Exhibit 99.1

 

 

				News Release
CONTACTS:		Sameer Gokhale (Investors)		FOR IMMEDIATE RELEASE
		(513) 534-2219		April 21, 2016
		Jim Eglseder (Investors)
		(513) 534-8424
		Larry Magnesen (Media)
		(513) 534-8055

FIFTH THIRD ANNOUNCES FIRST QUARTER 2016 NET INCOME TO COMMON SHAREHOLDERS OF $312 MILLION, OR $0.40 PER DILUTED SHARE

 

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1Q16 net income available to common shareholders of $312 million, or $0.40 per diluted common share

 

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Includes a $47 million pre-tax (~$31 million after-tax) positive valuation adjustment on the remaining warrant in Vantiv, a $14 million pre-tax (~$9 million after-tax) expense related to the voluntary early retirement program, and an $8 million pre-tax (~$5 million after-tax) gain on the previously announced sale of certain branches in St. Louis. These items resulted in a net $0.03 impact on earnings per share

 

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1Q16 return on average assets (ROA) of 0.93%; return on average common equity of 8.3%; return on average tangible common equity** of 9.9%

 

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Pre-provision net revenue (PPNR)** of $554 million in 1Q16

 

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Net interest income (FTE) of $909 million, up 1 percent sequentially and up 7 percent from 1Q15; net interest margin of 2.91%, up 6 bps sequentially

 

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Average portfolio loans of $93.3 billion, down $319 million sequentially and up $2.8 billion from 1Q15; Period end portfolio loans and leases of $93.6 billion increased $1.0 billion, or 1 percent sequentially and $2.4 billion, or 3 percent, from 1Q15; the sequential and year over year increases were primarily driven by increases in C&I, residential mortgage, and commercial construction loans

 

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Non-interest income of $637 million compared with $1.1 billion in the prior quarter; primarily driven by the Vantiv-related items in the prior quarter; Capital markets fees within Corporate banking revenue increased 20% from 4Q15, driven primarily by M&A advisory work

 

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Non-interest expense of $986 million, up 2 percent from prior quarter, primarily driven by seasonally higher compensation-related expenses and $14 million in expense related to the voluntary early retirement program

 

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Credit trends

 

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1Q16 net charge-offs of $96 million (0.42% of loans and leases) increased from 4Q15 NCOs of $80 million (0.34% of loans and leases)

 

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Portfolio NPA ratio of 0.88% up 18 bps from 4Q15, NPL ratio of 0.75% up 20 bps from 4Q15; total nonperforming assets (NPAs) of $830 million, including loans held-for-sale (HFS), increased $171 million sequentially

 

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1Q16 provision expense of $119 million; $91 million in 4Q15 and $69 million in 1Q15

 

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Strong capital ratios*

 

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Common equity Tier 1 (CET1) ratio 9.81%; fully phased-in CET1 ratio of 9.72%

 

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Tier 1 risk-based capital ratio 10.91%, Total risk-based capital ratio 14.66%, Leverage ratio 9.57%

 

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Tangible common equity ratio** of 8.97%; 8.55% excluding securities portfolio unrealized gains/losses

 

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15 million reduction in common shares outstanding during the quarter

 

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Book value per share of $19.46 up 5% from 4Q15 and up 9% from 1Q15; tangible book value per share** of $16.32

 

*	Capital ratios estimated; presented under current U.S. capital regulations.

**	Non-GAAP measure; see Reg. G reconciliation on page 32.

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Fifth Third Bancorp (Nasdaq: FITB) today reported first quarter 2016 net income of $327 million versus net income of $657 million in the fourth quarter of 2015 and $361 million in the first quarter of 2015. After preferred dividends, net income available to common shareholders was $312 million, or $0.40 per diluted share, in the first quarter of 2016, compared with $634 million, or $0.79 per diluted share, in the fourth quarter of 2015, and $346 million, or $0.42 per diluted share, in the first quarter of 2015.

First quarter 2016 included:

Income

 

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$47 million positive valuation adjustment on the remaining Vantiv warrant

 

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$8 million gain on sale of certain St. Louis branches as part of the previously announced branch consolidation and sales plan

 

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$1 million benefit related to the valuation of the Visa total return swap

Expense

 

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($15 million) in severance expense, primarily consisting of $14 million related to the voluntary early retirement program

Fourth quarter 2015 included:

Income

 

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$331 million gain on the sale of Vantiv shares

 

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$89 million gain on Vantiv warrant actions taken during the quarter

 

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$49 million payment received from Vantiv to terminate a portion of its tax receivable agreement

 

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$21 million positive valuation adjustment on the remaining Vantiv warrant

 

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($10 million) charge related to the valuation of the Visa total return swap

Expense

 

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($2 million) in severance expense

 

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($10 million) contribution to Fifth Third Foundation

Results also included a $31 million annual payment recognized from Vantiv pursuant to the tax receivable agreement recorded in other non-interest income.

First quarter 2015 included:

Income

 

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$70 million positive valuation adjustment on the Vantiv warrant

 

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$37 million gain on the sale of residential mortgage loans classified as troubled debt restructurings

 

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($17 million) charge related to the valuation of the Visa total return swap

 

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($30 million) impairment associated with aircraft leases

Expense

 

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($1 million) in severance expense

 

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($2 million) in litigation reserve charges

 

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($4 million) contribution to Fifth Third Foundation

 

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Earnings Highlights

 

		For the Three Months Ended																				% Change
		March				December				September				June				March
		2016				2015				2015				2015				2015				Seq				Yr/Yr
Earnings ($ in millions)
Net income attributable to Bancorp		$	327			$	657			$	381			$	315			$	361				(50%)				(9%)
Net income available to common shareholders		$	312			$	634			$	366			$	292			$	346				(51%)				(10%)
Common Share Data
Earnings per share, basic		$	0.40			$	0.80			$	0.46			$	0.36			$	0.42				(50%)				(5%)
Earnings per share, diluted			0.40				0.79				0.45				0.36				0.42				(49%)				(5%)
Cash dividends per common share			0.13				0.13				0.13				0.13				0.13				—				—
Financial Ratios
Return on average assets			0.93%				1.83%				1.07%				0.90%				1.06%				(49%)				(12%)
Return on average common equity			8.3				17.2				10.0				8.1				9.7				(52%)				(14%)
Return on average tangible common equity(b)			9.9				20.6				12.0				9.7				11.7				(52%)				(15%)
CET1 capital(c)			9.81				9.82				9.40				9.42				9.52				—				3%
Tier I risk-based capital(c)			10.91				10.93				10.49				10.51				10.62				—				3%
CET1 capital (fully-phased in)(b)(c)			9.72				9.72				9.30				9.31				9.41				—				3%
Net interest margin(a)			2.91				2.85				2.89				2.90				2.86				2%				2%
Efficiency(a)			63.8				48.0				58.2				65.4				62.3				33%				2%
Common shares outstanding (in thousands)			770,471				785,080				795,439				810,054				815,190				(2%)				(5%)
Average common shares outstanding (in thousands):
Basic			773,564				784,855				795,793				803,965				810,210				(1%)				(5%)
Diluted			778,392				794,481				805,023				812,843				818,672				(2%)				(5%)

 

(a)	Presented on a fully taxable equivalent basis.

(b)	These ratios have been included herein to facilitate a greater understanding of the Bancorp’s capital structure and financial condition. See the Regulation G Non-GAAP Reconciliation table for a reconciliation of these ratios to U.S. GAAP.

(c)

Under the banking agencies’ Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets used in the calculation of the tier I risk-based capital and common equity tier 1 ratios. Current period regulatory capital ratios are estimated.

NA: Not applicable.

“First quarter results were strong despite significant market volatility,” said Greg D. Carmichael, President and CEO of Fifth Third Bancorp. “Our net interest income increased from the fourth quarter, reflecting the benefit of the Fed’s December rate hike on loan yields. In addition, we had very strong results this quarter in our fee generating businesses. At the same time the results also highlight our focus on expense management. We remain cautious about the economic outlook and are continuing to look to drive better near term performance without relying on higher interest rates.”

“The first quarter of 2016 represented a critical starting point for the planned investments we discussed in January. During the quarter we also executed other expense saving initiatives, including our early retirement offer, which will positively impact our operating leverage going forward. Despite the challenging economic environment, we are making these investments now as they will help drive revenue growth and efficiency improvements, while enhancing the quality of customer service. We believe these investments will help us generate attractive and more stable returns through business cycles.”

 

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“Economic conditions within our footprint remain relatively unchanged, and activity levels are in line with customer sentiment. Our customers continue to embrace the changes we have made to our products, services, and delivery methods as we adapt to their evolving preferences. Our focus on the customer remains at the core of our efforts.”

Income Statement Highlights

 

		For the Three Months Ended																				% Change
		March				December				September				June				March
		2016				2015				2015				2015				2015				Seq				Yr/Yr
Condensed Statements of Income ($ in millions)
Net interest income (taxable equivalent)		$	909			$	904			$	906			$	892			$	852				1%				7%
Provision for loan and lease losses			119				91				156				79				69				31%				72%
Total non-interest income			637				1,104				713				556				630				(42%)				1%
Total non-interest expense			986				963				943				947				923				2%				7%
Income before income taxes (taxable equivalent)		$	441			$	954			$	520			$	422			$	490				(54%)				(10%)
Taxable equivalent adjustment			6				5				5				5				5				20%				20%
Applicable income tax expense			108				292				134				108				124				(63%)				(13%)
Net income		$	327			$	657			$	381			$	309			$	361				(50%)				(9%)
Less: Net income attributable to noncontrolling interests			—				—				—				(6)				—				—				—
Net income attributable to Bancorp		$	327			$	657			$	381			$	315			$	361				(50%)				(9%)
Dividends on preferred stock			15				23				15				23				15				(35%)				—
Net income available to common shareholders		$	312			$	634			$	366			$	292			$	346				(51%)				(10%)
Earnings per share, diluted		$	0.40			$	0.79			$	0.45			$	0.36			$	0.42				(49%)				(5%)

 

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Net Interest Income

 

		For the Three Months Ended																				% Change
		March				December				September				June				March
		2016				2015				2015				2015				2015				Seq				Yr/Yr
Interest Income ($ in millions)
Total interest income (taxable equivalent)		$	1,044			$	1,035			$	1,031			$	1,008			$	975				1%				7%
Total interest expense			135				131				125				116				123				3%				10%
Net interest income (taxable equivalent)		$	909			$	904			$	906			$	892			$	852				1%				7%
Average Yield
Yield on interest-earning assets (taxable equivalent)			3.34%				3.26%				3.29%				3.28%				3.28%				2%				2%
Rate paid on interest-bearing liabilities			0.64%				0.61%				0.58%				0.56%				0.60%				5%				7%
Net interest rate spread (taxable equivalent)			2.70%				2.65%				2.71%				2.72%				2.68%				2%				1%
Net interest margin (taxable equivalent)			2.91%				2.85%				2.89%				2.90%				2.86%				2%				2%
Average Balances ($ in millions)
Loans and leases, including held for sale		$	94,078			$	94,587			$	94,329			$	92,739			$	91,659				(1%)				3%
Total securities and other short-term investments			31,573				31,256				30,102				30,563				29,038				1%				9%
Total interest-earning assets			125,651				125,843				124,431				123,302				120,697				—				4%
Total interest-bearing liabilities			85,450				85,381				85,171				83,480				83,305				—				3%
Bancorp shareholders’ equity			16,376				15,982				15,815				15,841				15,820				2%				4%

Net interest income increased $5 million to $909 million on a fully taxable equivalent basis from the fourth quarter, primarily driven by improvement in loan yields due to the December Fed funds rate increase. The increase was partially offset by continued loan yield compression as a result of mix shift to lower yielding, higher quality credits, as well as lower consumer loan balances, a lower day count, and the reduction in the Fed stock dividend rate.

The net interest margin was 2.91 percent, an increase of 6 bps from the previous quarter. The increase was primarily driven by the impact of the December Fed funds rate hike on loan yields and a lower day count. This increase was partially offset by continued loan yield compression as a result of a mix shift to lower yielding, higher quality credits, as well as lower consumer loan balances and the reduction in the Fed stock dividend rate.

Compared with the first quarter of 2015, net interest income increased $57 million and the net interest margin increased 5 bps. The increase in net interest income was driven by the impact of higher investment securities and loan balances. The increase in the net interest margin from the prior year was primarily driven by lower cash balances held at the Fed.

Securities

Average securities and other short-term investments were $31.6 billion in the first quarter of 2016 compared with $31.3 billion in the previous quarter and $29.0 billion in the first quarter of 2015. Other short-term investments average balances of $1.9 billion decreased $377 million sequentially reflecting lower cash balances held at the Federal Reserve.

