FIFTH THIRD BANC(US:FITBO)2025-05-06 20:24Financial Performance - For the three months ended March 31, 2025, net interest income on an FTE basis was $1.442 billion, a 4% increase from $1.390 billion in the same period of 2024[26]. - Noninterest income decreased by $16 million to $694 million for the three months ended March 31, 2025, primarily due to a $19 million decrease in net securities gains/losses[31]. - Net income available to common shareholders for Q1 2025 was $478 million, or $0.71 per diluted share, compared to $480 million, or $0.70 per diluted share, for Q1 2024[28]. - The efficiency ratio for the Bancorp was 60.9% for the three months ended March 31, 2025, compared to 63.9% for the same period in 2024[26]. - The Bancorp's return on average tangible common equity was 15.2% for the three months ended March 31, 2025, compared to 17.0% for the same period in 2024[38]. - Income before income taxes (FTE) was $658 million for the three months ended March 31, 2025, compared to $664 million for the same period in the prior year[130]. - Income before income taxes for the Consumer and Small Business Banking segment was $522 million for the three months ended March 31, 2025, down from $685 million in the prior year, mainly due to a decrease in net interest income[143]. Credit Losses and Provisions - The provision for credit losses increased to $174 million for the three months ended March 31, 2025, compared to $94 million in the same period of 2024, reflecting higher loan and lease balances[30]. - The provision for credit losses increased to $174 million for Q1 2025, up from $94 million in Q1 2024, reflecting higher loan balances and economic forecast deterioration[56]. - The allowance for loan and lease losses (ALLL) rose by $32 million to $2.4 billion as of March 31, 2025, with the ALLL as a percentage of portfolio loans and leases decreasing slightly to 1.95%[57]. - The provision for credit losses was $10 million for the three months ended March 31, 2025, compared to a benefit from credit losses of $61 million for the same period in the prior year[155]. Interest Income and Expenses - Net interest margin on an FTE basis was 3.03% for the three months ended March 31, 2025, compared to 2.86% for the same period in 2024[29]. - The net interest rate spread on an FTE basis was 2.33% for the three months ended March 31, 2025, compared to 2.02% for the same period in the prior year[45]. - Interest income on an FTE basis from loans and leases decreased by $44 million during the three months ended March 31, 2025, primarily due to lower yields on average commercial loans[47]. - Interest expense on average core deposits decreased by $165 million for the three months ended March 31, 2025, with the cost of average interest-bearing core deposits dropping to 239 bps from 291 bps year-over-year[48]. - Net interest income (FTE) decreased by $111 million for the three months ended March 31, 2025, primarily driven by a decrease in FTP credits on deposits[134]. - Net interest income decreased by $177 million for the three months ended March 31, 2025, primarily due to a decrease in FTP credits on deposits[144]. Asset and Liability Management - The Bancorp's total assets were $213 billion as of March 31, 2025, with operations in 11 states[13]. - Total loans and leases reached $121.8 billion in Q1 2025, with a net interest income of $1.44 billion, reflecting a net interest margin of 3.03%[52]. - Total deposits decreased to $165.505 billion as of March 31, 2025, from $167.252 billion as of December 31, 2024[111]. - The total core deposits decreased to $163.611 billion as of March 31, 2025, from $164.894 billion as of December 31, 2024[111]. - Total borrowings increased by $1.2 billion, or 6%, from December 31, 2024, primarily due to increases in other short-term borrowings and long-term debt[123]. Noninterest Income - Total noninterest income decreased by $16 million to $694 million in Q1 2025 compared to Q1 2024, primarily due to a decline in capital markets fees and commercial banking revenue[59]. - Noninterest income decreased by $24 million for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to decreases in capital markets fees and commercial banking revenue[136]. - Noninterest income increased by $14 million for the three months ended March 31, 2025, primarily driven by an increase in wealth and asset management revenue[145]. Loan and Lease Performance - Average loans and leases increased by $4.1 billion, or 3%, for the three months ended March 31, 2025, compared to the same period in the prior year[89]. - Commercial loans and leases increased by $1.8 billion, or 2%, from December 31, 2024, primarily due to increases in commercial and industrial loans[86]. - Average commercial loans and leases increased by $917 million for the three months ended March 31, 2025, driven by increases in average commercial mortgage loans and average commercial leases[139]. - The Bancorp's total outstanding commercial loans and leases amounted to $75.137 billion, with an exposure of $138.099 billion and 623 nonaccrual loans[171]. Nonperforming Assets - Nonperforming assets increased to $1.0 billion at March 31, 2025, compared to $860 million at December 31, 2024[208]. - Nonperforming portfolio assets as a percentage of total portfolio loans and leases were 0.81% at March 31, 2025, up from 0.71% at December 31, 2024[209]. - Portfolio commercial nonaccrual loans and leases rose to $623 million at March 31, 2025, an increase of $167 million from December 31, 2024[210]. Capital and Equity - As of March 31, 2025, the Bancorp's CET1 capital ratio was 10.43%, Tier 1 risk-based capital ratio was 11.71%, total risk-based capital ratio was 13.63%, and leverage ratio was 9.23%[34]. - Total Bancorp shareholders' equity under U.S. GAAP was $20.403 billion as of March 31, 2025, compared to $19.645 billion as of December 31, 2024[39]. - The total equity increased to $20 billion as of March 31, 2025, compared to $18.7 billion a year earlier[52]. Consumer and Residential Loans - Residential mortgage loan originations increased to $1.4 billion in Q1 2025 from $1.1 billion in Q1 2024, attributed to larger average loan sizes and higher correspondent channel volume[65]. - The residential mortgage portfolio's total outstanding loans amount to $17.6 billion, with a weighted average LTV of 73.7% as of March 31, 2025[185]. - The Bancorp's home equity portfolio totals $4.3 billion, with 19% of outstanding balances having a balloon structure at maturity, and approximately $539 million maturing before December 31, 2028[188]. - The Bancorp's residential mortgage loans with LTV greater than 80% and no mortgage insurance have shown immaterial net charge-offs for both the three months ended March 31, 2025 and 2024[187]. Investment Securities - Investment securities totaled $52.6 billion as of March 31, 2025, compared to $52.4 billion as of December 31, 2024[92]. - The total available-for-sale debt and other securities amounted to $43.445 billion as of March 31, 2025, a decrease from $43.878 billion as of December 31, 2024[96]. - The Bancorp transferred $12.6 billion of investment securities from available-for-sale to held-to-maturity in January 2024 to reduce capital volatility[98]. - Total net unrealized losses on the available-for-sale debt and other securities portfolio were $3.7 billion at March 31, 2025, down from $4.3 billion at December 31, 2024[104].