FIFTH THIRD BANCORP

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

BALANCE SHEET ANALYSIS

Loans and Leases

The Bancorp classifies its commercial loans and leases based upon primary purpose and consumer loans based upon product or collateral. Table 14 summarizes end of period loans and leases, including loans and leases held for sale, and Table 15 summarizes average total loans and leases, including average loans and leases held for sale.

Total loans and leases, including loans and leases held for sale, decreased $496 million from December 31, 2023 driven by a decrease in commercial loans and leases, partially offset by an increase in consumer loans.

Commercial loans and leases decreased $982 million, or 1%, from December 31, 2023 due to a decrease in commercial and industrial loans, partially offset by increases in commercial construction loans, commercial mortgage loans and commercial leases. Commercial and industrial loans decreased $1.4 billion, or 3%, from December 31, 2023 primarily as a result of payoffs exceeding loan originations. Commercial construction loans increased $185 million, or 3%, from December 31, 2023 as draws on existing commitments and loan originations exceeded payoffs. Commercial mortgage loans increased $153 million, or 1%, from December 31, 2023 as loan originations exceeded payoffs. Commercial leases increased $129 million, or 5%, from December 31, 2023 primarily as a result of an increase in lease originations.

Consumer loans increased $486 million, or 1%, from December 31, 2023 primarily due to increases in indirect secured consumer loans, solar energy installation loans and residential mortgage loans, partially offset by decreases in other consumer loans and credit card. Indirect secured consumer loans increased $477 million, or 3%, from December 31, 2023 primarily driven by loan production exceeding payoffs. Solar energy installation loans increased $223 million, or 6%, from December 31, 2023 primarily driven by increased loan originations. Residential mortgage loans increased $192 million, or 1%, from December 31, 2023 primarily driven by an increase in residential mortgage loans held for sale. Other consumer loans decreased $327 million, or 11%, from December 31, 2023 primarily driven by the paydowns of loans originated in connection with one third-party point-of-sale company with which the Bancorp discontinued the origination of new loans in September 2022. Credit card decreased $132 million, or 7%, from December 31, 2023 primarily due to seasonal paydowns on year-end balances.

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

Average loans and leases, including average loans and leases held for sale, decreased $6.7 billion, or 5%, for the three months ended June 30, 2024 compared to the same period in the prior year driven by decreases in average commercial loans and leases and average consumer loans.

Average commercial loans and leases decreased $5.5 billion, or 7%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to decreases in average commercial and industrial loans and average commercial leases, partially offset by an increase in average commercial construction loans. Average commercial and industrial loans decreased $5.8 billion, or 10%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily as a result of a planned reduction in balances in the second half of 2023. Average commercial leases decreased $127 million, or 5%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily as a result of a planned reduction in indirect non-relationship-based lease originations. Average commercial construction loans increased $382 million, or 7%, for the three months ended June 30, 2024 compared to the same period in the prior year as draws on existing commitments and loan originations exceeded payoffs.

Average consumer loans decreased $1.2 billion, or 3%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to decreases in average indirect secured consumer loans, average residential mortgage loans and average other consumer loans, partially offset by an increase in average solar energy installation loans. Average indirect secured consumer loans decreased $908 million, or 6%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily driven by paydowns exceeding loan originations and a planned reduction in balances in the second half of 2023. Average residential mortgage loans decreased $795 million, or 4%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to lower origination volumes and a decrease in residential mortgage loans held for sale as the Bancorp sold government-guaranteed loans that were previously in forbearance programs. Average other consumer loans decreased $538 million, or 16%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily driven by the paydowns of loans originated in connection with one third-party point-of-sale company with which the Bancorp discontinued the origination of new loans in September 2022. Average solar energy installation loans increased $1.1 billion, or 41%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to increased loan originations.

Investment Securities

The Bancorp uses investment securities as a means of managing interest rate risk, providing collateral for pledging purposes and for liquidity risk management. Total investment securities were $52.0 billion and $51.9 billion at June 30, 2024 and December 31, 2023, respectively. The taxable available-for-sale debt and other investment securities portfolio had an effective duration of 4.0 at June 30, 2024 compared to 4.8 at December 31, 2023. The taxable held-to-maturity securities portfolio had an effective duration of 5.8 at June 30, 2024.

