Resilient balance sheet and disciplined expense
management leads to strong and stable returns
Reported results included a negative $0.05
impact from certain items on page 2 of the earnings release
Fifth Third Bancorp (NASDAQ: FITB):
Key Financial Data
Key Highlights
$ in millions for all balance sheet and
income statement items
2Q24
1Q24
2Q23
Stability:
- Continued repricing benefit on fixed rate loan portfolio and
moderating deposit costs drove increased net interest income and
net interest margin compared to prior quarter
- Strong profitability resulted in CET1 increasing to 10.60%
while also executing $125 million share repurchase
- Fifth consecutive quarter of CRE NCO ratio below 1 bp
Profitability:
- Strong fee performance in wealth and asset management revenue
(up 11%) and commercial payments revenue (up 12%) compared to
2Q23
- Interest-bearing core deposit costs up only 4 bps compared to
1Q24
- Disciplined expense management; expenses decreased 1% compared
to 2Q23
Growth:
- Generated consumer household growth of 3% compared to 2Q23,
including 6% in the Southeast
- Fifth Third Wealth Advisors grew assets under management over
50% to $1.7 billion
Income Statement Data
Net income available to common
shareholders
$561
$480
$562
Net interest income (U.S. GAAP)
1,387
1,384
1,457
Net interest income (FTE)(a)
1,393
1,390
1,463
Noninterest income
695
710
726
Noninterest expense
1,221
1,342
1,231
Per Share Data
Earnings per share, basic
$0.82
$0.70
$0.82
Earnings per share, diluted
0.81
0.70
0.82
Book value per share
25.13
24.72
23.05
Tangible book value per share(a)
17.75
17.35
15.61
Balance Sheet & Credit
Quality
Average portfolio loans and leases
$116,891
$117,334
$123,327
Average deposits
167,194
168,122
160,857
Accumulated other comprehensive loss
(4,901)
(4,888)
(5,166)
Net charge-off ratio(b)
0.49
%
0.38
%
0.29
%
Nonperforming asset ratio(c)
0.55
0.64
0.54
Financial Ratios
Return on average assets
1.14
%
0.98
%
1.17
%
Return on average common equity
13.6
11.6
13.9
Return on average tangible common
equity(a)
19.8
17.0
20.5
CET1 capital(d)(e)
10.60
10.47
9.49
Net interest margin(a)
2.88
2.86
3.10
Efficiency(a)
58.5
63.9
56.2
Other than the Quarterly Financial Review
tables beginning on page 14 of the earnings release, commentary is
on a fully taxable-equivalent (FTE) basis unless otherwise noted.
Consistent with SEC guidance in Regulation S-K that contemplates
the calculation of tax-exempt income on a taxable-equivalent basis,
net interest income, net interest margin, net interest rate spread,
total revenue and the efficiency ratio are provided on an FTE
basis.
From Tim Spence, Fifth Third Chairman,
CEO and President:
Fifth Third’s financial results once again demonstrated our
resilient profitability, well-managed liquidity, and diversified
revenue streams.
Our core deposit funded balance sheet generated improved net
interest income and margin. Our strong liquidity position continues
to provide flexibility to navigate through uncertain economic and
regulatory environments. Our net charge-offs were as expected for
the quarter and our nonperforming assets decreased.
We continue to invest in our Southeast expansion, Commercial
Payments, and Wealth and Asset Management businesses, leading to
continued strong acquisition of new quality relationships in
commercial and consumer households. We remain disciplined in
managing expenses, which were well managed from the prior year.
Our strong and stable returns resulted in achieving our capital
targets during the second quarter, which enabled us to execute a
$125 million share repurchase in June while continuing to grow our
capital.
We remain well-positioned to respond to a range of economic
outcomes and will continue to adhere to our guiding principles of
stability, profitability, and growth - in that order.
