FIFTH THIRD BANC(FITBP) - 2025 Q3 - Quarterly Report

Financial 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 reported at $212,903 million as of September 30, 2025, slightly down from $212,927 million at December 31, 2024[50]. - Total Bancorp Shareholders' Equity increased to $21,107 million as of September 30, 2025, up from $19,645 million at December 31, 2024[50]. - The Bancorp's total residential mortgage loans serviced as of September 30, 2025, were $106.5 billion, down from $112.4 billion as of September 30, 2024[86]. Revenue and Income - For the three months ended September 30, 2025, net interest income 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, and by $107 million for the nine months ended September 30, 2025, totaling $2.224 billion[40]. - Wealth and asset management revenue rose to $181 million for the three months ended September 30, 2025, an increase of 11% from $163 million in the same period in 2024[74]. Expenses and Efficiency - Noninterest expense rose by $23 million for Q3 2025, totaling $1.267 billion, and by $28 million for the nine months ended September 30, 2025, totaling $3.835 billion[41]. - The efficiency ratio, a non-GAAP measure, is used to evaluate the Bancorp's operational efficiency[30]. - Compensation and benefits expense increased by $33 million for the nine months ended September 30, 2025, primarily driven by increases in base compensation and performance-based compensation[91]. Capital and Ratios - The CET1 risk-based capital ratio as of September 30, 2025, was 10.57%, with a total risk-based capital ratio of 13.54%[43]. - The CET1 risk-based Capital Ratio is a key performance indicator used to assess the Bancorp's capital strength[30]. - Book value per share increased by 6% to $29.26 as of September 30, 2025, from $27.60 in the prior year[36]. Loans and Credit Quality - Total loans and leases amounted to $123,147 million for the nine months ended September 30, 2025, with a yield of 6.09%, compared to $117,466 million and a yield of 6.43% for the same period in 2024[66]. - The provision for credit losses was $197 million for Q3 2025, a 23% increase from $160 million in Q3 2024, and $544 million for the nine months ended September 30, 2025, up 55% from $351 million[38]. - The net charge-off ratio was 1.09% for Q3 2025, compared to 0.48% for Q3 2024[39]. - The allowance for loan and lease losses (ALLL) decreased to $2.3 billion at September 30, 2025, from $2.4 billion at December 31, 2024, representing a decrease of $87 million[71]. Mergers and Acquisitions - The Bancorp entered into a merger agreement with Comerica Incorporated, with a transaction value of $10.9 billion, expected to close at the end of Q1 2026[19]. Legislative and Regulatory Impact - Recent legislative changes did not have a material impact on the Bancorp's financial statements for the period ending September 30, 2025[28]. Deposits and Funding - Total deposits decreased slightly to $166.569 billion as of September 30, 2025, down from $167.252 billion at December 31, 2024[128]. - Core deposits decreased by $300 million from December 31, 2024, primarily due to declines in transaction deposits and CDs of $250,000 or less[130]. - Average core deposits represented 77% of average total assets for both the three months ended September 30, 2025 and 2024[127]. 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]. Credit Risk Management - The Bancorp's credit risk management strategy emphasizes conservatism, diversification, and monitoring, with a focus on limiting exposure to borrowers with higher than average default risk[184]. - The Bancorp maintains a dual risk rating system for credit approval and pricing, which includes thirteen categories for estimating probabilities of default and eleven categories for estimating losses given an event of default[185]. - The Bancorp closely monitors economic factors impacting borrowers, including inflation, interest rates, and market volatility, to ensure disciplined client selection and adherence to underwriting policies[190].