Fifth Third Reports Third Quarter 2023 Diluted Earnings Per Share of $0.91

Rhea-AI Summary

Fifth Third Bancorp reports strong third quarter results, with net income of $660 million and earnings per share of $0.91.

Positive

• Raised quarterly common stock dividend by 6% to $0.35 per share.
• Achieved full Category I LCR compliance and increased CET1 capital by 31 bps sequentially.
• Improved credit quality metrics with 30-89 day early stage delinquencies at 0.26% and NPA ratio at 0.51%.
• Improved profitability with PPNR increase of 1% and net income increase of 10% compared to the previous quarter.
• Generated consumer household growth of 2.3% compared to the same quarter last year.
• Reduced risk-weighted assets and increased CET1 capital by over 30 basis points.
• Grew average deposits by 4% compared to the same quarter last year.
• Maintained stability, profitability, and growth as guiding principles.

Negative

• None.

Grew deposits and continued to improve liquidity and capital; maintained strong credit quality

Raised quarterly common stock dividend 2 cents, or 6%, to $0.35 per share

Reported results included a negative $0.01 impact from a certain item on page 2 of the earnings release

CINCINNATI--(BUSINESS WIRE)-- Fifth Third Bancorp (NASDAQ: FITB):

	Key Financial Data							Key Highlights
	$ in millions for all balance sheet and income statement items
		3Q23		2Q23		3Q22		Stability: Average deposits increased 3% and period-end deposits increased 2% compared to 2Q23; period-end deposits increased 4% compared to 3Q22 Achieved full Category I LCR compliance during the quarter and at quarter-end CET1 capital increased 31 bps sequentially reflecting strong earnings power and balance sheet optimization efforts Strong credit quality metrics; 30-89 day early stage delinquencies of 0.26%, and NPA ratio of 0.51%, both improved compared to 2Q23 ACL of 2.11%, an increase of 3 bps from 2Q23, primarily reflecting a change in macroeconomic forecast Profitability: Compared to 2Q23 Revenue decreased 1%, PPNR(a) increased 1%, and net income increased 10% Efficiency ratio(a) of 55% improved 120 bps Adjusted ROTCE ex. AOCI(a) of 15.9% increased 50 basis points Growth: Generated consumer household growth of 2.3% compared to 3Q22 Continued to add new quality commercial relationships
	Income Statement Data
	Net income available to common shareholders	$623		$562		$631
	Net interest income (U.S. GAAP)	1,438		1,457		1,498
	Net interest income (FTE)(a)	1,445		1,463		1,502
	Noninterest income	715		726		672
	Noninterest expense	1,188		1,231		1,167
	Per Share Data
	Earnings per share, basic	$0.91		$0.82		$0.91
	Earnings per share, diluted	0.91		0.82		0.91
	Book value per share	21.19		23.05		21.30
	Tangible book value per share(a)	13.76		15.61		13.87
	Balance Sheet & Credit Quality
	Average portfolio loans and leases	$121,630		$123,327		$119,644
	Average deposits	165,644		160,857		159,469
	Accumulated other comprehensive loss	(6,839)		(5,166)		(5,306)
	Net charge-off ratio(b)	0.41	%	0.29	%	0.21	%
	Nonperforming asset ratio(c)	0.51		0.54		0.46
	Financial Ratios
	Return on average assets	1.26	%	1.17	%	1.25	%
	Return on average common equity	16.3		13.9		14.9
	Return on average tangible common equity(a)	24.7		20.5		21.9
	CET1 capital(d)(e)	9.80		9.49		9.14
	Net interest margin(a)	2.98		3.10		3.22
	Efficiency(a)	55.0		56.2		53.7
	Other than the Quarterly Financial Review tables beginning on page 14 of the earnings release, commentary is on a fully taxable-equivalent (FTE) basis unless otherwise noted. Consistent with SEC guidance in Regulation S-K that contemplates the calculation of tax-exempt income on a taxable-equivalent basis, net interest income, net interest margin, net interest rate spread, total revenue and the efficiency ratio are provided on an FTE basis.

