Grew deposits and continued to improve
liquidity and capital; maintained strong credit quality
Raised quarterly common stock dividend 2 cents,
or 6%, to $0.35 per share
Reported results included a negative $0.01
impact from a certain item 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
3Q23
2Q23
3Q22
Stability:
- Average deposits increased 3% and period-end deposits increased
2% compared to 2Q23; period-end deposits increased 4% compared to
3Q22
- Achieved full Category I LCR compliance during the quarter and
at quarter-end
- CET1 capital increased 31 bps sequentially reflecting strong
earnings power and balance sheet optimization efforts
- Strong credit quality metrics; 30-89 day early stage
delinquencies of 0.26%, and NPA ratio of 0.51%, both improved
compared to 2Q23
- ACL of 2.11%, an increase of 3 bps from 2Q23, primarily
reflecting a change in macroeconomic forecast
Profitability:
Compared to 2Q23
- Revenue decreased 1%, PPNR(a) increased 1%, and net income
increased 10%
- Efficiency ratio(a) of 55% improved 120 bps
- Adjusted ROTCE ex. AOCI(a) of 15.9% increased 50 basis
points
Growth:
- Generated consumer household growth of 2.3% compared to
3Q22
- Continued to add new quality commercial relationships
Income Statement Data
Net income available to common
shareholders
$623
$562
$631
Net interest income (U.S. GAAP)
1,438
1,457
1,498
Net interest income (FTE)(a)
1,445
1,463
1,502
Noninterest income
715
726
672
Noninterest expense
1,188
1,231
1,167
Per Share Data
Earnings per share, basic
$0.91
$0.82
$0.91
Earnings per share, diluted
0.91
0.82
0.91
Book value per share
21.19
23.05
21.30
Tangible book value per share(a)
13.76
15.61
13.87
Balance Sheet & Credit
Quality
Average portfolio loans and leases
$121,630
$123,327
$119,644
Average deposits
165,644
160,857
159,469
Accumulated other comprehensive loss
(6,839)
(5,166)
(5,306)
Net charge-off ratio(b)
0.41
%
0.29
%
0.21
%
Nonperforming asset ratio(c)
0.51
0.54
0.46
Financial Ratios
Return on average assets
1.26
%
1.17
%
1.25
%
Return on average common equity
16.3
13.9
14.9
Return on average tangible common
equity(a)
24.7
20.5
21.9
CET1 capital(d)(e)
9.80
9.49
9.14
Net interest margin(a)
2.98
3.10
3.22
Efficiency(a)
55.0
56.2
53.7
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 President
and CEO:
Our third quarter results were once again strong, as we have
continued to navigate the challenging environment well. Our key
return and profitability metrics remained resilient despite the
market-related headwinds that all banks are facing. We generated
strong fee growth compared to the year-ago quarter while
maintaining expense discipline. Our credit metrics remained strong,
with net charge-offs for the quarter in-line with our expectations.
Additionally, early-stage delinquencies and nonperforming loans
improved sequentially, reflecting our disciplined approach to
client selection.
We reduced our risk-weighted assets and accreted over 30 basis
points of CET1 capital. We generated strong deposit outcomes,
growing average deposits 4% compared to the year-ago quarter while
the industry continued to shrink. As a result, we achieved our goal
of full LCR compliance for the quarter.
We continue to prudently invest in this environment, adding net
new households in consumer and new quality middle market
relationships in commercial. While the economic and regulatory
environments remain uncertain, Fifth Third has spent nearly a
decade focused on positioning the bank to outperform peers through
the cycle. We will continue to follow 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
September
June
September
2023
2023
2022
Seq
Yr/Yr
Condensed Statements of Income
Net interest income (NII)(a)
$1,445
$1,463
$1,502
(1)%
(4)%
Provision for credit losses
119
177
158
(33)%
(25)%
Noninterest income
715
726
672
(2)%
6%
Noninterest expense
1,188
1,231
1,167
(3)%
2%
Income before income taxes(a)
$853
$781
$849
9%
—
Taxable equivalent adjustment
$7
$6
$4
17%
75%
Applicable income tax expense
186
174
192
7%
(3)%
Net income
$660
$601
$653
10%
1%
Dividends on preferred stock
37
39
22
(5)%
68%
Net income available to common
shareholders
$623
$562
$631
11%
(1)%
Earnings per share, diluted
$0.91
$0.82
$0.91
11%
—
Fifth Third Bancorp (NASDAQ®: FITB) today reported third quarter
2023 net income of $660 million compared to net income of $601
million in the prior quarter and $653 million in the year-ago
quarter. Net income available to common shareholders in the current
quarter was $623 million, or $0.91 per diluted share, compared to
$562 million, or $0.82 per diluted share, in the prior quarter and
$631 million, or $0.91 per diluted share, in the year-ago
quarter.
