FIFTH THIRD BANCORP
For the period ended Mar 31, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
FITB$53.04-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0000035527-24-000249
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)OverviewNon-GAAP Financial MeasuresRecent Accounting StandardsCritical Accounting PoliciesStatements of Income AnalysisBalance Sheet AnalysisBusiness Segment ReviewRisk Management—OverviewCredit Risk ManagementInterest Rate and Price Risk ManagementLiquidity Risk ManagementCapital ManagementCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0000035527-25-000137
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)OverviewNon-GAAP Financial MeasuresRecent Accounting StandardsCritical Accounting PoliciesStatements of Income AnalysisBalance Sheet AnalysisBusiness Segment ReviewRisk Management—OverviewCredit Risk ManagementInterest Rate and Price Risk ManagementLiquidity Risk ManagementCapital ManagementThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 525 previous paragraphs and 482 current paragraphs.
276 unchanged; 153 reworded; 49 added; 81 removed; 15 previous and 4 current paragraphs rearranged.
Tables are not compared: 61 previous and 59 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
(b)This is a non-GAAP measure. For further information, refer to the Non-GAAP Financial Measures section of MD&A.
Current report
Net income available to common shareholders for the first quarter of 2025 was $478 million, or $0.71 per diluted share, compared to $480 million, or $0.70 per diluted share, for the first quarter of 2024. Preferred stock dividends were $37 million and $40 million for the first quarter of 2025 and 2024, respectively.
Current report
Net interest income on an FTE basis (non-GAAP) was $1.4 billion for the three months ended March 31, 2025, increasing $52 million compared to the same period in the prior year. Net interest income for the three months ended March 31, 2025 was positively impacted by lower rates paid on average interest-bearing liabilities and higher average balances of loans and leases. These positive impacts were partially offset by lower yields on average commercial loans and leases as well as a decrease in the average balances of other short-term investments. Net interest margin on an FTE basis (non-GAAP) was 3.03% for the three months ended March 31, 2025 compared to 2.86% for the same period in the prior year.
Current report
Noninterest income decreased $16 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to a $19 million decrease in net securities gains/losses which was driven by the mark-to-market impacts of non-qualified deferred compensation plans that are offset in expenses. Excluding the impact of securities gains/losses, noninterest income was relatively stable as growth in wealth and asset management revenue and commercial payments revenue was mostly offset by decreases in capital markets fees, commercial banking revenue and other noninterest income.
Current report
Noninterest expense decreased $38 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to the $33 million charge related to the FDIC special assessment recognized in the first quarter of 2024 not recurring in 2025, partially offset by increases in technology and communications expense and equipment expense.
Current report
(c)This is a non-GAAP measure. For further information, refer to the Non-GAAP Financial Measures section of MD&A.
Current report
(d)Effective January 1, 2025, foreign office deposits are included in interest checking. Prior periods have been adjusted to conform to current period presentation.
Current report
Noninterest income decreased $16 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
Commercial payments revenue increased $8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by an increase in treasury management fees due to new client acquisition and higher average revenue per existing customer.
Current report
Capital markets fees decreased $7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by decreases in loan syndication revenue and merger and acquisition fees, partially offset by an increase in revenue from commercial customer derivatives.
Current report
Mortgage banking net revenue increased $3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
Origination fees and gains on loan sales were flat for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Residential mortgage loan originations increased to $1.4 billion for the three months ended March 31, 2025 from $1.1 billion for the three months ended March 31, 2024 primarily due to an increase in the average loan size originated and an increase in correspondent channel volume.
Current report
Other noninterest income decreased $9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in private equity investment income, which was driven by valuation adjustments recognized on certain private equity investments during the prior year.
Current report
Net securities losses were $9 million for the three months ended March 31, 2025 compared to gains of $10 million for the three months ended March 31, 2024. For more information, refer to Note 4 of the Notes to Condensed Consolidated Financial Statements.
Current report
Noninterest expense decreased $38 million for the three months ended March 31, 2025 compared to the same period in the prior year.
