Fifth Third Announces First Quarter 2022 Results

By: Fifth Third Bancorp via Business Wire

April 19, 2022 at 06:30 AM EDT

Reported diluted earnings per share of $0.68

Reported results included a negative $0.01 impact from certain item(s) on page 2 of the 1Q22 earnings release

Fifth Third Bancorp (NASDAQ: FITB):

Key Highlights

Select Business Highlights:

Named one of the "World's Most Ethical Companies" by Ethisphere in March 2022 for the third time
Generated consumer household growth of 3% compared to 1Q21
Announced $20/hour minimum wage for eligible employees effective July 2022

Select Financial Highlights:

ROTCE^(a) of 13.4%; adjusted ROTCE^(a) of 13.7% excl. AOCI
Net interest income^(a) stable compared to 4Q21, or up 1% excluding the impact of PPP; NIM^(a) up 4 basis points compared to 4Q21
Average C&I loan growth ex. PPP of 8% compared to 4Q21
Average securities balances increased $5 billion compared to 4Q21
Core deposits increased 1% compared to 4Q21; Interest bearing deposit costs flat
Benign credit quality continued, including near-record low NCO ratio, stable non-performing loans and lower commercial criticized assets

Key Financial Data

$ millions for all balance sheet and income statement items
	1Q22		4Q21		1Q21

Income Statement Data
Net income available to common shareholders	$474		$627		$674
Net interest income (U.S. GAAP)	1,195		1,197		1,176
Net interest income (FTE)^(a)	1,198		1,200		1,179
Noninterest income	684		791		749
Noninterest expense	1,222		1,206		1,215

Per Share Data
Earnings per share, basic	$0.69		$0.91		$0.94
Earnings per share, diluted	0.68		0.90		0.93
Book value per share	26.33		29.43		28.78
Tangible book value per share^(a)	19.54		22.58		22.60

Balance Sheet & Credit Quality
Average portfolio loans and leases	$113,467		$109,487		$108,956
Average deposits	168,662		167,541		158,888
Net charge-off ratio^(b)	0.12	%	0.14	%	0.27	%
Nonperforming asset ratio^(c)	0.47		0.47		0.72

Financial Ratios
Return on average assets	0.96	%	1.25	%	1.38	%
Return on average common equity	10.0		12.2		13.1
Return on average tangible common equity^(a)	13.4		16.1		16.8
CET1 capital^(d)(e)	9.28		9.54		10.46
Net interest margin^(a)	2.59		2.55		2.62
Efficiency^(a)	64.9		60.6		63.0
Other than the Quarterly Financial Review tables beginning on page 14 of the 1Q22 earnings release, commentary is on a fully taxable-equivalent (FTE) basis unless otherwise noted. Consistent with SEC guidance in Regulation S-K that contemplates the calculation of tax-exempt income on a taxable-equivalent basis, net interest income, net interest margin, net interest rate spread, total revenue and the efficiency ratio are provided on an FTE basis.

CEO Commentary

Fifth Third continued to produce solid financial results in a volatile first quarter of 2022 while fully supporting customers, communities, and employees. We continue to navigate the economic environment with a disciplined approach focused on long-term through-the-cycle outperformance, and remain extremely well positioned to benefit from higher short-term interest rates. We generated strong loan growth during the quarter, including average C&I growth of 8% excluding PPP. Also excluding PPP, net interest income increased 1% sequentially, reflecting the partial impact of our decision to begin growing the securities portfolio.

We had yet another quarter of benign credit quality reflecting our disciplined approach to client selection and underwriting, which resulted in near-record low charge-offs of just 12 basis points. Additionally, commercial criticized assets continued to improve.

Last week, I announced my plans to retire as CEO and transition to Executive Chairman, effective July 5, 2022. As part of our thorough succession planning process, I am excited and proud to announce the Board of Directors has appointed Tim Spence to succeed me as our next CEO. I believe this is the right time for a transition, given Fifth Third’s tremendous financial health and performance. Being the CEO of Fifth Third has been an honor of a lifetime. I am grateful for the hard work, dedication, and support of all our employees over the years. I am also grateful for the confidence the Board and shareholders have had in me throughout my tenure.

Tim is an outstanding and visionary leader. He has been an integral part of Fifth Third's leadership team since 2015, helping develop the strategies and vision that we continue to execute with excellence through innovation and technology. I have no doubt that Tim’s focus on operational discipline will extend our track record for delivering on our commitments to continue generating sustainable, top quartile results among regional banks.