 

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Loans

 

		For the Three Months Ended																				% Change
		March				December				September				June				March
		2016				2015				2015				2015				2015				Seq				Yr/Yr
Average Portfolio Loans and Leases ($ in millions)
Commercial:
Commercial and industrial loans		$	43,089			$	43,154			$	43,149			$	42,550			$	41,426				—				4%
Commercial mortgage loans			6,886				7,032				7,023				7,148				7,241				(2%)				(5%)
Commercial construction loans			3,297				3,141				2,965				2,549				2,197				5%				50%
Commercial leases			3,874				3,839				3,846				3,776				3,715				1%				4%
Total commercial loans and leases		$	57,146			$	57,166			$	56,983			$	56,023			$	54,579				—				5%
Consumer:
Residential mortgage loans		$	13,788			$	13,504			$	13,144			$	12,831			$	12,433				2%				11%
Home equity			8,217				8,360				8,479				8,654				8,802				(2%)				(7%)
Automobile loans			11,283				11,670				11,877				11,902				11,933				(3%)				(5%)
Credit card			2,179				2,218				2,277				2,296				2,321				(2%)				(6%)
Other consumer loans and leases			662				676				613				467				440				(2%)				50%
Total consumer loans and leases		$	36,129			$	36,428			$	36,390			$	36,150			$	35,929				(1%)				1%
Total average loans and leases (excluding held for sale)		$	93,275			$	93,594			$	93,373			$	92,173			$	90,508				—				3%
Average loans held for sale		$	803			$	993			$	956			$	566			$	1,151				(19%)				(30%)

Average loan and lease balances (excluding loans held-for-sale) decreased $319 million sequentially and increased $2.8 billion, or 3 percent, from the first quarter of 2015. The year-over-year increase in average loans and leases was driven by increased commercial and industrial (C&I), residential mortgage and commercial construction loans. Period end loans and leases (excluding loans held-for-sale) of $93.6 billion increased $1.0 billion, or 1 percent, sequentially and increased $2.4 billion, or 3 percent, from a year ago.

Average commercial portfolio loan and lease balances were flat sequentially and increased $2.6 billion, or 5 percent, from the first quarter of 2015. Average C&I loans were flat from the prior quarter and increased $1.7 billion, or 4 percent, from the first quarter of 2015. Within commercial real estate, average commercial mortgage balances decreased $146 million and average commercial construction balances increased $156 million sequentially. Commercial line usage, on an end of period basis, increased 62 bps from the fourth quarter of 2015 and decreased 15 bps from the first quarter of 2015.

Average consumer portfolio loan and lease balances decreased $299 million sequentially and increased $200 million from the first quarter of 2015 primarily driven by average residential mortgage loans which increased 2 percent sequentially and 11 percent from a year ago. Average auto loans decreased 3 percent sequentially and 5 percent from the previous year. Average home equity loans declined 2 percent sequentially and 7 percent from the first quarter of 2015. Average credit card loans decreased 2 percent sequentially and 6 percent from the first quarter of 2015.

Period end loans held-for-sale balances of $803 million decreased $100 million sequentially and increased $79 million compared with the prior year. During the quarter, we closed on the previously announced sale of branches in St. Louis. The sale included approximately $158 million of loans and consisted primarily of residential mortgages. The sale had an impact of $51 million on average loans held for sale in the first quarter of 2016.

 

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Deposits

 

		For the Three Months Ended																				% Change
		March				December				September				June				March
		2016				2015				2015				2015				2015				Seq				Yr/Yr
Average Deposits ($ in millions)
Demand		$	35,201			$	36,254			$	35,231			$	35,384			$	33,760				(3%)				4%
Interest checking			25,740				25,296				25,590				26,894				26,885				2%				(4%)
Savings			14,601				14,615				14,868				15,156				15,174				—				(4%)
Money market			18,655				18,775				18,253				18,071				17,492				(1%)				7%
Foreign office(a)			483				736				718				955				861				(34%)				(44%)
Total transaction deposits		$	94,680			$	95,676			$	94,660			$	96,460			$	94,172				(1%)				1%
Other time			4,035				4,052				4,057				4,074				4,022				—				—
Total core deposits		$	98,715			$	99,728			$	98,717			$	100,534			$	98,194				(1%)				1%
Certificates - $100,000 and over			2,815				3,305				2,924				2,558				2,683				(15%)				5%
Other			—				7				222				—				—				(100%)				—
Total average deposits		$	101,530			$	103,040			$	101,863			$	103,092			$	100,877				(1%)				1%

 

(a)	Includes commercial customer Eurodollar sweep balances for which the Bancorp pays rates comparable to other commercial deposit accounts.

Average core deposits decreased $1.0 billion, or 1 percent, sequentially and increased $521 million, or 1 percent, from the first quarter of 2015. Average transaction deposits decreased $996 million, or 1 percent, from the fourth quarter of 2015 and increased $508 million, or 1 percent, from the first quarter of 2015. Sequential performance was primarily driven by lower demand deposit and foreign office account balances, partially offset by higher interest checking account balances. Year-over-year growth reflected higher demand and money market account balances, partially offset by lower interest checking, savings, and foreign office account balances. Other time deposits were flat sequentially and compared with the first quarter of 2015. Average deposit balances were impacted by approximately $68 million due to the previously noted sale of branches in St. Louis. This sale included $219 million of primarily core consumer deposit balances.

Average commercial transaction deposits decreased 4 percent sequentially and 1 percent from the previous year. Sequential performance was primarily driven by seasonally lower demand deposit balances and lower money market account balances. The year-over-year decline reflected lower interest checking and foreign office account balances, partially offset by higher demand deposit and money market account balances.

Average consumer transaction deposits increased 2 percent both sequentially and from the first quarter of 2015. The sequential performance reflected higher interest checking, money market account, and demand deposit account balances. Year-over-year growth was driven by increased interest checking, money market account, and demand deposit account balances, partially offset by lower savings account balances.

 

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Wholesale Funding

 

		For the Three Months Ended																				% Change
		March 2016				December 2015				September 2015				June 2015				March 2015				Seq				Yr/Yr
Average Wholesale Funding ($ in millions)
Certificates - $100,000 and over		$	2,815			$	3,305			$	2,924			$	2,558			$	2,683				(15%)				5%
Other deposits			—				7				222				—				—				(100%)				—
Federal funds purchased			608				1,182				1,978				326				172				(49%)				NM
Other short-term borrowings			3,564				1,675				1,897				1,705				1,602				NM				NM
Long-term debt			14,949				15,738				14,664				13,741				14,414				(5%)				4%
Total average wholesale funding		$	21,936			$	21,907			$	21,685			$	18,330			$	18,871				—				16%

Average wholesale funding of $21.9 billion was flat sequentially, and increased $3.1 billion, or 16 percent, compared with the first quarter of 2015. The year-over-year increase in average wholesale funding was driven by higher securities balances and the impact of reducing LCR punitive deposit balances through targeted pricing changes.

Non-interest Income

 

		For the Three Months Ended																				% Change
		March 2016				December 2015				September 2015				June 2015				March 2015				Seq				Yr/Yr
Non-interest Income ($ in millions)
Service charges on deposits		$	137			$	144			$	145			$	139			$	135				(5%)				1%
Corporate banking revenue			102				104				104				113				63				(2%)				62%
Mortgage banking net revenue			78				74				71				117				86				5%				(9%)
Investment advisory revenue			102				102				103				105				108				—				(6%)
Card and processing revenue			79				77				77				77				71				3%				11%
Other non-interest income			136				602				213				1				163				(77%)				(17%)
Securities gains, net			3				1				—				4				4				NM				(25%)
Total non-interest income		$	637			$	1,104			$	713			$	556			$	630				(42%)				1%

Non-interest income of $637 million decreased $467 million sequentially and increased $7 million compared with prior year results. The sequential and year-over-year comparisons reflect the impacts described below.

 

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Non-interest Income excluding certain items

 

		For the Three Months Ended												% Change
		March 2016				December 2015				March 2015				Seq				Yr/Yr
Non-interest Income excluding certain items ($ in millions)
Non-interest income (U.S. GAAP)		$	637			$	1,104			$	630
Vantiv warrant valuation			(47)				(21)				(70)
Gain on sale of certain branches			(8)				—				—
Gain on sale of Vantiv shares			—				(331)				—
Gain on Vantiv warrant actions			—				(89)				—
Vantiv TRA settlement payment			—				(49)				—
Gain on sale of TDRs			—				—				(37)
Impairment associated with aircraft leases			—				—				30
Valuation of Visa total return swap			(1)				10				17
Securities (gains) / losses			(3)				(1)				(4)
Non-interest income excluding certain items		$	578			$	623			$	566				(7%)				2%

Excluding the items in the table above, non-interest income of $578 million decreased $45 million, or 7 percent, from the previous quarter and increased $12 million, or 2 percent, from the first quarter of 2015. The sequential decline was primarily due to the $31 million annual Vantiv tax receivable payment recorded in the fourth quarter of 2015. Year-over-year growth was driven by an increase in corporate banking revenue and card and processing revenue.

Service charges on deposits of $137 million decreased 5 percent from the fourth quarter of 2015, reflecting normal seasonality, and increased 1 percent compared with the same quarter last year. The sequential decrease reflected an 11 percent decrease in retail service charges due to seasonality. The increase from the first quarter of 2015 was due to a 4 percent increase in commercial service charges.

Corporate banking revenue of $102 million decreased $2 million compared to the fourth quarter of 2015 and increased $39 million from the first quarter of 2015. The sequential comparison reflects lower lease remarketing fees and business lending fees, partially offset by an increase in institutional sales revenue. The year-over-year increase was primarily driven by the $30 million impairment associated with aircraft leases in the first quarter of 2015 and higher loan syndications revenue, partially offset by lower foreign exchange fees.

Mortgage banking net revenue was $78 million in the first quarter of 2016, up $4 million from the fourth quarter of 2015 and down $8 million from the first quarter of 2015. Originations were stable at $1.8 billion in the current quarter, the previous quarter and in the first quarter of 2015. First quarter 2016 originations resulted in gains of $42 million on mortgages sold, compared with gains of $37 million during the previous quarter and $44 million during the first quarter of 2015. Mortgage servicing fees were $52 million this quarter, $53 million in the fourth quarter of 2015, and $59 million in the first quarter of 2015. Mortgage banking net revenue is also affected by net servicing asset valuation adjustments, which include mortgage servicing rights (MSR) amortization and MSR valuation adjustments (including mark-to-market adjustments on free-standing derivatives used to economically hedge the MSR portfolio). These net servicing asset valuation adjustments were negative $16 million in the first quarter of 2016 (reflecting MSR amortization of $27 million and MSR valuation adjustments of positive $11 million); negative $16 million in the fourth quarter of 2015 (MSR amortization of $29 million and MSR valuation adjustments of positive $13 million); and negative $17 million in the first quarter of 2015 (MSR amortization of $34 million and MSR valuation adjustments of positive $17 million). The mortgage servicing asset, net of the valuation reserve, was $685 million at quarter end on a servicing portfolio of $58 billion.

 

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Investment advisory revenue of $102 million was flat from the fourth quarter of 2015 as seasonally higher tax related private client service revenue was offset by lower securities and brokerage fees. There was a decrease of 6 percent from the prior year primarily due to lower securities and brokerage fees and personal asset management fees due to the market decline during the quarter.

Card and processing revenue of $79 million in the first quarter of 2016 increased 3 percent sequentially and increased 11 percent from the first quarter of 2015.

Other non-interest income totaled $136 million in the first quarter of 2016, compared with $602 million in the previous quarter and $163 million in the first quarter of 2015. As previously described, the results included the adjustments in the table on page 9 with the exception of securities gains in all comparable periods. Excluding these items, other non-interest income of $80 million decreased approximately $42 million, or 34 percent, from the fourth quarter of 2015 and increased approximately $7 million, or 10 percent, from the first quarter of 2015. The sequential decrease was primarily due to the payment from Vantiv pursuant to the tax receivable agreement of $31 million recognized in the fourth quarter of 2015.

Net gains on investment securities were $3 million in the first quarter of 2016, compared with $1 million in the previous quarter and $4 million in the first quarter of 2015.