Diluted earnings per share impact of
certain item(s) - 3Q23
(after-tax impact(f); $ in millions,
except per share data)
Valuation of Visa total return swap
(noninterest income)
$(8)
After-tax impact(f) of certain item(s)
$(8)
Diluted earnings per share impact of
certain item(s)1
$(0.01)
1Diluted earnings per share impact
reflects 687.059 million average diluted shares outstanding
Net Interest Income
(FTE; $ in millions)(a)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Interest Income
Interest income
$2,536
$2,376
$1,764
7%
44%
Interest expense
1,091
913
262
19%
316%
Net interest income (NII)
$1,445
$1,463
$1,502
(1)%
(4)%
Average Yield/Rate Analysis
bps Change
Yield on interest-earning assets
5.23%
5.04%
3.78%
19
145
Rate paid on interest-bearing
liabilities
3.10%
2.72%
0.87%
38
223
Ratios
Net interest rate spread
2.13%
2.32%
2.91%
(19)
(78)
Net interest margin (NIM)
2.98%
3.10%
3.22%
(12)
(24)
Balance sheet actions continued to reflect a defensive
positioning given the uncertain economic and regulatory
environments. NII decreased $18 million, or 1%, compared to the
prior quarter. Actions undertaken during the quarter include
reducing risk-weighted assets, issuing long-term debt, securitizing
an automobile loan portfolio, and continued strategies to generate
core deposit growth, which resulted in a strong liquidity position.
The costs associated with the deposit growth were partially offset
by improved loan yields from higher market rates and the impact of
day count. Compared to the prior quarter, NIM decreased 12 bps,
primarily reflecting the aforementioned deposit dynamics and the
impact of day count, partially offset by higher loan yields. NIM
results continue to be impacted by the decision to carry additional
liquidity, with the combination of cash and due from banks and
other short-term investments reaching approximately $22 billion at
quarter-end.
Compared to the year-ago quarter, NII decreased $57 million, or
4%, reflecting the impact of the deposit mix shift from demand to
interest-bearing accounts and continued deposit repricing dynamics,
partially offset by higher loan yields. Compared to the year-ago
quarter, NIM decreased 24 bps, reflecting the aforementioned
deposit dynamics and the decision to carry additional liquidity,
partially offset by higher loan yields and higher investment
portfolio yields.
Noninterest Income
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Noninterest Income
Service charges on deposits
$149
$144
$143
3%
4%
Commercial banking revenue
154
146
134
5%
15%
Mortgage banking net revenue
57
59
69
(3)%
(17)%
Wealth and asset management revenue
145
143
141
1%
3%
Card and processing revenue
104
106
105
(2)%
(1)%
Leasing business revenue
58
47
60
23%
(3)%
Other noninterest income
55
74
59
(26)%
(7)%
Securities (losses) gains, net
(7)
7
(38)
NM
(82)%
Securities losses, net - non-qualifying
hedges
on mortgage servicing rights
—
—
(1)
NM
(100)%
Total noninterest income
$715
$726
$672
(2)%
6%
Reported noninterest income decreased $11 million, or 2%, from
the prior quarter, and increased $43 million, or 6%, from the
year-ago quarter. The reported results reflect the impact of
certain items in the table below, including securities gains/losses
which incorporate mark-to-market impacts from securities associated
with non-qualified deferred compensation plans.
