Fifth Third Bancorp (Nasdaq:FITB):
-
1Q18 net income available to common shareholders of $689 million, or
$0.97 per diluted common share
-
Results included a net positive $0.40 impact on reported 1Q18 EPS:
-
$414 million pre-tax (~$327 million after-tax)(a)
step-up gain included in other noninterest income from the Vantiv
merger with Worldpay
-
$39 million pre-tax (~$31 million after-tax)(a) charge
to other noninterest income related to the valuation of the Visa
total return swap
-
$8 million pre-tax (~$6 million after-tax)(a)
impairment charge to other noninterest income related to an
assessment of the branch network which is expected to result in a
9 branch reduction by 3Q18
-
$8 million pre-tax (~$6 million after-tax)(a) charge to
other noninterest expense from an adjustment to litigation reserves
-
Reported net interest income (NII) of $996 million; taxable equivalent
NII of $999 million(b), up 4% from 4Q17 (or up 1% excluding
4Q17 lease remeasurement)(b) and up 6% from 1Q17 (or up 8%
excluding 1Q17 card remediation impact)(b)
-
Taxable equivalent net interest margin (NIM) of 3.18%(b),
up 16 bps from 4Q17 (or up 8 bps excluding 4Q17 lease remeasurement)(b)
and up 16 bps from 1Q17 (or up 20 bps excluding 1Q17 card remediation
impact)(b)
-
Average portfolio loans and leases of $92.3 billion, flat from both
4Q17 and from 1Q17
-
Noninterest income of $909 million, compared with $577 million in 4Q17
and $523 million in 1Q17; performance primarily driven by the Worldpay
step-up gain previously noted
-
Noninterest expense of $1.046 billion, down 3% from 4Q17 and up 6%
from 1Q17
-
Net charge-offs (NCOs) of $81 million, up $5 million from 4Q17 and
down $8 million from 1Q17; NCO ratio of 0.36% compared to 0.33% in
4Q17 and 0.40% in 1Q17
-
Portfolio nonperforming asset (NPA) ratio of 0.55%, up 2 bps from 4Q17
and down 24 bps from 1Q17
-
1Q18 provision expense of $23 million compared to $67 million in 4Q17
and $74 million in 1Q17
-
Common equity Tier 1 (CET1)(c) ratio of 10.82%
-
Tangible common equity ratio of 8.89%(b); 9.14% excluding
unrealized gains/losses(b)
-
Book value per share of $21.68, flat from 4Q17 and up 8% from 1Q17;
tangible book value per share(b) of $18.05 flat from 4Q17
and up 7% from 1Q17
Fifth Third Bancorp (Nasdaq:FITB) today reported first quarter 2018 net
income of $704 million versus net income of $509 million in the fourth
quarter of 2017 and $305 million in the first quarter of 2017. After
preferred dividends, net income available to common shareholders was
$689 million, or $0.97 per diluted share, in the first quarter of 2018,
compared with $486 million, or $0.67 per diluted share, in the fourth
quarter of 2017, and $290 million, or $0.38 per diluted share, in the
first quarter of 2017.
|
Earnings Highlights
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
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2018
|
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2017
|
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2017
|
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2017
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2017
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Seq
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Yr/Yr
|
|
Income Statement Data ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bancorp
|
|
|
$704
|
|
|
$509
|
|
$1,014
|
|
$367
|
|
$305
|
|
|
38%
|
|
131%
|
|
Net income available to common shareholders
|
|
|
$689
|
|
|
$486
|
|
$999
|
|
$344
|
|
$290
|
|
|
42%
|
|
138%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Earnings Per Share Data
|
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Average common shares outstanding
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
689,820
|
|
|
703,372
|
|
721,280
|
|
741,401
|
|
747,668
|
|
|
(2%)
|
|
(8%)
|
|
Diluted
|
|
|
704,101
|
|
|
716,908
|
|
733,285
|
|
752,328
|
|
760,809
|
|
|
(2%)
|
|
(7%)
|
|
Earnings per share, basic
|
|
|
$0.99
|
|
|
$0.68
|
|
$1.37
|
|
$0.46
|
|
$0.38
|
|
|
46%
|
|
161%
|
|
Earnings per share, diluted
|
|
|
0.97
|
|
|
0.67
|
|
1.35
|
|
0.45
|
|
0.38
|
|
|
45%
|
|
155%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Common Share Data
|
|
|
|
|
|
|
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|
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Cash dividends per common share
|
|
|
$0.16
|
|
|
$0.16
|
|
$0.16
|
|
$0.14
|
|
$0.14
|
|
|
-
|
|
14%
|
|
Book value per share
|
|
|
21.68
|
|
|
21.67
|
|
21.30
|
|
20.42
|
|
20.13
|
|
|
-
|
|
8%
|
|
Tangible book value per share
(b)
|
|
|
18.05
|
|
|
18.10
|
|
17.86
|
|
17.11
|
|
16.89
|
|
|
-
|
|
7%
|
|
Common shares outstanding (in thousands)
|
|
|
684,942
|
|
|
693,805
|
|
705,474
|
|
738,873
|
|
750,145
|
|
|
(1%)
|
|
(9%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
bps Change
|
|
Return on average assets
|
|
|
2.02
|
%
|
|
1.43
|
%
|
2.85
|
%
|
1.05
|
%
|
0.88
|
%
|
|
59
|
|
114
|
|
Return on average common equity
|
|
|
18.6
|
|
|
12.7
|
|
25.6
|
|
9.0
|
|
7.8
|
|
|
590
|
|
1080
|
|
Return on average tangible common equity
(b)
|
|
|
22.4
|
|
|
15.2
|
|
30.4
|
|
10.7
|
|
9.3
|
|
|
720
|
|
1310
|
|
CET1 capital
(c)
|
|
|
10.82
|
|
|
10.61
|
|
10.59
|
|
10.63
|
|
10.76
|
|
|
21
|
|
6
|
|
Tier I risk-based capital
(c)
|
|
|
11.95
|
|
|
11.74
|
|
11.72
|
|
11.76
|
|
11.90
|
|
|
21
|
|
5
|
|
Net interest margin (taxable equivalent)
(b)
|
|
|
3.18
|
|
|
3.02
|
|
3.07
|
|
3.01
|
|
3.02
|
|
|
16
|
|
16
|
|
Efficiency (taxable equivalent)
(b)
|
|
|
54.8
|
|
|
69.7
|
|
38.4
|
|
63.4
|
|
67.4
|
|
|
(1490)
|
|
(1260)
|
|
|
|
|
|
|
|
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|
“Our first quarter results were strong and reflected the repositioning
of our balance sheet over the last 24 months to improve the resiliency
of our earnings. Our balance sheet continues to strengthen as evidenced
by improving credit quality, strong capital ratios and the level of
asset sensitivity which positions us well in the current rate
environment,” said Greg D. Carmichael, Chairman, President and CEO of
Fifth Third Bancorp.