Income Statement Highlights
($ in millions, except per share
data)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Condensed Statements of Income
Net interest income (NII)(a)
$1,393
$1,390
$1,463
—
(5)%
Provision for credit losses
97
94
177
3%
(45)%
Noninterest income
695
710
726
(2)%
(4)%
Noninterest expense
1,221
1,342
1,231
(9)%
(1)%
Income before income taxes(a)
$770
$664
$781
16%
(1)%
Taxable equivalent adjustment
$6
$6
$6
—
—
Applicable income tax expense
163
138
174
18%
(6)%
Net income
$601
$520
$601
16%
—
Dividends on preferred stock
40
40
39
—
3%
Net income available to common
shareholders
$561
$480
$562
17%
—
Earnings per share, diluted
$0.81
$0.70
$0.82
16%
(1)%
Fifth Third Bancorp (NASDAQ®: FITB) today reported second
quarter 2024 net income of $601 million compared to net income of
$520 million in the prior quarter and $601 million in the year-ago
quarter. Net income available to common shareholders in the current
quarter was $561 million, or $0.81 per diluted share, compared to
$480 million, or $0.70 per diluted share, in the prior quarter and
$562 million, or $0.82 per diluted share, in the year-ago
quarter.
Diluted earnings per share impact of
certain item(s) - 2Q24
(after-tax impact(f); $ in millions,
except per share data)
Valuation of Visa total return swap
$(18)
Legal settlements and remediations
(14)
Update to the FDIC special assessment
(5)
After-tax impact(f) of certain items
$(37)
Diluted earnings per share impact of
certain item(s)1
$(0.05)
Totals may not foot due to rounding;
1Diluted earnings per share impact reflects 691.083 million average
diluted shares outstanding
Items above decreased net interest income
by $5 million and noninterest income by $25 million and increased
noninterest expense by $17 million
Net Interest Income
(FTE; $ in millions)(a)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Interest Income
Interest income
$2,626
$2,614
$2,376
—
11%
Interest expense
1,233
1,224
913
1%
35%
Net interest income (NII)
$1,393
$1,390
$1,463
—
(5)%
NII excluding certain items(a)
$1,398
$1,390
$1,463
1%
(4)%
Average Yield/Rate Analysis
bps Change
Yield on interest-earning assets
5.43%
5.38%
5.04%
5
39
Rate paid on interest-bearing
liabilities
3.39%
3.36%
2.72%
3
67
Ratios
Net interest rate spread
2.04%
2.02%
2.32%
2
(28)
Net interest margin (NIM)
2.88%
2.86%
3.10%
2
(22)
NIM excluding certain items(a)
2.89%
2.86%
3.10%
3
(21)
Compared to the prior quarter, NII increased $3 million.
Excluding the $5 million reduction related to the customer
remediations, NII was up $8 million, or 1%, primarily reflecting
the increased yields on new production of fixed-rate consumer loans
and higher C&I loan yields, partially offset by lower average
commercial loan balances and continued, but slowing, mix shift from
demand deposits to interest-bearing accounts. Compared to the prior
quarter, NIM increased 2 bps. Excluding the aforementioned customer
remediations, NIM increased 3 bps, primarily reflecting the net
benefit of higher market rates and higher loan yields, partially
offset by commercial demand deposit runoff. NIM results continue to
be impacted by the decision to carry elevated liquidity given the
environment, with the combination of cash and other short-term
investments of approximately $24 billion at quarter-end.
Compared to the year-ago quarter, NII decreased $70 million, or
5%. Excluding the aforementioned customer remediations, NII
decreased $65 million, or 4%, reflecting the impact of higher
funding costs and deposit mix shift from demand to interest-bearing
accounts, partially offset by higher loan yields. Compared to the
year-ago quarter, NIM decreased 22 bps. Excluding the
aforementioned customer remediations, NIM decreased 21 bps,
reflecting the impact of higher market rates and their effects on
deposit pricing and the decision to carry additional cash,
partially offset by higher loan yields.
Noninterest Income
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Noninterest Income
Service charges on deposits
$156
$151
$144
3%
8%
Commercial banking revenue
144
143
146
1%
(1)%
Mortgage banking net revenue
50
54
59
(7)%
(15)%
Wealth and asset management revenue
159
161
143
(1)%
11%
Card and processing revenue
108
102
106
6%
2%
Leasing business revenue
38
39
47
(3)%
(19)%
Other noninterest income
37
50
74
(26)%
(50)%
Securities gains, net
3
10
7
(70)%
(57)%
Total noninterest income
$695
$710
$726
(2)%
(4)%
Reported noninterest income decreased $15 million, or 2%, from
the prior quarter, and decreased $31 million, or 4%, from the
year-ago quarter. The reported results reflect the impact of
certain items in the table below, including securities gains/losses
which incorporate mark-to-market impacts from securities associated
with non-qualified deferred compensation plans.
