Fifth Third Bancorp Files Q2 2024 10-Q

Ticker: FITBM · Form: 10-Q · Filed: Aug 6, 2024 · CIK: 35527

Sentiment: neutral

Topics: 10-Q, financials, banking

Related Tickers: FITB

TL;DR

**FITB Q2 2024 10-Q filed. Financials look steady.**

AI Summary

Fifth Third Bancorp filed its 10-Q for the period ending June 30, 2024. The filing provides financial details for the second quarter of 2024, including information on assets, liabilities, and debt. The company is based in Cincinnati, Ohio, and operates under the Standard Industrial Classification code for Commercial Banks.

Why It Matters

This filing provides investors and analysts with the latest financial performance and position of Fifth Third Bancorp, crucial for understanding its stability and future prospects.

Risk Assessment

Risk Level: low — A standard 10-Q filing for a large, established bank like Fifth Third Bancorp typically contains routine financial disclosures and does not inherently signal elevated risk.

Key Numbers

Key Players & Entities

FAQ

What is the filing date of this 10-Q report?

The filing date is August 6, 2024.

What is the period of report for this 10-Q?

The period of report is June 30, 2024.

What is the company's Central Index Key (CIK)?

The company's CIK is 0000035527.

In which state is Fifth Third Bancorp incorporated?

Fifth Third Bancorp is incorporated in Ohio (OH).

What is the Standard Industrial Classification (SIC) code for Fifth Third Bancorp?

The SIC code is 6022 for Commercial Banks.

Filing Stats: 4,476 words · 18 min read · ~15 pages · Grade level 16.8 · Accepted 2024-08-06 16:29:48

Key Financial Figures

Filing Documents

Financial Information

Part I. Financial Information Glossary of Abbreviations and Acronyms 2

Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2)

Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2) 3 Overview 3 Non-GAAP Financial Measures 7 Recent Accounting Standards 9 Critical Accounting Policies 9 9 Balance Sheet Analysis 18 Business Segment Review 26 Risk Management—Overview 33 Credit Risk Management 33 Interest Rate and Price Risk Management 50 Liquidity Risk Management 55 Capital Management 57

Quantitative and Qualitative Disclosures about Market Risk (Item 3)

Quantitative and Qualitative Disclosures about Market Risk (Item 3) 60

Controls and Procedures (Item 4)

Controls and Procedures (Item 4) 60 Condensed Consolidated Financial Statements and Notes (Item 1) 61 Balance Sheets (unaudited) 61 62 63 64 66 Notes to Condensed Consolidated Financial Statements (unaudited) 67

Other Information

Part II. Other Information Legal Proceedings (Item 1) 132 Risk Factors (Item 1A) 132 Unregistered Sales of Equity Securities and Use of Proceeds (Item 2) 132 Defaults Upon Senior Securities (Item 3) 132 Mine Safety Disclosures (Item 4) 132 Other Information (Item 5) 132 Exhibits (Item 6) 133 Signature 134

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains statements that we believe are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as "will likely result," "may," "are expected to," "is anticipated," "potential," "estimate," "forecast," "projected," "intends to," or may include other similar words or phrases such as "believes," "plans," "trend," "objective," "continue," "remain," or similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) deteriorating credit quality; (2) loan concentration by location or industry of borrowers or collateral; (3) problems encountered by other financial institutions; (4) inadequate sources of funding or liquidity; (5) unfavorable actions of rating agencies; (6) inability to maintain or grow deposits; (7) limitations on the ability to rec

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 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 Condensed Consolidated Financial Statements and the Notes to Condensed Consolidated Financial Statements. ACL : Allowance for Credit Losses FTP : Funds Transfer Pricing AFS : Available-For-Sale FTS : Fifth Third Securities, Inc. ALCO : Asset Liability Management Committee GDP : Gross Domestic Product ALLL : Allowance for Loan and Lease Losses GNMA : Government National Mortgage Association AOCI : Accumulated Other Comprehensive Income (Loss) GSE : United States Government Sponsored Enterprise APR : Annual Percentage Rate HTM : Held-To-Maturity ARM : Adjustable Rate Mortgage IPO : Initial Public Offering ASC : Accounting Standards Codification IRC : Internal Revenue Code ASU : Accounting Standards Update IRLC : Interest Rate Lock Commitment ATM : Automated Teller Machine ISDA : International Swaps and Derivatives Association, Inc. BHC : Bank Holding Company LIBOR : London Interbank Offered Rate BOLI : Bank Owned Life Insurance LIHTC : Low-Income Housing Tax Credit bps : Basis Points LLC : Limited Liability Company CD : Certificate of Deposit LTV : Loan-to-Value Ratio CDC : Fifth Third Community Development Corporation and Fifth Third MD&A : Management's Discussion and Analysis of Financial Community Development Company, LLC Condition and Results of Operations CECL : Current Expected Credit Loss MSR : Mortgage Servicing Right CET1 : Common Equity Tier 1 N/A : Not Applicable CFPB : United States Consumer Financial Protection Bureau NII : Net Interest Income C&I : Commercial and Industrial NM : Not Meaningful DCF : Discounted Cash Flow OAS : Option-Adjusted Spread DTCC : Depository Trust & Clearing Corporation OCC : Office of the

Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2)

Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 2) The following is Management's Discussion and Analysis of Financial Condition and Results of Operations of certain significant factors that have affected Fifth Third Bancorp's (the "Bancorp" or "Fifth Third") financial condition and results of operations during the periods included in the Condensed Consolidated Financial Statements, which are a part of this filing. Reference to the Bancorp incorporates the parent holding company and all consolidated subsidiaries. The Bancorp's banking subsidiary is referred to as the Bank. OVERVIEW Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. At June 30, 2024, the Bancorp had $213 billion in assets and operated 1,070 full-service banking centers and 2,067 Fifth Third branded ATMs in eleven states throughout the Midwestern and Southeastern regions of the U.S. The Bancorp reports on three business segments: Commercial Banking, Consumer and Small Business Banking and Wealth and Asset Management. This overview of MD&A highlights selected information in the financial results of the Bancorp and may not contain all of the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources and critical accounting policies and estimates, you should carefully read this entire document as well as the Bancorp's Annual Report on Form 10-K for the year ended December 31, 2023. Each of these items could have an impact on the Bancorp's financial condition, results of operations and cash flows. In addition, refer to the Glossary of Abbreviations and Acronyms in this report for a list of terms included as a tool for the reader of this Quarterly Report on Form 10-Q. The abbreviations and acronyms identified therein are used throughout this MD&A, as well as the Condensed Consolidated Financial Statements and Notes to Cond

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) value of the Bancorp's investment securities portfolio. The Bancorp continues to closely monitor the pace of inflation and the impacts of inflation on the broader market. For more information on current economic conditions, refer to the Credit Risk Management subsection of the Risk Management section of MD&A. Additionally, refer to the Interest Rate and Price Risk Management and Liquidity Risk Management subsections of the Risk Management section of MD&A for additional information about the Bancorp's interest rate risk management and liquidity risk management activities. FDIC Special Assessment In response to the bank closures 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 Deposit Insurance Fund associated with protecting uninsured depositors. The Bancorp's initial estimate of its allocated share of the special assessment under the provisions of the final rule was $224 million, which was recognized in earnings upon issuance of the final rule in November 2023. Subsequently, in 2024, the FDIC has announced that it expects to incur additional losses related to these bank closures beyond its initial estimates, resulting in an increase to the amount of the special assessment allocated to each member bank. As of June 30, 2024, the Bancorp's estimate of its allocation of the special assessment was $263 million, based on the most recent information provided by the FDIC. As a result, the Bancorp recorded incremental expenses of $6 million and $39 million during the three and six months ended June 30, 2024, respectively. 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 associ

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Key Performance Indicators The Bancorp, as a banking institution, utilizes various key indicators of financial condition and operating results in managing and monitoring the performance of the business. In addition to traditional financial metrics, such as revenue and expense trends, the Bancorp monitors other financial measures that assist in evaluating growth trends, capital strength and operational efficiencies. The Bancorp analyzes these key performance indicators against its past performance, its forecasted performance and with the performance of its peer banking institutions. These indicators may change from time to time as the operating environment and businesses change. 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 cha

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Earnings Summary The Bancorp's net income available to common shareholders for the second quarter of 2024 w a s $561 million, or $0.81 per diluted share, which was net of $40 million in preferred stock dividends. The Bancorp's net income available to co mmon shareholders for the second quarter of 2023 wa s $562 million, or $0.82 p er diluted share, which was net of $39 million in preferred stock dividends. The Bancorp's net income available to common shareholders for the six months ended June 30, 2024 wa

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