“Expenses were well managed while we continued to invest in our
strategic initiatives. We remain focused on driving improved shareholder
returns and achieving our long term profitability targets.”
|
Income Statement Highlights
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($ in millions, except per-share data)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Condensed Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent net interest income
(b)
|
|
|
$999
|
|
$963
|
|
$977
|
|
$945
|
|
$939
|
|
4%
|
|
6%
|
|
Provision for loan and lease losses
|
|
|
23
|
|
67
|
|
67
|
|
52
|
|
74
|
|
(66%)
|
|
(69%)
|
|
Total noninterest income
|
|
|
909
|
|
577
|
|
1,561
|
|
564
|
|
523
|
|
58%
|
|
74%
|
|
Total noninterest expense
|
|
|
1,046
|
|
1,073
|
|
975
|
|
957
|
|
986
|
|
(3%)
|
|
6%
|
|
Taxable equivalent income before income taxes
(b)
|
|
|
$839
|
|
$400
|
|
$1,496
|
|
$500
|
|
$402
|
|
110%
|
|
109%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent adjustment
|
|
|
3
|
|
7
|
|
7
|
|
6
|
|
6
|
|
(57%)
|
|
(50%)
|
|
Applicable income tax expense (benefit)
|
|
|
132
|
|
(116)
|
|
475
|
|
127
|
|
91
|
|
(214%)
|
|
45%
|
|
Net income
|
|
|
$704
|
|
$509
|
|
$1,014
|
|
$367
|
|
$305
|
|
38%
|
|
131%
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
Net income attributable to Bancorp
|
|
|
$704
|
|
$509
|
|
$1,014
|
|
$367
|
|
$305
|
|
38%
|
|
131%
|
|
Dividends on preferred stock
|
|
|
15
|
|
23
|
|
15
|
|
23
|
|
15
|
|
(35%)
|
|
-
|
|
Net income available to common shareholders
|
|
|
$689
|
|
$486
|
|
$999
|
|
$344
|
|
$290
|
|
42%
|
|
138%
|
|
Earnings per share, diluted
|
|
|
$0.97
|
|
$0.67
|
|
$1.35
|
|
$0.45
|
|
$0.38
|
|
45%
|
|
155%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Taxable equivalent basis; $ in millions)
(b)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income
|
|
|
$1,209
|
|
|
$1,151
|
|
|
$1,159
|
|
|
$1,112
|
|
|
$1,092
|
|
|
5%
|
|
11%
|
|
Total interest expense
|
|
|
210
|
|
|
188
|
|
|
182
|
|
|
167
|
|
|
153
|
|
|
12%
|
|
37%
|
|
Net interest income (NII)
|
|
|
$999
|
|
|
$963
|
|
|
$977
|
|
|
$945
|
|
|
$939
|
|
|
4%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
bps Change
|
|
Yield on interest-earning assets
|
|
|
3.85%
|
|
|
3.61%
|
|
|
3.64%
|
|
|
3.54%
|
|
|
3.51%
|
|
|
24
|
|
34
|
|
Adjusted yield on interest-earning assets
|
|
|
3.85%
|
|
|
3.69%
|
|
|
3.64%
|
|
|
3.54%
|
|
|
3.51%
|
|
|
16
|
|
34
|
|
Rate paid on interest-bearing liabilities
|
|
|
0.97%
|
|
|
0.88%
|
|
|
0.85%
|
|
|
0.79%
|
|
|
0.73%
|
|
|
9
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread
|
|
|
2.88%
|
|
|
2.73%
|
|
|
2.79%
|
|
|
2.75%
|
|
|
2.78%
|
|
|
15
|
|
10
|
|
Net interest margin (NIM)
|
|
|
3.18%
|
|
|
3.02%
|
|
|
3.07%
|
|
|
3.01%
|
|
|
3.02%
|
|
|
16
|
|
16
|
|
Adjusted NIM
|
|
|
3.18%
|
|
|
3.10%
|
|
|
3.07%
|
|
|
3.01%
|
|
|
2.98%
|
|
|
8
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
Loans and leases, including held for sale
|
|
|
$92,869
|
|
|
$92,865
|
|
|
$92,617
|
|
|
$92,653
|
|
|
$92,791
|
|
|
-
|
|
-
|
|
Total securities and other short-term investments
|
|
|
34,677
|
|
|
33,756
|
|
|
33,826
|
|
|
33,481
|
|
|
33,177
|
|
|
3%
|
|
5%
|
|
Total interest-earning assets
|
|
|
127,546
|
|
|
126,621
|
|
|
126,443
|
|
|
126,134
|
|
|
125,968
|
|
|
1%
|
|
1%
|
|
Total interest-bearing liabilities
|
|
|
87,607
|
|
|
84,820
|
|
|
85,328
|
|
|
85,320
|
|
|
84,890
|
|
|
3%
|
|
3%
|
|
Bancorp shareholders' equity
|
|
|
16,313
|
|
|
16,493
|
|
|
16,820
|
|
|
16,615
|
|
|
16,429
|
|
|
(1%)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent NII of $999 million in the first quarter of 2018
increased $36 million, or 4 percent, from the prior quarter. The prior
quarter’s results were negatively impacted by a $27 million leveraged
lease remeasurement. Excluding the impact of the remeasurement, taxable
equivalent NII in the first quarter of 2018 was up $9 million, or 1
percent, from the prior quarter, reflecting higher short-term market
rates, partially offset by a lower day count. Taxable equivalent NIM of
3.18 percent in the first quarter of 2018 increased 16 bps from the
prior quarter. Excluding the lease remeasurement, taxable equivalent NIM
increased 8 bps from the prior quarter’s adjusted NIM, primarily driven
by higher short-term market rates and a lower day count.
