Q - FIFTH THIRD BANCORP

Previous 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.

Current wording

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. At June 30, 2025, the Bancorp had $210 billion in assets and operated 1,089 full-service banking centers and 2,170 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 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.

Current wording

The Bancorp’s revenues are dependent on both net interest income and noninterest income. For both the three and six months ended June 30, 2025, 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. 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, 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.

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, marketing expense, loan and lease expense, card and processing expense and other noninterest expense.

Previous 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.

Current wording

During the first quarter of 2025, the Bancorp entered into and settled an accelerated share repurchase transaction in the amount of $225 million.

Previous 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%.

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, to, but excluding, the maturity date, the senior notes will bear interest at a rate of compounded SOFR plus 0.81%.

Previous wording

The Bancorp, as a banking institution, utilizes various key indicators of financial condition and operating results in managing and monitoring the performance of the business. In addition to traditional financial metrics, such as revenue and expense trends, the Bancorp monitors other financial measures that assist in evaluating growth trends, capital strength and operational efficiencies. The Bancorp analyzes these key performance indicators against its past performance, its forecasted performance and with the performance of its peer banking institutions. These indicators may change from time to time as the operating environment and businesses change.

Current wording

The Bancorp, as a banking institution, utilizes various key indicators of financial condition and operating results in managing and monitoring the performance of the business. In addition to traditional financial metrics, such as revenue and expense trends, the Bancorp monitors other financial measures that assist in evaluating growth trends, capital and liquidity strength and operational efficiencies. The Bancorp analyzes these key performance indicators against its past performance, its forecasted performance and with the performance of its peer banking institutions. These indicators may change from time to time as the operating environment and businesses change.

Previous 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.

Current wording

(a)Amounts presented on an FTE basis. The FTE adjustments were $5 and $6 for the three months ended June 30, 2025 and 2024, respectively, and $10 and $12 for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

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 wording

Net income available to common shareholders for the second quarter of 2025 was $591 million, or $0.88 per diluted share, compared to $561 million, or $0.81 per diluted share, for the second quarter of 2024. Preferred stock dividends were $37 million and $40 million for the second quarter of 2025 and 2024, respectively. Net income available to common shareholders for the six months ended June 30, 2025 was $1.1 billion, or $1.58 per diluted share, compared to $1.0 billion, or $1.51 per diluted share, for the six months ended June 30, 2024. Preferred stock dividends were $73 million and $81 million for the six months ended June 30, 2025 and 2024, respectively.

Previous 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. 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 wording

Net interest income on an FTE basis (non-GAAP) was $1.5 billion and $2.9 billion for the three and six months ended June 30, 2025, respectively, increasing $107 million and $159 million compared to the same periods in the prior year. Net interest income for the three and six months ended June 30, 2025 was positively impacted by lower rates paid on average interest-bearing liabilities, higher average balances of loans and leases and increases in yields on average consumer loans and leases. These positive impacts were partially offset by decreases in the average balances of and yields on other short-term investments as well as lower yields on average commercial loans and leases. Net interest margin on an FTE basis (non-GAAP) was 3.12% and 3.08% for the three and six months ended June 30, 2025, respectively, compared to 2.88% and 2.87% for the comparable periods in the prior year.

Previous 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.

Current wording

The provision for credit losses was $173 million and $347 million for the three and six months ended June 30, 2025, respectively, compared to $97 million and $191 million during the same periods in the prior year. Provision expense for the three and six months ended June 30, 2025 was affected by factors that caused increases in the ACL from both March 31, 2025 and December 31, 2024, including deterioration in the economic forecasts used to calculate the ACL and higher period-end loan and lease balances. The increase in the ACL from December 31, 2024 was also driven by an increase in specific reserves on individually evaluated commercial and industrial loans. Net losses charged-off as a percent of average portfolio loans and leases were 0.45% and 0.49% for the three months ended June 30, 2025 and 2024, respectively, and 0.45% and 0.44% for the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO increased to 0.72% 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

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 wording

wealth and asset management revenue, consumer banking revenue, mortgage banking net revenue and other noninterest income, partially offset by decreases in capital markets fees, commercial banking revenue and net securities gains.

Previous wording

•Tier 1 risk-based capital ratio: 11.71%;

Current wording

•Tier 1 risk-based capital ratio: 11.85%;

Previous wording

•Total risk-based capital ratio: 13.63%;

Current wording

•Total risk-based capital ratio: 13.77%;

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, 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.

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 six months ended June 30, 2025.

Previous 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.

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 six months ended June 30, 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 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.