Debt securities are classified as available-for-sale when, in management’s judgment, they may be sold in response to, or in anticipation of, changes in market conditions. Securities that management has the intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. Debt securities are classified as trading typically when bought and held principally for the purpose of selling them in the near term. At June 30, 2024, the Bancorp’s investment securities portfolio consisted primarily of AAA-rated available-for-sale debt and other securities and held-to-maturity securities. The Bancorp held an immaterial amount of below-investment grade available-for-sale debt and other securities and held-to-maturity securities atboth June 30, 2024 and December 31, 2023.

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

At both June 30, 2024 and December 31, 2023, the Bancorp did not recognize an allowance for credit losses for its investment securities. The Bancorp also did not recognize provision for credit losses for investment securities during both the three and six months ended June 30, 2024 and 2023.

During the three and six months ended June 30, 2024, respectively, the Bancorp recognized $5 million and $10 million of impairment losses on its available-for-sale debt and other securities, included in securities gains, net, in the Condensed Consolidated Statements of Income. The Bancorp recognized impairment losses on its available-for-sale debt and other securities of $4 million for both the three and six months ended June 30, 2023. These losses related to certain securities in unrealized loss positions where the Bancorp had determined that it no longer intends to hold the securities until the recovery of their amortized cost bases.

The following table summarizes the end of period components of investment securities:

(a)Other securities consist of FHLB, FRB and DTCC restricted stock hold ings that are carried at cost.

(b)Includes a discount of $930 at June 30, 2024 pertaining to the unamortized portion of unrealized losses on securities.

In January 2024, the Bancorp transferred $12.6 billion (amortized cost basis) of securities from available-for-sale to held-to-maturity to reflect the Bancorp’s change in intent to hold these securities to maturity in order to reduce potential capital volatility associated with investment security market price fluctuations. The transfer included U.S. Treasury and federal agencies securities, agency residential mortgage-backed securities and agency commercial mortgage-backed securities. On the date of the transfer, pre-tax unrealized losses of $994 million were included in AOCI related to these transferred securities. The unrealized losses that existed on the date of transfer will continue to be reported as a component of AOCI and will be amortized into income over the remaining life of the securities as an adjustment to yield, offsetting the amortization of the discount resulting from the transfer recorded at fair value.

On an amortized cost basis, available-for-sale debt and other securities and held-to-maturity securities comprised 28% of total interest-earning assets at both June 30, 2024 and December 31, 2023. The estimated weighted-average life of the debt securities in the available-for-sale debt and other securities portfolio was 5.3 years and 6.2 years at June 30, 2024 and December 31, 2023, respectively. In addition, the debt securities in the available-for-sale debt and other securities portfolio had a weighted-average yield of 3.10% and 3.06%at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024, the held-to-maturity securities portfolio had an estimated weighted-average life of 7.2 years and a weighted-average yield of 3.43%.

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

Information presented in Tables 17 and 18 is on a weighted-average life basis, anticipating future prepayments. Yield information is presented on an FTE basis and is computed using amortized cost balances and reflects the impact of prepayments. Maturity and yield calculations for the total available-for-sale debt and other securities portfolio exclude other securities that have no stated yield or maturity.

The fair values of investment securities are impacted by interest rates, credit spreads, market volatility and liquidity conditions. The fair value of the Bancorp’s investment securities portfolio generally decreases when interest rates increase or when credit spreads widen. Total net unrealized losses on the available-for-sale debt and other securities portfolio were$4.6 billion and $5.4 billion at June 30, 2024 and December 31, 2023, respectively.

(a)Taxable-equivalent yield adjustments included in the above table are 0.01%, 0.15% and 0.03% for securities with an average life between 5 and 10 years, average life greater than 10 years and in total, respectively.