Compared to the first quarter of 2017, taxable equivalent NII increased
$60 million, or 6 percent, from the first quarter of 2017. The first
quarter of 2017 results were positively impacted by a $12 million
reversal of a previously-estimated charge for refunds to certain
bankcard customers. Excluding the card remediation impact, taxable
equivalent NII in the first quarter of 2018 was up $72 million, or 8
percent, from the first quarter of 2017, reflecting higher short-term
rates and an increase in investment portfolio balances. Taxable
equivalent NIM increased 16 bps from the first quarter of 2017,
primarily driven by higher short-term market rates, partially offset by
the aforementioned card remediation impact. Excluding this impact, the
taxable equivalent NIM increased 20 bps from the first quarter of 2017.
Securities
Average securities and other short-term investments were $34.7 billion
in the first quarter of 2018 compared to $33.8 billion in the previous
quarter and $33.2 billion in the first quarter of 2017. Average
available-for-sale debt and other securities of $32.2 billion in the
first quarter of 2018 were up $917 million, or 3 percent, sequentially
and up $937 million, or 3 percent, from the first quarter of 2017.
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Average Portfolio Loans and Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
$41,782
|
|
|
$41,438
|
|
|
$41,302
|
|
|
$41,601
|
|
|
$41,854
|
|
|
1%
|
|
-
|
|
Commercial mortgage loans
|
|
|
6,582
|
|
|
6,751
|
|
|
6,807
|
|
|
6,845
|
|
|
6,941
|
|
|
(3%)
|
|
(5%)
|
|
Commercial construction loans
|
|
|
4,671
|
|
|
4,660
|
|
|
4,533
|
|
|
4,306
|
|
|
3,987
|
|
|
-
|
|
17%
|
|
Commercial leases
|
|
|
3,960
|
|
|
4,016
|
|
|
4,072
|
|
|
4,036
|
|
|
3,901
|
|
|
(1%)
|
|
2%
|
|
Total commercial loans and leases
|
|
|
$56,995
|
|
|
$56,865
|
|
|
$56,714
|
|
|
$56,788
|
|
|
$56,683
|
|
|
-
|
|
1%
|
|
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
|
$15,575
|
|
|
$15,590
|
|
|
$15,523
|
|
|
$15,417
|
|
|
$15,200
|
|
|
-
|
|
2%
|
|
Home equity
|
|
|
6,889
|
|
|
7,066
|
|
|
7,207
|
|
|
7,385
|
|
|
7,581
|
|
|
(3%)
|
|
(9%)
|
|
Automobile loans
|
|
|
9,064
|
|
|
9,175
|
|
|
9,267
|
|
|
9,410
|
|
|
9,786
|
|
|
(1%)
|
|
(7%)
|
|
Credit card
|
|
|
2,224
|
|
|
2,202
|
|
|
2,140
|
|
|
2,080
|
|
|
2,141
|
|
|
1%
|
|
4%
|
|
Other consumer loans
|
|
|
1,587
|
|
|
1,352
|
|
|
1,055
|
|
|
892
|
|
|
755
|
|
|
17%
|
|
110%
|
|
Total consumer loans
|
|
|
$35,339
|
|
|
$35,385
|
|
|
$35,192
|
|
|
$35,184
|
|
|
$35,463
|
|
|
-
|
|
-
|
|
Total average portfolio loans and leases
|
|
|
$92,334
|
|
|
$92,250
|
|
|
$91,906
|
|
|
$91,972
|
|
|
$92,146
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans held for sale
|
|
|
$535
|
|
|
$615
|
|
|
$711
|
|
|
$681
|
|
|
$645
|
|
|
(13%)
|
|
(17%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average portfolio loan and lease balances were flat sequentially and
year-over-year. Sequential performance was primarily driven by increases
in commercial and industrial (C&I) and other consumer loans, offset by
decreases in home equity and commercial real estate loans.
Year-over-year performance was primarily driven by increases in other
consumer loans and residential mortgage loans, offset by decreases in
automobile and home equity loans. Period end portfolio loans and leases
of $92.0 billion were flat sequentially and year-over-year.
Average commercial portfolio loan and lease balances were flat
sequentially, and increased 1 percent from the first quarter of 2017.
Sequential performance was primarily driven by an increase in C&I loans
reflecting growth within industry verticals, offset by a decrease in
commercial real estate loans. Within commercial real estate, commercial
mortgage balances decreased 3 percent and commercial construction
balances were flat sequentially. Year-over-year performance was
primarily driven by an increase in commercial real estate loans. Period
end commercial line utilization of 35 percent compared to 34 percent in
the fourth quarter of 2017 and 34 percent in the first quarter of 2017.
Average consumer portfolio loan and lease balances were flat
sequentially and year-over-year. Sequential performance was primarily
driven by an increase in other consumer loans, offset by a decline in
home equity and automobile loan balances. Year-over-year performance was
primarily driven by an increase in other consumer loans and residential
mortgage loans, offset by lower automobile and home equity loan balances.
