Business Segments

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Business Segments

Business Segments

The Bancorp reports on three business segments: Commercial Banking, Consumer & Small Business Banking 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 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 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.

Consumer and Small Business Banking provides a full range of deposit and loan products to individuals and small businesses through a network of full-service banking centers and relationships with indirect and correspondent loan originators in addition to providing products designed to meet the specific needs of small businesses, including cash management services. Consumer and Small Business Banking includes the Bancorp’s residential mortgage, home equity loans and lines of credit, credit cards, automobile and other indirect lending and other consumer lending activities. Residential mortgage activities include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans and all associated hedging activities. Indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers. Other consumer lending activities include home improvement and solar energy installation loans originated through a network of contractors and installers.

Wealth and Asset Management provides a full range of wealth management solutions for individuals, companies and not-for-profit organizations, including wealth planning, investment management, banking, insurance, trust and estate services. These offerings include retail brokerage services for individual clients, advisory services for institutional clients including middle market businesses, non-profits, states and municipalities, and wealth management strategies and products for high net worth and ultra-high net worth clients.

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

2023 ($ in millions)	Commercial Banking		Consumer and Small Business Banking	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	3,812	5,207	360	(3,552)		—		5,827
Provision for credit losses	12		303	1	199		—		515
Net interest income after provision for credit      losses	3,800		4,904	359	(3,751)		—		5,312
Noninterest income:
Commercial banking revenue	619		4	1	—		—		624
Wealth and asset management revenue	2		216	549	—		(186)	(a)	581
Service charges on deposits	371		208	1	(3)		—		577
Card and processing revenue	92		312	2	10		—		416
Mortgage banking net revenue	—		250	—	—		—		250
Leasing business revenue	208		—	—	—		—		208
Other noninterest income(b)	73		115	2	17		—		207
Securities gains (losses), net	(9)		—	—	27		—		18
Securities losses, net - non-qualifying      hedges on MSRs	—		—	—	—		—		—
Total noninterest income	1,356		1,105	555	51		(186)		2,881
Noninterest expense:
Compensation and benefits	654		878	220	942		—		2,694
Technology and communications	14		27	1	422		—		464
Net occupancy expense(c)	41		209	12	69		—		331
Equipment expense	29		44	—	75		—		148
Marketing expense	3		70	1	52		—		126
Leasing business expense	121		—	—	—		—		121
Card and processing expense	11		76	1	(4)		—		84
Other noninterest expense	1,130		1,211	326	(1,244)		(186)		1,237
Total noninterest expense	2,003		2,515	561	312		(186)		5,205
Income (loss) before income taxes	3,153		3,494	353	(4,012)		—		2,988
Applicable income tax expense (benefit)	594		733	74	(762)		—		639
Net income (loss)	2,559		2,761	279	(3,250)		—		2,349
Total goodwill	$	2,324	2,369	226	—		—		4,919
Total assets	$	77,640	88,144	10,891	37,899	(d)	—		214,574

(a)Revenue sharing agreements between Wealth and Asset Management and Consumer and Small Business Banking are eliminated in the Consolidated Statements of Income. 

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

(c)Includes impairment losses and termination charges of $2 for ROU assets related to certain operating leases. For more information, refer to Note 9.

(d)Includes bank premises and equipment of $19 classified as held for sale. For more information, refer to Note 7. 

2022 ($ in millions)	Commercial Banking			Consumer and Small Business Banking	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	2,542		3,131	262	(326)		—		5,609
Provision for credit losses	33			139	—	391		—		563
Net interest income after provision for credit      losses	2,509			2,992	262	(717)		—		5,046
Noninterest income:
Commercial banking revenue	563			3	1	(2)		—		565
Wealth and asset management revenue	3			204	540	—		(177)	(a)	570
Service charges on deposits	372			216	1	—		—		589
Card and processing revenue	87			308	2	12		—		409
Mortgage banking net revenue	—			214	1	—		—		215
Leasing business revenue	237		(c)	—	—	—		—		237
Other noninterest income(b)	111			110	—	44		—		265
Securities losses, net	(33)			—	—	(49)		—		(82)
Securities losses, net -non-qualifying hedges on MSRs	—			(2)	—	—		—		(2)
Total noninterest income	1,340			1,053	545	5		(177)		2,766
Noninterest expense:
Compensation and benefits	639			828	218	869		—		2,554
Technology and communications	11			22	1	382		—		416
Net occupancy expense(d)	40			196	13	58		—		307
Equipment expense	27			38	—	80		—		145
Marketing expense	5			58	1	54		—		118
Leasing business expense	131			—	—	—		—		131
Card and processing expense	11			72	1	(4)		—		80
Other noninterest expense	959			1,175	322	(1,311)		(177)		968
Total noninterest expense	1,823			2,389	556	128		(177)		4,719
Income (loss) before income taxes	2,026			1,656	251	(840)		—		3,093
Applicable income tax expense (benefit)	377			347	53	(130)		—		647
Net income (loss)	1,649			1,309	198	(710)		—		2,446
Total goodwill	$	2,324		2,365	226	—		—		4,915
Total assets	$	83,535		83,697	14,253	25,967	(e)	—		207,452

(a)Revenue sharing agreements between Wealth and Asset Management and Consumer and Small Business Banking are eliminated in the Consolidated Statements of Income.

(b)Includes impairment charges of $6 recorded in Consumer and Small Business Banking and $3 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 $2 for operating lease equipment. For more information, refer to Note 8 and Note 28.

(d)Includes impairment losses and termination charges of $2 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.

2021 ($ in millions)	Commercial Banking			Consumer and Small Business Banking	Wealth and Asset Management	General Corporate and Other		Eliminations		Total
Net interest income	$	1,596		1,685	88	1,401		—		4,770
(Benefit from) provision for credit losses	(597)			120	(1)	101		—		(377)
Net interest income after (benefit from) provision      for credit losses	2,193			1,565	89	1,300		—		5,147
Noninterest income:
Commercial banking revenue	633			2	2	—		—		637
Wealth and asset management revenue	2			206	558	—		(180)	(a)	586
Service charges on deposits	385			214	1	—		—		600
Card and processing revenue	78			312	2	10		—		402
Mortgage banking net revenue	—			267	3	—		—		270
Leasing business revenue	300		(c)	—	—	—		—		300
Other noninterest income(b)	91			108	4	129		—		332
Securities (losses) gains, net	8			—	—	(15)		—		(7)
Securities losses, net -non-qualifying hedges on MSRs	—			(2)	—	—		—		(2)
Total noninterest income	1,497			1,107	570	124		(180)		3,118
Noninterest expense:
Compensation and benefits	644			833	205	944		—		2,626
Technology and communications	17			16	1	354		—		388
Net occupancy expense(d)	37			197	15	63		—		312
Equipment expense	26			38	—	74		—		138
Marketing expense	7			41	2	57		—		107
Leasing business expense	137			—	—	—		—		137
Card and processing expense	7			85	1	(4)		—		89
Other noninterest expense	898			1,185	316	(1,268)		(180)		951
Total noninterest expense	1,773			2,395	540	220		(180)		4,748
Income before income taxes	1,917			277	119	1,204		—		3,517
Applicable income tax expense	363			57	25	302		—		747
Net income	1,554			220	94	902		—		2,770
Total goodwill	$	1,980		2,303	231	—		—		4,514
Total assets	$	75,387		85,455	13,836	36,438	(e)	—		211,116

(a)Revenue sharing agreements between Wealth and Asset Management and Consumer and Small Business Banking are eliminated in the Consolidated Statements of Income.

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

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

(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.