Fair Value Measurements

9 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Bancorp measures certain financial assets and liabilities at fair value in accordance with U.S. GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. For more information regarding the fair value hierarchy, refer to Note 1 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize assets and liabilities measured at fair value on a recurring basis as of:

	Fair Value Measurements Using
September 30, 2025 ($ in millions)	Level 1		Level 2	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	2,105	—	—	2,105
Mortgage-backed securities:
Agency residential mortgage-backed securities	—		7,535	—	7,535
Agency commercial mortgage-backed securities	—		20,564	—	20,564
Non-agency commercial mortgage-backed securities	—		2,947	—	2,947
Asset-backed securities and other debt securities	—		2,442	—	2,442
Available-for-sale debt and other securities(a)	2,105		33,488	—	35,593
Trading debt securities:
U.S. Treasury and federal agencies securities	558		18	—	576
Obligations of states and political subdivisions securities	—		58	—	58
Agency residential mortgage-backed securities	—		39	—	39
Asset-backed securities and other debt securities	—		593	—	593
Trading debt securities	558		708	—	1,266
Equity securities	270		17	—	287
Residential mortgage loans held for sale	—		565	—	565
Residential mortgage loans(b)	—		—	107	107
Servicing rights	—		—	1,601	1,601
Derivative assets:
Interest rate contracts	3		491	8	502
Foreign exchange contracts	—		668	—	668
Commodity contracts	164		503	—	667
Derivative assets(c)	167		1,662	8	1,837
Total assets	$	3,100	36,440	1,716	41,256
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	595	5	605
Foreign exchange contracts	—		628	—	628
Equity contracts	—		—	150	150
Commodity contracts	54		618	—	672
Derivative liabilities(d)	59		1,841	155	2,055
Short positions:
U.S. Treasury and federal agencies securities	113		1	—	114
Asset-backed securities and other debt securities	—		276	—	276
Equity securities	29		—	—	29
Short positions(d)	142		277	—	419
Total liabilities	$	201	2,118	155	2,474

(a)Excludes FHLB, FRB and DTCC restricted stock holdings totaling $362, $504 and $2, respectively, at September 30, 2025.

(b)Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

(c)Included in other assets in the Condensed Consolidated Balance Sheets.

(d)Included in other liabilities in the Condensed Consolidated Balance Sheets.

	Fair Value Measurements Using
December 31, 2024 ($ in millions)	Level 1		Level 2	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	4,360	—	—	4,360
Mortgage-backed securities:
Agency residential mortgage-backed securities	—		5,681	—	5,681
Agency commercial mortgage-backed securities	—		20,832	—	20,832
Non-agency commercial mortgage-backed securities	—		4,167	—	4,167
Asset-backed securities and other debt securities	—		3,729	—	3,729
Available-for-sale debt and other securities(a)	4,360		34,409	—	38,769
Trading debt securities:
U.S. Treasury and federal agencies securities	591		35	—	626
Obligations of states and political subdivisions securities	—		120	—	120
Agency residential mortgage-backed securities	—		10	—	10
Asset-backed securities and other debt securities	—		429	—	429
Trading debt securities	591		594	—	1,185
Equity securities	307		34	—	341
Residential mortgage loans held for sale	—		574	—	574
Residential mortgage loans(b)	—		—	108	108
Servicing rights	—		—	1,704	1,704
Derivative assets:
Interest rate contracts	7		721	2	730
Foreign exchange contracts	—		1,167	—	1,167
Commodity contracts	75		500	—	575
Derivative assets(c)	82		2,388	2	2,472
Total assets	$	5,340	37,999	1,814	45,153
Liabilities:
Derivative liabilities:
Interest rate contracts	$	—	939	5	944
Foreign exchange contracts	—		1,120	—	1,120
Equity contracts	—		—	170	170
Commodity contracts	57		507	—	564
Derivative liabilities(d)	57		2,566	175	2,798
Short positions:
U.S. Treasury and federal agencies securities	139		—	—	139
Asset-backed securities and other debt securities	—		156	—	156
Equity securities	21		—	—	21
Short positions(d)	160		156	—	316
Total liabilities	$	217	2,722	175	3,114

(a)Excludes FHLB, FRB and DTCC restricted stock holdings totaling $276, $500 and $2, respectively, at December 31, 2024.

(b)Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

(c)Included in other assets in the Condensed Consolidated Balance Sheets.

(d)Included in other liabilities in the Condensed Consolidated Balance Sheets.

For further information on the valuation methodologies used for significant instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, refer to Note 28 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2024.