Non-interest Expense

 

		For the Three Months Ended																				% Change
		March 2016				December 2015				September 2015				June 2015				March 2015				Seq				Yr/Yr
Non-interest Expense ($ in millions)
Salaries, wages and incentives		$	403			$	386			$	387			$	383			$	369				4	%			9	%
Employee benefits			100				74				72				78				99				35	%			1	%
Net occupancy expense			77				83				77				83				79				(7	%)			(3	%)
Technology and communications			56				59				56				54				55				(5	%)			2	%
Equipment expense			30				32				31				31				31				(6	%)			(3	%)
Card and processing expense			35				40				40				38				36				(13	%)			(3	%)
Other non-interest expense			285				289				280				280				254				(1	%)			12	%
Total non-interest expense		$	986			$	963			$	943			$	947			$	923				2	%			7	%

Non-interest expense of $986 million increased 2 percent compared with the fourth quarter of 2015 and increased 7 percent compared with the first quarter of 2015. The sequential increase was primarily due to a seasonal increase in FICA and unemployment tax expense recorded in employee benefits and a $14 million expense related to the voluntary early retirement program. The year-over-year increase reflected higher compensation expense as a result of additions primarily in risk and compliance and the benefit from a settlement of a tax liability in the first quarter of 2015 recorded in other non-interest expense.

 

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Credit Quality

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Total net losses charged-off ($ in millions)
Commercial and industrial loans		($	46)			($	30)			($	128)			($	34)			($	38)
Commercial mortgage loans			(6)				(3)				(11)				(11)				(1)
Commercial construction loans			—				—				(3)				—				—
Commercial leases			(2)				(1)				—				—				—
Residential mortgage loans			(2)				(3)				(3)				(5)				(6)
Home equity			(8)				(9)				(9)				(9)				(14)
Automobile loans			(9)				(9)				(7)				(4)				(8)
Credit card			(20)				(19)				(21)				(21)				(21)
Other consumer loans and leases			(3)				(6)				(6)				(2)				(3)
Total net losses charged-off		($	96)			($	80)			($	188)			($	86)			($	91)
Total losses charged-off		($	116)			($	105)			($	209)			($	112)			($	115)
Total recoveries of losses previously charged-off			20				25				21				26				24
Total net losses charged-off		($	96)			($	80)			($	188)			($	86)			($	91)
Ratios (annualized)
Net losses charged-off as a percent of average portfolio loans and leases (excluding held for sale)			0.42%				0.34%				0.80%				0.37%				0.41%
Commercial			0.38%				0.24%				0.99%				0.32%				0.29%
Consumer			0.48%				0.49%				0.51%				0.46%				0.59%

Net charge-offs were $96 million, or 42 bps of average loans and leases on an annualized basis, in the first quarter of 2016 compared with net charge-offs of $80 million, or 34 bps, in the fourth quarter of 2015 and $91 million, or 41 bps, in the first quarter of 2015.

Commercial net charge-offs were $54 million, or 38 bps, and were up $20 million sequentially. The increase was primarily due to higher charge-offs of C&I Loans, which increased by $16 million from the fourth quarter of 2015. Of this increase, $9 million was in the energy portfolio and related to oil field services loans. Commercial real estate net charge-offs increased $3 million from the previous quarter.

Consumer net charge-offs were $42 million, or 48 bps, and were down $4 million sequentially. Compared with the previous quarter, net charge-offs on residential mortgage loans in the portfolio and home equity portfolio were each down $1 million. Net charge-offs in the auto portfolio were flat and net charge-offs on credit card loans were up $1 million from the fourth quarter of 2015. Net charge-offs on other consumer loans were $3 million, down $3 million the previous quarter.

 

11

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		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Allowance for Credit Losses ($ in millions)
Allowance for loan and lease losses, beginning		$	1,272			$	1,261			$	1,293			$	1,300			$	1,322
Total net losses charged-off			(96)				(80)				(188)				(86)				(91)
Provision for loan and lease losses			119				91				156				79				69
Allowance for loan and lease losses, ending		$	1,295			$	1,272			$	1,261			$	1,293			$	1,300
Reserve for unfunded commitments, beginning		$	138			$	134			$	132			$	130			$	135
Provision (benefit) for unfunded commitments			6				4				2				2				(4)
Charge-offs			—				—				—				—				(1)
Reserve for unfunded commitments, ending		$	144			$	138			$	134			$	132			$	130
Components of allowance for credit losses:
Allowance for loan and lease losses		$	1,295			$	1,272			$	1,261			$	1,293			$	1,300
Reserve for unfunded commitments			144				138				134				132				130
Total allowance for credit losses		$	1,439			$	1,410			$	1,395			$	1,425			$	1,430
Allowance for loan and lease losses ratio
As a percent of portfolio loans and leases			1.38%				1.37%				1.35%				1.39%				1.42%
As a percent of nonperforming loans and leases(a)			185%				252%				275%				272%				247%
As a percent of nonperforming assets(a)			157%				197%				208%				206%				188%

 

(a)	Excludes nonaccrual loans and leases in loans held for sale.

Provision for loan and lease losses totaled $119 million in the first quarter of 2016. The allowance represented 1.38 percent of total portfolio loans and leases outstanding as of quarter end, compared with 1.37 percent last quarter, and represented 185 percent of nonperforming loans and leases, and 157 percent of nonperforming assets.

The provision increased $28 million from the fourth quarter of 2015 and increased $50 million from the first quarter of 2015. The allowance for loan and lease losses increased $23 million sequentially, primarily reflecting a higher reserve build for the energy portfolio as a result of sustained low oil prices. As of March 31, the reserve allocated to the energy portfolio was approximately 6.20%, up from approximately 4.75% last quarter.

 

12

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		As of
		March 2016				December 2015				September 2015				June 2015				March 2015
Nonperforming Assets and Delinquent Loans ($ in millions)
Nonaccrual portfolio loans and leases:
Commercial and industrial loans		$	278			$	82			$	47			$	61			$	61
Commercial mortgage loans			51				56				60				49				57
Commercial construction loans			—				—				—				—				—
Commercial leases			4				—				2				2				2
Residential mortgage loans			25				28				31				35				40
Home equity			61				62				65				70				71
Total nonaccrual portfolio loans and leases (excludes restructured loans)		$	419			$	228			$	205			$	217			$	231
Nonaccrual restructured portfolio commercial loans and leases(b)			210				203				177				175				205
Nonaccrual restructured portfolio consumer loans and leases			72				75				76				83				90
Total nonaccrual portfolio loans and leases		$	701			$	506			$	458			$	475			$	526
Repossessed property			17				18				17				16				20
OREO			107				123				131				135				145
Total nonperforming portfolio assets(a)		$	825			$	647			$	606			$	626			$	691
Nonaccrual loans held for sale			3				1				1				1				2
Nonaccrual restructured loans held for sale			2				11				1				—				—
Total nonperforming assets		$	830			$	659			$	608			$	627			$	693
Restructured Portfolio Consumer loans and leases (accrual)		$	998			$	979			$	973			$	970			$	943
Restructured Portfolio Commercial loans and leases (accrual)(b)		$	461			$	491			$	571			$	769			$	774
Total loans and leases 90 days past due		$	73			$	75			$	70			$	70			$	78
Nonperforming loans and leases as a percent of portfolio loans, leases and other assets, including OREO(a)			0.75%				0.55%				0.49%				0.51%				0.57%
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO(a)			0.88%				0.70%				0.65%				0.67%				0.76%

 

(a)	Does not include nonaccrual loans held for sale.

(b)

Excludes $20 million of restructured nonaccrual loans and $7 million of restructured accruing loans as of March 31, 2016 and December 31, 2015. Excludes $21 million of restructured nonaccrual loans and $7 million of restructured accruing loans as of September 30, 2015, June 30, 2015 and March 31, 2015.

Total nonperforming assets, including loans held-for-sale, increased $171 million, or 26 percent, from the previous quarter to $830 million. Nonperforming loans (NPLs) at quarter-end increased $195 million, or 39 percent, from the previous quarter to $701 million or 0.75 percent of total loans, leases and OREO.

Commercial NPAs increased $192 million, or 46 percent, from the fourth quarter to $611 million, or 1.06 percent of commercial loans, leases and OREO. Commercial NPLs increased $202 million from last quarter to $543 million, or 0.94 percent of commercial loans and leases. The increase in commercial NPAs was primarily due to an increase in C&I NPAs. C&I NPAs increased $200 million from the prior quarter to $472 million. This increase primarily reflected a $168 million increase in NPLs associated with the RBL (reserve based lending) energy portfolio and the impact of low oil prices. This increase, coupled with the collateralized nature of the RBL loans and the recognition of losses on previous individually evaluated loans, resulted in a decline in the reserve coverage of both NPLs and NPAs compared with those coverage levels in the fourth quarter of 2015. Commercial mortgage NPAs decreased $12 million from the previous quarter to $126 million. Commercial construction NPAs were flat from the previous quarter at $8 million. Commercial lease NPAs were $5 million, up $4 million from the previous quarter. Commercial NPAs included $210 million of nonaccrual troubled debt restructurings (TDRs), compared with $203 million last quarter.

 

13

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Consumer NPAs decreased $14 million from the fourth quarter to $214 million, or 0.59 percent of consumer loans, leases and OREO. Consumer NPLs decreased $7 million from last quarter to $158 million, or 0.44 percent of consumer loans and leases. Residential mortgage NPAs decreased $9 million from the second quarter to $77 million. Home equity NPAs decreased $3 million, sequentially, to $95 million. Consumer nonaccrual TDRs were $72 million in the first quarter of 2016, compared with $75 million in the fourth quarter of 2015.

First quarter OREO balances included in NPA balances were down $16 million from the fourth quarter to $107 million, and included $60 million in commercial OREO and $47 million in consumer OREO. Repossessed personal property decreased $1 million from the prior quarter to $17 million.

Loans over 90 days past due and still accruing decreased $2 million from the fourth quarter of 2015 to $73 million. Commercial balances over 90 days past due were $3 million compared with $7 million in the prior quarter, and consumer balances 90 days past due increased $2 million from the previous quarter to $70 million. Loans 30-89 days past due of $208 million were down $37 million from the previous quarter. Commercial balances 30-89 days past due decreased $1 million sequentially to $34 million and consumer balances 30-89 days past due were down $36 million from the fourth quarter at $174 million. The above delinquency figures exclude nonaccruals described previously.

 

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Capital Position

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Capital Position
Average total Bancorp shareholders’ equity to average assets			11.57	%			11.26	%			11.24	%			11.32	%			11.50	%
Tangible equity(a)			9.51	%			9.55	%			9.29	%			9.29	%			9.37	%
Tangible common equity (excluding unrealized gains/losses)(a)			8.55	%			8.59	%			8.33	%			8.33	%			8.40	%
Tangible common equity (including unrealized gains/losses)(a)			8.97	%			8.71	%			8.65	%			8.51	%			8.77	%
Tangible common equity as a percent of risk-weighted assets (excluding unrealized gains/losses)(a)(b)			9.78	%			9.80	%			9.37	%			9.39	%			9.49	%
		Basel III
Regulatory capital ratios:		Transitional
CET1 capital(b)			9.81	%			9.82	%			9.40	%			9.42	%			9.52	%
Tier I risk-based capital(b)			10.91	%			10.93	%			10.49	%			10.51	%			10.62	%
Total risk-based capital(b)			14.66	%			14.13	%			13.68	%			13.69	%			14.01	%
Tier I leverage			9.57	%			9.54	%			9.38	%			9.44	%			9.59	%
CET1 capital (fully phased-in)(a)(b)			9.72	%			9.72	%			9.30	%			9.31	%			9.41	%
Book value per share		$	19.46			$	18.48			$	18.22			$	17.62			$	17.83
Tangible book value per share(a)		$	16.32			$	15.39			$	15.18			$	14.62			$	14.85

 

(a)	These ratios have been included herein to facilitate a greater understanding of the Bancorp’s capital structure and financial condition. See the Regulation G Non-GAAP Reconciliation table for a reconciliation of these ratios to U.S. GAAP.

(b)	Under the banking agencies Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are calculated based upon the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets.

(c)	Current period regulatory capital ratios are estimated.

Capital ratios remained strong during the quarter. The common equity Tier 1 ratio was 9.81 percent, the tangible common equity to tangible assets ratio* was 8.55 percent (excluding unrealized gains/losses), and 8.97 percent (including unrealized gains/losses). The Tier 1 risk-based capital ratio was 10.91 percent, the total risk-based capital ratio was 14.66 percent, and the Leverage ratio was 9.57 percent.

 

*	Non-GAAP measure; see Reg. G reconciliation on page 32.

 

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Book value per share at March 31, 2016 was $19.46 and tangible book value per share* was $16.32, compared with the December 31, 2015 book value per share of $18.48 and tangible book value per share* of $15.39.