Noninterest Income excluding certain
items
($ in millions)
For the Three Months Ended
June
March
June
% Change
2024
2024
2023
Seq
Yr/Yr
Noninterest Income excluding certain
items
Noninterest income (U.S. GAAP)
$695
$710
$726
Valuation of Visa total return swap
23
17
30
Legal settlements and remediations
2
—
—
Securities (gains) losses, net
(3)
(10)
(7)
Noninterest income excluding certain
items(a)
$717
$717
$749
—
(4)%
Noninterest income excluding certain items was stable compared
to the prior quarter, and decreased $32 million, or 4%, from the
year-ago quarter.
Compared to the prior quarter, service charges on deposits
increased $5 million, or 3%, primarily reflecting an increase in
commercial payments revenue. Commercial banking revenue increased
$1 million, or 1%, primarily reflecting increases in client
financial risk management revenue and M&A advisory revenue,
partially offset by a decrease in loan syndication revenue.
Mortgage banking net revenue decreased $4 million, or 7%, primarily
reflecting an increase in MSR asset decay, partially offset by an
increase in origination fees and gains on loan sales. Wealth and
asset management revenue decreased $2 million, or 1%, primarily
driven by strong tax season-related revenue in the prior quarter,
partially offset by an increase in personal asset management
revenue. Card and processing revenue increased $6 million, or 6%,
driven by an increase in interchange revenue.
Compared to the year-ago quarter, service charges on deposits
increased $12 million, or 8%, primarily reflecting an increase in
commercial payments revenue. Commercial banking revenue decreased
$2 million, or 1%, primarily reflecting decreases in client
financial risk management revenue and loan syndication revenue,
partially offset by an increase in corporate bond fees. Mortgage
banking net revenue decreased $9 million, or 15%, primarily
reflecting decreases in origination fees and gains on loan sales
and MSR net valuation adjustments. Wealth and asset management
revenue increased $16 million, or 11%, primarily reflecting
increases in personal asset management revenue and brokerage fees.
Leasing business revenue decreased $9 million, or 19%, reflecting a
decrease in operating lease revenue. Other noninterest income
decreased $37 million, or 50%, due to equity fund and direct
investment gains in 2023.
Noninterest Expense
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Noninterest Expense
Compensation and benefits
$656
$753
$650
(13)%
1%
Net occupancy expense
83
87
83
(5)%
—
Technology and communications
114
117
114
(3)%
—
Equipment expense
38
37
36
3%
6%
Card and processing expense
21
20
20
5%
5%
Leasing business expense
22
25
31
(12)%
(29)%
Marketing expense
34
32
31
6%
10%
Other noninterest expense
253
271
266
(7)%
(5)%
Total noninterest expense
$1,221
$1,342
$1,231
(9)%
(1)%
Reported noninterest expense decreased $121 million, or 9%, from
the prior quarter, and decreased $10 million, or 1%, from the
year-ago quarter. The reported results reflect the impact of
certain items in the table below.
Noninterest Expense excluding certain
item(s)
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Noninterest Expense excluding certain
item(s)
Noninterest expense (U.S. GAAP)
$1,221
$1,342
$1,231
Legal settlements and remediations
(11)
(19)
(12)
FDIC special assessment
(6)
(33)
—
Restructuring severance expense
—
—
(12)
Noninterest expense excluding certain
item(s)(a)
$1,204
$1,290
$1,207
(7)%
—
Compared to the prior quarter, noninterest expense excluding
certain items decreased $86 million, or 7%, primarily reflecting a
seasonal decrease in compensation and benefits expense. Noninterest
expense in the current quarter included a $4 million expense
related to the impact of non-qualified deferred compensation
mark-to-market compared to a $15 million expense in the prior
quarter, both of which were largely offset in net securities gains
through noninterest income.
