FIFTH THIRD BANCORP

Previous wording

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.

Current wording

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. At September 30, 2024, the Bancorp had $214 billion in assets and operated 1,072 full-service banking centers and 2,060 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.

Previous wording

The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the three months ended June 30, 2024, net interest income on an FTE basis and noninterest income provided 67% and 33% of total revenue, respectively. For the six months ended June 30, 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. Revenue from foreign countries and external customers domiciled in foreign countries was immaterial to the Condensed Consolidated Financial Statements for the three and six months ended June 30, 2024. Changes in interest rates, credit quality, economic trends and the capital markets are primary factors that drive the performance of the Bancorp. As discussed later in the Risk Management section of MD&A, risk identification, measurement, monitoring, control and reporting are important to the management of risk and to the financial performance and capital strength of the Bancorp.

Current wording

The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the three and nine months ended September 30, 2024, 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. Revenue from foreign countries and external customers domiciled in foreign countries was immaterial to the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024. Changes in interest rates, credit quality, economic trends and the capital markets are primary factors that drive the performance of the Bancorp. As discussed later in the Risk Management section of MD&A, risk identification, measurement, monitoring, control and reporting are important to the management of risk and to the financial performance and capital strength of the Bancorp.

Previous wording

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 associated with protecting the uninsured depositors will continue to be subject to periodic adjustment until the final loss amount is determined by the FDIC.

Current wording

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 an incremental expense of $39 million during the first six months of 2024. 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.

Previous wording

On January 29, 2024, the Bancorp issued and sold $1.0 billion of fixed-rate/floating-rate senior notes which will mature on January 29, 2032. The senior notes will bear interest at a rate of 5.631% per annum until January 28, 2031. From January 29, 2031 until maturity, the senior notes will bear interest at a rate of compounded SOFR plus 1.840%. Refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for more information.

Current wording

On January 29, 2024, the Bancorp issued and sold $1.0 billion of fixed-rate/floating-rate senior notes which will mature on January 29, 2032. The senior notes will bear interest at a rate of 5.631% per annum until January 28, 2031. From January 29, 2031 until maturity, the senior notes will bear interest at a rate of compounded SOFR plus 1.840%.

Previous wording

During the second quarter of 2024, the Bancorp entered into and settled an accelerated share repurchase transaction. As part of the transaction, the Bancorp entered into a forward contract in which the final number of shares delivered at settlement was based on a discount to the average daily volume weighted-average price of the Bancorp’s common stock during the term of the repurchase agreement. Refer to Note 16 and Note 24 of the Notes to Condensed Consolidated Financial Statements for additional information on share repurchase activity.

Current wording

Refer to Note 16 of the Notes to Condensed Consolidated Financial Statements for more information.

Previous wording

(a)Amounts presented on an FTE basis. The FTE adjustments were $6 for both the three months ended June 30, 2024 and 2023 and were $12 and $11 for thesix months ended June 30, 2024 and 2023, respectively.

Current wording

(a)Amounts presented on an FTE basis. The FTE adjustments were $6 and $7 for the three months ended September 30, 2024 and 2023, respectively, and were $18 for both the nine months ended September 30, 2024 and 2023.

Previous wording

The Bancorp’s net income available to common shareholders for the second quarter of 2024 was $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 common shareholders for the second quarter of 2023 was $562 million, or $0.82 per 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 was $1.0 billion, or $1.51 per diluted share, which was net of $81 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the six months ended June 30, 2023 was $1.1 billion, or $1.59 per diluted share, which was net of $62 million in preferred stock dividends.

Current wording

The Bancorp’s net income available to common shareholders for the third quarter of 2024 was $532 million, or $0.78 per diluted share, which was net of $41 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the third quarter of 2023 was $623 million, or $0.91 per diluted share, which was net of $37 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the nine months ended September 30, 2024 was $1.6 billion, or $2.28 per diluted share, which was net of $121 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the nine months ended September 30, 2023 was $1.7 billion, or $2.50 per diluted share, which was net of $100 million in pref erred stock dividends.

