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What changed in FIFTH THIRD BANCORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FIFTH THIRD BANCORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+646 added−765 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-27)

Top changes in FIFTH THIRD BANCORP's 2024 10-K

646 paragraphs added · 765 removed · 529 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+20 added−61 removed88 unchanged
Biggest changeThe FRB may require BHCs, including the Bancorp, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile, and growth plans. 21 Fifth Third Bancorp Table of Contents The following table presents the minimum regulatory capital ratios, minimum ratio plus stress capital buffer, and well-capitalized minimums compared with the Bancorp’s and the Bank’s regulatory capital ratios as of December 31, 2023, calculated using the regulatory capital methodology applicable during 2023: Regulatory Capital Ratios: Minimum Regulatory Capital Ratio Minimum Ratio + Stress Capital Buffer (a) Well-Capitalized Minimums (b) Actual at December 31, 2023 CET1 risk-based capital ratio: Fifth Third Bancorp 4.50 % 7.00 N/A 10.29 Fifth Third Bank, National Association 4.50 7.00 6.50 12.42 Tier 1 risk-based capital ratio: Fifth Third Bancorp 6.00 8.50 6.00 11.59 Fifth Third Bank, National Association 6.00 8.50 8.00 12.42 Total risk-based capital ratio: Fifth Third Bancorp 8.00 10.50 10.00 13.72 Fifth Third Bank, National Association 8.00 10.50 10.00 13.85 Leverage ratio: Fifth Third Bancorp 4.00 N/A N/A 8.73 Fifth Third Bank, National Association 4.00 N/A 5.00 9.38 (a) Reflects the stress capital buffer of 2.5% applicable during 2023.
Biggest changeThe following table presents the minimum regulatory capital ratios, minimum ratio plus stress capital buffer and well-capitalized minimums compared with the Bancorp’s and the Bank’s regulatory capital ratios as of December 31, 2024: Regulatory Capital Ratios: Minimum Regulatory Capital Ratio Minimum Ratio + Stress Capital Buffer (a) Well-Capitalized Minimums (b) Actual at December 31, 2024 CET1 risk-based capital ratio: Fifth Third Bancorp 4.50 % 7.70 N/A 10.57 Fifth Third Bank, National Association 4.50 7.70 6.50 12.86 Tier 1 risk-based capital ratio: Fifth Third Bancorp 6.00 9.20 6.00 11.86 Fifth Third Bank, National Association 6.00 9.20 8.00 12.86 Total risk-based capital ratio: Fifth Third Bancorp 8.00 11.20 10.00 13.86 Fifth Third Bank, National Association 8.00 11.20 10.00 14.19 Leverage ratio: Fifth Third Bancorp 4.00 N/A N/A 9.22 Fifth Third Bank, National Association 4.00 N/A 5.00 10.02 (a) Reflects the stress capital buffer of 3.2% as of December 31, 2024.
These companies compete across geographic boundaries and provide customers with meaningful alternatives to traditional banking services in nearly all significant products. The increasingly competitive environment is a result primarily of changes in regulation, changes in technology, product delivery systems and the accelerating pace of consolidation among financial service providers. These competitive trends are likely to continue.
These companies compete across geographic boundaries and provide customers with meaningful alternatives to traditional banking services in nearly all significant products. The increasingly competitive environment is primarily a result of changes in regulation, changes in technology, product delivery systems and the accelerating pace of consolidation among financial service providers. These competitive trends are likely to continue.
Refer to Exhibit 21 filed as an attachment to this Annual Report on Form 10-K for a list of subsidiaries of the Bancorp as of February 15, 2024. Additional information regarding the Bancorp’s businesses is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Availability of Financial Information The Bancorp files reports with the SEC.
Refer to Exhibit 21 filed as an attachment to this Annual Report on Form 10-K for a list of subsidiaries of the Bancorp as of February 15, 2025. Additional information regarding the Bancorp’s businesses is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Availability of Financial Information The Bancorp files reports with the SEC.
The regulatory agencies may seek to apply higher standards to the Bancorp and the Bank than as required by law, through supervision. The impact of any future legislative or regulatory changes, or supervisory direction, cannot be predicted. However, such changes could affect the Bancorp’s business, financial condition and results of operations. 26 Fifth Third Bancorp Table of Contents
The regulatory agencies may seek to apply higher standards to the Bancorp and the Bank than as required by law, through supervision. The impact of any future legislative or regulatory changes, or supervisory direction, cannot be predicted. However, such changes could affect the Bancorp’s business, financial condition and results of operations. 24 Fifth Third Bancorp Table of Contents
FDIC Assessments The DIF provides insurance coverage for certain deposits, up to a standard maximum deposit insurance amount of $250,000 per depositor per account ownership category per bank and is funded through assessments on insured depository institutions, based on the risk each institution poses to the DIF.
FDIC Assessments The Deposit Insurance Fund (“DIF”) provides insurance coverage for certain deposits, up to a standard maximum deposit insurance amount of $250,000 per depositor per account ownership category per bank and is funded through assessments on insured depository institutions, based on the risk each institution poses to the DIF.
The CCAR process is intended to help ensure that those BHCs have robust, forward-looking capital planning processes that account for each company’s unique risks and that permit continued operations during times of economic and financial stress.
The evaluation process is intended to help ensure that those BHCs have robust, forward-looking capital planning processes that account for each company’s unique risks and that permit continued operations during times of economic and financial stress.
If the FRB were to apply the same or a very similar well-capitalized standard to BHCs as that applicable to the Bank, the Bancorp’s capital ratios as of December 31, 2023, would exceed such revised well-capitalized standard.
If the FRB were to apply the same or a very similar well-capitalized standard to BHCs as that applicable to the Bank, the Bancorp’s capital ratios as of December 31, 2024 would exceed such revised well-capitalized standard.
The advanced approaches to regulatory capital are generally required for large, internationally active banking organizations including those designated as global systemically important bank holding companies and those with total assets or cross-jurisdictional activity in excess of certain thresholds. • Tier 1 Risk-Based Capital Ratio, equal to the ratio of Tier 1 capital to risk-weighted assets.
The advanced approaches to regulatory capital are generally required for large, internationally active banking organizations including those designated as global systemically important BHCs and those with total assets or cross-jurisdictional activity in excess of certain thresholds. • Tier 1 Risk-Based Capital Ratio, equal to the ratio of Tier 1 capital to risk-weighted assets.
Competition The Bancorp, primarily through the Bank, competes for deposits, loans and other banking services in its principal geographic markets as well as in selected national markets as opportunities arise. In addition to traditional financial institutions, the Bancorp competes with securities dealers, brokers, mortgage bankers, investment advisors, specialty finance, telecommunications, technology and insurance companies as well as large retailers.
Competition The Bancorp, primarily through the Bank, competes for deposits, loans and other banking services in its principal geographic markets as well as in selected national markets as opportunities arise. In addition to traditional banking institutions, the Bancorp competes with securities dealers, brokers, mortgage bankers, investment advisors, specialty finance, private credit, financial technology and insurance companies.
Human Capital Resources The Bancorp’s human capital strategy is designed to attract, develop and retain talent. This strategy ensures that Fifth Third has the talent, capabilities, and organizational structure to support business needs now and in the future. As of December 31, 2023, the Bancorp had 18,724 full-time equivalent employees, compared to 19,319 as of December 31, 2022.
Human Capital Resources The Bancorp’s human capital strategy is designed to attract, develop and retain talent. This strategy ensures that Fifth Third has the talent, capabilities and organizational structure to support business needs now and in the future. As of December 31, 2024, the Bancorp had 18,616 full-time equivalent employees, compared to 18,724 as of December 31, 2023.
U.S. banking regulators may require a BHC to make capital injections into a troubled subsidiary bank and may charge the BHC with engaging in unsafe and unsound practices if the BHC fails to commit resources to such a subsidiary bank or if it undertakes actions that the FRB believes might jeopardize the BHC’s ability to commit resources to such subsidiary bank.
United States (“U.S.”) banking regulators may require a BHC to make capital injections into a troubled subsidiary bank and may charge the BHC with engaging in unsafe and unsound practices if the BHC fails to commit resources to such a subsidiary bank or if it undertakes actions that the FRB believes might jeopardize the BHC’s ability to commit resources to such subsidiary bank.
These include the Bank Secrecy Act, the Money Laundering Control Act, the USA PATRIOT Act and regulations for the International Emergency Economic Powers Act and the Trading with the Enemy Act, as administered by the United States Treasury Department’s Office of Foreign Assets Control.
These include the Bank Secrecy Act, the Money Laundering Control Act, the USA PATRIOT Act and regulations for the International Emergency Economic Powers Act and the Trading with the Enemy Act, as administered by the U.S. Treasury Department’s Office of Foreign Assets Control.
The mortgage-related final rules issued by the CFPB have materially restructured the origination, servicing, and securitization of residential mortgages in the United States. These rules have impacted, and will continue to impact, the business practices of mortgage lenders, including the Bancorp.
The mortgage-related final rules issued by the CFPB have materially restructured the origination, servicing and securitization of residential mortgages in the U.S. These rules have impacted, and will continue to impact, the business practices of mortgage lenders, including the Bancorp.
Fifth Third is among the largest money managers in the Midwest and, as of December 31, 2023, had $574 billion in assets under care, of which it managed $59 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed on the Bancorp’s Investor Relations website at ir.53.com.
Fifth Third is among the largest money managers in the Midwest and, as of December 31, 2024, had $634 billion in assets under care, of which it managed $69 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed on the Bancorp’s Investor Relations website at ir.53.com.
Recruitment and Retention The Bancorp continues to navigate the changing talent landscape by monitoring the external environment and adapting talent strategies to meet internal needs. The Bancorp’s focus on the Employee Value Proposition demonstrates a continued commitment to employees by developing great leaders, evolving the employee experience, and focusing on equality, equity and inclusion.
Recruitment and Retention The Bancorp continues to navigate the changing talent landscape by monitoring the external environment and adapting talent strategies to meet internal needs. The Bancorp’s focus on its employee value proposition demonstrates a continued commitment to employees by developing great leaders and evolving the employee experience.
This includes a variety of checking, savings and money market accounts, wealth management solutions, payments and commerce solutions, insurance services and credit products such as commercial loans and leases, mortgage loans, credit cards, installment loans and auto loans.
This includes a variety of checking, savings and money market accounts, wealth management solutions, payments and commerce solutions, securities products and services, insurance services and credit products such as commercial loans and leases, mortgage loans, credit cards, installment loans and other lending products.
These laws obligate depository 23 Fifth Third Bancorp Table of Contents institutions and broker-dealers to verify their customers’ identity, conduct customer due diligence, report on suspicious activity, file reports of transactions in currency and conduct enhanced due diligence on certain accounts. They also prohibit U.S. persons from engaging in transactions with certain designated restricted countries and persons.
These laws obligate depository institutions and broker-dealers to verify their customers’ identity, conduct customer due diligence, report on suspicious activity, file reports of transactions in currency and conduct enhanced due diligence on certain accounts. They also prohibit U.S. persons from engaging in transactions with certain designated restricted countries and persons.
Tier 1 capital is primarily comprised of CET1 capital, perpetual preferred stock and certain qualifying capital instruments. • Total Risk-Based Capital Ratio, equal to the ratio of total capital, including CET1 capital, Tier 1 capital, and Tier 2 capital, to risk-weighted assets. Tier 2 capital primarily includes qualifying subordinated debt and qualifying allowance for loan and lease losses (“ALLL”).
Tier 1 capital is primarily comprised of CET1 capital, perpetual preferred stock and certain qualifying capital instruments. • Total Risk-Based Capital Ratio, equal to the ratio of total capital, including CET1 capital, Tier 1 capital and Tier 2 capital, to risk-weighted assets. Tier 2 capital primarily includes qualifying subordinated debt and qualifying allowance for credit losses (“ACL”).
The estimated impact of CECL on regulatory capital (modified CECL transitional amount) is calculated as the sum of the day-one impact on retained earnings upon adoption of CECL (CECL transitional amount) and the calculated change in the ACL relative to the day-one ACL upon adoption of CECL multiplied by a scaling factor of 25%.
The estimated impact of CECL on regulatory capital (“modified CECL transitional amount”) is calculated as the sum of the day-one impact on retained earnings upon adoption of CECL (“CECL transitional amount”) and the calculated change in the ACL relative to the day-one ACL upon adoption of CECL multiplied by a scaling factor of 25%.
As of December 31, 2023, Fifth Third had $215 billion in assets and operates 1,088 full-service Banking Centers and 2,104 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. The Bancorp operates three main businesses: Commercial Banking, Consumer and Small Business Banking and Wealth & Asset Management.
As of December 31, 2024, Fifth Third had $213 billion in assets and operates 1,089 full-service Banking Centers and 2,080 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. The Bancorp operates three main businesses: Commercial Banking, Consumer and Small Business Banking and Wealth and Asset Management.
As a registered swap dealer, the Bank is subject to the requirements of Title VII, including rules related to internal and external business conduct standards, reporting, recordkeeping, mandatory clearing for certain swaps, and trade documentation and confirmation requirements.
As a CFTC registered swap dealer, the Bank is subject to the requirements of Title 23 Fifth Third Bancorp Table of Contents VII, including rules related to internal and external business conduct standards, reporting, recordkeeping, mandatory clearing for certain swaps and trade documentation and confirmation requirements.
Among other things, the revised rules evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, apply a metrics-based benchmarking approach to assessment, and clarify eligible CRA activities.
Among other things, the revised rules evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, apply a metrics-based benchmarking approach to assessment and clarify eligible CRA activities. The revised CRA regulations have been subject to an injunction since March 29, 2024.
In November 2023, the FDIC issued a final rule for a special deposit insurance assessment on banking organizations with greater than $5 billion in assets to recover the costs associated with protecting uninsured depositors following the bank failures that occurred in 2023.
In response to the bank failures that occurred in the first half of 2023, the FDIC issued a final rule for a special deposit insurance assessment on banking organizations with greater than $5 billion in assets to recover the losses to the DIF associated with protecting uninsured depositors.
The Bancorp’s banking subsidiary has implemented a privacy policy. States are also increasingly proposing or enacting legislation that relates to data privacy and data protection such as the California Consumer Privacy Act. The Bancorp continues to assess the requirements of such laws and proposed legislation and their applicability to the Bancorp.
The Bancorp’s banking subsidiary has implemented a privacy policy. States are also increasingly proposing or enacting legislation that relates to data privacy and data protection such as the California Consumer Privacy Act.
The BHCA generally prohibits a BHC from engaging in, or acquiring a direct or indirect interest in or control of more than 5% of any class of the voting shares of a company that is not a bank or a BHC that engages directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to its banking subsidiaries, except that it may engage in and may own shares of companies engaged in certain activities the FRB has determined to be so closely related to banking or managing or controlling banks as to be proper incident thereto.
Acquisitions The BHCA requires the prior approval of the FRB for a BHC to acquire substantially all the assets of a bank or to acquire direct or indirect ownership or control of more than 5% of any class of the voting shares of any bank, BHC or savings association, or to merge or consolidate with any BHC. 18 Fifth Third Bancorp Table of Contents The BHCA generally prohibits a BHC from engaging in, or acquiring a direct or indirect interest in or control of more than 5% of any class of the voting shares of a company that is not a bank or a BHC that engages directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to its banking subsidiaries, except that it may engage in and may own shares of companies engaged in certain activities the FRB has determined to be so closely related to banking or managing or controlling banks as to be proper incident thereto.
In addition, various U.S. regulators, including the OCC, FRB and the SEC, have increased their focus on cybersecurity through guidance, examinations and regulations. The Bancorp has adopted a customer information security program that has been approved by the Bancorp’s Board of Directors.
In addition, various U.S. regulators, including the OCC, FRB and the SEC, have increased their focus on cybersecurity through guidance, examinations and regulations. The Bancorp has adopted an information security program that has been approved by the Bancorp’s Board of Directors. For more information related to cybersecurity, refer to Part I, Item 1C of this report.
An institution’s eligible retained income, when considered in conjunction with capital ratios and the stress capital buffer, provides limitations on capital distributions (including dividends and share repurchases) and certain executive compensation arrangements for the quarter following the calculation.
Under the Capital Rules, an institution’s eligible retained income, when considered in conjunction with capital ratios and the stress capital buffer, provides limitations on capital distributions (including dividends and share repurchases) and certain executive compensation arrangements for the quarter following the calculation. As of December 31, 2024, the Bancorp was not subject to these limitations.
For purposes of CRA examinations, the OCC rates each institution’s compliance with the CRA as “Outstanding,” “Satisfactory,” “Needs to Improve” or “Substantial Noncompliance.” The Bank received an “Outstanding” rating on its most recent CRA performance examination from the OCC.
For purposes of CRA examinations, the OCC rates each institution’s compliance with the CRA as “Outstanding,” “Satisfactory,” “Needs to Improve” or “Substantial Noncompliance.” The Bank’s most recently received CRA performance rating from the OCC was Outstanding.
Similar to the capital conservation 22 Fifth Third Bancorp Table of Contents buffer, the Bancorp must maintain capital ratios above the sum of its minimum risk-based capital ratios and the stress capital buffer to avoid certain limitations on capital distributions and discretionary bonuses to executive officers.
Stress Buffer Requirements The Bancorp is subject to the stress capital buffer requirement and must maintain capital ratios above the sum of its minimum risk-based capital ratios and the stress capital buffer to avoid certain limitations on capital distributions and discretionary bonuses to executive officers.
Anti-Money Laundering and Economic Sanctions The Bancorp is subject to federal laws that are designed to counter money laundering and terrorist financing, and transactions with certain persons, companies or foreign governments sanctioned by the United States.
Similar state laws may impose additional requirements on the Bancorp and its subsidiaries. Anti-Money Laundering and Economic Sanctions The Bancorp is subject to federal laws that are designed to counter money laundering and terrorist financing, and transactions with certain persons, companies or foreign governments sanctioned by the U.S.
The Bank is registered with the CFTC as a swap dealer. With the finalization of the position limits and capital requirements, CFTC and U.S. banking regulators have finalized the rules implementing Title VII applicable to the over-the-counter derivatives markets and swap dealers, and the SEC has finalized most of its rules related to security-based swaps.
The Bank is registered with the CFTC as a swap dealer. The CFTC, SEC and U.S. banking regulators have finalized the rules implementing Title VII applicable to the over-the-counter derivatives markets and swap dealers.