Noninterest Income excluding certain
items
($ in millions)
For the Three Months Ended
September
June
September
% Change
2023
2023
2022
Seq
Yr/Yr
Noninterest Income excluding certain
items
Noninterest income (U.S. GAAP)
$715
$726
$672
Valuation of Visa total return swap
10
30
17
Securities (gains)/losses, net
7
(7)
38
Noninterest income excluding certain
items(a)
$732
$749
$727
(2)%
1%
Noninterest income excluding certain items decreased $17
million, or 2%, from the prior quarter, and increased $5 million,
or 1%, from the year-ago quarter.
Compared to the prior quarter, service charges on deposits
increased $5 million, or 3%, reflecting an increase in both
commercial treasury management and consumer deposit fees.
Commercial banking revenue increased $8 million, or 5%, primarily
reflecting higher M&A advisory revenue and institutional
brokerage revenue, partially offset by a decrease in client
financial risk management revenue. Mortgage banking net revenue
decreased $2 million, or 3%, primarily reflecting a decrease in
origination fees and gains on loan sales, partially offset by a
decrease in MSR asset decay. Wealth and asset management revenue
increased $2 million, or 1%, primarily driven by higher personal
asset management revenue. Card and processing revenue decreased $2
million, or 2%, driven by lower interchange revenue. Leasing
business revenue increased $11 million, or 23%, primarily
reflecting higher lease remarketing revenue. The decrease in other
noninterest income was primarily due to strong equity fund and
direct investment income in the prior quarter.
Compared to the year-ago quarter, service charges on deposits
increased $6 million, or 4%, reflecting an increase in both
commercial treasury management and consumer deposit fees.
Commercial banking revenue increased $20 million, or 15%, primarily
driven by increased corporate bond fees, loan syndication revenue,
and institutional brokerage revenue. Mortgage banking net revenue
decreased $12 million, or 17%, primarily reflecting lower
origination fees and gains on loan sales, as well as an increase in
MSR asset decay. Wealth and asset management revenue increased $4
million, or 3%, driven by higher personal asset management revenue.
Card and processing revenue decreased $1 million, or 1%, driven by
higher rewards partially offset by higher interchange revenue.
Leasing business revenue decreased $2 million, or 3%, primarily
reflecting lower operating lease revenue.
Noninterest Expense
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Noninterest Expense
Compensation and benefits
$629
$650
$605
(3)%
4%
Net occupancy expense
84
83
74
1%
14%
Technology and communications
115
114
106
1%
8%
Equipment expense
37
36
36
3%
3%
Card and processing expense
21
20
21
5%
—
Leasing business expense
29
31
33
(6)%
(12)%
Marketing expense
35
31
35
13%
—
Other noninterest expense
238
266
257
(11)%
(7)%
Total noninterest expense
$1,188
$1,231
$1,167
(3)%
2%
Reported noninterest expense decreased $43 million, or 3%, from
the prior quarter, and increased $21 million, or 2%, from the
year-ago quarter. The reported results reflect the impact of a
certain item in the table below.
Noninterest Expense excluding certain
item(s)
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Noninterest Expense excluding certain
item(s)
Noninterest expense (U.S. GAAP)
$1,188
$1,231
$1,167
Restructuring severance expense
—
(12)
—
Noninterest expense excluding certain
item(s)(a)
$1,188
$1,219
$1,167
(3)%
2%
Compared to the prior quarter, noninterest expense excluding
certain items decreased $31 million, or 3%, primarily driven by
decreases in compensation and benefits expense and other
noninterest expense reflecting overall expense discipline,
partially offset by higher marketing expense. Noninterest expense
in the current quarter included a $5 million benefit related to the
impact of non-qualified deferred compensation mark-to-market
compared to a $10 million expense in the prior quarter (both of
which were largely offset in net securities gains/losses through
noninterest income).
Compared to the year-ago quarter, noninterest expense increased
$21 million, or 2%, primarily driven by higher compensation and
benefits expense, net occupancy expense, and technology and
communications expense related to continued modernization
investments, partially offset by lower other noninterest expense.
The year-ago quarter included a $7 million benefit to noninterest
expense related to the impact of non-qualified deferred
compensation mark-to-market (which was largely offset in net
securities losses through noninterest income).