Fifth Third entered into or completed multiple share repurchases during the quarter. Below is a summary of those share repurchases.

 

•

On January 14, 2016, Fifth Third settled the forward contract related to the December 14, 2015 $215 million share repurchase agreement. An additional 1.78 million shares were repurchased in connection with the completion of this agreement.

 

•

On March 4, 2016, Fifth Third entered into a share repurchase agreement whereby Fifth Third would purchase approximately $240 million of its outstanding stock, which reduced the first quarter share count by 12.62 million shares.

 

•

On April 11, 2016, Fifth Third settled the forward contract related to the March 4, 2016 $240 million share repurchase agreement. An additional 1.87 million shares were repurchased in connection with the completion of this agreement.

In total, common shares outstanding decreased by approximately 15 million shares in the first quarter of 2016 from the fourth quarter of 2015.

Tax Rate

The effective tax rate was 25.0 percent in the first quarter of 2016 compared with 30.7 percent in the fourth quarter of 2015 and 25.6 percent in the first quarter of 2015. The sequential comparison was primarily driven by the impact of Vantiv-related transactions during the prior quarter.

Other

Fifth Third Bank owns approximately 35 million units representing an 18.3 percent interest in Vantiv Holding, LLC, convertible into shares of Vantiv, Inc., a publicly traded firm. Based upon Vantiv’s closing price of $53.88 on March 31, 2016, our interest in Vantiv was valued at approximately $1.9 billion. Next month in our 10-Q, we will update our disclosure of the carrying value of our interest in Vantiv stock, which was $360 million as of December 31, 2015. The difference between the market value and the book value of Fifth Third’s interest in Vantiv’s shares is not recognized in Fifth Third’s equity or capital. Additionally, Fifth Third has a remaining warrant to purchase approximately 7.8 million additional shares in Vantiv which is carried as a derivative asset at a fair value of $308 million as of March 31, 2016.

Conference Call

Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. This conference call will be webcast live by Thomson Financial and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on “About Fifth Third” then “Investor Relations”). Institutional investors can access the call via Thomson Financial’s password-protected event management site, StreetEvents (www.streetevents.com).

 

*	Non-GAAP measure; see Reg. G reconciliation on page 32.

 

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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. Additionally, a telephone replay of the conference call will be available beginning approximately two hours after the conference call until Thursday, May 5, 2016 by dialing 800-585-8367 for domestic access or 404-537-3406 for international access (passcode 75971680#).

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of March 31, 2016, the Company had $142 billion in assets and operates 1,241 full-service Banking Centers, including 95 Bank Mart® locations, most open seven days a week, inside select grocery stores and 2,556 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third also has an 18.3% interest in Vantiv Holding, LLC. Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2016, had $303 billion in assets under care, of which it managed $26 billion for individuals, corporations and not-for-profit organizations. 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.”

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. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “anticipates,” “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 from time to time by our Quarterly Reports on Form 10-Q. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. 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. There is a risk that additional information may become known during the company’s quarterly closing process or as a result of subsequent events that could affect the accuracy of the statements and financial information contained herein.

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) general economic conditions and the economy weaken and become less favorable than expected, particularly in the real estate market, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business; (2) deteriorating credit quality; (3) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (4) changes in the interest rate environment reduce interest margins; (5) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (6) Fifth Third’s ability to maintain required capital levels and adequate sources of funding and liquidity; (7) maintaining capital requirements and adequate sources of funding and liquidity may limit Fifth Third’s operations and potential growth; (8) changes and trends in capital markets; (9) problems encountered by larger or similar financial institutions may adversely affect the banking industry and/or Fifth Third; (10) competitive pressures among depository institutions increase significantly; (11) effects of critical accounting policies and judgments; (12) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (13) legislative or regulatory changes or actions, or significant litigation, adversely affect Fifth Third, one or more acquired entities and/or the combined company or the businesses in which Fifth Third, one or more acquired entities and/or the combined company are engaged, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain favorable ratings from rating agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to attract and retain key personnel; (17) ability to receive dividends from its subsidiaries; (18) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (19) effects of accounting or financial results of one or more acquired entities; (20) difficulties from Fifth Third’s investment in, relationship with, and nature of the operations of Vantiv, LLC; (21) loss of income from any sale or potential sale of businesses; (22) difficulties in separating the operations of any branches or other assets divested; (23) inability to achieve expected benefits from branch consolidations and planned sales within desired timeframes, if at all; (24) ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; and (25) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity.

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.

# # #

 

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Quarterly Financial Review for March 31, 2016

Table of Contents

 

 

 

Financial Highlights			19-20
Consolidated Statements of Income			21
Consolidated Statements of Income (Taxable Equivalent)			22
Consolidated Balance Sheets			23-24
Consolidated Statements of Changes in Equity			25
Average Balance Sheet and Yield Analysis			26-27
Summary of Loans and Leases			28
Regulatory Capital			29
Summary of Credit Loss Experience			30
Asset Quality			31
Regulation G Non-GAAP Reconciliation			32
Segment Presentation			33

 

 

 

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Fifth Third Bancorp and Subsidiaries

Financial Highlights

$ in millions, except per share data

(unaudited)

 

		For the Three Months Ended												% Change
		March 2016				December 2015				March 2015				Seq				Yr/Yr
Income Statement Data
Net interest income(a)		$	909			$	904			$	852				1%				7%
Non-interest income			637				1,104				630				(42%)				1%
Total revenue(a)			1,546				2,008				1,482				(23%)				4%
Provision for loan and lease losses			119				91				69				31%				72%
Non-interest expense			986				963				923				2%				7%
Net income attributable to Bancorp			327				657				361				(50%)				(9%)
Net income available to common shareholders			312				634				346				(51%)				(10%)
Common Share Data
Earnings per share, basic		$	0.40			$	0.80			$	0.42				(50%)				(5%)
Earnings per share, diluted			0.40				0.79				0.42				(49%)				(5%)
Cash dividends per common share			0.13				0.13				0.13				—				—
Book value per share			19.46				18.48				17.83				5%				9%
Market price per share			16.69				20.10				18.85				(17%)				(11%)
Common shares outstanding (in thousands)			770,471				785,080				815,190				(2%)				(5%)
Average common shares outstanding (in thousands):
Basic			773,564				784,855				810,210				(1%)				(5%)
Diluted			778,392				794,481				818,672				(2%)				(5%)
Market capitalization		$	12,859			$	15,780			$	15,366				(19%)				(16%)
Financial Ratios
Return on average assets			0.93%				1.83%				1.06%				(49%)				(12%)
Return on average common equity			8.3%				17.2%				9.7%				(52%)				(14%)
Return on average tangible common equity(b)(d)			9.9%				20.6%				11.7%				(52%)				(15%)
Non-interest income as a percent of total revenue			41%				55%				43%				(25%)				(5%)
Dividend payout ratio			32.5%				16.3%				31.0%				101%				5%
Average total Bancorp shareholders’ equity as a percent of average assets			11.57%				11.26%				11.50%				3%				1%
Tangible common equity(c)(d)(j)			8.55%				8.59%				8.40%				—				2%
Net interest margin(a)			2.91%				2.85%				2.86%				2%				2%
Efficiency(a)			63.8%				48.0%				62.3%				33%				2%
Effective tax rate			25.0%				30.7%				25.6%				(19%)				(2%)
Credit Quality
Net losses charged-off		$	96			$	80			$	91				22%				5%
Net losses charged-off as a percent of average portfolio loans and leases			0.42%				0.34%				0.41%				24%				2%
Allowance for loan and lease losses as a percent of portfolio loans and leases			1.38%				1.37%				1.42%				1%				(3%)
Allowance for credit losses as a percent of portfolio loans and leases			1.54%				1.52%				1.57%				1%				(2%)
Nonperforming assets as a percent of portfolio loans, leases and other assets, including OREO(e)			0.88%				0.70%				0.76%				26%				16%
Average Balances
Loans and leases, including held for sale		$	94,078			$	94,587			$	91,659				(1%)				3%
Total securities and other short-term investments			31,573				31,256				29,038				1%				9%
Total assets			141,582				141,973				137,617				—				3%
Transaction deposits(f)			94,680				95,676				94,172				(1%)				1%
Core deposits(g)			98,715				99,728				98,194				(1%)				1%
Wholesale funding(h)			21,936				21,907				18,871				—				16%
Bancorp shareholders’ equity			16,376				15,982				15,820				2%				4%
		Basel III Transitional
Regulatory Capital Ratios(i)
CET1 capital(j)			9.81%				9.82%				9.52%				—				3%
Tier I risk-based capital(j)			10.91%				10.93%				10.62%				—				3%
Total risk-based capital(j)			14.66%				14.13%				14.01%				4%				5%
Tier I leverage			9.57%				9.54%				9.59%				—				—
CET1 capital (fully phased-in)(j)			9.72%				9.72%				9.41%				—				3%
Operations
Banking centers			1,241				1,254				1,303				(1%)				(4%)
ATMs			2,556				2,593				2,637				(1%)				(3%)
Full-time equivalent employees			18,200				18,261				18,471				—				(1%)

 

(a)	Presented on a fully taxable equivalent basis.

(b)	The return on average tangible common equity is calculated as tangible net income available to common shareholders excluding tax effected amortization of intangibles) divided by average tangible common equity (average common equity less goodwill and intangible assets).

(c)	The tangible common equity ratio is calculated as tangible common equity (shareholders’ equity less preferred stock, goodwill, intangible assets and accumulated other comprehensive income divided by tangible assets (total assets less goodwill, intangible assets and AOCI).

(d)	These ratios have been included herein to facilitate a greater understanding of the Bancorp’s capital structure and financial condition. Non-GAAP measure; see Reg. G reconciliation on page 32.

(e)	Excludes nonaccrual loans held for sale.

(f)	Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers.

(g)	Includes transaction deposits plus other time deposits.

(h)	Includes certificates $100,000 and over, other deposits, federal funds purchased, other short-term borrowings and long-term debt.

(i)	Current period regulatory capital ratios are estimates.

(j)	Under the banking agencies’ Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are calculated based upon the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets.

 

19

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Fifth Third Bancorp and Subsidiaries

Financial Highlights

$ in millions, except per share data

(unaudited)

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Income Statement Data
Net interest income(a)		$	909			$	904			$	906			$	892			$	852
Non-interest income			637				1,104				713				556				630
Total revenue(a)			1,546				2,008				1,619				1,448				1,482
Provision for loan and lease losses			119				91				156				79				69
Non-interest expense			986				963				943				947				923
Net income attributable to Bancorp			327				657				381				315				361
Net income available to common shareholders			312				634				366				292				346
Common Share Data
Earnings per share, basic		$	0.40			$	0.80			$	0.46			$	0.36			$	0.42
Earnings per share, diluted			0.40				0.79				0.45				0.36				0.42
Cash dividends per common share			0.13				0.13				0.13				0.13				0.13
Book value per share			19.46				18.48				18.22				17.62				17.83
Market price per share			16.69				20.10				18.91				20.82				18.85
Common shares outstanding (in thousands)			770,471				785,080				795,439				810,054				815,190
Average common shares outstanding (in thousands):
Basic			773,564				784,855				795,793				803,965				810,210
Diluted			778,392				794,481				805,023				812,843				818,672
Market capitalization		$	12,859			$	15,780			$	15,042			$	16,865			$	15,366
Financial Ratios
Return on average assets			0.93	%			1.83	%			1.07	%			0.90	%			1.06	%
Return on average common equity			8.3	%			17.2	%			10.0	%			8.1	%			9.7	%
Return on average tangible common equity(b)(d)			9.9	%			20.6	%			12.0	%			9.7	%			11.7	%
Non-interest income as a percent of total revenue			41	%			55	%			44	%			38	%			43	%
Dividend payout ratio			32.5	%			16.3	%			28.3	%			36.1	%			31.0	%
Average total Bancorp shareholders’ equity as a percent of average assets			11.57	%			11.26	%			11.24	%			11.32	%			11.50	%
Tangible common equity(c)(d)			8.55	%			8.59	%			8.33	%			8.33	%			8.40	%
Net interest margin(a)			2.91	%			2.85	%			2.89	%			2.90	%			2.86	%
Efficiency(a)			63.8	%			48.0	%			58.2	%			65.4	%			62.3	%
Effective tax rate			25.0	%			30.7	%			26.0	%			26.1	%			25.6	%
Credit Quality
Net losses charged-off		$	96			$	80			$	188			$	86			$	91
Net losses charged-off as a percent of average portfolio loans and leases			0.42	%			0.34	%			0.80	%			0.37	%			0.41	%
ALLL as a percent of portfolio loans and leases			1.38	%			1.37	%			1.35	%			1.39	%			1.42	%
Allowance for credit losses as a percent of portfolio loans and leases			1.54	%			1.52	%			1.49	%			1.54	%			1.57	%
Nonperforming assets as a percent of portfolio loans, leases and other assets, including OREO(e)			0.88	%			0.70	%			0.65	%			0.67	%			0.76	%
Average Balances
Loans and leases, including held for sale		$	94,078			$	94,587			$	94,329			$	92,739			$	91,659
Total securities and other short-term investments			31,573				31,256				30,102				30,563				29,038
Total assets			141,582				141,973				140,706				139,960				137,617
Transaction deposits(f)			94,680				95,676				94,660				96,460				94,172
Core deposits(g)			98,715				99,728				98,717				100,534				98,194
Wholesale funding(h)			21,936				21,907				21,685				18,330				18,871
Bancorp shareholders’ equity			16,376				15,982				15,815				15,841				15,820
		Basel III Transitional
Regulatory Capital Ratios(i)
CET1 capital(j)			9.81	%			9.82	%			9.40	%			9.42	%			9.52	%
Tier I risk-based capital(j)			10.91	%			10.93	%			10.49	%			10.51	%			10.62	%
Total risk-based capital(j)			14.66	%			14.13	%			13.68	%			13.69	%			14.01	%
Tier I leverage			9.57	%			9.54	%			9.38	%			9.44	%			9.59	%
CET1 capital (fully phased-in)(j)			9.72	%			9.72	%			9.30	%			9.31	%			9.41	%
Operations
Banking centers			1,241				1,254				1,295				1,299				1,303
ATMs			2,556				2,593				2,650				2,630				2,637
Full-time equivalent employees			18,200				18,261				18,311				18,527				18,471

 

(a)	Presented on a fully taxable equivalent basis.