The FDIC may increase the Bank’s insurance premiums based on various factors, including the FDIC’s assessment of its risk profile. 19 Fifth Third Bancorp Table of Contents As of June 30, 2020, the DIF reserve ratio fell to 1.30%, below the statutory minimum of 1.35%.
The Bank accepts customer deposits that are insured by the DIF and, therefore, must pay insurance premiums. The FDIC may increase the Bank’s insurance premiums based on various factors, including the FDIC’s assessment of its risk profile. As of June 30, 2020, the DIF reserve ratio fell to 1.30%, below the statutory minimum of 1.35%.
Regulatory Capital Requirements The Bancorp and the Bank are subject to certain risk-based capital and leverage ratio requirements under the capital adequacy rules (the “Capital Rules”) adopted by the FRB, for the Bancorp, and by the OCC, for the Bank.
The effective dates will be extended for each day the injunction remains in place, pending the resolution of the lawsuit. Regulatory Capital Requirements The Bancorp and the Bank are subject to certain risk-based capital and leverage ratio requirements under the capital adequacy rules (the “Capital Rules”) adopted by the FRB, for the Bancorp, and by the OCC, for the Bank.
Use of such data is regulated under the Fair Credit Reporting Act (“FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. Similar state laws may impose additional requirements on the Bancorp and its subsidiaries.
Like other lenders, the Bank and other of the Bancorp’s subsidiaries use credit bureau data in their underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act (“FCRA”), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates and using affiliate data for marketing purposes.
The proposal would also establish a regular process for updating the maximum amount every other year going forward.
The proposal would also establish a regular process for updating the maximum amount every other year going forward. Fifth Third continues to monitor the development of these proposed rule revisions.
In April 2019, the FDIC released an advanced notice of proposed rulemaking with respect to the FDIC’s bank resolution plan requirements that requested comments on how to better tailor bank resolution plans to a firm’s size, complexity, and risk profile.
The FDIC’s resolution planning requirements were temporarily suspended in April 2019 as the FDIC requested comments on how to better tailor bank resolution plans to a firm’s size, complexity and risk profile.
In addition, the U.S. banking regulators have finalized regulations applicable to the Bank regarding mandatory posting, collection, and segregation of margin by certain swap counterparties, and capital requirements.
In addition, the U.S. banking regulators have finalized regulations applicable to the Bank regarding mandatory posting, collection and segregation of margin by certain swap counterparties and capital requirements. The Bank is not registered as a security-based swap dealer. Broker-Dealer and Investment Adviser Regulation Fifth Third’s broker-dealer and investment adviser subsidiaries are subject to regulation by the SEC.
Fifth Third’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
Financial Industry Regulation Authority (“FINRA”) is the primary self-regulatory organization for Fifth Third’s registered broker-dealer subsidiary. Fifth Third’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
The following discussion describes certain elements of the comprehensive regulatory framework applicable to the Bancorp and its subsidiaries.
The following discussion describes certain elements of the comprehensive regulatory framework applicable to the Bancorp and its subsidiaries. This discussion is not intended to describe all laws and regulations applicable to the Bancorp, the Bank and the Bancorp’s other subsidiaries.
As a result, discussions, and in some cases, negotiations regarding acquisitions and investments may take place and future transactions involving cash, debt or equity securities may occur.
In order to take into account the integration and other risks, the Bancorp conducts due diligence to evaluate and identify the risks associated with possible transactions. As a result, discussions, and in some cases, negotiations regarding acquisitions and investments may take place and future transactions involving cash, debt or equity securities may occur.
Moreover, these laws, and proposed legislation, are still subject to revision or formal guidance and they may be interpreted or applied in a manner inconsistent with our understanding. Like other lenders, the Bank and other of the Bancorp’s subsidiaries use credit bureau data in their underwriting activities.
The Bancorp continues to assess the requirements of such laws and proposed legislation and their applicability to the Bancorp. 22 Fifth Third Bancorp Table of Contents Moreover, these laws, and proposed legislation, are still subject to revision or formal guidance and they may be interpreted or applied in a manner inconsistent with our understanding.
The EGRRCPA amended various sections of Dodd-Frank, including section 165, which was revised to raise the asset thresholds for determining the application of enhanced prudential standards for BHCs.
While the regulatory environment has recently been in a period of rebalancing, the Bancorp expects that its business will remain subject to extensive regulation and supervision. The EGRRCPA amended various sections of Dodd-Frank, including section 165, which was revised to raise the asset thresholds for determining the application of enhanced prudential standards for BHCs.
On October 18, 2022, the FDIC adopted an amended restoration plan to increase the likelihood that the reserve ratio would be restored to at least 1.35% by September 30, 2028. The FDIC’s amended restoration plan increases the initial base deposit insurance assessment rate schedules uniformly by 2 basis points, which began with the first quarterly assessment period of 2023.
The FDIC’s amended restoration plan increases the initial base deposit insurance assessment rate schedules uniformly by 2 basis points, which began with the first quarterly assessment period of 2023.
The Bancorp is required to provide the FRB notice within 15 days after making any capital distributions in excess of those included in its capital plan. Under its CCAR process, the FRB annually evaluates capital adequacy, internal capital adequacy assessment processes and capital distribution plans of BHCs with $100 billion or more in total consolidated assets.
The FRB annually evaluates capital adequacy, internal capital adequacy assessment processes and capital distribution plans of BHCs with $100 billion or more in total consolidated assets.
As a result of the EPS Tailoring Rule, the Bancorp is subject to a quantitative assessment of capital through supervisory stress tests every two years, with the next required assessment in 2024. These supervisory stress tests are forward-looking quantitative evaluations of the impact of stressful economic and financial market conditions on the Bancorp's capital.
These supervisory stress tests are forward-looking quantitative evaluations of the impact of stressful economic and financial market conditions on the Bancorp’s capital.
The Bancorp’s holistic approach to collecting, measuring and responding to employee feedback enhances the employee experience at critical points during times of change in business or work environments. Feedback is collected through a variety of methods, including the Employee Viewpoints Survey which includes questions related to culture, engagement, inclusion, employee well-being, expectations and intent to stay.
The Bancorp’s continuous listening strategy is an important component of its inclusive culture. The Bancorp’s holistic approach to collecting, measuring and responding to employee feedback enhances the employee experience at critical points during times of change in business or work environments.
Further, in August 2021, the FDIC informed the Bank of certain requirements applicable to the resolution plan submission required under the FDIC’s rule with a submission due date of on or before December 1, 2022. The Bank submitted the resolution plan as required.
In 2021, the FDIC provided implementation guidance on certain aspects of its resolution plan rule and the Bank submitted a resolution plan to the FDIC by the December 1, 2022 deadline, as required under that guidance.
Capital Planning and Stress Testing BHCs with $100 billion or more in consolidated assets, including the Bancorp, generally must submit capital plans to the FRB on an annual basis. In March 2020, the FRB adopted a final rule to integrate the annual capital planning and stress testing requirements with certain ongoing regulatory capital requirements for large BHCs.
In March 2020, the FRB adopted a final rule to integrate the annual capital planning and stress testing requirements with certain ongoing regulatory capital requirements for large BHCs. As a result, the FRB’s supervisory stress test process is now used to calibrate the stress capital buffer requirement for large BHCs.
These employees support the organization’s vision to be the One Bank people most value and trust by upholding its four Core Values: Be Respectful & Inclusive, Take Accountability, Work as One Bank and Act with Integrity. 16 Fifth Third Bancorp Table of Contents Equality, Equity and Inclusion Fifth Third believes that an inclusive culture is essential to living its Core Values, serving its customers, delivering financial performance and being recognized as a leader in building an engaging workplace.
Fifth Third is committed to living its values, serving its customers, delivering financial performance and being recognized as a leader in building an engaging workplace. 16 Fifth Third Bancorp Table of Contents Engagement and Development Fifth Third believes that an engaged workforce is one of its most valuable assets in sustaining its success.
The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including the Bank, if the DIF reserve ratio is not restored as projected. Transactions with Affiliates Federal banking laws restrict transactions between a bank and its affiliates, including a parent BHC.
Transactions with Affiliates Federal banking laws restrict transactions between a bank and its affiliates, including a parent BHC.
Full year turnover significantly improved, decreasing from 21.0% in 2022 to 16.9% in 2023. The Bancorp’s focus on multicultural recruitment strengthens the organization by fostering an inclusive culture.
Full year turnover improved, decreasing from 16.9% in 2023 to 16.2% in 2024. The Bancorp’s recruitment strategies enhance the organization by promoting an inclusive culture. To attract the most talented employees, the Bancorp continues to enhance relationships with universities and partner organizations to attract top talent.
Under the final rule, the capital conservation buffer was replaced with a stress capital buffer requirement. During each supervisory stress testing cycle, the FRB will use the Bancorp’s supervisory stress test to determine its stress capital buffer, subject to a floor of 2.5%.
The FRB uses the supervisory stress test to determine the Bancorp’s stress capital buffer, subject to a floor of 2.5%. The Bancorp’s stress capital buffer under the FRB severely adverse scenario was 3.2% as of December 31, 2024 and 2.5% as of December 31, 2023. The Bancorp’s capital ratios have exceeded the stress capital buffer requirement for all periods presented.
Total Rewards – Compensation and Benefits The Bancorp is committed to providing competitive compensation programs that attract and retain top talent, while driving its business strategy and effectively managing risk. Compensation programs are designed to pay for performance and consider applicable regulatory expectations, corporate values and behavioral expectations. The Bancorp’s Compensation Philosophy aligns with the creation of long-term shareholder value.
Fifth Third’s commitment to compliance and risk management also remains strong, with all employees and contingent workers completing more than 475,000 course hours on these topics. Total Rewards – Compensation and Benefits The Bancorp is committed to providing competitive compensation programs that attract and retain top talent, while driving the business strategy and effectively managing risk.
To attract the most talented employees, the Bancorp continues to enhance relationships with universities and partner organizations to attract top talent from various backgrounds including women, minorities, individuals with disabilities, veterans and LGBTQ+ individuals. Creating and developing an inclusive workforce is important for the Bancorp’s business growth, leading to enhanced innovation while focusing on the needs of our customers.
Creating and developing an inclusive workforce is important for the Bancorp’s business growth, leading to enhanced innovation while focusing on the needs of its customers. Acquisitions and Investments The Bancorp’s strategy for growth includes strengthening its presence in core markets, expanding its presence in high-growth markets and broadening its product offerings.
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As of December 31, 2023, the Bancorp’s employees were approximately 57% female and approximately 29% persons of color: 71% White, 13% Black/African American, 8% Hispanic/Latino, 6% Asian, and 2% Other. The Bancorp has embedded approaches that continue to drive strategies across several key workstreams that focus on employees, customers, and the community.
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These employees support the organization’s ambition and purpose by upholding its values by committing to excellence, being connected and acting with creativity and courage.
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To support its commitment, the Bancorp has invested in the ongoing growth and expansion of its nine employee Business Resource Groups (“BRGs”). All employees regardless of background may join any BRG. Each BRG focuses on three pillars: employee development, community involvement/volunteerism and business innovation.
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Feedback is collected through a variety of methods, including the Employee Viewpoints Survey, which includes questions related to culture, engagement, inclusion, employee well-being, expectations and intent to stay. The Bancorp’s learning, development and career mobility strategy delivers personalized and accessible experiences that fuel career growth and help retain talent.
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BRGs across the footprint share best practices, embedding specific actions and activities to progress a culture of belonging and engagement. Engagement and Development Fifth Third believes that an engaged workforce is one of its most valuable assets in sustaining its success. The Bancorp’s continuous listening strategy is an important component of its inclusive culture.
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In response to employee feedback, Fifth Third continued its focus on career mobility with enhanced tools to support internal career pathing. This includes a robust suite of learning resources covering several areas, including leadership and professional development to foster learning and career advancement across the employee population. In 2024, employees engaged in over 255,000 hours of discretionary learning.
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The Bancorp’s learning, development and career mobility strategy delivers personalized and accessible experiences that fuel career growth and help retain talent. In 2023, employees completed over 779,000 training hours. In addition, the Bancorp requires all employees and contingent workers to complete compliance courses that support strong risk management behaviors and accountability.
Added
Several new initiatives were introduced, including a comprehensive onboarding program for new managers, a high performing program for senior leaders, and new offerings aimed at developing the professional and leadership skills necessary to build a strong pipeline of leaders. Fifth Third leaders engaged in 2,800 different development offerings.
Removed
The Bancorp continuously analyzes its compensation and benefits programs and practices with the objective of providing all employees with an equal opportunity to maximize their potential. Although not a nationwide requirement, Fifth Third recognizes a footprint-wide salary history ban and does not ask for a candidate’s current salary to use as a factor in determining an employment offer.
Added
Fifth Third’s compensation programs are designed to reward performance and align with regulatory expectations while reflecting the Bancorp’s values and behavioral standards. The Bancorp’s compensation philosophy is centered on creating long-term shareholder value. Fifth Third continuously analyzes its compensation programs to ensure all employees have equal opportunities to maximize their potential.
Removed
The Bancorp offers a holistic suite of benefits that demonstrates its commitment to its employees’ physical, financial and personal health and well-being.
Added
Fifth Third’s comprehensive benefits program is designed to address the personal and professional needs of employees and their families. In addition to traditional benefits offerings, the Bancorp provides comprehensive support with unique programs focused on the financial, physical, emotional and social well-being of employees.
Removed
In addition to traditional benefit offerings, the Bancorp offers a 401(k) retirement program that pays a match up to 7% of an employee’s eligible compensation, parental bonding leave, telemedicine services and tools that help find the highest quality and lowest cost treatment options. These services assist employees in maintaining a healthy work-life balance.
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On October 18, 2022, the FDIC adopted an amended restoration plan to increase the likelihood that the reserve 19 Fifth Third Bancorp Table of Contents ratio would be restored to at least 1.35% by September 30, 2028.
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In 2023, the Bancorp transitioned to a new paid time off structure that provides employees more control and flexibility to manage their time away, which includes paid time off for volunteering. In addition, the Bancorp enhanced its wellness offerings and resources to support employees and their families.
Added
As of December 31, 2024, the Bancorp’s estimate of its allocation of the special assessment was $252 million, based on the most recent information provided by the FDIC. As a result of this special assessment, the Bancorp recorded expense of $28 million and $224 million during the years ended December 31, 2024 and 2023, respectively, related to this estimate.
Removed
Acquisitions and Investments The Bancorp’s strategy for growth includes strengthening its presence in core markets and broadening its product offerings while taking into account the integration and other risks of growth. The Bancorp evaluates strategic acquisition and investment opportunities and conducts due diligence activities in connection with possible transactions.
Added
The Bancorp currently expects to pay the special assessment to the FDIC over a total of ten quarterly assessment periods, which began with the first quarter of 2024. The estimate of the cost associated with protecting the uninsured depositors will continue to be subject to periodic adjustment until the final loss amount is determined by the FDIC.
Removed
Both the scope of the laws and regulations and the intensity of the supervision to which the Bancorp and its subsidiaries are subject increased in response to the financial crisis, as well as other factors, such as technological and market changes. Regulatory enforcement and fines have also increased across the banking and financial services sector.
Added
Effective January 1, 2020, the Bancorp elected the five-year transition phase-in option for the impact of ASU 2016-13 (“CECL”) on regulatory capital.
Removed
Many of these changes have occurred as a result of Dodd-Frank and its implementing regulations, most of which are now in place. While the regulatory environment has recently been in a period of rebalancing the post financial crisis framework, the Bancorp expects that its business will remain subject to extensive regulation and supervision.
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The FRB may require BHCs, including the Bancorp, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile and growth plans.
Removed
This discussion is not intended to describe all laws and regulations applicable to the Bancorp, the Bank and the Bancorp’s other subsidiaries. 18 Fifth Third Bancorp Table of Contents Acquisitions The BHCA requires the prior approval of the FRB for a BHC to acquire substantially all the assets of a bank or to acquire direct or indirect ownership or control of more than 5% of any class of the voting shares of any bank, BHC or savings association, or to merge or consolidate with any BHC.
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(b) Reflects the well-capitalized standard applicable to the Bancorp under FRB Regulation Y and the well-capitalized standard applicable to the Bank. 21 Fifth Third Bancorp Table of Contents Capital Planning and Stress Testing The FRB’s capital plan rule requires BHCs with $100 billion or more in consolidated assets, including the Bancorp, to develop and maintain a capital plan approved by the Board of Directors on an annual basis.
Removed
The Bank accepts customer deposits that are insured by the DIF and, therefore, must pay insurance premiums.
Added
As a result of the EPS Tailoring Rule, Category IV BHCs, including the Bancorp, are no longer required to conduct and disclose the results of company-run stress tests and are subject to the supervisory stress test process every two years. The Bancorp’s most recent required assessment was completed in 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA ratings downgrade to Fifth Third, its subsidiaries or their securities could also create obligations or liabilities of Fifth Third under the terms of its outstanding securities that could increase Fifth Third’s costs or otherwise have a negative effect on its results of operations or financial condition. 28 Fifth Third Bancorp Table of Contents Additionally, a downgrade of the credit rating of any particular security issued by Fifth Third or its subsidiaries could negatively affect the ability of the holders of that security to sell the securities and the prices at which any such securities may be sold.
Biggest changeA ratings downgrade to Fifth Third, its subsidiaries or their securities could also create obligations or liabilities of Fifth Third under the terms of its outstanding securities that could increase Fifth Third’s costs or otherwise have a negative effect on its results of operations or financial condition.
If personal, confidential or proprietary information of customers or clients in the Bancorp’s or such vendors’ or other third parties’ possession were to be mishandled or misused, the Bancorp could suffer significant regulatory consequences, reputational damage and financial loss.
If personal, confidential or proprietary information of customers or clients in the Bancorp’s or such vendors’ or other third parties’ possession were to be mishandled or misused, the Bancorp could suffer significant regulatory consequences, reputational damage and financial loss.
International events such as trade disputes, separatist movements, leadership changes and political and military conflicts (such as the ongoing military tension between Russia and Ukraine and the evolving conflict in Israel and Gaza) could adversely affect global financial activity and markets and could negatively affect the U.S. economy.
