Market Overview - The U.S. stock market is showing strong momentum, particularly in technology stocks, despite a government shutdown [1][2] - Major market indexes are near record highs, indicating resilience amid political uncertainty [1][2] Major Market Indexes - The S&P 500 Index (SPX) is up approximately 0.3%, continuing its all-time highs [2] - The Nasdaq Composite (IXIC) is performing even better, up around 0.4% to 0.7%, but has not yet surpassed its previous record [2] - The Dow Jones Industrial Average (DJI) is struggling, falling into the red after an earlier rise [2] - The small-cap Russell 2000 (RUT) has reached an all-time peak above 2,500, reflecting broad market strength [2] Key Corporate News - Advanced Micro Devices (AMD) shares surged by 32.6% following a major deal with OpenAI, which will use AMD's chips for its AI infrastructure [3] - Nvidia (NVDA) saw a decline of 1.5% despite announcing a $100 billion investment in OpenAI [3] - Comerica (CMA) shares jumped 10.9% in pre-market trading and 16.5% by midday after Fifth Third Bancorp (FITB) announced an acquisition deal valued at $10.9 billion [4] - Fifth Third Bancorp's shares dipped 4.7% pre-market but later gained 1% by midday [4] - Archer Aviation Inc. (ACHR) rose 10.1% amid rumors of a partnership with Tesla (TSLA) [5] - Critical Metals Corp (CRML) surged 94.5% after reports of U.S. government discussions to acquire a stake in the company [5] - Quantum Computing Inc (QUBT) fell 10.5% after agreeing to sell shares at a discount [5] Sector Performance - The pharmaceutical sector is highlighted by Pfizer (PFE), which gained 15% last week due to a drug-pricing deal with the U.S. government [6] - The S&P 500 Pharmaceuticals Index experienced its strongest weekly performance in 23 years [6] Upcoming Market Events - The ongoing government shutdown is affecting the release of key economic data, including the September jobs report [7] - Investors are awaiting the Federal Reserve's minutes from its last meeting, expected to provide insights into interest rate cuts [8] - Fed Chair Jerome Powell is scheduled to speak on October 9, which may offer further guidance on monetary policy [9] - The third-quarter earnings season is starting, with major companies like Delta Air Lines (DAL), PepsiCo (PEP), and Levi Strauss & Co. (LEVI) set to report [10] Market Sentiment - Overall market sentiment remains optimistic, driven by AI growth and resilient consumer spending, despite geopolitical uncertainties [11]

Mergers and Acquisitions - Fifth Third Bancorp (FITB) announced its acquisition of Comerica Incorporated (CMA) in an all-stock transaction valued at $10.9 billion, with Comerica shareholders receiving 1.8663 Fifth Third shares for each share, equating to $82.88 per share based on Fifth Third's closing price on October 3, 2025, aiming to create the 9th largest U.S. bank with approximately $288 billion in assets [2][9] - Qualtrics (XM) is set to acquire Press Ganey Forsta for $6.75 billion, including debt, to enhance its experience management and market research capabilities [3][9] Regulatory Environment - Apple (AAPL) is under investigation in France regarding Siri voice recordings, with allegations of GDPR violations and unlawful data processing without user consent, following a $95 million settlement in the U.S. over similar issues [4][9] - The ongoing government shutdown has paused antitrust cases against major tech companies, including Amazon (AMZN) and Apple (AAPL), potentially affecting the timelines for significant legal challenges [5][7][9] Semiconductor Sector - Melius Research raised its price target for Nvidia Corp (NVDA) to $275 from $240, reflecting optimism about Nvidia's market position and growth prospects [8][10] - Morgan Stanley upgraded Micron Technology Inc (MU) to Overweight from Equal-Weight, citing stronger-than-expected DRAM pricing and raised its price target to $220 from $160, anticipating multiple quarters of double-digit price increases [10][9] Investment Trends - Blackstone and Lunate are partnering to establish a $5 billion logistics investments platform, indicating strong investment interest in the logistics and supply chain sectors [12] - A general sentiment among investors suggests a long-term commitment to the market, indicating resilience despite fluctuations [12] Geopolitical Tensions - China has threatened retaliation against the UK over proposed foreign influence rules, warning of negative consequences if the UK government targets parts of its security apparatus under new regulations [11]

Company Overview - Fifth Third Bancorp is based in Cincinnati, Ohio and was founded in 1858 [1] - The company has a market capitalization of $30 billion and assets exceeding $200 billion [1] Investment Focus - Binary Tree Analytics (BTA) specializes in providing transparency and analytics for capital markets instruments and trades, focusing on Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations [2] - BTA aims to deliver high annualized returns with a low volatility profile, leveraging over 20 years of investment experience [2]

Group 1 - The company reaffirmed its loan guidance and increased its PPNR guidance by 3% due to stronger fee income [2] - The company updated its credit loss outlook and shared positive developments regarding growth strategies [2] - A significant fraud issue was identified in the collateral file related to a client for whom the company provides an asset-backed warehouse facility [3][4] Group 2 - The client involved has been in business for nearly two decades, transacts with global lenders, and is backed by sophisticated equity investors [3] - The client is an issuer of rated securitizations and is audited by a major accounting firm [3]

Core Insights - Several banks, including JPMorgan Chase & Co., Fifth Third Bancorp, and Barclays Plc, are preparing for potential losses amounting to hundreds of millions of dollars linked to loans from subprime auto lender Tricolor Holdings [1] Group 1: Financial Impact - Fifth Third Bancorp disclosed in a regulatory filing that it anticipates an impairment charge of up to $200 million due to alleged fraudulent activities involving a commercial borrower [2] - The outstanding balance on Fifth Third's asset-backed finance loan related to Tricolor is approximately $200 million, with the bank expecting a non-cash charge of $170 million to $200 million in Q3 [4] Group 2: Company Operations - Tricolor specializes in lending to borrowers in the US southwest with poor or no credit scores, funding loans partially through asset-backed securities [3] - Recently, Tricolor sold a $217 million bond in early June, with JPMorgan and Barclays leading the offering [3] Group 3: Market Reaction - Following reports of Tricolor furloughing most of its staff, the company's asset-backed securities experienced a decline in trading value [5] - Fifth Third's shares fell by 2.5% to $44.30 in late trading [5]

Part I. Financial Information [Glossary of Abbreviations and Acronyms](index=5&type=section&id=Glossary%20of%20Abbreviations%20and%20Acronyms) This section defines abbreviations and acronyms used in the financial statements and MD&A, serving as a reference tool for readers - The glossary defines key financial and regulatory terms such as **ACL**, **FTE**, **NII**, and **CET1** to aid in understanding the report[10](index=10&type=chunk)[11](index=11&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2)](index=6&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28Item%202%29) This section analyzes Fifth Third Bancorp's financial condition and operations, covering overview, non-GAAP measures, accounting standards, policies, income, balance sheet, segments, and risk management [Overview](index=6&type=section&id=Overview) Fifth Third Bancorp, with **$210 billion in assets**, is a diversified financial services company whose revenue is primarily driven by **67% net interest income** and **33% noninterest income**, influenced by market conditions and strategic share repurchases Fifth Third Bancorp Key Information (June 30, 2025) | Metric | Value | | :-------------------------------- | :------------------- | | Total Assets | $210 billion | | Banking Centers | 1,089 | | Branded ATMs | 2,170 | | Revenue Composition (FTE) | | | - Net Interest Income | 67% | | - Noninterest Income | 33% | - The Bancorp settled a **$225 million** accelerated share repurchase in Q1 2025 and authorized the purchase of **100 million** additional common shares on June 13, 2025[19](index=19&type=chunk) - On January 28, 2025, the Bank issued **$700 million** in fixed/floating-rate senior notes and **$300 million** in floating-rate senior notes, both due January 28, 2028[21](index=21&type=chunk)[22](index=22&type=chunk) - The 'One Big Beautiful Bill Act,' enacted July 4, 2025, introduced significant U.S. tax code changes, with the Bancorp evaluating its impact on the effective tax rate and deferred tax assets/liabilities, to be reflected in Q3 2025 financial statements[24](index=24&type=chunk) Key Performance Indicators (June 30, 2025 vs. 2024) | Indicator | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :--------------------------------------- | :------ | :------ | :-------------- | :------ | :------ | :-------------- | | Net income available to common shareholders ($M) | $591 | $561 | 5% | $1,069 | $1,041 | 3% | | Diluted EPS | $0.88 | $0.81 | 9% | $1.58 | $1.51 | 5% | | Net interest income (FTE) ($M) | $1,500 | $1,393 | 8% | $2,942 | $2,783 | 6% | | Noninterest income ($M) | $750 | $695 | 8% | $1,444 | $1,406 | 3% | | Total revenue (FTE) ($M) | $2,250 | $2,088 | 8% | $4,386 | $4,189 | 5% | | Provision for credit losses ($M) | $173 | $97 | 78% | $347 | $191 | 82% | | Noninterest expense ($M) | $1,264 | $1,221 | 4% | $2,568 | $2,562 | —% | | Return on average assets | 1.20% | 1.14% | 5% | 1.09% | 1.06% | 3% | | Return on average common equity | 12.8% | 13.6% | (6)% | 11.8% | 12.6% | (6)% | | CET1 Capital Ratio | 10.58% | N/A | N/A | N/A | N/A | N/A | | Nonperforming Portfolio Assets Ratio | 0.72% | N/A | N/A | N/A | N/A | N/A | | Net Charge-off Ratio | 0.45% | 0.49% | (8)% | 0.45% | 0.44% | 2% | [Non-GAAP Financial Measures](index=11&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures, including net interest income (FTE), return on average tangible common equity, and tangible capital ratios, to U.S. GAAP for industry comparative analysis and additional performance insights - Non-GAAP measures such as **Net Interest Income (FTE)**, **Net Interest Margin (FTE)**, and **Efficiency Ratio (FTE)** are presented for tax-favored income adjustments and industry comparisons[38](index=38&type=chunk)[39](index=39&type=chunk) Non-GAAP Financial Measures (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | | Net interest income (U.S. GAAP) ($M) | $1,495 | $1,387 | $2,932 | $2,771 | | FTE adjustment ($M) | $5 | $6 | $10 | $12 | | Net interest income on an FTE basis ($M) | $1,500 | $1,393 | $2,942 | $2,783 | | Net interest margin on an FTE basis | 3.12% | 2.88% | 3.08% | 2.87% | | Net interest rate spread on an FTE basis | 2.40% | 2.04% | 2.36% | 2.04% | | Efficiency ratio on an FTE basis | 56.2% | 58.5% | 58.6% | 61.2% | Return on Average Tangible Common Equity (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------ | | Tangible net income available to common shareholders ($M) | $596 | $568 | $1,080 | $1,055 | | Average tangible common equity ($M) | $13,557 | $11,562 | $13,220 | $11,567 | | Return on average tangible common equity | 17.6% | 19.8% | 16.5% | 18.3% | Non-GAAP Capital Ratios (June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 | Dec 31, 2024 | | :--------------------------------------- | :------------ | :----------- | | Tangible equity as a percentage of tangible assets | 9.39% | 9.02% | | Tangible common equity as a percentage of tangible assets | 8.38% | 8.03% | [Recent Accounting Standards](index=13&type=section&id=Recent%20Accounting%20Standards) The Bancorp adopted **ASU 2023-09** on January 1, 2025, amending income tax disclosures, and is evaluating **ASU 2024-03**, effective in 2027, for disaggregating income statement expenses - **ASU 2023-09**, adopted January 1, 2025, mandates new disclosures for effective tax rate reconciliation and income taxes paid, while discontinuing certain other requirements[328](index=328&type=chunk) - **ASU 2024-03**, effective in 2027, introduces new requirements for disaggregating income statement expenses, including compensation and depreciation, with the Bancorp currently evaluating its impact[329](index=329&type=chunk) [Critical Accounting Policies](index=13&type=section&id=Critical%20Accounting%20Policies) The Bancorp's critical accounting policies, including **ALLL**, reserve for unfunded commitments, and fair value measurements, involve significant judgment, with no material changes to valuation techniques during H1 2025 - Key critical accounting policies include **ALLL**, reserve for unfunded commitments, valuation of servicing rights, goodwill, legal contingencies, and fair value measurements[46](index=46&type=chunk) - No material changes to valuation techniques or models occurred during the six months ended June 30, 2025[46](index=46&type=chunk) [Statements of Income Analysis](index=13&type=section&id=Statements%20of%20Income%20Analysis) Net income available to common shareholders increased by **5% to $591 million** in Q2 2025 and **3% to $1.1 billion** in H1 2025, driven by higher net interest and noninterest income, despite increased provision for credit losses and noninterest expenses Net Income Available to Common Shareholders (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change (QoQ) | | :--------------------------------------- | :----------- | :----------- | :-------------- | | Net income available to common shareholders | $591 | $561 | 5% | | Diluted EPS | $0.88