Current wording

Net interest income on an FTE basis (non-GAAP) was $1.5 billion and $2.9 billion for the three and six months ended June 30, 2025, respectively, increasing $107 million and $159 million compared to the same periods in the prior year. Net interest income for the three and six months ended June 30, 2025 was positively impacted by lower rates paid on average interest-bearing liabilities, higher average balances of loans and leases and increases in yields on average consumer loans and leases. These positive impacts were partially offset by decreases in the average balances of and yields on other short-term investments as well as lower yields on average commercial loans and leases.

Previous 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.

Current wording

Net interest rate spread on an FTE basis (non-GAAP) was 2.40% and 2.36% for the three and six months ended June 30, 2025, respectively, compared to 2.04% for the same periods in the prior year. Rates paid on average interest-bearing liabilities decreased 61 bps and 58 bps, partially offset by decreases in yields on average interest-earning assets of 25 bps and 26 bps for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year.

Previous 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.

Current wording

Net interest margin on an FTE basis (non-GAAP) was 3.12% and 3.08% for the three and six months ended June 30, 2025, respectively, compared to 2.88% and 2.87% for the same periods in the prior year. Net interest margin for the three and six months ended June 30, 2025 was positively impacted by the previously mentioned increases in net interest rate spread and decreases in interest-earning assets, which included decreases in average other short-term investments partially offset by increases in average loans and leases. The increase for the three months ended June 30, 2025 also included a $14 million benefit associated with the payoff of a partially charged-off commercial loan previously classified as nonaccrual. Net interest margin results are expected to remain stable or modestly increase over the next several quarters driven by loan growth, fixed-rate asset repricing and continued liability cost management, assuming 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 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.

Current wording

Interest income on an FTE basis (non-GAAP) from loans and leases increased $9 million during the three months ended June 30, 2025 compared to the same period in the prior year primarily driven by an increase in the average balances of loans and leases and higher yields on average consumer loans due to fixed-rate asset repricing and the previously mentioned benefit from the payoff of a partially charged-off commercial loan previously classified as nonaccrual, partially offset by a decrease in yields on average commercial loans and leases associated with lower market rates. Interest income on an FTE basis (non-GAAP) from loans and leases decreased $36 million during the six months ended June 30, 2025 compared to the same period in the prior year 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 other short-term investments decreased $146 million and $273 million during the three and six months ended June 30, 2025, respectively,

Previous 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.

Current wording

Interest expense on average core deposits decreased $187 million and $351 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to decreases in the cost of average interest-bearing core deposits to 236 bps and 237 bps for the three and six months ended June 30, 2025, respectively, from 295 bps and 293 bps for the three and six months ended June 30, 2024, respectively. Refer to the Deposits subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s deposits.

Previous 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.

Current wording

Interest expense on average wholesale funding decreased $57 million and $121 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024 primarily due to decreases in rates paid on average wholesale funding and decreases in the average balances of CDs over $250,000, partially offset by increases 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 both the three and six months ended June 30, 2025, average wholesale funding represented 16% of average interest-bearing liabilities compared to 17% for both the three and six months ended June 30, 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

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.

Current wording

The provision for credit losses was $173 million and $347 million for the three and six months ended June 30, 2025, respectively, compared to $97 million and $191 million during the same periods in the prior year. Provision expense for the three and six months ended June 30, 2025 was affected by factors that caused increases in the ACL from both March 31, 2025 and December 31, 2024, including deterioration in the economic forecasts used to calculate the ACL and higher period-end loan and lease balances. The increase in the ACL from December 31, 2024 was also driven by an increase in specific reserves on individually evaluated commercial and industrial loans.

Previous 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.

Current wording

The ALLL increased $60 million from December 31, 2024 to $2.4 billion at June 30, 2025. At June 30, 2025, the ALLL as a percent of portfolio loans and leases increased to 1.97%, compared to 1.96% at December 31, 2024. The reserve for unfunded commitments increased $12 million from December 31, 2024 to $146 million at June 30, 2025. At June 30, 2025, the ACL as a percent of portfolio loans and leases increased to 2.09%, compared to 2.08% at December 31, 2024.

Previous 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.

Current wording

Wealth and asset management revenue increased $7 million and $18 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024 primarily driven by increases in personal asset management revenue and brokerage income. The Bancorp’s trust and registered investment advisory businesses had approximately $657 billion and $631 billion in total assets under care as of June 30, 2025 and 2024, respectively, and managed $73 billion and $65 billion in assets for individuals, corporations and not-for-profit organizations as of June 30, 2025 and 2024, respectively.

Previous wording

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 wording

Commercial payments revenue increased $7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily driven by an increase in treasury management fees due to higher average revenue per existing customer, which included the benefit of cross sales to existing customers, and new client acquisition partially offset by a decrease in credit card interchange due to decreased customer spend.