International events such as trade disputes, separatist movements, leadership changes and political and military conflicts (such as the ongoing military tension between Russia and Ukraine and the conflict in Israel and Gaza) could adversely affect global financial activity and markets and could negatively affect the U.S. economy.
Some of these regions have experienced weather events including hurricanes, tornadoes, fires and other natural disasters. The nature and level of these events and the impact of global climate change upon their frequency and severity cannot be predicted.
Some of these regions have experienced severe weather events including hurricanes, tornadoes, fires and other natural disasters. The nature and level of these events and the impact of global climate change upon their frequency and severity cannot be predicted.
Actual or perceived shortcomings with respect to these ESG initiatives and reporting can impact Fifth Third’s ability to hire and retain employees, increase its customer base or attract and retain certain types of investors.
Actual or perceived shortcomings with respect to these initiatives and reporting can impact Fifth Third’s ability to hire and retain employees, increase its customer base or attract and retain certain types of investors.
This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which the Bancorp interacts on a daily basis, and therefore could adversely affect Fifth Third. 27 Fifth Third Bancorp Table of Contents Inability to refinance in capital markets could cause a default that impacts Fifth Third borrowers.
This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which the Bancorp interacts on a daily basis, and therefore could adversely affect Fifth Third. 25 Fifth Third Bancorp Table of Contents Inability to refinance in capital markets could cause a default that impacts Fifth Third borrowers.
Although Fifth Third has a defined risk management approach for client selection, Fifth Third could be inherently exposed to reputational, financial and legal risk, and its ability to retain and attract customers and employees may be negatively impacted as a result of these contrasting arguments in how a financial institution should address these issues.
Although Fifth Third has a defined risk-based approach for client selection, Fifth Third could be inherently exposed to reputational, financial and legal risk, and its ability to retain and attract customers and employees may be negatively impacted as a result of these contrasting arguments in how a financial institution should address these issues.
Collecting, measuring, and reporting ESG information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact, including on Fifth Third’s reputation and stock price.
Collecting, measuring, and reporting on this information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact, including on Fifth Third’s reputation and stock price.
Additionally, legislation or regulatory reform could affect the behaviors of third parties that Fifth Third deals within the course of business, such as rating agencies, insurance companies and investors. In addition, changes in laws or regulations that affect Fifth Third’s customers and business partners could negatively affect Fifth Third’s revenues and expenses.
Additionally, legislation or regulatory reform could affect the behaviors of third parties that Fifth Third deals with in the course of business, such as rating agencies, insurance companies and investors. In addition, changes in laws or regulations that affect Fifth Third’s customers and business partners could negatively affect Fifth Third’s revenues and expenses.
In order to restore the DIF to its statutorily mandated minimums, the FDIC significantly increased deposit insurance premium rates, including the Bank’s, resulting in increased expenses. The revised assessment rate schedules became effective January 1, 2023, and are applicable to the first quarterly assessment period of 2023.
In order to restore the DIF to its statutorily mandated minimums, the FDIC significantly increased deposit insurance premium rates, including the Bank’s, resulting in increased expenses. The revised assessment rate schedules became effective January 1, 2023, and were applicable to the first quarterly assessment period of 2023.
Fifth Third earns revenue from the fees it receives for originating mortgage loans and for servicing mortgage loans. When rates rise, the demand for mortgage loans tends to fall, reducing the revenue Fifth Third receives from loan originations. At the same time, revenue from mortgage servicing rights (“MSR”) can increase through increases in fair value.
Fifth Third earns revenue from the fees it receives for originating mortgage loans and for servicing mortgage loans. When rates rise, the demand for mortgage loans tends to fall, reducing the revenue Fifth Third receives from loan originations. At the same time, revenue from mortgage servicing rights (“MSRs”) can increase through increases in fair value.
Fifth Third’s necessary dependence upon automated systems to record and process its transaction volume poses the risk that technical system flaws or employee errors, tampering or manipulation of those systems will result in losses and may be difficult to detect.
Fifth Third’s necessary dependence upon automated systems to record and process its transaction volume poses the risk that technical system flaws or employee errors, tampering or manipulation of those systems could result in losses and may be difficult to detect.
Fifth Third is also subject to certain regulatory requirements as a result of its banking activity including with respect to stress testing, liquidity and capital levels, asset quality, provisioning, AML/BSA, fair lending, consumer compliance and other prudential matters and efforts to ensure that financial institutions take steps to improve their risk management and prevent future crises.
Fifth Third is also subject to certain regulatory requirements as a result of its banking activity including with respect to stress testing, liquidity and capital levels, asset quality, provisioning, AML/BSA, fair lending, consumer compliance, protection of customer information and other prudential matters and efforts to ensure that financial institutions take steps to improve their risk management and prevent future crises.
Global financial markets, including the United States, face political and economic uncertainties (such as recent budget deficit concerns and political conflict over legislation to raise the U.S. government’s debt limit) that may delay investment and hamper economic activity.
Global financial markets, including the U.S., face political and economic uncertainties (such as recent budget deficit concerns and political conflict over legislation to raise the U.S. government’s debt limit) that may delay investment and hamper economic activity.
Fifth Third faces operational risk from the effects of climate change as an increase in severe weather may cause closures, damage to infrastructure, or damage to Fifth Third’s physical locations that may disrupt the physical operation of the Bancorp.
Fifth Third faces operational risk from the effects of climate change as an increase in severe weather may cause closures, damage to infrastructure or damage to Fifth Third’s physical locations or other assets that may disrupt the physical operation of the Bancorp.
Treasury and impose risk-based assessments on covered financial companies. Risk-based assessments would be made, first, on entities that received more in the resolution than they would have received in the liquidation to the extent of such excess and second, if necessary, on, among others, bank holding companies with total consolidated assets of $50 billion or more, such as Fifth Third.
Treasury and impose risk-based assessments on covered financial companies. Risk-based assessments would be made, first, on entities that received more in the resolution than they would have received in the liquidation to the extent of such excess and second, if necessary, on, among others, BHCs with total consolidated assets of $50 billion or more, such as Fifth Third.
In addition, Fifth Third may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.
In addition, Fifth Third may incur significant training, licensing, maintenance, consulting, depreciation expense and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.
Third-party service providers with which the Bancorp does business both domestically and offshore, as well as vendors and other third parties with which the Bancorp’s customers do business, can also be sources of operational risk to the Bancorp, particularly where processes are highly concentrated or activities of customers are beyond the Bancorp’s security and control systems, such as through the use of the internet, personal computers, tablets, smart phones and other mobile services.
Third-party service providers with which the Bancorp does business both domestically and offshore, as well as vendors and other third parties with which the Bancorp’s customers do business, can also be sources of operational risk to the Bancorp, particularly where processes are highly concentrated or in widespread use on critical Bancorp systems, or activities of customers are beyond the Bancorp’s security and control systems, such as through the use of the internet, personal computers, tablets, smart phones and other mobile services.
Advances in technology such as e-commerce, telephone, internet and mobile banking, and in-branch self-service technologies including automatic teller machines and other equipment, as well as changing work arrangements and customer preferences for these other methods of accessing Fifth Third’s products and services, could affect the value of Fifth Third’s branch network or other retail distribution assets and may cause it to change its retail distribution strategy, close and/or sell certain branches or parcels of land held for development and restructure or reduce its remaining branches and work force.
Advances in technology such as e-commerce, telephone, internet and mobile banking and in-branch self-service technologies 35 Fifth Third Bancorp Table of Contents including automatic teller machines and other equipment, as well as changing work arrangements and customer preferences for these other methods of accessing Fifth Third’s products and services, could affect the value of Fifth Third’s branch network or other retail distribution assets and may cause it to change its retail distribution strategy, close and/or sell certain branches or parcels of land held for development and restructure or reduce its remaining branches and work force.
Fifth Third sells residential mortgage loans to various parties, including government-sponsored enterprises (“GSE”) and other financial institutions that purchase residential mortgage loans for investment or private label securitization.
Fifth Third sells residential mortgage loans to various parties, including government-sponsored enterprises (“GSEs”) and other financial institutions that purchase residential mortgage loans for investment or private label securitization.
Fifth Third’s actual or alleged conduct in activities, such as certain sales and lending practices, data security, operational resiliency, corporate governance and acquisitions, inappropriate behavior or misconduct of employees, failure to deliver minimum or required standards of service or quality, association with particular customers, business partners, investments or vendors, as well as developments from any of the other risks described above, may result in negative public opinion at large (or with certain segments of the public) and may damage Fifth Third’s reputation.
Fifth Third’s actual or alleged conduct in activities, such as certain sales and lending practices, data security, operational resiliency, corporate governance and acquisitions, inappropriate behavior or misconduct of employees, failure to deliver minimum or required standards of service or quality, association with particular customers, business partners, investments or vendors, as well as developments from any of the other 36 Fifth Third Bancorp Table of Contents risks described above, may result in negative public opinion at large (or with certain segments of the public) and may damage Fifth Third’s reputation.
The Bancorp may be subject to disruptions of its operating systems arising from events that are wholly or partially beyond the Bancorp’s control, which may include, for example, security breaches; electrical or telecommunications outages; failures of computer components or servers or other damage to the Bancorp’s property or assets; natural disasters or severe weather conditions; health emergencies; or events arising from local or larger-scale political events, including outbreaks of hostilities or terrorist acts.
The Bancorp may be subject to disruptions of its operating systems arising from events that are wholly or partially beyond the 28 Fifth Third Bancorp Table of Contents Bancorp’s control, which may include, for example, security breaches; electrical or telecommunications outages; failures of computer components or servers or other damage to the Bancorp’s property or assets; natural disasters or severe weather conditions; health emergencies; or events arising from local or larger-scale political events, including outbreaks of hostilities or terrorist acts.
Although Fifth Third establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, Fifth Third does not have accruals for all legal proceedings where it faces a risk of loss.
Although Fifth Third establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, Fifth Third does not have accruals 30 Fifth Third Bancorp Table of Contents for all legal proceedings where it faces a risk of loss.
Future acquisition and investment activities and efforts to monitor newly acquired businesses or reap the benefits of a new strategic relationship may 37 Fifth Third Bancorp Table of Contents require Fifth Third to devote substantial time and resources and may cause these acquisitions, investments and relationships to be unprofitable or cause Fifth Third to be unable to pursue other business opportunities.
Future acquisition and investment activities and efforts to monitor newly acquired businesses or reap the benefits of a new strategic relationship may require Fifth Third to devote substantial time and resources and may cause these acquisitions, investments and relationships to be unprofitable or cause Fifth Third to be unable to pursue other business opportunities.
During the course of an investigation, Fifth Third may not necessarily know the full effects of the incident or how to remediate it, and actions and decisions that are taken or made in an effort to mitigate risk may further increase the costs and other negative 29 Fifth Third Bancorp Table of Contents consequences of the incident.
During the course of an investigation, Fifth Third may not necessarily know the full effects of the incident or how to remediate it, and actions and decisions that are taken or made in an effort to mitigate risk may further increase the costs and other negative consequences of the incident.
Any failures or disruptions of the Bancorp’s systems or operations could give rise to losses in service to customers and clients, adversely affect the Bancorp’s business and results of operations by subjecting the Bancorp to losses or liability, or require the Bancorp to expend significant resources to correct the failure or disruption, as well as by exposing the Bancorp to reputational harm, litigation, regulatory fines 30 Fifth Third Bancorp Table of Contents or penalties or losses not covered by insurance.
Any failures or disruptions of the Bancorp’s systems or operations could give rise to losses in service to customers and clients, adversely affect the Bancorp’s business and results of operations by subjecting the Bancorp to losses or liability, or require the Bancorp to expend significant resources to correct the failure or disruption, as well as by exposing the Bancorp to reputational harm, litigation, regulatory fines or penalties or losses not covered by insurance.
In addition, because the techniques used to cause such security breaches change frequently, often are not recognized until launched against a target and may originate from remote and less regulated areas around the world, Fifth Third may be unable to proactively address these techniques or to implement adequate preventative measures.
In addition, because the techniques used to cause such security breaches change frequently, often are not recognized until launched against a target and may originate from remote and less regulated areas around the world, Fifth Third may be unable to 27 Fifth Third Bancorp Table of Contents proactively address these techniques or to implement adequate preventative measures.
Activist criticism of Fifth Third’s relationships with clients in sensitive industries could potentially engender dissatisfaction among stakeholders with how Fifth Third addresses environmental or social concerns through business activities which could negatively affect its business or reputation.
Activist criticism of Fifth Third’s relationships or due diligence practices with clients in sensitive industries could potentially engender dissatisfaction among stakeholders with how Fifth Third addresses environmental or social concerns through business activities or disclosures which could negatively affect its business or reputation.
Fifth Third also considers the physical and transition risks arising from climate change to be transverse risk drivers 39 Fifth Third Bancorp Table of Contents that impact all of these material risks and has therefore integrated climate change considerations into its risk management framework.
Fifth Third also considers the physical and transition risks arising from climate change to be transverse risk drivers that impact all of these material risks and has therefore integrated climate risk considerations into its risk management framework.
Regulatory scrutiny of liquidity and capital levels at bank holding companies and insured depository institutions has resulted in increased regulatory focus on all aspects of capital planning, including dividends and other distributions to shareholders of banks such as the parent bank holding companies.
Regulatory scrutiny of liquidity and capital levels at BHCs and insured depository institutions has resulted in increased regulatory focus on all aspects of capital planning, including dividends and other distributions to shareholders of banks such as the parent BHCs.
Activists are increasingly targeting financial firms with public criticism for their relationships with clients that are engaged in certain industries (such as those which are carbon intensive), including businesses whose products are or are perceived to be harmful to health, the environment, the global climate, or the social good.
Activists have historically targeted financial firms with public criticism for their relationships with clients that are engaged in certain industries (such as those which are carbon intensive), including businesses whose products are or are perceived to be harmful to health, the environment, the global climate or the social good.
Changes in interest rates could affect Fifth Third’s income and cash flows . Fifth Third’s income and cash flows depend to a great extent on the difference between the interest rates earned on interest-earning assets such as loans and investment securities and the interest rates paid on interest-bearing liabilities such as deposits and borrowings.
Fifth Third’s income and cash flows depend to a great extent on the difference between the interest rates earned on interest-earning assets such as loans and investment securities and the interest rates paid on interest-bearing liabilities such as deposits and borrowings.
Decisions that its regulators make, including those related to capital distributions to its shareholders, could be affected adversely due to the perception that the models used to generate the relevant information are unreliable or inadequate. Fifth Third’s framework for managing risks may not be effective in mitigating its risk and loss.
Decisions that its regulators make, including those related to capital distributions to its shareholders, could be affected adversely due to the perception that the models used to generate the relevant information are unreliable or inadequate. 37 Fifth Third Bancorp Table of Contents Fifth Third’s framework for managing risks may not be effective in mitigating its risk and loss.
Nationally, reported incidents of fraud and other financial crimes have increased. Increased use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and operations, coupled with the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others increases Fifth Third’s security risks.
Increased use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and operations, coupled with the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others increases Fifth Third’s security risks.
These rates are highly sensitive to many factors that are beyond Fifth Third’s control, including general economic conditions in the U.S. or abroad and the 35 Fifth Third Bancorp Table of Contents policies of various governmental and regulatory agencies (in particular, the FRB).
These rates are highly sensitive to many factors that are beyond Fifth Third’s control, including general economic conditions in the U.S. or abroad and the policies of various governmental and regulatory agencies (in particular, the FRB).
Such actions and activities that may be subject to prior approval include, but are not limited to, increasing dividends or other 33 Fifth Third Bancorp Table of Contents capital distributions by the Bancorp or the Bank, entering into a merger or acquisition transaction, acquiring or establishing new branches, and entering into certain new businesses.
Such actions and activities that may be subject to prior approval include, but are not limited to, increasing dividends or other capital distributions by the Bancorp or the Bank, entering into a merger or acquisition transaction, acquiring or establishing new branches and entering into certain new businesses.
Core deposits, which include transaction deposits and certificates of deposit $250,000 or less, have historically provided Fifth Third with a sizeable source of relatively stable and low-cost funds (average core deposits funded 76% of average total assets for the year ending December 31, 2023).
Core deposits, which include transaction deposits and certificates of deposit $250,000 or less, have historically provided Fifth Third with a sizeable source of relatively stable and low-cost funds (average core deposits funded 77% of average total assets for the year ended December 31, 2024).
Fifth Third’s liquidity and ability to fund and operate its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility or a lack of market or customer confidence in financial markets in general similar to what occurred during the financial crisis in 2008 and early 2009, which may result in a loss of customer deposits or outflows of cash or collateral and/or ability to access capital markets on favorable terms.
Fifth Third’s liquidity and ability to fund and operate its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility or a lack of market or customer confidence in financial markets in general, which may result in a loss of customer deposits or outflows of cash or collateral and/or the ability to access capital markets on favorable terms.
Many of the above conditions and factors may be caused by events over which Fifth Third has little or no control such as what occurred during the financial crisis. There can be no assurance that significant disruption and volatility in the financial markets will not occur again in the future.
Many of the above conditions and factors may be caused by events over which Fifth Third has little or no control. There can be no assurance that significant disruption and volatility in the financial markets will not occur again in the future.
An additional risk is the use of third- and fourth-party providers to host critical data and platforms for Fifth Third, or in some cases provide IT services to Fifth Third domestically and internationally.
An additional risk is the use of third- and fourth-party providers to host critical data and platforms for Fifth Third, or in some cases provide services to Fifth Third domestically and internationally. Fifth Third has a third-party risk program to oversee third- and fourth-party providers.
Fifth Third believes that both the ALLL and the reserve for unfunded commitments are adequate to cover expected losses at December 31, 2023; however, there is no assurance that they will be sufficient to cover future credit losses associated with exposures existing at December 31, 2023, especially if economic conditions decline, including but not limited to housing and employment conditions.
Fifth Third believes that both the ALLL and the reserve for unfunded commitments are adequate to cover expected losses at December 31, 2024. However, there is no assurance that they will be sufficient to cover future credit losses associated with exposures existing at December 31, 2024, especially if economic conditions decline.
Additionally, the FRB and other major central banks have removed or reduced monetary accommodation and raised interest rates, increasing the risk of recession and may also negatively impact asset values and credit spreads that were impacted by extraordinary monetary stimulus.
