Fifth Third Bancorp (FITB) risk factors, FY2024 10-K

Other

1. 01Deteriorating credit quality has adversely impacted Fifth Third in the past and may adversely impact Fifth Third in the future
2. 02Fifth 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
3. 03Problems encountered by other financial institutions could adversely affect financial markets generally and have direct and indirect adverse effects on Fifth Third
4. 04Inability to refinance in capital markets could cause a default that impacts Fifth Third borrowers
5. 05The 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
6. 06Fifth Third must maintain adequate sources of funding and liquidity
7. 07Fifth Third and/or the holders of its securities could be adversely affected by unfavorable ratings from rating agencies
8. 08Additionally, 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
9. 09If Fifth Third is unable to maintain or grow its deposits, it may be subject to paying higher funding costs
10. 10The Bancorp’s ability to receive dividends from its subsidiaries accounts for most of its revenue and could affect its liquidity and ability to pay dividends

OPERATIONAL RISKS

1. 11Fifth Third is exposed to cybersecurity risks that create both operational and reputational risk for the Bank and its customers across all lines of business
2. 12Fifth Third relies on its systems and certain third-party service providers and certain failures (including those related to cybersecurity or weather events exacerbated by climate change) could materially adversely affect operations
3. 13Fifth Third may not be able to effectively manage organizational changes and implement key initiatives in a timely fashion, or at all, due to competing priorities which could adversely affect its business, results of operations, financial condition and reputation
4. 14Fifth Third may not be able to successfully implement future information technology system enhancements, which could adversely affect Fifth Third’s business operations and profitability
5. 15New technological advancements may subject Fifth Third to additional risks
6. 16Fifth Third may experience losses related to fraud, theft or violence
7. 17Fifth Third could suffer if it fails to attract and retain skilled personnel
8. 18Fifth Third may experience operational disruption from the effects of climate change

LEGAL AND REGULATORY COMPLIANCE RISKS

1. 19Fifth Third may be required to repurchase residential mortgage loans or reimburse investors and others as a result of breaches in contractual representations and warranties
2. 20Government regulation and legislation subject Fifth Third and other financial institutions to restrictions, oversight and/or costs that may have an impact on Fifth Third’s business, financial condition, results of operations or the price of its common stock
3. 21Fifth Third could suffer from unauthorized use of intellectual property
4. 22Fifth Third is subject to various regulatory requirements that may limit its operations and potential growth
5. 23Fifth Third could face serious negative consequences if its third-party service providers, business partners, customers or investments fail to comply with applicable laws, rules or regulations
6. 24As a regulated entity, the Bancorp is subject to certain capital requirements that may limit its operations, potential growth and ability to pay or increase dividends on its common stock or to repurchase its capital stock
7. 25Deposit insurance premiums levied against the Bank could increase further if the number of bank failures increase or the cost of resolving failed banks increases
8. 26If an orderly liquidation of a systemically important BHC or non-bank financial company were triggered, Fifth Third could face assessments for the Orderly Liquidation Fund
9. 27Weakness in the U.S. economy, including within Fifth Third’s geographic footprint, has adversely affected Fifth Third in the past and may adversely affect Fifth Third in the future
10. 28Global and domestic political, social and economic uncertainties and changes may adversely affect Fifth Third
11. 29Changes in interest rates could affect Fifth Third’s income and cash flows
12. 30Changes and trends in the capital markets may affect Fifth Third’s income and cash flows
13. 31Fifth Third’s stock price is volatile
14. 32Fifth Third’s mortgage banking net revenue can be volatile from quarter to quarter

STRATEGIC RISKS

1. 33If Fifth Third does not respond to intense competition and rapid changes in the financial services industry or otherwise adapt to changing customer preferences, its financial performance may suffer
2. 34Industry adoption of real-time payments networks could negatively impact financial performance through reductions in product profitability, increased liquidity reserves and the potential for increased fraud losses, among other risks
3. 35Changes in retail distribution strategies and consumer behavior may adversely impact Fifth Third’s investments in its bank premises and equipment and other assets and may lead to increased expenditures to change its retail distribution channel
4. 36Future acquisitions may dilute current shareholders’ ownership of Fifth Third and may cause Fifth Third to become more susceptible to adverse economic events
5. 37Fifth Third has businesses other than banking that are subject to a variety of risks
6. 38Damage to Fifth Third’s reputation could harm its business
7. 39Fifth Third is subject to environmental, social and governance risks that could adversely affect its reputation, the trading price of its common stock and/or its business, operations and earnings

GENERAL BUSINESS RISKS

1. 40Changes in accounting standards or interpretations could impact Fifth Third’s reported earnings and financial condition
2. 41Fifth Third uses models for business planning purposes that may not adequately predict future results
3. 42Fifth Third’s framework for managing risks may not be effective in mitigating its risk and loss
4. 43The preparation of financial statements requires Fifth Third to make subjective determinations and use estimates that may vary from actual results and materially impact its results of operations or financial position
5. 44Societal responses to climate change could adversely affect Fifth Third’s business and performance, including indirectly through impacts on Fifth Third’s customers
6. 45The U.S. government has adopted or proposed a variety of measures and new regulations, including modifications to liquidity, long-term debt and capital requirements, enhancing existing stress testing frameworks, and may include additional special assessments to recover losses to the DIF