $2.21 billion, a 6.4% increase year-over-year [15].

Prior to a company's earnings announcement, it is crucial to consider revisions to earnings estimates. This serves as a significant indicator for predicting potential investor actions regarding the stock. Empirical research has consistently demonstrated a robust correlation between trends in earnings estimate revision and the short- term price performance of a stock. While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examin ...

Group 1: Stock Buybacks Overview - Stock buybacks are effective for boosting share prices, especially when supported by strong fundamentals [1] - Companies with healthy balance sheets are combining repurchase plans with strategic capital returns to enhance shareholder value [1] Group 2: Collegium Pharmaceuticals - Collegium Pharmaceuticals focuses on pain management and is expected to see growing revenue and improving profitability in 2025 [2] - The company has a share count reduction of 20% year-over-year in Q1 and has authorized a new $150 million share repurchase [3] - Collegium's balance sheet shows increased cash, reduced intangibles, and flat assets, resulting in improved equity and leverage [4] Group 3: Enovix - Enovix initiated a $60 million buyback plan, which is significant as it exceeds the company's 2025 revenue outlook [6] - The company is expected to experience over 300% revenue growth by 2026, supported by improving manufacturing capabilities and market demand [7] - Enovix's balance sheet indicates a solid cash position of $248 million, equal to its total liabilities, allowing for comfortable share repurchases [7][8] Group 4: Thor Industries - Thor Industries has re-authorized a $400 million buyback plan, which represents over 8% of its market cap [11][12] - The company is experiencing growth and widening margins post-pandemic, providing sufficient cash flow to sustain buybacks and dividends [13] Group 5: Darden Restaurants - Darden Restaurants announced a $1 billion share repurchase authorization, representing 3.8% of its shares, alongside a dividend increase [16] - The decision to sell Bahama Breeze is expected to provide a cash injection and allow Darden to focus on its core business [17][18] Group 6: Fifth Third Bancorp - Fifth Third Bancorp reauthorized a buyback plan worth 100 million shares, with no expiration, to reduce share count quarterly [22] - The company has a robust dividend yield of 3.36%, expected to grow at a mid-single-digit pace annually [22] - Analyst sentiment is firming, with a consensus forecast predicting a 10% upside for the stock [23]

Company Overview - Fifth Third Bancorp (FITB) is expected to report a year-over-year increase in earnings, with a projected EPS of $0.87, reflecting a +1.2% change, and revenues anticipated at $2.21 billion, up 6.3% from the previous year [3][12] Earnings Expectations - The earnings report is scheduled for July 17, and the stock may rise if the actual results exceed expectations, while a miss could lead to a decline [2][12] - The consensus EPS estimate has been revised 0.43% higher in the last 30 days, indicating a slight positive sentiment among analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model shows a negative Earnings ESP of -0.59% for Fifth Third Bancorp, suggesting analysts have become bearish on the company's earnings prospects [12] - Despite the negative Earnings ESP, the company holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [12] Historical Performance - In the last reported quarter, Fifth Third Bancorp had an EPS of $0.73, surpassing the expected $0.70, resulting in a surprise of +4.29% [13] - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14] Industry Comparison - M&T Bank Corporation (MTB), a peer in the Zacks Banks - Major Regional industry, is expected to post earnings of $4.03 per share, indicating a +6.3% year-over-year change, with revenues projected at $2.39 billion, up 3.6% [18][19] - M&T Bank has an Earnings ESP of +0.12% and a Zacks Rank of 3, suggesting a likelihood of beating the consensus EPS estimate [20]

Industry Overview - A number of regional banks have announced significant new share buyback authorizations, indicating a level of industry-wide confidence and suggesting these firms are well-capitalized to return excess funds to shareholders [1][17]. Fifth Third Bancorp (FITB) - Fifth Third Bancorp has initiated a buyback program allowing for the repurchase of up to 100 million shares, representing approximately 15% of its outstanding shares as of June 20 [2]. - The bank's Common Equity Tier 1 (CET1) ratio is nearly 10.5%, exceeding the regulatory requirement of approximately 7.7%, which supports its ability to buy back shares [5][6]. - The firm generates around $1 billion in cash flow per quarter from its bond portfolio, further bolstering its confidence in executing buybacks [7]. Citizens Financial Group (CFG) - Citizens Financial Group has increased its share buyback authorization to $1.5 billion, which is about 8.3% of its market capitalization [9]. - The company's CET1 ratio stands at 10.6%, reflecting strong financial performance and confidence in its capital return strategy [9]. Cathay General Bancorp (CATY) - Cathay General Bancorp announced a $150 million share repurchase program, equating to around 5% of its $3 billion market cap [11]. - The bank's CET1 ratio is nearly 13.6%, indicating strong capital strength to support ongoing shareholder returns [12]. Third Coast Bancshares (TCBX) - Third Coast Bancshares announced a $30 million buyback authorization, which is approximately 7.1% of its $424 million market cap [14]. - The company's CET1 ratio has improved to 8.7%, up from 8% a year ago, indicating enhanced financial stability [15]. RBB Bancorp (RBB) - RBB Bancorp announced an $18 million buyback program, equal to around 6.2% of its $291 million market cap [16]. - The company's CET1 ratio is approximately 17.9%, showcasing strong capital adequacy [16].