Current report
Compensation and benefits expense decreased $3 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by a decrease in non-qualified deferred compensation expense, partially offset by increases in base compensation and performance-based compensation. Full-time equivalent employees totaled 18,786 at March 31, 2025 compared to 18,657 at March 31, 2024.
Current report
Equipment expense increased $5 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to investments in retail and treasury management equipment as well as the expansion of the Southeast branch network.
Current report
Other noninterest expense decreased $44 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to decreases in FDIC insurance and other taxes and leasing business expense.
Current report
Consumer loans increased $427 million, or 1%, from December 31, 2024 primarily due to an increase in indirect secured consumer loans. Indirect secured consumer loans increased $491 million, or 3%, from December 31, 2024 primarily driven by higher loan production.
Current report
Average commercial loans and leases increased $1.9 billion, or 3%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to increases in average commercial mortgage loans and average commercial leases. Average commercial mortgage loans increased $1.0 billion, or 9%, for the three months ended March 31, 2025 compared to the same period in the prior year and included the impact of commercial construction loans transitioning to commercial mortgage loans and increased originations. Average commercial leases increased $567 million, or 22%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by an increase in lease originations as a result of a shift in business strategy in the second half of 2024.
Current report
Average consumer loans increased $2.2 billion, or 5%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to increases in average indirect secured consumer loans, average residential mortgage loans, average solar energy installation loans and average home equity, partially offset by a decrease in average other consumer loans. Average indirect secured consumer loans increased $1.3 billion, or 9%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by higher loan production during the second half of 2024 that has continued into 2025 following a planned reduction in balances in the second half of 2023. Average residential mortgage loans increased $712 million, or 4%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by an increase in held-for-investment loan originations and loan purchase transactions completed in the second half of 2024. Average solar energy installation loans increased $427 million, or 11%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to loan originations exceeding payoffs. Average home equity loans increased $289 million, or 7%, for the three months ended March 31, 2025 compared to the same period in the prior year as loan originations and new advances exceeded payoffs, driven by increased marketing efforts. Average other consumer loans decreased $392 million, or 14%, for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by paydowns of point-of-sale loans, including 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.
Current report
(b)Effective January 1, 2025, foreign office deposits are included in interest checking. Prior periods have been adjusted to conform to current period presentation.
Current report
(b)Effective January 1, 2025, foreign office deposits are included in interest checking. Prior periods have been adjusted to conform to current period presentation.
Current report
For more information about the Bancorp’s FTP process and other allocation methodologies, refer to the Business Segment Review section included in the MD&A of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024.
Current report
In January 2025, the Bancorp realigned its reporting structure and moved certain business banking customer relationships and relationship management personnel to the Consumer and Small Business Banking segment from the Commercial Banking segment to improve alignment of customer acquisition and servicing resources with customer product and service demand. In conjunction with this change, the loans, deposits and operating results associated with the affected business banking customer relationships were reclassified from the Commercial Banking segment to the Consumer and Small Business Banking segment effective January 1, 2025. This change was applied retrospectively to all prior periods presented.
Current report
The following table summarizes income (loss) before income taxes on an FTE basis by segment:
Current report
(a)General Corporate and Other is not a reportable segment and is presented for reconciliation purposes.
Current report
Income before income taxes on an FTE basis was $262 million for the three months ended March 31, 2025 compared to $427 million for the same period in the prior year. The decrease was driven by a decrease in net interest income on an FTE basis, a decrease in noninterest income, an increase in noninterest expense and an increase in provision for credit losses.
Current report
Noninterest expense increased $21 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by an increase in other noninterest expense, partially offset by a decrease in compensation and benefits expense. Other noninterest expense increased $28 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily
Current report
Average commercial loans and leases increased $917 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to increases in average commercial mortgage loans and average commercial leases, partially offset by a decrease in average commercial and industrial loans. Average commercial mortgage loans increased for the three months ended March 31, 2025 compared to the same period in the prior year and included the impact of commercial construction loans transitioning to commercial mortgage loans and increased originations. Average commercial leases increased for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by an increase in lease originations as a result of a shift in business strategy in the second half of 2024. Average commercial and industrial loans decreased for the three months ended March 31, 2025 compared to the same period in the prior year primarily as a result of lower demand throughout 2024.
