FIFTH THIRD BANC(FITBO) - 2025 Q3 - Quarterly Results

Executive Summary & Key Highlights This section provides an initial overview of Fifth Third Bancorp's strong Q3 2025 performance, highlighting diluted EPS growth, positive operating leverage, and strategic financial management across net interest income, noninterest income, and expense control Key Financial Data & Highlights Fifth Third Bancorp reported Q3 2025 diluted EPS of $0.91, driven by strong revenue growth and expense discipline, marking the 4th consecutive quarter of positive operating leverage Key Financial Data (3Q25 vs. Prior Periods) | Metric | 3Q25 | 2Q25 | 3Q24 | | :----------------------------------- | :----- | :----- | :----- | | Net income available to common shareholders ($M) | $608 | $591 | $532 | | Net interest income (FTE) ($M) | $1,525 | $1,500 | $1,427 | | Noninterest income ($M) | $781 | $750 | $711 | | Noninterest expense ($M) | $1,267 | $1,264 | $1,244 | | Earnings per share, diluted | $0.91 | $0.88 | $0.78 | | Tangible book value per share | $21.66 | $20.98 | $20.20 | | Net interest margin (FTE) | 3.13% | 3.12% | 2.90% | | Efficiency (FTE) | 54.9% | 56.2% | 58.2% | | Average portfolio loans and leases ($M) | $123,326 | $123,071 | $116,826 | | Average deposits ($M) | $164,754 | $163,575 | $167,196 | | Net charge-off ratio | 1.09% | 0.45% | 0.48% | | Nonperforming asset ratio | 0.65% | 0.72% | 0.62% | | Return on average assets | 1.21% | 1.20% | 1.06% | | CET1 capital | 10.54% | 10.58% | 10.75% | * Adjusted Pre-Provision Net Revenue (PPNR) increased 6% sequentially and 11% year-over-year, marking the highest annual growth rate in over two years[3] * The company repurchased $300 million of shares in the quarter and achieved a 7% increase in tangible book value per share over the past year[3] Income Statement Highlights Net income available to common shareholders increased 3% sequentially and 14% YoY to $608 million, with diluted EPS rising 3% sequentially and 17% YoY to $0.91 Condensed Statements of Income (3Q25 vs. Prior Periods) | Metric ($ in millions, except per share data) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :------------------------------------------ | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Net interest income (NII) | $1,525 | $1,500 | $1,427 | 2% | 7% | | Provision for credit losses | 197 | 173 | 160 | 14% | 23% | | Noninterest income | 781 | 750 | 711 | 4% | 10% | | Noninterest expense | 1,267 | 1,264 | 1,244 | — | 2% | | Net income available to common shareholders | $608 | $591 | $532 | 3% | 14% | | Earnings per share, diluted | $0.91 | $0.88 | $0.78 | 3% | 17% | Diluted Earnings Per Share Impact of Certain Items - 3Q25 | Item (after-tax impact; $ in millions, except per share data) | Impact | | :---------------------------------------------------------- | :----- | | Interchange litigation matters | $(21) | | FDIC special assessment (noninterest expense) | 5 | | After-tax impact of certain item(s) | $(16) | | Diluted earnings per share impact of certain item(s) | $(0.02) | Net Interest Income Fully-taxable equivalent (FTE) Net Interest Income (NII) increased 2% sequentially to $1.525 billion and 7% YoY, driven by improved earning asset mix, fixed-rate asset repricing, and strategic management actions Net Interest Income (FTE) Analysis | Metric (FTE; $ in millions) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :-------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Net interest income (NII) | $1,525 | $1,500 | $1,427 | 2% | 7% | | Yield on interest-earning assets | 5.18% | 5.18% | 5.43% | — | (25) bps | | Rate paid on interest-bearing liabilities | 2.77% | 2.78% | 3.38% | (1) bps | (61) bps | | Net interest rate spread | 2.41% | 2.40% | 2.05% | 1 bp | 36 bps | | Net interest margin (NIM) | 3.13% | 3.12% | 2.90% | 1 bp | 23 bps | * The improvement in NII and NIM was primarily due to improved earning asset mix, fixed-rate asset repricing, and strategic management actions decreasing the cost of interest-bearing liabilities[7][8] Noninterest Income