FITB

FIFTH THIRD BANCORP

NYSE · FINANCIALS · STATE COMMERCIAL BANKS

52.81

+0.40 +0.76%

USD · close Oct 21

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MKT CAP $47.9BP/E 17.8DIV YIELD 3.03%FCF YIELD 6.31%REV TTM —NET INCOME $2.3B +0.4%NET DEBT $13.3B52W 41.12 – 59.37SEC XBRL · TTM TO Invalid Date

How FITB rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

28%

of sentences unchanged

Added

209

new sentences

Dropped

253

sentences removed

Length

−1,796

words, now 12,001

New in FY2025

RISK FACTORS The risks and uncertainties listed below present risks that could have a material impact on the Bancorp’s business, financial condition or results of operations.
Refer to page 19 for cautionary information regarding forward-looking statements.
The performance of these credit portfolios significantly affects the Bancorp’s financial results and condition, including the level of credit losses and reserves for credit losses.
Refer to the Credit Risk Management subsection of the Risk Management section in Item 7 of this Annual Report for more information on specific concentrations.
Fifth Third reserves for expected credit losses by establishing an allowance for credit losses through a charge to earnings.
The amount of this allowance is based on Fifth Third’s assessment of credit losses expected to be incurred in the credit portfolios, including unfunded commitments, and requires difficult, subjective and complex judgments about the environment, including analysis of economic or market conditions that may impair the ability of borrowers to repay their loans.
Fifth Third believes that both the ALLL and reserve for unfunded commitments are adequate to cover expected losses at December 31, 2025.
However there is no assurance that they will be sufficient to cover all potential future credit losses associated with exposures existing at December 31, 2025, especially if economic conditions decline.
Fifth Third has exposure to counterparties in the financial services industry and other industries and routinely executes transactions with such counterparties, which may expose Fifth Third to credit risk in the event of default of a counterparty or client.
This is sometimes referred to as systemic risk and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which the Bancorp interacts on a daily basis, and therefore could adversely affect Fifth Third.
Inability to refinance in public or private capital markets could cause a default that impacts Fifth Third borrowers.
If public or private capital markets are disrupted or unavailable to these borrowers such that they cannot obtain funds for refinancing, those borrowers may experience a shortfall that would leave them unable to honor short-term and/or long-term obligations to the Bancorp.
Core deposits, which include transaction deposits and certificates of deposit $250,000 or less, have historically provided Fifth Third with a sizeable source of relatively stable and low-cost funds (average core deposits funded 77% of average total assets for the year ended December 31, 2025).
In addition to customer deposits, sources of liquidity include investments in the securities portfolio, Fifth Third’s sale or securitization of loans in secondary markets, the pledging of loans and investment securities to access secured borrowing facilities through the FHLB and the FRB and Fifth Third’s ability to raise funds in money markets and capital markets.
Fifth Third’s liquidity and ability to fund and operate its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility or a lack of market or customer confidence in financial markets in general, which may result in a loss of customer deposits or outflows of cash or collateral and/or the ability to access capital markets on favorable terms. 27 Fifth Third Bancorp Other conditions and factors that could materially adversely affect Fifth Third’s liquidity and funding include: • a lack of market or customer confidence in Fifth Third or negative news about Fifth Third, regional banks or the financial services industry generally, which also may result in a loss of customer deposits and/or negatively affect Fifth Third’s ability to access the capital markets; • the loss of customer deposits due to competition from other banks or due to alternative investments; • inability to sell or securitize loans or other assets; • increased collateral requirements including those driven by a decline in the market value of the financial instruments; • increased regulatory requirements; • reductions in one or more of Fifth Third’s agency ratings; • increased utilization of revolving lines of credit by customers; and • systematic failure of financial market utilities relied upon by Fifth Third to settle intrabank payment activity.
Fifth Third’s access to capital markets is a key component of its funding strategy and is influenced by ratings assigned by rating agencies to Fifth Third, certain of its subsidiaries and particular classes of securities they issue.
These ratings also affect the interest rates that Fifth Third pays when issuing new debt securities.
A downgrade to Fifth Third or its subsidiaries’ credit rating could limit its access to the capital markets, affect its ability to retain deposits, cause creditors and business counterparties to raise collateral requirements, increase its borrowing costs and reduce profitability.