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) Fifth Third Bancorp achieved strong Q2 2025 results, marked by increased diluted EPS, expanding net interest margin, improved credit quality, and robust loan growth [Key Financial Data & Highlights](index=1&type=section&id=Key%20Financial%20Data) Fifth Third Bancorp reported strong Q2 2025 results with diluted EPS of $0.88, driven by accelerating revenue growth from continued loan growth and net interest margin expansion. The company demonstrated stability with declining net charge-off ratios and nonperforming assets, improved profitability through disciplined expense management and NIM expansion, and robust loan and asset under management growth Key Financial Data (2Q25 vs. 1Q25 vs. 2Q24) | Key Financial Data | 2Q25 | 1Q25 | 2Q24 | | :------------------------------------ | :--- | :--- | :--- | | **Income Statement Data ($ in millions)** | | | | | Net income available to common shareholders | $591 | $478 | $561 | | Net interest income (U.S. GAAP) | 1,495 | 1,437 | 1,387 | | Net interest income (FTE) (a) | 1,500 | 1,442 | 1,393 | | Noninterest income | 750 | 694 | 695 | | Noninterest expense | 1,264 | 1,304 | 1,221 | | **Per Share Data ($)** | | | | | Earnings per share, basic | $0.88 | $0.71 | $0.82 | | Earnings per share, diluted | 0.88 | 0.71 | 0.81 | | Book value per share | 28.47 | 27.41 | 25.13 | | (a) Tangible book value per share | 20.98 | 19.92 | 17.75 | | **Balance Sheet & Credit Quality ($ in millions, except percentages)** | | | | | Average portfolio loans and leases | $123,071 | $121,272 | $116,891 | | Average deposits | 163,575 | 164,157 | 167,194 | | Accumulated other comprehensive loss | (3,546) | (3,895) | (4,901) | | (b) Net charge-off ratio | 0.45 % | 0.46 % | 0.49 % | | Nonperforming asset ratio (c) | 0.72 | 0.81 | 0.55 | | **Financial Ratios (percentages)** | | | | | Return on average assets | 1.20 % | 0.99 % | 1.14 % | | Return on average common equity | 12.8 | 10.8 | 13.6 | | Return on average tangible common equity (a) | 17.6 | 15.2 | 19.8 | | (d)(e) CET1 capital | 10.56 | 10.43 | 10.62 | | (a) Net interest margin | 3.12 | 3.03 | 2.88 | | (a) Efficiency | 56.2 | 61.0 | 58.5 | - Key Highlights: - **Stability**: Net charge-off ratio declined **1 bp sequentially** and **4 bps compared to 2Q24**; NPAs decreased **11% sequentially**. Interest-bearing liabilities costs down **2 bps QoQ**; **4% DDA growth YoY**. Strong profitability resulted in **CET1 increasing 13 bps to 10.56%**[1](index=1&type=chunk) - **Profitability**: Disciplined expense management; efficiency ratio of **56.2%**; adjusted efficiency ratio of **55.5%**, an improvement of **130 bps YoY**. Net interest margin expanded for the **6th consecutive quarter**. Adjusted ROTCE ex. AOCI of **13.9%** and adjusted ROA of **1.22%**[1](index=1&type=chunk) - **Growth**: **5% loan growth compared to 2Q24**; annual loan growth reaches highest level in over two years. Consumer household growth of **2%**, including **6% in the Southeast**. Assets under management of **$73 billion**, up **12% compared to 2Q24**[1](index=1&type=chunk) [CEO Statement](index=1&type=section&id=From%20Tim%20Spence%2C%20Fifth%20Third%20Chairman%2C%20CEO%20and%20President) CEO Tim Spence highlighted the strong balance sheet, diverse revenue streams, and disciplined expense management, leading to expanded net interest margin, improved credit metrics, and a strengthened efficiency ratio - Adjusted revenues and adjusted PPNR increased year-over-year by **6%** and **10%**, respectively, marking the highest growth rate in the past two years[3](index=3&type=chunk) - CET1 capital increased **13 basis points to 10.56%** and tangible book value per share grew **18% over the past year**[1](index=1&type=chunk)[3](index=3&type=chunk) - The company will continue to adhere to its operating principles of stability, profitability, and growth – in that order[5](index=5&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) Fifth Third Bancorp's Q2 2025 financial performance showed significant revenue growth, disciplined expense management, and continued balance sheet expansion [Income Statement Highlights](index=2&type=section&id=Income%20Statement%20Highlights) Fifth Third Bancorp reported a significant sequential increase in net income available to common shareholders and diluted EPS for Q2 2025, with NII and noninterest income also showing strong growth Condensed Statements of Income (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions, except per share data) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :----------------------------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | (a) Net interest income (NII) | $1,500 | $1,442 | $1,393 | 4% | 8% | | Provision for credit losses | 173 | 174 | 97 | (1)% | 78% | | Noninterest income | 750 | 694 | 695 | 8% | 8% | | Noninterest expense | 1,264 | 1,304 | 1,221 | (3)% | 4% | | Income before income taxes (a) | $813 | $658 | $770 | 24% | 6% | | Net income available to common shareholders | $591 | $478 | $561 | 24% | 5% | | Earnings per share, diluted | $0.88 | $0.71 | $0.81 | 24% | 9% | - Diluted earnings per share impact of certain item(s) was **$(0.02) in 2Q25**, primarily due to severance expense and valuation of Visa total return swap[6](index=6&type=chunk) [Net Interest Income (NII)](index=3&type=section&id=Net%20Interest%20Income) Net Interest Income (NII) increased sequentially by 4% and year-over-year by 8%, driven by higher average loan balances, fixed-rate asset repricing, and strategic deposit management Net Interest Income (FTE) and Average Yield/Rate Analysis | (a) (FTE; $ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :----------------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | Net interest income (NII) | $1,500 | $1,442 | $1,393 | 4% | 8% | | Yield on interest-earning assets | 5.18 % | 5.13 % | 5.43 % | 5 bps | (25) bps | | Rate paid on interest-bearing liabilities | 2.78 % | 2.80 % | 3.39 % | (2) bps | (61) bps | | Net interest rate spread | 2.40 % | 2.33 % | 2.04 % | 7 bps | 36 bps | | Net interest margin (NIM) | 3.12 % | 3.03 % | 2.88 % | 9 bps | 24 bps | - NII increased **$58 million, or 4%**, compared to the prior quarter, primarily reflecting higher average loan balances, fixed-rate asset repricing, and strategic deposit management actions decreasing the cost of interest-bearing deposits[7](index=7&type=chunk) - Net interest margin (NIM) increased **9 bps sequentially** and **24 bps year-over-year**, marking the **6th consecutive quarter of expansion**[1](index=1&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Noninterest Income](index=4&type=section&id=Noninterest%20Income) Reported noninterest income increased 8% sequentially and year-over-year. Excluding certain items, noninterest income grew 2% sequentially and 3% year-over-year, with consumer banking revenue and mortgage banking net revenue showing notable increases Noninterest Income (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :------------------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | Wealth and asset management revenue | $166 | $172 | $159 | (3)% | 4% | | Commercial payments revenue | 152 | 153 | 154 | (1)% | (1)% | | Consumer banking revenue | 147 | 137 | 139 | 7% | 6% | | Capital markets fees | 90 | 90 | 93 | — | (3)% | | Commercial banking revenue | 79 | 80 | 90 | (1)% | (12)% | | Mortgage banking net revenue | 56 | 57 | 50 | (2)% | 12% | | Other noninterest income | 44 | 14 | 7 | 214% | 529% | | Securities gains (losses), net | 16 | (9) | 3 | NM | 433% | | Total noninterest income | $750 | $694 | $695 | 8% | 8% | Noninterest Income excluding certain items (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :-------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | Noninterest income (U.S. GAAP) | $750 | $694 | $695 | | | | Valuation of Visa total return swap | 1 | 18 | 23 | | | | Legal settlements and remediations | — | — | 2 | | | | Securities (gains) losses, net | (16) | 9 | (3) | | | | Noninterest income excluding certain items (a) | $735 | $721 | $717 | 2% | 3% | - Consumer banking revenue increased **$10 million, or 7% sequentially**, driven by card and processing revenue and deposit fees[11](index=11&type=chunk) - Mortgage banking net revenue increased **$6 million, or 12% year-over-year**, due to the prior year loss on MSR net valuation adjustments not recurring in the current quarter[12](index=12&type=chunk) [Noninterest Expense](index=5&type=section&id=Noninterest%20Expense) Reported noninterest expense decreased 3% sequentially but increased 4% year-over-year. Excluding certain items, noninterest expense decreased 4% sequentially, primarily due to a seasonal decrease in compensation and benefits Noninterest Expense (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :------------------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | Compensation and benefits | $698 | $750 | $656 | (7)% | 6% | | Technology and communications | 126 | 123 | 114 | 2% | 11% | | Net occupancy expense | 83 | 87 | 83 | (5)% | — | | Equipment expense | 41 | 42 | 38 | (2)% | 8% | | Loan and lease expense | 36 | 30 | 33 | 20% | 9% | | Marketing expense | 43 | 28 | 34 | 54% | 26% | | Card and processing expense | 22 | 21 | 21 | 5% | 5% | | Other noninterest expense | 215 | 223 | 242 | (4)% | (11)% | | Total noninterest expense | $1,264 | $1,304 | $1,221 | (3)% | 4% | Noninterest Expense excluding certain item(s) (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :-------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | Noninterest expense (U.S. GAAP) | $1,264 | $1,304 | $1,221 | | | | Severance expense | (15) | — | — | | | | Legal settlements and remediations | — | — | (11) | | | | FDIC special assessment | — | — | (6) | | | | Noninterest expense excluding certain item(s) (a) | $1,249 | $1,304 | $1,204 | (4)% | 4% | - Noninterest expense excluding certain items decreased **$55 million, or 4%**, compared to the prior quarter, primarily reflecting a seasonal decrease in compensation and benefits expense[14](index=14&type=chunk) [Balance Sheet Highlights](index=6&type=section&id=Balance%20Sheet%20Highlights) The balance sheet showed continued loan growth, particularly in consumer segments, while average deposits remained stable sequentially and wholesale funding decreased year-over-year, reflecting proactive liability management [Average Interest-Earning Assets](index=6&type=section&id=Average%20Interest-Earning%20Assets) Total average portfolio loans and leases increased 1% sequentially and 5% year-over-year, driven by growth in both commercial and consumer segments. Securities and other short-term investments decreased, reflecting