Company: FITBI
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000035527-25-000079
Chunk: 320

Company: FIFTH THIRD BANCORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 320
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31, 2024: ($ in millions)Less than 1 year(a)$980 1 - 5 years(a)967 Over 5 years5 Total letters of credit$1,952 (a)Includes $2 and $3 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire in less than 1 year and between 1 - 5 years, respectively.Standby letters of credit accounted for approximately 99% of total letters of credit at both December 31, 2024 and 2023 and are considered guarantees in accordance with U.S. GAAP. Approximately 76% and 72% of the total standby letters of credit were collateralized as of December 31, 2024 and 2023, respectively. In the event of nonperformance by the customers, the Bancorp has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The reserve related to these standby letters of credit, which was included in the total reserve for unfunded commitments, was $12 million and $20 million at December 31, 2024 and 2023, respectively. The Bancorp monitors the credit risk associated with letters of credit using the same standard regulatory risk rating systems utilized for its loan and lease portfolio.

167 Fifth Third Bancorp

Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Risk ratings of outstanding letters of credit under this risk rating system are summarized in the following table as of December 31:($ in millions)20242023Pass$1,779 1,902 Special mention60 81 Substandard110 112 Doubtful3 — Total letters of credit$1,952 2,095 At December 31, 2024 and 2023, the Bancorp had outstanding letters of credit that were supporting certain securities issued as VRDNs. The Bancorp facilitates financing for its commercial customers, which consist of companies and municipalities, by marketing the VRDNs to investors. The VRDNs pay interest to holders at a rate of interest that fluctuates based upon market demand. The VRDNs generally have long-term maturity dates, but can be tendered by the holder for purchase at par value upon proper advance notice. When the VRDNs are tendered, a remarketing agent generally finds another investor to purchase the VRDNs to keep the securities outstanding