-Greg D. Carmichael, Chairman and CEO

Income Statement Highlights
($ in millions, except per share data)	For the Three Months Ended			% Change
	March	December	March
	2022	2021	2021	Seq	Yr/Yr
Condensed Statements of Income
Net interest income (NII)^(a)	$1,198	$1,200	$1,179	—	2%
Provision for (benefit from) credit losses	45	(47)	(173)	NM	NM
Noninterest income	684	791	749	(14)%	(9)%
Noninterest expense	1,222	1,206	1,215	1%	1%
Income before income taxes^(a)	$615	$832	$886	(26)%	(31)%

Taxable equivalent adjustment	$3	$3	$3	—	—
Applicable income tax expense	118	167	189	(29)%	(38)%
Net income	$494	$662	$694	(25)%	(29)%
Dividends on preferred stock	20	35	20	(43)%	—
Net income available to common shareholders	$474	$627	$674	(24)%	(30)%
Earnings per share, diluted	$0.68	$0.90	$0.93	(24)%	(27)%

Fifth Third Bancorp (NASDAQ^®: FITB) today reported first quarter 2022 net income of $494 million compared to net income of $662 million in the prior quarter and $694 million in the year-ago quarter. Net income available to common shareholders in the current quarter was $474 million, or $0.68 per diluted share, compared to $627 million, or $0.90 per diluted share, in the prior quarter and $674 million, or $0.93 per diluted share, in the year-ago quarter.


		Diluted earnings per share impact of certain item(s) - 1Q22
		(after-tax impact^(f); $ in millions, except per share data)

		Valuation of Visa total return swap (noninterest income)	$(8)

		Diluted earnings per share impact of certain item(s)¹	$(0.01)

		¹Diluted earnings per share impact reflects 696.242 million average diluted shares outstanding

Net Interest Income
(FTE; $ in millions)^(a)	For the Three Months Ended			% Change
	March	December	March
	2022	2021	2021	Seq	Yr/Yr
Interest Income
Interest income	$1,292	$1,297	$1,305	—	(1)%
Interest expense	94	97	126	(3)%	(25)%
Net interest income (NII)	$1,198	$1,200	$1,179	—	2%

Average Yield/Rate Analysis				bps Change
Yield on interest-earning assets	2.79%	2.75%	2.90%	4	(11)
Rate paid on interest-bearing liabilities	0.33%	0.33%	0.44%	—	(11)

Ratios
Net interest rate spread	2.46%	2.42%	2.46%	4	—
Net interest margin (NIM)	2.59%	2.55%	2.62%	4	(3)

Compared to the prior quarter, NII was stable, as the impacts of lower day count, lower PPP-related income, and a decline in residential mortgage balances (primarily from previous purchases of government guaranteed loan buyouts from a third party) were partially offset by higher commercial & industrial (C&I) loan balances, higher investment portfolio balances, and the impact of higher market rates. PPP-related income was $20 million in the current quarter compared to $36 million in the prior quarter. Excluding the impact of PPP-related income, NII increased $14 million, or 1%, sequentially. Compared to the prior quarter, reported NIM increased 4 bps, primarily due to a decrease in other short-term investments (primarily interest-bearing cash), the impact of lower day count, and higher market rates.

Compared to the year-ago quarter, NII increased $19 million, or 2%, primarily reflecting higher C&I and indirect secured consumer loan balances, higher investment portfolio balances, and a reduction in long-term debt, partially offset by lower PPP-related income and lower home equity balances. Excluding the impact of PPP-related income, NII increased $52 million, or 5%, year-over-year. Compared to the year-ago quarter, reported NIM decreased 3 bps, primarily reflecting loan spread compression, partially offset by lower other short-term investments (primarily interest-bearing cash) and lower long-term debt and deposit costs.