Additionally, downgrades may trigger obligations or create liabilities under the terms of Fifth Third’s existing arrangements that could increase costs, impair the marketability of affected securities, prompt further downgrades and otherwise have a negative effect on Fifth Third’s financial condition or results of operations.
The Bancorp is a separate and distinct legal entity from its subsidiaries and typically receives substantially all of its revenue from dividends from its subsidiaries.
These dividends are the principal source of funds to pay dividends on the Bancorp’s stock and interest and principal on its debt.
The ability of its subsidiaries to pay dividends or make other payments or distributions depends on their respective operating results and may be restricted by, among other things, regulatory constraints, prevailing economic conditions (including interest rates) and financial, business and other factors, many of which are beyond the control of the Bancorp.
Regulatory scrutiny of liquidity and capital levels at BHCs and banks has resulted in increased regulatory focus on all aspects of capital planning, including dividends and other distributions.
In addition, the Bancorp’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of that subsidiary’s creditors.
Regulatory limitations on the Bancorp’s ability to receive dividends from its subsidiaries, economic conditions and other financial or business factors could have a material adverse effect on the Bancorp’s liquidity and ability to pay dividends on stock or interest and principal on its debt and to engage in share repurchases.
For further information, refer to Regulation and Supervision in Item 1 of this Annual Report on Form 10-K and Note 3 of the Notes to Consolidated Financial Statements. 28 Fifth Third Bancorp OPERATIONAL RISKS Fifth Third’s business is dependent on the availability and performance of operational and information technology systems, including those provided by third-party service providers.
Interruptions or failures could materially adversely affect operations.
Fifth Third’s operations depend on operational and information technology systems, including financial, accounting, transaction-execution, and other operational systems, as well as devices, hardware, and networks supporting those systems, all of which may be operated by both Fifth Third and/or by third-party service providers.
Failure, disruption, interruption or outage to any system may cause disruptions in critical business operations such as the ability to use accounting, deposit, loan, payment and other systems.
It could also cause unfavorable effects to clients and customers, including delays or other disruptions in services, limitations on Fifth Third’s ability to collect data needed for its business, inability to settle or clear transactions, the possibility that fund transfers are completed erroneously and fraudulent transactions.
While Fifth Third invests in automation and emerging technologies such as AI, to prevent, detect and remedy any interruptions or failures, manual oversight remains a critical component of its risk mitigation strategy.
Exception handling and control testing are employed to help identify and remediate errors that may not be captured through automated processes.
Despite these controls, failures are still possible and could result in operational disruptions or financial loss.
In addition, any security compromise or information technology system disruptions in the financial services industry could interrupt Fifth Third’s business or operations, harm its reputation, erode borrower confidence, negatively affect Fifth Third’s ability to attract new members, or subject it to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect Fifth Third’s business and results of operations.
Risks of operational failures, disruptions or outages in Fifth Third’s operational and information technology systems, and those provided by third-party providers, can result from a variety of factors, only some of which may be wholly or partially within the control of Fifth Third, its third-party providers or the financial services industry more generally.
Such events could affect Fifth Third’s systems or limit Fifth Third’s ability to use information technology due to effects on underlying infrastructure.
Although Fifth Third regularly updates and replaces systems that it depends on, financial institutions generally continue to utilize some older systems alongside newer systems.
Causes of system failures, disruptions or outages may be difficult to detect.
While the Bancorp believes that its current business continuity plans are adequate, there can be no assurance that such plans will fully mitigate all potential risks to Fifth Third, its customers or its clients.
Third-party service providers with which Fifth Third does business, as well as vendors and other third parties with which Fifth Third’s customers do business, can also be sources of operational risk to Fifth Third, particularly where processes are highly concentrated or customer activities are beyond Fifth Third’s security and control systems, such as through the use of the internet, personal computers, tablets, smart phones and other mobile services.