Additionally, in recent years, the FRB and other major central banks have removed or reduced monetary accommodation and raised interest rates (although offset by recent rate reductions), increasing the risk of recession and may also negatively impact asset values and credit spreads that were impacted by extraordinary monetary stimulus.
Fifth Third has been, and will continue to be, impacted by general business and economic conditions in the United States.
Fifth Third has been, and will continue to be, impacted by general business and economic conditions in the U.S.
The price for shares of Fifth Third’s common stock may fluctuate significantly in the future, and these fluctuations may be unrelated to Fifth Third’s performance.
The price for shares of Fifth Third’s common stock may fluctuate significantly in the future, and these fluctuations may be unrelated to Fifth 34 Fifth Third Bancorp Table of Contents Third’s performance.
Fifth Third may also be subject to disruptions of its operating systems arising from events that are beyond its control (for example, computer viruses or electrical or telecommunications outages).
Fifth Third may also be subject to disruptions of its operating systems arising from events that are beyond its control (for example, cyber-attacks, equipment failure, or electrical or telecommunications outages).
Fifth Third may underestimate the credit losses expected to be incurred in its portfolios and have credit losses in excess of the amount reserved. Fifth Third may increase the reserve because of changing economic or market conditions, including falling home prices or higher unemployment, or other factors such as changes in borrower’s behavior or changing protections in credit agreements.
Fifth Third may underestimate the credit losses expected to be incurred in its portfolios and have credit losses in excess of the amount reserved. Alternatively, Fifth Third may increase the reserve because of changing economic or market conditions, including inflation, interest rate fluctuations, higher unemployment, or other factors such as changing protections in credit agreements or changes in borrowers’ behavior.
Fifth Third has significant investments in bank premises and equipment for its branch network including its 1,088 full-service banking centers, 5 parcels of land held for the development of future banking centers and 49 properties that are developed or in the process of being developed as branches, as well as its retail work force and other branch banking assets.
Fifth Third has significant investments in bank premises and equipment for its branch network including its 1,089 full-service banking centers and 102 properties that are developed or in the process of being developed as branches, as well as its retail work force and other branch banking assets.
Government regulation and legislation subject Fifth Third and other financial institutions to restrictions, oversight and/or costs that may have an impact on Fifth Third’s business, financial condition, results of operations or the price of its common stock.
Fifth Third is subject to extensive governmental regulation which could adversely impact Fifth Third or the businesses in which Fifth Third is engaged. Government regulation and legislation subject Fifth Third and other financial institutions to restrictions, oversight and/or costs that may have an impact on Fifth Third’s business, financial condition, results of operations or the price of its common stock.
The effects of global climate change, natural disasters or health emergencies may have an effect on the performance of Fifth Third’s loan portfolios, thereby adversely impacting its results of operations. Fifth Third’s footprint stretches from the upper Midwestern to lower Southeastern regions of the United States and it has offices in many other areas of the country.
The effects of global physical climate risks, severe weather events or health emergencies may have an effect on the performance of Fifth Third’s loan portfolios, thereby adversely impacting its results of operations. Fifth Third’s footprint stretches from the upper Midwestern to lower Southeastern regions of the U.S. and it has offices in many other areas of the country.
Fifth Third owns, or owns a minority stake in, as applicable, several non-strategic businesses, investments and other assets that are not significantly synergistic with its core financial services businesses or, in the future, may no longer be aligned with Fifth Third’s strategic plans or regulatory expectations.
Fifth Third owns, or owns a minority stake in, as applicable, several businesses, investments and other assets that, in the future, may no longer be aligned with Fifth Third’s strategic plans or regulatory expectations.
Further, the increase in market interest rates is likely to reduce Fifth Third’s loan origination volume, particularly refinance volume, and/or reduce its interest rate spread, which could have an adverse effect on Fifth Third’s profitability and results of operations.
Further, any increase in market interest rates is likely to reduce Fifth Third’s loan origination volume, particularly refinance volume, and/or reduce its interest rate spread, which could have an adverse effect on Fifth Third’s profitability and results of operations. Conversely, a lowering in interest rates would likely further reduce the interest Fifth Third earns on loans and other earning assets.
These conditions include short-term and long-term interest rates, inflation, money supply, political issues, legislative and regulatory changes, fluctuations in both debt and equity capital markets, broad trends in industry and finance, unemployment and the strength of the U.S. economy and the local economies in which Fifth Third operates, all of which are beyond Fifth Third’s control.
These conditions include short-term and long-term interest rates, inflation, money supply, political issues, legislative and regulatory changes, fluctuations in both debt 33 Fifth Third Bancorp Table of Contents and equity capital markets, broad trends in industry and finance, unemployment, tariffs or other anticipated changes in trade policy and other social, economic and political impacts of the incoming administration and the strength of the U.S. economy and the local economies in which Fifth Third operates, all of which are beyond Fifth Third’s control.
Fifth Third may experience losses related to fraud, theft or violence. Fifth Third has experienced, and may experience again in the future, losses incurred due to customer or employee fraud, theft or physical violence. Additionally, physical violence may negatively affect Fifth Third’s key personnel, facilities or systems.
Fifth Third has experienced, and may experience again in the future, losses incurred due to customer or employee fraud, theft or physical violence. Additionally, physical violence may negatively affect Fifth Third’s key personnel, facilities or systems. These losses may be material and negatively affect Fifth Third’s results of operations, financial condition or prospects.
Despite Fifth Third’s efforts to prevent a cyber-attack, a successful cyber-attack could persist for an extended period of time before being detected, and, following detection, it could take considerable time for Fifth Third to obtain full and reliable information about the cybersecurity incident and the extent, amount and type of information compromised.
Despite Fifth Third’s efforts to prevent a cyber-attack and monitoring of data flow inside and outside Fifth Third, due to the increasing sophistication of techniques used by attackers to conceal access to systems, a successful cyber-attack could persist for an extended period of time before being detected, and, following detection, it could take considerable time for Fifth Third to obtain full and reliable information about the cybersecurity incident and the extent, amount and type of information compromised.
In addition, as climate change issues become more prevalent, the U.S. and foreign governments are beginning to respond to these issues. The increasing government focus on climate change may result in new environmental regulations, including disclosure required by the SEC, that could result in additional compliance costs.
In addition, as climate change issues become more prevalent, the U.S. and foreign governments are beginning to respond to these issues. The evolving federal and state government focus on climate change may result in new environmental regulations, including disclosure requirements from other jurisdictions in which the Bank operates that could result in additional compliance costs.
Fifth Third could face serious negative consequences if its third-party service providers, business partners or investments fail to comply with applicable laws, rules or regulations. Fifth Third is expected to oversee the legal and regulatory compliance of its business endeavors, including those performed by third-party service providers, business partners, other vendors and certain companies in which Fifth Third has invested.
Fifth Third is expected to oversee the legal and regulatory compliance of its business endeavors, including those performed by third-party service providers, business partners, customers, other vendors and certain companies in which Fifth Third has invested. Legal authorities and regulators could hold Fifth Third responsible for failures by these parties to comply with applicable laws, rules or regulations.
Due to uncertainties relating to these factors, there can be no assurance that the reserves Fifth Third establishes will be adequate or that the total amount of losses incurred will not have a material adverse effect on Fifth Third’s financial condition or results of operations. 32 Fifth Third Bancorp Table of Contents Fifth Third is subject to extensive governmental regulation which could adversely impact Fifth Third or the businesses in which Fifth Third is engaged.
Due to uncertainties relating to these factors, there can be no assurance that the reserves Fifth Third establishes will be adequate or that the total amount of losses incurred will not have a material adverse effect on Fifth Third’s financial condition or results of operations.
Additionally, Fifth Third has a substantial portfolio of commercial and residential real estate loans and weaknesses in residential or commercial real estate markets may adversely impact Fifth Third’s business, results of operations or financial condition. Problems encountered by other financial institutions could adversely affect financial markets generally and have direct and indirect adverse effects on Fifth Third.
Fifth Third also has a portfolio of indirect secured consumer loans, and the depreciation in the value of used vehicles may adversely impact Fifth Third’s business, results of operations or financial condition. Problems encountered by other financial institutions could adversely affect financial markets generally and have direct and indirect adverse effects on Fifth Third.
These losses may be material and negatively affect Fifth Third’s results of operations, financial condition or prospects. These losses could also lead to significant reputational risks and other effects. The industry fraud threat continues to evolve, including but not limited to, card fraud, check fraud, electronic fraud, wire fraud, social engineering and phishing attacks for identity theft and account takeover.
These losses could also lead to significant reputational risks and other effects. The industry fraud threat continues to evolve, including but not limited to, card fraud, check fraud, electronic fraud, wire fraud, social engineering and phishing attacks for identity theft and account takeover. Nationally, reported incidents of fraud and other financial crimes have increased.
These interruptions may impair Fifth Third’s ability to operate and may interfere with its ability to carry out business and serve clients and customers. 31 Fifth Third Bancorp Table of Contents LEGAL AND REGULATORY COMPLIANCE RISKS Fifth Third and/or its affiliates are or may become involved from time to time in information-gathering requests, investigations and litigation, regulatory or other enforcement proceedings by various governmental regulatory agencies and law enforcement authorities, as well as self-regulatory agencies which may lead to adverse consequences.
LEGAL AND REGULATORY COMPLIANCE RISKS Fifth Third and/or its affiliates are or may become involved from time to time in information-gathering requests, investigations and litigation, regulatory or other enforcement proceedings by various governmental regulatory agencies and law enforcement authorities, as well as self-regulatory agencies which may lead to adverse consequences.
The FDIC maintains a Deposit Insurance Fund (“DIF”) to protect insured depositors in the event of bank failures. The DIF is funded by fees assessed on insured depository institutions including the Bank.
Deposit insurance premiums levied against the Bank could increase further if the number of bank failures increase or the cost of resolving failed banks increases. The FDIC maintains a Deposit Insurance Fund (“DIF”) to protect insured depositors in the event of bank failures. The DIF is funded by fees assessed on insured depository institutions including the Bank.
Dodd-Frank created authority for the orderly liquidation of systemically important BHCs and non-bank financial companies and is based on the FDIC’s bank resolution model. The Secretary of the U.S.
If an orderly liquidation of a systemically important BHC or non-bank financial company were triggered, Fifth Third could face assessments for the Orderly Liquidation Fund. Dodd-Frank created authority for the orderly liquidation of systemically important BHCs and non-bank financial companies and is based on the FDIC’s bank resolution model. The Secretary of the U.S.
Deterioration or continued weakness in any of these conditions could result in a decrease in demand for Fifth Third’s products and services.
Deterioration or continued weakness in any of these conditions could result in a decrease in demand for Fifth Third’s products and services. Global and domestic political, social and economic uncertainties and changes may adversely affect Fifth Third.
The impact on Fifth Third’s customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities that may be negatively affected by economic transition towards a lower-carbon economy. Fifth Third could experience a drop in demand for its products and services, particularly in certain sectors.
Fifth Third and its customers may face cost increases, asset value reductions, operating process changes, and the like. The impact on Fifth Third’s customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities that may be negatively affected by economic transition towards a lower-carbon economy.
Such supervisory actions or restrictions, if and in whatever manner imposed, could negatively affect Fifth Third’s ability to engage in new activities and certain transactions, as well as have a material adverse effect on Fifth Third’s business and results of operations and may not be publicly disclosed.
Such supervisory actions or restrictions, if and in whatever manner imposed, could negatively affect Fifth Third’s ability to engage in new activities and certain transactions, as well as have a material adverse effect on Fifth Third’s business and results of operations and may not be publicly disclosed. 32 Fifth Third Bancorp Table of Contents Fifth Third could face serious negative consequences if its third-party service providers, business partners, customers or investments fail to comply with applicable laws, rules or regulations.
The Biden Administration has sought to implement a regulatory agenda that has included, or could include, a heightened focus on the risks arising from climate change, fair lending, consumer protection, Bank Secrecy Act and anti-money laundering requirements, topics related to social equity, executive compensation, and increased capital and liquidity, as well as limits on share buybacks and dividends.
It is anticipated that the Trump administration will promulgate a number of executive orders and propose legislation that could directly impact the regulation of the financial services industry, many of which may mark a departure from the Biden administration’s regulatory agenda that has included a heightened focus on the risks arising from climate change, fair lending, consumer protection, Bank Secrecy Act and anti-money laundering requirements, topics related to social equity, executive compensation, and increased capital and liquidity, as well as limits on share buybacks and dividends.
Even without revisions to the regulatory framework, the financial services industry has faced an enhanced level of scrutiny and escalation from its regulators, which could negatively impact Fifth Third’s business activities as its regulators perform reviews of, among other things, its liquidity, capital, stress testing and risk management programs and may require Fifth Third to enhance its liquidity position and take other steps regarding risk management.
If enhanced levels of scrutiny and escalation from its regulators continues, it could negatively impact Fifth Third’s business activities as its regulators perform reviews of, among other things, its liquidity, capital, stress testing and risk management programs and may require Fifth Third to enhance its liquidity position and take other steps regarding risk management. 38 Fifth Third Bancorp Table of Contents
If its borrowers are adversely affected due to a widespread health emergency that impacts Fifth Third employees, vendors or economic growth generally, Fifth Third’s financial condition and results of operations could be adversely affected. Societal responses to climate change could adversely affect Fifth Third’s business and performance, including indirectly through impacts on Fifth Third’s customers.
If its borrowers are adversely affected due to a widespread health emergency that impacts Fifth Third employees, vendors or economic growth generally, Fifth Third’s financial condition and results of operations could be adversely affected. LIQUIDITY RISKS Fifth Third must maintain adequate sources of funding and liquidity.
Fifth Third cannot predict whether any pending or future legislation will be adopted or the substance and impact of any such new legislation on Fifth Third. Changes in regulation and supervisory and enforcement focus could affect Fifth Third in a substantial way and could have an adverse effect on its business, financial condition and results of operations.
Changes in regulation and supervisory and enforcement focus could affect Fifth Third in a substantial way and could have an adverse effect on its business, financial condition and results of operations.
Worldwide financial markets have recently experienced periods of extraordinary disruption and volatility, which have been driven by factors such as the COVID-19 pandemic, the Russia/Ukraine conflict and the evolving conflict in Israel and Gaza, resulting in heightened credit risk, reduced valuation of investments, decreased economic activity, heightened risk of cyber-attacks, and inflation.
Worldwide financial markets have recently experienced periods of extraordinary disruption and volatility, which have been driven by geopolitical events that have resulted in heightened credit risk, reduced valuation of investments, decreased economic activity, heightened risk of cyber-attacks and inflation.
Treasury rates, SOFR or other benchmarks that may not perfectly correlate with the value or income being hedged. Fifth Third could incur significant losses from its hedging activities.
Treasury rates, SOFR or other benchmarks that may not perfectly correlate with the value or income being hedged. Fifth Third could incur significant losses from its hedging activities. There may be periods where Fifth Third elects not to use derivatives and other instruments to hedge mortgage banking interest rate and price risks.
Fifth Third may have more credit risk and higher credit losses to the extent loans are concentrated by exposure to individual borrowers, location or industry of the borrowers or collateral.
In the event of significant deterioration in economic or market conditions, Fifth Third may be required to increase reserves in future periods, which would reduce earnings. Fifth Third may have more credit risk and higher credit losses to the extent loans are concentrated by exposure to individual borrowers or the location or industry of borrowers or collateral.
Fifth Third primarily relies on bank deposits to be a low cost and stable source of funding for the loans it makes and the operation of its business.
Fifth Third must maintain adequate funding sources in the normal course of business to support its operations and fund outstanding liabilities, as well as meet regulatory expectations. Fifth Third primarily relies on bank deposits to be a low cost and stable source of funding for the loans it makes and the operation of its business.
There may be periods where Fifth Third elects not to use derivatives and other instruments to hedge mortgage banking interest rate and price risks. 36 Fifth Third Bancorp Table of Contents STRATEGIC RISKS If Fifth Third does not respond to intense competition and rapid changes in the financial services industry or otherwise adapt to changing customer preferences, its financial performance may suffer.
STRATEGIC RISKS If Fifth Third does not respond to intense competition and rapid changes in the financial services industry or otherwise adapt to changing customer preferences, its financial performance may suffer.
Moreover, many companies have experienced reduced liquidity and uncertainty as to their ability to raise capital during such periods of market disruption and volatility. In the event that these conditions recur or result in a prolonged economic downturn, Fifth Third’s results of operations, financial position and/or liquidity could be materially and adversely affected.
In the event that these conditions recur or result in a prolonged economic downturn, Fifth Third’s results of operations, financial position and/or liquidity could be materially and adversely affected. These market conditions may affect the Bancorp’s ability to access debt and equity capital markets.
Legal authorities and regulators could hold Fifth Third responsible for failures by these parties to comply with applicable laws, rules or regulations. These failures could expose Fifth Third to significant litigation or regulatory action that could limit its activities or impose significant fines or other financial losses.
These failures could expose Fifth Third to significant litigation or regulatory action that could limit its activities or impose significant fines or other financial losses.
Additionally, other activist groups have begun to target firms with public criticism for engaging in ESG practices or adhering to certain ESG principles.
Additionally, other activist groups and state officials have in the past targeted firms with public criticism and penalties for engaging in, or adhering to, certain environmental, social or governance practices or principles.
The interest rates that Fifth Third pays on its securities are also influenced by, among other things, the credit ratings that it, its subsidiaries and/or its securities receive from recognized rating agencies. A downgrade to Fifth Third or its subsidiaries’ credit rating could affect its ability to access the capital markets, increase its borrowing costs and negatively impact its profitability.
The interest rates that Fifth Third pays 26 Fifth Third Bancorp Table of Contents on its securities are also influenced by, among other things, the credit ratings that it, its subsidiaries and/or its securities receive from recognized rating agencies.
New government regulations could also result in new or more stringent forms of ESG oversight and expand mandatory and voluntary reporting, diligence and disclosure. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact Fifth Third’s reputation, ability to do business with certain partners, access to capital and its stock price.
These laws and regulations may impose additional compliance or disclosure obligations on us. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact Fifth Third’s reputation, ability to do business with certain partners, access to capital and its stock price.
However, Fifth Third cannot be certain that the measures will be successful.
However, Fifth Third cannot be certain that the measures will be successful, particularly given the rapidly evolving sophistication of threat actors and technologies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−0 removed12 unchanged
Biggest changeThe CISO also reports directly to the Technology Committee and participates in various management councils and committees. The Bancorp’s IT CSRM team monitors that the CISO has appropriate authority to carry out the duties and responsibilities necessary of that position.