liability management and increased lending Average Portfolio Loans and Leases (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :------------------------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | Commercial loans and leases: | | | | | | | Commercial and industrial loans | $54,075 | $53,401 | $52,357 | 1% | 3% | | Commercial mortgage loans | 12,410 | 12,368 | 11,352 | — | 9% | | Commercial construction loans | 5,810 | 5,797 | 5,917 | — | (2)% | | Commercial leases | 3,120 | 3,110 | 2,575 | — | 21% | | Total commercial loans and leases | $75,415 | $74,676 | $72,201 | 1% | 4% | | Consumer loans: | | | | | | | Residential mortgage loans | $17,615 | $17,552 | $17,004 | — | 4% | | Home equity | 4,383 | 4,222 | 3,929 | 4% | 12% | | Indirect secured consumer loans | 17,248 | 16,476 | 15,373 | 5% | 12% | | Credit card | 1,659 | 1,627 | 1,728 | 2% | (4)% | | Solar energy installation loans | 4,268 | 4,221 | 3,916 | 1% | 9% | | Other consumer loans | 2,483 | 2,498 | 2,740 | (1)% | (9)% | | Total consumer loans | $47,656 | $46,596 | $44,690 | 2% | 7% | | Total average portfolio loans and leases | $123,071 | $121,272 | $116,891 | 1% | 5% | - Total average portfolio loans and leases increased **1% sequentially** and **5% year-over-year**[16](index=16&type=chunk)[17](index=17&type=chunk) - Average other short-term investments decreased **12% sequentially** and **38% year-over-year** due to proactive liability management and increased lending activity[18](index=18&type=chunk) [Average Deposits](index=8&type=section&id=Average%20Deposits) Total average deposits were stable sequentially, with demand deposits increasing and interest checking/savings declining. Year-over-year, total average deposits decreased 2%, primarily due to reduced brokered deposits. The period-end loan-to-core deposit ratio increased to 76% Average Deposits (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :------------------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | Demand | $40,885 | $39,788 | $40,266 | 3% | 2% | | Interest checking | 56,738 | 57,964 | 58,156 | (2)% | (2)% | | Savings | 16,962 | 17,226 | 17,747 | (2)% | (4)% | | Money market | 36,296 | 36,453 | 35,511 | — | 2% | | Total transaction deposits | $150,881 | $151,431 | $151,680 | — | (1)% | | CDs $250,000 or less | 10,494 | 10,380 | 10,767 | 1% | (3)% | | Total core deposits | $161,375 | $161,811 | $162,447 | — | (1)% | | CDs over $250,000 | 2,200 | 2,346 | 4,747 | (6)% | (54)% | | Total average deposits | $163,575 | $164,157 | $167,194 | — | (2)% | - Demand deposits increased **3% sequentially**, a result of the focus on improving deposit mix, leading to four consecutive quarters of declining deposit costs[22](index=22&type=chunk) - The period-end portfolio loan-to-core deposit ratio was **76%** in the current quarter, compared to **75%** in the prior quarter and **72%** in the year-ago quarter[23](index=23&type=chunk) [Average Wholesale Funding](index=8&type=section&id=Average%20Wholesale%20Funding) Average wholesale funding increased 1% sequentially but decreased 7% year-over-year, primarily due to lower balances in CDs over $250,000 and long-term debt, partially offset by increased FHLB advances Average Wholesale Funding (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | % Change Seq | % Change Yr/Yr | | :-------------------------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | CDs over $250,000 | $2,200 | $2,346 | $4,747 | (6)% | (54)% | | Federal funds purchased | 206 | 194 | 230 | 6% | (10)% | | Securities sold under repurchase agreements | 353 | 286 | 373 | 23% | (5)% | | FHLB advances | 4,976 | 4,767 | 3,165 | 4% | 57% | | Derivative collateral and other secured borrowings | 89 | 84 | 54 | 6% | 65% | | Long-term debt | 14,599 | 14,585 | 15,611 | — | (6)% | | Total average wholesale funding | $22,423 | $22,262 | $24,180 | 1% | (7)% | - Average wholesale funding increased **1% sequentially**, driven by higher short-term FHLB advances and securities sold under repurchase agreements, partially offset by a reduction in CDs over **$250,000**[24](index=24&type=chunk) - The **7% decrease** in average wholesale funding compared to the year-ago quarter was primarily due to lower balances in CDs over **$250,000** and long-term debt[24](index=24&type=chunk) [Credit Quality Summary](index=10&type=section&id=Credit%20Quality%20Summary) Credit quality metrics showed improvement sequentially, with the net charge-off ratio declining and nonperforming assets decreasing, while the Allowance for Credit Losses (ACL) remained strong Credit Quality Summary (2Q25 vs. 1Q25 vs. 2Q24) | ($ in millions) | June 2025 | March 2025 | June 2024 | | :-------------- | :-------- | :--------- | :-------- | | Total nonaccrual portfolio loans and leases (NPLs) | $853 | $966 | $606 | | Total nonperforming portfolio loans and leases and OREO (NPAs) | $886 | $996 | $643 | | NPL ratio | 0.70 % | 0.79 % | 0.52 % | | NPA ratio | 0.72 % | 0.81 % | 0.55 % | | Provision for loan and lease losses | 167 | 168 | 114 | | ALLL, ending | $2,412 | $2,384 | $2,288 | | Total allowance for credit losses (ACL) | $2,558 | $2,524 | $2,425 | | ACL as a % of portfolio loans and leases | 2.09 % | 2.07 % | 2.08 % | | ACL as a % of nonperforming portfolio loans and leases | 300 % | 261 % | 400 % | | Total net losses charged-off | $(139) | $(136) | $(144) | | Net charge-off ratio (NCO ratio) | 0.45 % | 0.46 % | 0.49 % | | Commercial NCO ratio | 0.38 % | 0.35 % | 0.45 % | | Consumer NCO ratio | 0.56 % | 0.63 % | 0.57 % | - The net charge-off ratio (NCO ratio) decreased **1 bp sequentially to 0.45%** and **4 bps compared to 2Q24**[1](index=1&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - Nonperforming portfolio assets (NPAs) totaled **$886 million** in the current quarter, resulting in an NPA ratio of **0.72%**, compared to **0.81%** in the prior quarter, a decrease of **11% sequentially**[1](index=1&type=chunk)[29](index=29&type=chunk) - The Allowance for Credit Losses (ACL) ratio represented **2.09% of total portfolio loans and leases** and covered **300% of nonperforming portfolio loans and leases**[26](index=26&type=chunk) [Capital Position](index=11&type=section&id=Capital%20Position) Fifth Third Bancorp maintained a strong capital position, with the CET1 capital ratio increasing sequentially to 10.56% due to strong profitability, and approved a new share repurchase authorization Capital Position (Regulatory Capital Ratios) | Capital Position | June 2025 | March 2025 | June 2024 | | :--------------- | :-------- | :--------- | :-------- | | CET1 capital | 10.56 % | 10.43 % | 10.62 % | | Tier 1 risk-based capital | 11.83 % | 11.71 % | 11.93 % | | Total risk-based capital | 13.75 % | 13.63 % | 13.95 % | | Leverage | 9.42 % | 9.23 % | 9.07 % | - The CET1 capital ratio of **10.56%** increased **13 bps sequentially**, driven by strong profitability[1](index=1&type=chunk)[30](index=30&type=chunk) - Fifth Third's Board of Directors approved a new share repurchase authorization of up to **100 million shares** in June 2025, with no expiration date[31](index=31&type=chunk) [Other Information](index=12&type=section&id=Other%20Information) This section provides supplementary details on tax rates, conference calls, corporate profile, forward-looking statements, and earnings release end notes [Tax Rate](index=12&type=section&id=Tax%20Rate) The effective tax rate for Q2 2025 was 22.2%, an increase from 21.2% in the prior quarter and 21.3% in the year-ago quarter - The effective tax rate for the quarter was **22.2%** compared with **21.2%** in the prior quarter and **21.3%** in the year-ago quarter[32](index=32&type=chunk) [Conference Call](index=12&type=section&id=Conference%20Call) Fifth Third Bancorp will host a conference call to discuss financial results, accessible via live webcast and replay on its Investor Relations website - Fifth Third will host a conference call to discuss these financial results at **9:00 a.m. (Eastern Time)**, accessible via live webcast and replay through the Fifth Third Investor Relations website at www.53.com[33](index=33&type=chunk) [Corporate Profile](index=12&type=section&id=Corporate%20Profile) Fifth Third is a US-based bank known for innovation, ethical practices, and a commitment to customers, employees, communities, and shareholders, aiming to be a high-performing regional bank valued for trust - Fifth Third is a bank founded in **1858**, focused on innovation, dedicated people, and community impact[34](index=34&type=chunk) - The company has been named among Ethisphere's **World's Most Ethical Companies®** for several years[34](index=34&type=chunk) - Fifth Third Bancorp's common stock is traded 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) The release contains forward-looking statements subject to various risks and uncertainties, including credit quality, funding, regulatory changes, economic conditions, and competition - The release contains forward-looking statements subject to risks and uncertainties, including deteriorating credit quality, inadequate funding, cyber-security risks, government regulation, changes in interest rates, and economic uncertainty[37](index=37&type=chunk)[38](index=38&type=chunk) - Readers should not place undue reliance on these statements and should refer to SEC filings for further information on other factors that could cause actual results to differ materially[37](index=37&type=chunk)[39](index=39&type=chunk) - The company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements, except as may be required by law[39](index=39&type=chunk) [Earnings Release End Notes](index=12&type=section&id=Earnings%20Release%20End%20Notes) This section provides definitions and clarifications for various financial measures and ratios used in the earnings release, including non-GAAP measures, net charge-off ratio, nonperforming asset ratio, and regulatory capital ratio calculations - Provides definitions for non-GAAP measures, net losses charged-off as a percent of average portfolio loans and leases (annualized), nonperforming portfolio assets as a percent of portfolio loans and leases and OREO, and regulatory capital ratio calculations[36](index=36&type=chunk) [Quarterly Financial Review (Detailed Tables)](index=14&type=section&id=Quarterly%20Financial%20Review%20for%20June%2030%2C%202025) This section presents comprehensive detailed financial tables, covering income statements, balance sheets, equity changes, and key financial metrics [Financial Highlights (Detailed)](index=15&type=section&id=Financial%20Highlights) This section provides a comprehensive overview of Fifth Third Bancorp's financial performance and position, including detailed income statement data, per share data, common share data, financial ratios, credit quality metrics, average balances, and regulatory capital ratios for the current and prior periods Financial Highlights (2Q25 vs. 1Q25 vs. 2Q24) | Financial Highlights | June 2025 | March 2025 | June 2024 | Seq % Change | Yr/Yr % Change | | :------------------- | :-------- | :--------- | :-------- | :----------- | :------------- | | **Income Statement Data ($ in millions)** | | | | | | | Net interest income (FTE) | $1,500 | $1,442 | $1,393 | 4% | 8% | | Total revenue (FTE) | 2,250 | 2,136 | 2,088 | 5% | 8% | | Net income available to common shareholders | 591 | 478 | 561 | 24% | 5% | | Earnings per share, diluted | $0.88 | $0.71 | $0.81 | 24% | 9% | | **Financial Ratios (percentages)** | | | | | | | Return on average assets | 1.20 % | 0.99 % | 1.14 % | 21 bps | 6 bps | | Net interest margin (FTE) | 3.12 % | 3.03 % | 2.88 % | 9 bps | 24 bps | | Efficiency (FTE) | 56.2 % | 61.0 % | 58.5 % | (480) bps | (230) bps | | **Credit Quality (percentages)** | | | | | | | Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 0.45 % | 0.46 % | 0.49 % | (1) bps | (4) bps | | Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.72 % | 0.81 % | 0.55 % | (9) bps | 17 bps | | **Average Balances ($ in millions)** | | | | | | | Loans and leases, including held for sale | $123,657 | $121,764 | $117,283 | 2% | 5% | | Assets | 210,554 | 210,558 | 212,475 | — | (1)% | | Total deposits | 163,575 | 164,157 | 167,194 | — | (2)% | | **Regulatory Capital Ratios (percentages)** | | | | | | | CET1 capital | 10.56 % | 