10-KPeriod: FY2018

FIFTH THIRD BANCORP Annual Report, Year Ended Dec 31, 2018

Filed March 1, 2019For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) presented a solid financial performance in its 2018 10-K filing, reflecting an increase in net income to $2.19 billion, or $3.06 per diluted share, up from $2.18 billion in 2017. The bank experienced growth in net interest income, driven by higher yields on loans and securities, aided by Federal Reserve rate hikes, and improved net interest margin. Noninterest income saw a decrease primarily due to a significant gain on the sale of Worldpay, Inc. shares in the prior year, although other fee income segments showed positive performance. The bank managed its balance sheet effectively, with an increase in total assets to $146.1 billion and a focus on core deposit growth. Credit quality remained a strong point, with a decrease in nonperforming assets as a percentage of total loans and leases. The Bancorp also demonstrated robust capital ratios, exceeding regulatory requirements and actively returning capital to shareholders through share repurchases and dividends, highlighting a commitment to shareholder value while navigating a dynamic regulatory and economic environment.

Financial Highlights

42 data points
Beta

Revenue

$549.00M

Net Income

$2.19B

399.5% Net Margin

EPS (Diluted)

$3.06

Total Assets

$146.07B

Cash & Equivalents

$2.68B

Free Cash Flow

$2.66B

Financial Statements
Beta
Revenue$549.00M
Interest Expense$1.04B
Net Income$2.19B
EPS (Basic)$3.11
EPS (Diluted)$3.06
Shares Outstanding (Basic)673.35M
Shares Outstanding (Diluted)685.49M

Key Highlights

  • 1Net income available to common shareholders increased to $2.12 billion in 2018, up from $2.11 billion in 2017, with diluted EPS at $3.06 compared to $2.81 in the prior year.
  • 2Net interest income on a FTE basis increased to $4.16 billion in 2018, up from $3.82 billion in 2017, reflecting higher yields and increased average volumes.
  • 3Total assets grew to $146.1 billion at December 31, 2018, up from $142.1 billion at December 31, 2017, supported by deposit growth and strategic asset management.
  • 4Nonperforming portfolio assets as a percentage of portfolio loans and leases and OREO decreased to 0.41% at December 31, 2018, down from 0.53% at December 31, 2017, indicating improved credit quality.
  • 5Regulatory capital ratios remained strong, with CET1 capital at 10.24% and Tier I leverage at 9.72% at December 31, 2018, comfortably exceeding minimum requirements.
  • 6The Bancorp repurchased approximately 15.1 million shares of its common stock for $405 million during the fourth quarter of 2018, demonstrating a commitment to shareholder returns.
  • 7The company announced plans to close 100-125 branches in mature markets and open a similar number in higher-growth markets as part of its 2018 Branch Optimization Plan.

Frequently Asked Questions

Fifth Third Bancorp reported a net income of $2.19 billion, or $3.06 per diluted share, for the year ended December 31, 2018, representing a slight increase from $2.18 billion, or $2.81 per diluted share, in 2017. The bank saw growth in net interest income, benefiting from rising interest rates and increased average loan volumes, while credit quality metrics remained strong with a reduction in nonperforming assets.

Noninterest income decreased by $434 million in 2018 compared to 2017, primarily due to a significant gain on the sale of Worldpay, Inc. shares recognized in the prior year. However, the bank saw increases in corporate banking revenue, wealth and asset management revenue, and card and processing revenue, partially offsetting the decline.

Fifth Third Bancorp maintained strong capital ratios in 2018, with its Common Equity Tier 1 (CET1) capital ratio at 10.24% and Tier 1 leverage ratio at 9.72%, both exceeding regulatory well-capitalized levels. The Bancorp is committed to returning capital to shareholders through share repurchases and dividends, with significant share repurchases conducted in 2018 and a consistent dividend policy.

Fifth Third Bancorp is executing its 2018 Branch Optimization Plan, which involves closing approximately 100-125 branches in more mature markets and opening a similar number of new branches in higher-growth markets. This strategy aims to adapt to changing customer behavior and optimize the profitability and growth potential of its retail network.