Current report
Average deposits decreased $1.3 billion for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to a decrease in average demand deposits, partially offset by increases in average interest checking deposits and average money market deposits. Average demand deposits decreased $1.7 billion for the three months ended March 31, 2025 compared to the same period in the prior year primarily as a result of lower average balances per customer account. Average interest checking deposits increased $338 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by increases in balances associated with embedded payments products. Average money market deposits increased $186 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by balance growth resulting from expanded market presence in the Southeast U.S.
Current report
Income before income taxes was $522 million for the three months ended March 31, 2025 compared to $685 million for the same period in the prior year. The decrease was primarily driven by a decrease in net interest income, partially offset by an increase in noninterest income.
Current report
Noninterest income increased $14 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by an increase of $7 million in wealth and asset management revenue primarily due to increases in brokerage income and personal asset management revenue.
Current report
$858 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by loan originations exceeding payoffs.
Current report
Average deposits increased $1.1 billion for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by increases in average money market deposits and average demand deposits, partially offset by a decrease in average savings deposits. Average money market deposits increased $1.7 billion for the three months ended March 31, 2025 compared to the same period in the prior year primarily as a result of higher average balances per customer account due to higher offering rates. Average demand deposits increased $698 million forthe three months ended March 31, 2025 compared to the same period in the prior year primarily as a result of an increase in the number of customer accounts as well as higher average balances per customer account. Average savings deposits decreased $980 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to lower average balances per customer account driven by the impact of consumer preferences for products with higher offering rates.
Current report
Income before income taxes was $52 million for the three months ended March 31, 2025 compared to $58 million for the same period in the prior year. The decrease was primarily driven by a decrease in net interest income, partially offset by an increase in noninterest income.
Current report
Average loans and leases increased $172 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by increases in average other consumer loans, average commercial mortgage loans and average commercial and industrial loans as loan production exceeded payoffs.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Removed paragraphs (81)
Previous report
In response to the bank closures that occurred in the first half of 2023, the FDIC issued a final rule for a special deposit insurance assessment on banking organizations with greater than $5 billion in assets to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors. The Bancorp’s initial estimate of its allocated share of the special assessment under the provisions of the final rule was $224 million, which was recognized in earnings upon issuance of the final rule in November 2023.
Previous report
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 September 30, 2024, the
Previous report
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 report
On July 9, 2024, the Bank and the CFPB agreed to resolve previously outstanding litigation which alleged violations of the Consumer Financial Protection Act, the Truth in Lending Act and Truth in Savings Act. The Bank agreed to the entry of a Stipulated Final Judgment and Order, pursuant to which the Bank, without admitting or denying any of the allegations in the suit except as specified in the order, agreed to pay a civil monetary penalty of $15 million, agreed to maintain existing policies around its consumer sales incentives, agreed to create a compliance plan to ensure its account opening practices comply with law and the order and agreed to provide a redress plan to remediate certain customers with checking, savings, or credit card accounts opened beginning January 1, 2010 and ending December 31, 2016.
Previous report
Concurrently, the Bank also agreed to entry of a Consent Order related to a since-discontinued program in its auto lending business that placed collateral protection insurance on certain automobile loans. Under this Consent Order, without admitting or denying any of the findings of fact or conclusions of law (except to establish jurisdiction), the Bank agreed to pay a $5 million civil monetary penalty related to those issues, maintain existing policy changes related to its auto servicing practices, agreed to create a compliance plan to ensure its compliance with the order and provide a redress plan to remediate certain customers within a redress period beginning July 21, 2011 and ending December 31, 2020.
Previous report
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 report
average interest-earning assets. 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.
Previous report
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 report
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 report
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 average interest-earning assets.