Previous wording

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 wording

Capital markets fees decreased $11 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily driven by decreases in merger and acquisition fees and revenue from commercial customer foreign exchange derivatives.

Previous 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.

Current wording

Commercial banking revenue decreased $11 million and $14 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024 primarily driven by decreases in operating lease income and business lending fees.

Previous wording

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 wording

Mortgage banking net revenue increased $6 million and $9 million for the three and six months ended June 30, 2025, respectively, compared to the three and six months ended June 30, 2024.

Previous wording

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 wording

Origination fees and gains on loan sales increased $1 million for both the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 primarily driven by higher volumes of residential mortgage loan originations. Residential mortgage loan originations increased to $2.0 billion and $3.4 billion for the three and six months ended June 30, 2025, respectively, from $1.6 billion and $2.7 billion for the three and six months ended June 30, 2024, respectively, primarily due to increases in the average loan size originated and increases in correspondent channel volume.

Previous 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.

Current wording

Net mortgage servicing revenue increased $5 million and $8 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year as decreases in gross mortgage servicing fees of $5 million and $8 million for the three and six months ended June 30, 2025, respectively, were more than offset by decreases in negative valuation adjustments of $10 million and $16 million on the MSR and MSR related hedges for the three and six months ended June 30, 2025, respectively. The valuation adjustments on the MSR portfolio included decreases of $8 million and $25 million for the three and six months ended June 30, 2025, respectively, and increases of $10 million and $51 million for the three and six months ended June 30, 2024, respectively, due to changes in market rates and other inputs in the valuation model, including future prepayment speeds and OAS assumptions. The fair value of the MSR portfolio decreased $41 million and $75 million for the three and six months ended June 30, 2025, respectively, and decreased $40 million and $73 million for the three and six months ended June 30, 2024, 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 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.

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 and six months ended June 30, 2025 and 2024.

Previous 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.

Current wording

The Bancorp’s total residential mortgage loans serviced as of June 30, 2025 and 2024 were $108.0 billion and $113.7 billion, respectively, with $91.2 billion and $97.3 billion, respectively, of residential mortgage loans serviced for others.

Previous wording

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 wording

Compensation and benefits expense increased $42 million and $38 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily driven by increases in performance-based compensation, base compensation and severance expense. The increase for the three months ended June 30, 2025 also included an increase in non-qualified deferred compensation expense. Full-time equivalent employees totaled 18,690 at June 30, 2025 compared to 18,607 at June 30, 2024.

Previous 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.

Current wording

Technology and communications expense increased $12 million and $19 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily driven by increased investments in strategic initiatives and technology modernization.

Previous wording

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 wording

Other noninterest expense decreased $27 million and $69 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily driven by decreases in FDIC insurance and other taxes, losses and adjustments and leasing business expense.

Previous 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.

Current wording

FDIC insurance and other taxes decreased $12 million and $43 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to the expense recognized in the first half of 2024 associated with the Bancorp’s updated estimate of its allocated share of the FDIC’s special assessment. Losses and adjustments decreased $10 million and $16 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily due to increased expense levels in the prior year related to remediation items. Leasing business expense decreased $4 million and $12 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year primarily driven by a decrease in depreciation expense associated with operating lease equipment.

Previous 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.

Current wording

The effective tax rate increased to 22.2% for the three months ended June 30, 2025 compared to 21.3% for the same period in the prior year primarily related to an increase in state tax expense. The effective tax rate increased to 21.8% for the six months ended June 30, 2025 compared to 21.2% for the same period in the prior year primarily related to an increase in state tax expense partially 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, increased $2.2 billion, or 2%, from December 31, 2024 driven by increases in both commercial loans and leases and consumer loans.

Current wording

Total loans and leases, including loans and leases held for sale, increased $2.6 billion, or 2%, from December 31, 2024 driven by increases in both consumer loans and commercial loans and leases.

Previous 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.

Current wording

Commercial loans and leases increased $867 million, or 1%, from December 31, 2024 primarily due to an increase in commercial and industrial loans. Commercial and industrial loans increased $1.1 billion, or 2%, from December 31, 2024 primarily as a result of loan originations exceeding payoffs.

Previous wording

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 wording

Consumer loans increased $1.7 billion, or 4%, from December 31, 2024 primarily due to increases in indirect secured consumer loans and home equity. Indirect secured consumer loans increased $1.3 billion, or 8%, from December 31, 2024 primarily driven by higher loan production. Home equity increased $297 million, or 7%, from December 31, 2024 as loan originations and new advances exceeded payoffs, driven by increased marketing efforts.