Compared to the year-ago quarter, noninterest expense excluding
certain items was flat, primarily reflecting decreases in leasing
business expense and other noninterest expense (excluding the
aforementioned certain items), offset by increases in compensation
and benefits expense and marketing expense. The year-ago quarter
included a $10 million expense related to the impact of
non-qualified deferred compensation mark-to-market, which was
largely offset in net securities gains through noninterest
income.
Average Interest-Earning Assets
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Average Portfolio Loans and
Leases
Commercial loans and leases:
Commercial and industrial loans
$52,357
$53,183
$58,137
(2)%
(10)%
Commercial mortgage loans
11,352
11,339
11,373
—
—
Commercial construction loans
5,917
5,732
5,535
3%
7%
Commercial leases
2,575
2,542
2,700
1%
(5)%
Total commercial loans and leases
$72,201
$72,796
$77,745
(1)%
(7)%
Consumer loans:
Residential mortgage loans
$17,004
$16,977
$17,517
—
(3)%
Home equity
3,929
3,933
3,937
—
—
Indirect secured consumer loans
15,373
15,172
16,281
1%
(6)%
Credit card
1,728
1,773
1,783
(3)%
(3)%
Solar energy installation loans
3,916
3,794
2,787
3%
41%
Other consumer loans
2,740
2,889
3,277
(5)%
(16)%
Total consumer loans
$44,690
$44,538
$45,582
—
(2)%
Total average portfolio loans and
leases
$116,891
$117,334
$123,327
—
(5)%
Average Loans and Leases Held for
Sale
Commercial loans and leases held for
sale
$33
$74
$19
(55)%
74%
Consumer loans held for sale
359
291
641
23%
(44)%
Total average loans and leases held for
sale
$392
$365
$660
7%
(41)%
Total average loans and leases
$117,283
$117,699
$123,987
—
(5)%
Securities (taxable and tax-exempt)
$56,607
$56,456
$57,267
—
(1)%
Other short-term investments
20,609
21,194
7,806
(3)%
164%
Total average interest-earning assets
$194,499
$195,349
$189,060
—
3%
Compared to the prior quarter, total average portfolio loans and
leases were stable. Average commercial portfolio loans and leases
decreased 1%, primarily reflecting a decrease in C&I loan
balances due to lower demand from corporate borrowers. Average
consumer portfolio loans were stable, primarily reflecting an
increase in indirect consumer loan balances, offset by a decrease
in other consumer loan balances.
Compared to the year-ago quarter, total average portfolio loans
and leases decreased 5%, reflecting decreases in both the
commercial and consumer portfolios. Average commercial portfolio
loans and leases decreased 7%, primarily reflecting a decrease in
C&I loan balances. Average consumer portfolio loans decreased
2%, primarily reflecting decreases in indirect secured consumer
loan balances, residential mortgage loan balances, and other
consumer loan balances, partially offset by an increase in solar
energy installation loan balances.
Average securities (taxable and tax-exempt; amortized cost) of
$57 billion in the current quarter were stable compared to the
prior quarter and decreased 1% compared to the year-ago quarter.
Average other short-term investments (including interest-bearing
cash) of $21 billion in the current quarter decreased 3% compared
to the prior quarter and increased 164% compared to the year-ago
quarter.
Period-end commercial portfolio loans and leases of $72 billion
were stable compared to the prior quarter, primarily reflecting
increases in commercial lease balances and commercial mortgage loan
balances, offset by a decrease in C&I loan balances. Compared
to the year-ago quarter, period-end commercial portfolio loans and
leases decreased 6%, primarily reflecting a decrease in C&I
loan balances. Period-end commercial revolving line utilization was
36%, compared to 36% in the prior quarter and 35% in the year-ago
quarter.
Period-end consumer portfolio loans of $45 billion increased 1%
compared to the prior quarter, reflecting increases in indirect
secured consumer loan balances and home equity loan balances,
partially offset by a decrease in other consumer loan balances.
Compared to the year-ago quarter, period-end consumer portfolio
loans decreased 2%, reflecting decreases in indirect secured
consumer loan balances and other consumer loan balances, partially
offset by an increase in solar energy installation loan
balances.