(b)	The return on average tangible common equity is calculated as tangible net income available to common shareholders excluding tax effected amortization of intangibles) divided by average tangible common equity (average common equity less goodwill and intangible assets).

(c)	The tangible common equity ratio is calculated as tangible common equity (shareholders’ equity less preferred stock, goodwill, intangible assets and accumulated other comprehensive income divided by tangible assets (total assets less goodwill, intangible assets and AOCI).

(d)	The ratios have been included herein to facilitate a greater understanding of the Bancorp’s capital structure and financial condition. Non-GAAP measure; see Reg. G reconciliation on page 32.

(e)	Excludes nonaccrual loans held for sale.

(f)	Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers.

(g)	Includes transaction deposits plus other time deposits.

(h)	Includes certificates $100,000 and over, other deposits, federal funds purchased, other short-term borrowings and long-term debt.

(i)	Current period regulatory capital ratios are estimates.

(j)	Under the banking agencies’ Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are calculated based upon the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets.

 

20

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Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Income

$ in millions

(unaudited)

 

		For the Three Months Ended												% Change
		March 2016				December 2015				March 2015				Seq				Yr/Yr
Interest Income
Interest and fees on loans and leases		$	804			$	797			$	778				1%				3%
Interest on securities			232				231				188				—				23%
Interest on other short-term investments			2				2				4				—				(50%)
Total interest income			1,038				1,030				970				1%				7%
Interest Expense
Interest on deposits			49				46				50				7%				(2%)
Interest on federal funds purchased			1				—				—				100%				100%
Interest on short-term borrowings			3				1				—				NM				100%
Interest on long-term debt			82				84				73				(2%)				12%
Total interest expense			135				131				123				3%				10%
Net Interest Income			903				899				847				—				7%
Provision for loan and lease losses			119				91				69				31%				72%
Net Interest Income After Provision for Loan and Lease Losses			784				808				778				(3%)				1%
Non-interest Income
Service charges on deposits			137				144				135				(5%)				1%
Corporate banking revenue			102				104				63				(2%)				62%
Mortgage banking net revenue			78				74				86				5%				(9%)
Investment advisory revenue			102				102				108				—				(6%)
Card and processing revenue			79				77				71				3%				11%
Other non-interest income			136				602				163				(77%)				(17%)
Securities gains, net			3				1				4				NM				(25%)
Total non-interest income			637				1,104				630				(42%)				1%
Non-interest Expense
Salaries, wages and incentives			403				386				369				4%				9%
Employee benefits			100				74				99				35%				1%
Net occupancy expense			77				83				79				(7%)				(3%)
Technology and communications			56				59				55				(5%)				2%
Equipment expense			30				32				31				(6%)				(3%)
Card and processing expense			35				40				36				(13%)				(3%)
Other non-interest expense			285				289				254				(1%)				12%
Total non-interest expense			986				963				923				2%				7%
Income Before Income Taxes			435				949				485				(54%)				(10%)
Applicable income tax expense			108				292				124				(63%)				(13%)
Net Income			327				657				361				(50%)				(9%)
Less: Net income attributable to noncontrolling interests			—				—				—				—				—
Net Income Attributable to Bancorp			327				657				361				(50%)				(9%)
Dividends on preferred stock			15				23				15				(35%)				—
Net Income Available to Common Shareholders		$	312			$	634			$	346				(51%)				(10%)

 

21

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Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Income (Taxable Equivalent)

$ in millions

(unaudited)

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Interest Income
Interest and fees on loans and leases		$	804			$	797			$	795			$	782			$	778
Interest on securities			232				231				230				219				188
Interest on other short-term investments			2				2				1				2				4
Total interest income			1,038				1,030				1,026				1,003				970
Taxable equivalent adjustment			6				5				5				5				5
Total interest income (taxable equivalent)			1,044				1,035				1,031				1,008				975
Interest Expense
Interest on deposits			49				46				44				46				50
Interest on federal funds purchased			1				—				—				—				—
Interest on other short-term borrowings			3				1				1				1				—
Interest on long-term debt			82				84				80				69				73
Total interest expense			135				131				125				116				123
Net Interest Income (Taxable Equivalent)			909				904				906				892				852
Provision for loan and lease losses			119				91				156				79				69
Net Interest Income (Taxable Equivalent) After Provision for Provision for Loan and Lease Losses			790				813				750				813				783
Non-interest Income
Service charges on deposits			137				144				145				139				135
Corporate banking revenue			102				104				104				113				63
Mortgage banking net revenue			78				74				71				117				86
Investment advisory revenue			102				102				103				105				108
Card and processing revenue			79				77				77				77				71
Other non-interest income			136				602				213				1				163
Securities gains, net			3				1				—				4				4
Total non-interest income			637				1,104				713				556				630
Non-interest Expense
Salaries, wages and incentives			403				386				387				383				369
Employee benefits			100				74				72				78				99
Net occupancy expense			77				83				77				83				79
Technology and communications			56				59				56				54				55
Equipment expense			30				32				31				31				31
Card and processing expense			35				40				40				38				36
Other non-interest expense			285				289				280				280				254
Total non-interest expense			986				963				943				947				923
Income Before Income Taxes (Taxable Equivalent)			441				954				520				422				490
Taxable equivalent adjustment			6				5				5				5				5
Income Before Income Taxes			435				949				515				417				485
Applicable income tax expense			108				292				134				108				124
Net Income			327				657				381				309				361
Less: Net Income attributable to noncontrolling interests			—				—				—				(6)				—
Net Income Attributable to Bancorp			327				657				381				315				361
Dividends on preferred stock			15				23				15				23				15
Net Income Available to Common Shareholders		$	312			$	634			$	366			$	292			$	346

 

22

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Fifth Third Bancorp and Subsidiaries

Consolidated Balance Sheets

$ in millions, except per share data

(unaudited)

 

		As of												% Change
		March				December				March
		2016				2015				2015				Seq				Yr/Yr
Assets
Cash and due from banks		$	2,298			$	2,540			$	2,920				(10%)				(21%)
Available-for-sale and other securities(a)			29,891				29,044				26,409				3%				13%
Held-to-maturity securities(b)			64				70				177				(9%)				(64%)
Trading securities			405				386				392				5%				3%
Other short-term investments			1,778				2,671				4,919				(33%)				(64%)
Loans held for sale			803				903				724				(11%)				11%
Portfolio loans and leases:
Commercial and industrial loans			43,433				42,131				42,052				3%				3%
Commercial mortgage loans			6,864				6,957				7,209				(1%)				(5%)
Commercial construction loans			3,428				3,214				2,302				7%				49%
Commercial leases			3,956				3,854				3,786				3%				4%
Residential mortgage loans			13,895				13,716				12,569				1%				11%
Home equity			8,112				8,301				8,714				(2%)				(7%)
Automobile loans			11,128				11,493				11,873				(3%)				(6%)
Credit card			2,138				2,259				2,291				(5%)				(7%)
Other consumer loans and leases			651				657				448				(1%)				45%
Portfolio loans and leases			93,605				92,582				91,244				1%				3%
Allowance for loan and lease losses			(1,295)				(1,272)				(1,300)				2%				—
Portfolio loans and leases, net			92,310				91,310				89,944				1%				3%
Bank premises and equipment			2,185				2,239				2,433				(2%)				(10%)
Operating lease equipment			738				707				695				4%				6%
Goodwill			2,416				2,416				2,416				—				—
Intangible assets			11				12				14				(8%)				(21%)
Servicing rights			685				785				789				(13%)				(13%)
Other assets			8,846				7,965				8,605				11%				3%
Total Assets		$	142,430			$	141,048			$	140,437				1%				1%
Liabilities
Deposits:
Demand		$	35,858			$	36,267			$	35,343				(1%)				1%
Interest checking			25,182				26,768				27,191				(6%)				(7%)
Savings			14,738				14,601				15,355				1%				(4%)
Money market			19,377				18,494				18,105				5%				7%
Foreign office			441				464				811				(5%)				(46%)
Other time			4,049				4,019				4,044				1%				—
Certificates $100,000 and over			2,830				2,592				2,566				9%				10%
Total deposits			102,475				103,205				103,415				(1%)				(1%)
Federal funds purchased			134				151				200				(11%)				(33%)
Other short-term borrowings			3,523				1,507				1,413				NM				NM
Accrued taxes, interest and expenses			2,011				2,164				1,979				(7%)				2%
Other liabilities			2,627				2,341				3,504				12%				(25%)
Long-term debt			15,305				15,810				14,022				(3%)				9%
Total Liabilities			126,075				125,178				124,533				1%				1%
Equity
Common stock(c)			2,051				2,051				2,051				—				—
Preferred stock			1,331				1,331				1,331				—				—
Capital surplus			2,686				2,666				2,659				1%				1%
Retained earnings			12,570				12,358				11,380				2%				10%
Accumulated other comprehensive income			684				197				588				NM				16%
Treasury stock			(2,999)				(2,764)				(2,145)				9%				40%
Total Bancorp shareholders’ equity			16,323				15,839				15,864				3%				3%
Noncontrolling interests			32				31				40				3%				(20%)
Total Equity			16,355				15,870				15,904				3%				3%
Total Liabilities and Equity		$	142,430			$	141,048			$	140,437				1%				1%
(a) Amortized cost		$	28,838			$	28,678			$	25,475				1%				13%
(b) Market values			64				70				177				(9%)				(64%)
(c) Common shares, stated value $2.22 per share (in thousands):
Authorized			2,000,000				2,000,000				2,000,000				—				—
Outstanding, excluding treasury			770,471				785,080				815,190				(2%)				(5%)
Treasury			153,422				138,812				108,702				11%				41%

 

23

---

Fifth Third Bancorp and Subsidiaries

Consolidated Balance Sheets

$ in millions, except per share data

(unaudited)

 