Average Interest-Earning Assets
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Average Portfolio Loans and
Leases
Commercial loans and leases:
Commercial and industrial loans
$57,001
$58,137
$56,646
(2)%
1%
Commercial mortgage loans
11,216
11,373
10,751
(1)%
4%
Commercial construction loans
5,539
5,535
5,557
—
—
Commercial leases
2,616
2,700
2,792
(3)%
(6)%
Total commercial loans and leases
$76,372
$77,745
$75,746
(2)%
1%
Consumer loans:
Residential mortgage loans
$17,400
$17,517
$17,617
(1)%
(1)%
Home equity
3,897
3,937
3,956
(1)%
(1)%
Indirect secured consumer loans
15,787
16,281
16,750
(3)%
(6)%
Credit card
1,808
1,783
1,756
1%
3%
Other consumer loans
6,366
6,064
3,819
5%
67%
Total consumer loans
$45,258
$45,582
$43,898
(1)%
3%
Total average portfolio loans and
leases
$121,630
$123,327
$119,644
(1)%
2%
Average Loans and Leases Held for
Sale
Commercial loans and leases held for
sale
$17
$19
$3
(11)%
467%
Consumer loans held for sale
619
641
2,253
(3)%
(73)%
Total average loans and leases held for
sale
$636
$660
$2,256
(4)%
(72)%
Total average loans and leases
$122,266
$123,987
$121,900
(1)%
—
Securities (taxable and tax-exempt)
$56,994
$57,267
$57,713
—
(1)%
Other short-term investments
12,956
7,806
5,765
66%
125%
Total average interest-earning assets
$192,216
$189,060
$185,378
2%
4%
Compared to the prior quarter, total average portfolio loans and
leases decreased 1%, reflecting the aforementioned reduction in
risk-weighted assets initiative which impacted both commercial and
consumer portfolios. Average commercial portfolio loans and leases
decreased 2%, reflecting a decrease in commercial and industrial
(C&I) loan balances. Average consumer portfolio loans decreased
1%, primarily reflecting a decrease in indirect secured consumer
loan balances, partially offset by an increase in other consumer
loan balances driven by Dividend Finance.
Compared to the year-ago quarter, total average portfolio loans
and leases increased 2%, reflecting an increase in both commercial
and consumer portfolios. Average commercial portfolio loans and
leases increased 1%, primarily reflecting an increase in commercial
mortgage loan balances and C&I loan balances, partially offset
by a decrease in commercial lease balances. Average consumer
portfolio loans increased 3%, primarily reflecting an increase in
other consumer loan balances driven by Dividend Finance, partially
offset by a decrease in indirect secured consumer loan balances and
residential mortgage loan balances.
Average loans and leases held for sale were $0.6 billion in the
current quarter compared to $0.7 billion in the prior quarter and
$2.3 billion in the year-ago quarter.
Average securities (taxable and tax-exempt; amortized cost) of
$57 billion in the current quarter were flat compared to the prior
quarter and decreased $1 billion, or 1%, compared to the year-ago
quarter. Average other short-term investments (including
interest-bearing cash) of $13 billion in the current quarter
increased $5 billion, or 66%, compared to the prior quarter and
increased $7 billion, or 125%, compared to the year-ago
quarter.
Total period-end commercial portfolio loans and leases of $75
billion decreased 2% compared to the prior quarter, primarily
reflecting a decrease in C&I loan balances. Compared to the
year-ago quarter, total period-end commercial portfolio loans and
leases decreased 1%, primarily reflecting a decrease in C&I
loan balances and commercial lease balances, partially offset by an
increase in commercial mortgage loan balances. Period-end
commercial revolving line utilization was 36%, compared to 35% in
the prior quarter and 37% in the year-ago quarter.
Total period-end consumer portfolio loans of $45 billion
decreased 1% compared to the prior quarter, primarily reflecting a
decrease in indirect secured consumer loan balances and residential
mortgage loan balances, partially offset by an increase in other
consumer loan balances driven by Dividend Finance. Compared to the
year-ago quarter, total period-end consumer portfolio loans
increased 2%, primarily driven by an increase in other consumer
loan balances driven by Dividend Finance, partially offset by a
decrease in indirect secured consumer loans and residential
mortgage 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 decreased $1 billion, or 2%, compared to the
year-ago quarter. Period-end other short-term investments of
approximately $19 billion increased $8 billion, or 73%, compared to
the prior quarter, and increased $12 billion, or 187%, compared to
the year-ago quarter.