Previous wording

Net interest income on an FTE basis (non-GAAP) was $1.4 billion and $2.8 billion for the three and six months ended June 30, 2024, respectively, decreasing $70 million and $202 million compared to the same periods in the prior year. Net interest income was negatively impacted by higher funding costs due to increases in market interest rates and deposit balance migration into higher yielding products. Rates paid on average interest-bearing core deposits and average long-term debt increased for the three and six months ended June 30, 2024 compared to the same periods in the prior year. The deposit balance migration impacting net interest income contributed to decreases in the average balances of demand deposits and increases in the average balances of interest-bearing core deposits for the three and six months ended June 30, 2024 compared to the same periods in the prior year. Additionally, net interest income was negatively impacted by decreases in the average balances of commercial and industrial loans and increases in the average balances of long-term debt for the three and six months ended June 30, 2024 compared to the same periods in the prior year. These negative impacts on net interest income were partially offset by increases in yields on average loans and leases and average taxable securities for the three and six months ended June 30, 2024 compared to the same periods in the prior year. Net interest income for the three and six months ended June 30, 2024 also benefited from increases in the average balances of other short-term investments and decreases in the average balances of FHLB advances for the three and six months ended June 30, 2024 compared to the same periods in the prior year. Net interest income for the six months ended June 30, 2024 was also positively impacted by an increase in the average balances of solar energy installation loans compared to the same period in the prior year. Net interest margin on an FTE basis (non-GAAP) was 2.88% and 2.87% for the three and six months ended June 30, 2024, respectively, compared to 3.10% and 3.20% for the comparable periods in the prior year.

Current wording

Net interest income on an FTE basis (non-GAAP) was $1.4 billion and $4.2 billion for the three and nine months ended September 30, 2024, respectively, decreasing $18 million and $219 million compared to the same periods in the prior year. For both the three and nine months ended September 30, 2024, net interest income was negatively impacted by higher funding costs due to increases in market interest rates and deposit balance migration into higher yielding products as well as decreases in the average balances of commercial and industrial loans. These negative impacts were partially offset by increases in the average balances of other short-term investments and increases in yields on

Previous wording

The provision for credit losses was $97 million and $191 million for the three and six months ended June 30, 2024, respectively, compared to $177 million and $341 million during the same periods in the prior year. Provision expense for the three months ended June 30, 2024 was affected by factors that caused a decrease in the ACL from March 31, 2024, primarily including decreases in specific reserves on individually evaluated commercial and industrial loans. The provision for credit losses for the six months ended June 30, 2024 was affected by factors that caused a decrease in the ACL from December 31, 2023, including improvement in the economic forecast used to calculate the ACL and lower period-end loan and lease balances. Net losses charged-off as a percent of average portfolio loans and leases were 0.49% and 0.29% for the three months ended June 30, 2024 and 2023, respectively, and 0.44% and 0.27% for the six months ended June 30, 2024 and 2023, respectively. At June 30, 2024 and December 31, 2023, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO were 0.55% and 0.59%, respectively. For more information on credit quality, refer to the Credit Risk Management subsection of the Risk Management section of MD&A as well as Note 6 of the Notes to Condensed Consolidated Financial Statements.

Current wording

The provision for credit losses was $160 million and $351 million for the three and nine months ended September 30, 2024, respectively, compared to $119 million and $460 million during the same periods in the prior year. Provision expense for the three months ended September 30, 2024 was affected by factors that caused an increase in the ACL from June 30, 2024, primarily including the recognition of specific reserves on individually evaluated commercial and industrial loans, slight deterioration in the economic forecast and changes in loan mix. The provision for credit losses for the nine months ended September 30, 2024 was affected by factors that caused a decrease in the ACL from December 31, 2023, including improvement in the economic forecast used to calculate the ACL and lower period-end loan and lease balances. Net losses charged-off as a percent of average portfolio loans and leases were 0.48% and 0.41% for the three months ended September 30, 2024 and 2023, respectively, and 0.45% and 0.32% for the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO were 0.62% and 0.59%, respectively. For more information on credit quality, refer to the Credit Risk Management subsection of the Risk Management section of MD&A as well as Note 6 of the Notes to Condensed Consolidated Financial Statements.

Previous wording

Noninterest income decreased $13 million and $23 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year. The decrease for the three months ended June 30, 2024 was driven by decreases in other noninterest income, leasing business revenue and commercial banking revenue, partially offset by an increase in service charges on deposits. The decrease for the

Current wording

Noninterest income decreased $4 million and $20 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily due to decreases in other noninterest income, leasing business revenue and mortgage banking net revenue, partially offset by increases in wealth and asset management revenue, services charges on deposits and net securities gains.

