Company: FITBI
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000035527-25-000171
Chunk: 57

Company: FIFTH THIRD BANCORP
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 7
Chunk 57
---
 payments and continues to assess the impact on the overall risk appetite and soundness of the portfolio.

Residential mortgage portfolio

The Bancorp manages credit risk in the residential mortgage portfolio through underwriting guidelines that limit exposure to loan characteristics determined to increase credit risk. Additionally, the portfolio is governed by concentration limits that ensure product and channel diversification. The Bancorp may also package and sell loans in the portfolio.

The Bancorp does not originate residential mortgage loans that permit customers to make payments that are less than the accruing interest. The Bancorp originates both fixed-rate and ARM loans. Within the ARM portfolio, approximately $441 million of ARM loans will have rate resets during the next twelve months. Underlying characteristics of these borrowers include a weighted-average origination debt-to-income ratio of 35% and weighted-average origination LTV of 72%. Approximately 28% of these loans are expected to experience an increase in rate upon reset. For those borrowers, rates are expected to increase by an average of approximately 2.6%, resulting in an average increase in monthly payment amount of approximately 34%.

Certain residential mortgage products have characteristics that may increase the Bancorp’s credit loss rates in the event of a decline in housing values. These types of mortgage products offered by the Bancorp include loans with high LTVs, multiple loans secured by the same collateral that when combined result in an LTV greater than 80% and interest-only loans. The Bancorp has deemed residential mortgage loans with greater than 80% LTVs and no mortgage insurance as loans that represent a higher level of risk. Approximately 70% of these loans consist of loans originated through the Bancorp’s loan program for doctors.

37

Table of ContentsManagement’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table provides an analysis of the residential mortgage portfolio loans outstanding by LTV at origination as of:

TABLE 33:  Residential Mortgage Portfolio Loans by LTV at OriginationJune 30, 2025December 31, 2024($ in millions)OutstandingWeighted-Average LTVOutstandingWeighted-Average LTVLTV ≤ 80%$11,764 63.9 %$11,836 63.5 %LTV > 80%, with mortgage insurance(a)3,242 95.4 3,165 95.5 LTV > 80%, no mortgage insurance2,675 91.2 2,542 90.9 Total$