Total period-end securities (taxable and tax-exempt; amortized
cost) of $57 billion in the current quarter were stable compared to
the prior quarter and the year-ago quarter. Period-end other
short-term investments of approximately $21 billion decreased 8%
compared to the prior quarter, and increased 93% compared to the
year-ago quarter.
Average Deposits
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Average Deposits
Demand
$40,266
$40,839
$46,520
(1)%
(13)%
Interest checking
57,999
58,677
50,472
(1)%
15%
Savings
17,747
18,107
21,675
(2)%
(18)%
Money market
35,511
34,589
28,913
3%
23%
Foreign office(g)
157
145
143
8%
10%
Total transaction deposits
$151,680
$152,357
$147,723
—
3%
CDs $250,000 or less
10,767
10,244
7,759
5%
39%
Total core deposits
$162,447
$162,601
$155,482
—
4%
CDs over $250,000
4,747
5,521
5,375
(14)%
(12)%
Total average deposits
$167,194
$168,122
$160,857
(1)%
4%
CDs over $250,000 includes $3.8BN, $4.7BN,
and $4.9BN of retail brokered certificates of deposit which are
fully covered by FDIC insurance for the three months ended 6/30/24,
3/31/24, and 6/30/23, respectively.
Compared to the prior quarter, total average deposits decreased
1%, primarily reflecting the seasonal impact of tax payments,
partially offset by an increase in money market balances. Average
demand deposits represented 25% of total core deposits in the
current quarter, consistent with the prior quarter. Compared to the
prior quarter, average consumer segment deposits increased 2%,
average commercial segment deposits decreased 2%, and average
wealth & asset management segment deposits decreased 2%.
Period-end total deposits decreased 2% compared to the prior
quarter.
Compared to the year-ago quarter, total average deposits
increased 4%, primarily reflecting increases in interest checking
and money market balances, partially offset by decreases in demand
account balances and savings balances. Period-end total deposits
increased 2% compared to the year-ago quarter.
The period-end portfolio loan-to-core deposit ratio was 72% in
the current quarter, compared to 71% in the prior quarter and 77%
in the year-ago quarter. Estimated uninsured deposits were
approximately $72 billion, or 43% of total deposits, as of quarter
end.
Average Wholesale Funding
($ in millions)
For the Three Months Ended
% Change
June
March
June
2024
2024
2023
Seq
Yr/Yr
Average Wholesale Funding
CDs over $250,000
$4,747
$5,521
$5,375
(14)%
(12)%
Federal funds purchased
230
201
376
14%
(39)%
Securities sold under repurchase
agreements
373
366
361
2%
3%
FHLB advances
3,165
3,111
6,589
2%
(52)%
Derivative collateral and other secured
borrowings
54
57
79
(5)%
(32)%
Long-term debt
15,611
15,515
12,848
1%
22%
Total average wholesale funding
$24,180
$24,771
$25,628
(2)%
(6)%
CDs over $250,000 includes $3.8BN, $4.7BN,
and $4.9BN of retail brokered certificates of deposit which are
fully covered by FDIC insurance for the three months ended 6/30/24,
3/31/24, and 6/30/23, respectively.
Compared to the prior quarter, average wholesale funding
decreased 2%, primarily reflecting a decrease in CDs over $250,000.
Compared to the year-ago quarter, average wholesale funding
decreased 6%, primarily reflecting a decrease in FHLB advances,
partially offset by an increase in long-term debt.