Previous wording

Noninterest expense decreased $10 million for the three months ended June 30, 2024 compared to the same period in the prior year primarily due to decreases in other noninterest expense and leasing business expense, partially offset by increases in compensation and benefits expense and marketing expense. Noninterest expense was flat for the six months ended June 30, 2024 compared to the same period in the prior year and included increases in net occupancy expense and marketing expense, offset by a decrease in leasing business expense.

Current wording

Noninterest expense increased $56 million and $57 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily due to increases in compensation and benefits expense, other noninterest expense and technology and communications expense, partially offset by decreases in leasing business expense and marketing expense.

Previous wording

•Tier 1 risk-based capital ratio: 11.93%;

Current wording

•Tier 1 risk-based capital ratio: 12.07%;

Previous wording

•Total risk-based capital ratio: 13.95%;

Current wording

•Total risk-based capital ratio: 14.13%;

Previous wording

The Bancorp’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. Certain accounting policies require management to exercise judgment in determining methodologies, economic assumptions and estimates that may materially affect the Bancorp’s financial position, results of operations and cash flows. The Bancorp’s critical accounting policies include the accounting for the ALLL, reserve for unfunded commitments, valuation of servicing rights, fair value measurements, goodwill and legal contingencies. These accounting policies are discussed in detail in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the valuation techniques or models during the six months ended June 30, 2024.

Current wording

The Bancorp’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. Certain accounting policies require management to exercise judgment in determining methodologies, economic assumptions and estimates that may materially affect the Bancorp’s financial position, results of operations and cash flows. The Bancorp’s critical accounting policies include the accounting for the ALLL, reserve for unfunded commitments, valuation of servicing rights, fair value measurements, goodwill and legal contingencies. These accounting policies are discussed in detail in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to the valuation techniques or models during the nine months ended September 30, 2024.

Previous wording

Tables 5 and 6 present the components of net interest income, net interest margin and net interest rate spread for the three and six months ended June 30, 2024 and 2023, as well as the relative impact of changes in the average balance sheet and changes in interest rates on net interest income. Nonaccrual loans and leases and loans and leases held for sale have been included in the average loan and lease balances. Average outstanding securities balances are based on amortized cost with any unrealized gains or losses included in average other assets.

Current wording

Tables 5 and 6 present the components of net interest income, net interest margin and net interest rate spread for the three and nine months ended September 30, 2024 and 2023, as well as the relative impact of changes in the average balance sheet and changes in interest rates on net interest income. Nonaccrual loans and leases and loans and leases held for sale have been included in the average loan and lease balances. Average outstanding securities balances are based on amortized cost with any unrealized gains or losses included in average other assets.

Previous wording

Net interest rate spread on an FTE basis (non-GAAP) was 2.04% for both the three and six months ended June 30, 2024, compared to 2.32% and 2.46% for the three and six months ended June 30, 2023, respectively. Rates paid on average interest-bearing liabilities increased 67 bps and 91 bps, partially offset by increases in yields on average interest-earning assets of 39 bps and 49 bps for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023.

Current wording

Net interest rate spread on an FTE basis (non-GAAP) was 2.05% for both the three and nine months ended September 30, 2024, compared to 2.13% and 2.35% for the three and nine months ended September 30, 2023, respectively. Rates paid on average interest-bearing liabilities increased 28 bps and 69 bps, partially offset by increases in yields on average interest-earning assets of 20 bps and 39 bps for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023.

Previous wording

Net interest margin on an FTE basis (non-GAAP) was 2.88% and 2.87% for the three and six months ended June 30, 2024, respectively, compared to 3.10% and 3.20%for the comparable periods in the prior year. Net interest margin for the three and six months ended June 30, 2024 was negatively impacted by the migration of average balances of deposits from demand deposits to interest-bearing deposits, increases in rates paid on core deposits and wholesale funding and decreases in average balances of loans and leases, partially offset by higher market interest rates on interest-earning assets and growth in average balances of other short-term investments. Net interest margin results are expected to modestly increase over the next several quarters driven by fixed-rate asset repricing and deposit growth, partially offset by the

Current wording

Net interest margin on an FTE basis (non-GAAP) was 2.90% and 2.88% for the three and nine months ended September 30, 2024, respectively, compared to 2.98% and 3.12% for the comparable periods in the prior year. Net interest margin for the three and nine months ended September 30, 2024 was primarily impacted by the previously mentioned impacts of higher market interest rates, migration of average balances of deposits from demand deposits to interest-bearing deposits and decreases in average balances of loans and leases. Net interest margin results are expected to modestly increase over the next several quarters driven by fixed-rate asset repricing and moderating deposit costs. However, net interest margin may be negatively impacted by increased deposit competition or higher levels of cash and other short-term investments.