Noninterest Income
($ in millions)	For the Three Months Ended			% Change
	March	December	March
	2022	2021	2021	Seq	Yr/Yr
Noninterest Income
Service charges on deposits	$152	$156	$144	(3)%	6%
Commercial banking revenue	135	171	153	(21)%	(12)%
Mortgage banking net revenue	52	35	85	49%	(39)%
Wealth and asset management revenue	149	150	143	(1)%	4%
Card and processing revenue	97	104	94	(7)%	3%
Leasing business revenue	62	74	87	(16)%	(29)%
Other noninterest income	52	120	42	(57)%	24%
Securities (losses) gains, net	(14)	(19)	3	(26)%	NM
Securities losses, net - non-qualifying hedges
on mortgage servicing rights	(1)	—	(2)	NM	(50)%
Total noninterest income	$684	$791	$749	(14)%	(9)%

Reported noninterest income decreased $107 million, or 14%, from the prior quarter, and decreased $65 million, or 9%, from the year-ago quarter. The reported results reflect the impact of certain items in the table below. Reported current quarter results included $14 million of net securities losses, which comprised of $14 million in net losses attributable to mark-to-market impacts related to non-qualified deferred compensation assets and a $12 million loss attributable to market value changes on Fifth Third's shares of AvidXchange Holdings, Inc., partially offset by $12 million in net gains related to investment portfolio activity.

Noninterest Income excluding certain items
($ in millions)	For the Three Months Ended
	March	December	March
	2022	2021	2021
Noninterest Income excluding certain items
Noninterest income (U.S. GAAP)	$684	$791	$749
Valuation of Visa total return swap	11	19	13
Securities losses/(gains), net	14	19	(3)
Noninterest income excluding certain items^(a)	$709	$829	$759

Compared to the prior quarter, noninterest income excluding certain items decreased $120 million, or 14%. Compared to the year-ago quarter, noninterest income excluding certain items decreased $50 million, or 7%.

Compared to the prior quarter, service charges on deposits decreased $4 million, or 3%, primarily reflecting a decrease in consumer deposit fees. Commercial banking revenue decreased $36 million, or 21%, primarily driven by lower M&A advisory revenue and loan syndication revenue, partially offset by higher customer financial risk management revenue. Mortgage banking net revenue increased $17 million, or 49%, reflecting a $14 million increase from MSR net valuation adjustments and an $11 million decrease in MSR asset decay reflecting slower prepayment speeds, partially offset by a $12 million decrease in origination fees and gains on loan sales. Wealth and asset management revenue decreased $1 million, or 1%, as the impact of lower market values was mostly offset by seasonally strong tax-related private client service revenue combined with continued asset inflows. Card and processing revenue decreased $7 million, or 7%, primarily driven by seasonally lower spend volume. Leasing business revenue decreased $12 million, or 16%, primarily driven by a decrease in lease remarketing revenue. The decline in other noninterest income was primarily attributable to the prior quarter recognition of tax receivable agreement revenue as well as lower private equity income.

Compared to the year-ago quarter, service charges on deposits increased $8 million, or 6%, reflecting an increase in commercial treasury management fees. Commercial banking revenue decreased $18 million, or 12%, primarily driven by decreases in corporate bond fees, partially offset by an increase in customer financial risk management revenue. Mortgage banking net revenue decreased $33 million, or 39%, reflecting a $64 million decrease in origination fees and gains on loan sales and a $9 million reduction from MSR net valuation adjustments, partially offset by a $28 million decrease in MSR asset decay reflecting slower prepayment speeds. Wealth and asset management revenue increased $6 million, or 4%, primarily driven by higher personal asset management revenue. Card and processing revenue increased $3 million, or 3%, primarily driven by higher spend volumes, partially offset by higher rewards. Leasing business revenue decreased $25 million, or 29%, primarily reflecting a decrease in lease syndication revenue.

Noninterest Expense
($ in millions)	For the Three Months Ended			% Change
	March	December	March
	2022	2021	2021	Seq	Yr/Yr
Noninterest Expense
Compensation and benefits	$711	$655	$706	9%	1%
Net occupancy expense	77	77	79	—	(3)%
Technology and communications	101	103	93	(2)%	9%
Equipment expense	36	36	34	—	6%
Card and processing expense	19	19	30	—	(37)%
Leasing business expense	32	36	35	(11)%	(9)%
Marketing expense	24	35	23	(31)%	4%
Other noninterest expense	222	245	215	(9)%	3%
Total noninterest expense	$1,222	$1,206	$1,215	1%	1%

Reported noninterest expense increased $16 million, or 1%, from the prior quarter. The results in the prior period were impacted by the item shown in the table below.