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Average Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
|
|
|
$33,825
|
|
|
$35,519
|
|
|
$34,850
|
|
|
$34,915
|
|
|
$35,084
|
|
|
(5%)
|
|
(4%)
|
|
Interest checking
|
|
|
28,403
|
|
|
26,992
|
|
|
25,765
|
|
|
26,014
|
|
|
26,760
|
|
|
5%
|
|
6%
|
|
Savings
|
|
|
13,546
|
|
|
13,593
|
|
|
13,889
|
|
|
14,238
|
|
|
14,117
|
|
|
-
|
|
(4%)
|
|
Money market
|
|
|
20,750
|
|
|
20,023
|
|
|
20,028
|
|
|
20,278
|
|
|
20,603
|
|
|
4%
|
|
1%
|
|
Foreign office
(d)
|
|
|
494
|
|
|
323
|
|
|
395
|
|
|
380
|
|
|
454
|
|
|
53%
|
|
9%
|
|
Total transaction deposits
|
|
|
$97,018
|
|
|
$96,450
|
|
|
$94,927
|
|
|
$95,825
|
|
|
$97,018
|
|
|
1%
|
|
-
|
|
Other time
|
|
|
3,856
|
|
|
3,792
|
|
|
3,722
|
|
|
3,745
|
|
|
3,827
|
|
|
2%
|
|
1%
|
|
Total core deposits
|
|
|
$100,874
|
|
|
$100,242
|
|
|
$98,649
|
|
|
$99,570
|
|
|
$100,845
|
|
|
1%
|
|
-
|
|
Certificates - $100,000 and over
|
|
|
2,284
|
|
|
2,429
|
|
|
2,625
|
|
|
2,623
|
|
|
2,579
|
|
|
(6%)
|
|
(11%)
|
|
Other
|
|
|
379
|
|
|
119
|
|
|
560
|
|
|
264
|
|
|
162
|
|
|
218%
|
|
134%
|
|
Total average deposits
|
|
|
$103,537
|
|
|
$102,790
|
|
|
$101,834
|
|
|
$102,457
|
|
|
$103,586
|
|
|
1%
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average core deposits increased 1 percent sequentially and were flat
year-over-year. Average transaction deposits increased 1 percent
sequentially and were flat compared with the first quarter of 2017. The
sequential performance was primarily driven by increases in commercial
interest checking deposits and consumer money market account balances,
partially offset by lower commercial demand deposit account balances.
Year-over-year performance was primarily driven by higher consumer money
market account balances and commercial interest checking deposits,
offset by lower commercial demand deposit account balances and
commercial money market account balances. Other time deposits increased
by 2 percent sequentially and 1 percent year-over-year.
Average total commercial transaction deposits of $43 billion decreased 2
percent sequentially and decreased 3 percent from the first quarter of
2017. Average total consumer transaction deposits of $54 billion
increased 2 percent sequentially and increased 3 percent from the first
quarter of 2017.
|
Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Average Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates - $100,000 and over
|
|
|
$2,284
|
|
|
$2,429
|
|
|
$2,625
|
|
|
$2,623
|
|
|
$2,579
|
|
|
(6%)
|
|
(11%)
|
|
Other deposits
|
|
|
379
|
|
|
119
|
|
|
560
|
|
|
264
|
|
|
162
|
|
|
218%
|
|
134%
|
|
Federal funds purchased
|
|
|
692
|
|
|
602
|
|
|
675
|
|
|
311
|
|
|
639
|
|
|
15%
|
|
8%
|
|
Other short-term borrowings
|
|
|
2,423
|
|
|
2,316
|
|
|
4,212
|
|
|
4,194
|
|
|
1,893
|
|
|
5%
|
|
28%
|
|
Long-term debt
|
|
|
14,780
|
|
|
14,631
|
|
|
13,457
|
|
|
13,273
|
|
|
13,856
|
|
|
1%
|
|
7%
|
|
Total average wholesale funding
|
|
|
$20,558
|
|
|
$20,097
|
|
|
$21,529
|
|
|
$20,665
|
|
|
$19,129
|
|
|
2%
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average wholesale funding of $20.6 billion increased $461 million, or 2
percent, sequentially and increased $1.4 billion, or 7 percent, from the
first quarter of 2017. The sequential and year-over-year increase in
wholesale funding reflected the increase in interest-earning assets.
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
|
$137
|
|
$138
|
|
$138
|
|
$139
|
|
$138
|
|
(1%)
|
|
(1%)
|
|
Corporate banking revenue
|
|
|
88
|
|
77
|
|
101
|
|
101
|
|
74
|
|
14%
|
|
19%
|
|
Mortgage banking net revenue
|
|
|
56
|
|
54
|
|
63
|
|
55
|
|
52
|
|
4%
|
|
8%
|
|
Wealth and asset management revenue
|
|
|
113
|
|
106
|
|
102
|
|
103
|
|
108
|
|
7%
|
|
5%
|
|
Card and processing revenue
|
|
|
79
|
|
80
|
|
79
|
|
79
|
|
74
|
|
(1%)
|
|
7%
|
|
Other noninterest income
|
|
|
460
|
|
123
|
|
1,076
|
|
85
|
|
77
|
|
274%
|
|
497%
|
|
Securities gains (losses), net
|
|
|
(11)
|
|
1
|
|
-
|
|
-
|
|
-
|
|
NM
|
|
NM
|
|
Securities gains (losses), net - non-qualifying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
hedges on mortgage servicing rights
|
|
|
(13)
|
|
(2)
|
|
2
|
|
2
|
|
-
|
|
550%
|
|
NM
|
|
Total noninterest income
|
|
|
$909
|
|
$577
|
|
$1,561
|
|
$564
|
|
$523
|
|
58%
|
|
74%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income of $909 million increased $332 million sequentially
and increased $386 million year-over-year. The sequential and
year-over-year comparisons reflect the impact of the following items:
|
Noninterest Income excluding certain items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
March
|
|
December
|
|
March
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Income excluding certain items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income (U.S. GAAP)
|
|
|
$909
|
|
|
$577
|
|
|
$523
|
|
|
|
|
|
|
Worldpay step-up gain
|
|
|
(414
|
)
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Valuation of Visa total return swap
|
|
|
39
|
|
|
11
|
|
|
13
|
|
|
|
|
|
|
Branch network impairment charge
|
|
|
8
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Securities losses / (gains), net
|
|
|
11
|
|
|
(1
|
)
|
|
-
|
|
|
|
|
|
|
Noninterest income excluding certain items
(b)
|
|
|
$553
|
|
|
$587
|
|
|
$536
|
|
|
(6
|
%)
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding the items in the table above, noninterest income of $553
million decreased 6 percent from the previous quarter and increased 3
percent from the first quarter of 2017. The sequential performance was
impacted by $44 million in revenue recognized from Worldpay related to
the tax receivable agreement (TRA) and a $25 million lease remarketing
impairment recognized in the fourth quarter of 2017. The year-over-year
performance was impacted by a $31 million lease remarketing impairment
recognized in the first quarter of 2017. Excluding these impacts,
adjusted noninterest income decreased 3 percent sequentially and
decreased 2 percent year-over-year, primarily due to lower equity method
income resulting from Worldpay acquisition and integration costs.