The following tables are a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended September 30, 2025 ($ in millions)	Residential Mortgage Loans		Servicing Rights	Interest Rate Derivatives, Net(a)	Equity Derivatives	Total Fair Value
Balance, beginning of period	$	107	1,629	2	(145)	1,593
Total (losses) gains (realized/unrealized):(b)
Included in earnings	2		(40)	19	(18)	(37)
Purchases/originations	—		12	—	—	12
Settlements	(3)		—	(18)	13	(8)
Transfers into Level 3(c)	1		—	—	—	1
Balance, end of period	$	107	1,601	3	(150)	1,561
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2025	$	2	(19)	8	(18)	(27)

(a)Net interest rate derivatives include derivative assets and liabilities of $8 and $5, respectively, as of September 30, 2025.

(b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2025.

(c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended September 30, 2024 ($ in millions)	Residential Mortgage Loans		Servicing Rights	Interest Rate Derivatives, Net(a)	Equity Derivatives	Total Fair Value
Balance, beginning of period	$	109	1,731	—	(164)	1,676
Total (losses) gains (realized/unrealized):(b)
Included in earnings	7		(90)	18	(47)	(112)
Purchases/originations	—		15	—	—	15
Settlements	(3)		—	(16)	15	(4)
Transfers into Level 3(c)	1		—	—	—	1
Balance, end of period	$	114	1,656	2	(196)	1,576
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2024	$	7	(66)	6	(47)	(100)

(a)Net interest rate derivatives include derivative assets and liabilities of $7 and $5, respectively, as of September 30, 2024.

(b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2024.

(c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the nine months ended September 30, 2025 ($ in millions)	Residential Mortgage Loans		Servicing Rights	Interest Rate Derivatives, Net(a)	Equity Derivatives	Total Fair Value
Balance, beginning of period	$	108	1,704	(3)	(170)	1,639
Total (losses) gains (realized/unrealized):(b)
Included in earnings	5		(139)	47	(37)	(124)
Purchases/originations	—		36	(1)	—	35
Settlements	(9)		—	(40)	57	8
Transfers into Level 3(c)	3		—	—	—	3
Balance, end of period	$	107	1,601	3	(150)	1,561
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2025	$	5	(76)	10	(37)	(98)

(a)Net interest rate derivatives include derivative assets and liabilities of $8 and $5, respectively, as of September 30, 2025.

(b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2025.

(c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the nine months ended September 30, 2024 ($ in millions)	Residential Mortgage Loans		Servicing Rights	Interest Rate Derivatives, Net(a)	Equity Derivatives	Total Fair Value
Balance, beginning of period	$	116	1,737	—	(168)	1,685
Total (losses) gains (realized/unrealized):(b)
Included in earnings	4		(112)	38	(87)	(157)
Purchases/originations	—		36	(1)	—	35
Sales	—		(5)	—	—	(5)
Settlements	(9)		—	(35)	59	15
Transfers into Level 3(c)	3		—	—	—	3
Balance, end of period	$	114	1,656	2	(196)	1,576
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at September 30, 2024	$	4	(44)	7	(87)	(120)

(a)Net interest rate derivatives include derivative assets and liabilities of $7 and $5, respectively, as of September 30, 2024.

(b)There were no unrealized gains or losses for the period included in other comprehensive income for instruments still held at September 30, 2024.

(c)Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

The total losses and gains included in earnings for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were recorded in the Condensed Consolidated Statements of Income as follows:

	For the three months ended September 30,			For the nine months ended September 30,
($ in millions)	2025		2024	2025	2024
Mortgage banking net revenue	$	(19)	(66)	(89)	(71)
Capital markets fees	—		1	2	2
Other noninterest income	(18)		(47)	(37)	(88)
Total losses	$	(37)	(112)	(124)	(157)

The total losses and gains included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at September 30, 2025 and 2024 were recorded in the Condensed Consolidated Statements of Income as follows:

	For the three months ended September 30,			For the nine months ended September 30,
($ in millions)	2025		2024	2025	2024
Mortgage banking net revenue	$	(9)	(54)	(63)	(34)
Capital markets fees	—		1	2	2
Other noninterest income	(18)		(47)	(37)	(88)
Total losses	$	(27)	(100)	(98)	(120)

The following tables present information as of September 30, 2025 and 2024 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a recurring basis:

As of September 30, 2025 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs			Weighted-Average
Residential mortgage loans	$	107	Loss rate model	Interest rate risk factor	(52.0)	-	6.4%		(10.1)	%	(a)
				Credit risk factor	—	-	0.7%		0.1	%	(a)
Servicing rights	1,601		DCF	Prepayment speed	—	-	100.0%	(Fixed)	6.9	%	(b)
								(Adjustable)	18.9	%	(b)
				OAS (bps)	335	-	1,827	(Fixed)	441		(b)
								(Adjustable)	714		(b)
IRLCs, net	8		DCF	Loan closing rates	18.9	-	96.0%		81.9	%	(c)
Swap associated with the sale of Visa, Inc. Class B Shares	(150)		DCF	Timing of the resolution    of the Covered Litigation	Q4 2027	-	Q1 2029	Q2 2028			(d)

(a)Unobservable inputs were weighted by the relative carrying value of the instruments.

