FITB Fifth Third Bancorp

• 1Q16 net income available to common shareholders of $312 million, or $0.40 per diluted common share
  • 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
• 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%
• Pre-provision net revenue (PPNR)** of $554 million in 1Q16
  • 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
  • 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
  • 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
  • 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

• Credit trends
  • 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)
  • 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
  • 1Q16 provision expense of $119 million; $91 million in 4Q15 and $69 million in 1Q15

• Strong capital ratios*
  • Common equity Tier 1 (CET1) ratio 9.81%; fully phased-in CET1 ratio of 9.72%
  • Tier 1 risk-based capital ratio 10.91%, Total risk-based capital ratio 14.66%, Leverage ratio 9.57%
  • Tangible common equity ratio** of 8.97%; 8.55% excluding securities portfolio unrealized gains/losses
• 15 million reduction in common shares outstanding during the quarter
• 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.

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

• $47 million positive valuation adjustment on the remaining Vantiv warrant
• $8 million gain on sale of certain St. Louis branches as part of the previously announced branch consolidation and sales plan
• $1 million benefit related to the valuation of the Visa total return swap

Expense

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

Fourth quarter 2015 included:

Income

• $331 million gain on the sale of Vantiv shares
• $89 million gain on Vantiv warrant actions taken during the quarter
• $49 million payment received from Vantiv to terminate a portion of its tax receivable agreement
• $21 million positive valuation adjustment on the remaining Vantiv warrant
• ($10 million) charge related to the valuation of the Visa total return swap

Expense

• ($2 million) in severance expense
• ($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 noninterest income.

First quarter 2015 included:

Income

• $70 million positive valuation adjustment on the Vantiv warrant
• $37 million gain on the sale of residential mortgage loans classified as troubled debt restructurings
• ($17 million) charge related to the valuation of the Visa total return swap
• ($30 million) impairment associated with aircraft leases

Expense

• ($1 million) in severance expense
• ($2 million) in litigation reserve charges
• ($4 million) contribution to Fifth Third Foundation

   

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.”

“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     $0.42   (49 %)   (5 %)                 Net Interest Income   For the Three Months Ended     % Change   March December September June March 2016   2015   2015   2015   2015   Seq   Yr/Yr Interest Income ($ 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.

              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.

              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.

              Wholesale Funding       For the Three Months Ended     % Change March December September June March 2016   2015   2015   2015   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 December September June March 2016   2015   2015   2015   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.

  Non-interest Income excluding certain items     For the Three Months Ended     % Change March   December     March       2016   2015     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.

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 December September June March 2016   2015     2015     2015     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.

          Credit Quality   For the Three Months Ended March December September June March 2016   2015   2015   2015   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.

        For the Three Months Ended March   December   September   June   March 2016   2015   2015   2015   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.

                          As of March   December   September   June   March Nonperforming Assets and Delinquent Loans ($ in millions) 2016   2015   2015   2015   2015 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.

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.

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

  Capital Position     For the Three Months Ended March   December   September   June   March 2016   2015   2015   2015   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%  

Regulatory capital ratios:

Basel III 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) $ 16.31 $ 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.

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.

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

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).

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.

 

Quarterly Financial Review for March 31, 2016Table 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     Fifth Third Bancorp and Subsidiaries Financial Highlights $ in millions, except per share data (unaudited)   For the Three Months Ended   % Change March   December   March         2016   2015   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 Regulatory Capital Ratios(i) Transitional 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.

    Fifth Third Bancorp and Subsidiaries Financial Highlights $ in millions, except per share data (unaudited)   For the Three Months Ended March   December   September   June   March     2016   2015   2015   2015   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 Regulatory Capital Ratios(i) Transitional 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.

            Fifth Third Bancorp and Subsidiaries Consolidated Statements of Income $ in millions (unaudited) For the Three Months Ended   % Change March December March     2016   2015   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%)             Fifth Third Bancorp and Subsidiaries Consolidated Statements of Income (Taxable Equivalent) $ in millions (unaudited) For the Three Months Ended March December September June March     2016   2015   2015   2015     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     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 %             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         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               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.             Fifth Third Bancorp and Subsidiaries Average Balance Sheet and Yield Analysis $ in millions, except share data For the Three Months Ended (unaudited) 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.             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.             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.

            Fifth Third Bancorp and Subsidiaries Summary of Credit Loss Experience $ in millions (unaudited) For the Three Months Ended March December September June March     2016   2015   2015   2015   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 %             Fifth Third Bancorp and Subsidiaries Asset Quality $ in millions (unaudited) For the Three Months Ended March December September June March     2016   2015   2015   2015   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 December September June March     2016   2015   2015   2015   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.             Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconciliation $ and shares in millions (unaudited) For the Three Months Ended     March December September June March     2016   2015   2015   2015   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 December September June March     2016   2015   2015   2015   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.

    Fifth Third Bancorp and Subsidiaries Segment Presentation $ in millions (unaudited)     Commercial   Branch   Consumer   Investment   Other/   For the three months ended March 31, 2016   Banking   Banking   Lending   Advisors   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                                                     Commercial Branch Consumer Investment Other/

For the three months ended December 31, 2015(b)

  Banking   Banking   Lending   Advisors   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                                                     Commercial Branch Consumer Investment Other/

For the three months ended September 30, 2015(b)

  Banking   Banking   Lending   Advisors   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 before income taxes 117 151 20 23 209 520 Applicable income tax expense(a)   4     (53 )   (7 )   (9 )   (74 )   (139 ) Net income 121 98 13 14 135 381 Less: Net income attributable to noncontrolling interests   -     -     -     -     -     -   Net income attributable to Bancorp 121 98 13 14 135 381 Dividends on preferred stock   -     -     -     -     15     15   Net income available to common shareholders $121 $98 $13 $14 $120 $366                                                     Commercial Branch Consumer Investment Other/

For the three months ended June 30, 2015(b)

  Banking   Banking   Lending   Advisors   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                                                     Commercial Branch Consumer Investment Other/

For the three months ended March 31, 2015(b)

  Banking   Banking   Lending   Advisors   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 (loss) 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.  

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Investors:Sameer Gokhale, 513-534-2219orJim Eglseder, 513-534-8424orMedia:Larry Magnesen, 513-534-8055