Corporate banking revenue of $88 million was up 14 percent sequentially
and up 19 percent year-over-year. The sequential and year-over-year
increases were primarily driven by an increase in M&A advisory fees, as
well as the aforementioned lease remarketing impairments recognized both
in the fourth quarter of 2017 and first quarter of 2017. Excluding the
impact of the lease impairments, corporate banking revenue decreased 14
percent sequentially and decreased 16 percent year-over-year, primarily
driven by lower loan syndication fees and business lending fees.
|
Mortgage Banking Net Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Seq
|
|
Yr/Yr
|
|
Mortgage Banking Net Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination fees and gains on loan sales
|
|
|
$24
|
|
$32
|
|
$40
|
|
$37
|
|
$29
|
|
(25%)
|
|
(17%)
|
|
Net mortgage servicing revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross mortgage servicing fees
|
|
|
53
|
|
54
|
|
56
|
|
49
|
|
47
|
|
(2%)
|
|
13%
|
|
Net valuation adjustments on MSRs and
|
|
|
(21)
|
|
(32)
|
|
(33)
|
|
(31)
|
|
(24)
|
|
(34%)
|
|
(13%)
|
|
free-standing derivatives purchased to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
economically hedge MSRs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net mortgage servicing revenue
|
|
|
32
|
|
22
|
|
23
|
|
18
|
|
23
|
|
45%
|
|
39%
|
|
Total mortgage banking net revenue
|
|
|
$56
|
|
$54
|
|
$63
|
|
$55
|
|
$52
|
|
4%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking net revenue was $56 million in the first quarter of
2018, up 4 percent from the fourth quarter of 2017 and up 8 percent from
the first quarter of 2017. The sequential increase was driven by a lower
negative impact from net valuation adjustments, partially offset by
lower origination fees and gains on loan sales. The year-over-year
increase was driven by higher gross mortgage servicing fees, partially
offset by lower origination fees and gains on loan sales. Originations
of $1.6 billion in the current quarter decreased 18 percent sequentially
and decreased 19 percent from the first quarter of 2017.
Wealth and asset management revenue of $113 million increased 7 percent
from the fourth quarter of 2017 and increased 5 percent from the first
quarter of 2017. The sequential increase was primarily driven by
seasonally strong tax-related private client service revenue. The
year-over-year increase was primarily driven by higher personal asset
management revenue.
Card and processing revenue of $79 million in the first quarter of 2018
decreased 1 percent sequentially and increased 7 percent year-over-year.
The sequential decrease reflected seasonally lower credit card spend
volume compared with the fourth quarter, largely offset by lower rewards
costs. The year-over-year increase reflected higher credit spend volume
and an increase in actively used cards.
Other noninterest income totaled $460 million in the first quarter of
2018, compared with $123 million in the previous quarter, and $77
million in the first quarter of 2017. As disclosed in the table on page
7, the reported results included the impact of the Worldpay step-up
gain, valuation of the Visa total return swap, and the branch impairment
charge. For the first quarter of 2018, excluding these items, other
noninterest income of $93 million decreased $41 million, or 31 percent,
from the fourth quarter of 2017 and increased $3 million, or 3 percent,
from the first quarter of 2017. The sequential decrease was primarily
due to the $44 million gain from the TRA in the fourth quarter of 2017.
The year-over-year increase was primarily due to an increase in private
equity investment income.
Net losses on investment securities were $11 million in the first
quarter of 2018, compared with a net gain of $1 million in the fourth
quarter of 2017 and no net gains/losses in the first quarter of 2017.
Net losses on securities held as non-qualifying hedges for the MSR
portfolio were $13 million in the first quarter of 2018 and $2 million
in the fourth quarter of 2017.
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and incentives
|
|
|
$447
|
|
|
$418
|
|
|
$407
|
|
|
$397
|
|
|
$411
|
|
|
7%
|
|
9%
|
|
Employee benefits
|
|
|
110
|
|
|
82
|
|
|
77
|
|
|
86
|
|
|
111
|
|
|
34%
|
|
(1%)
|
|
Net occupancy expense
|
|
|
75
|
|
|
74
|
|
|
74
|
|
|
70
|
|
|
78
|
|
|
1%
|
|
(4%)
|
|
Technology and communications
|
|
|
68
|
|
|
68
|
|
|
62
|
|
|
57
|
|
|
58
|
|
|
-
|
|
17%
|
|
Equipment expense
|
|
|
31
|
|
|
29
|
|
|
30
|
|
|
29
|
|
|
28
|
|
|
7%
|
|
11%
|
|
Card and processing expense
|
|
|
29
|
|
|
34
|
|
|
32
|
|
|
33
|
|
|
30
|
|
|
(15%)
|
|
(3%)
|
|
Other noninterest expense
|
|
|
286
|
|
|
368
|
|
|
293
|
|
|
285
|
|
|
270
|
|
|
(22%)
|
|
6%
|
|
Total noninterest expense
|
|
|
$1,046
|
|
|
$1,073
|
|
|
$975
|
|
|
$957
|
|
|
$986
|
|
|
(3%)
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense of $1.046 billion decreased $27 million, or 3
percent, compared with the fourth quarter of 2017, and increased $60
million, or 6 percent, compared with the first quarter of 2017.