Average Deposits
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Average Deposits
Demand
$44,228
$46,520
$59,535
(5)%
(26)%
Interest checking
53,109
50,472
42,574
5%
25%
Savings
20,511
21,675
23,814
(5)%
(14)%
Money market
32,072
28,913
29,066
11%
10%
Foreign office(g)
168
143
206
17%
(18)%
Total transaction deposits
$150,088
$147,723
$155,195
2%
(3)%
CDs $250,000 or less
9,630
7,759
2,048
24%
370%
Total core deposits
$159,718
$155,482
$157,243
3%
2%
CDs over $250,000
5,926
5,375
2,226
10%
166%
Total average deposits
$165,644
$160,857
$159,469
3%
4%
CDs over $250,000 includes $5.2BN, $4.9BN,
and $2.1BN of retail brokered certificates of deposit which are
fully covered by FDIC insurance for the three months ended 9/30/23,
6/30/23, and 9/30/22, respectively.
Compared to the prior quarter, total average deposits increased
3%, as increases in money market and interest checking account
balances were partially offset by a decrease in demand account
balances. Average demand deposits represented 28% of total core
deposits in the current quarter, compared to 30% in the prior
quarter. Compared to the prior quarter, average consumer segment
deposits increased 2%, average commercial segment deposits
increased 4%, and average wealth & asset management segment
deposits decreased 2% reflecting clients' alternative investment
options. Period-end total deposits increased 2% compared to the
prior quarter.
Compared to the year-ago quarter, total average deposits
increased 4%, primarily reflecting an increase in interest checking
and time deposit balances, partially offset by a decrease in demand
account balances. Period-end total deposits increased 4% compared
to the year-ago quarter.
The period end portfolio loan-to-core deposit ratio was 74% in
the current quarter, compared to 77% in the prior quarter and 75%
in the year-ago quarter. Estimated uninsured deposits were
approximately $68 billion, or 41% of total deposits, as of quarter
end.
Average Wholesale Funding
($ in millions)
For the Three Months Ended
% Change
September
June
September
2023
2023
2022
Seq
Yr/Yr
Average Wholesale Funding
CDs over $250,000
$5,926
$5,375
$2,226
10%
166%
Federal funds purchased
181
376
607
(52)%
(70)%
Securities sold under repurchase
agreements
352
361
472
(2)%
(25)%
FHLB advances
3,726
6,589
6,608
(43)%
(44)%
Derivative collateral and other secured
borrowings
81
79
356
3%
(77)%
Long-term debt
14,023
12,848
11,796
9%
19%
Total average wholesale funding
$24,289
$25,628
$22,065
(5)%
10%
CDs over $250,000 includes $5.2BN, $4.9BN,
and $2.1BN of retail brokered certificates of deposit which are
fully covered by FDIC insurance for the three months ended 9/30/23,
6/30/23, and 9/30/22, respectively.
Compared to the prior quarter, average wholesale funding
decreased 5%, primarily reflecting a decrease in FHLB advances,
partially offset by an increase in long-term debt (driven by the
aforementioned long-term debt issuance and an automobile loan
portfolio securitization), and CDs over $250,000 (which consists
primarily of retail brokered CDs which are fully covered by FDIC
insurance). Compared to the year-ago quarter, average wholesale
funding increased 10%, primarily reflecting an increase in CDs over
$250,000 and long-term debt, partially offset by a decrease in FHLB
advances.