Previous wording

Interest income on an FTE basis (non-GAAP) from loans and leases increased $41 million and$187 million during the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily driven by the previously mentioned increases in yields on loans and leases, partially offset by decreases in average balances of commercial and industrial loans. The increase for the six months ended June 30, 2024 was also driven by the previously mentioned increase in the average balances of solar energy installation loans. For more information on the Bancorp’s loan and lease portfolio, refer to the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A. Interest income on an FTE basis (non-GAAP) from investment securities and other short-term investments increased$209 million and $459 million during the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to the previously mentioned increases in the average balances of other short-term investments and increases in yields on average taxable securities.

Current wording

Interest income on an FTE basis (non-GAAP) from loans and leases increased $11 million and$195 million during the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily driven by increases in yields on loans and leases, partially offset by decreases in average balances of commercial and industrial loans. For more information on the Bancorp’s loan and lease portfolio, refer to the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A. Interest income on an FTE basis (non-GAAP) from investment securities and other short-term investments increased$128 million and $589 million during the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily due to increases in the average balances of other short-term investments. The increase for the nine months ended September 30, 2024 was also driven by an increase in yields on average taxable securities.

Previous wording

Interest expense on average core deposits increased $303 million and $751 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to the previously mentioned increases in the cost of average interest-bearing core deposits to 295 bps and 293 bps for the three and six months ended June 30, 2024, respectively, from 219 bps and 193 bps for the three and six months ended June 30, 2023, respectively, as a result of higher short-term interest rates and greater competition for deposits. The increases for the three and six months ended June 30, 2024 were also driven by the previously mentioned increases in the average balances of interest-bearing core deposits. Refer to the Deposits subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s deposits.

Current wording

bps for the three and nine months ended September 30, 2023, respectively, as a result of higher short-term interest rates and greater competition for deposits. The increases for the three and nine months ended September 30, 2024 were also driven by increases in the average balances of interest-bearing core deposits. Refer to the Deposits subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s deposits.

Previous wording

Interest expense on average wholesale funding increased$17 million and $97 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to the previously mentioned increases in average balances of and rates paid on long-term debt, partially offset by decreases in average balances of FHLB advances. The increase for the six months ended June 30, 2024 was also driven by increases in the rates paid on average CDs over $250,000 and average FHLB advances of 83 bps and 81 bps, respectively. Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. Average wholesale funding represented 17% of average interest-bearing liabilities during both the three and six months ended June 30, 2024, compared to 19% for both the three and six months ended June 30, 2023. For more information on the Bancorp’s interest rate risk management, including estimated earnings sensitivity to changes in market interest rates, refer to the Interest Rate and Price Risk Management subsection of the Risk Management section of MD&A.

Current wording

Interest expense on average wholesale funding increased$4 million and $98 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily due to increases in the average balances of long-term debt. The increase for the three months ended September 30, 2024 was partially offset by a decrease in the average balances of CDs over $250,000. The increase for the nine months ended September 30, 2024 was also driven by an increase in the rates paid on average long-term debt, partially offset by a decrease in the average balances of FHLB advances. Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. Average wholesale funding represented 16% of average interest-bearing liabilities for both the three and nine months ended September 30, 2024, compared to 17% and 18% for the three and nine months ended September 30, 2023, respectively. For more information on the Bancorp’s interest rate risk management, including estimated earnings sensitivity to changes in market interest rates, refer to the Interest Rate and Price Risk Management subsection of the Risk Management section of MD&A.

Previous wording

(b)The FTE adjustments included in the above table were $6 for both the three months ended June 30, 2024 and 2023.

Current wording

(b)The FTE adjustments included in the above table were $6 and $7 for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

(b)The FTE adjustments included in the above table were $12 and $11 for the six months ended June 30, 2024 and 2023, respectively.

Current wording

(b)The FTE adjustments included in the above table were $18 for both the nine months ended September 30, 2024 and 2023.