		As of
		March				December				September				June				March
		2016				2015				2015				2015				2015
Assets
Cash and due from banks		$	2,298			$	2,540			$	2,455			$	2,785			$	2,920
Available-for-sale and other securities(a)			29,891				29,044				28,799				27,987				26,409
Held-to-maturity securities(b)			64				70				157				157				177
Trading securities			405				386				374				370				392
Other short-term investments			1,778				2,671				1,994				3,451				4,919
Loans held for sale			803				903				994				995				724
Portfolio loans and leases:
Commercial and industrial loans			43,433				42,131				42,948				42,800				42,052
Commercial mortgage loans			6,864				6,957				7,061				7,150				7,209
Commercial construction loans			3,428				3,214				3,101				2,709				2,302
Commercial leases			3,956				3,854				3,898				3,881				3,786
Residential mortgage loans			13,895				13,716				13,392				12,933				12,569
Home equity			8,112				8,301				8,427				8,547				8,714
Automobile loans			11,128				11,493				11,826				11,909				11,873
Credit card			2,138				2,259				2,229				2,278				2,291
Other consumer loans and leases			651				657				692				496				448
Portfolio loans and leases			93,605				92,582				93,574				92,703				91,244
Allowance for loan and lease losses			(1,295	)			(1,272	)			(1,261	)			(1,293	)			(1,300	)
Portfolio loans and leases, net			92,310				91,310				92,313				91,410				89,944
Bank premises and equipment			2,185				2,239				2,264				2,298				2,433
Operating lease equipment			738				707				680				670				695
Goodwill			2,416				2,416				2,416				2,416				2,416
Intangible assets			11				12				13				13				14
Servicing rights			685				785				757				854				789
Other assets			8,846				7,965				8,667				8,222				8,605
Total Assets		$	142,430			$	141,048			$	141,883			$	141,628			$	140,437
Liabilities
Deposits:
Demand		$	35,858			$	36,267			$	34,832			$	35,449			$	35,343
Interest checking			25,182				26,768				24,832				27,074				27,191
Savings			14,738				14,601				14,632				14,976				15,355
Money market			19,377				18,494				18,887				17,900				18,105
Foreign office			441				464				754				728				811
Other time			4,049				4,019				4,041				4,050				4,044
Certificates $100,000 and over			2,830				2,592				2,915				2,846				2,566
Total deposits			102,475				103,205				100,893				103,023				103,415
Federal funds purchased			134				151				132				126				200
Other short-term borrowings			3,523				1,507				4,904				4,136				1,413
Accrued taxes, interest and expenses			2,011				2,164				1,990				1,858				1,979
Other liabilities			2,627				2,341				2,614				3,356				3,504
Long-term debt			15,305				15,810				15,492				13,491				14,022
Total Liabilities			126,075				125,178				126,025				125,990				124,533
Equity
Common stock(c)			2,051				2,051				2,051				2,051				2,051
Preferred stock			1,331				1,331				1,331				1,331				1,331
Capital surplus			2,686				2,666				2,659				2,632				2,659
Retained earnings			12,570				12,358				11,826				11,564				11,380
Accumulated other comprehensive income			684				197				522				291				588
Treasury stock			(2,999	)			(2,764	)			(2,563	)			(2,264	)			(2,145	)
Total Bancorp shareholders’ equity			16,323				15,839				15,826				15,605				15,864
Noncontrolling interests			32				31				32				33				40
Total Equity			16,355				15,870				15,858				15,638				15,904
Total Liabilities and Equity		$	142,430			$	141,048			$	141,883			$	141,628			$	140,437
(a) Amortized cost		$	28,838			$	28,678			$	27,986			$	27,483			$	25,475
(b) Market values			64				70				157				157				177
(c) Common shares, stated value $2.22 per share (in thousands):
Authorized			2,000,000				2,000,000				2,000,000				2,000,000				2,000,000
Outstanding, excluding treasury			770,471				785,080				795,439				810,054				815,190
Treasury			153,422				138,812				128,453				113,838				108,702

 

24

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Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Changes in Equity

$ in millions

(unaudited)

 

		For the Three Months Ended
		March				March
		2016				2015
Total equity, beginning		$	15,870			$	15,665
Net income attributable to Bancorp			327				361
Other comprehensive income, net of tax:
Change in unrealized gains:
Available-for-sale securities			447				133
Qualifying cash flow hedges			39				24
Change in accumulated other comprehensive income related to employee benefit plans			1				2
Comprehensive income			814				520
Cash dividends declared:
Common stock			(100	)			(106	)
Preferred stock			(15	)			(15	)
Impact of stock transactions under stock compensation plans, net			24				21
Shares acquired for treasury			(240	)			(180	)
Noncontrolling interest			1				1
Other			1				(2	)
Total equity, ending		$	16,355			$	15,904

 

25

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Fifth Third Bancorp and Subsidiaries

Average Balance Sheet and Yield Analysis

$ in millions, except share data

(unaudited)

 

		For the Three Months Ended												% Change
		March				December				March
		2016				2015				2015				Seq				Yr/Yr
Assets
Interest-earning assets:
Commercial and industrial loans		$	43,127			$	43,175			$	41,462				—				4%
Commercial mortgage loans			6,908				7,053				7,248				(2%)				(5%)
Commercial construction loans			3,297				3,141				2,198				5%				50%
Commercial leases			3,875				3,841				3,716				1%				4%
Residential mortgage loans			14,405				14,315				13,515				1%				7%
Home equity			8,241				8,394				8,802				(2%)				(6%)
Automobile loans			11,285				11,674				11,933				(3%)				(5%)
Credit card			2,277				2,320				2,321				(2%)				(2%)
Other consumer loans and leases			663				674				464				(2%)				43%
Taxable securities			29,619				28,951				23,102				2%				28%
Tax exempt securities			78				52				59				50%				32%
Other short-term investments			1,876				2,253				5,877				(17%)				(68%)
Total interest-earning assets			125,651				125,843				120,697				—				4%
Cash and due from banks			2,335				2,466				2,830				(5%)				(17%)
Other assets			14,869				14,925				15,412				—				(4%)
Allowance for loan and lease losses			(1,273)				(1,261)				(1,322)				1%				(4%)
Total Assets		$	141,582			$	141,973			$	137,617				—				3%
Liabilities
Interest-bearing liabilities:
Interest checking deposits		$	25,740			$	25,296			$	26,885				2%				(4%)
Savings deposits			14,601				14,615				15,174				—				(4%)
Money market deposits			18,655				18,775				17,492				(1%)				7%
Foreign office deposits			483				736				861				(34%)				(44%)
Other time deposits			4,035				4,052				4,022				—				—
Certificates $100,000 and over			2,815				3,305				2,683				(15%)				5%
Other deposits			—				7				—				(100%)				—
Federal funds purchased			608				1,182				172				(49%)				NM
Other short-term borrowings			3,564				1,675				1,602				NM				NM
Long-term debt			14,949				15,738				14,414				(5%)				4%
Total interest-bearing liabilities			85,450				85,381				83,305				—				3%
Demand deposits			35,201				36,254				33,760				(3%)				4%
Other liabilities			4,524				4,325				4,693				5%				(4%)
Total Liabilities			125,175				125,960				121,758				(1%)				3%
Total Equity			16,407				16,013				15,859				2%				3%
Total Liabilities and Equity		$	141,582			$	141,973			$	137,617				—				3%
Yield Analysis
Interest-earning assets:
Commercial and industrial loans(a)			3.23%				3.12%				3.16%				4%				2%
Commercial mortgage loans(a)			3.27%				3.11%				3.27%				5%				—
Commercial construction loans(a)			3.38%				3.18%				3.23%				6%				5%
Commercial leases(a)			2.77%				2.68%				2.90%				3%				(4%)
Residential mortgage loans			3.63%				3.62%				3.83%				—				(5%)
Home equity			3.80%				3.57%				3.66%				6%				4%
Automobile loans			2.65%				2.67%				2.68%				(1%)				(1%)
Credit card			10.64%				10.17%				10.22%				5%				4%
Other consumer loans and leases			6.27%				6.95%				10.79%				(10%)				(42%)
Total loans and leases			3.46%				3.36%				3.46%				3%				—
Taxable securities			3.14%				3.16%				3.30%				(1%)				(5%)
Tax exempt securities(a)			4.32%				5.69%				5.24%				(24%)				(18%)
Other short-term investments			0.42%				0.28%				0.25%				50%				68%
Total interest-earning assets			3.34%				3.26%				3.28%				2%				2%
Interest-bearing liabilities:
Interest checking deposits			0.23%				0.19%				0.20%				21%				15%
Savings deposits			0.04%				0.05%				0.07%				(20%)				(43%)
Money market deposits			0.25%				0.22%				0.32%				14%				(22%)
Foreign office deposits			0.15%				0.14%				0.20%				7%				(25%)
Other time deposits			1.22%				1.20%				1.17%				2%				4%
Certificates $100,000 and over			1.28%				1.09%				1.16%				17%				10%
Other deposits			0.00%				0.09%				0.00%				(100%)				—
Federal funds purchased			0.36%				0.12%				0.09%				NM				NM
Other short-term borrowings			0.39%				0.12%				0.11%				NM				NM
Long-term debt			2.22%				2.12%				2.03%				5%				9%
Total interest-bearing liabilities			0.64%				0.61%				0.60%				5%				7%
Ratios:
Net interest margin (taxable equivalent)			2.91%				2.85%				2.86%				2%				2%
Net interest rate spread (taxable equivalent)			2.70%				2.65%				2.68%				2%				1%
Interest-bearing liabilities to interest-earning assets			68.01%				67.85%				69.02%				—				(1%)

 

(a)	Presented on a fully taxable equivalent basis.

 

26

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Fifth Third Bancorp and Subsidiaries

Average Balance Sheet and Yield Analysis

$ in millions, except share data

(unaudited)

 

		For the Three Months Ended
		March				December				September				June				March
		2016				2015				2015				2015				2015
Assets
Interest-earning assets:
Commercial and industrial loans		$	43,127			$	43,175			$	43,162			$	42,554			$	41,462
Commercial mortgage loans			6,908				7,053				7,038				7,149				7,248
Commercial construction loans			3,297				3,141				2,966				2,549				2,198
Commercial leases			3,875				3,841				3,847				3,776				3,716
Residential mortgage loans			14,405				14,315				13,976				13,375				13,515
Home equity			8,241				8,394				8,521				8,655				8,802
Automobile loans			11,285				11,674				11,881				11,902				11,933
Credit card			2,277				2,320				2,277				2,296				2,321
Other consumer loans and leases			663				674				661				483				464
Taxable securities			29,619				28,951				28,251				27,344				23,102
Tax exempt securities			78				52				52				59				59
Other short-term investments			1,876				2,253				1,799				3,160				5,877
Total interest-earning assets			125,651				125,843				124,431				123,302				120,697
Cash and due from banks			2,335				2,466				2,503				2,636				2,830
Other assets			14,869				14,925				15,064				15,322				15,412
Allowance for loan and lease losses			(1,273)				(1,261)				(1,292)				(1,300)				(1,322)
Total Assets		$	141,582			$	141,973			$	140,706			$	139,960			$	137,617
Liabilities
Interest-bearing liabilities:
Interest checking deposits		$	25,740			$	25,296			$	25,590			$	26,894			$	26,885
Savings deposits			14,601				14,615				14,868				15,156				15,174
Money market deposits			18,655				18,775				18,253				18,071				17,492
Foreign office deposits			483				736				718				955				861
Other time deposits			4,035				4,052				4,057				4,074				4,022
Certificates $100,000 and over			2,815				3,305				2,924				2,558				2,683
Other deposits			—				7				222				—				—
Federal funds purchased			608				1,182				1,978				326				172
Other short-term borrowings			3,564				1,675				1,897				1,705				1,602
Long-term debt			14,949				15,738				14,664				13,741				14,414
Total interest-bearing liabilities			85,450				85,381				85,171				83,480				83,305
Demand deposits			35,201				36,254				35,231				35,384				33,760
Other liabilities			4,524				4,325				4,458				5,215				4,693
Total Liabilities			125,175				125,960				124,860				124,079				121,758
Total Equity			16,407				16,013				15,846				15,881				15,859
Total Liabilities and Equity		$	141,582			$	141,973			$	140,706			$	139,960			$	137,617
Yield Analysis
Interest-earning assets:
Commercial and industrial loans(a)			3.23%				3.12%				3.11%				3.14%				3.16%
Commercial mortgage loans(a)			3.27%				3.11%				3.17%				3.22%				3.27%
Commercial construction loans(a)			3.38%				3.18%				3.13%				3.17%				3.23%
Commercial leases(a)			2.77%				2.68%				2.72%				2.83%				2.90%
Residential mortgage loans			3.63%				3.62%				3.63%				3.69%				3.83%
Home equity			3.80%				3.57%				3.61%				3.66%				3.66%
Automobile loans			2.65%				2.67%				2.62%				2.65%				2.68%
Credit card			10.64%				10.17%				10.38%				10.33%				10.22%
Other consumer loans and leases			6.27%				6.95%				6.81%				8.49%				10.79%
Total loans and leases			3.46%				3.36%				3.36%				3.41%				3.46%
Taxable securities			3.14%				3.16%				3.23%				3.20%				3.30%
Tax exempt securities(a)			4.32%				5.69%				5.20%				4.82%				5.24%
Other short-term investments			0.42%				0.28%				0.23%				0.25%				0.25%
Total interest-earning assets			3.34%				3.26%				3.29%				3.28%				3.28%
Interest-bearing liabilities:
Interest checking deposits			0.23%				0.19%				0.18%				0.19%				0.20%
Savings deposits			0.04%				0.05%				0.05%				0.05%				0.07%
Money market deposits			0.25%				0.22%				0.21%				0.23%				0.32%
Foreign office deposits			0.15%				0.14%				0.14%				0.14%				0.20%
Other time deposits			1.22%				1.20%				1.19%				1.24%				1.17%
Certificates $100,000 and over			1.28%				1.09%				1.16%				1.24%				1.16%
Other deposits			0.00%				0.09%				0.16%				0.00%				0.00%
Federal funds purchased			0.36%				0.12%				0.14%				0.12%				0.09%
Other short-term borrowings			0.39%				0.12%				0.13%				0.12%				0.11%
Long-term debt			2.22%				2.12%				2.16%				2.04%				2.03%
Total interest-bearing liabilities			0.64%				0.61%				0.58%				0.56%				0.60%
Ratios:
Net interest margin (taxable equivalent)			2.91%				2.85%				2.89%				2.90%				2.86%
Net interest rate spread (taxable equivalent)			2.70%				2.65%				2.71%				2.72%				2.68%
Interest-bearing liabilities to interest-earning assets			68.01%				67.85%				68.45%				67.70%				69.02%

 

(a)	Presented on a fully taxable equivalent basis.