Total noninterest income increased 4% sequentially to $781 million and 10% YoY, primarily driven by strong growth in capital markets fees and wealth and asset management revenue Noninterest Income (3Q25 vs. Prior Periods) | Noninterest Income ($ in millions) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :-------------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Wealth and asset management revenue | $181 | $166 | $163 | 9% | 11% | | Commercial payments revenue | 157 | 152 | 154 | 3% | 2% | | Consumer banking revenue | 144 | 147 | 143 | (2)% | 1% | | Capital markets fees | 115 | 90 | 111 | 28% | 4% | | Commercial banking revenue | 87 | 79 | 93 | 10% | (6)% | | Mortgage banking net revenue | 58 | 56 | 50 | 4% | 16% | | Total noninterest income | $781 | $750 | $711 | 4% | 10% | Noninterest Income Excluding Certain Items | Noninterest Income ($ in millions) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :-------------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Noninterest income (U.S. GAAP) | $781 | $750 | $711 | | | | Interchange litigation matters | 18 | 1 | 47 | | | | Securities (gains) losses, net | (10) | (16) | (10) | | | | Noninterest income excluding certain items (a) | $789 | $735 | $748 | 7% | 5% | * Capital markets fees saw a strong rebound, increasing 28% sequentially, driven by loan syndications and M&A advisory revenue[11] Noninterest Expense Total noninterest expense remained stable sequentially at $1.267 billion and increased 2% YoY, primarily due to increases in equipment, occupancy, marketing, and technology expenses Noninterest Expense (3Q25 vs. Prior Periods) | Noninterest Expense ($ in millions) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :-------------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Compensation and benefits | $685 | $698 | $690 | (2)% | (1)% | | Technology and communications | 128 | 126 | 121 | 2% | 6% | | Net occupancy expense | 89 | 83 | 81 | 7% | 10% | | Equipment expense | 44 | 41 | 38 | 7% | 16% | | Loan and lease expense | 39 | 36 | 34 | 8% | 15% | | Marketing expense | 34 | 43 | 26 | (21)% | 31% | | Total noninterest expense | $1,267 | $1,264 | $1,244 | — | 2% | Noninterest Expense Excluding Certain Items | Noninterest Expense ($ in millions) | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :-------------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Noninterest expense (U.S. GAAP) | $1,267 | $1,264 | $1,244 | | | | Interchange litigation matters | (9) | — | (10) | | | | Severance expense | — | (15) | (9) | | | | FDIC special assessment | 6 | — | — | | | | Noninterest expense excluding certain item(s) (a) | $1,264 | $1,249 | $1,225 | 1% | 3% | | Non-qualified deferred compensation (expense)/benefit | (11) | (16) | (10) | | | | Noninterest expense excluding certain item(s) and non-qualified (a) deferred compensation | $1,253 | $1,233 | $1,215 | 2% | 3% | Balance Sheet & Credit Quality Overview This section details Fifth Third Bancorp's asset and liability structure, including loan and deposit trends, wholesale funding, and an in-depth analysis of credit quality metrics and capital position Average Interest-Earning Assets Total average portfolio loans and leases remained stable sequentially at $123 billion and increased 6% YoY, with commercial loans decreasing and consumer loans increasing Average Portfolio Loans and Leases ($ in millions) | Category | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :----------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Total commercial loans and leases | $74,915 | $75,415 | $71,769 | (1)% | 4% | | Total consumer loans | $48,411 | $47,656 | $45,057 | 2% | 7% | | Total average portfolio loans and leases | $123,326 | $123,071 | $116,826 | — | 6% | * Average commercial portfolio loans and leases decreased 1% sequentially due to declines in commercial mortgage and commercial construction loans, partially offset by increases in C&I middle market loans[17] * Average consumer portfolio loans increased 2% sequentially, driven by continued