From Tim Spence, Fifth Third President and CEO:

Our third quarter results were once again strong, as we have continued to navigate the challenging environment well. Our key return and profitability metrics remained resilient despite the market-related headwinds that all banks are facing. We generated strong fee growth compared to the year-ago quarter while maintaining expense discipline. Our credit metrics remained strong, with net charge-offs for the quarter in-line with our expectations. Additionally, early-stage delinquencies and nonperforming loans improved sequentially, reflecting our disciplined approach to client selection.

We reduced our risk-weighted assets and accreted over 30 basis points of CET1 capital. We generated strong deposit outcomes, growing average deposits 4% compared to the year-ago quarter while the industry continued to shrink. As a result, we achieved our goal of full LCR compliance for the quarter.

We continue to prudently invest in this environment, adding net new households in consumer and new quality middle market relationships in commercial. While the economic and regulatory environments remain uncertain, Fifth Third has spent nearly a decade focused on positioning the bank to outperform peers through the cycle. We will continue to follow our guiding principles of stability, profitability, and growth – in that order.

	Income Statement Highlights
	($ in millions, except per share data)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Condensed Statements of Income
	Net interest income (NII)(a)	$1,445			$1,463			$1,502			(1)%		(4)%
	Provision for credit losses	119			177			158			(33)%		(25)%
	Noninterest income	715			726			672			(2)%		6%
	Noninterest expense	1,188			1,231			1,167			(3)%		2%
	Income before income taxes(a)	$853			$781			$849			9%		—
	Taxable equivalent adjustment	$7			$6			$4			17%		75%
	Applicable income tax expense	186			174			192			7%		(3)%
	Net income	$660			$601			$653			10%		1%
	Dividends on preferred stock	37			39			22			(5)%		68%
	Net income available to common shareholders	$623			$562			$631			11%		(1)%
	Earnings per share, diluted	$0.91			$0.82			$0.91			11%		—

Fifth Third Bancorp (NASDAQ^®: FITB) today reported third quarter 2023 net income of $660 million compared to net income of $601 million in the prior quarter and $653 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $623 million, or $0.91 per diluted share, compared to $562 million, or $0.82 per diluted share, in the prior quarter and $631 million, or $0.91 per diluted share, in the year-ago quarter.

		Diluted earnings per share impact of certain item(s) - 3Q23
		(after-tax impact(f); $ in millions, except per share data)
		Valuation of Visa total return swap (noninterest income)	$(8)
		After-tax impact(f) of certain item(s)	$(8)
		Diluted earnings per share impact of certain item(s)1	$(0.01)
		1Diluted earnings per share impact reflects 687.059 million average diluted shares outstanding

	Net Interest Income
	(FTE; $ in millions)(a)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Interest Income
	Interest income	$2,536			$2,376			$1,764			7%		44%
	Interest expense	1,091			913			262			19%		316%
	Net interest income (NII)	$1,445			$1,463			$1,502			(1)%		(4)%
	Average Yield/Rate Analysis										bps Change
	Yield on interest-earning assets	5.23%			5.04%			3.78%			19		145
	Rate paid on interest-bearing liabilities	3.10%			2.72%			0.87%			38		223
	Ratios
	Net interest rate spread	2.13%			2.32%			2.91%			(19)		(78)
	Net interest margin (NIM)	2.98%			3.10%			3.22%			(12)		(24)

Balance sheet actions continued to reflect a defensive positioning given the uncertain economic and regulatory environments. NII decreased $18 million, or 1%, compared to the prior quarter. Actions undertaken during the quarter include reducing risk-weighted assets, issuing long-term debt, securitizing an automobile loan portfolio, and continued strategies to generate core deposit growth, which resulted in a strong liquidity position. The costs associated with the deposit growth were partially offset by improved loan yields from higher market rates and the impact of day count. Compared to the prior quarter, NIM decreased 12 bps, primarily reflecting the aforementioned deposit dynamics and the impact of day count, partially offset by higher loan yields. NIM results continue to be impacted by the decision to carry additional liquidity, with the combination of cash and due from banks and other short-term investments reaching approximately $22 billion at quarter-end.

