Fifth Third(FITB) - 2025 Q1 - Quarterly Results

Financial Performance - Fifth Third Bancorp reported net income available to common shareholders of $478 million, or$ 0.71 per diluted share, a decrease of 18% from the prior quarter and stable compared to the year-ago quarter [6]. - Net interest income (NII) for Q1 2025 was $1,442 million, reflecting a 4% increase year-over-year, while the net interest margin (NIM) expanded to 3.03%, up 17 basis points from the previous year [7][8]. - Noninterest income decreased by 5% sequentially to$ 694 million, with notable declines in capital markets fees and commercial banking revenue, down 27% each compared to the prior quarter [9][11]. - Noninterest expense increased by 6% sequentially to $1,304 million, but decreased by 3% year-over-year, reflecting disciplined expense management [13][14]. - The return on average common equity was 10.8%, down from 13.0% in the previous quarter, indicating a need for improved profitability measures [1]. - Net income available to common shareholders fell by 18% to$ 478 million compared to the previous quarter [42]. - Earnings per share (diluted) decreased by 16% to $0.71, while basic earnings per share increased by 1% to$ 0.71 year-over-year [42]. - Total revenue (FTE) for Q1 2025 was $2,136 million, a decrease of 1.8% sequentially and an increase of 1.7% year-over-year [46]. - Income before income taxes (FTE) for Q1 2025 was$ 658 million, a decrease from $770 million in Q4 2024, showing a decline in profitability [72]. Loan and Lease Growth - The average portfolio loans and leases rose to$ 121,272 million, a 3% increase sequentially and year-over-year, driven by growth in both commercial and consumer lending [1]. - Total average portfolio loans and leases increased 3% compared to the prior quarter, with commercial loans and leases up 4% and consumer loans up 2% [16]. - Period-end commercial portfolio loans and leases reached $75 billion, a 3% increase from the prior quarter and a 4% increase year-over-year [19]. - Period-end consumer portfolio loans totaled$ 47 billion, increasing 1% from the prior quarter and 6% year-over-year [20]. - Total loans and leases increased to $121.764 billion in March 2025, up from$ 118.492 billion in December 2024, representing a growth of 1.92% [53]. Credit Quality - The provision for credit losses totaled $174 million in the current quarter, with an allowance for credit losses (ACL) ratio of 2.07% of total portfolio loans and leases [26]. - Nonperforming portfolio loans and leases (NPLs) increased to$ 966 million, resulting in an NPL ratio of 0.79%, up 10 basis points from the prior quarter [60]. - Total net charge-offs were $136 million, with a net charge-off (NCO) ratio of 0.46%, unchanged from the prior quarter [27]. - The allowance for loan and lease losses increased to$ 2,384 million, a 3% increase from $2,318 million in March 2024 [50]. - Total nonperforming assets rose to$ 1,017 million in March 2025, compared to $860 million in December 2024 [60]. Capital and Equity - CET1 capital ratio decreased by 12 basis points to 10.45% due to loan growth increasing risk-weighted assets [31]. - Average total Bancorp shareholders' equity as a percentage of average assets increased to 9.50% from 9.40% in the previous quarter [31]. - Fifth Third repurchased$ 225 million of its common stock, reducing shares outstanding by approximately 5.2 million [31]. - Total equity rose to $20,403 million, a 7% increase compared to$ 19,018 million in March 2024 [50]. - The Tier 1 risk-based capital ratio was 11.73% in March 2025, down from 11.86% in December 2024 [56]. Market and Operational Efficiency - The effective tax rate for the quarter was 21.2%, up from 18.8% in the prior quarter [32]. - The efficiency ratio (FTE) improved to 61.0% in Q1 2025 compared to 56.4% in Q4 2024, indicating increased operational efficiency [70]. - The company plans to continue focusing on stability, profitability, and growth as its operating principles amid economic uncertainty [4]. - The company has been recognized among Ethisphere's World's Most Ethical Companies® for several years [34]. - Fifth Third aims to be the highest performing regional bank in the U.S. while maintaining a strong commitment to community impact [34].