Credit Quality Summary
($ in millions)
As of and For the Three Months
Ended
September
June
March
December
September
2023
2023
2023
2022
2022
Total nonaccrual portfolio loans and
leases (NPLs)
$570
$629
$593
$515
$522
Repossessed property
11
8
8
6
6
OREO
31
24
22
18
18
Total nonperforming portfolio loans and
leases and OREO (NPAs)
$612
$661
$623
$539
$546
NPL ratio(h)
0.47%
0.52%
0.48%
0.42%
0.44%
NPA ratio(c)
0.51%
0.54%
0.51%
0.44%
0.46%
Portfolio loans and leases 30-89 days past
due (accrual)
$316
$339
$317
$364
$335
Portfolio loans and leases 90 days past
due (accrual)
29
51
46
40
59
30-89 days past due as a % of portfolio
loans and leases
0.26%
0.28%
0.26%
0.30%
0.28%
90 days past due as a % of portfolio loans
and leases
0.02%
0.04%
0.04%
0.03%
0.05%
Allowance for loan and lease losses
(ALLL), beginning
$2,327
$2,215
$2,194
$2,099
$2,014
Impact of adoption of ASU 2022-02
—
—
(49)
—
—
Total net losses charged-off
(124)
(90)
(78)
(68)
(62)
Provision for loan and lease losses
137
202
148
163
147
ALLL, ending
$2,340
$2,327
$2,215
$2,194
$2,099
Reserve for unfunded commitments,
beginning
$207
$232
$216
$199
$188
(Benefit from) provision for the reserve
for unfunded commitments
(18)
(25)
16
17
11
Reserve for unfunded commitments,
ending
$189
$207
$232
$216
$199
Total allowance for credit losses
(ACL)
$2,529
$2,534
$2,447
$2,410
$2,298
ACL ratios:
As a % of portfolio loans and leases
2.11%
2.08%
1.99%
1.98%
1.91%
As a % of nonperforming portfolio loans
and leases
443%
403%
413%
468%
440%
As a % of nonperforming portfolio
assets
413%
383%
393%
447%
420%
ALLL as a % of portfolio loans and
leases
1.95%
1.91%
1.80%
1.81%
1.75%
Total losses charged-off
$(158)
$(121)
$(110)
$(103)
$(104)
Total recoveries of losses previously
charged-off
34
31
32
35
42
Total net losses charged-off
$(124)
$(90)
$(78)
$(68)
$(62)
Net charge-off ratio (NCO ratio)(b)
0.41%
0.29%
0.26%
0.22%
0.21%
Commercial NCO ratio
0.34%
0.16%
0.17%
0.13%
0.17%
Consumer NCO ratio
0.53%
0.50%
0.42%
0.38%
0.28%
Nonperforming portfolio loans and leases were $570 million in
the current quarter, with the resulting NPL ratio of 0.47%.
Compared to the prior quarter, NPLs decreased $59 million with the
NPL ratio decreasing 5 bps. Compared to the year-ago quarter, NPLs
increased $48 million with the NPL ratio increasing 3 bps.
Nonperforming portfolio assets were $612 million in the current
quarter, with the resulting NPA ratio of 0.51%. Compared to the
prior quarter, NPAs decreased $49 million with the NPA ratio
decreasing 3 bps. Compared to the year-ago quarter, NPAs increased
$66 million with the NPA ratio increasing 5 bps.
The provision for credit losses totaled $119 million in the
current quarter. The allowance for credit loss ratio represented
2.11% of total portfolio loans and leases at quarter end, compared
with 2.08% for the prior quarter end and 1.91% for the year-ago
quarter end. In the current quarter, the allowance for credit
losses represented 443% of nonperforming portfolio loans and leases
and 413% of nonperforming portfolio assets.
Net charge-offs were $124 million in the current quarter,
resulting in an NCO ratio of 0.41%. Compared to the prior quarter,
net charge-offs increased $34 million and the NCO ratio increased
12 bps. Commercial net charge-offs were $64 million, resulting in a
commercial NCO ratio of 0.34%, which increased 18 bps compared to
the prior quarter. Consumer net charge-offs were $60 million,
resulting in a consumer NCO ratio of 0.53%, which increased 3 bps
compared to the prior quarter.
Compared to the year-ago quarter, net charge-offs increased $62
million and the NCO ratio increased 20 bps, reflecting a
normalization from near-historically low net charge-offs in the
year-ago quarter. The commercial NCO ratio increased 17 bps
compared to the prior year, and the consumer NCO ratio increased 25
bps compared to the prior year.