Compared to the year-ago quarter, NII decreased $57 million, or 4%, reflecting the impact of the deposit mix shift from demand to interest-bearing accounts and continued deposit repricing dynamics, partially offset by higher loan yields. Compared to the year-ago quarter, NIM decreased 24 bps, reflecting the aforementioned deposit dynamics and the decision to carry additional liquidity, partially offset by higher loan yields and higher investment portfolio yields.

	Noninterest Income
	($ in millions)	For the Three Months Ended						% Change
		September		June		September
		2023		2023		2022		Seq		Yr/Yr
	Noninterest Income
	Service charges on deposits	$149		$144		$143		3%		4%
	Commercial banking revenue	154		146		134		5%		15%
	Mortgage banking net revenue	57		59		69		(3)%		(17)%
	Wealth and asset management revenue	145		143		141		1%		3%
	Card and processing revenue	104		106		105		(2)%		(1)%
	Leasing business revenue	58		47		60		23%		(3)%
	Other noninterest income	55		74		59		(26)%		(7)%
	Securities (losses) gains, net	(7)		7		(38)		NM		(82)%
	Securities losses, net - non-qualifying hedges
	on mortgage servicing rights	—		—		(1)		NM		(100)%
	Total noninterest income	$715		$726		$672		(2)%		6%

Reported noninterest income decreased $11 million, or 2%, from the prior quarter, and increased $43 million, or 6%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below, including securities gains/losses which incorporate mark-to-market impacts from securities associated with non-qualified deferred compensation plans.

	Noninterest Income excluding certain items
	($ in millions)	For the Three Months Ended
		September			June			September			% Change
		2023			2023			2022			Seq		Yr/Yr
	Noninterest Income excluding certain items
	Noninterest income (U.S. GAAP)	$715			$726			$672
	Valuation of Visa total return swap	10			30			17
	Securities (gains)/losses, net	7			(7)			38
	Noninterest income excluding certain items(a)	$732			$749			$727			(2)%		1%

Noninterest income excluding certain items decreased $17 million, or 2%, from the prior quarter, and increased $5 million, or 1%, from the year-ago quarter.

Compared to the prior quarter, service charges on deposits increased $5 million, or 3%, reflecting an increase in both commercial treasury management and consumer deposit fees. Commercial banking revenue increased $8 million, or 5%, primarily reflecting higher M&A advisory revenue and institutional brokerage revenue, partially offset by a decrease in client financial risk management revenue. Mortgage banking net revenue decreased $2 million, or 3%, primarily reflecting a decrease in origination fees and gains on loan sales, partially offset by a decrease in MSR asset decay. Wealth and asset management revenue increased $2 million, or 1%, primarily driven by higher personal asset management revenue. Card and processing revenue decreased $2 million, or 2%, driven by lower interchange revenue. Leasing business revenue increased $11 million, or 23%, primarily reflecting higher lease remarketing revenue. The decrease in other noninterest income was primarily due to strong equity fund and direct investment income in the prior quarter.

Compared to the year-ago quarter, service charges on deposits increased $6 million, or 4%, reflecting an increase in both commercial treasury management and consumer deposit fees. Commercial banking revenue increased $20 million, or 15%, primarily driven by increased corporate bond fees, loan syndication revenue, and institutional brokerage revenue. Mortgage banking net revenue decreased $12 million, or 17%, primarily reflecting lower origination fees and gains on loan sales, as well as an increase in MSR asset decay. Wealth and asset management revenue increased $4 million, or 3%, driven by higher personal asset management revenue. Card and processing revenue decreased $1 million, or 1%, driven by higher rewards partially offset by higher interchange revenue. Leasing business revenue decreased $2 million, or 3%, primarily reflecting lower operating lease revenue.