10.43 % | 10.62 % | 13 bps | (6) bps | - Assets under management increased **12% year-over-year to $73 billion**[43](index=43&type=chunk) [Consolidated Statements of Income](index=19&type=section&id=Consolidated%20Statements%20of%20Income) Detailed consolidated income statements show total interest income decreased 5% YoY, while total interest expense decreased 20% YoY, leading to an 8% YoY increase in Net Interest Income. Noninterest income increased 8% YoY, and total noninterest expense increased 4% YoY Consolidated Statements of Income (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 | March 2025 | June 2024 | Seq % Change | Yr/Yr % Change | | :------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | **Interest Income** | | | | | | | Total interest income | 2,484 | 2,432 | 2,620 | 2% | (5)% | | **Interest Expense** | | | | | | | 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% | | **Noninterest Income** | | | | | | | Total noninterest income | 750 | 694 | 695 | 8% | 8% | | **Noninterest Expense** | | | | | | | Total noninterest expense | 1,264 | 1,304 | 1,221 | (3)% | 4% | | Income Before Income Taxes | 808 | 653 | 764 | 24% | 6% | | Net Income | 628 | 515 | 601 | 22% | 4% | | Net Income Available to Common Shareholders | $591 | $478 | $561 | 24% | 5% | - Total interest income decreased **5% year-over-year**, primarily due to a **50% decrease** in interest on other short-term investments[48](index=48&type=chunk) - Total interest expense decreased **20% year-over-year**, mainly driven by a **24% decrease** in interest on deposits[48](index=48&type=chunk) [Consolidated Balance Sheets](index=21&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a 2% YoY decrease in total assets. Portfolio loans and leases increased 5% YoY, while other short-term investments decreased 38% YoY. Total deposits decreased 2% YoY, with a significant 41% YoY decrease in CDs over $250,000 Consolidated Balance Sheets (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 | March 2025 | June 2024 | Seq % Change | Yr/Yr % Change | | :------------ | :-------- | :--------- | :-------- | :----------- | :------------- | | **Assets** | | | | | | | Total Assets | $209,991 | $212,669 | $213,262 | (1)% | (2)% | | Other short-term investments | 13,043 | 14,965 | 21,085 | (13)% | (38)% | | Portfolio loans and leases | 122,396 | 122,191 | 116,579 | — | 5% | | Allowance for loan and lease losses | (2,412) | (2,384) | (2,288) | 1% | 5% | | **Liabilities** | | | | | | | Total deposits | 164,207 | 165,505 | 166,768 | (1)% | (2)% | | CDs over $250,000 | 2,426 | 1,894 | 4,082 | 28% | (41)% | | Total Liabilities | 188,867 | 192,266 | 194,036 | (2)% | (3)% | | **Equity** | | | | | | | Total Equity | 21,124 | 20,403 | 19,226 | 4% | 10% | - Total Assets decreased **2% year-over-year to $209,991 million**[50](index=50&type=chunk) - Portfolio loans and leases increased **5% year-over-year to $122,396 million**[50](index=50&type=chunk) - Total deposits decreased **2% year-over-year to $164,207 million**, with CDs over **$250,000 decreasing 41% YoY**[50](index=50&type=chunk) [Consolidated Statements of Changes in Equity](index=26&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $21,124 million at the end of Q2 2025, up from $19,226 million in Q2 2024, driven by net income and significant positive changes in unrealized gains on available-for-sale debt securities and qualifying cash flow hedges Consolidated Statements of Changes in Equity (2Q25 vs. 2Q24) | $ in millions | June 2025 | June 2024 | | :------------ | :-------- | :-------- | | Total Equity, Beginning | $20,403 | $19,018 | | Net income | 628 | 601 | | Other comprehensive income (loss), net of tax: | | | | Change in unrealized gains (losses): | | | | Available-for-sale debt securities | 179 | 2 | | Qualifying cash flow hedges | 148 | (40) | | Comprehensive income | 977 | 588 | | Cash dividends declared: | | | | Common stock | (250) | (243) | | Preferred stock | (37) | (40) | | Total Equity, Ending | $21,124 | $19,226 | - Total Equity increased from **$19,226 million in June 2024 to $21,124 million in June 2025**[52](index=52&type=chunk) - Comprehensive income for Q2 2025 was **$977 million**, including **$179 million** from available-for-sale debt securities and **$148 million** from qualifying cash flow hedges[52](index=52&type=chunk) [Average Balance Sheets and Yield/Rate Analysis](index=27&type=section&id=Average%20Balance%20Sheets%20and%20Yield%2FRate%20Analysis) This section provides detailed average balance sheets and yield/rate analysis for interest-earning assets and interest-bearing liabilities, highlighting the expansion of net interest margin (FTE) to 3.12% in Q2 2025, driven by a 61 bps decrease in the rate paid on interest-bearing liabilities Average Balance Sheets and Yield/Rate Analysis (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 Average Balance | June 2025 Average Yield/Rate | March 2025 Average Balance | March 2025 Average Yield/Rate | June 2024 Average Balance | June 2024 Average Yield/Rate | | :------------ | :------------------------ | :--------------------------- | :------------------------- | :---------------------------- | :------------------------ | :--------------------------- | | **Assets** | | | | | | | | Total interest-earning assets | 192,682 | 5.18 % | 192,808 | 5.13 % | 194,499 | 5.43 % | | **Liabilities** | | | | | | | | Total interest-bearing liabilities | 142,913 | 2.78 % | 144,285 | 2.80 % | 146,361 | 3.39 % | | **Ratios** | | | | | | | | Net interest margin (FTE) | | 3.12 % | | 3.03 % | | 2.88 % | | Net interest rate spread (FTE) | | 2.40 % | | 2.33 % | | 2.04 % | - Yield on interest-earning assets decreased **25 bps year-over-year to 5.18%**[7](index=7&type=chunk)[53](index=53&type=chunk) - Rate paid on interest-bearing liabilities decreased **61 bps year-over-year to 2.78%**[7](index=7&type=chunk)[53](index=53&type=chunk) - Net interest margin (FTE) increased **24 bps year-over-year to 3.12%**[7](index=7&type=chunk)[53](index=53&type=chunk) [Summary of Loans and Leases](index=30&type=section&id=Summary%20of%20Loans%20and%20Leases) The summary details average and period-end portfolio loans and leases, showing overall growth. Total average portfolio loans and leases increased 5% YoY, with significant growth in commercial leases (21% YoY) and indirect secured consumer loans (12% YoY) Total Average Portfolio Loans and Leases (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 | March 2025 | June 2024 | | :------------ | :-------- | :--------- | :-------- | | Total average portfolio loans and leases | $123,071 | $121,272 | $116,891 | | Commercial leases | 3,120 | 3,110 | 2,575 | | Indirect secured consumer loans | 17,248 | 16,476 | 15,373 | - Total average portfolio loans and leases increased to **$123,071 million in 2Q25**, up **5% year-over-year**[57](index=57&type=chunk) - Average commercial leases increased **21% year-over-year to $3,120 million**[57](index=57&type=chunk) - Average indirect secured consumer loans increased **12% year-over-year to $17,248 million**[57](index=57&type=chunk) [Regulatory Capital (Detailed)](index=31&type=section&id=Regulatory%20Capital) Fifth Third Bancorp's regulatory capital ratios remained strong, with CET1 capital at 10.56% and Tier 1 risk-based capital at 11.83% for the Bancorp. Fifth Third Bank, National Association also showed robust capital levels, exceeding regulatory minimums Regulatory Capital Ratios (Bancorp and Bank) | Regulatory Capital Ratios | June 2025 | March 2025 | June 2024 | | :------------------------ | :-------- | :--------- | :-------- | | **Fifth Third Bancorp** | | | | | CET1 capital | 10.56 % | 10.43 % | 10.62 % | | Tier 1 risk-based capital | 11.83 % | 11.71 % | 11.93 % | | Total risk-based capital | 13.75 % | 13.63 % | 13.95 % | | Leverage | 9.42 % | 9.23 % | 9.07 % | | **Fifth Third Bank, National Association** | | | | | Tier 1 risk-based capital | 12.85 % | 12.78 % | 12.81 % | | Total risk-based capital | 14.09 % | 14.02 % | 14.14 % | | Leverage | 10.26 % | 10.10 % | 9.76 % | - Fifth Third Bancorp's CET1 capital was **$17,616 million**, with a ratio of **10.56% in June 2025**[58](index=58&type=chunk) - Fifth Third Bank, National Association reported a Tier 1 risk-based capital ratio of **12.85%** and a Leverage ratio of **10.26% in June 2025**[58](index=58&type=chunk) [Summary of Credit Loss Experience (Detailed)](index=32&type=section&id=Summary%20of%20Credit%20Loss%20Experience) This section provides a detailed breakdown of credit loss experience, including losses charged-off, recoveries, and net losses charged-off by loan category. The total net losses charged-off decreased 3% YoY, and the overall net charge-off ratio declined to 0.45% Net Losses Charged-Off by Loan Type (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 | March 2025 | June 2024 | | :------------ | :-------- | :--------- | :-------- | | **Total net losses charged-off** | $(139) | $(136) | $(144) | | Commercial and industrial loans | $(69) | $(52) | $(80) | | Indirect secured consumer loans | (16) | (21) | (17) | | Credit card | (15) | (17) | (17) | | Solar energy installation loans | (20) | (18) | (12) | Net Losses Charged-Off as a Percent of Average Portfolio Loans and Leases (Annualized) (2Q25 vs. 1Q25 vs. 2Q24) | (annualized) | June 2025 | March 2025 | June 2024 | | :----------- | :-------- | :--------- | :-------- | | Total commercial loans and leases | 0.38 % | 0.35 % | 0.45 % | | Total consumer loans | 0.56 % | 0.63 % | 0.57 % | | Total net losses charged-off as a percent of average portfolio loans and leases | 0.45 % | 0.46 % | 0.49 % | - Total net losses charged-off decreased to **$139 million in 2Q25**, down **$5 million or 3%** compared to the year-ago quarter[28](index=28&type=chunk)[60](index=60&type=chunk) - The commercial NCO ratio decreased **7 bps year-over-year to 0.38%**, and the consumer NCO ratio decreased **1 bp year-over-year to 0.56%**[28](index=28&type=chunk)[61](index=61&type=chunk) [Asset Quality (Detailed)](index=34&type=section&id=Asset%20Quality) Detailed asset quality metrics show a sequential decrease in nonperforming assets and nonaccrual portfolio loans. The Allowance for Credit Losses (ACL) increased to $2,558 million, maintaining strong coverage ratios against nonperforming assets Allowance for Credit Losses and Nonperforming Assets (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | June 2025 | March 2025 | June 2024 | | :------------ | :-------- | :--------- | :-------- | | Allowance for loan and lease losses, ending | $2,412 | $2,384 | $2,288 | | Reserve for unfunded commitments, ending | $146 | $140 | $137 | | Total allowance for credit losses | $2,558 | $2,524 | $2,425 | | Total nonaccrual portfolio loans and leases | 853 | 966 | 606 | | Total nonperforming portfolio loans and leases and OREO | 886 | 996 | 643 | | Total nonperforming assets | $913 | $1,017 | $647 | | ACL as a percent of portfolio loans and leases | 2.09 % | 2.07 % | 2.08 % | | ACL as a percent of nonperforming portfolio loans and leases | 300 % | 261 % | 400 % | | Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.72 % | 0.81 % | 0.55 % | - Total nonperforming assets decreased to **$913 million in 2Q25**, down from **$1,017 million in 1Q25**[62](index=62&type=chunk) - Total nonaccrual portfolio loans and leases declined to **$853 million in 2Q25**, down from **$966 million in 1Q25**[62](index=62&type=chunk) - The Allowance for Credit Losses (ACL) increased to **$2,558 million**, with ACL as a percent of nonperforming portfolio loans and leases at **300%**[62](index=62&type=chunk) [Non-GAAP Reconciliation](index=36&type=section&id=Non-GAAP%20Reconciliation) This section provides reconciliations of various non-GAAP financial measures to their most directly comparable GAAP measures. Management uses these non-GAAP measures, such as FTE basis adjustments, tangible common equity, and adjusted metrics, to evaluate operating performance and enhance comparability, while cautioning that they should not substitute GAAP analysis - Management uses non-GAAP measures like FTE, tangible common equity, and adjusted metrics to evaluate operating performance and make day-to-day operating decisions, believing they provide useful information to