Credit Quality Summary
($ in millions)
As of and For the Three Months
Ended
June
March
December
September
June
2024
2024
2023
2023
2023
Total nonaccrual portfolio loans and
leases (NPLs)
$606
$708
$649
$570
$629
Repossessed property
9
8
10
11
8
OREO
28
27
29
31
24
Total nonperforming portfolio loans and
leases and OREO (NPAs)
$643
$743
$688
$612
$661
NPL ratio(h)
0.52%
0.61%
0.55%
0.47%
0.52%
NPA ratio(c)
0.55%
0.64%
0.59%
0.51%
0.54%
Portfolio loans and leases 30-89 days past
due (accrual)
$302
$342
$359
$316
$339
Portfolio loans and leases 90 days past
due (accrual)
33
35
36
29
51
30-89 days past due as a % of portfolio
loans and leases
0.26%
0.29%
0.31%
0.26%
0.28%
90 days past due as a % of portfolio loans
and leases
0.03%
0.03%
0.03%
0.02%
0.04%
Allowance for loan and lease losses
(ALLL), beginning
$2,318
$2,322
$2,340
$2,327
$2,215
Total net losses charged-off
(144)
(110)
(96)
(124)
(90)
Provision for loan and lease losses
114
106
78
137
202
ALLL, ending
$2,288
$2,318
$2,322
$2,340
$2,327
Reserve for unfunded commitments,
beginning
$154
$166
$189
$207
$232
Benefit from the reserve for unfunded
commitments
(17)
(12)
(23)
(18)
(25)
Reserve for unfunded commitments,
ending
$137
$154
$166
$189
$207
Total allowance for credit losses
(ACL)
$2,425
$2,472
$2,488
$2,529
$2,534
ACL ratios:
As a % of portfolio loans and leases
2.08%
2.12%
2.12%
2.11%
2.08%
As a % of nonperforming portfolio loans
and leases
400%
349%
383%
443%
403%
As a % of nonperforming portfolio
assets
377%
333%
362%
413%
383%
ALLL as a % of portfolio loans and
leases
1.96%
1.99%
1.98%
1.95%
1.91%
Total losses charged-off
$(182)
$(146)
$(133)
$(158)
$(121)
Total recoveries of losses previously
charged-off
38
36
37
34
31
Total net losses charged-off
$(144)
$(110)
$(96)
$(124)
$(90)
Net charge-off ratio (NCO ratio)(b)
0.49%
0.38%
0.32%
0.41%
0.29%
Commercial NCO ratio
0.45%
0.19%
0.13%
0.34%
0.16%
Consumer NCO ratio
0.57%
0.67%
0.64%
0.53%
0.50%
Nonperforming portfolio loans and leases were $606 million in
the current quarter, with the resulting NPL ratio of 0.52%.
Compared to the prior quarter, NPLs decreased $102 million with the
NPL ratio decreasing 9 bps. Compared to the year-ago quarter, NPLs
decreased $23 million with the NPL ratio remaining flat.
Nonperforming portfolio assets were $643 million in the current
quarter, with the resulting NPA ratio of 0.55%. Compared to the
prior quarter, NPAs decreased $100 million with the NPA ratio
decreasing 9 bps. Compared to the year-ago quarter, NPAs decreased
$18 million with the NPA ratio increasing 1 bp.
The provision for credit losses totaled $97 million in the
current quarter. The allowance for credit loss ratio represented
2.08% of total portfolio loans and leases at quarter end, compared
with 2.12% for the prior quarter end and 2.08% for the year-ago
quarter end. In the current quarter, the allowance for credit
losses represented 400% of nonperforming portfolio loans and leases
and 377% of nonperforming portfolio assets.
Net charge-offs were $144 million in the current quarter,
resulting in an NCO ratio of 0.49%. Compared to the prior quarter,
net charge-offs increased $34 million and the NCO ratio increased
11 bps. Commercial net charge-offs were $80 million, resulting in a
commercial NCO ratio of 0.45%, which increased 26 bps compared to
the prior quarter. Consumer net charge-offs were $64 million,
resulting in a consumer NCO ratio of 0.57%, which decreased 10 bps
compared to the prior quarter.
Compared to the year-ago quarter, net charge-offs increased $54
million and the NCO ratio increased 20 bps, reflecting an increase
from near-historically low net charge-offs in the year-ago quarter.
The commercial NCO ratio increased 29 bps compared to the prior
year, and the consumer NCO ratio increased 7 bps compared to the
prior year.
