Resource item

Management report and analysis of the financial situation and operating results (point 2)

The following is Management's Discussion and Analysis of Financial Condition and
Results of Operations of certain significant factors that have affected Fifth
Third Bancorp's (the "Bancorp" or "Fifth Third") financial condition and results
of operations during the periods included in the Condensed Consolidated
Financial Statements, which are a part of this filing. Reference to the Bancorp
incorporates the parent holding company and all consolidated subsidiaries. The
Bancorp's banking subsidiary is referred to as the Bank.


PREVIEW

Fifth Third Bancorp is a diversified financial services company headquartered in
Cincinnati, Ohio. At March 31, 2022, the Bancorp had $211 billion in assets and
operated 1,079 full-service banking centers and 2,201 Fifth Third branded ATMs
in eleven states throughout the Midwestern and Southeastern regions of the U.S.
The Bancorp reports on four business segments: Commercial Banking, Branch
Banking, Consumer Lending and Wealth and Asset Management.

This overview of MD&A highlights selected information in the financial results
of the Bancorp and may not contain all of the information that is important to
you. For a more complete understanding of trends, events, commitments,
uncertainties, liquidity, capital resources and critical accounting policies and
estimates, you should carefully read this entire document as well as the
Bancorp's Annual Report on Form 10-K for the year ended December 31, 2021. Each
of these items could have an impact on the Bancorp's financial condition,
results of operations and cash flows. In addition, refer to the Glossary of
Abbreviations and Acronyms in this report for a list of terms included as a tool
for the reader of this Quarterly Report on Form 10-Q. The abbreviations and
acronyms identified therein are used throughout this MD&A, as well as the
Condensed Consolidated Financial Statements and Notes to Condensed Consolidated
Financial Statements.

Net interest income, net interest margin, net interest rate spread and the
efficiency ratio are presented in MD&A on an FTE basis. The FTE basis adjusts
for the tax-favored status of income from certain loans and leases and
securities held by the Bancorp that are not taxable for federal income tax
purposes. The Bancorp believes this presentation to be the preferred industry
measurement of net interest income as it provides a relevant comparison between
taxable and non-taxable amounts. The FTE basis for presenting net interest
income is a non-GAAP measure. For further information, refer to the Non-GAAP
Financial Measures section of MD&A.

The Bancorp's revenues are dependent on both net interest income and noninterest
income. For the three months ended March 31, 2022, net interest income on an FTE
basis and noninterest income provided 64% and 36% of total revenue,
respectively. The Bancorp derives the majority of its revenues within the U.S.
from customers domiciled in the U.S. Revenue from foreign countries and external
customers domiciled in foreign countries was immaterial to the Condensed
Consolidated Financial Statements for the three months ended March 31, 2022.
Changes in interest rates, credit quality, economic trends and the capital
markets are primary factors that drive the performance of the Bancorp. As
discussed later in the Risk Management section of MD&A, risk identification,
measurement, monitoring, control and reporting are important to the management
of risk and to the financial performance and capital strength of the Bancorp.

Net interest income is the difference between interest income earned on assets
such as loans, leases and securities, and interest expense incurred on
liabilities such as deposits, other short-term borrowings and long-term debt.
Net interest income is affected by the general level of interest rates, the
relative level of short-term and long-term interest rates, changes in interest
rates and changes in the amount and composition of interest-earning assets and
interest-bearing liabilities. Generally, the rates of interest the Bancorp earns
on its assets and pays on its liabilities are established for a period of time.
The change in market interest rates over time exposes the Bancorp to interest
rate risk through potential adverse changes to net interest income and financial
position. The Bancorp manages this risk by continually analyzing and adjusting
the composition of its assets and liabilities based on their payment streams and
interest rates, the timing of their maturities and their sensitivity to changes
in market interest rates. Additionally, in the ordinary course of business, the
Bancorp enters into certain derivative transactions as part of its overall
strategy to manage its interest rate and prepayment risks. The Bancorp is also
exposed to the risk of loss on its loan and lease portfolio, as a result of
changing expected cash flows caused by borrower credit events, such as loan
defaults and inadequate collateral.