	Noninterest Expense
	($ in millions)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Noninterest Expense
	Compensation and benefits	$629			$650			$605			(3)%		4%
	Net occupancy expense	84			83			74			1%		14%
	Technology and communications	115			114			106			1%		8%
	Equipment expense	37			36			36			3%		3%
	Card and processing expense	21			20			21			5%		—
	Leasing business expense	29			31			33			(6)%		(12)%
	Marketing expense	35			31			35			13%		—
	Other noninterest expense	238			266			257			(11)%		(7)%
	Total noninterest expense	$1,188			$1,231			$1,167			(3)%		2%

Reported noninterest expense decreased $43 million, or 3%, from the prior quarter, and increased $21 million, or 2%, from the year-ago quarter. The reported results reflect the impact of a certain item in the table below.

	Noninterest Expense excluding certain item(s)
	($ in millions)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Noninterest Expense excluding certain item(s)
	Noninterest expense (U.S. GAAP)	$1,188			$1,231			$1,167
	Restructuring severance expense	—			(12)			—
	Noninterest expense excluding certain item(s)(a)	$1,188			$1,219			$1,167			(3)%		2%

Compared to the prior quarter, noninterest expense excluding certain items decreased $31 million, or 3%, primarily driven by decreases in compensation and benefits expense and other noninterest expense reflecting overall expense discipline, partially offset by higher marketing expense. Noninterest expense in the current quarter included a $5 million benefit related to the impact of non-qualified deferred compensation mark-to-market compared to a $10 million expense in the prior quarter (both of which were largely offset in net securities gains/losses through noninterest income).

Compared to the year-ago quarter, noninterest expense increased $21 million, or 2%, primarily driven by higher compensation and benefits expense, net occupancy expense, and technology and communications expense related to continued modernization investments, partially offset by lower other noninterest expense. The year-ago quarter included a $7 million benefit to noninterest expense related to the impact of non-qualified deferred compensation mark-to-market (which was largely offset in net securities losses through noninterest income).

	Average Interest-Earning Assets
	($ in millions)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Average Portfolio Loans and Leases
	Commercial loans and leases:
	Commercial and industrial loans	$57,001			$58,137			$56,646			(2)%		1%
	Commercial mortgage loans	11,216			11,373			10,751			(1)%		4%
	Commercial construction loans	5,539			5,535			5,557			—		—
	Commercial leases	2,616			2,700			2,792			(3)%		(6)%
	Total commercial loans and leases	$76,372			$77,745			$75,746			(2)%		1%
	Consumer loans:
	Residential mortgage loans	$17,400			$17,517			$17,617			(1)%		(1)%
	Home equity	3,897			3,937			3,956			(1)%		(1)%
	Indirect secured consumer loans	15,787			16,281			16,750			(3)%		(6)%
	Credit card	1,808			1,783			1,756			1%		3%
	Other consumer loans	6,366			6,064			3,819			5%		67%
	Total consumer loans	$45,258			$45,582			$43,898			(1)%		3%
	Total average portfolio loans and leases	$121,630			$123,327			$119,644			(1)%		2%
	Average Loans and Leases Held for Sale
	Commercial loans and leases held for sale	$17			$19			$3			(11)%		467%
	Consumer loans held for sale	619			641			2,253			(3)%		(73)%
	Total average loans and leases held for sale	$636			$660			$2,256			(4)%		(72)%
	Total average loans and leases	$122,266			$123,987			$121,900			(1)%		—
	Securities (taxable and tax-exempt)	$56,994			$57,267			$57,713			—		(1)%
	Other short-term investments	12,956			7,806			5,765			66%		125%
	Total average interest-earning assets	$192,216			$189,060			$185,378			2%		4%

Compared to the prior quarter, total average portfolio loans and leases decreased 1%, reflecting the aforementioned reduction in risk-weighted assets initiative which impacted both commercial and consumer portfolios. Average commercial portfolio loans and leases decreased 2%, reflecting a decrease in commercial and industrial (C&I) loan balances. Average consumer portfolio loans decreased 1%, primarily reflecting a decrease in indirect secured consumer loan balances, partially offset by an increase in other consumer loan balances driven by Dividend Finance.