strong growth in indirect secured consumer and home equity loans[17] End of Period Interest-Earning Assets Total period-end portfolio loans and leases increased 1% sequentially to $123.13 billion and 6% YoY, with commercial loans stable and consumer loans increasing End of Period Portfolio Loans and Leases ($ in millions) | Category | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :----------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Total commercial loans and leases | $74,423 | $74,152 | $71,130 | — | 5% | | Total consumer loans | $48,707 | $48,244 | $45,538 | 1% | 7% | | Total portfolio loans and leases | $123,130 | $122,396 | $116,668 | 1% | 6% | * Period-end consumer portfolio loans increased 1% sequentially, primarily reflecting increases in indirect secured consumer and home equity loans[21] * Total period-end securities decreased 4% sequentially and 7% YoY[22] Average Deposits Total average deposits increased 1% sequentially to $165 billion, driven by money market and demand deposits, partially offset by declines in savings and interest checking Average Deposits ($ in millions) | Category | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :----------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Demand | $41,235 | $40,885 | $40,020 | 1% | 3% | | Interest checking | 56,624 | 56,738 | 58,605 | — | (3)% | | Savings | 16,376 | 16,962 | 17,272 | (3)% | (5)% | | Money market | 37,434 | 36,296 | 37,257 | 3% | — | | Total average deposits | $164,754 | $163,575 | $167,196 | 1% | (1)% | * The growth in demand deposits reflects a strategic focus on enhancing the deposit mix and represents the second consecutive quarter of demand deposit growth[23] * The period-end portfolio loan-to-core deposit ratio was 75% in the current quarter, compared to 76% in the prior quarter and 71% in the year-ago quarter[24] Average Wholesale Funding Total average wholesale funding decreased 3% sequentially to $22 billion and 7% YoY, primarily due to reductions in long-term debt and CDs over $250,000 Average Wholesale Funding ($ in millions) | Category | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :------------------------------------ | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | CDs over $250,000 | $2,244 | $2,200 | $3,499 | 2% | (36)% | | FHLB advances | 4,920 | 4,976 | 2,576 | (1)% | 91% | | Long-term debt | 14,001 | 14,599 | 16,716 | (4)% | (16)% | | Total average wholesale funding | $21,821 | $22,423 | $23,415 | (3)% | (7)% | * The decrease in average wholesale funding was primarily attributable to a reduction in long-term debt and CDs over $250,000, inclusive of brokered deposits[25] Credit Quality Summary Provision for credit losses totaled $197 million, with the Allowance for Credit Losses (ACL) ratio decreasing to 1.96%, while net charge-offs significantly increased due to a commercial credit impairment Credit Quality Summary ($ in millions) | Metric | September 2025 | June 2025 | September 2024 | | :------------------------------------------------- | :--------------- | :-------- | :--------------- | | Total nonaccrual portfolio loans and leases (NPLs) | $768 | $853 | $686 | | Total nonperforming portfolio loans and leases and OREO (NPAs) | $801 | $886 | $725 | | NPL ratio | 0.62% | 0.70% | 0.59% | | NPA ratio | 0.65% | 0.72% | 0.62% | | Provision for loan and lease losses | 192 | 167 | 159 | | Total net losses charged-off | $(339) | $(139) | $(142) | | Net charge-off ratio (NCO ratio) | 1.09% | 0.45% | 0.48% | | Commercial NCO ratio | 1.46% | 0.38% | 0.40% | | Consumer NCO ratio | 0.52% | 0.56% | 0.62% | | ACL as a % of portfolio loans and leases | 1.96% | 2.09% | 2.09% | | ACL as a % of nonperforming portfolio loans and leases | 314% | 300% | 356% | * Net charge-offs in Q3 2025 included $178 million related to the impairment of an asset-backed finance commercial credit[27] * Nonperforming portfolio loans and leases decreased to $768 million (0.62% NPL ratio) from $853 million (0.70% NPL ratio) in the prior quarter[30] Capital Position The