Previous report
Interest expense on average core deposits increased $153 million and $905 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 cost of average interest-bearing core deposits to 297 bps and 295 bps for the three and nine months ended September 30, 2024, respectively, from 265 bps and 219
Previous report
(c)Net interest income (FTE), net interest margin (FTE) and net interest rate spread (FTE) are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.
Previous report
(b)The FTE adjustments included in the above table were $18 for both the nine months ended September 30, 2024 and 2023.
Previous report
(c)Net interest income (FTE), net interest margin (FTE) and net interest rate spread (FTE) are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.
Previous report
Noninterest income decreased $4 million and $20 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023.
Previous report
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 report
deposits were $41 million and $117 million for the three and nine months ended September 30, 2024, respectively, compared to $40 million and $116 million for the same periods in the prior year.
Previous report
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 report
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 report
Mortgage banking net revenue decreased $7 million and $30 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023.
Previous report
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 report
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 report
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 report
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 report
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.
Previous report
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.
Showing the first 40 of 81 passages. Open the source sections for the rest.
Reworded paragraphs (153)
Previous 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.
Current wording
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. At March 31, 2025, the Bancorp had $213 billion in assets and operated 1,084 full-service banking centers and 2,069 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 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.
Current wording
The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the three months ended March 31, 2025, net interest income on an FTE basis and noninterest income provided 68% and 32% of total revenue, respectively. The Bancorp derives the majority of its revenues within the U.S. from customers domiciled in the U.S. 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
Noninterest income is derived from wealth and asset management revenue, service charges on deposits, commercial banking revenue, card and processing revenue, mortgage banking net revenue, leasing business revenue, other noninterest income and net securities gains or losses. Noninterest expense includes compensation and benefits, technology and communications, net occupancy expense, equipment expense, marketing expense, leasing business expense, card and processing expense and other noninterest expense.
Current wording
Noninterest income is derived from wealth and asset management revenue, commercial payments revenue, consumer banking revenue, capital markets fees, commercial banking revenue, mortgage banking net revenue, other noninterest income and net securities gains or losses. Noninterest expense includes compensation and benefits, technology and communications, net occupancy expense, equipment expense, loan and lease expense, marketing expense, card and processing expense and other noninterest expense.
Previous wording
During the three and nine months ended September 30, 2024, the Bancorp entered into and settled accelerated share repurchase transactions totaling $200 million and $325 million, respectively. Refer to Note 17 and Note 25 of the Notes to Condensed Consolidated Financial Statements for additional information on share repurchase activity.
Current wording
During the three months ended March 31, 2025, the Bancorp entered into and settled an accelerated share repurchase transaction in the amount of $225 million. Refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for additional information on share repurchase activity.
Previous wording
On September 6, 2024, the Bancorp issued and sold $750 million of fixed-rate/floating-rate senior notes which will mature on September 6, 2030. The senior notes will bear interest at a rate of 4.895% per annum until September 5, 2029. From September 6, 2029 until maturity, the senior notes will bear interest at a rate of compounded SOFR plus 1.486%.
Current wording
On January 28, 2025, the Bank issued and sold, under its bank note program, $700 million of fixed-rate/floating-rate senior notes due on January 28, 2028. The senior notes will bear interest at a rate of 4.967% per annum to, but excluding, January 28, 2027. From, and including January 28, 2027 until maturity, the senior notes will bear interest at a rate of compounded SOFR plus 0.81%.
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%.
Current wording
On January 28, 2025, the Bank issued and sold, under its bank note program, $300 million of floating-rate senior notes due on January 28, 2028. The senior notes will bear interest at a rate of compounded SOFR plus 0.81%.
Previous 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.
Current wording
(a)Amounts presented on an FTE basis. The FTE adjustments were $5 and $6 for the three months ended March 31, 2025 and 2024, respectively.
Previous 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.