Compared to the year-ago quarter, total average portfolio loans and leases increased 2%, reflecting an increase in both commercial and consumer portfolios. Average commercial portfolio loans and leases increased 1%, primarily reflecting an increase in commercial mortgage loan balances and C&I loan balances, partially offset by a decrease in commercial lease balances. Average consumer portfolio loans increased 3%, primarily reflecting an increase in other consumer loan balances driven by Dividend Finance, partially offset by a decrease in indirect secured consumer loan balances and residential mortgage loan balances.

Average loans and leases held for sale were $0.6 billion in the current quarter compared to $0.7 billion in the prior quarter and $2.3 billion in the year-ago quarter.

Average securities (taxable and tax-exempt; amortized cost) of $57 billion in the current quarter were flat compared to the prior quarter and decreased $1 billion, or 1%, compared to the year-ago quarter. Average other short-term investments (including interest-bearing cash) of $13 billion in the current quarter increased $5 billion, or 66%, compared to the prior quarter and increased $7 billion, or 125%, compared to the year-ago quarter.

Total period-end commercial portfolio loans and leases of $75 billion decreased 2% compared to the prior quarter, primarily reflecting a decrease in C&I loan balances. Compared to the year-ago quarter, total period-end commercial portfolio loans and leases decreased 1%, primarily reflecting a decrease in C&I loan balances and commercial lease balances, partially offset by an increase in commercial mortgage loan balances. Period-end commercial revolving line utilization was 36%, compared to 35% in the prior quarter and 37% in the year-ago quarter.

Total period-end consumer portfolio loans of $45 billion decreased 1% compared to the prior quarter, primarily reflecting a decrease in indirect secured consumer loan balances and residential mortgage loan balances, partially offset by an increase in other consumer loan balances driven by Dividend Finance. Compared to the year-ago quarter, total period-end consumer portfolio loans increased 2%, primarily driven by an increase in other consumer loan balances driven by Dividend Finance, partially offset by a decrease in indirect secured consumer loans and residential mortgage loan balances.

Total period-end securities (taxable and tax-exempt; amortized cost) of $57 billion in the current quarter were stable compared to the prior quarter and decreased $1 billion, or 2%, compared to the year-ago quarter. Period-end other short-term investments of approximately $19 billion increased $8 billion, or 73%, compared to the prior quarter, and increased $12 billion, or 187%, compared to the year-ago quarter.

Average Deposits
	($ in millions)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Average Deposits
	Demand	$44,228			$46,520			$59,535			(5)%		(26)%
	Interest checking	53,109			50,472			42,574			5%		25%
	Savings	20,511			21,675			23,814			(5)%		(14)%
	Money market	32,072			28,913			29,066			11%		10%
	Foreign office(g)	168			143			206			17%		(18)%
	Total transaction deposits	$150,088			$147,723			$155,195			2%		(3)%
	CDs $250,000 or less	9,630			7,759			2,048			24%		370%
	Total core deposits	$159,718			$155,482			$157,243			3%		2%
	CDs over $250,000	5,926			5,375			2,226			10%		166%
	Total average deposits	$165,644			$160,857			$159,469			3%		4%
	CDs over $250,000 includes $5.2BN, $4.9BN, and $2.1BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 9/30/23, 6/30/23, and 9/30/22, respectively.

Compared to the prior quarter, total average deposits increased 3%, as increases in money market and interest checking account balances were partially offset by a decrease in demand account balances. Average demand deposits represented 28% of total core deposits in the current quarter, compared to 30% in the prior quarter. Compared to the prior quarter, average consumer segment deposits increased 2%, average commercial segment deposits increased 4%, and average wealth & asset management segment deposits decreased 2% reflecting clients' alternative investment options. Period-end total deposits increased 2% compared to the prior quarter.

Compared to the year-ago quarter, total average deposits increased 4%, primarily reflecting an increase in interest checking and time deposit balances, partially offset by a decrease in demand account balances. Period-end total deposits increased 4% compared to the year-ago quarter.

The period end portfolio loan-to-core deposit ratio was 74% in the current quarter, compared to 77% in the prior quarter and 75% in the year-ago quarter. Estimated uninsured deposits were approximately $68 billion, or 41% of total deposits, as of quarter end.

