FIFTH THIRD BANC(US:FITBO)2025-11-04 21:35Financial Overview - As of September 30, 2025, Fifth Third Bancorp had $213 billion in assets and operated 1,102 full-service banking centers and 2,184 ATMs across twelve states[13]. - Total assets were $212,903 million as of September 30, 2025, slightly down from $212,927 million at December 31, 2024[50]. - The total assets as of September 30, 2025, were $210,965 million, a slight decrease from $213,174 million as of September 30, 2024[66]. - Total deposits decreased to $166.569 billion as of September 30, 2025, down from $167.252 billion at December 31, 2024[128]. Revenue and Income - For the three months ended September 30, 2025, net interest income on an FTE basis accounted for 66% of total revenue, while noninterest income contributed 34%[16]. - Net income available to common shareholders for Q3 2025 was $608 million, or $0.91 per diluted share, up 14% from $532 million, or $0.78 per diluted share in Q3 2024[36]. - Noninterest income increased by $70 million for Q3 2025, totaling $781 million, driven by growth in wealth and asset management revenue, mortgage banking net revenue, and capital markets fees[40]. - Income before income taxes (FTE) increased to $842 million for the three months ended September 30, 2025, compared to $734 million in the prior year[147]. Expenses and Efficiency - Noninterest expense rose by $23 million for Q3 2025, totaling $1.267 billion, mainly due to increases in technology, marketing, and occupancy expenses[41]. - The efficiency ratio, a non-GAAP measure, is calculated as noninterest expense divided by the sum of net interest income on an FTE basis and noninterest income[30]. - Noninterest expense increased by $23 million and $28 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year[89]. Capital and Ratios - The CET1 risk-based capital ratio as of September 30, 2025, was 10.57%, indicating strong capital adequacy[43]. - The CET1 risk-based Capital Ratio is a key performance indicator used to assess the Bancorp's financial condition, calculated as CET1 risk-based capital divided by risk-weighted assets[30]. - Tangible common equity, excluding AOCI, was $17,590 million as of September 30, 2025, compared to $17,157 million at December 31, 2024[50]. Loans and Credit Quality - Total loans and leases amounted to $123,147 million for the nine months ended September 30, 2025, with a net interest income (FTE) of $4,468 million, reflecting a 51% increase from $4,210 million in the same period last year[66]. - The provision for credit losses was $197 million for Q3 2025, up from $160 million in Q3 2024, and $544 million for the nine months ended September 30, 2025, compared to $351 million in the same period last year[70]. - The net charge-off ratio increased to 1.09% for Q3 2025, compared to 0.48% in Q3 2024, indicating a rise in credit losses[39]. - The allowance for loan and lease losses (ALLL) decreased by $87 million from December 31, 2024, to $2.3 billion at September 30, 2025, with the ALLL as a percentage of portfolio loans and leases decreasing to 1.84%[71]. Mergers and Acquisitions - The Bancorp entered into a definitive merger agreement with Comerica Incorporated on October 5, 2025, with a transaction value of $10.9 billion based on the closing price of Fifth Third's common stock[19]. Shareholder Returns - Cash dividends declared per common share increased to $0.40 in Q3 2025, an 8% rise from $0.37 in Q3 2024[36]. - During the nine months ended September 30, 2025, the Bancorp executed accelerated share repurchase transactions totaling $525 million[23]. Legislative and Tax Changes - Recent legislative changes introduced significant modifications to the U.S. tax code, which were reflected in the Bancorp's financial statements but did not have a material impact[28]. - The effective tax rate increased to 22.6% for the three months ended September 30, 2025, compared to 21.3% for the same period in the prior year, primarily due to decreases in tax credits[98]. Investment Securities - The carrying value of total investment securities decreased to $49.5 billion at September 30, 2025, down from $52.4 billion at December 31, 2024[108]. - Total net unrealized losses on the available-for-sale debt and other securities portfolio were $3.2 billion at September 30, 2025, compared to $4.3 billion at December 31, 2024[121]. - The Bancorp transferred $12.6 billion of investment securities from available-for-sale to held-to-maturity in January 2024 to reduce potential capital volatility[115]. Consumer and Commercial Banking - Consumer banking revenue increased by $10 million for the nine months ended September 30, 2025, primarily due to increased deposit fees from higher overdraft occurrences[76]. - Commercial banking revenue decreased by $6 million and $20 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024, primarily due to decreases in operating lease income[79]. - Wealth and asset management revenue rose to $181 million in Q3 2025, an increase of 11% from $163 million in Q3 2024, and $519 million for the nine months ended September 30, 2025, up 7% from $483 million in the same period last year[74].