10-QPeriod: Q3 FY2021

FIFTH THIRD BANCORP Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) reported a strong third quarter of 2021, demonstrating significant year-over-year growth in net income and earnings per diluted share. Net income available to common shareholders rose to $684 million, or $0.97 per diluted share, up from $562 million, or $0.78 per diluted share, in the same period last year. For the nine-month period, net income available to common shareholders reached $2.0 billion, or $2.83 per diluted share, a substantial increase from $754 million, or $1.04 per diluted share, in the prior year. This performance was driven by a notable increase in noninterest income, which grew 16% year-over-year for the quarter, and a significant reduction in the provision for credit losses, reflecting improved economic forecasts and credit quality. The Bancorp maintained a solid capital position with a CET1 capital ratio of 9.86% as of September 30, 2021. The company also actively managed its capital through accelerated share repurchase transactions, repurchasing approximately 14.5 million shares for $550 million during the first nine months of 2021. Despite a slight decrease in average commercial loans and leases, the Bancorp saw growth in its consumer lending segment, particularly in residential mortgage and indirect secured consumer loans. The company also noted the ongoing transition away from LIBOR, with plans to be fully transitioned to alternative rates by year-end 2021.

Financial Highlights

41 data points
Beta

Revenue

$152.00M

Net Income

$704.00M

463.2% Net Margin

EPS (Diluted)

$0.97

Total Assets

$207.73B

Cash & Equivalents

$3.21B

Free Cash Flow

$1.14B

Financial Statements
Beta
Revenue$152.00M
Interest Expense$103.00M
Net Income$704.00M
EPS (Basic)$0.98
EPS (Diluted)$0.97
Shares Outstanding (Basic)697.46M
Shares Outstanding (Diluted)706.09M

Key Highlights

  • 1Net income available to common shareholders increased by 22% to $684 million in Q3 2021 compared to Q3 2020.
  • 2Diluted EPS grew 24% year-over-year to $0.97 in Q3 2021.
  • 3Noninterest income increased by 16% to $836 million in Q3 2021, driven by commercial banking, wealth and asset management, and card and processing revenues.
  • 4Provision for credit losses swung to a benefit of $42 million in Q3 2021, compared to a provision of $15 million in Q3 2020, reflecting improved credit quality.
  • 5The CET1 capital ratio remained strong at 9.86% as of September 30, 2021.
  • 6The Bancorp repurchased approximately 14.5 million shares for $550 million during the first nine months of 2021 through accelerated share repurchase transactions.
  • 7The Bancorp is actively managing the LIBOR transition, aiming for full transition to alternative rates by the end of 2021.

Frequently Asked Questions

Fifth Third Bancorp's profitability saw a significant improvement. Net income available to common shareholders increased by 22% to $684 million, and diluted earnings per share (EPS) grew by 24% to $0.97 in the third quarter of 2021 compared to the same period in 2020.

The increase in noninterest income was primarily driven by growth in commercial banking revenue (up 22%), wealth and asset management revenue (up 11%), and card and processing revenue (up 11%). Mortgage banking net revenue also saw a modest increase of 13%.

Fifth Third Bancorp maintained a strong capital position, with a Common Equity Tier 1 (CET1) capital ratio of 9.86% as of September 30, 2021, exceeding the regulatory minimums.

Fifth Third Bancorp is actively managing the transition away from LIBOR to alternative reference rates, such as SOFR and Prime. The Bancorp expects to be fully transitioned for new financial contracts by the end of 2021 and has a plan in place for existing LIBOR-based contracts.