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

(a)Taxable-equivalent yield adjustments included in the above table are 0.01%, 0.01%, 0.60% and 0.08% for securities with an average life between 1 and 5 years, average life between 5 and 10 years, average life greater than 10 years and in total, respectively.

(b)Includes a discount of $930 at June 30, 2024 pertaining to the unamortized portion of unrealized losses on securities.

Other Short-Term Investments

Other short-term investments have original maturities less than one year and primarily include interest-bearing balances that are funds on deposit at other depository institutions or the FRB. The Bancorp uses other short-term investments as part of its liquidity risk management tools. Other short-term investments were $21.1 billion at June 30, 2024, a decrease of $997 million from December 31, 2023. This decrease was primarily attributable to a decrease in deposits during the six months ended June 30, 2024, partially offset by the impact of a decrease in loan and lease balances during the same period.

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

Deposits

The Bancorp’s deposit balances represent an important source of funding and revenue growth opportunity. The Bancorp continues to focus on core deposit growth in its retail and commercial franchises by improving customer satisfaction, building full relationships and offering competitive rates. Average core deposits represented 76% and 75% of average total assets for the three months ended June 30, 2024 and 2023, respectively.

The following table presents the end of period components of deposits:

(a)Includes $3.1 billion and $4.4 billion of retail brokered certificates of deposit which are fully covered by FDIC insurance as of June 30, 2024 and December 31, 2023, respectively.

Core deposits decreased $1.0 billion, or 1%, from December 31, 2023 primarily due to a decrease in transaction deposits, partially offset by an increase in CDs $250,000 or less. Transaction deposits decreased $1.4 billion, or 1%, from December 31, 2023 primarily driven by decreases in demand deposits and saving deposits, partially offset by increases in money market deposits and interest checking deposits. In response to the higher interest rate environment, deposit balances have migrated from noninterest-bearing products or lower interest-bearing products into higher interest-bearing products. Demand deposits decreased $2.5 billion, or 6%, from December 31, 2023 primarily as a result of the aforementioned balance migration, partially offset by higher balances per consumer customer account. Savings deposits decreased $796 million, or 4%, from December 31, 2023 primarily due to lower average balances per consumer customer account, driven by increased consumer spending and the impact of consumer preferences for products with higher offering rates. Money market deposits increased $1.9 billion, or 5%, from December 31, 2023 primarily as a result of higher balances per consumer customer account due to higher offering rates and the aforementioned balance migration. Interest checking deposits increased $133 million from December 31, 2023 primarily as a result of the aforementioned balance migration, partially offset by lower balances per customer account. CDs $250,000 or less increased $330 million, or 3%, from December 31, 2023 primarily due to higher offering rates.

CDs over $250,000 decreased $1.1 billion, or 22%, from December 31, 2023 primarily due to maturities of retail brokered CDs.

The following table presents the components of average deposits for the three months ended:

(a)Includes $3.8 billion and $4.9 billion of retail brokered certificates of deposit which are fully covered by FDIC insurance for the three months ended June 30, 2024 and 2023, respectively.

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

On an average basis, core deposits increased $7.0 billion, or 4%, for the three months ended June 30, 2024 compared to the same period in the prior year due to increases in average transaction deposits and average CDs $250,000 or less. In response to the higher interest rate environment, deposit balances have migrated from noninterest-bearing products or lower interest-bearing products into higher interest-bearing products. Average transaction deposits increased $4.0 billion, or 3%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily driven by increases in average interest checking deposits and average money market deposits, partially offset by decreases in average demand deposits and average savings deposits. Average interest checking deposits increased $7.5 billion, or 15%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily as a result of the aforementioned balance migration as well as average commercial balance growth, partially offset by lower average balances per consumer customer account. Average money market deposits increased $6.6 billion, or 23%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily as a result of higher average balances per consumer customer account due to higher offering rates and the aforementioned balance migration. Average demand deposits decreased $6.3 billion, or 13%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily as a result of the aforementioned balance migration and lower average balances per consumer customer account. Average savings deposits decreased $3.9 billion, or 18%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to lower average balances per consumer customer account due to increased consumer spending and the impact of consumer preferences for products with higher offering rates. Average CDs $250,000 or less increased $3.0 billion, or 39%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to higher offering rates.