Previous wording

The provision for credit losses was $97 million and $191 million for the three and six months ended June 30, 2024, respectively, compared to $177 million and $341 million during the same periods in the prior year. Provision expense for the three months ended June 30, 2024 was affected by factors that caused a decrease in the ACL from March 31, 2024, primarily including decreases in specific reserves on individually evaluated commercial and industrial loans. The provision for credit losses for the six months ended June 30, 2024 was affected by factors that caused a decrease in the ACL from December 31, 2023, including improvement in the economic forecast used to calculate the ACL and lower period-end loan and lease balances.

Current wording

The provision for credit losses was $160 million and $351 million for the three and nine months ended September 30, 2024, respectively, compared to $119 million and $460 million during the same periods in the prior year. Provision expense for the three months ended September 30, 2024 was affected by factors that caused an increase in the ACL from June 30, 2024, primarily including the recognition of specific reserves on individually evaluated commercial and industrial loans, slight deterioration in the economic forecast and changes in loan mix. The provision for credit losses for the nine months ended September 30, 2024 was affected by factors that caused a decrease in the ACL from December 31, 2023, including improvement in the economic forecast used to calculate the ACL and lower period-end loan and lease balances.

Previous wording

The ALLL decreased $34 million from December 31, 2023 to $2.3 billion at June 30, 2024. At June 30, 2024, the ALLL as a percent of portfolio loans and leases decreased to 1.96%, compared to 1.98% at December 31, 2023. The reserve for unfunded commitments decreased $29 million from December 31, 2023 to $137 million at June 30, 2024. At June 30, 2024, the ACL as a percent of portfolio loans and leases decreased to 2.08%, compared to 2.12% at December 31, 2023.

Current wording

The ALLL decreased $17 million from December 31, 2023 to $2.3 billion at September 30, 2024. The ALLL as a percent of portfolio loans and leases was 1.98% at both September 30, 2024 and December 31, 2023. The reserve for unfunded commitments decreased $28 million from December 31, 2023 to $138 million at September 30, 2024. At September 30, 2024, the ACL as a percent of portfolio loans and leases decreased to 2.09%, compared to 2.12% at December 31, 2023.

Previous wording

Wealth and asset management revenue increased $16 million and $31 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily driven by increases in personal asset management revenue and brokerage income. The Bancorp’s trust and registered investment advisory businesses had approximately $631 billion and $554 billion in total assets under care as of June 30, 2024 and 2023, respectively, and managed $65 billion and $59 billion in assets for individuals, corporations and not-for-profit organizations as of June 30, 2024 and 2023, respectively.

Current wording

Wealth and asset management revenue increased $18 million and $49 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily driven by increases in personal asset management revenue and brokerage income. The Bancorp’s trust and registered investment advisory businesses had approximately $635 billion and $547 billion in total assets under care as of September 30, 2024 and 2023, respectively, and managed $69 billion and $57 billion in assets for individuals, corporations and not-for-profit organizations as of September 30, 2024 and 2023, respectively.

Previous wording

Service charges on deposits increased $12 million and $25 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to increases in service charges on commercial deposits. Service charges on commercial deposits were $118 million and $230 million for the three and six months ended June 30, 2024, respectively, increasing $13 million and $25 million from the same periods in the prior year, primarily due to increases in revenue from commercial payments activities, which include traditional treasury management and embedded payments. Service charges on consumer deposits were $38 million and $76

Current wording

Service charges on deposits increased $12 million and $36 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily due to increases in service charges on commercial deposits. Service charges on commercial deposits were $120 million and $350 million for the three and nine months ended September 30, 2024, respectively, increasing $11 million and $35 million from the same periods in the prior year, primarily due to increases in revenue from commercial payments activities, which include traditional treasury management and embedded payments. Service charges on consumer

Previous wording

Commercial banking revenue decreased $2 million and $19 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily driven by decreases in revenue from commercial customer derivatives and loan syndication fees, partially offset by an increase in corporate bond fees. The decrease for the three months ended June 30, 2024 was also partially offset by an increase in merger and acquisition fees.

Current wording

Commercial banking revenue increased $9 million and decreased $10 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023. The increase for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily driven by an increase in corporate bond fees, partially offset by a decrease in foreign exchange fees. The decrease for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily driven by decreases in revenue from commercial customer derivatives, foreign exchange fees and loan syndication revenue, partially offset by an increase in corporate bond fees.

Previous wording

Card and processing revenue increased $2 million and $4 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to an increase in electronic funds transfer income. The increase for the six months ended June 30, 2024 also included an increase in credit and debit card interchange, partially offset by increased reward costs.