CET1 capital ratio decreased 4 bps sequentially to 10.54% due to risk-weighted asset growth and capital returns, while Fifth Third repurchased $300 million of common stock and increased its quarterly common dividend Regulatory Capital Ratios (Bancorp) | Metric | September 2025 | June 2025 | September 2024 | | :-------------------- | :--------------- | :-------- | :--------------- | | CET1 capital | 10.54% | 10.58% | 10.75% | | Tier 1 risk-based capital | 11.60% | 11.85% | 12.07% | | Total risk-based capital | 13.51% | 13.77% | 14.13% | | Leverage | 9.24% | 9.42% | 9.11% | * Fifth Third repurchased $300 million of its common stock during the third quarter of 2025[31] * The quarterly cash common dividend was increased by $0.03, or 8%, to $0.40 per share for Q3 2025[31] Other Financial Information This section covers supplementary financial details such as the effective tax rate, corporate profile, forward-looking statements, and explanations of non-GAAP measures used in the report Tax Rate The effective tax rate for Q3 2025 was 22.6%, an increase from 22.2% in the prior quarter and 21.3% in the year-ago quarter Effective Tax Rate | Period | Effective Tax Rate | | :----- | :----------------- | | 3Q25 | 22.6% | | 2Q25 | 22.2% | | 3Q24 | 21.3% | Corporate Profile & Conference Call Fifth Third Bancorp, founded in 1858, is a bank recognized for innovation and ethical practices, aiming to be a high-performing and trusted regional bank * Fifth Third is a bank founded in 1858, known for innovation and helping individuals, families, businesses, and communities grow[34] * The company has been named among Ethisphere's World's Most Ethical Companies® for several years[34] * A conference call to discuss financial results will be webcast live at 9:00 a.m. (Eastern Time) via the Fifth Third Investor Relations website (www.53.com)[33](index=33&type=chunk) Forward-Looking Statements This release contains forward-looking statements subject to various risks and uncertainties, including deteriorating credit quality, regulatory changes, economic conditions, cybersecurity risks, and potential impacts of the pending merger with Comerica Incorporated * Statements in this release are forward-looking and subject to risks and uncertainties, not statements of historical fact[37] * Key risk factors include deteriorating credit quality, loan concentration, problems encountered by other financial institutions, inadequate funding or liquidity, adverse government regulation, changes in interest rates, and litigation[38] * The company disclaims any obligation to publicly update or revise forward-looking statements, except as required by law[39] Earnings Release End Notes This section provides definitions and clarifications for various financial measures and ratios used in the earnings release, including non-GAAP measures, annualized ratios, and regulatory capital calculation methods * Non-GAAP measures are used and reconciled on page 27[36] * Net losses charged-off are presented as a percent of average portfolio loans and leases on an annualized basis[36] * Regulatory capital ratios for prior periods were calculated using a five-year transition provision option for CECL effects, and current period ratios are estimated[36] Quarterly Financial Review (Detailed Tables) This section presents the comprehensive financial statements and detailed breakdowns of key financial data, including income statements, balance sheets, equity changes, average balances, loans, regulatory capital, credit loss experience, asset quality, non-GAAP reconciliations, and segment performance for the quarter ended September 30, 2025 Financial Highlights This section provides a comprehensive overview of Fifth Third Bancorp's key financial performance indicators and ratios for the three months ended September 30, 2025, and year-to-date, with comparative data for prior periods Key Financial Highlights (3Q25 vs. Prior Periods) | Metric | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :------------------------------------------------- | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Net