Current wording
The provision for credit losses was $174 million and $94 million for the three months ended March 31, 2025 and 2024, respectively. Provision expense for the three months ended March 31, 2025 was affected by factors which caused an increase in the ACL from December 31, 2024, including higher period-end loan and lease balances and deterioration in the economic forecasts used to calculate the ACL, partially offset by favorable impacts of improvements in the risk profile of the loan and lease portfolio. Net losses charged-off as a percent of average portfolio loans and leases were 0.46% and 0.38% for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO increased to 0.81% compared to 0.71% at December 31, 2024. For further discussion 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
The Bancorp calculated its regulatory capital ratios under the Basel III standardized approach to risk-weighting of assets and pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital as of September 30, 2024. As of September 30, 2024, the Bancorp’s capital ratios, as defined by the U.S. banking agencies, were:
Current wording
The Bancorp calculated its regulatory capital ratios under the Basel III standardized approach to risk-weighting of assets as of March 31, 2025. As of March 31, 2025, the Bancorp’s capital ratios, as defined by the U.S. banking agencies, were:
Previous wording
Note 3 of the Notes to Condensed Consolidated Financial Statements provides a discussion of the significant new accounting standards applicable to the Bancorp and the expected impact of a significant accounting standard issued, but not yet required to be adopted.
Current wording
Note 3 of the Notes to Condensed Consolidated Financial Statements provides a discussion of the significant new accounting standard applicable to the Bancorp and the expected impact of a significant accounting standard issued, but not yet required to be adopted.
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 nine months ended September 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, goodwill, legal contingencies and fair value measurements. 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, 2024. There have been no material changes to the valuation techniques or models during the three months ended March 31, 2025.
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 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.
Current wording
Table 5 presents the components of net interest income, net interest margin and net interest rate spread for the three months ended March 31, 2025 and 2024, 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 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
Current wording
Net interest income on an FTE basis (non-GAAP) was $1.4 billion for the three months ended March 31, 2025, increasing $52 million compared to the same period in the prior year. Net interest income for the three months ended March 31, 2025 was positively impacted by lower rates paid on average interest-bearing liabilities and higher average balances of loans and leases. These positive impacts were partially offset by lower yields on average commercial loans and leases as well as a decrease in the average balances of other short-term investments.
Previous 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.
Current wording
Net interest rate spread on an FTE basis (non-GAAP) was 2.33% for the three months ended March 31, 2025 compared to 2.02% for the same period in the prior year. Rates paid on average interest-bearing liabilities decreased 56 bps, partially offset by a 25 bps decrease in yields on average interest-earning assets for the three months ended March 31, 2025 compared to the same period in the prior year.
Previous 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.
Current wording
Net interest margin on an FTE basis (non-GAAP) was 3.03% for the three months ended March 31, 2025 compared to 2.86% for the comparable period in the prior year. Net interest margin for the three months ended March 31, 2025 was positively impacted by the previously mentioned increase in net interest rate spread and a decrease in interest-earning assets, which included a decrease in average other short-term investments partially offset by an increase in average loans and leases. Net interest margin results are expected to modestly increase over the next several quarters driven by loan growth, fixed-rate asset repricing and continued liability cost management, assuming that the FOMC continues its easing cycle. 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 $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.
Current wording
Interest income on an FTE basis (non-GAAP) from loans and leases decreased $44 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by a decrease in yields on average commercial loans and leases associated with lower market rates, partially offset by an increase in the average balances of loans and leases and higher yields on average consumer loans due to fixed-rate asset repricing. 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 decreased$133 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to decreases in the average balances of and yields on other short-term investments.
Previous 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.
Current wording
Interest expense on average core deposits decreased $165 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in the cost of average interest-bearing core deposits to 239 bps for the three months ended March 31, 2025 from 291 bps for the three months ended March 31, 2024. 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$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.
Current wording
of CDs over $250,000, partially offset by an increase 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. During the three months ended March 31, 2025, average wholesale funding represented 15% of average interest-bearing liabilities compared to 17% for the three months ended March 31, 2024. 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 and $7 for the three months ended September 30, 2024 and 2023, respectively.