investors[64](index=64&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Non-GAAP measures should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures[70](index=70&type=chunk) Key Non-GAAP Reconciliations (2Q25 vs. 1Q25 vs. 2Q24) | $ and shares in millions | June 2025 | March 2025 | June 2024 | | :----------------------- | :-------- | :--------- | :-------- | | Net interest income (FTE) (a) | 1,500 | 1,442 | 1,393 | | Tangible net income available to common shareholders (h) | 596 | 484 | 568 | | Average tangible common equity, including AOCI (j) | 13,557 | 12,880 | 11,562 | | Tangible common equity, excluding AOCI (m) | 17,561 | 17,182 | 16,986 | | Tangible book value per share (including AOCI) (l) | $20.98 | $19.92 | $17.75 | | Adjusted return on average tangible common equity, excluding AOCI (ac) | 13.9 % | 11.7 % | 14.4 % | | Adjusted return on average assets (z) | 1.22 % | 1.02 % | 1.21 % | | Adjusted efficiency ratio (aa) | 55.5 % | 60.5 % | 56.8 % | [Segment Presentation](index=39&type=section&id=Segment%20Presentation) The segment presentation provides financial results by business segment: Commercial Banking, Consumer and Small Business Banking, Wealth and Asset Management, and General Corporate and Other. It reflects a realignment of certain business banking customer relationships from Commercial Banking to Consumer and Small Business Banking in Q1 2025, with prior periods adjusted for comparability Income (loss) before income taxes (FTE) by Segment (2Q25 vs. 1Q25 vs. 2Q24) | $ in millions | Commercial Banking | Consumer and Small Business Banking | Wealth and Asset Management | General Corporate and Other | Total | | :------------ | :----------------- | :---------------------------------- | :-------------------------- | :-------------------------- | :---- | | **For the three months ended June 30, 2025** | | | | | | | (a) Income (loss) before income taxes (FTE) | $384 | $648 | $65 | $(284) | $813 | | **For the three months ended March 31, 2025** | | | | | | | (a) Income (loss) before income taxes (FTE) | $262 | $522 | $52 | $(178) | $658 | | **For the three months ended June 30, 2024** | | | | | | | (a) Income (loss) before income taxes (FTE) | $372 | $648 | $59 | $(309) | $770 | - During the first quarter of 2025, the Bancorp realigned its reporting structure, moving certain business banking customer relationships and relationship management personnel to the Consumer and Small Business Banking segment from the Commercial Banking segment. Prior period results have been adjusted to reflect current presentation[75](index=75&type=chunk)

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Glossary of Abbreviations and Acronyms](index=5&type=section&id=Glossary%20of%20Abbreviations%20and%20Acronyms) This section provides a comprehensive list of abbreviations and acronyms used throughout the financial statements and management's discussion and analysis to aid reader comprehension - The glossary serves as a tool for readers to understand terms used in Management's Discussion and Analysis, Condensed Consolidated Financial Statements, and Notes[10](index=10&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2)](index=6&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Item%202)) This section provides an in-depth analysis of Fifth Third Bancorp's financial condition and operational results for the quarter ended March 31, 2025, highlighting key performance drivers, financial metrics, and risk management strategies [Overview](index=6&type=section&id=Overview) The overview introduces Fifth Third Bancorp as a diversified financial services company, outlines its business segments, revenue composition, and highlights key financial events and performance indicators for the quarter Key Financial Highlights (Q1 2025 vs. Q1 2024) | Indicator | March 31, 2025 | March 31, 2024 | % Change | | :----------------------------------- | :------------- | :------------- | :------- | | Net interest income (U.S. GAAP) | $1,437 million | $1,384 million | 4% | | Net interest income (FTE) | $1,442 million | $1,390 million | 4% | | Noninterest income | $694 million | $710 million | (2)% | | Total revenue (FTE) | $2,136 million | $2,100 million | 2% | | Provision for credit losses | $174 million | $94 million | 85% | | Noninterest expense | $1,304 million | $1,342 million | (3)% | | Net income | $515 million | $520 million | (1)% | | Net income available to common shareholders | $478 million | $480 million | — | | Diluted EPS | $0.71 | $0.70 | 1% | | Cash dividends declared per common share | $0.37 | $0.35 | 6% | | Book value per share | $27.41 | $24.72 | 11% | | Market value per share | $39.20 | $37.21 | 5% | | Return on average assets | 0.99% | 0.98% | 1% | | Return on average common equity | 10.8% | 11.6% | (7)% | | Return on average tangible common equity | 15.2% | 17.0% | (11)% | | Dividend payout | 52.1% | 50.0% | 4% | - The Bancorp settled a **$225 million** accelerated share repurchase transaction during Q1 2025[19](index=19&type=chunk) - On January 28, 2025, the Bank issued **$700 million** of fixed-rate/floating-rate senior notes and **$300 million** of floating-rate senior notes, both due January 28, 2028[20](index=20&type=chunk)[21](index=21&type=chunk) Regulatory Capital Ratios (March 31, 2025) | Capital Ratio | Value | | :------------ | :---- | | CET1 capital ratio | **10.43%** | | Tier 1 risk-based capital ratio | **11.71%** | | Total risk-based capital ratio | **13.63%** | | Leverage ratio | **9.23%** | [Non-GAAP Financial Measures](index=11&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures, such as net interest income on an FTE basis, return on average tangible common equity, and various capital ratios, to their most directly comparable U.S. GAAP measures - Non-GAAP measures like FTE basis adjustments for tax-favored income and return on average tangible common equity are used for industry comparison and performance evaluation, as they exclude the impact of intangible assets and their amortization[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) Non-GAAP Financial Measures (Q1 2025 vs. Q1 2024) | Indicator | March 31, 2025 | March 31, 2024 | | :----------------------------------- | :------------- | :------------- | | Net interest income on an FTE basis | $1,442 million | $1,390 million | | Net interest margin on an FTE basis | **3.03%** | **2.86%** | | Net interest rate spread on an FTE basis | **2.33%** | **2.02%** | | Efficiency ratio on an FTE basis | **61.0%** | **63.9%** | | Return on average tangible common equity | **15.2%** | **17.0%** | [Recent Accounting Standards](index=13&type=section&id=Recent%20Accounting%20Standards) The Bancorp adopted ASU 2023-09 on Income Taxes in January 2025, which amends disclosure requirements, and is evaluating ASU 2024-03 on Expense Disaggregation Disclosures, effective for the year ending December 31, 2027 - ASU 2023-09 (Income Taxes) was adopted on January 1, 2025, requiring additional disclosures for effective tax rate reconciliation, income taxes paid, and disaggregation of income before taxes[312](index=312&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) was issued in November 2024, with an effective date for the Bancorp for the year ending December 31, 2027, and is currently being evaluated for impact[313](index=313&type=chunk) [Critical Accounting Policies](index=13&type=section&id=Critical%20Accounting%20Policies) The Bancorp's critical accounting policies, including those for ALLL, reserve for unfunded commitments, servicing rights, goodwill, legal contingencies, and fair value measurements, remain consistent with the previous Annual Report on Form 10-K, with no material changes in valuation techniques or models during the quarter - Critical accounting policies include ALLL, reserve for unfunded commitments, valuation of servicing rights, goodwill, legal contingencies, and fair value measurements[41](index=41&type=chunk) - There have been no material changes to valuation techniques or models during the three months ended March 31, 2025[41](index=41&type=chunk) [Statements of Income Analysis](index=13&type=section&id=Statements%20of%20Income%20Analysis) This section analyzes the components of the Bancorp's income statement, including net interest income, provision for credit losses, noninterest income, noninterest expense, and applicable income taxes, detailing the drivers of changes year-over-year [Net Interest Income](index=13&type=section&id=Net%20Interest%20Income) Net interest income (FTE) increased by **$52 million** to **$1.4 billion** for Q1 2025 compared to Q1 2024, driven by lower rates on interest-bearing liabilities and higher loan balances, partially offset by lower commercial loan yields and decreased short-term investments Net Interest Income (FTE) and Margin (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 | March 31, 2024 | Change | | :-------------------------- | :------------- | :------------- | :----- | | Net interest income (FTE) | $1,442 million | $1,390 million | +$52 million | | Net interest margin (FTE) | **3.03%** | **2.86%** | +17 bps | | Net interest rate spread (FTE) | **2.33%** | **2.02%** | +31 bps | - Net interest income was positively impacted by lower rates paid on average interest-bearing liabilities and higher average balances of loans and leases[44](index=44&type=chunk) - These positive impacts were partially offset by lower yields on average commercial loans and leases and a decrease in average balances of other short-term investments[44](index=44&type=chunk) - Interest expense on average core deposits decreased **$165 million**, primarily due to a **52 bps decrease** in the cost of average interest-bearing core deposits (**239 bps** in Q1 2025 vs **291 bps** in Q1 2024)[48](index=48&type=chunk) [Provision for Credit Losses](index=18&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased significantly to **$174 million** in Q1 2025 from **$94 million** in Q1 2024, primarily due to higher loan balances and deteriorating economic forecasts, partially offset by improvements in the loan portfolio's risk profile Provision for Credit Losses (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 | March 31, 2024 | % Change | | :-------------------------- | :------------- | :------------- | :------- | | Provision for credit losses | $174 million | $94 million | **85%** | | Net charge-off ratio | **0.46%** | **0.38%** | +8 bps | | Nonperforming portfolio assets ratio | **0.81%** | **0.71%** (Dec 31, 2024) | +10 bps | - The increase in provision expense was driven by higher period-end loan and lease balances and deterioration in economic forecasts used for ACL calculation[56](index=56&type=chunk) - The ALLL as a percent of portfolio loans and leases decreased slightly to **1.95%** at March 31, 2025, from **1.96%** at December 31, 2024[57](index=57&type=chunk) [Noninterest Income](index=18&type=section&id=Noninterest%20Income) Noninterest income decreased by **$16 million** to **$694 million** in Q1 2025 compared to Q1 2024, primarily due to a **$19 million decrease** in net securities gains/losses, largely offset by growth in wealth and asset management and commercial payments revenue Components of Noninterest Income (Q1 2025 vs. Q1 2024) | Component | March 31, 2025 | March 31, 2024 | % Change | | :-------------------------------- | :------------- | :------------- | :------- | | Wealth and asset management revenue | $172 million | $161 million | **7%** | | Commercial payments revenue | $153 million | $145 million | **6%** | | Consumer banking revenue | $137 million | $135 million | **1%** | | Capital markets fees | $90 million | $97 million | (7)% | | Commercial banking revenue | $80 million | $85 million | (6)% | | Mortgage banking net revenue | $57 million | $54 million | **6%** | | Other noninterest income | $14 million | $23 million | (39)% | | Securities (losses) gains, net | ($9) million | $10 million | NM | | Total noninterest income | $694 million | $710 million | (2)% | - Wealth and asset management revenue increased **$11 million**, driven by personal asset management and brokerage income[60](index=60&type=chunk) - Commercial payments revenue increased **$8 million** due to new client acquisition and higher average revenue per existing customer[61](index=61&type=chunk) - Capital