(b)Unobservable inputs were weighted by the relative unpaid principal balance of the instruments.

(c)Unobservable inputs were weighted by the relative notional amount of the instruments.

(d)Unobservable inputs were weighted by the probability of the final funding date of the instruments.

As of September 30, 2024 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs			Weighted-Average
Residential mortgage loans	$	114	Loss rate model	Interest rate risk factor	(52.3)	-	4.3 %		(9.3)	%	(a)
				Credit risk factor	—	-	0.5 %		0.1	%	(a)
Servicing rights	1,656		DCF	Prepayment speed	—	-	100.0 %	(Fixed)	6.7	%	(b)
								(Adjustable)	22.0	%	(b)
				OAS (bps)	420	-	1,833	(Fixed)	470		(b)
								(Adjustable)	696		(b)
IRLCs, net	6		DCF	Loan closing rates	18.5	-	96.0 %		78.7	%	(c)
Swap associated with the sale of Visa, Inc. Class B Shares	(196)		DCF	Timing of the resolution    of the Covered Litigation	Q4 2026	-	Q1 2028	Q2 2027			(d)

(a)Unobservable inputs were weighted by the relative carrying value of the instruments.

(b)Unobservable inputs were weighted by the relative unpaid principal balance of the instruments.

(c)Unobservable inputs were weighted by the relative notional amount of the instruments.

(d)Unobservable inputs were weighted by the probability of the final funding date of the instruments.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following tables provide the fair value hierarchy and carrying amount of all assets that were held as of September 30, 2025 and 2024, and for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2025 and 2024, and the related gains and losses from fair value adjustments on assets sold during the period as well as assets still held as of the end of the period.

	Fair Value Measurements Using					Total (Losses) Gains
As of September 30, 2025 ($ in millions)	Level 1		Level 2	Level 3	Total	For the three months ended September 30, 2025	For the nine months ended September 30, 2025
Commercial loans and leases	$	—	—	171	171	(246)	(450)
Consumer and residential mortgage loans	—		—	216	216	(2)	(9)
OREO	—		—	4	4	6	7
Bank premises and equipment	—		—	1	1	(1)	(1)
Private equity investments	—		13	—	13	—	4
Total	$	—	13	392	405	(243)	(449)

	Fair Value Measurements Using					Total (Losses) Gains
As of September 30, 2024 ($ in millions)	Level 1		Level 2	Level 3	Total	For the three months ended  September 30, 2024	For the nine months ended September 30, 2024
Commercial loans held for sale	$	—	—	47	47	(1)	(1)
Commercial loans and leases	—		—	125	125	(73)	(177)
Consumer and residential mortgage loans	—		—	208	208	(7)	(10)
OREO	—		—	6	6	—	(1)
Bank premises and equipment	—		—	9	9	—	—
Private equity investments	—		3	—	3	2	11
Total	$	—	3	395	398	(79)	(178)

The following tables present information as of September 30, 2025 and 2024 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a nonrecurring basis:

As of September 30, 2025 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans and leases	$	171	Appraised value	Collateral value	NM	NM
Consumer and residential mortgage loans	216		Appraised value	Collateral value	NM	NM
OREO	4		Appraised value	Appraised value	NM	NM
Bank premises and equipment	1		Appraised value	Appraised value	NM	NM
Private equity investments	—		Comparable company analysis	Market comparable transactions	NM	NM

As of September 30, 2024 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans held for sale	$	47	Comparable company analysis	Market comparable transactions	NM	NM
Commercial loans and leases	125		Appraised value	Collateral value	NM	NM
Consumer and residential mortgage loans	208		Appraised value	Collateral value	NM	NM
OREO	6		Appraised value	Appraised value	NM	NM
Bank premises and equipment	9		Appraised value	Appraised value	NM	NM
Private equity investments	—		Comparable company analysis	Market comparable transactions	NM	NM

Commercial loans held for sale

The Bancorp estimated the fair value of certain commercial loans held for sale during the three and nine months ended September 30, 2024. These valuations were based on appraisals of the underlying collateral or by applying unobservable inputs such as an estimated market discount to the unpaid principal balance of the loans or the appraised value of the assets (Level 3 of the valuation hierarchy).

Portfolio loans and leases

During the three and nine months ended September 30, 2025 and 2024, the Bancorp recorded nonrecurring adjustments to certain portfolio loans and leases. These valuations were based on appraisals of the underlying collateral or by applying unobservable inputs such as an estimated market discount to the unpaid principal balance of the loans or the appraised value of the assets (Level 3 of the valuation hierarchy).