Average Wholesale Funding
	($ in millions)	For the Three Months Ended									% Change
		September			June			September
		2023			2023			2022			Seq		Yr/Yr
	Average Wholesale Funding
	CDs over $250,000	$5,926			$5,375			$2,226			10%		166%
	Federal funds purchased	181			376			607			(52)%		(70)%
	Securities sold under repurchase agreements	352			361			472			(2)%		(25)%
	FHLB advances	3,726			6,589			6,608			(43)%		(44)%
	Derivative collateral and other secured borrowings	81			79			356			3%		(77)%
	Long-term debt	14,023			12,848			11,796			9%		19%
	Total average wholesale funding	$24,289			$25,628			$22,065			(5)%		10%
	CDs over $250,000 includes $5.2BN, $4.9BN, and $2.1BN of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended 9/30/23, 6/30/23, and 9/30/22, respectively.

Compared to the prior quarter, average wholesale funding decreased 5%, primarily reflecting a decrease in FHLB advances, partially offset by an increase in long-term debt (driven by the aforementioned long-term debt issuance and an automobile loan portfolio securitization), and CDs over $250,000 (which consists primarily of retail brokered CDs which are fully covered by FDIC insurance). Compared to the year-ago quarter, average wholesale funding increased 10%, primarily reflecting an increase in CDs over $250,000 and long-term debt, partially offset by a decrease in FHLB advances.

Credit Quality Summary
($ in millions)	As of and For the Three Months Ended
	September			June			March			December			September
	2023			2023			2023			2022			2022
Total nonaccrual portfolio loans and leases (NPLs)	$570			$629			$593			$515			$522
Repossessed property	11			8			8			6			6
OREO	31			24			22			18			18
Total nonperforming portfolio loans and leases and OREO (NPAs)	$612			$661			$623			$539			$546
NPL ratio(h)	0.47%			0.52%			0.48%			0.42%			0.44%
NPA ratio(c)	0.51%			0.54%			0.51%			0.44%			0.46%
Portfolio loans and leases 30-89 days past due (accrual)	$316			$339			$317			$364			$335
Portfolio loans and leases 90 days past due (accrual)	29			51			46			40			59
30-89 days past due as a % of portfolio loans and leases	0.26%			0.28%			0.26%			0.30%			0.28%
90 days past due as a % of portfolio loans and leases	0.02%			0.04%			0.04%			0.03%			0.05%
Allowance for loan and lease losses (ALLL), beginning	$2,327			$2,215			$2,194			$2,099			$2,014
Impact of adoption of ASU 2022-02	—			—			(49)			—			—
Total net losses charged-off	(124)			(90)			(78)			(68)			(62)
Provision for loan and lease losses	137			202			148			163			147
ALLL, ending	$2,340			$2,327			$2,215			$2,194			$2,099
Reserve for unfunded commitments, beginning	$207			$232			$216			$199			$188
(Benefit from) provision for the reserve for unfunded commitments	(18)			(25)			16			17			11
Reserve for unfunded commitments, ending	$189			$207			$232			$216			$199
Total allowance for credit losses (ACL)	$2,529			$2,534			$2,447			$2,410			$2,298
ACL ratios:
As a % of portfolio loans and leases	2.11%			2.08%			1.99%			1.98%			1.91%
As a % of nonperforming portfolio loans and leases	443%			403%			413%			468%			440%
As a % of nonperforming portfolio assets	413%			383%			393%			447%			420%
ALLL as a % of portfolio loans and leases	1.95%			1.91%			1.80%			1.81%			1.75%
Total losses charged-off	$(158)			$(121)			$(110)			$(103)			$(104)
Total recoveries of losses previously charged-off	34			31			32			35			42
Total net losses charged-off	$(124)			$(90)			$(78)			$(68)			$(62)
Net charge-off ratio (NCO ratio)(b)	0.41%			0.29%			0.26%			0.22%			0.21%
Commercial NCO ratio	0.34%			0.16%			0.17%			0.13%			0.17%
Consumer NCO ratio	0.53%			0.50%			0.42%			0.38%			0.28%

Nonperforming portfolio loans and leases were $570 million in the current quarter, with the resulting NPL ratio of 0.47%. Compared to the prior quarter, NPLs decreased $59 million with the NPL ratio decreasing 5 bps. Compared to the year-ago quarter, NPLs increased $48 million with the NPL ratio increasing 3 bps.

