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    Fifth Third Bancorp (FITB)

    New Share Buyback Program

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    Fifth Third Bancorp is a diversified financial services company that operates through three main business segments: Commercial Banking, Consumer and Small Business Banking, and Wealth and Asset Management. The company provides a wide range of financial products and services, including credit intermediation, cash management, deposit and loan products, and wealth management solutions . Fifth Third Bancorp's revenue is primarily derived from net interest income and noninterest income, with a focus on a diversified fee revenue strategy to mitigate cyclical impacts . The company is also experiencing significant growth in its Commercial Payments business, which processes a substantial volume of payments and generates recurring fee revenue .

    1. Commercial Banking - Provides credit intermediation, cash management, and financial services to large and middle-market businesses, government, and professional customers, including global cash management, foreign exchange, and international trade finance.
    2. Consumer and Small Business Banking - Offers a range of deposit and loan products to individuals and small businesses, including residential mortgages, home equity loans, credit cards, and solar energy installation loans.
    3. Wealth and Asset Management - Delivers wealth management solutions such as investment management, banking, insurance, and trust services for individuals and organizations.
    NamePositionStart DateShort Bio
    Timothy N. SpenceChairman, CEO, and PresidentChairman: Jan 2024, CEO: Jul 2022, President: Oct 2020Timothy N. Spence has been serving as Chairman since January 2024, CEO since July 2022, and President since October 2020. He was previously EVP and Head of Consumer Bank, Payments, and Strategy .
    Kristine R. GarrettEVP, Group Regional President & Head of Wealth & Asset ManagementJul 2022Kristine R. Garrett has been EVP, Group Regional President, and Head of Wealth & Asset Management since July 2022. She was previously EVP and Head of Wealth & Asset Management from November 2020 .
    Kala J. GibsonEVP & Chief Corporate Responsibility OfficerEVP: Jun 2019, Chief Corporate Responsibility Officer: Feb 2022Kala J. Gibson has been EVP since June 2019 and Chief Corporate Responsibility Officer since February 2022. He was previously Head of Business Banking and Chief Enterprise Corporate Responsibility Officer .
    Mark D. HazelEVP & ControllerFeb 2010Mark D. Hazel has been EVP and Controller since February 2010. He became an EVP in September 2021 and was previously Assistant Bancorp Controller .
    Kevin P. LavenderEVP & Head of Commercial BankJan 2020Kevin P. Lavender has been EVP and Head of Commercial Bank since January 2020. He was previously Head of Corporate Banking .
    James C. LeonardEVP & Chief Operating OfficerEVP: Sep 2015, COO: Jan 2024James C. Leonard has been EVP since September 2015 and COO since January 2024. He was previously CFO from November 2020 to December 2023 .
    Nancy C. PinckneyEVP & Chief Human Resource OfficerSep 2021Nancy C. Pinckney has been EVP and Chief Human Resources Officer since September 2021. She was previously SVP and Director of Human Capital Business Consulting .
    Bryan D. PrestonEVP & Chief Financial OfficerJan 2024Bryan D. Preston has been EVP and CFO since January 2024. He was previously Treasurer from February 2020 to January 2024 .
    Jude A. SchrammEVP & Chief Information OfficerMar 2018Jude A. Schramm has been EVP and CIO since March 2018. He was previously CIO for GE Aviation .
    Robert P. ShafferEVP & Chief Risk OfficerNov 2020Robert P. Shaffer has been EVP and Chief Risk Officer since November 2020. He was previously Chief Human Resource Officer .
    Melissa S. StevensEVP & Chief Marketing OfficerFeb 2023Melissa S. Stevens has been EVP and Chief Marketing Officer since February 2023. She was previously Chief Digital Officer and Head of Digital, Marketing, Design, and Innovation .
    Susan B. ZaunbrecherEVP & Chief Legal OfficerMay 2018Susan B. Zaunbrecher has been EVP and Chief Legal Officer since May 2018. She resumed the role of Corporate Secretary in March 2023 .
    Jeffrey A. LopperSVP & Chief Accounting OfficerOct 6, 2024Jeffrey A. Lopper was appointed SVP and Chief Accounting Officer effective October 6, 2024. He has been with Fifth Third since 2000, previously serving as Assistant Controller .
    1. Given your expectation that normalizing the yield curve could expand your net interest margin to 315-325 basis points over time, how will you achieve this target if the interest rate environment remains challenging and the curve stays flat?

    2. With your CET1 ratio at 10.8% and plans to increase share repurchases, how do you balance returning capital to shareholders with funding organic growth, especially considering potential regulatory requirements under Basel III endgame?

    3. As you aim to shift your deposit mix to a 50-50 split between the Midwest and other regions solely through building new branches, what specific strategies are you implementing to accelerate this expansion without acquisitions, and how confident are you in achieving this goal?

    4. How are you managing the risk of deposit migration from index deposits to higher-rate products as interest rates decline, and what measures are in place to prevent reverse migration from impacting your deposit costs and betas?