Noninterest Expense excluding certain item(s)
($ in millions)	For the Three Months Ended
	March	December	March
	2022	2021	2021
Noninterest Expense excluding certain item(s)
Noninterest expense (U.S. GAAP)	$1,222	$1,206	$1,215
Special COVID staffing bonus to front-line employees	—	(10)	—
Noninterest expense excluding certain item(s)^(a)	$1,222	$1,196	$1,215

Compared to the prior quarter, noninterest expense excluding certain items increased $26 million, or 2%, primarily reflecting a seasonal increase in compensation and benefits expense and a $21 million impact from the previously communicated special broad-based compensation bonus, partially offset by a decrease in incentive compensation and marketing expense. Noninterest expense in the current quarter included a $12 million benefit related to the impact of non-qualified deferred compensation mark-to-market (compared to $10 million expense in the prior quarter).

Compared to the year-ago quarter, noninterest expense increased $7 million, or 1%, reflecting an increase in technology and communications expense related to continued modernization investments, and an increase in compensation and benefits expense. These items were partially offset by lower card and processing expense due to contract renegotiations.

Average Interest-Earning Assets
($ in millions)	For the Three Months Ended			% Change
	March	December	March
	2022	2021	2021	Seq	Yr/Yr
Average Portfolio Loans and Leases
Commercial loans and leases:
Commercial and industrial loans	$52,554	$49,566	$49,629	6%	6%
Commercial mortgage loans	10,521	10,247	10,532	3%	—
Commercial construction loans	5,371	5,329	6,039	1%	(11)%
Commercial leases	2,942	3,057	3,114	(4)%	(6)%
Total commercial loans and leases	$71,388	$68,199	$69,314	5%	3%
Consumer loans:
Residential mortgage loans	$16,501	$16,188	$15,803	2%	4%
Home equity	4,009	4,179	5,009	(4)%	(20)%
Indirect secured consumer loans	17,136	16,345	13,955	5%	23%
Credit card	1,691	1,739	1,879	(3)%	(10)%
Other consumer loans	2,742	2,837	2,996	(3)%	(8)%
Total consumer loans	$42,079	$41,288	$39,642	2%	6%
Total average portfolio loans and leases	$113,467	$109,487	$108,956	4%	4%

Memo:
Average PPP loans	$1,012	$1,756	$5,200	(42)%	(81)%
Average portfolio commercial and industrial loans - excl. PPP loans	$51,542	$47,810	$44,429	8%	16%

Average Loans and Leases Held for Sale
Commercial loans and leases held for sale	$18	$5	$104	260%	(83)%
Consumer loans held for sale	3,677	5,298	4,641	(31)%	(21)%
Total average loans and leases held for sale	$3,695	$5,303	$4,745	(30)%	(22)%

Securities (taxable and tax-exempt)	$42,422	$37,631	$36,297	13%	17%
Other short-term investments	28,310	34,624	32,717	(18)%	(13)%
Total average interest-earning assets	$187,894	$187,045	$182,715	—	3%

Compared to the prior quarter, total average portfolio loans and leases increased 4%, reflecting an increase in both commercial loan and lease balances and consumer loans. Average commercial portfolio loans and leases increased 5%, primarily reflecting of 8% in C&I loans excluding PPP. Average consumer portfolio loans increased 2%, reflecting higher indirect secured consumer and residential mortgage loans, partially offset by lower home equity and other consumer loan balances.

Compared to the year-ago quarter, total average portfolio loans and leases increased 4%, reflecting an increase in both consumer loans and commercial loans and leases. Average commercial portfolio loans and leases increased 3%, primarily reflecting growth of 16% in C&I loans excluding PPP, partially offset by PPP forgiveness and lower commercial construction loans. Average consumer portfolio loans increased 6%, as higher indirect secured consumer and residential mortgage loans were partially offset by lower home equity and other consumer loan balances.

Average loans and leases held for sale were $4 billion in the current quarter compared to $5 billion in the prior quarter and $5 billion in the year-ago quarter. Current quarter average loans and leases held for sale were impacted by a decline in residential mortgage balances (primarily from a decline in government loan buyouts purchased from a third party).

Average securities (taxable and tax-exempt) of $42 billion in the current quarter increased $5 billion, or 13%, compared to the prior quarter and increased $6 billion, or 17%, compared to the year-ago quarter. Average other short-term investments (including interest-bearing cash) of $28 billion in the current quarter decreased $6 billion, or 18%, compared to the prior quarter and decreased $4 billion, or 13%, compared to the year-ago quarter.