Nonperforming portfolio assets were $612 million in the current quarter, with the resulting NPA ratio of 0.51%. Compared to the prior quarter, NPAs decreased $49 million with the NPA ratio decreasing 3 bps. Compared to the year-ago quarter, NPAs increased $66 million with the NPA ratio increasing 5 bps.

The provision for credit losses totaled $119 million in the current quarter. The allowance for credit loss ratio represented 2.11% of total portfolio loans and leases at quarter end, compared with 2.08% for the prior quarter end and 1.91% for the year-ago quarter end. In the current quarter, the allowance for credit losses represented 443% of nonperforming portfolio loans and leases and 413% of nonperforming portfolio assets.

Net charge-offs were $124 million in the current quarter, resulting in an NCO ratio of 0.41%. Compared to the prior quarter, net charge-offs increased $34 million and the NCO ratio increased 12 bps. Commercial net charge-offs were $64 million, resulting in a commercial NCO ratio of 0.34%, which increased 18 bps compared to the prior quarter. Consumer net charge-offs were $60 million, resulting in a consumer NCO ratio of 0.53%, which increased 3 bps compared to the prior quarter.

Compared to the year-ago quarter, net charge-offs increased $62 million and the NCO ratio increased 20 bps, reflecting a normalization from near-historically low net charge-offs in the year-ago quarter. The commercial NCO ratio increased 17 bps compared to the prior year, and the consumer NCO ratio increased 25 bps compared to the prior year.

	Capital Position
		As of and For the Three Months Ended
		September			June		March		December		September
		2023			2023		2023		2022		2022
	Capital Position
	Average total Bancorp shareholders' equity as a % of average assets	8.30%			8.90%		8.77%		8.18%		9.13%
	Tangible equity(a)	8.46%			8.58%		8.39%		8.31%		8.18%
	Tangible common equity (excluding AOCI)(a)	7.49%			7.57%		7.38%		7.30%		7.16%
	Tangible common equity (including AOCI)(a)	4.51%			5.26%		5.49%		5.00%		4.75%
	Regulatory Capital Ratios(d)(e)
	CET1 capital	9.80%			9.49%		9.28%		9.28%		9.14%
	Tier 1 risk-based capital	11.05%			10.73%		10.53%		10.53%		10.40%
	Total risk-based capital	13.12%			12.83%		12.64%		12.79%		12.64%
	Leverage	8.85%			8.81%		8.67%		8.56%		8.44%

The CET1 capital ratio was 9.80%, the Tangible common equity to tangible assets ratio was 7.49% excluding AOCI, and 4.51% including AOCI. The Tier 1 risk-based capital ratio was 11.05%, the Total risk-based capital ratio was 13.12%, and the Leverage ratio was 8.85%. Fifth Third did not execute share repurchases in the third quarter of 2023.

Fifth Third increased its quarterly cash dividend on its common shares by $0.02, or 6%, to $0.35 per share for the third quarter of 2023.

Tax Rate

The effective tax rate for the quarter was 22.0% compared with 22.5% in the prior quarter and 22.7% in the year-ago quarter.

Conference Call

Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. This conference call will be webcast live and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on “About Us” then “Investor Relations”). Those unable to listen to the live webcast may access a webcast replay through the Fifth Third Investor Relations website at the same web address, which will be available for 30 days.

Corporate Profile

Fifth Third is a bank that’s as long on innovation as it is on history. Since 1858, we’ve been helping individuals, families, businesses and communities grow through smart financial services that improve lives. Our list of firsts is extensive, and it’s one that continues to expand as we explore the intersection of tech-driven innovation, dedicated people, and focused community impact. Fifth Third is one of the few U.S.-based banks to have been named among Ethisphere's World’s Most Ethical Companies® for several years. With a commitment to taking care of our customers, employees, communities and shareholders, our goal is not only to be the nation’s highest performing regional bank, but to be the bank people most value and trust.