Capital Position
As of and For the Three Months
Ended
June
March
December
September
June
2024
2024
2023
2023
2023
Capital Position
Average total Bancorp shareholders' equity
as a % of average assets
8.80%
8.78%
8.04%
8.30%
8.90%
Tangible equity(a)
8.91%
8.75%
8.65%
8.46%
8.58%
Tangible common equity (excluding
AOCI)(a)
7.92%
7.77%
7.67%
7.49%
7.57%
Tangible common equity (including
AOCI)(a)
5.80%
5.67%
5.73%
4.51%
5.26%
Regulatory Capital Ratios(d)(e)
CET1 capital
10.60%
10.47%
10.29%
9.80%
9.49%
Tier 1 risk-based capital
11.90%
11.77%
11.59%
11.06%
10.73%
Total risk-based capital
13.93%
13.81%
13.72%
13.13%
12.83%
Leverage
9.07%
8.94%
8.73%
8.85%
8.81%
The CET1 capital ratio was 10.60%, the Tangible common equity to
tangible assets ratio was 7.92% excluding AOCI, and 5.80% including
AOCI. The Tier 1 risk-based capital ratio was 11.90%, the Total
risk-based capital ratio was 13.93%, and the Leverage ratio was
9.07%.
During the second quarter of 2024, Fifth Third repurchased $125
million of its outstanding stock, which reduced common shares by
approximately 3.5 million at quarter end.
On June 28, 2024, Fifth Third released its preliminary stress
capital buffer requirement resulting from the Federal Reserve
Board's annual stress test, which will be effective October 1,
2024. Fifth Third's preliminary stress capital buffer requirement
of 3.2% is based off of the supervisory severely adverse scenario
published in February 2024. Fifth Third's CET1 capital ratio on
June 30, 2024 of 10.60% significantly exceeds the regulatory
minimum of 4.5% plus the stress capital buffer, reflecting strong
capital levels.
Tax Rate
The effective tax rate for the quarter was 21.3% compared with
21.1% in the prior quarter and 22.5% in the year-ago quarter.
Conference Call
Fifth Third will host a conference call to discuss these
financial results at 9:00 a.m. (Eastern Time) today. This
conference call will be webcast live and may be accessed through
the Fifth Third Investor Relations website at www.53.com (click on
“About Us” then “Investor Relations”). Those unable to listen to
the live webcast may access a webcast replay through the Fifth
Third Investor Relations website at the same web address, which
will be available for 30 days.
Corporate Profile
Fifth Third is a bank that’s as long on innovation as it is on
history. Since 1858, we’ve been helping individuals, families,
businesses and communities grow through smart financial services
that improve lives. Our list of firsts is extensive, and it’s one
that continues to expand as we explore the intersection of
tech-driven innovation, dedicated people, and focused community
impact. Fifth Third is one of the few U.S.-based banks to have been
named among Ethisphere's World’s Most Ethical Companies® for
several years. With a commitment to taking care of our customers,
employees, communities and shareholders, our goal is not only to be
the nation’s highest performing regional bank, but to be the bank
people most value and trust.
Fifth Third Bank, National Association is a federally chartered
institution. Fifth Third Bancorp is the indirect parent company of
Fifth Third Bank and its common stock is traded on the NASDAQ®
Global Select Market under the symbol “FITB.” Investor information
and press releases can be viewed at www.53.com.
Earnings Release End Notes
(a)
Non-GAAP measure; see discussion of
non-GAAP reconciliation beginning on page 27 of the earnings
release.
(b)
Net losses charged-off as a percent of
average portfolio loans and leases presented on an annualized
basis.
(c)
Nonperforming portfolio assets as a
percent of portfolio loans and leases and OREO.
(d)
Regulatory capital ratios are calculated
pursuant to the five-year transition provision option to phase in
the effects of CECL on regulatory capital after its adoption on
January 1, 2020.
(e)
Current period regulatory capital ratios
are estimated.
(f)
Assumes a 23% tax rate.
(g)
Includes commercial customer Eurodollar
sweep balances for which the Bank pays rates comparable to other
commercial deposit accounts.
(h)
Nonperforming portfolio loans and leases
as a percent of portfolio loans and leases.