Total period-end commercial portfolio loans and leases of $73 billion increased 4% compared to the prior quarter, primarily reflecting growth of 6% in C&I loans excluding PPP, partially offset by PPP forgiveness. Compared to the year-ago quarter, total period-end commercial portfolio loans increased $4 billion, or 6%, primarily reflecting growth of 22% in C&I loans excluding PPP, partially offset by PPP forgiveness and lower construction loan balances. Period-end commercial revolving line utilization was 36%, compared to 33% in the prior quarter and 31% in the year-ago quarter.

Period-end consumer portfolio loans of $43 billion increased 3% compared to the prior quarter, primarily reflecting higher residential mortgage and indirect secured consumer loan balances, partially offset by a decline in home equity balances. Compared to the year-ago quarter, total period-end consumer portfolio loans increased $3 billion, or 8%, reflecting an increase in indirect secured consumer loans and residential mortgage balances, partially offset by lower home equity and other consumer loan balances.

Total period-end securities (taxable and tax-exempt; amortized cost) of $51 billion in the current quarter increased $13 billion, or 34%, compared to the prior quarter and increased $14 billion, or 38%, compared to the year-ago quarter. Period-end other short term investments of $21 billion in the current quarter decreased $14 billion, or 41%, compared to the prior quarter and decreased $14 billion, or 40%, compared to the year-ago quarter.

Average Deposits
	($ in millions)	For the Three Months Ended			% Change
		March	December	March
		2022	2021	2021	Seq	Yr/Yr
	Average Deposits
	Demand	$64,212	$64,828	$58,586	(1)%	10%
	Interest checking	48,659	47,384	45,568	3%	7%
	Savings	22,772	21,702	18,951	5%	20%
	Money market	30,263	30,566	30,601	(1)%	(1)%
	Foreign office^(g)	126	193	128	(35)%	(2)%
	Total transaction deposits	$166,032	$164,673	$153,834	1%	8%
	CDs $250,000 or less	2,376	2,604	3,828	(9)%	(38)%
	Total core deposits	$168,408	$167,277	$157,662	1%	7%
	CDs over $250,000	254	264	1,226	(4)%	(79)%
	Total average deposits	$168,662	$167,541	$158,888	1%	6%

Compared to the prior quarter, average core deposits increased 1%, as increases in interest checking and savings deposit balances (led by consumer and wealth customer balance growth) were partially offset by decreases in demand and money market balances from commercial customer seasonal impacts. Average demand deposits represented 38% of total core deposits in the current quarter, relatively stable with the prior quarter. Average commercial transaction deposits decreased 2% and average consumer transaction deposits increased 4%.

Compared to the year-ago quarter, average core deposits increased 7%, reflecting ongoing success in generating consumer household growth. Average commercial transaction deposits increased 5% and average consumer transaction deposits increased 11%.

The period end portfolio loan-to-core deposit ratio was 68% in the current quarter, compared to 66% in the prior quarter and 68% in the year-ago quarter.

Average Wholesale Funding
	($ in millions)	For the Three Months Ended			% Change
		March	December	March
		2022	2021	2021	Seq	Yr/Yr
	Average Wholesale Funding
	CDs over $250,000	$254	$264	$1,226	(4)%	(79)%
	Federal funds purchased	259	315	324	(18)%	(20)%
	Other short-term borrowings	890	1,000	1,209	(11)%	(26)%
	Long-term debt	11,165	11,697	14,849	(5)%	(25)%
	Total average wholesale funding	$12,568	$13,276	$17,608	(5)%	(29)%

Compared to the prior quarter, average wholesale funding decreased 5%, reflecting the impact of reductions in long-term debt over the past two quarters (including the retirement of $800 million in long-term debt during the first quarter of 2022), as well as continued runoff in other short-term borrowings and jumbo CD balances. Compared to the year-ago quarter, average wholesale funding decreased 29%, reflecting decreases in long-term debt, jumbo CD balances, and other short-term borrowings.