Core Viewpoint - Fifth Third Bancorp (FITB) has approved a new share repurchase authorization of up to 100 million shares, replacing the previous authorization of 11.8 million shares, providing flexibility for stock buybacks without a set expiration or price limit [1][2][7] Group 1: Share Repurchase Program - The new repurchase authorization allows for buybacks through open-market transactions or privately negotiated transactions, including Rule 10b5-1 programs [2] - The repurchase program can be modified, suspended, or discontinued based on market conditions and legal requirements [2] Group 2: Dividend Actions - In September 2024, FITB announced a 5.7% increase in its quarterly dividend to 37 cents per share, marking the fourth increase in the last five years [3] - The company has a payout ratio of 44%, and with a closing price of $38.32, the annualized dividend yield stands at 3.86% [3] Group 3: Financial Position - As of March 31, 2025, FITB had cash and due from banks totaling $17.9 billion, with total debt at $19.9 billion and short-term borrowings of $5.5 billion [4] - The common equity tier (CET) 1 ratio was reported at 10.45%, indicating room for enhancing capital distribution plans [4][5] Group 4: Market Performance - Over the past year, FITB shares have gained 6.2%, while the industry has seen a growth of 17.8% [6] - Currently, FITB holds a Zacks Rank of 3 (Hold) [8]

Group 1: Industry Sentiment on Stablecoins - Senior executives from Bank of America, Fifth Third Bancorp, and U.S. Bancorp expressed openness to adopting stablecoins due to anticipated favorable regulations [1] - The current U.S. administration is viewed as the most crypto-friendly in 16 years, contributing to optimism about stablecoin adoption [6] - Executives are engaging in discussions about potential joint stablecoin initiatives, indicating a shift in sentiment towards crypto [7] Group 2: Regulatory Developments - U.S. regulators are advancing efforts to regulate payment stablecoins, with two major bipartisan bills introduced: the GENIUS Act and the STABLE Act [2] - The GENIUS Act defines payment stablecoins, mandates one-to-one reserves, and prohibits algorithmic stablecoins, with federal oversight for issuers over $10 billion in assets [3] - The STABLE Act proposes a centralized regulatory structure, similar reserve requirements, and a two-year moratorium on algorithmic stablecoins [4] Group 3: Benefits and Opportunities - Executives highlighted transaction speed, deposit retention, and payment efficiency as key benefits of stablecoins [8] - Stablecoins are seen as a means to facilitate instantaneous international payments and collateral movement, creating efficiencies in commerce [8] - Large global banks are expected to benefit from stablecoin adoption due to their solid liquidity positions, while smaller regional banks may face challenges [10]

Summary of the Conference Call Company Overview - The conference featured Fifth Third Bank, represented by Chief Financial Officer Brian Preston, discussing their strategies and performance in the financial sector, particularly focusing on their expansion in the Southeast region and various banking services. Key Points Southeast Expansion Strategy - Fifth Third Bank has accelerated its branch openings in the Southeast from 25 to 50 branches per year, with 140 branches already opened and 150 locations under contract for future openings [5][6] - The bank emphasizes maintaining discipline in branch location selection and has a strong focus on consumer deposits, boasting one of the highest concentrations of consumer-oriented deposits among peers [7][8] Competitive Landscape - The banking market in the Southeast is highly competitive, but Fifth Third Bank feels confident in its ability to navigate this competition due to investments in analytics, marketing, and personnel [10][11] - The bank has not yet seen significant increased competition in retail banking, as new entrants are still in the process of opening branches [12][13] Market Strategy - Fifth Third Bank aims for a market share of 7% to 8% in new markets to ensure they are part of the consumer's consideration set when choosing a bank [14][15] - The bank coordinates its marketing and analytics efforts to effectively attract customers and increase market share [16][17] Crypto Strategy - The bank is exploring opportunities in the crypto space, particularly with stablecoins, to enhance efficiencies in international payments and collateral optimization [21][22] - Fifth Third Bank is not currently engaged in significant crypto activities but is building relationships with infrastructure providers in the crypto space [23][24] Economic Environment and Loan Growth - The bank has observed increased confidence among clients regarding future investments, despite initial caution due to tariff concerns [27][28] - Loan utilization rates have increased from 35.5% to 37.5%, indicating a positive trend in borrowing activity [29][30] - The bank is optimistic about loan growth for the remainder of the year, supported by favorable tax policies and economic conditions [36][39] Consumer Lending Performance - The consumer portfolio is performing well, with strong growth in auto loans and home equity lending [45][46] - The bank has minimal exposure to subprime lending, focusing instead on prime and super-prime borrowers [47] Private Credit and Deposits - Fifth Third Bank is evaluating its role in the private credit market, recognizing its potential for leverage in transactions [48][49] - The bank has successfully reduced brokered CDs by $4 billion, allowing for reinvestment in core deposits [54][55] Deposit Pricing Strategy - The bank adjusts deposit pricing based on regional competition, leveraging its multi-region footprint to optimize strategies [57][58] - The bank has seen strong retention rates for deposits even after repricing, indicating effective management of deposit costs [62] Net Interest Income (NII) and Fee Growth - NII growth is expected to be driven equally by loan growth and fixed-rate asset repricing, with a significant impact from the yield curve [64][65] - The bank is focusing on enhancing fee income through innovative treasury management solutions and growth in its wealth management business [66][70] Expense Management and Credit Quality - Fifth Third Bank anticipates 2% to 3% expense growth in 2025, with ongoing investments in retail branches and technology [74][75] - Credit quality remains strong, with improving asset quality trends and a focus on managing non-performing assets [78][79] Capital Management - The bank targets a capital ratio of 10.5% and is comfortable with its current capital levels despite market volatility [84][85] Additional Insights - The bank's approach to integrating technology and analytics into its operations is seen as a key driver for future growth and efficiency [75][76] - The focus on community engagement and relationship banking is highlighted as a strategic advantage in building customer loyalty [19][20]