OREO

During the three and nine months ended September 30, 2025 and 2024, the Bancorp recorded nonrecurring adjustments to certain commercial and residential real estate properties and branch-related real estate no longer intended to be used for banking purposes classified as OREO and measured at the lower of carrying amount or fair value. These nonrecurring adjustments were primarily due to changes in real estate values of the properties recognized upon the transfer, or subsequent to the transfer, to OREO. For both the three and nine months ended September 30, 2025, these nonrecurring adjustments included $6 million recorded as gains from fair value adjustments upon the sale of certain branch-related real estate no longer intended to be used for banking purposes classified as OREO. The fair value amounts are generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Bank premises and equipment

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. These properties were written down to their lower of cost or market values. At least annually

thereafter, the Bancorp will review these properties for market fluctuations. The fair value amounts were generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy.

Private equity investments

The Bancorp accounts for its private equity investments using the measurement alternative to fair value, except for those accounted for under the equity method of accounting. Under the measurement alternative, the Bancorp carries each investment at its cost basis minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Bancorp did not recognize gains and recognized gains of $4 million during the three and nine months ended September 30, 2025, respectively, and recognized gains of $2 million and $11 million during the three and nine months ended September 30, 2024, respectively, resulting from observable price changes. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2025 includes a cumulative $23 million of positive adjustments as a result of observable price changes since January 1, 2018. Because these adjustments are based on observable transactions in inactive markets, they are classified in Level 2 of the fair value hierarchy.

For private equity investments which are accounted for using the measurement alternative to fair value, the Bancorp qualitatively evaluates each investment quarterly to determine if impairment may exist. If necessary, the Bancorp then measures impairment by estimating the value of its investment and comparing that to the investment’s carrying value, whether or not the Bancorp considers the impairment to be temporary. These valuations are typically developed using a DCF method, but other methods may be used if more appropriate for the circumstances. These valuations are based on unobservable inputs and therefore are classified in Level 3 of the fair value hierarchy. The Bancorp did not recognize impairment charges and recognized an immaterial amount of impairment charges on its private equity investments for the three and nine months ended September 30, 2025, respectively, and did not recognize impairment charges for both the three and nine months ended September 30, 2024. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2025 includes a cumulative $15 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018.

Fair Value Option

The 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 September 30, 2025 and 2024 for which the fair value option was elected included losses of $24 million and gains of $2 million, respectively. These changes 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 September 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:

September 30, 2025 ($ in millions)	Aggregate Fair Value		Aggregate Unpaid Principal Balance
Residential mortgage loans measured at fair value	$	672	668
Past due loans of 30-89 days	2		2
Past due loans of 90 days or more	1		1
Nonaccrual loans	3		3
December 31, 2024
Residential mortgage loans measured at fair value	$	682	693
Past due loans of 30-89 days	1		1
Past due loans of 90 days or more	1		1
Nonaccrual loans	2		2

Fair Value of Certain Financial Instruments

The 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 Carrying Amount		Fair Value Measurements Using			Total Fair Value
As of September 30, 2025 ($ in millions)			Level 1	Level 2	Level 3
Financial assets:
Cash and due from banks	$	2,901	2,901	—	—	2,901
Other short-term investments	17,215		17,215	—	—	17,215
Other securities	868		—	868	—	868
Held-to-maturity securities	11,498		2,436	9,068	2	11,506
Loans and leases held for sale	11		—	—	11	11
Portfolio loans and leases:
Commercial loans and leases	73,241		—	—	74,325	74,325
Consumer and residential mortgage loans	47,517		—	—	47,142	47,142
Total portfolio loans and leases, net	$	120,758	—	—	121,467	121,467
Financial liabilities:
Deposits	$	166,569	—	166,682	—	166,682
Federal funds purchased	183		183	—	—	183
Other short-term borrowings	5,077		—	5,079	—	5,079
Long-term debt	13,660		8,502	5,590	—	14,092

	Net Carrying Amount		Fair Value Measurements Using			Total Fair Value
As of December 31, 2024 ($ in millions)			Level 1	Level 2	Level 3
Financial assets:
Cash and due from banks	$	3,014	3,014	—	—	3,014
Other short-term investments	17,120		17,120	—	—	17,120
Other securities	778		—	778	—	778
Held-to-maturity securities	11,278		2,344	8,619	2	10,965
Loans and leases held for sale	66		—	—	66	66
Portfolio loans and leases:
Commercial loans and leases	72,139		—	—	72,319	72,319
Consumer and residential mortgage loans	45,192		—	—	42,155	42,155
Total portfolio loans and leases, net	$	117,331	—	—	114,474	114,474
Financial liabilities:
Deposits	$	167,252	—	167,353	—	167,353
Federal funds purchased	204		204	—	—	204
Other short-term borrowings	4,450		—	4,459	—	4,459
Long-term debt	14,440		3,753	10,835	—	14,588