markets fees decreased **$7 million**, mainly from lower loan syndication and M&A fees, partially offset by commercial customer derivatives[62](index=62&type=chunk) - Mortgage banking net revenue increased **$3 million**, with residential mortgage loan originations rising to **$1.4 billion** in Q1 2025 from **$1.1 billion** in Q1 2024[63](index=63&type=chunk)[65](index=65&type=chunk) [Noninterest Expense](index=22&type=section&id=Noninterest%20Expense) Noninterest expense decreased by **$38 million** to **$1.304 billion** in Q1 2025 compared to Q1 2024, primarily due to the non-recurrence of a **$33 million** FDIC special assessment from the prior year, partially offset by increased technology and equipment expenses Components of Noninterest Expense (Q1 2025 vs. Q1 2024) | Component | March 31, 2025 | March 31, 2024 | % Change | | :-------------------------- | :------------- | :------------- | :------- | | Compensation and benefits | $750 million | $753 million | — | | Technology and communications | $123 million | $117 million | **5%** | | Net occupancy expense | $87 million | $87 million | — | | Equipment expense | $42 million | $37 million | **14%** | | Loan and lease expense | $30 million | $29 million | **3%** | | Marketing expense | $28 million | $32 million | (13)% | | Card and processing expense | $21 million | $20 million | **5%** | | Other noninterest expense | $223 million | $267 million | (16)% | | Total noninterest expense | $1,304 million | $1,342 million | (3)% | | Efficiency ratio (FTE) | **61.0%** | **63.9%** | | - Other noninterest expense decreased **$44 million**, mainly due to a **$31 million decrease** in FDIC insurance and other taxes (related to a non-recurring special assessment in Q1 2024) and a **$7 million decrease** in leasing business expense[79](index=79&type=chunk)[80](index=80&type=chunk) - Technology and communications expense increased **$6 million** due to investments in strategic initiatives and technology modernization[77](index=77&type=chunk) - Equipment expense increased **$5 million**, driven by investments in retail and treasury management equipment and Southeast branch network expansion[77](index=77&type=chunk) [Applicable Income Taxes](index=24&type=section&id=Applicable%20Income%20Taxes) Applicable income tax expense remained stable at **$138 million** for Q1 2025 and Q1 2024, with the effective tax rate slightly increasing to **21.2%** from **21.1%** due to higher state tax expense, partially offset by increased excess tax benefits from share-based compensation Applicable Income Taxes (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | Income before income taxes | $653 million | $658 million | | Applicable income tax expense | $138 million | $138 million | | Effective tax rate | **21.2%** | **21.1%** | - The effective tax rate increased primarily due to an increase in state tax expense, largely offset by an increase in excess tax benefits related to share-based compensation[82](index=82&type=chunk) [Balance Sheet Analysis](index=25&type=section&id=Balance%20Sheet%20Analysis) This section analyzes the key components of the Bancorp's balance sheet, including loans and leases, investment securities, other short-term investments, deposits, and borrowings, detailing changes and their drivers [Loans and Leases](index=25&type=section&id=Loans%20and%20Leases) Total loans and leases increased by **$2.2 billion (2%)** from December 31, 2024, to $122.7 billion at March 31, 2025, driven by growth in both commercial and consumer portfolios, particularly commercial and industrial loans, commercial construction loans, and indirect secured consumer loans Total Loans and Leases (End of Period) | Category | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Commercial loans and leases | $75,165 million | $73,359 million | +$1,806 million | | Consumer loans | $47,499 million | $47,072 million | +$427 million | | Total loans and leases | $122,664 million | $120,431 million | +$2,233 million | - Commercial and industrial loans increased **$1.4 billion (3%)** due to originations exceeding payoffs and increased line utilization[86](index=86&type=chunk) - Indirect secured consumer loans increased **$491 million (3%)** driven by higher loan production[87](index=87&type=chunk) - Average loans and leases increased **$4.1 billion (3%)** for the three months ended March 31, 2025, compared to the prior year, with average commercial leases up **22%** due to a shift in business strategy[89](index=89&type=chunk)[90](index=90&type=chunk) [Investment Securities](index=27&type=section&id=Investment%20Securities) Total investment securities were $52.6 billion at March 31, 2025, remaining stable from December 31, 2024. The Bancorp transferred **$12.6 billion** of available-for-sale securities to held-to-maturity in January 2024 to reduce capital volatility, with **$833 million** in unamortized unrealized losses remaining at March 31, 2025 Total Investment Securities (End of Period) | Category | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------- | :---------------- | | Available-for-sale debt and other securities | $43,445 million | $43,878 million | | Held-to-maturity securities | $11,185 million | $11,278 million | | Trading debt securities | $1,159 million | $1,185 million | | Equity securities | $494 million | $341 million | | Total investment securities | $52,603 million | $52,404 million | - In January 2024, **$12.6 billion** of investment securities were transferred from available-for-sale to held-to-maturity to reduce capital volatility, with **$994 million** in pre-tax unrealized losses at the transfer date[98](index=98&type=chunk)[100](index=100&type=chunk) - Total net unrealized losses on the available-for-sale debt and other securities portfolio decreased to **$3.7 billion** at March 31, 2025, from **$4.3 billion** at December 31, 2024[104](index=104&type=chunk) - The Bancorp did not recognize impairment losses on available-for-sale debt and other securities in Q1 2025, compared to **$5 million** in Q1 2024[95](index=95&type=chunk) [Other Short-Term Investments](index=31&type=section&id=Other%20Short-Term%20Investments) Other short-term investments decreased by **$2.2 billion** to **$15.0 billion** at March 31, 2025, from December 31, 2024, primarily due to deploying excess liquidity to fund loan growth and proactive liability management Other Short-Term Investments (End of Period) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Other short-term investments | $15.0 billion | $17.1 billion | ($2.2 billion) | - The decrease was primarily due to deploying excess liquidity to fund loan growth and proactive liability management[109](index=109&type=chunk) [Deposits](index=32&type=section&id=Deposits) Total deposits decreased by **$1.7 billion (1%)** from December 31, 2024, to $165.5 billion at March 31, 2025, primarily due to decreases in core deposits and CDs over $250,000, influenced by seasonal impacts and maturities Components of Deposits (End of Period) | Category | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Demand deposits | $40,855 million | $41,038 million | ($183 million) | | Interest checking deposits | $58,420 million | $59,306 million | ($886 million) | | Savings deposits | $17,583 million | $17,147 million | +$436 million | | Money market deposits | $36,505 million | $36,605 million | ($100 million) | | CDs $250,000 or less | $10,248 million | $10,798 million | ($550 million) | | CDs over $250,000 | $1,894 million | $2,358 million | ($464 million) | | Total deposits | $165,505 million | $167,252 million | ($1,747 million) | - Core deposits decreased **$1.3 billion (1%)** from December 31, 2024, driven by decreases in transaction deposits and CDs $250,000 or less[113](index=113&type=chunk) - Average core deposits represented **77%** of average total assets for Q1 2025, up from **76%** in Q1 2024[110](index=110&type=chunk) - Approximately **61%** of domestic deposits were estimated to be insured at March 31, 2025[120](index=120&type=chunk) [Borrowings](index=34&type=section&id=Borrowings) Total borrowings increased by **$1.2 billion (6%)** from December 31, 2024, to $20.2 billion at March 31, 2025, primarily due to increased other short-term borrowings and long-term debt issuances, partially offset by debt redemptions Components of Borrowings (End of Period) | Category | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Federal funds purchased | $227 million | $204 million | +$23 million | | Other short-term borrowings | $5,457 million | $4,450 million | +$1,007 million | | Long-term debt | $14,539 million | $14,337 million | +$202 million | | Total borrowings | $20,223 million | $18,991 million | +$1,232 million | - Other short-term borrowings increased **$1.0 billion** due to increased funding needs from loan growth and decreased deposits[123](index=123&type=chunk) - Long-term debt increased **$202 million**, primarily from **$1.0 billion** in senior note issuances in January 2025, partially offset by **$750 million** in note redemptions/maturities[123](index=123&type=chunk) - Total average borrowings as a percent of average interest-bearing liabilities increased to **14%** in Q1 2025 from **13%** in Q1 2024[122](index=122&type=chunk) [Business Segment Review](index=35&type=section&id=Business%20Segment%20Review) The Bancorp's three reportable segments—Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management—are reviewed, detailing their financial performance and the impact of an internal reporting realignment in January 2025 - In January 2025, the Bancorp realigned its reporting structure, moving certain business banking customer relationships and personnel from Commercial Banking to Consumer and Small Business Banking, with retrospective application to prior periods[129](index=129&type=chunk)[509](index=509&type=chunk) Income (Loss) Before Income Taxes (FTE) by Segment (Q1 2025 vs. Q1 2024) | Segment | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | Commercial Banking | $262 million | $427 million | | Consumer and Small Business Banking | $522 million | $685 million | | Wealth and Asset Management | $52 million | $58 million | | General Corporate and Other | ($178) million | ($506) million | | Total | $658 million | $664 million | [Commercial Banking](index=36&type=section&id=Commercial%20Banking) Commercial Banking's income before income taxes (FTE) decreased to **$262 million** in Q1 2025 from **$427 million** in Q1 2024, primarily due to lower net interest income and noninterest income, and increased provision for credit losses and noninterest expense - Net interest income (FTE) decreased **$111 million**, driven by lower FTP credits on deposits and decreased yields on commercial loans, partially offset by lower FTP charges and increased average commercial loan balances[134](index=134&type=chunk) - Provision for credit losses increased **$9 million**, mainly due to higher net charge-offs on commercial loans and leases[135](index=135&type=chunk) - Average commercial loans and leases increased **$917 million**, primarily from commercial mortgage loans and commercial leases[139](index=139&type=chunk) - Average deposits decreased **$1.3 billion**, mainly due to lower average demand deposits[140](index=140&type=chunk) [Consumer and Small Business Banking](index=39&type=section&id=Consumer%20and%20Small%20Business%20Banking) Consumer and Small Business Banking's income before income taxes decreased to **$522 million** in Q1 2025 from **$685 million** in Q1 2024, primarily due to lower net interest income, partially offset by an increase in noninterest income - Net interest income decreased **$177 million**, driven by lower FTP credits on deposits and higher FTP charges on loans, partially offset by increased average loan balances and yields[144](index=144&type=chunk) - Noninterest income increased **$14 million**, primarily from a **$7 million increase** in wealth and asset management revenue[145](index=145&type=chunk) - Average consumer loans increased **$2.1 billion**, driven by indirect secured consumer loans, residential mortgage loans, and solar energy installation loans[146](index=146&type=chunk) - Average deposits increased **$1.1 billion**, primarily due to higher average money market