income available to common shareholders ($M) | $608 | $591 | $532 | 3% | 14% | | Earnings per share, diluted | $0.91 | $0.88 | $0.78 | 3% | 17% | | Net interest income (FTE) ($M) | $1,525 | $1,500 | $1,427 | 2% | 7% | | Noninterest income ($M) | $781 | $750 | $711 | 4% | 10% | | Provision for credit losses ($M) | 197 | 173 | 160 | 14% | 23% | | Return on average assets | 1.21% | 1.20% | 1.06% | 1 bp | 15 bps | | Net interest margin (FTE) | 3.13% | 3.12% | 2.90% | 1 bp | 23 bps | | Efficiency (FTE) | 54.9% | 56.2% | 58.2% | (130) bps | (330) bps | | Net losses charged-off as a percent of average portfolio loans and leases (annualized) | 1.09% | 0.45% | 0.48% | 64 bps | 61 bps | | CET1 capital | 10.54% | 10.58% | 10.75% | (4) bps | (21) bps | | Assets under management ($B) | $77 | $73 | $69 | 5% | 12% | Consolidated Statements of Income This section presents the detailed consolidated statements of income for Fifth Third Bancorp, showing interest income, interest expense, net interest income, provision for credit losses, noninterest income, noninterest expense, income before income taxes, and net income available to common shareholders for the three months ended September 30, 2025, and comparative periods Consolidated Statements of Income ($ in millions) | Metric | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :------------------------------------ | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Total interest income | $2,519 | $2,484 | $2,669 | 1% | (6)% | | Total interest expense | 999 | 989 | 1,248 | 1% | (20)% | | Net Interest Income | 1,520 | 1,495 | 1,421 | 2% | 7% | | Provision for credit losses | 197 | 173 | 160 | 14% | 23% | | Total noninterest income | 781 | 750 | 711 | 4% | 10% | | Total noninterest expense | 1,267 | 1,264 | 1,244 | — | 2% | | Income Before Income Taxes | 837 | 808 | 728 | 4% | 15% | | Net Income Available to Common Shareholders | $608 | $591 | $532 | 3% | 14% | Consolidated Balance Sheets This section provides a detailed breakdown of Fifth Third Bancorp's assets, liabilities, and equity as of September 30, 2025, and comparative prior periods, highlighting a 1% sequential increase in total assets and total deposits, and stable total equity Consolidated Balance Sheets ($ in millions) | Metric | September 2025 | June 2025 | September 2024 | Seq Change (%) | Yr/Yr Change (%) | | :------------------------------------ | :--------------- | :-------- | :--------------- | :------------- | :--------------- | | Total Assets | $212,903 | $209,991 | $214,318 | 1% | (1)% | | Other short-term investments | 17,215 | 13,043 | 21,729 | 32% | (21)% | | Portfolio loans and leases, net | 120,865 | 119,984 | 114,363 | 1% | 6% | | Total deposits | 166,569 | 164,207 | 168,340 | 1% | (1)% | | Total Liabilities | 191,796 | 188,867 | 193,534 | 2% | (1)% | | Total Equity | 21,107 | 21,124 | 20,784 | — | 2% | Consolidated Statements of Changes in Equity This statement details the changes in Fifth Third Bancorp's total equity for the three months and year-to-date periods ended September 30, 2025, compared to the prior year, showing the impact of net income, other comprehensive income, cash dividends, stock transactions, share repurchases, and preferred stock redemption Consolidated Statements of Changes in Equity ($ in millions) | Item | For the Three Months Ended September 2025 | | :------------------------------------------------- | :---------------------------------------- | | Total Equity, Beginning | $21,124 | | Net income | 649 | | Other comprehensive income, net of tax | 270 | | Comprehensive income | 919 | | Cash dividends declared: Common stock | (269) | | Cash dividends declared: Preferred stock | (37) | | Shares acquired for treasury | (303) | | Redemption of preferred stock | (350) | | Total Equity, Ending | $21,107 | Average Balance Sheets and Yield/Rate Analysis This section provides average balance sheet data and a detailed yield/rate analysis for interest-earning assets and interest-bearing