Capital Position
As of and For the Three Months
Ended
September
June
March
December
September
2023
2023
2023
2022
2022
Capital Position
Average total Bancorp shareholders' equity
as a % of average assets
8.30%
8.90%
8.77%
8.18%
9.13%
Tangible equity(a)
8.46%
8.58%
8.39%
8.31%
8.18%
Tangible common equity (excluding
AOCI)(a)
7.49%
7.57%
7.38%
7.30%
7.16%
Tangible common equity (including
AOCI)(a)
4.51%
5.26%
5.49%
5.00%
4.75%
Regulatory Capital Ratios(d)(e)
CET1 capital
9.80%
9.49%
9.28%
9.28%
9.14%
Tier 1 risk-based capital
11.05%
10.73%
10.53%
10.53%
10.40%
Total risk-based capital
13.12%
12.83%
12.64%
12.79%
12.64%
Leverage
8.85%
8.81%
8.67%
8.56%
8.44%
The CET1 capital ratio was 9.80%, the Tangible common equity to
tangible assets ratio was 7.49% excluding AOCI, and 4.51% including
AOCI. The Tier 1 risk-based capital ratio was 11.05%, the Total
risk-based capital ratio was 13.12%, and the Leverage ratio was
8.85%. Fifth Third did not execute share repurchases in the third
quarter of 2023.
Fifth Third increased its quarterly cash dividend on its common
shares by $0.02, or 6%, to $0.35 per share for the third quarter of
2023.
Tax Rate
The effective tax rate for the quarter was 22.0% compared with
22.5% in the prior quarter and 22.7% 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) effects of the
global COVID-19 pandemic; (2) deteriorating credit quality; (3)
loan concentration by location or industry of borrowers or
collateral; (4) problems encountered by other financial
institutions; (5) inadequate sources of funding or liquidity; (6)
unfavorable actions of rating agencies; (7) inability to maintain
or grow deposits; (8) limitations on the ability to receive
dividends from subsidiaries; (9) cyber-security risks; (10) Fifth
Third’s ability to secure confidential information and deliver
products and services through the use of computer systems and
telecommunications networks; (11) failures by third-party service
providers; (12) inability to manage strategic initiatives and/or
organizational changes; (13) inability to implement technology
system enhancements; (14) failure of internal controls and other
risk management systems; (15) losses related to fraud, theft,
misappropriation or violence; (16) inability to attract and retain
skilled personnel; (17) adverse impacts of government regulation;
(18) governmental or regulatory changes or other actions; (19)
failures to meet applicable capital requirements; (20) regulatory
objections to Fifth Third’s capital plan; (21) regulation of Fifth
Third’s derivatives activities; (22) deposit insurance premiums;
(23) assessments for the orderly liquidation fund; (24) replacement
of LIBOR; (25) weakness in the national or local economies; (26)
global political and economic uncertainty or negative actions; (27)
changes in interest rates and the effects of inflation; (28)
changes and trends in capital markets; (29) fluctuation of Fifth
Third’s stock price; (30) volatility in mortgage banking revenue;
(31) litigation, investigations, and enforcement proceedings by
governmental authorities; (32) breaches of contractual covenants,
representations and warranties; (33) competition and changes in the
financial services industry; (34) changing retail distribution
strategies, customer preferences and behavior; (35) difficulties in
identifying, acquiring or integrating suitable strategic
partnerships, investments or acquisitions; (36) potential dilution
from future acquisitions; (37) loss of income and/or difficulties
encountered in the sale and separation of businesses, investments
or other assets; (38) results of investments or acquired entities;
(39) changes in accounting standards or interpretation or declines
in the value of Fifth Third’s goodwill or other intangible assets;
(40) inaccuracies or other failures from the use of models; (41)
effects of critical accounting policies and judgments or the use of
inaccurate estimates; (42) weather-related events, other natural
disasters, or health emergencies (including pandemics); (43) the
impact of reputational risk created by these or other developments
on such matters as business generation and retention, funding and
liquidity; (44) changes in law or requirements imposed by Fifth
Third’s regulators impacting our capital actions, including
dividend payments and stock repurchases; and (45) 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231018632619/en/
Investor contact: Chris Doll (513) 534-2345 Media contact:
Jennifer Hendricks Sullivan (614) 744-7693
Fifth Third Bancorp (NASDAQ:FITB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Fifth Third Bancorp (NASDAQ:FITB)
Historical Stock Chart
From Jul 2023 to Jul 2024