Excluding the $8 million litigation reserve charge discussed on page 1,
as well as the items related to the Tax Cuts and Jobs Act recognized in
the fourth quarter of 2017, noninterest expense increased $63 million,
or 6 percent. The sequential increase primarily reflected seasonally
higher compensation-related expenses, as well as an increase in the
amortization of affordable housing investments primarily resulting from
the Tax Cuts and Jobs Act. The year-over-year increase was primarily
driven by higher base compensation and technology and communications
expense.
|
Summary of Credit Loss Experience
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Net losses charged-off
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
($28
|
)
|
|
($32
|
)
|
|
($27
|
)
|
|
($18
|
)
|
|
($36
|
)
|
|
Commercial mortgage loans
|
|
|
(1
|
)
|
|
1
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
Commercial leases
|
|
|
-
|
|
|
(1
|
)
|
|
-
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Residential mortgage loans
|
|
|
(3
|
)
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
(5
|
)
|
|
Home equity
|
|
|
(5
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
Automobile loans
|
|
|
(11
|
)
|
|
(10
|
)
|
|
(8
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|
Credit card
|
|
|
(25
|
)
|
|
(20
|
)
|
|
(20
|
)
|
|
(22
|
)
|
|
(22
|
)
|
|
Other consumer loans and leases
|
|
|
(8
|
)
|
|
(9
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
Total net losses charged-off
|
|
|
($81
|
)
|
|
($76
|
)
|
|
($68
|
)
|
|
($64
|
)
|
|
($89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses charged-off
|
|
|
($103
|
)
|
|
($94
|
)
|
|
($85
|
)
|
|
($95
|
)
|
|
($107
|
)
|
|
Total recoveries of losses previously charged-off
|
|
|
22
|
|
|
18
|
|
|
17
|
|
|
31
|
|
|
18
|
|
|
Total net losses charged-off
|
|
|
($81
|
)
|
|
($76
|
)
|
|
($68
|
)
|
|
($64
|
)
|
|
($89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses charged-off as a percent of average portfolio loans and
|
|
|
|
|
|
|
|
|
|
|
|
|
leases
|
|
|
0.36
|
%
|
|
0.33
|
%
|
|
0.29
|
%
|
|
0.28
|
%
|
|
0.40
|
%
|
|
Commercial
|
|
|
0.21
|
%
|
|
0.22
|
%
|
|
0.21
|
%
|
|
0.17
|
%
|
|
0.29
|
%
|
|
Consumer
|
|
|
0.60
|
%
|
|
0.51
|
%
|
|
0.43
|
%
|
|
0.46
|
%
|
|
0.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs were $81 million, or 36 bps of average portfolio loans
and leases on an annualized basis, in the first quarter of 2018 compared
with net charge-offs of $76 million, or 33 bps, in the fourth quarter of
2017 and $89 million, or 40 bps, in the first quarter of 2017.
Commercial net charge-offs of $29 million, or 21 bps, decreased $3
million sequentially. This primarily reflected a $4 million decrease in
net charge-offs of C&I loans, partially offset by a $2 million increase
in net charge-offs of commercial mortgage loans.
Consumer net charge-offs of $52 million, or 60 bps, increased $8 million
sequentially. This primarily reflected a $5 million increase in net
charge-offs on credit card loans.
|
|
|
|
|
|
($ in millions)
|
|
|
For the Three Months Ended
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Allowance for Credit Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning
|
|
|
$1,196
|
|
|
$1,205
|
|
|
$1,226
|
|
|
$1,238
|
|
|
$1,253
|
|
|
Total net losses charged-off
|
|
|
(81
|
)
|
|
(76
|
)
|
|
(68
|
)
|
|
(64
|
)
|
|
(89
|
)
|
|
Provision for loan and lease losses
|
|
|
23
|
|
|
67
|
|
|
67
|
|
|
52
|
|
|
74
|
|
|
Deconsolidation of a variable interest entity
|
|
|
-
|
|
|
-
|
|
|
(20
|
)
|
|
-
|
|
|
-
|
|
|
Allowance for loan and lease losses, ending
|
|
|
$1,138
|
|
|
$1,196
|
|
|
$1,205
|
|
|
$1,226
|
|
|
$1,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning
|
|
|
$161
|
|
|
$157
|
|
|
$162
|
|
|
$159
|
|
|
$161
|
|
|
Provision for unfunded commitments
|
|
|
(10
|
)
|
|
4
|
|
|
(5
|
)
|
|
3
|
|
|
(2
|
)
|
|
Reserve for unfunded commitments, ending
|
|
|
$151
|
|
|
$161
|
|
|
$157
|
|
|
$162
|
|
|
$159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
|
$1,138
|
|
|
$1,196
|
|
|
$1,205
|
|
|
$1,226
|
|
|
$1,238
|
|
|
Reserve for unfunded commitments
|
|
|
151
|
|
|
161
|
|
|
157
|
|
|
162
|
|
|
159
|
|
|
Total allowance for credit losses
|
|
|
$1,289
|
|
|
$1,357
|
|
|
$1,362
|
|
|
$1,388
|
|
|
$1,397
|
|
|
Allowance for loan and lease losses ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of portfolio loans and leases
|
|
|
1.24
|
%
|
|
1.30
|
%
|
|
1.31
|
%
|
|
1.34
|
%
|
|
1.35
|
%
|
|
As a percent of nonperforming portfolio loans and leases
(e)
|
|
|
252
|
%
|
|
274
|
%
|
|
238
|
%
|
|
200
|
%
|
|
188
|
%
|
|
As a percent of nonperforming portfolio assets
(e)
|
|
|
226
|
%
|
|
245
|
%
|
|
217
|
%
|
|
185
|
%
|
|
172
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The provision for loan and lease losses totaled $23 million in the first
quarter of 2018, and decreased $44 million sequentially, reflecting
continued low levels of net charge-offs and an improvement in criticized
assets. Provision expense decreased $51 million from the first quarter
of 2017.
As of quarter end, the allowance for loan and lease loss ratio
represented 1.24 percent of total portfolio loans and leases
outstanding, compared with 1.30 percent last quarter, and represented
252 percent of nonperforming loans and leases, and 226 percent of
nonperforming assets.