Current wording

Card and processing revenue increased $2 million and $6 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily due to increases in electronic funds transfer income. The increase for the nine months ended September 30, 2024 also included an increase in credit and debit card interchange, partially offset by increased reward costs.

Previous wording

Origination fees and gains on loan sales decreased $4 million and $8 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily driven by lower volumes of residential mortgage loan originations. Residential mortgage loan originations decreased to $1.6 billion and $2.7 billion for the three and six months ended June 30, 2024, respectively, from $1.7 billion and $3.1 billion for the three and six months ended June 30, 2023, respectively, primarily due to the impact of higher market interest rates on originations.

Current wording

Origination fees and gains on loan sales decreased $1 million and $9 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily driven by the impact of gains recognized during the three and nine months ended September 30, 2023 from sales of forbearance loans that were repurchased from GNMA, partially offset by the impacts of mark-to-market adjustments recognized on held for investment loans measured at fair value. Residential mortgage loan originations increased to $1.9 billion from $1.5 billion for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to the impact of lower market interest rates on originations. Residential mortgage loan originations were $4.6 billion for both the nine months ended September 30, 2024 and 2023.

Previous wording

The Bancorp recognized losses of $30 million and $22 million for the three and six months ended June 30, 2024, respectively, in mortgage banking net revenue for valuation adjustments on the MSR portfolio, compared to gains of $13 million and losses of $40 million for the same periods in the prior year. The valuation adjustments on the MSR portfolio included increases of $10 million and $51 million for the three and six months ended June 30, 2024, respectively, and increases of $53 million and $34 million for the three and six months ended June 30, 2023, respectively, due to changes in market rates and other inputs in the valuation model, including future prepayment speeds and OAS

Current wording

The Bancorp recognized losses of $90 million and $112 million for the three and nine months ended September 30, 2024, respectively, in mortgage banking net revenue for valuation adjustments on the MSR portfolio, compared to gains of $34 million and losses of $6 million for the same periods in the prior year. The valuation adjustments on the MSR portfolio included a decrease of $49 million and an increase of $1 million for the three and nine months ended September 30, 2024, respectively, and increases of $73 million and $107 million for the three and nine months ended September 30, 2023, respectively, due to changes in market rates and other inputs in the valuation model, including future prepayment speeds and OAS assumptions. Mortgage rates decreased during the three and nine months ended September 30, 2024, which caused an increase in prepayment speeds. The fair value of the MSR portfolio decreased $41 million and $113 million for the three and nine months ended September 30, 2024, respectively, and decreased $39 million and $113 million for the three and nine months ended September 30, 2023, respectively, as a result of contractual principal payments and actual prepayment activity.

Previous wording

Further detail on the valuation of MSRs can be found in Note 12 of the Notes to Condensed Consolidated Financial Statements. The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the valuation of the MSR portfolio. Refer to Note 13 of the Notes to Condensed Consolidated Financial Statements for more information on the free-standing derivatives used to economically hedge the MSR portfolio. In addition to the derivative positions used to economically hedge the MSR portfolio, the Bancorp acquires various securities as a component of its non-qualifying hedging strategy. Net gains and losses on these securities were immaterial for both the three and six months ended June 30, 2024 and 2023.

Current wording

Further detail on the valuation of MSRs can be found in Note 13 of the Notes to Condensed Consolidated Financial Statements. The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the valuation of the MSR portfolio. Refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for more information on the free-standing derivatives used to economically hedge the MSR portfolio. In addition to the derivative positions used to economically hedge the MSR portfolio, the Bancorp acquires various securities as a component of its non-qualifying hedging strategy. Net gains and losses on these securities were immaterial for both the three and nine months ended September 30, 2024 and 2023.

Previous wording

The Bancorp’s total residential mortgage loans serviced as of June 30, 2024 and 2023 were $113.7 billion and $119.7 billion, respectively, with $97.3 billion and $102.8 billion, respectively, of residential mortgage loans serviced for others.

Current wording

The Bancorp’s total residential mortgage loans serviced as of September 30, 2024 and 2023 were $112.4 billion and $118.5 billion, respectively, with $95.8 billion and $101.9 billion, respectively, of residential mortgage loans serviced for others.