liabilities for the three months ended September 30, 2025, and comparative periods Average Balance Sheets and Yield/Rate Analysis (3Q25) | Metric | Average Balance ($M) | Average Yield/Rate | | :------------------------------------ | :------------------- | :----------------- | | Total interest-earning assets | $193,500 | 5.18% | | Total interest-bearing liabilities | $143,096 | 2.77% | | Net interest margin (FTE) | | 3.13% | | Net interest rate spread (FTE) | | 2.41% | * The yield on total loans and leases was 6.12% for Q3 2025, stable sequentially[54] * The rate paid on total interest-bearing deposits was 2.41% for Q3 2025, up 2 bps sequentially[54] Summary of Loans and Leases This section details the average and end-of-period portfolio loans and leases, categorized by commercial and consumer segments, for the current and prior quarters, also including loans and leases held for sale and loans serviced for others Average Portfolio Loans and Leases ($ in millions) | Category | September 2025 | June 2025 | September 2024 | | :----------------------------- | :--------------- | :-------- | :--------------- | | Total commercial loans and leases | $74,915 | $75,415 | $71,769 | | Total consumer loans | $48,411 | $47,656 | $45,057 | | Total average portfolio loans and leases | $123,326 | $123,071 | $116,826 | End of Period Portfolio Loans and Leases ($ in millions) | Category | September 2025 | June 2025 | September 2024 | | :----------------------------- | :--------------- | :-------- | :--------------- | | Total commercial loans and leases | $74,423 | $74,152 | $71,130 | | Total consumer loans | $48,707 | $48,244 | $45,538 | | Total portfolio loans and leases | $123,130 | $122,396 | $116,668 | * Total loans and leases serviced for others amounted to $93,261 million in Q3 2025[59] Regulatory Capital This section provides detailed regulatory capital figures and ratios for Fifth Third Bancorp and Fifth Third Bank, National Association, as of September 30, 2025, and prior periods Regulatory Capital (Bancorp, $ in millions) | Metric | September 2025 | June 2025 | September 2024 | | :-------------------- | :--------------- | :-------- | :--------------- | | CET1 capital | $17,646 | $17,616 | $17,272 | | Additional tier 1 capital | 1,770 | 2,116 | 2,116 | | Tier 1 capital | 19,416 | 19,732 | 19,388 | | Total regulatory capital | $22,625 | $22,929 | $22,691 | | Risk-weighted assets | $167,415 | $166,517 | $160,604 | Regulatory Capital Ratios (Bancorp) | Metric | September 2025 | June 2025 | September 2024 | | :-------------------- | :--------------- | :-------- | :--------------- | | CET1 capital | 10.54% | 10.58% | 10.75% | | Tier 1 risk-based capital | 11.60% | 11.85% | 12.07% | | Total risk-based capital | 13.51% | 13.77% | 14.13% | | Leverage | 9.24% | 9.42% | 9.11% | * Fifth Third Bank, National Association maintained strong capital ratios with Tier 1 risk-based capital at 12.92% and Leverage at 10.30% in Q3 2025[60] Summary of Credit Loss Experience This section details the credit loss experience, including average portfolio loans and leases, total losses charged-off, recoveries, and net losses charged-off, broken down by commercial and consumer loan categories for the current and prior quarters Net Losses Charged-Off ($ in millions) | Category | September 2025 | June 2025 | September 2024 | | :----------------------------- | :--------------- | :-------- | :--------------- | | Total commercial loans and leases | $(275) | $(71) | $(72) | | Total consumer loans | $(64) | $(68) | $(70) | | Total net losses charged-off | $(339) | $(139) | $(142) | Net Losses Charged-Off as a Percent of Average Portfolio Loans and Leases (Annualized) | Category | September 2025 | June 2025 | September 2024 | | :------------------------------------------------- | :--------------- | :-------- | :--------------- | | Total commercial loans and leases | 1.46% | 0.38% | 0.40% | | Total consumer loans | 0.52% | 0.56% | 0.62% | | Total net losses charged-off as a percent of average portfolio loans