Company: FITBI
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0000035527-25-000171
Chunk: 324

Company: FIFTH THIRD BANCORP
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 1
Chunk 324
---
air Value OptionThe Bancorp elected to measure certain residential mortgage loans held for sale under the fair value option as allowed under U.S. GAAP. Electing to measure residential mortgage loans held for sale at fair value reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Management’s intent to sell residential mortgage loans classified as held for sale may change over time due to such factors as changes in the overall liquidity in markets or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified to loans held for investment and maintained in the Bancorp’s loan portfolio. In such cases, the loans will continue to be measured at fair value.Fair value changes recognized in earnings for residential mortgage loans held at June 30, 2025 and 2024 for which the fair value option was elected included losses of $9 million and $7 million, respectively. These losses are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income. Valuation adjustments related to instrument-specific credit risk for residential mortgage loans measured at fair value negatively impacted the fair value of those loans by an immaterial amount at both June 30, 2025 and December 31, 2024. Interest on loans measured at fair value is accrued as it is earned using the effective interest method and is reported as interest income in the Condensed Consolidated Statements of Income.The following table summarizes the fair value and the unpaid principal balance for residential mortgage loans measured at fair value as of:June 30, 2025 ($ in millions)AggregateFair ValueAggregate UnpaidPrincipal BalanceResidential mortgage loans measured at fair value$679 677 Past due loans of 30-89 days1 1 Past due loans of 90 days or more1 1 Nonaccrual loans2 2 December 31, 2024Residential mortgage loans measured at fair value$682 693 Past due loans of 30-89 days1 1 Past due loans of 90 days or more1 1 Nonaccrual loans2 2 

114

Table of ContentsFifth Third Bancorp and SubsidiariesNotes to Condensed Consolidated Financial Statements (unaudited)

Fair Value of Certain Financial InstrumentsThe following tables summarize the carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments measured at fair value on a recurring basis:Net CarryingAmountFair Value Measurements Using