Fifth Third(FITB) - 2025 Q2 - Quarterly Results

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