Current wording
(b)The FTE adjustments included in the above table were $5 and $6 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
The Bancorp provides, as an expense, an amount for expected credit losses within the loan and lease portfolio and the portfolio of unfunded commitments that is based on factors discussed in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2023. The provision is recorded to bring the ALLL and reserve for unfunded commitments to a level deemed appropriate by the Bancorp to cover losses expected in the portfolios. Actual credit losses on loans and leases are charged against the ALLL. The amount of loans and leases actually removed from the Condensed Consolidated Balance Sheets are referred to as charge-offs. Net charge-offs include current period charge-offs less recoveries on previously charged-off loans and leases.
Current wording
The Bancorp provides, as an expense, an amount for expected credit losses within the loan and lease portfolio and the portfolio of unfunded commitments that is based on factors discussed in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024.
Previous 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.
Current wording
The provision for credit losses was $174 million and $94 million for the three months ended March 31, 2025 and 2024, respectively. Provision expense for the three months ended March 31, 2025 was affected by factors which caused an increase in the ACL from December 31, 2024, including higher period-end loan and lease balances and deterioration in the economic forecasts used to calculate the ACL, partially offset by favorable impacts of improvements in the risk profile of the loan and lease portfolio.
Previous 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.
Current wording
The ALLL increased $32 million from December 31, 2024 to $2.4 billion at March 31, 2025. At March 31, 2025, the ALLL as a percent of portfolio loans and leases decreased to 1.95%, compared to 1.96% at December 31, 2024. The reserve for unfunded commitments increased $6 million from December 31, 2024 to $140 million at March 31, 2025. At March 31, 2025, the ACL as a percent of portfolio loans and leases decreased to 2.07%, compared to 2.08% at December 31, 2024.
Previous 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.
Current wording
Wealth and asset management revenue increased $11 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by increases in personal asset management revenue and brokerage income. The Bancorp’s trust and registered investment advisory businesses had approximately $639 billion and $634 billion in total assets under care as of March 31, 2025 and 2024, respectively, and managed $68 billion and $62 billion in assets for individuals, corporations and not-for-profit organizations as of March 31, 2025 and 2024, respectively.
Previous 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.
Current wording
Commercial banking revenue decreased $5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by a decrease in operating lease income.
Previous wording
The following table presents the components of net valuation adjustments on the MSR portfolio and the impact of the Bancorp’s non-qualifying hedging strategy:
Current wording
The following table presents the components of net valuation adjustments on the MSR portfolio and the impact of the Bancorp’s hedging strategy:
Previous 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.
Current wording
Net mortgage servicing revenue increased $3 million for the three months ended March 31, 2025 compared to the same period in the prior year as the $4 million reduction in gross mortgage servicing fees was more than offset by the $7 million reduction in negative valuation adjustments on the MSR and MSR related hedge. The valuation adjustments on the MSR portfolio included decreases of $16 million and increases of $41 million for the three months ended March 31, 2025 and 2024, 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 months ended March 31, 2025, which caused an increase in prepayment speeds. The fair value of the MSR portfolio decreased $34 million and $33 million as a result of contractual principal payments and actual prepayment activity for the three months ended March 31, 2025 and 2024, respectively.
Previous 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.
Current wording
Further detail on the valuation of MSRs can be found in Note 8 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 9 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 months ended March 31, 2025 and 2024.
Previous 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.
Current wording
The Bancorp’s total residential mortgage loans serviced as of March 31, 2025 and 2024 were $109.4 billion and $115.7 billion, respectively, with $92.8 billion and $99.6 billion, respectively, of residential mortgage loans serviced for others.
Previous wording
Technology and communications expense increased $6 million and $4 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year primarily driven by increased investments in strategic initiatives and technology modernization.
Current wording
Technology and communications expense increased $6 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by increased investments in strategic initiatives and technology modernization.
Previous wording
Marketing expense decreased $9 million and $4 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 advertising costs.
Current wording
Marketing expense decreased $4 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to decreases in advertising costs.
Previous 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.