 

27

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Fifth Third Bancorp and Subsidiaries

Summary of Loans and Leases

$ in millions

(unaudited)

 

		For the Three Months Ended
		March				December				September				June				March
		2016				2015				2015				2015				2015
Average Portfolio Loans and Leases
Commercial loans and leases:
Commercial and industrial loans		$	43,089			$	43,154			$	43,149			$	42,550			$	41,426
Commercial mortgage loans			6,886				7,032				7,023				7,148				7,241
Commercial construction loans			3,297				3,141				2,965				2,549				2,197
Commercial leases			3,874				3,839				3,846				3,776				3,715
Total commercial loans and leases			57,146				57,166				56,983				56,023				54,579
Consumer loans and leases:
Residential mortgage loans			13,788				13,504				13,144				12,831				12,433
Home equity			8,217				8,360				8,479				8,654				8,802
Automobile loans			11,283				11,670				11,877				11,902				11,933
Credit card			2,179				2,218				2,277				2,296				2,321
Other consumer loans and leases			662				676				613				467				440
Total consumer loans and leases			36,129				36,428				36,390				36,150				35,929
Total average portfolio loans and leases		$	93,275			$	93,594			$	93,373			$	92,173			$	90,508
Average loans held for sale		$	803			$	993			$	956			$	566			$	1,151
End of Period Portfolio Loans and Leases
Commercial loans and leases:
Commercial and industrial loans		$	43,433			$	42,131			$	42,948			$	42,800			$	42,052
Commercial mortgage loans			6,864				6,957				7,061				7,150				7,209
Commercial construction loans			3,428				3,214				3,101				2,709				2,302
Commercial leases			3,956				3,854				3,898				3,881				3,786
Total commercial loans and leases			57,681				56,156				57,008				56,540				55,349
Consumer loans and leases:
Residential mortgage loans			13,895				13,716				13,392				12,933				12,569
Home equity			8,112				8,301				8,427				8,547				8,714
Automobile loans			11,128				11,493				11,826				11,909				11,873
Credit card			2,138				2,259				2,229				2,278				2,291
Other consumer loans and leases			651				657				692				496				448
Total consumer loans and leases			35,924				36,426				36,566				36,163				35,895
Total portfolio loans and leases		$	93,605			$	92,582			$	93,574			$	92,703			$	91,244
Total loans held for sale		$	803			$	903			$	994			$	995			$	724
Operating lease equipment		$	738			$	707			$	680			$	670			$	695
Loans and Leases Serviced for Others:(a)
Commercial and industrial loans		$	552			$	588			$	589			$	594			$	609
Commercial mortgage loans			231				239				260				266				279
Commercial construction loans			26				27				26				25				21
Commercial leases			262				256				252				260				257
Residential mortgage loans			57,758				59,024				60,301				61,727				64,178
Automobile loans			102				122				146				174				203
Total loans and leases serviced for others			58,931				60,256				61,574				63,046				65,547
Total loans and leases serviced		$	154,077			$	154,448			$	156,822			$	157,414			$	158,210

 

(a)	Fifth Third sells certain loans and leases and obtains servicing responsibilities.

 

28

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Fifth Third Bancorp and Subsidiaries

Regulatory Capital

$ in millions

(unaudited)

 

		Basel III Transitional
		As of
		March				December				September				June				March
		2016(a)				2015				2015				2015				2015
Regulatory capital:
Common stock and related surplus (net of treasury stock)			1,738			$	1,953			$	2,147			$	2,419				2,565
Retained earnings			12,570				12,358				11,826				11,564				11,380
Common equity tier I capital adjustments and deductions			(2,394	)			(2,394	)			(2,399	)			(2,401	)			(2,402	)
CET1 capital			11,914				11,917				11,574				11,582				11,543
Additional tier I capital			1,330				1,343				1,340				1,340				1,339
Tier I capital			13,244				13,260				12,914			$	12,922			$	12,882
Tier II capital			4,553				3,874				3,935				3,909				4,112
Total regulatory capital		$	17,797			$	17,134			$	16,849			$	16,831			$	16,994
Risk-weighted assets(b)		$	121,432			$	121,290			$	123,148			$	122,986			$	121,310
Ratios:
Average shareholders’ equity to average assets			11.57	%			11.26	%			11.24	%			11.32	%			11.50	%
Regulatory capital ratios:
		Basel III Transitional
Fifth Third Bancorp
CET1 capital(b)			9.81	%			9.82	%			9.40	%			9.42	%			9.52	%
Tier I risk-based capital(b)			10.91	%			10.93	%			10.49	%			10.51	%			10.62	%
Total risk-based capital(b)			14.66	%			14.13	%			13.68	%			13.69	%			14.01	%
Tier I leverage			9.57	%			9.54	%			9.38	%			9.44	%			9.59	%
CET1 capital (fully phased-in)(b)(c)			9.72	%			9.72	%			9.30	%			9.31	%			9.41	%
Fifth Third Bank
Tier I risk-based capital(b)			11.79	%			11.92	%			11.39	%			11.25	%			11.36	%
Total risk-based capital(b)			13.63	%			13.12	%			12.55	%			12.44	%			12.58	%
Tier I leverage			10.39	%			10.43	%			10.21	%			10.14	%			10.30	%

 

(a)	Current period regulatory capital data and ratios are estimated.

(b)	Under the banking agencies’ Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are calculated according to the standardized approach for risk-weighted assets. The resulting weighted values are added together resulting in the total risk-weighted assets.

(c)	This ratio has been included herein to facilitate a greater understanding of the Bancorp’s capital structure and financial condition. Non-GAAP measure; see Reg. G reconciliation on page 32.

 

29

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Fifth Third Bancorp and Subsidiaries

Summary of Credit Loss Experience

$ in millions

(unaudited)

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Average portfolio loans and leases:
Commercial and industrial loans		$	43,089			$	43,154			$	43,149			$	42,550			$	41,426
Commercial mortgage loans			6,886				7,032				7,023				7,148				7,241
Commercial construction loans			3,297				3,141				2,965				2,549				2,197
Commercial leases			3,874				3,839				3,846				3,776				3,715
Residential mortgage loans			13,788				13,504				13,144				12,831				12,433
Home equity			8,217				8,360				8,479				8,654				8,802
Automobile loans			11,283				11,670				11,877				11,902				11,933
Credit card			2,179				2,218				2,277				2,296				2,321
Other consumer loans and leases			662				676				613				467				440
Total average portfolio loans and leases		$	93,275			$	93,594			$	93,373			$	92,173			$	90,508
Losses charged-off:
Commercial and industrial loans		($	50)			($	38)			($	133)			($	40)			($	43)
Commercial mortgage loans			(8)				(7)				(13)				(14)				(5)
Commercial construction loans			—				—				(3)				—				—
Commercial leases			(2)				(1)				—				—				—
Residential mortgage loans			(4)				(5)				(6)				(8)				(9)
Home equity			(11)				(13)				(13)				(13)				(17)
Automobile loans			(14)				(13)				(11)				(9)				(13)
Credit card			(23)				(22)				(24)				(24)				(24)
Other consumer loans and leases			(4)				(6)				(6)				(4)				(4)
Total losses charged-off		($	116)			($	105)			($	209)			($	112)			($	115)
Recoveries of losses previously charged-off:
Commercial and industrial loans		$	4			$	8			$	5			$	6			$	5
Commercial mortgage loans			2				4				2				3				4
Commercial construction loans			—				—				—				—				—
Commercial leases			—				—				—				—				—
Residential mortgage loans			2				2				3				3				3
Home equity			3				4				4				4				3
Automobile loans			5				4				4				5				5
Credit card			3				3				3				3				3
Other consumer loans and leases			1				—				—				2				1
Total recoveries of losses previously charged-off		$	20			$	25			$	21			$	26			$	24
Net losses charged-off:
Commercial and industrial loans		($	46)			($	30)			($	128)			($	34)			($	38)
Commercial mortgage loans			(6)				(3)				(11)				(11)				(1)
Commercial construction loans			—				—				(3)				—				—
Commercial leases			(2)				(1)				—				—				—
Residential mortgage loans			(2)				(3)				(3)				(5)				(6)
Home equity			(8)				(9)				(9)				(9)				(14)
Automobile loans			(9)				(9)				(7)				(4)				(8)
Credit card			(20)				(19)				(21)				(21)				(21)
Other consumer loans and leases			(3)				(6)				(6)				(2)				(3)
Total net losses charged-off		($	96)			($	80)			($	188)			($	86)			($	91)
Net losses charged-off as a percent of average portfolio loans and leases:
Commercial and industrial loans			0.43%				0.28%				1.17%				0.32%				0.38%
Commercial mortgage loans			0.35%				0.19%				0.66%				0.62%				0.05%
Commercial construction loans			(0.06%)				0.00%				0.43%				0.00%				(0.06%)
Commercial leases			0.20%				0.15%				0.00%				(0.01%)				0.00%
Residential mortgage loans			0.07%				0.08%				0.10%				0.16%				0.19%
Home equity			0.36%				0.39%				0.42%				0.41%				0.61%
Automobile loans			0.32%				0.31%				0.23%				0.14%				0.28%
Credit card			3.73%				3.40%				3.77%				3.62%				3.60%
Other consumer loans and leases			2.28%				3.10%				3.52%				2.45%				4.02%
Total net losses charged-off as a percent of average portfolio loans and leases			0.42%				0.34%				0.80%				0.37%				0.41%

 

30

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Fifth Third Bancorp and Subsidiaries

Asset Quality

$ in millions

(unaudited)

 