Average CDs over $250,000 decreased $628 million, or 12%, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to maturities of retail brokered CDs.

Contractual maturities

The contractual maturities of CDs as of June 30, 2024 are summarized in the following table:

(a)Includes CDs $250,000 or less and CDs over $250,000.

Deposit insurance

The FDIC generally provides a standard amount of insurance of $250,000 per depositor, per insured bank, for each account ownership category defined by the FDIC. Depositors may qualify for coverage of accounts over $250,000 if they have funds in different ownership categories and all FDIC requirements are met. 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 June 30, 2024 and December 31, 2023, approximately $94.9 billion, or 57%, and $97.6 billion, or 58%, respectively, of the Bancorp’s domestic deposits were estimated to be insured. As of June 30, 2024 and December 31, 2023, approximately $71.8 billion and $71.1 billion, respectively, of the Bancorp’s domestic deposits were estimated to be uninsured. At June 30, 2024 and December 31, 2023, approximately $2.3 billion and $1.9 billion, respectively, of time deposits were estimated to be uninsured. Where information is not readily available to determine the amount of insured deposits, the amount of uninsured deposits is estimated, consistent with the methodologies and assumptions utilized in providing information to the Bank’s regulators.

Borrowings

The Bancorp accesses a variety of short-term and long-term funding sources. Borrowings with original maturities of one year or less are classified as short-term and include federal funds purchased and other short-term borrowings. Total average borrowings as a percent of average interest-bearing liabilities were 13% and 15% for the three months ended June 30, 2024 and 2023, respectively.

The following table summarizes the end of period components of borrowings:

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

Total borr owings increased $423 million, or 2%, from December 31, 2023 primarily due to an increase in other short-term borrowings partially offset by a decrease in long-term debt. Other short-term borrowings increased $509 million from December 31, 2023 primarily due to increased FHLB advances outstanding as part of the Bancorp’s funding strategy. Long-term debt decreased $87 million from December 31, 2023 primarily due to the redemptions or maturities of $2.3 billion of notes, $261 million of paydowns associated with loan securitizations and $114 million of fair value adjustments associated with hedged long-term debt. These decreases were partially offset by the issuance of senior fixed-rate/floating-rate notes in January of 2024 totaling $1.0 billion. Additionally, during the six months ended June 30, 2024, the Bancorp obtained $1.5 billion of new long-term FHLB advances that will mature in 2026, utilizing its existing borrowing capacity.

The following table summarizes components of average borrowings for the three months ended:

Total average borrowings decreased $820 million, or 4%, for the three months ended June 30, 2024 compared to the same period in the prior year due to decreases in average other short-term borrowings and average federal funds purchased, partially offset by an increase in average long-term debt. Average other short-term borrowings and average federal funds purchased decreased $3.4 billion and$146 million, respectively, for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to increased long-term debt which reduced the need for short-term funding during the period. The level of other short-term borrowings can fluctuate significantly from period to period depending on funding needs and the sources that are used to satisfy those needs. For further information on the components of other short-term borrowings, refer to Note 14 of the Notes to Condensed Consolidated Financial Statements. Average long-term debt increased $2.8 billion for the three months ended June 30, 2024 compared to the same period in the prior year primarily driven by long-term debt transactions occurring since June 30, 2023, including the issuance of senior fixed-rate/floating-rate notes of $1.25 billion in July of 2023, the issuance of asset-backed securities of $1.5 billion in August of 2023 related to an automobile loan securitization and $2.0 billion in new long-term FHLB advances, as well as the aforementioned issuance of senior fixed-rate/floating-rate notes in 2024 of $1.0 billion. These increases were partially offset by redemptions or maturities of $2.3 billion of notes, $455 million of paydowns associated with loan securitizations and $47 million of fair value adjustments associated with hedged long-term debt since June 30, 2023. Information on the average rates paid on borrowings is discussed in the Net Interest Income subsection of the Statements of Income Analysis sectionof MD&A. 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.