and demand deposits, partially offset by decreased average savings deposits[148](index=148&type=chunk) [Wealth and Asset Management](index=40&type=section&id=Wealth%20and%20Asset%20Management) Wealth and Asset Management's income before income taxes decreased to **$52 million** in Q1 2025 from **$58 million** in Q1 2024, mainly due to lower net interest income, partially offset by increased noninterest income - Net interest income decreased **$10 million**, driven by lower FTP credits on deposits, partially offset by decreased rates paid on average deposits[150](index=150&type=chunk) - Noninterest income increased **$7 million**, primarily due to a **$5 million increase** in wealth and asset management revenue, driven by personal asset management revenue[151](index=151&type=chunk) - Average loans and leases increased **$172 million**, primarily from other consumer loans, commercial mortgage loans, and commercial and industrial loans[152](index=152&type=chunk) [General Corporate and Other](index=41&type=section&id=General%20Corporate%20and%20Other) General Corporate and Other's net interest income (FTE) increased by **$350 million** in Q1 2025 compared to Q1 2024, primarily due to decreased FTP credits on deposits and lower interest expense on retail brokered CDs and long-term debt, partially offset by reduced interest income on short-term investments - Net interest income (FTE) increased **$350 million**, driven by decreased FTP credits on deposits and lower interest expense on retail brokered CDs and long-term debt[154](index=154&type=chunk) - The provision for credit losses was **$10 million** in Q1 2025, compared to a benefit of **$61 million** in Q1 2024, primarily due to a decrease in allocations to the segments[155](index=155&type=chunk) - Noninterest expense decreased **$62 million**, primarily due to the non-recurrence of the FDIC special assessment in 2024 and increased corporate overhead allocations to other segments[157](index=157&type=chunk) [Risk Management—Overview](index=42&type=section&id=Risk%20Management%E2%80%94Overview) This section outlines the Bancorp's Enterprise Risk Management Framework, including its three lines of defense structure and key risk areas such as credit, liquidity, interest rate, and price risk, with detailed discussions on management strategies and monitoring - The Bancorp's Enterprise Risk Management Framework encompasses consistent processes for identifying, assessing, managing, monitoring, and reporting credit risk, supported by Board oversight, policies, risk limits, and risk committees[159](index=159&type=chunk)[160](index=160&type=chunk) - The credit risk management strategy is based on conservatism, diversification, and monitoring, including intentional risk-based limits, underwriting standards, and ongoing portfolio reviews[161](index=161&type=chunk) [Credit Risk Management](index=42&type=section&id=Credit%20Risk%20Management) Credit risk management focuses on quantifying and managing credit risk across the portfolio through conservative lending practices, diversification, and continuous monitoring, utilizing internal models and economic forecasts to estimate expected credit losses - The Bancorp uses internally developed models to estimate expected credit losses for portfolio loans and leases, forecasting losses over a reasonable and supportable period based on default probability, expected balance at default, and expected loss percentage[163](index=163&type=chunk) - For commercial portfolios, default probabilities are based on dual risk rating systems and macroeconomic conditions, while loss severity considers collateral type and coverage[162](index=162&type=chunk)[164](index=164&type=chunk) - For consumer and residential mortgage portfolios, models primarily use FICO scores, delinquency history, and macroeconomic conditions to estimate default probability and loss severity[165](index=165&type=chunk)[166](index=166&type=chunk) [Commercial Portfolio](index=44&type=section&id=Commercial%20Portfolio) The commercial portfolio is managed through diversification, industry and geographic concentration limits, and continuous loan-level reviews, with close monitoring of economic factors impacting commercial borrowers - Commercial loan concentration limits are based on industry, lines of business, geography, and credit product type to minimize risk[167](index=167&type=chunk) Commercial Loan and Lease Portfolio by Industry (March 31, 2025) | Industry | Outstanding ($ millions) | Exposure ($ millions) | Nonaccrual ($ millions) | | :-------------------------- | :----------------------- | :-------------------- | :---------------------- | | Real estate | $15,193 | $23,197 | $10 | | Financial services and insurance | $9,184 | $19,633 | $1 | | Manufacturing | $9,140 | $19,165 | $122 | | Healthcare | $6,047 | $8,465 | $82 | | Business services | $5,762 | $10,262 | $106 | | Wholesale trade | $5,511 | $10,525 | $44 | | Accommodation and food | $4,447 | $6,927 | $16 | | Retail trade | $3,611 | $8,427 | $149 | | Communication and information | $3,167 | $5,881 | $35 | | Construction | $2,978 | $6,858 | $36 | | Mining | $2,459 | $5,781 | — | | Transportation and warehousing | $2,390 | $4,110 | $6 | | Utilities | $1,960 | $3,383 | — | | Entertainment and recreation | $1,752 | $3,041 | $6 | | Other services | $1,197 | $1,768 | $6 | | Agribusiness | $234 | $506 | $4 | | Public administration | $97 | $151 | — | | Individuals | $8 | $19 | — | | Total | $75,137 | $138,099 | $623 | - Nonaccrual assets with relationships exceeding $1 million are reviewed quarterly, and collateral values are reviewed at least annually for all criticized assets[172](index=172&type=chunk) [Consumer Portfolio](index=47&type=section&id=Consumer%20Portfolio) The consumer portfolio is actively managed through concentration limits and underwriting standards, with specific attention to residential mortgage, home equity, indirect secured, credit card, solar energy installation, and other consumer loans, particularly in a changing interest rate environment - The consumer portfolio is managed through concentration limits to mitigate credit risk by limiting exposure to lower FICO scores, higher LTVs, and specific geographic concentrations[179](index=179&type=chunk) - Approximately **28%** of ARM loans are expected to experience an average rate increase of **2.6%** upon reset in the next **12 months**, resulting in an average **28%** increase in monthly payments[183](index=183&type=chunk) - The home equity portfolio has a weighted-average refreshed FICO score of **749** at March 31, 2025, with **73%** residing within the Bancorp's Midwest footprint[192](index=192&type=chunk) Indirect Secured Consumer Portfolio Loans by LTV at Origination (March 31, 2025) | LTV at Origination | Outstanding ($ millions) | Weighted-Average LTV | | :----------------- | :----------------------- | :------------------- | | LTV ≤ 100% | $12,144 | 79.9% | | LTV > 100% | $4,660 | 110.1% | | Total | $16,804 | 88.3% | - **98%** of the credit card portfolio balances are within the Bancorp's footprint, with **72%** originated through branch-based relationships[200](index=200&type=chunk) - Solar energy installation loans originated through the three largest approved installers represented approximately **23%** of total balances outstanding[202](index=202&type=chunk) [Analysis of Nonperforming Assets](index=54&type=section&id=Analysis%20of%20Nonperforming%20Assets) Nonperforming assets increased to **$1.0 billion** at March 31, 2025, from **$860 million** at December 31, 2024, with nonperforming portfolio assets as a percent of portfolio loans and leases and OREO rising to **0.81%** Summary of Nonperforming Assets (End of Period) | Metric | March 31, 2025 | December 31, 2024 | | :----------------------------------- | :------------- | :---------------- | | Total nonperforming assets | $1,017 million | $860 million | | Nonaccrual portfolio loans and leases | $966 million | $823 million | | OREO and other repossessed property | $30 million | $30 million | | Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | **0.81%** | **0.71%** | - Portfolio commercial nonaccrual loans and leases increased **$167 million** to **$623 million**, while residential mortgage and consumer nonaccrual loans decreased **$24 million** to **$343 million**[210](index=210&type=chunk) [Analysis of Net Loan Charge-offs](index=56&type=section&id=Analysis%20of%20Net%20Loan%20Charge-offs) Net charge-offs as a percent of average portfolio loans and leases increased to **46 bps** in Q1 2025 from **38 bps** in Q1 2024, driven by higher commercial loan charge-offs, while consumer loan charge-offs slightly decreased Net Losses Charged-off as a Percent of Average Portfolio Loans and Leases (Q1 2025 vs. Q1 2024) | Category | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | Commercial and industrial loans | 0.39% | 0.27% | | Commercial mortgage loans | 0.34% | — | | Commercial leases | 0.29% | (0.04)% | | Total commercial loans and leases | 0.35% | 0.19% | | Residential mortgage loans | — | (0.01)% | | Home equity | 0.04% | 0.03% | | Indirect secured consumer loans | 0.53% | 0.64% | | Credit card | 4.19% | 4.19% | | Solar energy installation loans | 1.73% | 1.31% | | Other consumer loans | 2.52% | 2.71% | | Total consumer loans | 0.63% | 0.67% | | Total net losses charged-off as a percent of average portfolio loans and leases | **0.46%** | **0.38%** | - Commercial loan and lease net charge-offs increased to **35 bps**, primarily due to increases in commercial and industrial loans ($17 million) and commercial mortgage loans ($10 million)[219](index=219&type=chunk) - Consumer loan net charge-offs decreased to **63 bps**, mainly due to decreases in other consumer loans ($5 million) and indirect secured consumer loans ($3 million), partially offset by an increase in solar energy installation loans ($6 million)[220](index=220&type=chunk) [Allowance for Credit Losses](index=58&type=section&id=Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses (ACL) increased by **$38 million** to **$2.524 billion** at March 31, 2025, driven by higher loan balances and deteriorating economic forecasts, partially offset by improvements in the loan portfolio's risk profile. The Bancorp uses a probability-weighted three-scenario approach for economic forecasting Changes in Allowance for Credit Losses (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | ALLL, beginning of period | $2,352 million | $2,322 million | | Provision for loan and lease losses | $168 million | $106 million | | ALLL, end of period | $2,384 million | $2,318 million | | Reserve for unfunded commitments, beginning of period | $134 million | $166 million | | Provision for (benefit from) the reserve for unfunded commitments | $6 million | ($12) million | | Reserve for unfunded commitments, end of period | $140 million | $154 million | | Total ACL, end of period | $2,524 million | $2,472 million | - The ACL increased due to higher period-end loan and lease balances and deterioration in economic forecasts, partially offset by favorable impacts of improvements in the risk profile of the loan and lease portfolio[227](index=227&type=chunk) - The Bancorp assigned an **80%** probability to the Baseline scenario, and **10%** to each of the Upside and Downside scenarios for Q1 2025 ACL calculation[228](index=228&type=chunk) - Qualitative adjustments resulted in a net increase to the ACL, primarily for commercial nonowner-occupied commercial loans secured by office buildings, reflecting challenges in the commercial real estate market[231](index=231&type=chunk) [Interest Rate and Price Risk Management](index=61&type=section&id=Interest%20Rate%20and%20Price%20Risk%20Management) This section details the Bancorp's management of interest rate and price risk, utilizing NII and EVE sensitivity models, derivative instruments, and hedging strategies to mitigate potential adverse impacts from market rate movements - Interest rate risk is managed through an NII simulation model and EVE analysis, with risk appetite thresholds for 200 bps increases and decreases in interest rates over **12-month** and **24-month** horizons[240](index=240&type=chunk)[241](index=241&type=chunk)[253](index=253&type=chunk) Estimated NII