Current wording
FDIC insurance and other taxes decreased $31 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily due to the expense recognized in the first quarter of 2024 associated with the Bancorp’s updated estimate of its allocated share of the FDIC’s special assessment. Leasing business expense decreased $7 million for the three months ended March 31, 2025 compared to the same period in the prior year primarily driven by a decrease in depreciation expense associated with operating lease equipment.
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 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.
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 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 Research Credit program established under Section 41 of the IRC.
Previous wording
The effective tax rate decreased to 21.3% for the three months ended September 30, 2024 compared to 22.0% for the same period in the prior year primarily related to an increase in tax credits and an increase in excess tax benefits related to share-based compensation. The effective tax rate decreased to 21.3% for the nine months ended September 30, 2024 compared to 22.2% for the same period in the prior year primarily related to the remeasurement of deferred tax assets for changes in certain state tax laws which were enacted during the second quarter of 2024 as well as a decrease in state tax expense associated with the recognition of certain previously unrecognized tax benefits.
Current wording
The effective tax rate increased to 21.2% for the three months ended March 31, 2025 compared to 21.1% for the same period in the prior year primarily related to an increase in state tax expense, largely offset by an increase in excess tax benefits related to share-based compensation.
Previous wording
Total loans and leases, including loans and leases held for sale, decreased $332 million from December 31, 2023 driven by a decrease in commercial loans and leases, partially offset by an increase in consumer loans.
Current wording
Total loans and leases, including loans and leases held for sale, increased $2.2 billion, or 2%, from December 31, 2024 driven by increases in both commercial loans and leases and consumer loans.
Previous wording
Commercial loans and leases decreased $1.6 billion, or 2%, from December 31, 2023 due to a decrease in commercial and industrial loans, partially offset by increases in commercial construction loans, commercial leases and commercial mortgage loans. Commercial and industrial loans decreased $2.4 billion, or 4%, from December 31, 2023 primarily as a result of payoffs exceeding loan originations. Commercial construction loans increased $376 million, or 7%, from December 31, 2023 as draws on existing commitments and loan originations exceeded payoffs. Commercial leases increased $293 million, or 11%, from December 31, 2023 primarily as a result of an increase in lease originations. Commercial mortgage loans increased $152 million, or 1%, from December 31, 2023 as loan originations exceeded payoffs.
Current wording
Commercial loans and leases increased $1.8 billion, or 2%, from December 31, 2024 primarily due to increases in commercial and industrial loans and commercial construction loans. Commercial and industrial loans increased $1.4 billion, or 3%, from December 31, 2024 primarily as a result of loan originations exceeding payoffs as well as increased line utilization. Commercial construction loans increased $335 million, or 6%, from December 31, 2024 as draws on existing commitments and loan originations exceeded payoffs.
Previous wording
Average loans and leases, including average loans and leases held for sale, decreased $4.9 billion, or 4%, for the three months ended September 30, 2024 compared to the same period in the prior year driven by decreases in average commercial loans and leases and average consumer loans.
Current wording
Average loans and leases, including average loans and leases held for sale, increased $4.1 billion, or 3%, for the three months ended March 31, 2025 compared to the same period in the prior year driven by increases in both average consumer loans and average commercial loans and leases.
Previous wording
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 $53.4 billion and $51.9 billion at September 30, 2024 and December 31, 2023, respectively. The taxable available-for-sale debt and other investment securities portfolio had an effective duration of 3.9 at September 30, 2024 compared to 4.8 at December 31, 2023. The taxable held-to-maturity securities portfolio had an effective duration of 5.6 at September 30, 2024.
Current wording
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 $52.6 billion and $52.4 billion at March 31, 2025 and December 31, 2024, respectively. The taxable available-for-sale debt and other securities portfolio had an effective duration of 3.8 at both March 31, 2025 and December 31, 2024. The taxable held-to-maturity securities portfolio had an effective duration of 5.5 at both March 31, 2025 and December 31, 2024.
Previous wording
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 September 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 at both September 30, 2024 and December 31, 2023.
Current wording
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. Debt 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 March 31, 2025, 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 at both March 31, 2025 and December 31, 2024.