Biggest changeThe Bancorp’s IT CSRM team monitors that the CISO has appropriate authority to carry out the duties and responsibilities necessary of that position. The CISO remains informed about developments in cybersecurity, including potential threats and emerging risk management techniques, reporting such information to the Chief Information Officer and Technology Committee periodically.
Risk Assessment and Management The Bancorp maintains a variety of programs and policies to support the management of cybersecurity risk within the organization with a focus on prevention, detection and recovery processes. These programs and policies leverage frameworks and controls from the National Institute of Standards and Technology as well as various other regulatory requirements and industry-specific standards.
Risk Assessment and Management The Bancorp maintains a variety of programs and policies to support the management of cybersecurity risk within the organization with a focus on prevention, detection and response processes. These programs and policies leverage frameworks and controls from the National Institute of Standards and Technology as well as various other regulatory requirements and industry-specific standards.
As of December 31, 2023, the Bancorp is not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect Fifth Third, including its business strategies, results of operations or financial condition.
As of December 31, 2024, the Bancorp is not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect Fifth Third, including its business strategies, results of operations or financial condition.
The ISGC provides cybersecurity reports periodically to the Risk and Compliance Committee and is comprised of the Bancorp’s senior information security, information technology and enterprise risk management leaders, including the Chief Information Security Officer (CISO), Chief Information Officer, Chief Technology Officer, Chief Data Officer and Chief Operational Risk Officer.
The ISGC provides cybersecurity reports periodically to the Risk and Compliance Committee and is comprised of the Bancorp’s senior information security, information technology and enterprise risk management leaders, including the Chief Information Security Officer (“CISO”), Chief Information Officer, Chief Technology & Information Security Officer, Chief Data Officer and Chief Operational Risk Officer.
In the event of a material cybersecurity incident, the Bancorp’s incident response procedures include notifications to the Technology Committee, Risk and Compliance Committee and full Board of Directors, when appropriate and necessary. 42 Fifth Third Bancorp Table of Contents Management Oversight The Bancorp’s Information Security Governance Committee (ISGC) is a management committee that reviews and discusses critical information security risks that impact the Bancorp, identifies solutions to address these risks and has oversight of the Bancorp’s information technology and information security policies.
In the event of a material cybersecurity incident, the Bancorp’s incident response procedures include notifications to the Technology Committee, Risk and Compliance Committee and full Board of Directors, when appropriate and necessary. 39 Fifth Third Bancorp Table of Contents Management Oversight The Bancorp’s Information Security Governance Committee (“ISGC”) is a management committee that reviews and discusses critical information security risks that impact the Bancorp, identifies solutions to address these risks and has oversight of the Bancorp’s information technology and information security policies.
The Bancorp’s Information Technology and Cybersecurity Risk Management (IT CSRM) team, as part of the Bancorp’s Risk Management division, provides independent risk management oversight to those IT and IS teams.
The Bancorp’s Information Technology and Cybersecurity Risk Management (“IT CSRM”) team, as part of the Bancorp’s Risk Management division, provides independent risk management oversight to those IT and IS teams.
The Bancorp’s Information Technology (IT) and Information Security (IS) teams have the primary responsibility for establishing appropriate policies and procedures that are responsive to cybersecurity threats and other information security risks.
The Bancorp’s Information Technology (“IT”) and Information Security (“IS”) teams have the primary responsibility for establishing appropriate policies and procedures that are responsive to cybersecurity threats and other information security risks.
In the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan. This plan includes immediate actions designed to mitigate the impact of any incident, and long-term strategies for remediation and prevention of future incidents.
This plan includes immediate actions designed to mitigate the impact of any incident, and long-term strategies for remediation and prevention of future incidents.
The Bancorp’s CISO is responsible for information security policies and the coordination of information security efforts across the organization. The CISO has over 35 years of diverse experience in information technology management and cybersecurity leadership at Fifth Third and at other large, complex organizations.
The CISO has over 35 years of diverse experience in information technology management and cybersecurity leadership at Fifth Third and at other large, complex organizations. This prior experience includes leadership of functions for cybersecurity threat management, intelligence, risk mitigation and incident response.
This prior experience includes leadership of functions for cybersecurity threat management, intelligence, risk mitigation and incident response. The CISO has a Bachelor of Science degree in Computer and Information Science and is a certified Six Sigma Black Belt. The Bancorp’s CISO reports to the Chief Information Officer.
The CISO has a Bachelor of Science degree in Computer and Information Science and is a certified Six Sigma Black Belt. The Bancorp’s CISO reports to the Chief Technology & Information Security Officer. The CISO also reports directly to the Technology Committee and participates in various management councils and committees.
The CISO remains informed about developments in cybersecurity, including potential threats and emerging risk management techniques, reporting such information to the Chief Information Officer and Technology Committee periodically. The CISO implements and oversees processes for the regular monitoring of information systems. This includes the deployment of advanced security measures and system audits to identify potential vulnerabilities.
The CISO implements and oversees processes for the regular monitoring of information systems. This includes the deployment of advanced security measures and system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan.
Added
The ISGC’s membership enables the ISGC to be informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity incidents, if any, in accordance with the Bancorp’s incident response plans. The Bancorp’s CISO is responsible for information security policies and the coordination of information security efforts across the organization.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeAt December 31, 2023, the Bancorp, through its banking and non-banking subsidiaries, operated 1,088 banking centers, of which 727 were owned, 192 were leased and 169 were in owned buildings but on leased land. The banking centers are located in the states of Ohio, Florida, Michigan, Illinois, Indiana, North Carolina, Kentucky, Tennessee, Georgia, South Carolina and West Virginia.
Biggest changeAt December 31, 2024, the Bancorp, through its banking and non-banking subsidiaries, operated 1,089 banking centers, of which 716 were owned, 186 were leased and 187 were in owned buildings but on leased land. The banking centers are located in the states of Ohio, Florida, Michigan, Illinois, Indiana, North Carolina, Kentucky, Tennessee, Georgia, South Carolina and West Virginia.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

13 edited+1 added−1 removed7 unchanged
Biggest changeNancy C. Pinckney , 60. Executive Vice President and Chief Human Resources Officer since September 2021. Previously, Ms. Pinckney was Senior Vice President and Director of Human Capital Business Consulting from February 2012 through September 2021 and Director of Employee Relations from March 2010 to February 2012. Prior to that, she held various positions within Fifth Third’s human resources division.
Biggest changeExecutive Vice President and Chief Human Resources Officer since September 2021. Previously, Ms. Pinckney was Senior Vice President and Director of Human Capital Business Consulting from February 2012 through September 2021 and Director of Employee Relations from March 2010 to February 2012. Prior to that, she held various positions within Fifth Third’s human resources division. Bryan D. Preston , 48.
He also previously served as a senior partner in the Financial Services practice at Oliver Wyman, a global strategy and risk management consulting firm, from 2006 to 2015. Kristine R. Garrett , 65. Executive Vice President, Group Regional President and Head of Wealth & Asset Management since July 2022. Ms.
He also previously served as a senior partner in the Financial Services practice at Oliver Wyman, a global strategy and risk management consulting firm, from 2006 to 2015. Kristine R. Garrett , 66. Executive Vice President, Group Regional President and Head of Wealth & Asset Management since July 2022. Ms.
Previously, she was President of Private Wealth in Chicago at CIBC U.S. from 2009 to 2017. Kala J. Gibson , 52. Executive Vice President and Chief Corporate Responsibility Officer since February 2022. Mr. Gibson has been an Executive Vice President of the Bancorp since June 2019. Previously, Mr.
Previously, she was President of Private Wealth in Chicago at CIBC U.S. from 2009 to 2017. Kala J. Gibson , 53. Executive Vice President and Chief Corporate Responsibility Officer since February 2022. Mr. Gibson has been an Executive Vice President of the Bancorp since June 2019. Previously, Mr.
Preston served as the Treasurer of the Bancorp from February 2020 to January 2024, Consumer Line of Business Chief Financial Officer from September 2017 to February 2020, Assistant Treasurer from March 2014 to September 2017 and in various other roles in finance and accounting within Fifth Third from 2008 to 2014. Jude A. Schramm , 51.
Preston served as the Treasurer of the Bancorp from February 2020 to January 2024, Consumer Line of Business Chief Financial Officer from September 2017 to February 2020, Assistant Treasurer from March 2014 to September 2017 and in various other roles in finance and accounting within Fifth Third from 2008 to 2014. Jude A. Schramm , 52.
Zaunbrecher was a partner at the law firm Dinsmore and Shohl LLP, where she practiced for 28 years and served as the Chair of the Corporate Department and a member of the firm’s board of directors and executive committee. 45 Fifth Third Bancorp Table of Contents PART II
Zaunbrecher was a partner at the law firm Dinsmore and Shohl LLP, where she practiced for 28 years and served as the Chair of the Corporate Department and a member of the firm’s board of directors and executive committee. 42 Fifth Third Bancorp Table of Contents PART II
Lavender was Senior Vice President and Managing Director of Large Corporate and Specialized Lending from January 2009 to 2016 and the Senior Vice President and Head of National Healthcare Lending from December 2005 to January 2009. James C. Leonard , 54. Executive Vice President and Chief Operating Officer since January 2024. Mr.
Lavender was Senior Vice President and Managing Director of Large Corporate and Specialized Lending from January 2009 to 2016 and the Senior Vice President and Head of National Healthcare Lending from December 2005 to January 2009. James C. Leonard , 55. Executive Vice President and Chief Operating Officer since January 2024. Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 43 Fifth Third Bancorp Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Officers are appointed annually by the Board of Directors at the meeting of Directors immediately following the Annual Meeting of Shareholders.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 40 Fifth Third Bancorp Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Officers are appointed annually by the Board of Directors at the meeting of Directors immediately following the Annual Meeting of Shareholders.
Executive Vice President and Chief Information Officer since March 2018. Previously, Mr. Schramm served as Chief Information Officer for GE Aviation and held various positions at GE beginning in 2001. Robert P. Shaffer , 54. Executive Vice President and Chief Risk Officer since November 2020. Previously, Mr.
Executive Vice President and Chief Information Officer since March 2018. Previously, Mr. Schramm served as Chief Information Officer for GE Aviation and held various positions at GE beginning in 2001. Robert P. Shaffer , 55. Executive Vice President and Chief Risk Officer since November 2020. Previously, Mr.
Prior to joining Fifth Third, she served in several senior management positions at Citigroup, including Chief Operating Officer and Managing Director of Citi FinTech from November 2015 through April 2016. 44 Fifth Third Bancorp Table of Contents Susan B. Zaunbrecher , 64. Executive Vice President, Chief Legal Officer and Corporate Secretary. Ms.
Prior to joining Fifth Third, she served in several senior management positions at Citigroup, including Chief Operating Officer and Managing Director of Citi FinTech from November 2015 through April 2016. 41 Fifth Third Bancorp Table of Contents Susan B. Zaunbrecher , 65. Executive Vice President, Chief Legal Officer and Corporate Secretary. Ms.
Shaffer was Chief Human Resource Officer from February 2017 to November 2020 and Chief Auditor from August 2007 to February 2017. He was named Executive Vice President in 2010 and Senior Vice President in 2004. Prior to that, he held various positions within Fifth Third’s audit division. Melissa S. Stevens , 49.
Shaffer was Chief Human Resources Officer from February 2017 to November 2020 and Chief Auditor from August 2007 to February 2017. He was named Executive Vice President in 2010 and Senior Vice President in 2004. Prior to that, he held various positions within Fifth Third’s audit division. Melissa S. Stevens , 50.
The names, ages and positions of the Executive Officers of the Bancorp as of February 27, 2024 are listed below along with their business experience during the past five years: Timothy N. Spence , 45. Chairman, Chief Executive Officer and President. Mr. Spence has been Chairman since January 2024, Chief Executive Officer since July 2022 and President since October 2020.
The names, ages and positions of the Executive Officers of the Bancorp as of February 24, 2025 are listed below along with their business experience during the past five years: Timothy N. Spence , 46. Chairman, Chief Executive Officer and President. Mr. Spence has been Chairman since January 2024, Chief Executive Officer since July 2022 and President since October 2020.
Bryan D. Preston , 47. Executive Vice President and Chief Financial Officer since January 2024. Mr. Preston has been an Executive Vice President of the Bancorp since October 2022. Previously, Mr.
Executive Vice President and Chief Financial Officer since January 2024. Mr. Preston has been an Executive Vice President of the Bancorp since October 2022. Previously, Mr.
Gibson served as Head of Business Banking and Chief Enterprise Corporate Responsibility Officer from December 2020 to February 2022, Head of Business Banking from September 2013 to December 2020, Senior Vice President from September 2011 to June 2019, and Business Banking Executive for Fifth Third’s East Michigan Region from July 2011 to September 2013. Mark D. Hazel , 58.
Gibson served as Head of Business Banking and Chief Enterprise Corporate Responsibility Officer from December 2020 to February 2022, Head of Business Banking from September 2013 to December 2020, Senior Vice President from September 2011 to June 2019, and Business Banking Executive for Fifth Third’s East Michigan Region from July 2011 to September 2013. Kevin P. Lavender , 63.
Removed
Executive Vice President and Controller of the Bancorp since February 2010. Mr. Hazel has been an Executive Vice President of the Bancorp since September 2021. Previously, Mr. Hazel was the Assistant Bancorp Controller from 2006 to 2010 and was the Controller of Nonbank entities from 2003 to 2006. Kevin P. Lavender , 62.
Added
Jeffrey A. Lopper , 51. Senior Vice President and Chief Accounting Officer since October 2024. Mr. Lopper has been a Senior Vice President since 2012. Previously, he was Assistant Bancorp Controller from 2010 to 2024. Prior to that, since 2000, he has held various positions within Fifth Third’s finance division. Nancy C. Pinckney , 61.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed4 unchanged
Biggest changeARM : Adjustable Rate Mortgage LCR : Liquidity Coverage Ratio ASC : Accounting Standards Codification LIBOR : London Interbank Offered Rate ASU : Accounting Standards Update LIHTC : Low-Income Housing Tax Credit ATM : Automated Teller Machine LLC : Limited Liability Company BHC : Bank Holding Company LTV : Loan-to-Value Ratio BOLI : Bank Owned Life Insurance MD&A : Management’s Discussion and Analysis of Financial bps : Basis Points Condition and Results of Operations CCAR : Comprehensive Capital Analysis and Review MSR : Mortgage Servicing Right CD: Certificate of Deposit N/A : Not Applicable CDC : Fifth Third Community Development Corporation and Fifth Third NII : Net Interest Income Community Development Company, LLC NM : Not Meaningful CECL : Current Expected Credit Loss OAS : Option-Adjusted Spread CET1 : Common Equity Tier 1 OCC : Office of the Comptroller of the Currency CFPB : United States Consumer Financial Protection Bureau OCI : Other Comprehensive Income (Loss) CME : Chicago Mercantile Exchange OREO : Other Real Estate Owned C&I : Commercial and Industrial PPP : Paycheck Protection Program DCF : Discounted Cash Flow PSA : Performance Share Award DTCC : Depository Trust & Clearing Corporation RCC : Risk and Compliance Committee DTI : Debt-to-Income Ratio ROU : Right-of-Use ERM : Enterprise Risk Management RSA : Restricted Stock Award ERMC : Enterprise Risk Management Committee RSU : Restricted Stock Unit EVE : Economic Value of Equity SAR : Stock Appreciation Right FASB : Financial Accounting Standards Board SBA : Small Business Administration FDIC : Federal Deposit Insurance Corporation SEC : United States Securities and Exchange Commission FHA : Federal Housing Administration SOFR : Secured Overnight Financing Rate FHLB : Federal Home Loan Bank TBA : To Be Announced FHLMC : Federal Home Loan Mortgage Corporation TDR : Troubled Debt Restructuring FICO : Fair Isaac Corporation (credit rating) TILA : Truth in Lending Act FINRA : Financial Industry Regulatory Authority TRA : Tax Receivable Agreement FNMA : Federal National Mortgage Association TruPS : Trust Preferred Securities FOMC : Federal Open Market Committee U.S. : United States of America FRB : Federal Reserve Bank U.S.
Biggest changeASC : Accounting Standards Codification LIBOR : London Interbank Offered Rate ASU : Accounting Standards Update LIHTC : Low-Income Housing Tax Credit ATM : Automated Teller Machine LLC : Limited Liability Company BHC : Bank Holding Company LTV : Loan-to-Value Ratio BOLI : Bank Owned Life Insurance MD&A : Management’s Discussion and Analysis of Financial bps : Basis Points Condition and Results of Operations CD: Certificate of Deposit MSR : Mortgage Servicing Right CDC : Fifth Third Community Development Corporation and Fifth Third N/A : Not Applicable Community Development Company, LLC NII : Net Interest Income CECL : Current Expected Credit Loss NM : Not Meaningful CET1 : Common Equity Tier 1 OAS : Option-Adjusted Spread CFPB : United States Consumer Financial Protection Bureau OCC : Office of the Comptroller of the Currency CME : Chicago Mercantile Exchange OCI : Other Comprehensive Income (Loss) C&I : Commercial and Industrial OREO : Other Real Estate Owned DCF : Discounted Cash Flow PSA : Performance Share Award DTCC : Depository Trust & Clearing Corporation RCC : Risk and Compliance Committee ERM : Enterprise Risk Management ROU : Right-of-Use ERMC : Enterprise Risk Management Committee RSA : Restricted Stock Award EVE : Economic Value of Equity RSU : Restricted Stock Unit FASB : Financial Accounting Standards Board SAR : Stock Appreciation Right FDIC : Federal Deposit Insurance Corporation SBA : Small Business Administration FHA : Federal Housing Administration SEC : United States Securities and Exchange Commission FHLB : Federal Home Loan Bank SOFR : Secured Overnight Financing Rate FHLMC : Federal Home Loan Mortgage Corporation TBA : To Be Announced FICO : Fair Isaac Corporation (credit rating) TILA : Truth in Lending Act FINRA : Financial Industry Regulatory Authority TRA : Tax Receivable Agreement FNMA : Federal National Mortgage Association TruPS : Trust Preferred Securities FOMC : Federal Open Market Committee U.S. : United States of America FRB : Federal Reserve Bank U.S.