Noninterest income is derived from service charges on deposits, wealth and asset
management revenue, commercial banking revenue, card and processing revenue,
leasing business revenue, mortgage banking net revenue, other noninterest income
and net securities gains or losses. Noninterest expense includes compensation
and benefits, technology and communications, net occupancy expense, equipment
expense, leasing business expense, marketing expense, card and processing
expense and other noninterest expense.

COVID-19 Global Pandemic
The COVID-19 pandemic created significant economic uncertainty and financial
disruptions during the years ended December 31, 2021 and 2020, and this
uncertainty has continued into 2022. Government and public responses to the
COVID-19 pandemic, including temporary closures of businesses and the
implementation of social distancing protocols, caused reductions and instability
in economic activity that resulted in increased unemployment levels in certain
industries and volatility in the financial markets. Markets continue to remain
volatile as a result of the pandemic and its evolving impacts, including
inflationary concerns as well as stresses in labor markets and supply chains.
During the years ended December 31, 2021 and 2020, low interest rates, reduced
economic activity and market volatility had the most immediate negative impacts
on the Bancorp's performance. The Bancorp is unable to estimate the extent of
the impact that these factors have had on its operating results since the
pandemic began and these factors may adversely impact its future operating
results.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Although the increased availability of COVID-19 vaccinations began to mitigate
the public health effects of the pandemic, there has been a rise of certain
variants of COVID-19 and slowing progress on vaccination rates. The recovery
from the related economic crisis disproportionately affected certain industries,
geographies and demographics more than others, and when combined with the
unprecedented nature of the government response to the pandemic, it becomes
difficult to predict the extent to which the pandemic will continue to adversely
impact the Bancorp and its customers. Furthermore, resurgence risk remains as
new virus variants are identified. The Bancorp continues to closely monitor the
pandemic and its effects on customers, employees, communities and markets. For
further discussion on current economic conditions, refer to the Credit Risk
Management subsection of the Risk Management section of MD&A.

LIBOR Transition
In July 2017, the Chief Executive of the United Kingdom Financial Conduct
Authority (the "FCA"), which regulates LIBOR, announced that the FCA will stop
persuading or compelling banks to submit rates for the calculation of LIBOR to
the administrator of LIBOR after 2021. Since then, central banks around the
world, including the Federal Reserve, have commissioned working groups of market
participants and official sector representatives with the goal of finding
suitable replacements for LIBOR.

On March 5, 2021, the FCA and ICE Benchmark Administration, Limited announced
that the publication of the one-week and two-month USD LIBOR maturities and
non-USD LIBOR maturities would cease immediately after December 31, 2021, with
the remaining USD LIBOR maturities ceasing immediately after June 30, 2023. In
the United States, the Alternative Rates Reference Committee (the "ARRC"), a
group of market participants convened in 2014 to help ensure a successful
transition away from USD LIBOR, identified SOFR as its preferred alternative
rate. SOFR is a measure of the cost of borrowing cash overnight, collateralized
by U.S. Treasury securities, and is based on directly observable U.S.
Treasury-backed repurchase transactions. The composition and characteristics of
SOFR are not the same as those of LIBOR, and SOFR is fundamentally different
from LIBOR for two key reasons: (1) SOFR is a secured rate, while LIBOR is an
unsecured rate, and (2) SOFR is an overnight rate, while LIBOR is a
forward-looking rate that represents interbank funding over different
maturities. As a result, there can be no assurance that SOFR, however
calculated, will perform the same way as LIBOR would have at any time,
including, as a result of changes in interest and yield rates in the market,
market volatility, or global or regional economic, financial, political,
regulatory, judicial or other events.

On March 15, 2022, President Biden signed the Adjustable Interest Rate (LIBOR)
Act (the "LIBOR Act") into law. The LIBOR Act offers a federal solution for
transitioning legacy instruments that lack sufficient provisions addressing
LIBOR's cessation by outlining a uniform process to govern the transition from
LIBOR to a replacement rate. The LIBOR Act also establishes a safe harbor for
lenders, shielding lenders from litigation as a result of their choice of a
replacement rate (such as SOFR) per Federal Reserve Board recommendations. The
Federal Reserve Board is required to promulgate regulations carrying out the
terms of the LIBOR Act not later than 180 days following its enactment.

Bancorp’s LIBOR transition plan is organized around key work streams, including continued engagement with central banks and industry task forces and regulators, active client engagement, comprehensive review of existing documentation, internal operational and technological readiness and risk management, among others, to facilitate the transition to alternative reference rates.