Credit Quality Summary
($ in millions)	As of and For the Three Months Ended
	March	December	September	June	March
	2022	2021	2021	2021	2021

Total nonaccrual portfolio loans and leases (NPLs)	$508	$498	$528	$621	$741
Repossessed property	5	5	4	5	7
OREO	27	24	27	31	35
Total nonperforming portfolio loans and leases and OREO (NPAs)	$540	$527	$559	$657	$783

NPL ratio^(h)	0.44%	0.44%	0.49%	0.58%	0.68%
NPA ratio^(c)	0.47%	0.47%	0.52%	0.61%	0.72%

Total loans and leases 30-89 days past due (accrual)	$288	$254	$267	$281	$305
Total loans and leases 90 days past due (accrual)	76	117	92	83	124

Allowance for loan and lease losses (ALLL), beginning	$1,892	$1,954	$2,033	$2,208	$2,453
Total net losses charged-off	(34)	(38)	(21)	(44)	(71)
Provision for (benefit from) loan and lease losses	50	(24)	(58)	(131)	(174)
ALLL, ending	$1,908	$1,892	$1,954	$2,033	$2,208

Reserve for unfunded commitments, beginning	$182	$205	$189	$173	$172
(Benefit from) provision for the reserve for unfunded commitments	(5)	(23)	16	16	1
Reserve for unfunded commitments, ending	$177	$182	$205	$189	$173

Total allowance for credit losses (ACL)	$2,085	$2,074	$2,159	$2,222	$2,381

ACL ratios:
As a % of portfolio loans and leases	1.80%	1.85%	2.00%	2.06%	2.19%
As a % of nonperforming portfolio loans and leases	411%	416%	409%	358%	321%
As a % of nonperforming portfolio assets	386%	394%	386%	338%	304%

ALLL as a % of portfolio loans and leases	1.65%	1.69%	1.81%	1.89%	2.03%

Total losses charged-off	$(64)	$(77)	$(56)	$(103)	$(109)
Total recoveries of losses previously charged-off	30	39	35	59	38
Total net losses charged-off	$(34)	$(38)	$(21)	$(44)	$(71)

Net charge-off ratio (NCO ratio)^(b)	0.12%	0.14%	0.08%	0.16%	0.27%
Commercial NCO ratio	0.05%	0.10%	0.03%	0.10%	0.17%
Consumer NCO ratio	0.25%	0.21%	0.16%	0.26%	0.43%

Nonperforming portfolio loans and leases were $508 million in the current quarter, with the resulting NPL ratio of 0.44%. Compared to the prior quarter, NPLs increased $10 million. Compared to the year-ago quarter, NPLs decreased $233 million with the NPL ratio decreasing 24 bps.

Nonperforming portfolio assets were $540 million in the current quarter, with the resulting NPA ratio of 0.47%. Compared to the prior quarter, NPAs increased $13 million. Compared to the year-ago quarter, NPAs decreased $243 million with the NPA ratio decreasing 25 bps.

The provision for credit losses totaled $45 million in the current quarter. The allowance for credit loss ratio represented 1.80% of total portfolio loans and leases at quarter end, compared with 1.85% for the prior quarter end and 2.19% for the year-ago quarter end. In the current quarter, the allowance for credit losses represented 411% of nonperforming portfolio loans and leases and 386% of nonperforming portfolio assets.

Net charge-offs were $34 million in the current quarter, with the resulting NCO ratio of 0.12%. Compared to the prior quarter, net charge-offs decreased $4 million and the NCO ratio decreased 2 bps, reflecting lower charge-offs in the commercial portfolio. Compared to the year-ago quarter, net charge-offs decreased $37 million and the NCO ratio decreased 15 bps, reflecting improvement in both commercial and consumer portfolios.

Capital Position
	As of and For the Three Months Ended
	March	December	September	June	March
	2022	2021	2021	2021	2021
Capital Position
Average total Bancorp shareholders' equity as a % of average assets	10.23%	10.71%	11.16%	11.11%	11.26%
Tangible equity^(a)	7.98%	7.97%	8.06%	8.35%	8.20%
Tangible common equity (excluding AOCI)^(a)	6.96%	6.94%	7.01%	7.28%	7.14%
Tangible common equity (including AOCI)^(a)	6.48%	7.47%	7.74%	8.18%	7.95%

Regulatory Capital Ratios^(d)(e)
CET1 capital	9.28%	9.54%	9.86%	10.37%	10.46%
Tier I risk-based capital	10.60%	10.91%	11.28%	11.83%	11.94%
Total risk-based capital	12.88%	13.42%	13.94%	14.60%	14.80%
Tier I leverage	8.32%	8.27%	8.41%	8.55%	8.61%

The CET1 capital ratio was 9.28%, the tangible common equity to tangible assets ratio was 6.96% excluding AOCI, and 6.48% including AOCI. The Tier I risk-based capital ratio was 10.60%, the Total risk-based capital ratio was 12.88%, and the Tier I leverage ratio was 8.32%. Certain capital ratios, including the Tier I leverage ratio, continued to be impacted by the increase in assets since the onset of the pandemic, predominantly from 0% risk-weighted assets resulting from interest-bearing cash as well as PPP loans.

