Business Segments

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Business Segments

Business Segments

The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Wealth and Asset Management. Results of the Bancorp’s business segments are presented based on its management structure and management accounting practices. The structure and accounting practices are specific to the Bancorp; therefore, the financial results of the Bancorp’s business segments are not necessarily comparable with similar information for other financial institutions. The Bancorp refines its methodologies from time to time as management’s accounting practices and businesses change.

The Bancorp manages interest rate risk centrally at the corporate level. By employing an FTP methodology, the business segments are insulated from most benchmark interest rate volatility, enabling them to focus on serving customers through the origination of loans and acceptance of deposits. The FTP methodology assigns charge and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of the cash flows for each transaction. Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each business segment so its resulting net interest income is insulated from future changes in benchmark interest rates. The Bancorp’s FTP methodology also allocates the contribution to net interest income of the asset-generating and deposit-providing businesses on a duration-adjusted basis to better attribute the driver of the performance. As the asset and liability durations are not perfectly matched, the residual impact of the FTP methodology is captured in General Corporate and Other. The charge and credit rates are determined using the FTP rate curve, which is based on an estimate of Fifth Third’s marginal borrowing cost in the wholesale funding markets. The FTP curve is constructed using the U.S. swap curve, brokered CD pricing and unsecured debt pricing.

The Bancorp adjusts the FTP charge and credit rates as dictated by changes in interest rates for various interest-earning assets and interest-bearing liabilities and by the review of behavioral assumptions, such as prepayment rates on interest-earning assets and the estimated durations for indeterminate-lived deposits. Key assumptions, including the credit rates provided for deposit accounts, are reviewed annually. Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions.

The Bancorp’s methodology for allocating provision for credit losses expense to the business segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each business segment. Provision for credit losses expense attributable to loan and lease growth and changes in ALLL factors is captured in General Corporate and Other. The financial results of the business segments include allocations for shared services and headquarters expenses. Additionally, the business segments form synergies by taking advantage of relationship depth opportunities and funding operations by accessing the capital markets as a collective unit.

The following is a description of each of the Bancorp’s business segments and the products and services they provide to their respective client bases.

Commercial Banking offers credit intermediation, cash management and financial services to large and middle-market businesses and government and professional customers. In addition to the traditional lending and depository offerings, Commercial Banking products and services include global cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing and syndicated finance.

Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through 1,117 full-service banking centers. Branch Banking offers depository and loan products, such as checking and savings accounts, home equity loans and lines of credit, credit cards and loans for automobiles and other personal financing needs, as well as products designed to meet the specific needs of small businesses, including cash management services.

Consumer Lending includes the Bancorp’s residential mortgage, automobile and other indirect lending activities. Residential mortgage activities within Consumer Lending include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans and all associated hedging activities. Residential mortgages are primarily originated through a dedicated sales force and through third-party correspondent lenders. Automobile and other indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers.

Wealth and Asset Management provides a full range of wealth management services for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of three main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Private Bank; and Fifth Third Institutional Services. FTS offers full service retail brokerage services to individual clients and broker-dealer services to the institutional marketplace. Fifth Third Private Bank offers wealth management strategies to high net worth and ultra-high net worth clients through wealth planning, investment management, banking, insurance, trust and estate services. Fifth Third Institutional Services provides advisory services for institutional clients including middle market businesses, non-profits, states and municipalities.

The following tables present the results of operations and assets by business segment for the years ended December 31:

2021 ($ in millions)	Commercial Banking			Branch Banking	Consumer Lending	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	1,498		1,221	562	88	1,401		—		4,770
(Benefit from) provision for credit losses	(583)			97	9	(1)	101		—		(377)
Net interest income after (benefit from)      provision for credit losses	2,081			1,124	553	89	1,300		—		5,147
Noninterest income:
Commercial banking revenue	626			9	—	2	—		—		637
Service charges on deposits	363			236	—	1	—		—		600
Wealth and asset management revenue	2			206	—	558	—		(180)	(a)	586
Card and processing revenue	61			329	—	2	10		—		402
Leasing business revenue	300		(c)	—	—	—	—		—		300
Mortgage banking net revenue	—			10	257	3	—		—		270
Other noninterest income(b)	87			103	9	4	129		—		332
Securities (losses) gains, net	8			—	—	—	(15)		—		(7)
Securities losses, net -non-qualifying      hedges on MSRs	—			—	(2)	—	—		—		(2)
Total noninterest income	1,447			893	264	570	124		(180)		3,118
Noninterest expense:
Compensation and benefits	586			646	245	205	944		—		2,626
Technology and communications	17			5	11	1	354		—		388
Net occupancy expense(d)	33			191	10	15	63		—		312
Equipment expense	26			38	—	—	74		—		138
Leasing business expense	137			—	—	—	—		—		137
Marketing expense	7			38	3	2	57		—		107
Card and processing expense	6			86	—	1	(4)		—		89
Other noninterest expense	843			870	370	316	(1,268)		(180)		951
Total noninterest expense	1,655			1,874	639	540	220		(180)		4,748
Income before income taxes	1,873			143	178	119	1,204		—		3,517
Applicable income tax expense	354			29	37	25	302		—		747
Net income	1,519			114	141	94	902		—		2,770
Total goodwill	$	1,980		2,303	—	231	—		—		4,514
Total assets	$	73,306		92,079	33,270	13,836	(1,375)	(e)	—		211,116

(a)Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Consolidated Statements of Income. 