Sensitivity Profile (March 31, 2025 vs. March 31, 2024) | Change in Interest Rates (bps) | 12 Months (2025) | 13-24 Months (2025) | 12 Months (2024) | 13-24 Months (2024) | | :----------------------------- | :--------------- | :------------------ | :--------------- | :------------------ | | +200 Ramp over 12 months | (3.54)% | (4.84)% | (2.76)% | (4.62)% | | +100 Ramp over 12 months | (1.72)% | (2.22)% | (1.36)% | (2.20)% | | -100 Ramp over 12 months | 0.84% | 0.69% | 0.23% | 0.11% | | -200 Ramp over 12 months | 1.15% | (0.03)% | 0.29% | (0.35)% | - The Bancorp's NII sensitivity in rising-rate scenarios is negative, as interest expense is expected to increase more than interest income due to deposit repricing and balance migration[249](index=249&type=chunk) Estimated EVE Sensitivity Profile (March 31, 2025 vs. March 31, 2024) | Change in Interest Rates (bps) | % Change in EVE (2025) | % Change in EVE (2024) | | :----------------------------- | :--------------------- | :--------------------- | | +200 Shock | (5.92)% | (4.37)% | | +100 Shock | (2.50)% | (1.80)% | | -100 Shock | 1.05% | 0.94% | | -200 Shock | (0.11)% | 0.14% | [Net Interest Income Sensitivity](index=61&type=section&id=Net%20Interest%20Income%20Sensitivity) NII sensitivity analysis uses a simulation model to assess the impact of interest rate changes, incorporating assumptions about deposit attrition, growth, and repricing betas. The Bancorp projects negative NII sensitivity in rising-rate scenarios and positive in falling-rate scenarios for the short term - NII sensitivity modeling assumes additional attrition of approximately **$380 million** of demand deposit balances over **24 months** for each **100 bps** increase in short-term market interest rates[242](index=242&type=chunk) - The Bancorp's NII sensitivity modeling assumes weighted-average rising-rate interest-bearing deposit betas of approximately **75%-80%** and falling-rate betas of **65%-70%**[245](index=245&type=chunk) [Economic Value of Equity Sensitivity](index=63&type=section&id=Economic%20Value%20of%20Equity%20Sensitivity) EVE sensitivity measures the longer-term interest rate risk of the current balance sheet, showing negative sensitivity in rising-rate scenarios and mixed results in falling-rate scenarios at March 31, 2025, influenced by forward interest rate expectations and deposit composition - EVE is a point-in-time analysis of the economic sensitivity of current balance sheet and off-balance sheet positions, incorporating all cash flows over their estimated remaining lives[253](index=253&type=chunk) - Changes in EVE sensitivity from March 31, 2024, were primarily related to changes in forward interest rate expectations, mix shift of deposit composition, increased fixed-rate loans, and reduced wholesale funding[254](index=254&type=chunk) [Use of Derivatives to Manage Interest Rate Risk](index=64&type=section&id=Use%20of%20Derivatives%20to%20Manage%20Interest%20Rate%20Risk) The Bancorp uses derivative instruments, such as interest rate swaps and forward contracts, as an integral part of its interest rate risk management strategy, both for qualifying hedges and free-standing derivatives for customer accommodation and economic hedging Summary of Qualifying Hedging Instruments (March 31, 2025) | Instrument | Notional Amount ($ millions) | Fair Value ($ millions) | Weighted-Average Remaining Term (years) | | :----------------------------------- | :--------------------------- | :---------------------- | :-------------------------------------- | | Interest rate swaps related to C&I loans – cash flow – receive fixed | $11,000 | ($3) | 6.0 | | Interest rate swaps related to commercial mortgage and commercial construction loans – cash flow – receive-fixed | $4,000 | $1 | 6.8 | | Interest rate swaps related to long-term debt – fair value – receive fixed | $4,955 | ($14) | 4.5 | | Total interest rate swaps | $19,955 | ($16) | | - The Bancorp enters into forward contracts and mortgage options to economically hedge IRLCs and residential mortgage loans held for sale[262](index=262&type=chunk) - Derivative contracts with commercial customers are economically hedged with major financial institutions to protect against market volatility[263](index=263&type=chunk)[265](index=265&type=chunk) [Residential Mortgage Servicing Rights and Price Risk](index=66&type=section&id=Residential%20Mortgage%20Servicing%20Rights%20and%20Price%20Risk) The fair value of the residential MSR portfolio was **$1.7 billion** at March 31, 2025, with the Bancorp maintaining a non-qualifying hedging strategy to manage the risk associated with changes in MSR valuation due to interest rate fluctuations - The fair value of the residential MSR portfolio was **$1.7 billion** at both March 31, 2025, and December 31, 2024[266](index=266&type=chunk) - The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the value of its MSR portfolio due to changing interest rates[266](index=266&type=chunk) [Foreign Currency Risk](index=66&type=section&id=Foreign%20Currency%20Risk) The Bancorp uses foreign exchange derivative contracts to economically hedge foreign denominated loans and customer exposures, with risk minimized through internal controls and counterparty credit approvals - The Bancorp enters into foreign exchange derivative contracts to economically hedge foreign denominated loans and commercial customer exposures[267](index=267&type=chunk) - Foreign denominated loans were **$869 million** at March 31, 2025[267](index=267&type=chunk) [Commodity Risk](index=66&type=section&id=Commodity%20Risk) The Bancorp enters into commodity contracts for commercial customers to hedge price fluctuations, offsetting this risk with major financial institutions or exchange-traded contracts, and maintaining internal controls to manage exposure - The Bancorp enters into commodity contracts for commercial customers to hedge their exposure to commodity price fluctuations[268](index=268&type=chunk) - Risk is offset with major financial institutions or exchange-traded commodity contracts, with internal controls in place to manage exposure[268](index=268&type=chunk) [Liquidity Risk Management](index=67&type=section&id=Liquidity%20Risk%20Management) Liquidity risk management aims to maintain sufficient funds to meet obligations through a granular core deposit base, stable long-term funding, and contingent borrowing capacity, with a strong liquidity profile driven by core deposits and readily available liquidity - Liquidity risk is managed by maintaining a granular core deposit base, utilizing stable, long-term funding sources, and a contingency funding plan with liquidity stress testing[269](index=269&type=chunk) - Primary sources of funds include noninterest income, cash flows from loan and lease payments, securities sales/maturities, loan sales/securitizations, core deposits, and wholesale borrowings[272](index=272&type=chunk) - The Bancorp maintains a strong liquidity profile with over **$100 billion** in readily available liquidity, driven by core deposit funding[278](index=278&type=chunk) - As of March 31, 2025, the Bancorp (parent company) had sufficient liquidity to meet contractual obligations and all dividends for **31 months** without accessing capital markets or upstream dividends from the Bank subsidiary[280](index=280&type=chunk) [Sources of Funds](index=67&type=section&id=Sources%20of%20Funds) The Bancorp's funding sources include revenue from noninterest income, cash flows from loan and securities portfolios, loan sales, core deposits, and wholesale borrowings, with significant borrowing capacity available through the FHLB and FRB - The available-for-sale and held-to-maturity securities portfolios had a fair value of $50.8 billion at March 31, 2025, with **$8.8 billion** in principal and interest payments expected in the next **12 months**[273](index=273&type=chunk) - For the three months ended March 31, 2025, the Bancorp sold or securitized loans and leases totaling **$1.1 billion**[274](index=274&type=chunk) - At March 31, 2025, the Bank had approximately **$68.8 billion** of borrowing capacity available through secured borrowing sources, including the FRB and FHLB[277](index=277&type=chunk) [Current Liquidity Position](index=67&type=section&id=Current%20Liquidity%20Position) The Bancorp maintains a strong liquidity profile, characterized by core deposit and stable long-term funding, supplemented by diverse wholesale funding sources and a highly liquid investment securities portfolio, ensuring immediate funding availability and effective management of concentration risk - The Bancorp maintains a liquidity profile focused on core deposit and stable long-term funding sources, supplemented by a variety of secured and unsecured wholesale funding sources[279](index=279&type=chunk) - The investment securities portfolio is highly concentrated in liquid and readily marketable instruments, serving as a significant source of secured borrowing capacity[279](index=279&type=chunk) [Credit Ratings](index=69&type=section&id=Credit%20Ratings) The Bancorp's credit ratings, which impact financing costs and availability, are summarized, reflecting stable outlooks from Moody's, Standard and Poor's, Fitch, and DBRS Morningstar Agency Ratings (As of May 6, 2025) | Entity | Moody's | Standard and Poor's | Fitch | DBRS Morningstar | | :----------------------------------- | :------ | :------------------ | :---- | :--------------- | | Fifth Third Bancorp: | | | | | | Short-term borrowings | No rating | A-2 | F1 | R-1L | | Senior debt | Baa1 | BBB+ | A- | A | | Subordinated debt | Baa1 | BBB | BBB+ | AL | | Fifth Third Bank, National Association: | | | | | | Short-term borrowings | P-2 | A-2 | F1 | R-1M | | Short-term deposit | P-1 | No rating | F1 | No rating | | Long-term deposit | A1 | No rating | A | AH | | Senior debt | A3 | A- | A- | AH | | Subordinated debt | A3 | BBB+ | BBB+ | A | | Rating Agency Outlook | Stable | Stable | Stable | Stable | - Key factors in maintaining high credit ratings include a stable and diverse earnings stream, strong credit quality, strong capital ratios, and diverse funding sources[281](index=281&type=chunk) [Capital Management](index=70&type=section&id=Capital%20Management) Capital management involves regular review of capital levels, adherence to Basel III regulatory requirements, and a comprehensive capital planning process, including dividend policy and stock repurchase programs, to ensure appropriate positioning under various operating environments Regulatory Capital Ratios (March 31, 2025) | Capital Ratio | Minimum | Well-Capitalized | Fifth Third Bancorp Ratio | Fifth Third Bank, National Association Ratio | | :-------------------------- | :------ | :--------------- | :------------------------ | :----------------------------------------- | | CET1 capital | 4.50% | N/A | **10.43%** | 12.78% | | Tier 1 risk-based capital | 6.00% | 6.00% | **11.71%** | 12.78% | | Total risk-based capital | 8.00% | 10.00% | **13.63%** | 14.02% | | Leverage | 4.00% | N/A | **9.23%** | 10.10% | - The Bancorp is subject to Category IV standards under Enhanced Prudential Standards, requiring an annual Board-approved capital plan and supervisory stress tests every two years[289](index=289&type=chunk) - Common stock dividends declared were **$0.37 per share** for Q1 2025, up from **$0.35 per share** in Q1 2024[290](index=290&type=chunk) - During Q1 2025, the Bancorp settled an accelerated share repurchase transaction of **$225 million**, repurchasing **5,242,382 shares**[290](index=290&type=chunk)[291](index=291&type=chunk)[435](index=435&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk (Item 3)](index=72&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk%20(Item%203)) This section incorporates by

Fifth Third Bancorp Reports First Quarter 2025 Diluted Earnings Per Share of $0.71 Loan growth, net interest margin expansion, and expense discipline leads to positive operating leverage Reported results included a negative $0.02 impact from certain items on page 2 | Key Financial Data | | | Key Highlights | | | --- | --- | --- | --- | --- | | $ in millions for all balance sheet and income statement items | | | | | | | 1Q25 | 4Q24 | 1Q24 | Stability: | | Income Statement Data | | | | | | Net income availabl ...