|
($ in millions)
|
|
|
As of
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
Nonperforming Assets and Delinquent Loans
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Nonaccrual portfolio loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
$155
|
|
$144
|
|
$144
|
|
$225
|
|
$251
|
|
Commercial mortgage loans
|
|
|
9
|
|
12
|
|
14
|
|
15
|
|
21
|
|
Commercial leases
|
|
|
4
|
|
-
|
|
1
|
|
1
|
|
-
|
|
Residential mortgage loans
|
|
|
16
|
|
17
|
|
19
|
|
19
|
|
21
|
|
Home equity
|
|
|
55
|
|
56
|
|
56
|
|
52
|
|
53
|
|
Other consumer loans and leases
|
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total nonaccrual portfolio loans and leases (excludes restructured
loans)
|
|
|
$240
|
|
$229
|
|
$234
|
|
$312
|
|
$346
|
|
Nonaccrual restructured portfolio commercial loans and leases
(f)
|
|
|
154
|
|
150
|
|
214
|
|
244
|
|
251
|
|
Nonaccrual restructured portfolio consumer loans and leases
|
|
|
58
|
|
58
|
|
58
|
|
58
|
|
60
|
|
Total nonaccrual portfolio loans and leases
|
|
|
$452
|
|
$437
|
|
$506
|
|
$614
|
|
$657
|
|
Repossessed property
|
|
|
9
|
|
9
|
|
10
|
|
11
|
|
14
|
|
OREO
|
|
|
43
|
|
43i
|
|
39i
|
|
37i
|
|
50i
|
|
Total nonperforming portfolio assets
(e)
|
|
|
$504
|
|
$489
|
|
$555
|
|
$662
|
|
$721
|
|
Nonaccrual loans held for sale
|
|
|
5
|
|
5
|
|
18
|
|
7
|
|
7
|
|
Nonaccrual restructured loans held for sale
|
|
|
19
|
|
1
|
|
2
|
|
1
|
|
2
|
|
Total nonperforming assets
|
|
|
$528
|
|
$495
|
|
$575
|
|
$670
|
|
$730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured portfolio consumer loans and leases (accrual)
|
|
|
$916
|
|
$927
|
|
$929
|
|
$933
|
|
$950
|
|
Restructured portfolio commercial loans and leases (accrual)
(f)
|
|
|
$249
|
|
$249
|
|
$232
|
|
$224
|
|
$277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 30-89 days past due (accrual)
|
|
|
$299
|
|
$280
|
|
$252
|
|
$190
|
|
$180
|
|
Total loans and leases 90 days past due (accrual)
|
|
|
$107
|
|
$97
|
|
$77
|
|
$75
|
|
$75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming portfolio loans and leases as a percent of portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
loans and leases and OREO
(e)
|
|
|
0.49%
|
|
0.48%
|
|
0.55%
|
|
0.67%
|
|
0.72%
|
|
Nonperforming portfolio assets as a percent of portfolio loans and
|
|
|
|
|
|
|
|
|
|
|
|
|
leases and OREO
(e)
|
|
|
0.55%
|
|
0.53%
|
|
0.60%
|
|
0.72%
|
|
0.79%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming portfolio assets increased $15 million, or 3
percent, from the previous quarter to $504 million. Portfolio
nonperforming loans and leases (NPLs) at quarter end increased $15
million from the previous quarter to $452 million. NPLs as a percent of
total loans, leases and OREO at quarter end increased 1 bps from the
previous quarter to 0.49 percent.
Commercial portfolio NPLs increased $16 million from last quarter to
$322 million, or 0.57 percent of commercial portfolio loans, leases and
OREO. Consumer portfolio NPLs decreased $1 million from last quarter to
$130 million, or 0.37 percent of consumer portfolio loans, leases and
OREO.
OREO balances were flat from the prior quarter at $43 million, and
included $18 million in commercial OREO and $25 million in consumer
OREO. Repossessed personal property was flat from the prior quarter at
$9 million.
Loans over 90 days past due and still accruing increased $10 million
from the fourth quarter of 2017 at $107 million. Loans 30-89 days past
due of $299 million increased $19 million from the previous quarter.
|
Capital and Liquidity Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total Bancorp shareholders' equity as a percent of average
assets
|
|
|
11.52%
|
|
11.69%
|
|
11.93%
|
|
11.84%
|
|
11.72%
|
|
Tangible equity
(b)
|
|
|
10.09%
|
|
9.90%
|
|
9.84%
|
|
9.98%
|
|
10.12%
|
|
Tangible common equity (excluding unrealized gains/losses)
(b)
|
|
|
9.14%
|
|
8.94%
|
|
8.89%
|
|
9.02%
|
|
9.15%
|
|
Tangible common equity (including unrealized gains/losses)
(b)
|
|
|
8.89%
|
|
8.99%
|
|
9.00%
|
|
9.12%
|
|
9.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory Capital and Liquidity Ratios
|
|
|
|
|
CET1 capital
(c)
|
|
|
10.82%
|
|
10.61%
|
|
10.59%
|
|
10.63%
|
|
10.76%
|
|
Tier I risk-based capital
(c)
|
|
|
11.95%
|
|
11.74%
|
|
11.72%
|
|
11.76%
|
|
11.90%
|
|
Total risk-based capital
(c)
|
|
|
15.29%
|
|
15.16%
|
|
15.16%
|
|
15.22%
|
|
15.45%
|
|
Tier I leverage
|
|
|
10.11%
|
|
10.01%
|
|
9.97%
|
|
10.07%
|
|
10.15%
|
|
Modified liquidity coverage ratio (LCR)
|
|
|
113%
|
|
129%
|
|
124%
|
|
115%
|
|
119%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratios remained strong and increased during the quarter. The
CET1 ratio was 10.82 percent, the tangible common equity to tangible
assets ratio(b) was 9.14 percent (excluding unrealized
gains/losses), and 8.89 percent (including unrealized gains/losses). The
Tier I risk-based capital ratio was 11.95 percent, the Total risk-based
capital ratio was 15.29 percent, and the Tier I leverage ratio was 10.11
percent.
Fifth Third entered into or completed multiple share repurchases during
the quarter. Below is a summary of those share repurchases.
-
On February 12, 2018, Fifth Third initially settled a $318 million
share repurchase agreement, including $283 million of repurchases that
were part of Fifth Third’s 2017 CCAR Capital Plan, as well as an
additional de minimis repurchase of $35 million. The initial
settlement reduced first quarter common shares outstanding by 8.7
million shares. On March 26, 2018, Fifth Third settled the forward
contract. An additional 1.0 million shares were repurchased in
connection with the completion of this agreement.
-
On March 19, 2018, Fifth Third settled the forward contract related to
the December 19, 2017 $273 million share repurchase agreement. An
additional 0.8 million shares were repurchased in connection with the
completion of this agreement.