and 169 more.

Gone since FY2024

RISK FACTORS The risks and uncertainties listed below present risks that could have a material impact on the Bancorp’s financial condition, the results of its operations or its business.
See “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K for more information.
The performance of these credit portfolios significantly affects the Bancorp’s financial results and condition.
If the current economic environment were to deteriorate, more customers may have difficulty in repaying their credit obligations which could result in a higher level of credit losses and reserves for credit losses.
Fifth Third reserves for credit losses by establishing reserves through a charge to earnings.
The amount of these reserves is based on Fifth Third’s assessment of credit losses expected to be incurred in the credit portfolios, including unfunded credit commitments.
The process for determining the amount of the ALLL and the reserve for unfunded commitments is critical to Fifth Third’s financial results and condition.
Such determination requires difficult, subjective and complex judgments about the environment, including analysis of economic or market conditions that may impair the ability of borrowers to repay their loans.
As an example, borrowers may “strategically default,” or discontinue making payments on their real estate-secured loans if the value of the real estate is less than what they owe, even if they are still financially able to make the payments.
Fifth Third believes that both the ALLL and the reserve for unfunded commitments are adequate to cover expected losses at December 31, 2024.
However, there is no assurance that they will be sufficient to cover future credit losses associated with exposures existing at December 31, 2024, especially if economic conditions decline.
In the event of significant deterioration in economic or market conditions, Fifth Third may be required to increase reserves in future periods, which would reduce earnings.
Fifth Third may have more credit risk and higher credit losses to the extent loans are concentrated by exposure to individual borrowers or the location or industry of borrowers or collateral.
Deterioration in economic conditions, including housing conditions or commodity and real estate values in certain states or locations, could result in materially higher credit losses if loans are concentrated in those locations or by other factors.
Fifth Third has significant exposure to businesses in certain economic sectors such as manufacturing, real estate, financial services, insurance and healthcare, and weaknesses in those businesses may adversely impact Fifth Third’s business, results of operations or financial condition.
Additionally, Fifth Third has a substantial portfolio of commercial and residential real estate loans, and weaknesses in residential or commercial real estate markets may adversely impact Fifth Third’s business, results of operations or financial condition.
Fifth Third also has a portfolio of indirect secured consumer loans, and the depreciation in the value of used vehicles may adversely impact Fifth Third’s business, results of operations or financial condition.
Fifth Third has exposure to counterparties in the financial services industry and other industries and routinely executes transactions with such counterparties, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds and other institutional clients.
Many of Fifth Third’s transactions with other financial institutions expose Fifth Third to credit risk in the event of default of a counterparty or client.
This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which the Bancorp interacts on a daily basis, and therefore could adversely affect Fifth Third. 25 Fifth Third Bancorp Inability to refinance in capital markets could cause a default that impacts Fifth Third borrowers.
If capital markets are disrupted or unavailable to these borrowers such that they cannot obtain funds for refinancing, those borrowers may experience a shortfall that would leave them unable to honor short-term and/or long-term obligations to the Bancorp.
The effects of global physical climate risks, severe weather events or health emergencies may have an effect on the performance of Fifth Third’s loan portfolios, thereby adversely impacting its results of operations.
Some of these regions have experienced severe weather events including hurricanes, tornadoes, fires and other natural disasters.
The nature and level of these events and the impact of global climate change upon their frequency and severity cannot be predicted.
If large scale events occur, they may significantly impact Fifth Third’s loan portfolios by damaging properties pledged as collateral as well as impairing its borrowers’ ability to repay their loans.
Additionally, the impact of widespread health emergencies may adversely impact Fifth Third’s results of operations, such as the impacts previously experienced from the COVID-19 pandemic.
If its borrowers are adversely affected due to a widespread health emergency that impacts Fifth Third employees, vendors or economic growth generally, Fifth Third’s financial condition and results of operations could be adversely affected.
Core deposits, which include transaction deposits and certificates of deposit $250,000 or less, have historically provided Fifth Third with a sizeable source of relatively stable and low-cost funds (average core deposits funded 77% of average total assets for the year ended December 31, 2024).
In addition to customer deposits, sources of liquidity include investments in the securities portfolio, Fifth Third’s sale or securitization of loans in secondary markets, the pledging of loans and investment securities to access secured borrowing facilities through the FHLB and the FRB and Fifth Third’s ability to raise funds in money and capital markets.
Fifth Third’s liquidity and ability to fund and operate its business could be materially adversely affected by a variety of conditions and factors, including financial and credit market disruptions and volatility or a lack of market or customer confidence in financial markets in general, which may result in a loss of customer deposits or outflows of cash or collateral and/or the ability to access capital markets on favorable terms.
Other conditions and factors that could materially adversely affect Fifth Third’s liquidity and funding include: • a lack of market or customer confidence in Fifth Third or negative news about Fifth Third, regional banks or the financial services industry generally, which also may result in a loss of customer deposits and/or negatively affect Fifth Third’s ability to access the capital markets; • the loss of customer deposits due to competition from other banks or due to alternative investments; • inability to sell or securitize loans or other assets; • increased collateral requirements; • increased regulatory requirements; • reductions in one or more of Fifth Third’s credit ratings; • increased utilization of revolving lines of credit by customers; and • systematic failure of financial market utilities relied upon by Fifth Third to settle intrabank payment activity.
A reduction in Fifth Third’s credit rating could adversely affect its ability to retain deposits, borrow funds (including by raising the cost of borrowings substantially) and could cause creditors and business counterparties to raise collateral requirements or take other actions that could adversely affect Fifth Third’s ability to raise liquidity or capital.
If Fifth Third is unable to continue to fund assets through customer bank deposits or access capital markets on favorable terms or if Fifth Third suffers an increase in borrowing costs or otherwise fails to manage liquidity effectively, Fifth Third’s liquidity, operating margins and financial results and condition may be materially adversely affected.
Fifth Third’s ability to access the capital markets is important to its overall funding profile.
This access is affected by the ratings assigned by rating agencies to Fifth Third, certain of its subsidiaries and particular classes of securities they issue.
The interest rates that Fifth Third pays 26 Fifth Third Bancorp on its securities are also influenced by, among other things, the credit ratings that it, its subsidiaries and/or its securities receive from recognized rating agencies.
A downgrade to Fifth Third or its subsidiaries’ credit rating could affect its ability to access the capital markets, increase its borrowing costs and negatively impact its profitability.
A ratings downgrade to Fifth Third, its subsidiaries or their securities could also create obligations or liabilities of Fifth Third under the terms of its outstanding securities that could increase Fifth Third’s costs or otherwise have a negative effect on its results of operations or financial condition.
Additionally, a downgrade of the credit rating of any particular security issued by Fifth Third or its subsidiaries could negatively affect the ability of the holders of that security to sell the securities and the prices at which any such securities may be sold.
Other rating agencies may also take actions to downgrade their ratings of the securities issued by Fifth Third or its subsidiaries.

and 213 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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