Company: FITBI
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000035527-25-000079
Chunk: 295

Company: FIFTH THIRD BANCORP
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 295
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 available-for-sale debt and trading debt securities. The interest income, mark-to-market adjustments and gain or loss from sale activities associated with these portfolios are expected to economically hedge a portion of the change in value of the MSR portfolio caused by fluctuating OAS, earnings rates and prepayment speeds. The fair value of the servicing asset is based on the present value of expected future cash flows.The following table presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy for the years ended December 31:($ in millions)202420232022Securities (losses) gains, net - non-qualifying hedges on mortgage servicing rights$— — (2)Changes in fair value and settlement of free-standing derivatives purchased to economically    hedge the MSR portfolio(a)(88)(43)(363)MSR fair value adjustment due to changes in inputs or assumptions(a)74 43 355 (a)Included in mortgage banking net revenue in the Consolidated Statements of Income.

153 Fifth Third Bancorp

Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The key economic assumptions used in measuring the servicing rights related to residential mortgage loans that continued to be held by the Bancorp at the date of sale, securitization or purchase resulting from transactions completed during the years ended December 31 were as follows:20242023Weighted-Average Life(in years)PrepaymentSpeed(annual)OAS    (bps)    Weighted-Average Life(in years)PrepaymentSpeed(annual)OAS(bps)Fixed-rate6.612.7 %4886.612.4 %596Adjustable-rate— — —3.027.9 774At December 31, 2024 and 2023, the Bancorp serviced $94.2 billion and $100.8 billion, respectively, of residential mortgage loans for other investors. The value of MSRs that continue to be held by the Bancorp is subject to credit, prepayment and interest rate risks on the sold financial assets. The weighted-average coupon of the MSR portfolio was 3.79% and 3.72% at December 31, 2024 and 2023, respectively.At December 31, 2024, the sensitivity of the current fair value of residual cash flows to immediate 10%, 20% and 50% adverse changes in prepayment speed assumptions and immediate 10% and 20