Fifth Third Bank, National Association is a federally chartered institution. Fifth Third Bancorp is the indirect parent company of Fifth Third Bank and its common stock is traded on the NASDAQ® Global Select Market under the symbol “FITB.” Investor information and press releases can be viewed at www.53.com.

Earnings Release End Notes

(a)		Non-GAAP measure; see discussion of non-GAAP reconciliation beginning on page 27 of the earnings release.
(b)		Net losses charged-off as a percent of average portfolio loans and leases presented on an annualized basis.
(c)		Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO.
(d)		Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
(e)		Current period regulatory capital ratios are estimated.
(f)		Assumes a 23% tax rate.
(g)		Includes commercial customer Eurodollar sweep balances for which the Bank pays rates comparable to other commercial deposit accounts.
(h)		Nonperforming portfolio loans and leases as a percent of portfolio loans and leases.

FORWARD-LOOKING STATEMENTS

This release contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K as updated by our filings with the U.S. Securities and Exchange Commission (“SEC”).

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) effects of the global COVID-19 pandemic; (2) deteriorating credit quality; (3) loan concentration by location or industry of borrowers or collateral; (4) problems encountered by other financial institutions; (5) inadequate sources of funding or liquidity; (6) unfavorable actions of rating agencies; (7) inability to maintain or grow deposits; (8) limitations on the ability to receive dividends from subsidiaries; (9) cyber-security risks; (10) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (11) failures by third-party service providers; (12) inability to manage strategic initiatives and/or organizational changes; (13) inability to implement technology system enhancements; (14) failure of internal controls and other risk management systems; (15) losses related to fraud, theft, misappropriation or violence; (16) inability to attract and retain skilled personnel; (17) adverse impacts of government regulation; (18) governmental or regulatory changes or other actions; (19) failures to meet applicable capital requirements; (20) regulatory objections to Fifth Third’s capital plan; (21) regulation of Fifth Third’s derivatives activities; (22) deposit insurance premiums; (23) assessments for the orderly liquidation fund; (24) replacement of LIBOR; (25) weakness in the national or local economies; (26) global political and economic uncertainty or negative actions; (27) changes in interest rates and the effects of inflation; (28) changes and trends in capital markets; (29) fluctuation of Fifth Third’s stock price; (30) volatility in mortgage banking revenue; (31) litigation, investigations, and enforcement proceedings by governmental authorities; (32) breaches of contractual covenants, representations and warranties; (33) competition and changes in the financial services industry; (34) changing retail distribution strategies, customer preferences and behavior; (35) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (36) potential dilution from future acquisitions; (37) loss of income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (38) results of investments or acquired entities; (39) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (40) inaccuracies or other failures from the use of models; (41) effects of critical accounting policies and judgments or the use of inaccurate estimates; (42) weather-related events, other natural disasters, or health emergencies (including pandemics); (43) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity; (44) changes in law or requirements imposed by Fifth Third’s regulators impacting our capital actions, including dividend payments and stock repurchases; and (45) Fifth Third's ability to meet its environmental and/or social targets, goals and commitments.

You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis to every other instance of such information appearing herein.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231018632619/en/

Investor contact: Chris Doll (513) 534-2345

Media contact: Jennifer Hendricks Sullivan (614) 744-7693

Source: Fifth Third Bancorp

FAQ

What is the net income of Fifth Third Bancorp in the third quarter?

The net income of Fifth Third Bancorp in the third quarter was $660 million.

How much did the quarterly common stock dividend increase by?

The quarterly common stock dividend increased by 6% to $0.35 per share.

Did Fifth Third Bancorp achieve full Category I LCR compliance?

Yes, Fifth Third Bancorp achieved full Category I LCR compliance during the quarter.

What is the growth rate of average deposits compared to the same quarter last year?

The average deposits grew by 4% compared to the same quarter last year.

What are the guiding principles of Fifth Third Bancorp?

The guiding principles of Fifth Third Bancorp are stability, profitability, and growth.