Based on the transactions noted above, common shares outstanding
decreased by approximately 10.5 million shares in the first quarter of
2018 from the fourth quarter of 2017.
Tax Rate
The effective tax rate was 15.8 percent in the first quarter of 2018
compared with (29.8) percent in the fourth quarter of 2017 and 22.9
percent in the first quarter of 2017. The tax rate in the first quarter
of 2018 was impacted by a $7 million tax benefit primarily associated
with the exercise and vesting of employee equity awards.
Other
As of March 31, 2018, Fifth Third Bank owned approximately 15 million
units representing a 4.9 percent interest in Vantiv Holding, LLC,
convertible into shares of Worldpay, Inc., a publicly traded firm. Based
upon Worldpay’s closing price of $82.24 on March 31, 2018, our interest
in Worldpay was valued at approximately $1.3 billion. The difference
between the market value and the book value of Fifth Third’s interest in
Worldpay’s shares is not recognized in Fifth Third’s equity or capital.
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 and may be accessed through the Fifth Third Investor
Relations website at www.53.com
(click on “About Us” then “Investor Relations”).
Those unable to listen to the live webcast may access a webcast replay
through the Fifth Third Investor Relations website at the same web
address. Additionally, a telephone replay of the conference call will be
available after the conference call until approximately May 8, 2018 by
dialing 800-585-8367 for domestic access or 404-537-3406 for
international access (passcode 2496576#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of March 31, 2018, the Company had
$142 billion in assets and operates 1,153 full-service Banking Centers,
and 2,459 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina.
In total, Fifth Third provides its customers with access to more than
54,000 fee-free ATMs across the United States. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer Lending,
and Wealth & Asset Management. As of March 31, 2018, Fifth Third also
had a 4.9% interest in Vantiv Holding, LLC, a subsidiary of Worldpay,
Inc. Fifth Third is among the largest money managers in the Midwest and,
as of March 31, 2018, had $363 billion in assets under care, of which it
managed $37 billion for individuals, corporations and not-for-profit
organizations through its Trust and Registered Investment Advisory
businesses. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third’s common stock is traded on the NASDAQ® Global Select Market
under the symbol “FITB.”
Earnings Release End Notes
(a) Assumes a 21% tax rate.
(b) Non-GAAP measure; see discussion of non-GAAP and Reg. G
reconciliation beginning on page 28.
(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 weighted values are added together resulting in the total
risk-weighted assets. Current period regulatory capital ratios
are estimated.
(d) Includes commercial customer Eurodollar sweep balances for which
the Bancorp pays rates comparable to other commercial deposit accounts.
(e) Excludes nonaccrual loans held for sale.
(f) As of June 30, 2017 and March 31, 2017, excludes $7 million of
restructured accruing loans and $19 million of restructured nonaccrual
loans associated with a consolidated VIE in which the Bancorp has no
continuing credit risk due to the risk being assumed by a third party.
FORWARD-LOOKING STATEMENTS
This release contains or incorporates 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,” “is anticipated,” “potential,” “estimate,” “forecast,”
“projected,” “intends to,” or may include other similar words or phrases
such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,”
or similar expressions, or future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” or similar verbs. You should
not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to those described in
this release or 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 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) deteriorating credit quality; (2)
loan concentration by location or industry of borrowers or collateral;
(3) problems encountered by other financial institutions; (4) inadequate
sources of funding or liquidity; (5) unfavorable actions of rating
agencies; (6) inability to maintain or grow deposits; (7) limitations on
the ability to receive dividends from subsidiaries; (8) cyber-security
risks; (9) Fifth Third’s ability to secure confidential information and
deliver products and services through the use of computer systems and
telecommunications networks; (10) failures by third-party service
providers; (11) inability to manage strategic initiatives and/or
organizational changes; (12) inability to implement technology system
enhancements; (13) failure of internal controls and other risk
management systems; (14) losses related to fraud, theft or violence;
(15) inability to attract and retain skilled personnel; (16) adverse
impacts of government regulation; (17) governmental or regulatory
changes or other actions; (18) failures to meet applicable capital
requirements; (19) regulatory objections to Fifth Third’s capital plan;
(20) regulation of Fifth Third’s derivatives activities; (21) regulatory
objections to Fifth Third’s resolution plan; (22) deposit insurance
premiums; (23) assessments for the orderly liquidation fund; (24)
changes in LIBOR; (25) weakness in the national or local economies; (26)
global political and economic uncertainty or negative actions; (27)
changes in interest rates; (28) changes and trends in capital markets;
(29) fluctuation of Fifth Third’s stock price; (30) volatility in
mortgage banking revenue; (31) litigation, investigations, and
enforcement proceedings by governmental authorities; (32) breaches of
contractual covenants, representations and warranties; (33) competition
and changes in the financial services industry; (34) changing retail
distribution strategies, customer preferences and behavior; (35)
difficulties in identifying, acquiring or integrating suitable strategic
partnerships, investments or acquisitions; (36) potential dilution from
future acquisitions; (37) loss of income and/or difficulties encountered
in the sale and separation of businesses, investments or other assets;
(38) results of Vantiv Holding, LLC, a subsidiary of Worldpay, Inc. or
other investments or acquired entities; (39) difficulties from or
changes in Fifth Third’s investment in, relationship with, and nature of
the operations of Vantiv Holding, LLC, a subsidiary of Worldpay, Inc.;
(40) changes in accounting standards or interpretation or declines in
the value of Fifth Third’s goodwill or other intangible assets; (41)
inaccuracies or other failures from the use of models; (42) effects of
critical accounting policies and judgments or the use of inaccurate
estimates; (43) weather related events or other natural disasters; and
(44) the impact of reputational risk created by these or other
developments on such matters as business generation and retention,
funding and liquidity.
In this release, we may sometimes provide non-GAAP financial
information. Please note that although non-GAAP financial measures
provide useful insight to analysts, investors and regulators, they
should not be considered in isolation or relied upon as a substitute for
analysis using GAAP measures. We provide a discussion of these non-GAAP
measures and reconciliation to the most directly comparable GAAP
measures beginning on page 28.
Fifth Third Bancorp
Sameer Gokhale, 513-534-2219
or
Larry Magnesen, 513-534-8055
(Media)