Although the full impact of LIBOR reforms and actions remains unclear, the
Bancorp has discontinued entering into new LIBOR-based contracts in accordance
with regulatory guidance, except for permissible limited use as part of hedging
and risk management programs. During the fourth quarter of 2021, the Bancorp
expanded its offering of alternative reference rate products, including SOFR. In
addition, the Bancorp is continuing its transition of existing LIBOR-based
exposures to an appropriate alternative reference rate on or before June 30,
2023. As of March 31, 2022, the Bancorp had substantial exposure to LIBOR-based
products throughout several of its lines of business. These exposures included
derivative contracts with a total notional value of approximately $103 billion,
loans outstanding of approximately $47 billion, preferred stock of approximately
$1.4 billion and long-term debt of approximately $237 million. The Bancorp
currently estimates that approximately 20% of the existing exposures will mature
before June 30, 2023. For the contracts that will not mature prior to June 30,
2023, an additional portion of these contracts is subject to contractual terms
specifying alternative reference rates ("fallback provisions") that would become
effective upon cessation of LIBOR's publication. Existing exposures without
fallback provisions are expected to be amended prior to June 30, 2023 to include
such terms or transition to an alternative reference rate.

For a further discussion of the various risks the Bancorp faces in connection
with the replacement of LIBOR on its operations, see "Risk Factors-Market
Risks-The replacement of LIBOR could adversely affect Fifth Third's revenue or
expenses and the value of those assets or obligations." in Item 1A. Risk Factors
of the Bancorp's Annual Report on Form 10-K for the year ended December 31,
2021.

Key Performance Indicators
The Bancorp, as a banking institution, utilizes various key indicators of
financial condition and operating results in managing and monitoring the
performance of the business. In addition to traditional financial metrics, such
as revenue and expense trends, the Bancorp monitors other financial measures
that assist in evaluating growth trends, capital strength and operational
efficiencies. The Bancorp analyzes these key performance indicators against its
past performance, its forecasted performance and with the performance of its
peer banking institutions. These indicators may change from time to time as the
operating environment and businesses change.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)


The following are some of the key indicators used by management to assess Bancorp’s business performance, including those reflected in Bancorp’s compensation programs:

•CET1 Capital Ratio: CET1 capital divided by risk-weighted assets as defined by
the Basel III standardized approach to risk-weighting of assets
•Return on Average Tangible Common Equity (non-GAAP): Tangible net income
available to common shareholders divided by average tangible common equity
•Net Interest Margin (non-GAAP): Net interest income on an FTE basis divided by
average interest-earning assets
•Efficiency Ratio (non-GAAP): Noninterest expense divided by the sum of net
interest income on an FTE basis and noninterest income
•Earnings Per Share, Diluted: Net income allocated to common shareholders
divided by average common shares outstanding after the effect of dilutive
stock-based awards
•Nonperforming Portfolio Assets Ratio: Nonperforming portfolio assets divided by
portfolio loans and leases and OREO
•Net Charge-off Ratio: Net losses charged-off divided by average portfolio loans
and leases
•Return on Average Assets: Net income divided by average assets
•Loan-to-Deposit Ratio: Total loans divided by total deposits
•Household Growth: Change in the number of consumer households with retail
relationship-based checking accounts

The list of indicators above is intended to summarize some of the most important
metrics utilized by management in evaluating the Bancorp's performance and does
not represent an all-inclusive list of all performance measures that may be
considered relevant or important to management or investors.

TABLE 1: Earnings Summary

                                                                  For the 

three months completed

                                                                           March 31,                   %
($ in millions, except for per share data)                            2022             2021          Change
Income Statement Data
Net interest income (U.S. GAAP)                                $      1,195             1,176                 2
Net interest income (FTE)(a)(b)                                       1,198             1,179                 2
Noninterest income                                                      684               749               (9)
Total revenue (FTE)(a)(b)                                             1,882             1,928               (2)
Provision for (benefit from) credit losses                               45              (173)               NM
Noninterest expense                                                   1,222             1,215                 1
Net income                                                              494               694              (29)
Net income available to common shareholders                             474               674              (30)
Common Share Data
Earnings per share - basic                                     $       0.69              0.94              (27)
Earnings per share - diluted                                           0.68              0.93              (27)
Cash dividends declared per common share                               0.30              0.27                11
Book value per share                                                  26.33             28.78               (9)
Market value per share                                                43.04             37.45                15
Financial Ratios
Return on average assets                                               0.96     %        1.38              (30)
Return on average common equity                                        10.0              13.1              (24)
Return on average tangible common equity(b)                            13.4              16.8              (20)
Dividend payout                                                        43.5              28.7                52