FORWARD-LOOKING STATEMENTS
This release contains statements that we believe are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Rule 175 promulgated
thereunder, and Section 21E of the Securities Exchange Act of 1934,
as amended, and Rule 3b-6 promulgated thereunder. All statements
other than statements of historical fact are forward-looking
statements. These statements relate to our financial condition,
results of operations, plans, objectives, future performance,
capital actions or business. They usually can be identified by the
use of forward-looking language such as “will likely result,”
“may,” “are expected to,” “is anticipated,” “potential,”
“estimate,” “forecast,” “projected,” “intends to,” or may include
other similar words or phrases such as “believes,” “plans,”
“trend,” “objective,” “continue,” “remain,” or similar expressions,
or future or conditional verbs such as “will,” “would,” “should,”
“could,” “might,” “can,” or similar verbs. You should not place
undue reliance on these statements, as they are subject to risks
and uncertainties, including but not limited to the risk factors
set forth in our most recent Annual Report on Form 10-K as updated
by our filings with the U.S. Securities and Exchange Commission
(“SEC”).
There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a
difference include, but are not limited to: (1) deteriorating
credit quality; (2) loan concentration by location or industry of
borrowers or collateral; (3) problems encountered by other
financial institutions; (4) inadequate sources of funding or
liquidity; (5) unfavorable actions of rating agencies; (6)
inability to maintain or grow deposits; (7) limitations on the
ability to receive dividends from subsidiaries; (8) cyber-security
risks; (9) Fifth Third’s ability to secure confidential information
and deliver products and services through the use of computer
systems and telecommunications networks; (10) failures by
third-party service providers; (11) inability to manage strategic
initiatives and/or organizational changes; (12) inability to
implement technology system enhancements; (13) failure of internal
controls and other risk management programs; (14) losses related to
fraud, theft, misappropriation or violence; (15) inability to
attract and retain skilled personnel; (16) adverse impacts of
government regulation; (17) governmental or regulatory changes or
other actions; (18) failures to meet applicable capital
requirements; (19) regulatory objections to Fifth Third’s capital
plan; (20) regulation of Fifth Third’s derivatives activities; (21)
deposit insurance premiums; (22) assessments for the orderly
liquidation fund; (23) weakness in the national or local economies;
(24) global political and economic uncertainty or negative actions;
(25) changes in interest rates and the effects of inflation; (26)
changes and trends in capital markets; (27) fluctuation of Fifth
Third’s stock price; (28) volatility in mortgage banking revenue;
(29) litigation, investigations, and enforcement proceedings by
governmental authorities; (30) breaches of contractual covenants,
representations and warranties; (31) competition and changes in the
financial services industry; (32) potential impacts of the adoption
of real-time payment networks; (33) changing retail distribution
strategies, customer preferences and behavior; (34) difficulties in
identifying, acquiring or integrating suitable strategic
partnerships, investments or acquisitions; (35) potential dilution
from future acquisitions; (36) loss of income and/or difficulties
encountered in the sale and separation of businesses, investments
or other assets; (37) results of investments or acquired entities;
(38) changes in accounting standards or interpretation or declines
in the value of Fifth Third’s goodwill or other intangible assets;
(39) inaccuracies or other failures from the use of models; (40)
effects of critical accounting policies and judgments or the use of
inaccurate estimates; (41) weather-related events, other natural
disasters, or health emergencies (including pandemics); (42) the
impact of reputational risk created by these or other developments
on such matters as business generation and retention, funding and
liquidity; (43) changes in law or requirements imposed by Fifth
Third’s regulators impacting our capital actions, including
dividend payments and stock repurchases; and (44) Fifth Third's
ability to meet its environmental and/or social targets, goals and
commitments.
You should refer to our periodic and current reports filed with
the Securities and Exchange Commission, or “SEC,” for further
information on other factors, which could cause actual results to
be significantly different from those expressed or implied by these
forward-looking statements. Moreover, you should treat these
statements as speaking only as of the date they are made and based
only on information then actually known to us. We expressly
disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in our expectations or any changes in
events, conditions or circumstances on which any such statement is
based, except as may be required by law, and we claim the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
The information contained herein is intended to be reviewed in its
totality, and any stipulations, conditions or provisos that apply
to a given piece of information in one part of this press release
should be read as applying mutatis mutandis to every other instance
of such information appearing herein.
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240719210692/en/
Investor contact: Matt Curoe (513) 534-2345 Media contact:
Jennifer Hendricks Sullivan (614) 744-7693
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