Previous wording

Leasing business revenue decreased $9 million and $27 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily driven by decreases in operating lease income. The decrease for the six months ended June 30, 2024 also included a decrease in lease remarketing fees.

Current wording

Leasing business revenue decreased $15 million and $42 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily driven by decreases in operating lease income, lease remarketing fees and lease syndication revenue.

Previous wording

Other noninterest income decreased $37 million and $9 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to decreases in equity method investment income, partially offset by decreases in the loss on the swap associated with the sale of Visa, Inc. Class B Shares.

Current wording

Other noninterest income decreased $40 million and $49 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023 primarily due to increases in the loss on the swap associated with the sale of Visa, Inc. Class B Shares. The decrease for the nine months ended September 30, 2024 also included a decrease in equity method investment income.

Previous wording

Equity method investment income decreased $37 million and $36 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023 primarily due to a gain on the partial disposition of an equity method investment during the second quarter of 2023. The Bancorp recognized negative valuation adjustments of $23 million and $40 million related to the Visa total return swap during the three and six months ended June 30, 2024, respectively, compared to negative valuation adjustments of $30 million and $61 million during the three and six months ended June 30, 2023, respectively. For additional information on the valuation of the swap associated with the sale of Visa, Inc. Class B Shares, refer to Note 22 of the Notes to Condensed Consolidated Financial Statements.

Current wording

The Bancorp recognized negative valuation adjustments of $47 million and $87 million related to the Visa total return swap during the three and nine months ended September 30, 2024, respectively, compared to negative valuation adjustments of $10 million and $72 million during the three and nine months ended September 30, 2023, respectively. For additional information on the valuation of the swap associated with the sale of Visa, Inc. Class B Shares, refer to Note 23 of the Notes to Condensed Consolidated Financial Statements. Equity method investment income decreased $35 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to a gain on the partial disposition of an equity method investment during the second quarter of 2023.

Previous wording

Net securities gains were $3 million and $13 million for the three and six months ended June 30, 2024, respectively, compared to $7 million and $11 million for the three and six months ended June 30, 2023, respectively. For more information, refer to Note 4 of the Notes to Condensed Consolidated Financial Statements.

Current wording

Net securities gains were $10 million and $23 million for the three and nine months ended September 30, 2024, respectively, compared to losses of $7 million and gains of $3 million for the three and nine months ended September 30, 2023, respectively. For more information, refer to Note 4 of the Notes to Condensed Consolidated Financial Statements.

Previous wording

Compensation and benefits expense increased $6 million and $2 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily driven by increases in performance-based compensation, partially offset by decreases in severance expense. Full-time equivalent employees totaled 18,607 at June 30, 2024 compared to 19,225 at June 30, 2023.

Current wording

Compensation and benefits expense increased $61 million and $63 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily driven by increases in performance-based compensation and employee benefits expense. Full-time equivalent employees totaled 18,579 at September 30, 2024 compared to 18,804 at September 30, 2023.

Previous wording

Leasing business expense decreased $9 million and $17 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily driven by decreases in depreciation expense associated with operating lease equipment.

Current wording

Leasing business expense decreased $8 million and $25 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily driven by decreases in depreciation expense associated with operating lease equipment.

Previous wording

Other noninterest expense included the impacts of FDIC insurance and other taxes which increased $5 million and $37 million for the three and six months ended June 30, 2024, respectively, compared to the same periods in the prior year primarily due to the incremental expenses associated with the Bancorp’s updated estimate of its allocated share of the FDIC’s special assessment, as further discussed in the Overview section of MD&A.

Current wording

Other noninterest expense included the impacts of FDIC insurance and other taxes, which increased $33 million for the nine months ended September 30, 2024 compared to the same period in the prior year primarily due to the incremental expenses associated with the Bancorp’s updated estimate of its allocated share of the FDIC’s special assessment, as further discussed in the Overview section of MD&A.

Previous wording

Applicable income tax expense for all periods presented includes the benefits from tax-exempt income, tax-advantaged investments and tax credits (and other related tax benefits), partially offset by the effect of proportional amortization of qualifying investments and certain nondeductible expenses. 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 and the Qualified Zone Academy Bond program established under Section 1397E of the IRC.

Current wording

Applicable income tax expense for all periods presented includes the benefits from tax-exempt income, tax-advantaged investments and tax credits (and other related tax benefits), partially offset by the effect of proportional amortization of qualifying investments and certain nondeductible expenses. 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.