Showing the first 40 of 153 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Interest expense on average wholesale funding decreased$64 millionfor the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in rates paid on average wholesale funding and a decrease in the average balances
Current report — wording carried from elsewhere
The Upside scenario assumed that, on an average annual basis, the change in real GDP is 2.5% in 2025, 2.7% in 2026 and 2.2% in 2027. The Upside scenario also assumed an average unemployment rate of 3.5% in 2025, 3.4% in 2026 and 3.6% in 2027. In this scenario, 10-year Treasury yields are fairly stable, reaching a peak of 4.5% in the second quarter of 2025, while credit spreads are consistent with the Baseline scenario, peaking at 2.5% in mid-2026. In the Upside scenario, the forecast for federal funds rate cuts was generally consistent with the Baseline scenario.
Current report — wording carried from elsewhere
The Bancorp also enters into derivative contracts with major financial institutions to economically hedge market risks assumed in interest rate derivative contracts with commercial customers. Generally, these contracts have similar terms in order to protect the Bancorp from market
Current report — wording carried from elsewhere
The Bancorp maintains a strong liquidity profile driven by strong core deposit funding and over $100 billion in readily available liquidity. Refer to the Deposits subsection of the Balance Sheet Analysis section of MD&A for more information regarding the Bancorp’s deposit
Rearranged previous paragraphs (15)
Previous report — wording carried elsewhere
Refer to Note 19 of the Notes to Condensed Consolidated Financial Statements for additional information on these settlements.
Previous report — wording carried elsewhere
(b)These are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.
Previous report — wording carried elsewhere
(a)Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate.
Previous report — wording carried elsewhere
The following table presents the components of other noninterest income:
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
(b)Applicable income tax expense for all periods includes the tax benefit from tax-exempt income, tax-advantaged investments and tax credits partially offset by the effect of certain nondeductible expenses. Refer to the Applicable Income Taxes subsection of the Statements of Income Analysis section of MD&A for additional information.
Previous report — wording carried elsewhere
with fixed-rate lending by transferring this risk to General Corporate and Other through the FTP methodology. As a result, the amount of FTP credits on deposits earned by the business segments generally increases or decreases at a faster pace than the amount of allocated FTP charges on loans and leases.
Previous report — wording carried elsewhere
home equity lines of credit have a balloon structure at maturity. Peak maturity years for the balloon home equity lines of credit are 2025 to 2028 and approximately $638 million of the balances mature before December 31, 2028.
Previous report — wording carried elsewhere
For the commercial portfolio segment, the estimates for probability of default are primarily based on internal ratings assigned to each commercial borrower on a 13-point scale and historical observations of how those ratings migrate to a default over time in the context of macroeconomic conditions. For loans with available credit, the estimate of the expected balance at the time of default considers expected utilization rates, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions. The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions.
Previous report — wording carried elsewhere
For collectively evaluated loans in the consumer and residential mortgage portfolio segments, the Bancorp’s expected credit loss models primarily utilize the borrower’s FICO score and delinquency history in combination with macroeconomic conditions when estimating the probability of default. The estimates for loss severity are primarily based on collateral type and coverage levels and the susceptibility of those characteristics to changes in macroeconomic conditions. The expected balance at the estimated date of default is also especially impactful in the expected credit loss models for portfolio classes which generally have longer terms (such as residential mortgage loans and home equity) and portfolio classes containing a high concentration of loans with revolving privileges (such as home equity). The estimate of the expected balance at the time of default considers expected prepayment and utilization rates where applicable, which are primarily based on macroeconomic conditions and the utilization history of similar borrowers under those economic conditions.
Previous report — wording carried elsewhere
options as well. Refer to the Residential Mortgage Servicing Rights and Price Risk section for the discussion of the use of derivatives to economically hedge this exposure.
Previous report — wording carried elsewhere
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Previous report — wording carried elsewhere
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Previous report — wording carried elsewhere
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Previous report — wording carried elsewhere
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)