and leases (annualized) | 1.09% | 0.45% | 0.48% | * Commercial and industrial loans experienced a significant increase in net charge-off ratio to 2.01% in Q3 2025 from 0.51% in Q2 2025[63] Asset Quality This section provides a detailed breakdown of the Allowance for Credit Losses (ACL), nonperforming assets, and delinquent loans, showing the ending balance of ALLL at $2,265 million and total nonperforming assets at $805 million for Q3 2025 Allowance for Credit Losses ($ in millions) | Metric | September 2025 | June 2025 | September 2024 | | :------------------------------------ | :--------------- | :-------- | :--------------- | | Allowance for loan and lease losses, ending | $2,265 | $2,412 | $2,305 | | Reserve for unfunded commitments, ending | $151 | $146 | $138 | | Total allowance for credit losses | $2,416 | $2,558 | $2,443 | Nonperforming Assets and Delinquent Loans ($ in millions) | Metric | September 2025 | June 2025 | September 2024 | | :------------------------------------------------- | :--------------- | :-------- | :--------------- | | Total nonaccrual portfolio loans and leases | $768 | $853 | $686 | | Total nonperforming portfolio loans and leases and OREO | $801 | $886 | $725 | | Total nonperforming assets | $805 | $913 | $733 | | Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO | 0.65% | 0.72% | 0.62% | * The ACL as a percent of nonperforming portfolio loans and leases increased to 314% in Q3 2025 from 300% in Q2 2025[64] Non-GAAP Reconciliation This section provides reconciliations of various non-GAAP financial measures to their most directly comparable GAAP measures, explaining why management uses these non-GAAP measures for evaluating performance and capital adequacy * Management uses non-GAAP measures like FTE net interest income, tangible common equity, and adjusted efficiency ratio to evaluate operating performance and capital adequacy, believing they provide useful information to investors[66][68][69] * The FTE basis adjusts for the tax-favored status of income from certain loans and securities, providing a relevant comparison between taxable and non-taxable amounts[67] Key Non-GAAP Metrics (3Q25 vs. Prior Periods) | Metric | September 2025 | June 2025 | September 2024 | | :------------------------------------------------- | :--------------- | :-------- | :--------------- | | Net interest income (FTE) ($M) | $1,525 | $1,500 | $1,427 | | Tangible net income available to common shareholders ($M) | 613 | 596 | 539 | | Tangible book value per share (including AOCI) | $21.66 | $20.98 | $20.20 | | Tangible book value per share (excluding AOCI) | $26.61 | $26.29 | $25.29 | | Adjusted efficiency ratio | 54.1% | 55.2% | 55.9% | | Adjusted pre-provision net revenue (PPNR) ($M) | $1,061 | $1,002 | $960 | Segment Presentation This section presents the financial performance by business segment: Commercial Banking, Consumer and Small Business Banking, Wealth and Asset Management, and General Corporate and Other, showing the contribution of each segment to net interest income (FTE), provision for credit losses, noninterest income, noninterest expense, and income (loss) before income taxes (FTE) for the current and prior quarters Income (Loss) Before Income Taxes (FTE) by Segment ($ in millions) | Segment | September 2025 | June 2025 | September 2024 | | :------------------------------------ | :--------------- | :-------- | :--------------- | | Commercial Banking | $251 | $384 | $466 | | Consumer and Small Business Banking | $665 | $648 | $647 | | Wealth and Asset Management | $71 | $65 | $54 | | General Corporate and Other | $(145) | $(284) | $(433) | | Total | $842 | $813 | $734 | * During Q1 2025, the Bancorp realigned its reporting structure, moving certain business banking customer relationships and personnel to the Consumer and Small Business Banking segment from Commercial Banking, with prior period results adjusted[77] * Consumer and Small Business Banking showed consistent growth in income before income taxes (FTE) across the periods presented[76]