Tax Rate

The effective tax rate was 19.2% compared with 20.1% in the prior quarter and 21.4% in the year-ago quarter.

Conference Call

Fifth Third will host a conference call to discuss these financial results at 10:00 a.m. (Eastern Time) today. This conference call will be webcast live and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on “About Us” then “Investor Relations”). Those unable to listen to the live webcast may access a webcast replay through the Fifth Third Investor Relations website at the same web address, which will be available for 30 days.

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. As of March 31, 2022, the Company had $211 billion in assets and operates 1,079 full-service Banking Centers, and 2,201 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. In total, Fifth Third provides its customers with access to approximately 54,000 fee-free ATMs across the United States. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Wealth & Asset Management. Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2022, had $549 billion in assets under care, of which it managed $61 billion for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the NASDAQ® Global Select Market under the symbol “FITB.”

Earnings Release End Notes

(a)	Non-GAAP measure; see discussion of non-GAAP reconciliation beginning on page 26 of the 1Q22 earnings release.
(b)	Net losses charged-off as a percent of average portfolio loans and leases presented on an annualized basis.
(c)	Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO.
(d)	Regulatory capital ratios are calculated pursuant to the five-year transition provision option to phase in the effects of CECL on regulatory capital after its adoption on January 1, 2020.
(e)	Current period regulatory capital ratios are estimated.
(f)	Assumes a 23% tax rate.
(g)	Includes commercial customer Eurodollar sweep balances for which the Bank pays rates comparable to other commercial deposit accounts.
(h)	Nonperforming portfolio loans and leases as a percent of portfolio loans and leases.

FORWARD-LOOKING STATEMENTS

This release contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are forward-looking statements. These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K as updated by our filings with the U.S. Securities and Exchange Commission (“SEC”).

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) effects of the global COVID-19 pandemic; (2) deteriorating credit quality; (3) loan concentration by location or industry of borrowers or collateral; (4) problems encountered by other financial institutions; (5) inadequate sources of funding or liquidity; (6) unfavorable actions of rating agencies; (7) inability to maintain or grow deposits; (8) limitations on the ability to receive dividends from subsidiaries; (9) cyber-security risks; (10) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (11) failures by third-party service providers; (12) inability to manage strategic initiatives and/or organizational changes; (13) inability to implement technology system enhancements; (14) failure of internal controls and other risk management systems; (15) losses related to fraud, theft, misappropriation or violence; (16) inability to attract and retain skilled personnel; (17) adverse impacts of government regulation; (18) governmental or regulatory changes or other actions; (19) failures to meet applicable capital requirements; (20) regulatory objections to Fifth Third’s capital plan; (21) regulation of Fifth Third’s derivatives activities; (22) deposit insurance premiums; (23) assessments for the orderly liquidation fund; (24) replacement of LIBOR; (25) weakness in the national or local economies; (26) global political and economic uncertainty or negative actions; (27) changes in interest rates; (28) changes and trends in capital markets; (29) fluctuation of Fifth Third’s stock price; (30) volatility in mortgage banking revenue; (31) litigation, investigations, and enforcement proceedings by governmental authorities; (32) breaches of contractual covenants, representations and warranties; (33) competition and changes in the financial services industry; (34) changing retail distribution strategies, customer preferences and behavior; (35) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (36) potential dilution from future acquisitions; (37) loss of income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (38) results of investments or acquired entities; (39) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (40) inaccuracies or other failures from the use of models; (41) effects of critical accounting policies and judgments or the use of inaccurate estimates; (42) weather-related events, other natural disasters, or health emergencies (including pandemics); (43) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity; (44) changes in law or requirements imposed by Fifth Third’s regulators impacting our capital actions, including dividend payments and stock repurchases; and (45) Fifth Third's ability to meet its sustainability targets, goals and commitments.

You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as may be required by law, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The information contained herein is intended to be reviewed in its totality, and any stipulations, conditions or provisos that apply to a given piece of information in one part of this press release should be read as applying mutatis mutandis to every other instance of such information appearing herein.

Category: Earnings