See further discussion on share repurchase transactions and stock-based compensation in Note 24 and Note 25 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference. 46 Fifth Third Bancorp Table of Contents The following performance graphs do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Bancorp specifically incorporates the performance graphs by reference therein.
See further discussion on share repurchase transactions and stock-based compensation in Note 24 and Note 25 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference. 43 Fifth Third Bancorp Table of Contents The following performance graphs do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Bancorp specifically incorporates the performance graphs by reference therein.
Total Return Analysis The graphs below summarize the cumulative return experienced by the Bancorp’s shareholders over the five and ten year periods ended December 31, 2023, respectively, compared to the S&P 500 Stock, the S&P Banks and the KBW Banks indices. FIFTH THIRD BANCORP VS.
Total Return Analysis The graphs below summarize the cumulative return experienced by the Bancorp’s shareholders over the five and ten year periods ended December 31, 2024, respectively, compared to the S&P 500 Stock, the S&P Banks and the KBW Banks indices. FIFTH THIRD BANCORP VS.
ACL : Allowance for Credit Losses GSE : United States Government Sponsored Enterprise AFS : Available-For-Sale HTM : Held-To-Maturity ALCO : Asset Liability Management Committee IPO : Initial Public Offering ALLL : Allowance for Loan and Lease Losses IRC : Internal Revenue Code AOCI : Accumulated Other Comprehensive Income (Loss) IRLC : Interest Rate Lock Commitment APR : Annual Percentage Rate ISDA : International Swaps and Derivatives Association, Inc.
ACL : Allowance for Credit Losses GNMA : Government National Mortgage Association AFS : Available-for-Sale GSE : United States Government Sponsored Enterprise ALCO : Asset Liability Management Committee HTM : Held-To-Maturity ALLL : Allowance for Loan and Lease Losses IPO : Initial Public Offering AOCI : Accumulated Other Comprehensive Income (Loss) IRC : Internal Revenue Code APR : Annual Percentage Rate IRLC : Interest Rate Lock Commitment ARM : Adjustable Rate Mortgage ISDA : International Swaps and Derivatives Association, Inc.
See a discussion of dividend limitations that the subsidiaries can pay to the Bancorp discussed in Note 3 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference. Additionally, as of December 31, 2023, the Bancorp had 32,995 common shareholders of record.
See a discussion of dividend limitations that the subsidiaries can pay to the Bancorp discussed in Note 3 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference. Additionally, as of December 31, 2024, the Bancorp had 30,820 common shareholders of record.
VIE : Variable Interest Entity GDP : Gross Domestic Product VRDN : Variable Rate Demand Note GNMA : Government National Mortgage Association 49 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
VIE : Variable Interest Entity GDP : Gross Domestic Product VRDN : Variable Rate Demand Note 46 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARKET INDICES 47 Fifth Third Bancorp Table of Contents 2023 ANNUAL REPORT FINANCIAL CONTENTS Glossary of Abbreviations and Acronyms 49 Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview 50 Non-GAAP Financial Measures 54 Recent Accounting Standards 56 Critical Accounting Policies 56 Statements of Income Analysis 61 Business Segment Review 69 Balance Sheet Analysis 75 Risk Management - Overview 82 Credit Risk Management 83 Interest Rate and Price Risk Management 98 Liquidity Risk Management 104 Operational Risk Management 106 Legal and Regulatory Compliance Risk Management 107 Capital Management 108 Report of Independent Registered Public Accounting Firm 110 Financial Statements Consolidated Balance Sheets 112 Consolidated Statements of Income 113 Consolidated Statements of Comprehensive Income 114 Consolidated Statements of Changes in Equity 115 Consolidated Statements of Cash Flows 117 Notes to Consolidated Financial Statements Summary of Significant Accounting and Reporting Policies 118 Long-Term Debt 170 Supplemental Cash Flow Information 133 Commitments, Contingent Liabilities and Guarantees 174 Restrictions on Dividends and Capital Actions 133 Legal and Regulatory Proceedings 178 Investment Securities 134 Related Party Transactions 180 Loans and Leases 137 Income Taxes 181 Credit Quality and the Allowance for Loan and Lease Losses 139 Retirement and Benefit Plans 183 Bank Premises and Equipment 152 Accumulated Other Comprehensive Income 186 Operating Lease Equipment 153 Common, Preferred and Treasury Stock 188 Lease Obligations – Lessee 153 Stock-Based Compensation 190 Goodwill 155 Other Noninterest Income and Other Noninterest Expense 193 Intangible Assets 156 Earnings Per Share 194 Variable Interest Entities 157 Fair Value Measurements 195 Sales of Receivables and Servicing Rights 160 Regulatory Capital Requirements and Capital Ratios 204 Derivative Financial Instruments 162 Parent Company Financial Statements 205 Other Assets 168 Business Segments 207 Short-Term Borrowings 169 Subsequent Event 210 Management’s Assessment as to the Effectiveness of Internal Control over Financial Reporting 211 Report of Independent Registered Public Accounting Firm 212 Consolidated Ten Year Comparison 221 Directors and Officers 222 Corporate Information 48 Fifth Third Bancorp Table of Contents GLOSSARY OF ABBREVIATIONS AND ACRONYMS Fifth Third Bancorp provides the following list of abbreviations and acronyms as a tool for the reader that are used in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Consolidated Financial Statements and the Notes to Consolidated Financial Statements.
MARKET INDICES 44 Fifth Third Bancorp Table of Contents 2024 ANNUAL REPORT FINANCIAL CONTENTS Glossary of Abbreviations and Acronyms 46 Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview 47 Non-GAAP Financial Measures 51 Recent Accounting Standards 53 Critical Accounting Policies 53 Statements of Income Analysis 57 Business Segment Review 64 Balance Sheet Analysis 69 Risk Management - Overview 76 Credit Risk Management 77 Interest Rate and Price Risk Management 94 Liquidity Risk Management 100 Operational Risk Management 102 Legal and Regulatory Compliance Risk Management 103 Capital Management 104 Report of Independent Registered Public Accounting Firm 106 Financial Statements Consolidated Balance Sheets 108 Consolidated Statements of Income 109 Consolidated Statements of Comprehensive Income 110 Consolidated Statements of Changes in Equity 111 Consolidated Statements of Cash Flows 112 Notes to Consolidated Financial Statements Summary of Significant Accounting and Reporting Policies 113 Long-Term Debt 163 Supplemental Cash Flow Information 126 Commitments, Contingent Liabilities and Guarantees 167 Restrictions on Dividends and Capital Actions 126 Legal and Regulatory Proceedings 171 Investment Securities 127 Related Party Transactions 173 Loans and Leases 130 Income Taxes 174 Credit Quality and the Allowance for Loan and Lease Losses 132 Retirement and Benefit Plans 176 Bank Premises and Equipment 145 Accumulated Other Comprehensive Income 179 Operating Lease Equipment 145 Common, Preferred and Treasury Stock 181 Lease Obligations – Lessee 146 Stock-Based Compensation 183 Goodwill 147 Other Noninterest Income and Other Noninterest Expense 186 Intangible Assets 148 Earnings Per Share 186 Variable Interest Entities 149 Fair Value Measurements 187 Sales of Receivables and Servicing Rights 153 Regulatory Capital Requirements and Capital Ratios 195 Derivative Financial Instruments 155 Parent Company Financial Statements 196 Other Assets 161 Business Segments 198 Short-Term Borrowings 162 Subsequent Events 201 Management’s Assessment as to the Effectiveness of Internal Control over Financial Reporting 202 Report of Independent Registered Public Accounting Firm 203 Consolidated Ten Year Comparison 211 Directors and Officers 212 Corporate Information 45 Fifth Third Bancorp Table of Contents GLOSSARY OF ABBREVIATIONS AND ACRONYMS Fifth Third Bancorp provides the following list of abbreviations and acronyms as a tool for the reader that are used in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Consolidated Financial Statements and the Notes to Consolidated Financial Statements.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (b) October 1 - October 31, 2023 75,992 $ 24.48 — 32,115,811 November 1 - November 30, 2023 17,203 25.78 — 32,115,811 December 1 - December 31, 2023 37,496 33.77 — 32,115,811 Total 130,691 $ 27.32 — 32,115,811 (a) Shares repurchased during the periods presented were in connection with various employee compensation plans.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (b) October 1 - October 31, 2024 5,998,158 $ 45.42 5,879,640 17,853,895 November 1 - November 30, 2024 29,699 47.06 — 17,853,895 December 1 - December 31, 2024 789,634 45.48 781,254 17,072,641 Total 6,817,491 $ 45.44 6,660,894 17,072,641 (a) Includes 156,597 shares repurchased during the fourth quarter of 2024 in connection with various employee compensation plans of the Bancorp.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

351 edited+70 added−145 removed215 unchanged
Biggest change(b) Refer to Note 1 of the Notes to Consolidated Financial Statements for further information. 96 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table provides an attribution of the Bancorp’s ALLL to portfolio loans and leases: TABLE 50: Attribution of Allowance for Loan and Lease Losses to Portfolio Loans and Leases As of December 31 ($ in millions) 2023 2022 Attributed ALLL: Commercial and industrial loans $ 767 776 Commercial mortgage loans 284 246 Commercial construction loans 66 90 Commercial leases 13 15 Residential mortgage loans 145 245 Home equity 102 133 Indirect secured consumer loans 271 187 Credit card 227 254 Other consumer loans 447 248 Total ALLL $ 2,322 2,194 Portfolio loans and leases: Commercial and industrial loans $ 53,270 57,232 Commercial mortgage loans 11,276 11,020 Commercial construction loans 5,621 5,433 Commercial leases 2,579 2,704 Residential mortgage loans (a) 17,026 17,628 Home equity 3,916 4,039 Indirect secured consumer loans 14,965 16,552 Credit card 1,865 1,874 Other consumer loans 6,716 4,998 Total portfolio loans and leases $ 117,234 121,480 Attributed ALLL as a percent of respective portfolio loans and leases: Commercial and industrial loans 1.44 % 1.36 Commercial mortgage loans 2.52 2.23 Commercial construction loans 1.17 1.66 Commercial leases 0.50 0.55 Residential mortgage loans 0.85 1.39 Home equity 2.60 3.29 Indirect secured consumer loans 1.81 1.13 Credit card 12.17 13.55 Other consumer loans 6.66 4.96 Total ALLL as a percent of portfolio loans and leases 1.98 % 1.81 Total ACL as a percent of portfolio loans and leases 2.12 1.98 (a) Includes $116 and $123 of residential mortgage loans measured at fair value at December 31, 2023 and 2022, respectively.
Biggest changeThis sensitivity calculation only reflects the impact of changing the probability weighting of the scenarios in the quantitative credit loss models and excludes any additional considerations associated with the qualitative component of the ACL that might be warranted if probability weights were adjusted. 91 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table provides a rollforward of the Bancorp’s ACL: TABLE 52: Changes in Allowance for Credit Losses For the years ended December 31 ($ in millions) 2024 2023 2022 ALLL: Balance, beginning of period $ 2,322 2,194 1,892 Losses charged-off (a) (686) (522) (362) Recoveries of losses previously charged-off (a) 154 134 135 Provision for loan and lease losses 562 565 529 Impact of adoption of ASU 2022-02 — (49) — Balance, end of period $ 2,352 2,322 2,194 Reserve for unfunded commitments: Balance, beginning of period $ 166 216 182 (Benefit from) provision for the reserve for unfunded commitments (32) (50) 34 Balance, end of period $ 134 166 216 (a) For the years ended December 31, 2024, 2023 and 2022, the Bancorp recorded $28, $35 and $32, respectively, in both losses charged-off and recoveries of losses previously charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements. 92 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table provides an attribution of the Bancorp’s ALLL to portfolio loans and leases: TABLE 53: Attribution of Allowance for Loan and Lease Losses to Portfolio Loans and Leases As of December 31 ($ in millions) 2024 2023 Attributed ALLL: Commercial and industrial loans $ 728 767 Commercial mortgage loans 351 284 Commercial construction loans 59 66 Commercial leases 16 13 Residential mortgage loans 146 145 Home equity 106 102 Indirect secured consumer loans 311 271 Credit card 165 227 Solar energy installation loans 351 292 Other consumer loans 119 155 Total ALLL $ 2,352 2,322 Portfolio loans and leases: Commercial and industrial loans $ 52,271 53,270 Commercial mortgage loans 12,246 11,276 Commercial construction loans 5,588 5,621 Commercial leases 3,188 2,579 Residential mortgage loans (a) 17,543 17,026 Home equity 4,188 3,916 Indirect secured consumer loans 16,313 14,965 Credit card 1,734 1,865 Solar energy installation loans 4,202 3,728 Other consumer loans 2,518 2,988 Total portfolio loans and leases $ 119,791 117,234 Attributed ALLL as a percent of respective portfolio loans and leases: Commercial and industrial loans 1.39 % 1.44 Commercial mortgage loans 2.87 2.52 Commercial construction loans 1.06 1.17 Commercial leases 0.50 0.50 Residential mortgage loans 0.83 0.85 Home equity 2.53 2.60 Indirect secured consumer loans 1.91 1.81 Credit card 9.52 12.17 Solar energy installation loans 8.35 7.83 Other consumer loans 4.73 5.19 Total ALLL as a percent of portfolio loans and leases 1.96 % 1.98 Total ACL as a percent of portfolio loans and leases 2.08 2.12 (a) Includes $108 and $116 of residential mortgage loans measured at fair value at December 31, 2024 and 2023, respectively.
The increase in net income was primarily driven by an increase in net interest income on an FTE basis, a decrease in provision for credit losses and an increase in noninterest income, partially offset by an increase in noninterest expense.
The decrease was primarily driven by a decrease in net interest income on an FTE basis and an increase in provision for credit losses, partially offset by a decrease in noninterest expense and an increase in noninterest income.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
For loans with available credit, the estimate of the expected balance at the time of default considers expected utilization rates, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions.
For loans with available credit, the estimate of the expected balance at the time of default considers expected utilization rates, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
For collectively evaluated loans in the consumer and residential mortgage portfolio segments, the Bancorp’s expected credit loss models primarily utilize the borrower’s FICO score and delinquency history in combination with macroeconomic conditions when estimating the probability of default.
For collectively evaluated loans in the consumer and residential mortgage portfolio segments, the Bancorp’s expected credit loss models primarily utilize the borrower’s FICO score and delinquency history in combination with macroeconomic conditions when estimating the probability of default.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
The expected balance at the estimated date of default is also especially impactful in the expected credit loss models for portfolio classes which generally have longer terms (such as residential mortgage loans and home equity) and portfolio classes containing a high concentration of loans with revolving privileges (such as home equity).
The expected balance at the estimated date of default is also especially impactful in the expected credit loss models for portfolio classes which generally have longer terms (such as residential mortgage loans and home equity) and portfolio classes containing a high concentration of loans with revolving privileges (such as home equity).
The estimate of the expected balance at the time of default considers expected prepayment and utilization rates where applicable, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions.
The estimate of the expected balance at the time of default considers expected prepayment and utilization rates where applicable, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions.
Fifth Third’s Enterprise Risk Management Framework, which is approved annually by the Capital Committee, ERMC, RCC and the Board of Directors, includes the following key elements: • The Bancorp ensures transparency of risk through defined risk policies, governance and a reporting structure that includes the RCC, ERMC and other risk-specific management committees and councils. • The Bancorp establishes a risk appetite in alignment with its strategic, financial and capital plans at the enterprise level and the line of business level.
Fifth Third’s Enterprise Risk Management Framework, which is approved annually by the ERMC, RCC and the Board of Directors, includes the following key elements: • The Bancorp ensures transparency of risk through defined risk policies, governance and a reporting structure that includes the RCC, ERMC and other risk-specific management committees and councils. • The Bancorp establishes a risk appetite in alignment with its strategic, financial and capital plans at the enterprise level and the line of business level.
As part of its larger environmental, social and governance responsibilities the Nominating and Corporate Governance Committee is responsible for overseeing climate strategy and climate-related issues in the context of stakeholder concerns. 106 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LEGAL AND REGULATORY COMPLIANCE RISK MANAGEMENT Legal and regulatory compliance risk is the risk of legal or regulatory sanctions, financial loss or damage to reputation as a result of noncompliance with (i) applicable laws, regulations, rules and other regulatory requirements (including but not limited to the risk of consumers experiencing economic loss or other legal harm as a result of noncompliance with consumer protection laws, regulations and requirements); (ii) internal policies and procedures, standards of best practice or codes of conduct; and (iii) principles of integrity and fair dealing applicable to Fifth Third’s activities and functions.
As part of its larger environmental, social and governance responsibilities the Nominating and Corporate Governance Committee is responsible for overseeing climate strategy and climate-related issues in the context of stakeholder concerns. 102 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LEGAL AND REGULATORY COMPLIANCE RISK MANAGEMENT Legal and regulatory compliance risk is the risk of legal or regulatory sanctions, financial loss or damage to reputation as a result of noncompliance with (i) applicable laws, regulations, rules and other regulatory requirements (including but not limited to the risk of consumers experiencing economic loss or other legal harm as a result of noncompliance with consumer protection laws, regulations and requirements); (ii) internal policies and procedures, standards of best practice or codes of conduct; and (iii) principles of integrity and fair dealing applicable to Fifth Third’s activities and functions.
The Board and executive management approve the risk appetite, which is considered in the development of business strategies and forms the basis for enterprise risk management. • The core principles that define the Bancorp’s risk appetite are as follows: ◦ Act with integrity in all activities. ◦ Understand the risks taken and ensure that they are in alignment with the Bancorp’s business strategies and risk appetite. ◦ Avoid risks that cannot be understood, managed or monitored. ◦ Provide transparency of risk to the Bancorp’s management and Board by escalating risks and issues as necessary. ◦ Ensure Fifth Third’s products and services are aligned to the Bancorp’s core customer base and are designed, delivered and maintained to provide value and benefit to the Bancorp’s customers and to Fifth Third. ◦ Only offer products or services that are appropriate or suitable for the Bancorp’s customers. ◦ Focus on providing operational excellence by providing reliable, accurate and efficient services to meet customers’ needs. ◦ Maintain a strong financial position to ensure the Bancorp meets its strategic objectives through all economic cycles and is able to access the capital markets at all times, even under stressed conditions. ◦ Protect the Bancorp’s reputation by thoroughly understanding the consequences of business strategies, products and processes. ◦ Conduct the Bancorp’s business in compliance with all applicable laws, rules and regulations and in alignment with internal policies and procedures. • Fifth Third’s core values and culture provide the foundation for supporting sound risk management practices by setting expectations for appropriate conduct and accountability across the organization.