(a)Amounts presented on an FTE basis. The FTE adjustments were $3 for both the
three months ended March 31, 2022 and 2021.
(b)These are non-GAAP measures. For further information, refer to the Non-GAAP
Financial Measures section of MD&A.

Earnings Summary
The Bancorp's net income available to common shareholders for the first quarter
of 2022 was $474 million, or $0.68 per diluted share, which was net of $20
million in preferred stock dividends. The Bancorp's net income available to
common shareholders for the first quarter of 2021 was $674 million, or $0.93 per
diluted share, which was net of $20 million in preferred stock dividends.

Net interest income on an FTE basis (non-GAAP) was $1.2 billion for the three
months ended March 31, 2022, an increase of $19 million compared to the same
period in the prior year. Net interest income benefited from an increase in
average interest-earning assets, primarily due to increases in average taxable
securities, average indirect secured consumer loans and average commercial and
industrial loans for the three months ended March 31, 2022. Net interest income
also benefited from a decrease in average long-term debt for the three months
ended
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Management's Discussion and Analysis of Financial Condition and Results of Operations
(continued)


March 31, 2022 compared to the same period in the prior year. These benefits
were partially offset by the impact of lower market rates, resulting in a
decrease in yields on average loans and leases primarily driven by decreases in
yields on average commercial and industrial loans, average indirect secured
consumer loans and average residential mortgage loans. Interest income
recognized from PPP loans decreased to $20 million for the three months ended
March 31, 2022 compared to $53 million for the same period in the prior year.
Net interest margin on an FTE basis (non-GAAP) was 2.59% for the three months
ended March 31, 2022 compared to 2.62% for the comparable period in the prior
year.

The provision for credit losses was $45 million for the three months ended
March 31, 2022 compared to a benefit from credit losses of $173 million during
the same period in the prior year. The increase in provision expense for the
three months ended March 31, 2022 was primarily driven by factors that caused an
increase in the ACL from December 31, 2021 including higher end-of-period
commercial and consumer loan balances, partially offset by improvements in
commercial credit quality. Net losses charged off as a percent of average
portfolio loans and leases were 0.12% and 0.27% for the three months ended
March 31, 2022 and 2021, respectively. At March 31, 2022, nonperforming
portfolio assets as a percent of portfolio loans and leases and OREO increased
to 0.49% compared to 0.47% at December 31, 2021. For further discussion on
credit quality refer to the Credit Risk Management subsection of the Risk
Management section of MD&A as well as Note 6 of the Notes to Condensed
Consolidated Financial Statements.

Noninterest income decreased $65 million for the three months ended March 31,
2022 compared to the same period in the prior year primarily due to decreases in
mortgage banking net revenue, leasing business revenue and commercial banking
revenue, partially offset by increases in other noninterest income, service
charges on deposits and wealth and asset management revenue.

Noninterest expense increased $7 million for the three months ended March 31,
2022 compared to the same period in the prior year primarily due to increases in
technology and communications expense, other noninterest expense and
compensation and benefits, partially offset by a decrease in card and processing
expense.

For more information on net interest income, non-interest income and non-interest expense, refer to the Analysis of the Statements of Income section of the Management’s Discussion and Analysis.

Capital Summary
The Bancorp calculated its regulatory capital ratios under the Basel III
standardized approach to risk-weighting of assets and pursuant to the five-year
transition provision option to phase in the effects of CECL on regulatory
capital as of March 31, 2022. As of March 31, 2022, the Bancorp's capital
ratios, as defined by the U.S. banking agencies, were:
•CET1 capital ratio: 9.31%;
•Tier 1 risk-based capital ratio: 10.63%;
•Total risk-based capital ratio: 12.93%;
•Leverage ratio: 8.32%.
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