		For the Three Months Ended
		March 2016				December 2015				September 2015				June 2015				March 2015
Allowance for Credit Losses
Allowance for loan and lease losses, beginning		$	1,272			$	1,261			$	1,293			$	1,300			$	1,322
Total net losses charged-off			(96)				(80)				(188)				(86)				(91)
Provision for loan and lease losses			119				91				156				79				69
Allowance for loan and lease losses, ending		$	1,295			$	1,272			$	1,261			$	1,293			$	1,300
Reserve for unfunded commitments, beginning		$	138			$	134			$	132			$	130			$	135
Provision (benefit) for unfunded commitments			6				4				2				2				(4)
Charge-offs			—				—				—				—				(1)
Reserve for unfunded commitments, ending		$	144			$	138			$	134			$	132			$	130
Components of allowance for credit losses:
Allowance for loan and lease losses		$	1,295			$	1,272			$	1,261			$	1,293			$	1,300
Reserve for unfunded commitments			144				138				134				132				130
Total allowance for credit losses		$	1,439			$	1,410			$	1,395			$	1,425			$	1,430
		As of
		March 2016				December 2015				September 2015				June 2015				March 2015
Nonperforming Assets and Delinquent Loans
Nonaccrual portfolio loans and leases:
Commercial and industrial loans		$	278			$	82			$	47			$	61			$	61
Commercial mortgage loans			51				56				60				49				57
Commercial construction loans			—				—				—				—				—
Commercial leases			4				—				2				2				2
Residential mortgage loans			25				28				31				35				40
Home equity			61				62				65				70				71
Total nonaccrual portfolio loans and leases (excludes restructured loans)			419				228				205				217				231
Nonaccrual restructured portfolio commercial loans and leases			210				203				177				175				205
Nonaccrual restructured portfolio consumer loans and leases			72				75				76				83				90
Total nonaccrual portfolio loans and leases			701				506				458				475				526
Repossessed property			17				18				17				16				20
OREO			107				123				131				135				145
Total nonperforming portfolio assets			825				647				606				626				691
Nonaccrual loans held for sale			3				1				1				1				2
Nonaccrual restructured loans held for sale			2				11				1				—				—
Total nonperforming assets		$	830			$	659			$	608			$	627			$	693
Restructured portfolio consumer loans and leases (accrual)		$	998			$	979			$	973			$	970			$	943
Restructured portfolio commercial loans and leases (accrual)		$	461			$	491			$	571			$	769			$	774
90 days past due loans and leases:
Commercial and industrial loans		$	3			$	7			$	3			$	2			$	2
Commercial mortgage loans			—				—				2				—				1
Commercial construction loans			—				—				—				—				—
Commercial leases			—				—				—				—				—
Total commercial loans and leases			3				7				5				2				3
Residential mortgage loans			44				40				40				43				48
Home equity			—				—				—				—				—
Automobile loans			8				10				8				8				7
Credit card			18				18				17				17				20
Other consumer loans and leases			—				—				—				—				—
Total consumer loans and leases			70				68				65				68				75
Total 90 days past due loans and leases(b)		$	73			$	75			$	70			$	70			$	78
Ratios
Net losses charged-off as a percent of average portfolio loans and leases			0.42%				0.34%				0.80%				0.37%				0.41%
Allowance for loan and lease losses:
As a percent of portfolio loans and leases			1.38%				1.37%				1.35%				1.39%				1.42%
As a percent of nonperforming loans and leases(a)			185%				252%				275%				272%				247%
As a percent of nonperforming assets(a)			157%				197%				208%				206%				188%
Nonperforming loans and leases as a percent of portfolio loans and leases and OREO(a)			0.75%				0.55%				0.49%				0.51%				0.57%
Nonperforming assets as a percent of portfolio loans, leases and other assets, including OREO(a)			0.88%				0.70%				0.65%				0.67%				0.76%
Nonperforming assets as a percent of total loans, leases and other assets, including OREO			0.88%				0.70%				0.64%				0.67%				0.75%
Allowance for credit losses as a percent of nonperforming assets			174%				218%				230%				228%				207%

 

(a)	Does not include nonaccrual loans held for sale.

(b)	Does not include loans held for sale.

 

31

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Fifth Third Bancorp and Subsidiaries

Regulation G Non-GAAP Reconciliation

$ and shares in millions

(unaudited)

 

				For the Three Months Ended
				March 2016				December 2015				September 2015				June 2015				March 2015
Income before income taxes (U.S. GAAP)				$	435			$	949			$	515			$	417			$	485
Add:		Provision expense (U.S. GAAP)			119				91				156				79				69
Pre-provision net revenue					554				1,040				671				496				554
Net income available to common shareholders (U.S. GAAP)					312				634				366				292				346
Add:		Intangible amortization, net of tax			—				—				—				—				—
Tangible net income available to common shareholders					312				634				366				292				346
Tangible net income available to common shareholders (annualized) (a)					1,255				2,515				1,452				1,171				1,403
Average Bancorp shareholders’ equity (U.S. GAAP)					16,376				15,982				15,815				15,841				15,820
Less:		Average preferred stock			(1,331)				(1,331)				(1,331)				(1,331)				(1,331)
		Average goodwill			(2,416)				(2,416)				(2,416)				(2,416)				(2,416)
		Average intangible assets and other servicing rights			(12)				(13)				(14)				(15)				(15)
Average tangible common equity (b)					12,617				12,222				12,054				12,079				12,058
Total Bancorp shareholders’ equity (U.S. GAAP)					16,323				15,839				15,826				15,605				15,864
Less:		Preferred stock			(1,331)				(1,331)				(1,331)				(1,331)				(1,331)
		Goodwill			(2,416)				(2,416)				(2,416)				(2,416)				(2,416)
		Intangible assets and other servicing rights			(12)				(13)				(13)				(14)				(15)
Tangible common equity, including unrealized gains / losses (c)					12,564				12,079				12,066				11,844				12,102
Less:		Accumulated other comprehensive income			(684)				(197)				(522)				(291)				(588)
Tangible common equity, excluding unrealized gains / losses (d)					11,880				11,882				11,544				11,553				11,514
Add:		Preferred stock			1,331				1,331				1,331				1,331				1,331
Tangible equity (e)					13,211				13,213				12,875				12,884				12,845
Total assets (U.S. GAAP)					142,430				141,048				141,883				141,628				140,437
Less:		Goodwill			(2,416)				(2,416)				(2,416)				(2,416)				(2,416)
		Intangible assets and other servicing rights			(12)				(13)				(13)				(14)				(15)
Tangible assets, including unrealized gains / losses (f)					140,002				138,619				139,454				139,198				138,006
Less:		Accumulated other comprehensive income / loss, before tax			(1,052)				(303)				(803)				(448)				(905)
Tangible assets, excluding unrealized gains / losses (g)				$	138,950			$	138,316			$	138,651				138,750				137,101
Common shares outstanding (h)					770				785				795				810				815
				Basel III
				Transitional
Risk-weighted assets (actual) (i) (1)				$	121,432			$	121,290			$	123,148			$	122,986			$	121,310
Ratios:
Return on average tangible common equity (a) / (b)					9.9%				20.6%				12.0%				9.7%				11.7%
Tangible equity (e) / (g)					9.51%				9.55%				9.29%				9.29%				9.37%
Tangible common equity (excluding unrealized gains/losses) (d) / (g)					8.55%				8.59%				8.33%				8.33%				8.40%
Tangible common equity (including unrealized gains/losses) (c) / (f)					8.97%				8.71%				8.65%				8.51%				8.77%
Tangible common equity as a percent of risk-weighted assets (excluding unrealized gains/losses) (d) / (i)					9.78%				9.80%				9.37%				9.39%				9.49%
Tangible book value per share (c) / (h)				$	16.32			$	15.39			$	15.18			$	14.62			$	14.85
Basel III Final Rule - Transition to fully phased-in
				March 2016				December 2015				September 2015				June 2015				March 2015
CET1 capital (transitional)				$	11,914			$	11,917			$	11,574			$	11,582			$	11,543
Less: Adjustments to CET1 capital from transitional to fully phased-in (2)					(5)				(8)				(11)				(12)				(13)
CET1 capital (fully phased-in) (j)					11,909				11,909				11,563				11,570				11,530
Risk-weighted assets (transitional)					121,432				121,290				123,148				122,986				121,310
Add: Adjustments to risk-weighted assets from transitional to fully phased-in (3)					1,027				1,178				1,136				1,280				1,182
Risk-weighted assets (fully phased-in) (k)				$	122,459			$	122,468			$	124,284			$	124,266			$	122,492
Estimated CET1 capital ratio under Basel III Final Rule (fully phased-in) (j)/(k)					9.72%				9.72%				9.30%				9.31%				9.41%

 

(1)

Under the banking agencies’ risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk-weight of the category. The resulting weighted values are added together, along with the measure for market risk, resulting in the Bancorp’s total risk-weighted assets.

(2)	Primarily relates to disallowed intangible assets (other than goodwill and MSRs, net of associated deferred tax liabilities).

(3)	Primarily relates to higher risk-weighting for MSRs.

 

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Fifth Third Bancorp and Subsidiaries

Segment Presentation

$ in millions

(unaudited)

 

For the three months ended March 31, 2016		Commercial Banking				Branch Banking				Consumer Lending				Investment Advisors				Other/ Eliminations				Total
Net interest income(a)		$	457			$	426			$	60			$	43			($	77)			$	909
Provision for loan and lease losses			(65)				(34)				(12)				—				(8)				(119)
Net interest income after provision for loan and lease losses			392				392				48				43				(85)				790
Total non-interest income			223				189				83				100				42				637
Total non-interest expense			(363)				(411)				(118)				(107)				13				(986)
Income (loss) before income taxes			252				170				13				36				(30)				441
Applicable income tax expense(a)			(41)				(60)				(5)				(13)				5				(114)
Net income (loss)			211				110				8				23				(25)				327
Less: Net income attributable to noncontrolling interests			—				—				—				—				—				—
Net income (loss) attributable to Bancorp			211				110				8				23				(25)				327
Dividends on preferred stock			—				—				—				—				15				15
Net income (loss) available to common shareholders		$	211			$	110			$	8			$	23			($	40)			$	312
For the three months ended December 31, 2015(b)		Commercial Banking				Branch Banking				Consumer Lending				Investment Advisors				Other/ Eliminations				Total
Net interest income(a)		$	425			$	406			$	63			$	37			($	27)			$	904
Provision for loan and lease losses			(27)				(35)				(11)				—				(18)				(91)
Net interest income after provision for loan and lease losses			398				371				52				37				(45)				813
Total non-interest income			223				186				80				101				514				1,104
Total non-interest expense			(338)				(393)				(116)				(112)				(4)				(963)
Income before income taxes			283				164				16				26				465				954
Applicable income tax expense(a)			(55)				(57)				(6)				(9)				(170)				(297)
Net income			228				107				10				17				295				657
Less: Net income attributable to noncontrolling interests			—				—				—				—				—				—
Net income attributable to Bancorp			228				107				10				17				295				657
Dividends on preferred stock			—				—				—				—				23				23
Net income available to common shareholders		$	228			$	107			$	10			$	17			$	272			$	634
For the three months ended September 30, 2015(b)		Commercial Banking				Branch Banking				Consumer Lending				Investment Advisors				Other/ Eliminations				Total
Net interest income(a)		$	418			$	395			$	62			$	33			($	2)			$	906
Provision for loan and lease losses			(195)				(37)				(11)				—				87				(156)
Net interest income after provision for loan and lease losses			223				358				51				33				85				750
Total non-interest income			228				197				76				102				110				713
Total non-interest expense			(334)				(404)				(107)				(112)				14				(943)
Income (loss) before income taxes			117				151				20				23				209				520
Applicable income tax expense(a)			4				(53)				(7)				(9)				(74)				(139)
Net income (loss)			121				98				13				14				135				381
Less: Net income attributable to noncontrolling interests			—				—				—				—				—				—
Net income (loss) attributable to Bancorp			121				98				13				14				135				381
Dividends on preferred stock			—				—				—				—				15				15
Net income (loss) available to common shareholders		$	121			$	98			$	13			$	14			$	120			$	366
For the three months ended June 30, 2015(b)		Commercial Banking				Branch Banking				Consumer Lending				Investment Advisors				Other/ Eliminations				Total
Net interest income(a)		$	407			$	376			$	63			$	29			$	17			$	892
Provision for loan and lease losses			(37)				(36)				(8)				(1)				3				(79)
Net interest income after provision for loan and lease losses			370				340				55				28				20				813
Total non-interest income			232				94				122				103				5				556
Total non-interest expense			(348)				(404)				(113)				(115)				33				(947)
Income before income taxes			254				30				64				16				58				422
Applicable income tax expense(a)			(43)				(11)				(23)				(6)				(30)				(113)
Net income			211				19				41				10				28				309
Less: Net income attributable to noncontrolling interests			—				—				—				—				(6)				(6)
Net income attributable to Bancorp			211				19				41				10				34				315
Dividends on preferred stock			—				—				—				—				23				23
Net income available to common shareholders		$	211			$	19			$	41			$	10			$	11			$	292
For the three months ended March 31, 2015(b)		Commercial Banking				Branch Banking				Consumer Lending				Investment Advisors				Other/ Eliminations				Total
Net interest income(a)		$	397			$	377			$	63			$	29			($	14)			$	852
Provision for loan and lease losses			(42)				(42)				(14)				(1)				30				(69)
Net interest income after provision for loan and lease losses			355				335				49				28				16				783
Total non-interest income			174				176				129				107				44				630
Total non-interest expense			(348)				(400)				(105)				(115)				45				(923)
Income before income taxes			181				111				73				20				105				490
Applicable income tax expense(a)			(18)				(39)				(26)				(7)				(39)				(129)
Net income			163				72				47				13				66				361
Less: Net income attributable to noncontrolling interests			—				—				—				—				—				—
Net income attributable to Bancorp			163				72				47				13				66				361
Dividends on preferred stock			—				—				—				—				15				15
Net income available to common shareholders		$	163			$	72			$	47			$	13			$	51			$	346

 

(a)	Includes taxable equivalent adjustments of $6 million for the three months ended March 31, 2016 and $5 million for the three months ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.

(b)	Prior period balances have been adjusted to reflect changes in internal allocation methodologies.

 

33