The Board and executive management approve the risk appetite, which is considered in the development of business strategies and forms the basis for enterprise risk management. • The core principles that define the Bancorp’s risk appetite are as follows: ◦ Conduct the Bancorp’s business in compliance with all applicable laws, rules and regulations and in alignment with internal policies and procedures. ◦ Act with integrity in all activities. ◦ Understand the risks taken and ensure that they are in alignment with the Bancorp’s business strategies and risk appetite. ◦ Avoid risks that cannot be understood, managed or monitored. ◦ Provide transparency of risk to the Bancorp’s management and Board by escalating risks and issues as necessary. ◦ Ensure Fifth Third’s products and services are designed, delivered and maintained to provide value and benefit to the Bancorp’s customers and to Fifth Third. ◦ Only offer products or services that are appropriate or suitable for the Bancorp’s customers. ◦ Focus on providing operational excellence by providing reliable, accurate and efficient services to meet customers’ needs. ◦ Maintain a strong financial position to ensure the Bancorp meets its strategic objectives through all economic cycles and is able to access the capital markets at all times, even under stressed conditions. ◦ Protect the Bancorp’s reputation by thoroughly understanding the consequences of business strategies, products and processes. • Fifth Third’s culture and values provide the foundation for supporting sound risk management practices by setting expectations for appropriate conduct and accountability across the organization.
Residential mortgage portfolio The Bancorp manages credit risk in the residential mortgage portfolio through underwriting guidelines that limit exposure to loan characteristics determined to influence credit risk. Additionally, the portfolio is governed by concentration limits that ensure geographic, product and channel diversification. The Bancorp may also package and sell loans in the portfolio.
Residential mortgage portfolio The Bancorp manages credit risk in the residential mortgage portfolio through underwriting guidelines that limit exposure to loan characteristics determined to influence credit risk. Additionally, the portfolio is governed by concentration limits that ensure product and channel diversification. The Bancorp may also package and sell loans in the portfolio.
Refer to Note 13 of the Notes to Consolidated Financial Statements for more information on servicing rights and the instruments used to hedge price risk on MSRs. Foreign Currency Risk The Bancorp may enter into foreign exchange derivative contracts to economically hedge certain foreign denominated loans.
Refer to Note 13 of the Notes to Condensed Consolidated Financial Statements for more information on servicing rights and the instruments used to hedge price risk on MSRs. Foreign Currency Risk The Bancorp may enter into foreign exchange derivative contracts to economically hedge certain foreign denominated loans.
GAAP measures and should not be read in isolation or relied upon as a substitute for the primary U.S. GAAP measures. The Bancorp encourages readers to consider its Consolidated Financial Statements in their entirety and not to rely on any single financial measure.
GAAP measures and should not be read in isolation or relied upon as a substitute for the primary U.S. GAAP measures. The Bancorp encourages readers to consider the Consolidated Financial Statements in their entirety and not to rely on any single financial measure.
The Bancorp’s methodology for allocating provision for credit losses to the business segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each business segment.
The Bancorp’s methodology for allocating provision for credit losses to the segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each segment.
For collectively evaluated loans and leases, the Bancorp uses models to forecast expected credit losses based on the probability of a loan or lease defaulting, the expected balance at the estimated date of default and the expected loss percentage given a default.
For collectively evaluated loans and leases, the Bancorp uses quantitative models to forecast expected credit losses based on the probability of a loan or lease defaulting, the expected balance at the estimated date of default and the expected loss percentage given a default.
Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each business segment so its resulting net interest income is insulated from future changes in benchmark interest rates.
Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each segment so its resulting net interest income is insulated from future changes in benchmark interest rates.
Additionally, the second line of defense is responsible for identifying, assessing, managing, monitoring and reporting on aggregate risks enterprise-wide. • The third line of defense is Internal Audit, which provides oversight of the first and second lines of defense, and independent assurance to the Board on the effectiveness of governance, risk management and internal controls. 82 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CREDIT RISK MANAGEMENT Credit risk management utilizes a framework that encompasses consistent processes for identifying, assessing, managing, monitoring and reporting credit risk.
Additionally, the second line of defense is responsible for identifying, assessing, managing, monitoring and reporting on aggregate risks enterprise-wide. • The third line of defense is Internal Audit, which provides oversight of the first and second lines of defense, and independent assurance to the Board on the effectiveness of governance, risk management and internal controls. 76 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CREDIT RISK MANAGEMENT Credit risk management utilizes a framework that encompasses consistent processes for identifying, assessing, managing, monitoring and reporting credit risk.
Other factors such as increased reliance on third parties and increased use of cloud-based technologies as well as the use of emerging technologies such as generative models and artificial intelligence may introduce additional operational risk considerations.
Other factors such as increased reliance on third parties, reliance on data and increased use of cloud-based technologies as well as the use of emerging technologies such as generative models and artificial intelligence may introduce additional operational risk considerations.
These controls include an independent determination of commodity volatility and potential future exposure on these contracts and counterparty credit approvals performed by independent risk management. 103 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY RISK MANAGEMENT The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand, unexpected levels of deposit withdrawals and other contractual obligations.
These controls include an independent determination of commodity volatility and potential future exposure on these contracts and counterparty credit approvals performed by independent risk management. 99 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY RISK MANAGEMENT The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand, unexpected levels of deposit withdrawals and other contractual obligations.
Under the Bancorp’s internal reporting methodology, the Bancorp insulates the business segments from interest rate risk associated with fixed-rate lending by transferring this risk to General Corporate and Other through the FTP methodology.
Under the Bancorp’s internal reporting methodology, the Bancorp insulates the segments from interest rate risk associated with fixed-rate lending by transferring this risk to General Corporate and Other through the FTP methodology.
The incremental balance attrition and growth are modeled to flow into and out of funding products that reprice in conjunction with short-term market rate changes. 98 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Another important deposit modeling assumption is the amount by which interest-bearing deposit rates will increase or decrease when market interest rates increase or decrease.
The incremental balance attrition and growth are modeled to flow into and out of funding products that reprice in conjunction with short-term market rate changes. 94 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Another important deposit modeling assumption is the amount by which interest-bearing deposit rates will increase or decrease when market interest rates increase or decrease.
In addition, refer to the Liquidity Risk Management subsection of the Risk Management section of MD&A for a discussion on the role of borrowings in the Bancorp’s liquidity management. 81 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RISK MANAGEMENT – OVERVIEW Effective risk management is critical to the Bancorp’s ongoing success and ensures that the Bancorp operates in a safe and sound manner, complies with applicable laws and regulations and safeguards the Bancorp’s brand and reputation.
In addition, refer to the Liquidity Risk Management subsection of the Risk Management section of MD&A for a discussion on the role of borrowings in the Bancorp’s liquidity management. 75 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RISK MANAGEMENT – OVERVIEW Effective risk management is critical to the Bancorp’s ongoing success and ensures that the Bancorp operates in a safe and sound manner, complies with applicable laws and regulations and safeguards the Bancorp’s brand and reputation.
At December 31, 2023 and 2022, 71% and 72%, respectively, of the outstanding balances were originated through branch-based relationships with the remainder coming from direct mail campaigns and online acquisitions. Given the variable nature of the credit card portfolio, interest rate increases impact this product and it is regularly monitored to ensure the portfolio remains within the Bancorp’s risk tolerance.
At December 31, 2024 and 2023, 72% and 71%, respectively, of the outstanding balances were originated through branch-based relationships with the remainder coming from direct mail campaigns and online acquisitions. Given the variable nature of the credit card portfolio, interest rate increases impact this product and it is regularly monitored to ensure the portfolio remains within the Bancorp’s risk tolerance.
Additionally, the business segments form synergies by taking advantage of relationship depth opportunities and funding operations by accessing the capital markets as a collective unit.
Additionally, the segments form synergies by taking advantage of relationship depth opportunities and funding operations by accessing the capital markets as a collective unit.
Additionally, collateral values are also reviewed at least annually for all criticized assets. 85 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Bancorp assesses all real estate and non-real estate collateral securing a loan and considers all cross-collateralized loans in the calculation of the LTV ratio.
Additionally, collateral values are also reviewed at least annually for all criticized assets. 79 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Bancorp assesses all real estate and non-real estate collateral securing a loan and considers all cross-collateralized loans in the calculation of the LTV ratio.
For additional information on the Bancorp’s methodology for measuring the ACL, refer to Note 1 of the Notes to Consolidated Financial Statements. 97 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTEREST RATE AND PRICE RISK MANAGEMENT Interest rate risk is the risk to earnings or capital arising from movement of interest rates.
For additional information on the Bancorp’s methodology for measuring the ACL, refer to Note 1 of the Notes to Consolidated Financial Statements. 93 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTEREST RATE AND PRICE RISK MANAGEMENT Interest rate risk is the risk to earnings or capital arising from movement of interest rates.
The Management Compliance Committee reports to the ERMC, which reports to the RCC of the Board of Directors of Fifth Third Bancorp and Fifth Third Bank, National Association. 107 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAPITAL MANAGEMENT Management regularly reviews the Bancorp’s capital levels to help ensure it is appropriately positioned under various operating environments.
The Management Compliance Committee reports to the ERMC, which reports to the RCC of the Board of Directors of Fifth Third Bancorp and Fifth Third Bank, National Association. 103 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAPITAL MANAGEMENT Management regularly reviews the Bancorp’s capital levels to help ensure it is appropriately positioned under various operating environments.
In order to recognize the risk of noninterest-bearing demand deposit balance migration or attrition in a rising interest rate environment, the Bancorp’s NII sensitivity modeling assumes additional attrition of approximately $800 million of demand deposit balances over a period of 24 months for each 100 bps increase in short-term market interest rates.
In order to recognize the risk of noninterest-bearing demand deposit balance migration or attrition in a rising interest rate environment, the Bancorp’s NII sensitivity modeling assumes additional attrition of approximately $470 million of demand deposit balances over a period of 24 months for each 100 bps increase in short-term market interest rates.
General Corporate and Other General Corporate and Other includes the unallocated portion of the investment securities portfolio, securities gains and losses, certain non-core deposit funding, unassigned equity, unallocated provision for credit losses or a benefit from the reduction of the ACL, the payment of preferred stock dividends and certain support activities and other items not attributed to the business segments.
General Corporate and Other General Corporate and Other includes the unallocated portion of the investment securities portfolio, securities gains and losses, certain non-core deposit funding, unassigned equity, unallocated provision for credit losses or a benefit from the reduction of the ACL, the payment of preferred stock dividends and certain support activities and other items not attributed to its segments.
The Bancorp does not originate residential mortgage loans that permit customers to make payments that are less than the accruing interest. The Bancorp originates both fixed-rate and ARM loans. Within the ARM portfolio, approximately $545 million of ARM loans will have rate resets during the next twelve months.
The Bancorp does not originate residential mortgage loans that permit customers to make payments that are less than the accruing interest. The Bancorp originates both fixed-rate and ARM loans. Within the ARM portfolio, approximately $458 million of ARM loans will have rate resets during the next twelve months.
Risk appetite is defined using quantitative metrics and qualitative measures to ensure prudent risk taking, driving balanced decision making. The Bancorp’s goal is to ensure that aggregate residual risks do not exceed the Bancorp’s risk appetite, and that risks taken are supportive of the Bancorp’s portfolio diversification and profitability objectives.
Risk appetite is defined using quantitative metrics and qualitative measures to ensure prudent risk taking that drives balanced decision making. The Bancorp’s goal is to ensure that aggregate residual risks do not exceed the Bancorp’s risk appetite, and that risks taken are supportive of the Bancorp’s portfolio diversification and profitability objectives.
At December 31, 2023, the Bancorp’s NII sensitivity in the rising-rate scenarios is negative in years one and two as interest expense is expected to increase more than interest income due to deposit repricing and balance migration estimates given the high interest rate environment.
At December 31, 2024, the Bancorp’s NII sensitivity in the rising-rate scenarios is negative in years one and two as interest expense is expected to increase more than interest income due to deposit repricing and balance migration estimates given the high interest rate environment.
Capital Summary The Bancorp calculated its regulatory capital ratios under the Basel III standardized approach to risk-weighting of assets and pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital as of December 31, 2023.
Capital Summary The Bancorp calculated its regulatory capital ratios under the Basel III standardized approach to risk-weighting of assets and pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital as of December 31, 2024.
Provision for Credit Losses The Bancorp provides, as an expense, an amount for expected credit losses within the loan and lease portfolio and the portfolio of unfunded commitments and letters of credit that is based on factors previously discussed in the Critical Accounting Policies section of MD&A.
Provision for Credit Losses The Bancorp provides, as an expense, an amount for expected credit losses within the loan and lease portfolio and the portfolio of unfunded commitments that is based on factors discussed in the Critical Accounting Policies section of MD&A.
Tables 6 and 7 present the components of net interest income, net interest margin and net interest rate spread for the years ended December 31, 2023, 2022 and 2021, as well as the relative impact of changes in the average balance sheet and changes in interest rates on net interest income.
Tables 6 and 7 present the components of net interest income, net interest margin and net interest rate spread for the years ended December 31, 2024, 2023 and 2022, as well as the relative impact of changes in the average balance sheet and changes in interest rates on net interest income.
A summary of nonperforming assets is included in Table 45. For further information on the Bancorp’s policies related to accounting for delinquent and nonperforming loans and leases, refer to the Nonaccrual Loans and Leases section of Note 1 of the Notes to Consolidated Financial Statements.
A summary of nonperforming assets is included in Table 48. For further information on the Bancorp’s policies related to accounting for delinquent and nonperforming loans and leases, refer to the Nonaccrual Loans and Leases section of Note 1 of the Notes to Consolidated Financial Statements.
Key factors in maintaining high credit ratings include a stable and diverse earnings stream, strong credit quality, strong capital ratios and diverse funding sources, in addition to disciplined liquidity monitoring procedures. The Bancorp’s and Bank’s credit ratings are summarized in Table 59.
Key factors in maintaining high credit ratings include a stable and diverse earnings stream, strong credit quality, strong capital ratios and diverse funding sources, in addition to disciplined liquidity monitoring procedures. The Bancorp’s and Bank’s credit ratings are summarized in Table 62.
At both December 31, 2023 and 2022, the Bancorp used three forward-looking economic scenarios during the reasonable and supportable forecast period in its expected credit loss models to address the inherent imprecision in macroeconomic forecasting.
At both December 31, 2024 and 2023, the Bancorp used three forward-looking economic scenarios during the reasonable and supportable forecast period in its expected credit loss models to address the inherent imprecision in macroeconomic forecasting.
Similarly, the Bancorp’s NII sensitivity modeling incorporates approximately $800 million of incremental growth in noninterest-bearing deposit balances over 24 months for each 100 bps decrease in short-term market interest rates.
Similarly, the Bancorp’s NII sensitivity modeling incorporates approximately $470 million of incremental growth in noninterest-bearing deposit balances over 24 months for each 100 bps decrease in short-term market interest rates.
GAAP: TABLE 3: Non-GAAP Financial Measures - Return on Average Tangible Common Equity For the years ended December 31 ($ in millions) 2023 2022 2021 Net income available to common shareholders (U.S.
GAAP: TABLE 3: Non-GAAP Financial Measures - Return on Average Tangible Common Equity For the years ended December 31 ($ in millions) 2024 2023 2022 Net income available to common shareholders (U.S.
The risk types are credit risk, liquidity risk, interest rate risk, price risk, legal and regulatory compliance risk, operational risk, reputation risk and strategic risk. • The Bancorp identifies and monitors existing and potential risks that may impact the company’s risk profile, including emerging risks that create uncertainties and/or would have broad implications if materialized (e.g., global pandemics, climate change, etc.).
The risk types are credit risk, liquidity risk, interest rate risk, price risk, legal and regulatory compliance risk, operational risk, reputation risk and strategic risk. • The Bancorp identifies and monitors existing and potential risks that may impact the company’s risk profile, including emerging risks that create uncertainties and/or would have broad implications if materialized (e.g., contagion risks, climate change, etc.).
Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions. In general, the charge rates on assets increased since December 31, 2022 as they were affected by the prevailing level of interest rates and by the duration and repricing characteristics of the portfolio.
Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions. In general, the charge rates on assets increased since December 31, 2023 as they were affected by the prevailing level of interest rates and repricing characteristics of the portfolio.
TABLE 1: Earnings Summary For the years ended December 31 ($ in millions, except per share data) 2023 2022 2021 Income Statement Data Net interest income (U.S.
TABLE 1: Earnings Summary For the years ended December 31 ($ in millions, except per share data) 2024 2023 2022 Income Statement Data Net interest income (U.S.
The Bancorp’s ALCO, which includes senior management representatives and is accountable to the ERMC, provides oversight and monitors interest rate and price risks for Mortgage and Treasury activities.
The Bancorp’s ALCO, which includes senior management representatives and is accountable to the ERMC, provides oversight and monitors interest rate and price risks, including those for Mortgage and Treasury activities.
The Bancorp routinely analyzes various potential and extreme scenarios, including parallel ramps and shocks as well as steepening and other non-parallel shifts in rates, to assess where risks to net interest income persist or develop as changes in the balance sheet and market rates evolve, and employs policy limits and/or key risk indicators to monitor and manage exposures under these types of scenarios.
The Bancorp routinely analyzes various potential and extreme scenarios, including parallel ramps and shocks as well as steepening and other non-parallel shifts in rates, to assess where risks to net interest income persist or develop as changes in the balance sheet and market rates evolve, and employs key risk indicators and early warning indicators to monitor and manage exposures under these types of scenarios.
Qualitative factors may also be used to address the impacts of unforeseen events on key inputs and assumptions within the Bancorp’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information or changes to the reversion period or methodology.
Qualitative factor adjustments may also be used to address the impacts of unforeseen events on key inputs and assumptions within the Bancorp’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information or changes to the reversion period or methodology.
Qualitative factors may also be used to address the impacts of unforeseen events on key inputs and assumptions within the Bancorp’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information or changes to the reversion period or methodology.