(b)Includes impairment charges of $6 and $1 for bank premises and equipment recorded in Branch Banking and General Corporate and Other, respectively. For more information, refer to Note 7 and Note 28. 

(c)Includes impairment charges of $25 for operating lease equipment. For more information, refer to Note 8 and Note 28. 

(d)Includes impairment losses and termination charges of $3 for ROU assets related to certain operating leases. For more information, refer to Note 9.

(e)Includes bank premises and equipment of $24 classified as held for sale. For more information, refer to Note 7. 

2020 ($ in millions)	Commercial Banking			Branch Banking	Consumer Lending	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	1,903		1,667	381	139	692		—		4,782
Provision for (benefit from) credit losses	1,050			231	34	3	(221)		—		1,097
Net interest income after provision for (benefit      from) credit losses	853			1,436	347	136	913		—		3,685
Noninterest income:
Commercial banking revenue	524			5	—	2	(3)		—		528
Service charges on deposits	343			215	—	1	—		—		559
Wealth and asset management revenue	3			172	—	498	—		(153)	(a)	520
Card and processing revenue	54			283	—	2	13		—		352
Leasing business revenue	276		(c)	—	—	—	—		—		276
Mortgage banking net revenue	—			8	307	5	—		—		320
Other noninterest income(b)	101			68	10	18	14		—		211
Securities gains, net	—			—	—	—	62		—		62
Securities gains, net -non-qualifying hedges on MSRs	—			—	2	—	—		—		2
Total noninterest income	1,301			751	319	526	86		(153)		2,830
Noninterest expense:
Compensation and benefits	557			649	221	218	945		—		2,590
Technology and communications	13			4	8	1	336		—		362
Net occupancy expense(d)	31			176	10	12	121		—		350
Equipment expense	27			41	—	1	61		—		130
Leasing business expense	140			—	—	—	—		—		140
Marketing expense	8			32	3	2	59		—		104
Card and processing expense	7			116	—	1	(3)		—		121
Other noninterest expense	938			851	276	298	(1,289)		(153)		921
Total noninterest expense	1,721			1,869	518	533	230		(153)		4,718
Income before income taxes	433			318	148	129	769		—		1,797
Applicable income tax expense	46			67	31	27	199		—		370
Net income	387			251	117	102	570		—		1,427
Total goodwill	$	1,980		2,047	—	231	—		—		4,258
Total assets	$	70,241		79,982	30,480	12,466	11,511	(e)	—		204,680

(a)Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Consolidated Statements of Income.

(b)Includes impairment charges of $15 recorded in Branch Banking and $15 recorded in General Corporate and Other for bank premises and equipment. For more information, refer to Note 7 and Note 28.

(c)Includes impairment charges of $7 for operating lease equipment. For more information, refer to Note 8 and Note 28.

(d)Includes impairment losses and termination charges of $8 for ROU assets related to certain operating leases. For more information, refer to Note 9. 

(e)Includes bank premises and equipment of $35 classified as held for sale. For more information, refer to Note 7.

2019 ($ in millions)	Commercial Banking			Branch Banking	Consumer Lending	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	2,360		2,371	325	182	(441)		—		4,797
Provision for credit losses	183			224	49	—	15		—		471
Net interest income after provision for credit      losses	2,177			2,147	276	182	(456)		—		4,326
Noninterest income:
Commercial banking revenue	455			4	—	1	—		—		460
Service charges on deposits	308			260	—	1	(4)		—		565
Wealth and asset management revenue	3			158	—	469	—		(143)	(a)	487
Card and processing revenue	66			285	—	3	6		—		360
Leasing business revenue	270		(c)	—	—	—	—		—		270
Mortgage banking net revenue	—			6	279	2	—		—		287
Other noninterest income(b)	85			89	14	13	863		—		1,064
Securities gains, net	—			—	—	—	40		—		40
Securities gains, net -non-qualifying hedges on MSRs	—			—	3	—	—		—		3
Total noninterest income	1,187			802	296	489	905		(143)		3,536
Noninterest expense:
Compensation and benefits	466			601	196	217	938		—		2,418
Technology and communications	11			4	8	1	398		—		422
Net occupancy expense(d)	28			173	10	13	108		—		332
Equipment expense	25			48	—	1	55		—		129
Leasing business expense	133			—	—	—	—		—		133
Marketing expense	12			72	4	5	69		—		162
Card and processing expense	8			123	—	1	(2)		—		130
Other noninterest expense	938			839	237	291	(1,228)		(143)		934
Total noninterest expense	1,621			1,860	455	529	338		(143)		4,660
Income before income taxes	1,743			1,089	117	142	111		—		3,202
Applicable income tax expense	319			229	25	30	87		—		690
Net income	1,424			860	92	112	24		—		2,512
Total goodwill	$	1,954		2,046	—	252	—		—		4,252
Total assets	$	74,570		69,413	26,555	10,500	(11,669)	(e)	—		169,369

(a)Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Consolidated Statements of Income.

(b)Includes impairment charges of $11 and $17 for bank premises and equipment recorded in Branch Banking and General Corporate and Other, respectively. For more information, refer to Note 7.

(c)Includes impairment charges of $3 for operating lease equipment. For more information, refer to Note 8.

(d)Includes impairment losses and termination charges of $15 for ROU assets related to certain operating leases. For more information, refer to Note 9.

(e)Includes bank premises and equipment of $27 classified as held for sale. For more information, refer to Note 7.