10-QPeriod: Q1 FY2024

FIFTH THIRD BANCORP Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 7, 2024For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) reported a net income of $520 million for the first quarter of 2024, a decrease from $558 million in the same period last year. Diluted earnings per share were $0.70, down from $0.78 year-over-year. Net interest income on a FTE basis declined by 9% to $1.4 billion, primarily due to higher funding costs resulting from increased market interest rates and a migration of deposits into higher-yielding products. Despite the decline in net interest income, noninterest income saw a modest increase of 2%, driven by growth in wealth and asset management revenue and service charges on deposits. However, this was partially offset by decreases in commercial banking and mortgage banking revenue. The provision for credit losses decreased significantly by 43% to $94 million, reflecting improved economic forecasts and lower period-end loan balances. The Bancorp maintained strong capital ratios, with its CET1 capital ratio at 10.47% as of March 31, 2024, well above regulatory requirements. The Bancorp also announced an incremental expense of $33 million related to the FDIC's special assessment, bringing the total estimated special assessment to $257 million, to be paid over eight quarters.

Financial Highlights

40 data points
Beta

Revenue

$151.00M

Net Income

$520.00M

344.4% Net Margin

EPS (Diluted)

$0.70

Total Assets

$214.51B

Cash & Equivalents

$2.80B

Free Cash Flow

$321.00M

Financial Statements
Beta
Revenue$151.00M
Interest Expense$1.22B
Net Income$520.00M
EPS (Basic)$0.70
EPS (Diluted)$0.70
Shares Outstanding (Basic)685.75M
Shares Outstanding (Diluted)690.63M

Key Highlights

  • 1Net income decreased to $520 million ($0.70 diluted EPS) compared to $558 million ($0.78 diluted EPS) in the prior year's quarter.
  • 2Net interest income on an FTE basis declined 9% to $1.4 billion, impacted by higher funding costs and deposit mix changes.
  • 3Noninterest income increased 2% to $710 million, with growth in Wealth & Asset Management and Service Charges on Deposits.
  • 4Provision for credit losses decreased 43% to $94 million, benefiting from improved economic forecasts.
  • 5CET1 capital ratio remained strong at 10.47%, exceeding regulatory requirements.
  • 6The FDIC special assessment added $33 million in incremental expense in the quarter, with total estimated assessment at $257 million.
  • 7Total loans decreased slightly by 1% to $116.8 billion, driven by a reduction in commercial loans and leases.

Frequently Asked Questions

The decrease in net interest income is primarily attributed to higher funding costs due to increases in market interest rates and a migration of deposits into higher-yielding products. This resulted in increased rates paid on core deposits and long-term debt.

Fifth Third Bancorp maintained a strong capital position. Its CET1 capital ratio stood at 10.47% as of March 31, 2024, exceeding regulatory requirements and the stress capital buffer requirement.

The Bancorp recorded an incremental expense of $33 million in the first quarter of 2024 related to the FDIC's special assessment. This brings the total estimated special assessment to $257 million, which is being paid over eight quarterly periods.

The Bancorp expects NIM to modestly increase over the next several quarters, driven by fixed-rate asset repricing and deposit growth. However, this could be partially offset by continued deposit margin compression and increased deposit competition or higher levels of cash and short-term investments.