Qualitative factor adjustments may also be used to address the impacts of unforeseen events on key inputs and assumptions within the Bancorp’s expected credit loss models, such as the reasonable and supportable forecast period, changes to historical loss information or changes to the reversion period or methodology.
The Bancorp sold or securitized loans and leases totaling $7.1 billion during the year ended December 31, 2023 compared to $13.5 billion during the year ended December 31, 2022. For further information, refer to Note 13 of the Notes to Consolidated Financial Statements. Core deposits have historically provided the Bancorp with a sizeable source of relatively stable and low-cost funds.
The Bancorp sold or securitized loans and leases totaling $4.4 billion during the year ended December 31, 2024 compared to $7.1 billion during the year ended December 31, 2023. For further information, refer to Note 13 of the Notes to Consolidated Financial Statements. Core deposits have historically provided the Bancorp with a sizeable source of relatively stable and low-cost funds.
The tax credits are primarily associated with the Low-Income Housing Tax Credit program established under Section 42 of the IRC, the New Markets Tax Credit program established under Section 45D of the IRC, the Rehabilitation Investment Tax Credit program established under Section 47 of the IRC, the Credit for Increasing Research Activities program established under Section 41 of the IRC and the Qualified Zone Academy Bond program established under Section 1397E of the IRC.
The tax credits are primarily associated with the Research Credit under Section 41 of the IRC, the Low-Income Housing Tax Credit program established under Section 42 of the IRC, the New Markets Tax Credit program established under Section 45D of the IRC, the Rehabilitation Investment Tax Credit program established under Section 47 of the IRC and the Qualified Zone Academy Bond program established under Section 1397E of the IRC.
Consumer and Small Business Banking includes the Bancorp’s residential mortgage, home equity loans and lines of credit, credit cards, automobile and other indirect lending and other consumer lending activities. Residential mortgage activities include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans and all associated hedging activities.
Consumer and Small Business Banking includes the Bancorp’s residential mortgage, home equity loans and lines of credit, credit cards, automobile and other indirect lending, solar energy installation and other consumer lending activities. Residential mortgage activities include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans and all associated hedging activities.
GAAP: TABLE 4: Non-GAAP Financial Measures - Capital Ratios As of December 31 ($ in millions) 2023 2022 Total Bancorp Shareholders’ Equity (U.S.
GAAP: TABLE 4: Non-GAAP Financial Measures - Capital Ratios As of December 31 ($ in millions) 2024 2023 Total Bancorp Shareholders’ Equity (U.S.
The Bancorp’s average core deposits and average shareholders’ equity funded 85% and 87% of its average total assets for the years ended December 31, 2023 and 2022, respectively. In addition to core deposit funding, the Bancorp also accesses a variety of other short-term and long-term funding sources, which include the use of the FHLB system.
The Bancorp’s average core deposits and average shareholders’ equity funded 86 % and 85% of its average total assets for the years ended December 31, 2024 and 2023, respectively. In addition to core deposit funding, the Bancorp also accesses a variety of other short-term and long-term funding sources, which include the use of the FHLB system.
A series of policy limits and key risk indicators are employed to ensure that risks are managed within the Bancorp’s risk tolerance for interest rate risk and price risk. The Commercial Banking and Wealth and Asset Management lines of business manage price risk for capital markets sales and trading activities related to their respective businesses.
A series of key risk indicators and early warning indicators are employed to ensure that risks are managed within the Bancorp’s risk tolerance for interest rate risk and price risk. The Commercial Banking and Wealth and Asset Management lines of business manage price risk for capital markets sales and trading activities related to their respective businesses.
Economic Value of Equity Sensitivity The Bancorp also uses EVE as a measurement tool to govern and manage its interest rate risk exposure. The exposure is governed by a risk framework that uses policy limits for scenarios assuming an instantaneous 200 bps increase and a 200 bps decrease in interest rates.
Economic Value of Equity Sensitivity The Bancorp also uses EVE as a measurement tool to govern and manage its interest rate risk exposure. The exposure is governed by a risk framework that uses risk appetite thresholds for scenarios assuming an instantaneous 200 bps increase and a 200 bps decrease in interest rates.
TABLE 59: Agency Ratings As of February 27, 2024 Moody’s Standard and Poor’s Fitch DBRS Morningstar Fifth Third Bancorp: Short-term borrowings No rating A-2 F1 R-1L Senior debt Baa1 BBB+ A- A Subordinated debt Baa1 BBB BBB+ AL Fifth Third Bank, National Association: Short-term borrowings P-2 A-2 F1 R-1M Short-term deposit P-1 No rating F1 No rating Long-term deposit A1 No rating A AH Senior debt A3 A- A- AH Subordinated debt A3 BBB+ BBB+ A Rating Agency Outlook for Fifth Third Bancorp and Fifth Third Bank, National Association: Negative Stable Stable Stable 105 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONAL RISK MANAGEMENT Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, human errors or misconduct or adverse external events that are neither market- nor credit-related.
TABLE 62: Agency Ratings As of February 24, 2025 Moody’s Standard and Poor’s Fitch DBRS Morningstar Fifth Third Bancorp: Short-term borrowings No rating A-2 F1 R-1L Senior debt Baa1 BBB+ A- A Subordinated debt Baa1 BBB BBB+ AL Fifth Third Bank, National Association: Short-term borrowings P-2 A-2 F1 R-1M Short-term deposit P-1 No rating F1 No rating Long-term deposit A1 No rating A AH Senior debt A3 A- A- AH Subordinated debt A3 BBB+ BBB+ A Rating Agency Outlook for Fifth Third Bancorp and Fifth Third Bank, National Association: Stable Stable Stable Stable 101 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONAL RISK MANAGEMENT Operational risk is the risk to current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, human errors or misconduct or adverse external events that are neither market- nor credit-related.
The following are some of the key indicators used by management to assess the Bancorp’s business performance, including those which are considered in the Bancorp’s compensation programs: • CET1 Capital Ratio: CET1 capital divided by risk-weighted assets as defined by the Basel III standardized approach to risk-weighting of assets • Return on Average Tangible Common Equity (non-GAAP): Tangible net income available to common shareholders divided by average tangible common equity • Return on Average Common Equity, Excluding AOCI (non-GAAP): Net income available to common shareholders divided by total equity, excluding AOCI and preferred stock • Net Interest Margin (non-GAAP): Net interest income on an FTE basis divided by average interest-earning assets • Efficiency Ratio (non-GAAP): Noninterest expense divided by the sum of net interest income on an FTE basis and noninterest income • Earnings Per Share, Diluted: Net income allocated to common shareholders divided by average common shares outstanding after the effect of dilutive stock-based awards • Nonperforming Portfolio Assets Ratio: Nonperforming portfolio assets divided by portfolio loans and leases and OREO • Net Charge-off Ratio: Net losses charged-off divided by average portfolio loans and leases • Return on Average Assets: Net income divided by average assets • Loan-to-Deposit Ratio: Total loans divided by total deposits • Household Growth: Change in the number of consumer households with retail relationship-based checking accounts The list of indicators above is intended to summarize some of the most important metrics utilized by management in evaluating the Bancorp’s performance and does not represent an all-inclusive list of all performance measures that may be considered relevant or important to management or investors.
The following are some of the key indicators used by management to assess the Bancorp’s business performance, including those which are considered in the Bancorp’s compensation programs: • CET1 Capital Ratio: CET1 capital divided by risk-weighted assets as defined by the Basel III standardized approach to risk-weighting of assets • Return on Average Tangible Common Equity (non-GAAP): Tangible net income available to common shareholders divided by average tangible common equity • Return on Average Common Equity, Excluding AOCI (non-GAAP): Net income available to common shareholders divided by total equity, excluding AOCI and preferred stock • Net Interest Margin (non-GAAP): Net interest income on an FTE basis divided by average interest-earning assets • Efficiency Ratio (non-GAAP): Noninterest expense divided by the sum of net interest income on an FTE basis and noninterest income • Earnings Per Share, Diluted: Net income allocated to common shareholders divided by average common shares outstanding after the effect of dilutive stock-based awards • Nonperforming Portfolio Assets Ratio: Nonperforming portfolio assets divided by portfolio loans and leases and OREO • Net Charge-off Ratio: Net losses charged-off divided by average portfolio loans and leases 48 Fifth Third Bancorp Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS • Return on Average Assets: Net income divided by average assets • Loan-to-Deposit Ratio: Total loans divided by total deposits • Household Growth: Change in the number of consumer households with retail relationship-based checking accounts The list of indicators above is intended to summarize some of the most important metrics utilized by management in evaluating the Bancorp’s performance and does not represent an all-inclusive list of all performance measures that may be considered relevant or important to management or investors.
The Bancorp’s investment portfolio remains highly concentrated in liquid and readily marketable instruments and is a significant source of secured borrowing capacity. As part of its liquidity management activities, the Bancorp maintains collateral at its secured funding providers to ensure immediate availability of funding.
The Bancorp’s investment portfolio remains highly concentrated in liquid and readily marketable instruments and is a significant source of secured borrowing capacity via several monetization channels. As part of its liquidity management activities, the Bancorp maintains collateral at its secured funding providers to ensure immediate availability of funding.
Dividend Policy and Stock Repurchase Program The Bancorp’s common stock dividend policy and stock repurchase program reflect its earnings outlook, desired payout ratios, the need to maintain adequate capital levels, the ability of its subsidiaries to pay dividends and the need to comply with safe and sound banking practices as well as meet regulatory requirements and expectations.
Dividend Policy and Stock Repurchase Program The Bancorp’s Capital Management and Dividend Policy reflects its earnings outlook, desired payout ratios, the need to maintain adequate capital levels, the ability of its subsidiaries to pay dividends and the need to comply with safe and sound banking practices as well as meet regulatory requirements and expectations.
(b) Information for all periods presented excludes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. These advances were $141 and $212 as of December 31, 2023 and 2022, respectively.
(b) Information for all periods presented excludes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. These advances were $163 and $141 as of December 31, 2024 and 2023, respectively.
The valuation adjustments on the MSR portfolio included increases of $43 million and $355 million for the years ended December 31, 2023 and 2022, respectively, due to changes in market rates and other inputs in the valuation model, including future prepayment speeds and OAS assumptions.
The valuation adjustments on the MSR portfolio included increases of $74 million and $43 million for the years ended December 31, 2024 and 2023, respectively, due to changes in market rates and other inputs in the valuation model, including future prepayment speeds and OAS assumptions.
Using the dynamic beta models, the Bancorp’s NII sensitivity modeling assumes weighted-average rising-rate interest-bearing deposit betas at the end of the ramped parallel scenarios of 78% for both a 100 bps and 200 bps increase in rates.
Using the dynamic beta models, the Bancorp’s NII sensitivity modeling assumes weighted-average rising-rate interest-bearing deposit betas at the end of the ramped parallel scenarios of approximately 75%-80% for both a 100 bps and 200 bps increase in rates.
Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. During the year ended December 31, 2023, average wholesale funding represented 18% of average interest-bearing liabilities compared to 15% for the year ended December 31, 2022.
Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. During the year ended December 31, 2024, average wholesale funding represented 16% of average interest-bearing liabilities compared to 18% for the year ended December 31, 2023.
During the years ended December 31, 2023, 2022 and 2021, the Bancorp recognized $5 million, $1 million and $19 million, respectively, of impairment losses on available-for-sale debt and other securities, included in securities gains (losses), net, in the Consolidated Statements of Income.
During the years ended December 31, 2024, 2023 and 2022, the Bancorp recognized $21 million, $5 million and $1 million, respectively, of impairment losses on available-for-sale debt and other securities, included in securities gains (losses), net, in the Consolidated Statements of Income.
During the years ended December 31, 2023 and 2022, approximately $54 million and $34 million, respectively, of interest income would have been recognized if the nonaccrual portfolio loans and leases had been current in accordance with their contractual terms.
During the years ended December 31, 2024 and 2023, approximately $64 million and $54 million, respectively, of interest income would have been recognized if the nonaccrual portfolio loans and leases had been current in accordance with their contractual terms.
Net charge-offs include current period charge-offs less recoveries on previously charged-off loans and leases. The provision for credit losses was $515 million for the year ended December 31, 2023 compared to $563 million in the prior year.
Net charge-offs include current period charge-offs less recoveries on previously charged-off loans and leases. The provision for credit losses was $530 million for the year ended December 31, 2024 compared to $515 million in the prior year.
Additionally, the Bancorp executes periodic test trades to assess the operational processes associated with its secured funding sources. As of December 31, 2023, the Bancorp (parent company) has sufficient liquidity to meet contractual obligations and all preferred and common dividends without accessing the capital markets or receiving upstream dividends from the Bank subsidiary for 33 months.
Additionally, the Bancorp executes periodic test trades to assess the operational processes and market depth associated with its secured funding sources. As of December 31, 2024, the Bancorp (parent company) had sufficient liquidity to meet contractual obligations and all preferred and common dividends without accessing the capital markets or receiving upstream dividends from the Bank subsidiary for 33 months.
The home equity portfolio is managed in two primary groups: loans outstanding with a combined LTV greater than 80% and those loans with an LTV of 80% or less based upon appraisals at origination. For additional information on these loans, refer to Table 37 and Table 38.
The home equity portfolio is managed in two primary groups: loans outstanding with a combined LTV greater than 80% and those loans with an LTV of 80% or less based upon appraisals at origination. For additional information on these loans, refer to Table 39, Table 40 and Table 41.
In partnership with Compliance Risk Management, the Financial Crimes Division conducts and oversees anti-money laundering and economic sanctions processes. Compliance Risk Management also partners with the Community and Economic Development team to oversee the Bancorp’s compliance with the Community Reinvestment Act. Fifth Third also reports and escalates legal and regulatory compliance risks to senior management and the Board of Directors.
In partnership with Compliance Risk Management, the Financial Crimes Division conducts and oversees anti-money laundering and economic sanctions processes. Compliance Risk Management also partners with the Corporate Responsibility Office to oversee the Bancorp’s compliance with the Community Reinvestment Act. Fifth Third also reports and escalates legal and regulatory compliance risks to senior management and the Board of Directors.
Sources of Funds The Bancorp’s primary sources of funds include revenue from noninterest income as well as cash flows from loan and lease repayments, payments from securities related to sales and maturities, the sale or securitization of loans and leases and funds generated by core deposits, in addition to the use of public and private debt offerings.
Sources of Funds The Bancorp’s primary sources of funds include revenue from noninterest income as well as cash flows from loan and lease repayments, payments from securities related to sales and maturities, the sale or securitization of loans and leases and funds generated by core deposits, in addition to the use of borrowings.
(b) Primarily reflects changes due to realized cash flows and the passage of time. For the years ended December 31, 2023 and 2022, the Bancorp recognized losses of $105 million and income of $177 million, respectively, in mortgage banking net revenue for valuation adjustments on the MSR portfolio.
(b) Primarily reflects changes due to realized cash flows and the passage of time. For the years ended December 31, 2024 and 2023, the Bancorp recognized losses of $77 million and $105 million, respectively, in mortgage banking net revenue for valuation adjustments on the MSR portfolio.
Indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers. Other consumer lending activities include home improvement and solar energy installation loans originated through a network of contractors and installers.
Indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers. Solar energy installation loans and certain other consumer loans are originated through a network of contractors and installers.
Under this authorization, t he Bancorp entered into and settled accelerated share repurchase transactions during the years ended December 31, 2023 and 2022. Refer to Note 24 of the Notes to Consolidated Financial Statements for additional information on the accelerated share repurchase activity.
Under this authorization, t he Bancorp entered into and settled a number of accelerated share repurchase transactions during the years ended December 31, 2024 and 2023 . Refer to Note 24 and Note 32 of the Notes to Consolidated Financial Statements for additional information on the accelerated share repurchase activity.
All deposits that an account owner has in the same ownership category at the same bank are added together and insured up to the standard insurance amount. As of December 31, 2023 and 2022, approximately $97.6 billion, or 58%, and $94.1 billion, or 58%, respectively, of the Bancorp’s domestic deposits were estimated to be insured.
All deposits that an account owner has in the same ownership category at the same bank are added together and insured up to the standard insurance amount. As of December 31, 2024 and 2023, approximately $100.6 billion, or 60%, and $97.6 billion, or 58%, respectively, of the Bancorp’s domestic deposits were estimated to be insured.
Additionally, the Bancorp routinely evaluates its exposures to changes in the bases between interest rates.
Additionally, the Bancorp routinely evaluates its exposures to changes in the basis between interest rates.
The Bancorp continues to ensure that underwriting standards and guidelines adequately account for the broader economic conditions that the consumer portfolio faces in a rising-rate environment. Guidelines are designed to ensure that the various consumer products fall within the Bancorp’s risk appetite.
The Bancorp continues to ensure that underwriting standards and guidelines adequately account for the broader economic conditions that the consumer portfolio faces in a high-rate environment and as rates begin to fall. Guidelines are designed to ensure that the various consumer products fall within the Bancorp’s risk appetite.
The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the year ended December 31, 2023, net interest income on an FTE basis and noninterest income provided 67% and 33% of total revenue, respectively. The Bancorp derives the majority of its revenues within the U.S. from customers domiciled in the U.S.
The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the year ended December 31, 2024, net interest income on an FTE basis and noninterest income provided 66% and 34% of total revenue, respectively. The Bancorp derives the majority of its revenues within the U.S. from customers domiciled in the U.S.
The ratio of commercial loan and lease net charge-offs as a percent of average portfolio commercial loans and leases increased to 20 bps during the year ended December 31, 2023, compared to 13 bps during 2022 primarily due to an increase in net charge-offs on commercial and industrial loans of $59 million.
The ratio of commercial loan and lease net charge-offs as a percent of average portfolio commercial loans and leases increased to 34 bps during the year ended December 31, 2024, compared to 20 bps during 2023, primarily due to an increase in net charge-offs on commercial and industrial loans of $87 million.
The derivatives are classified as free-standing instruments with the revaluation gain or loss being recorded in other noninterest income in the Consolidated Statements of Income. The balance of the Bancorp’s foreign denominated loans at both December 31, 2023 and 2022 was $1.0 billion.
The derivatives are classified as free-standing instruments with the revaluation gain or loss being recorded in other noninterest income in the Consolidated Statements of Income. The balance of the Bancorp’s foreign denominated loans at December 31, 2024 and 2023 was $861 million and $1.0 billion, respectively.

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