    5. With an annualized expense growth rate of around 3%, what key investment areas are you prioritizing for 2025, and how will you ensure these investments drive sufficient revenue growth to achieve positive operating leverage if net interest income faces pressure?

    Program DetailsProgram 1
    Approval DateJune 18, 2019
    End Date/DurationNo expiration date
    Total additional amount100 million shares
    Remaining authorization amount23,733,535 shares
    DetailsPart of capital management strategy, reflects earnings outlook, desired payout ratios, and regulatory compliance
    NameStart DateEnd DateReason for Change
    Deloitte & Touche LLP1970 PresentCurrent auditor

    Recent developments and announcements about FITB.

    Financial Actions

      Debt Issuance

      ·
      Jan 23, 2025, 12:15 PM

      On January 22, 2025, Fifth Third Bancorp ("Fifth Third") entered into a new share repurchase agreement with Royal Bank of Canada ("RBC"), with RBC Capital Markets, LLC acting as agent. This agreement involves Fifth Third purchasing approximately $225 million of its outstanding common stock. This transaction is part of Fifth Third's 100 million share repurchase program. Under the terms of the agreement, Fifth Third will pay an aggregate of $225 million to RBC on January 23, 2025, and expects to receive a substantial majority of the shares by the same date. The actual number of shares will be based on a discount to the average of the daily volume-weighted average NASDAQ prices of Fifth Third's common stock during the term of the agreement. The settlement is expected to occur on or before March 28, 2025. This repurchase agreement could potentially affect Fifth Third's balance sheet by reducing the number of outstanding shares, which may impact earnings per share and shareholder equity.

      New Share Buyback Program

      ·
      Jan 23, 2025, 12:15 PM

      Fifth Third Bancorp has initiated a new share repurchase agreement with Royal Bank of Canada, effective January 22, 2025. The agreement involves the repurchase of approximately $225 million of Fifth Third's outstanding common stock. This is part of a larger 100 million share repurchase program. The transaction is expected to settle by March 28, 2025, with the number of shares determined by a discount to the average daily volume-weighted average NASDAQ prices during the agreement's term.

      New Share Buyback Program

      ·
      Oct 22, 2024, 12:00 AM

      Fifth Third Bancorp has entered into a new share repurchase agreement with Morgan Stanley & Co. LLC to buy back approximately $300 million of its outstanding common stock. The repurchase is part of a 100 million share repurchase program. The transaction is expected to settle on or before December 27, 2024 .

    Financial Reporting

      Earnings Call

      ·
      Jan 21, 2025, 5:36 PM

      Summary of Fifth Third Bank's Fourth Quarter 2024 Earnings Call

      Key Financial Performance

      • Revenue and Profitability: Adjusted revenue grew 3% sequentially, with a 5% increase in pre-provision net revenue (PPNR) on an adjusted basis.
      • Net Interest Income (NII): Increased 1% sequentially to $1.4 billion, with a 7 basis point improvement in net interest margin (NIM). Management expects NIM to improve by a few basis points each quarter in 2025, targeting a return to the 3.20% range.
      • Loan Growth: End-of-period loans grew by $3 billion (3% sequentially), driven by strength in commercial and consumer loans, including auto and residential mortgages.
      • Deposit Trends: Core deposits increased by $1.6 billion, with interest-bearing deposit costs decreasing by 35 basis points sequentially.
      • Capital Return: Returned $1.6 billion to shareholders in 2024, including $300 million in share repurchases during Q4.

      Forward Guidance and Strategic Initiatives

      • 2025 Outlook: Management expects record NII, positive operating leverage, and 3%-4% loan growth for the year. Adjusted noninterest income is projected to grow 3%-6%, driven by commercial payments, capital markets, and wealth management.
      • Branch Expansion: Plans to open 60 new branches in the Southeast in 2025, with a focus on markets like Florida, South Carolina, and Atlanta.
      • Efficiency and Cost Management: Adjusted noninterest expense is expected to rise 3%-4% in 2025, with investments in technology, branches, and sales personnel partially offset by $150 million in annualized savings from efficiency programs.

      Market Conditions and Analyst Questions

      • Interest Rate Sensitivity: Management is neutral on rate sensitivity, with flexibility to adjust based on market conditions. The bank's liquidity position provides levers to manage margins effectively.
      • Labor Market Challenges: Middle-market clients face labor shortages, with some sectors investing in automation to offset challenges. Structural labor issues in the U.S. remain a concern.
      • Capital Management: CET1 ratio remains at 10.5%, with a pro forma CET1 (including AOCI) of 8.1%. Management plans to maintain strong capital levels while supporting organic growth and share repurchases.

      Analyst Highlights

      • Analysts inquired about the trajectory of NIM, deposit cost outlook, and the impact of labor market challenges on loan demand. Management emphasized confidence in achieving growth targets and maintaining flexibility in balance sheet management.

      Strategic Investments

      • Commercial Payments: Fee revenue grew 8% in 2024, with 40% of new relationships having no credit attached. Partnerships with firms like Stripe and Trustee are expected to drive growth in 2025.
      • Wealth Management: Assets under management grew 17% year-over-year, reaching $69 billion. The bank's wealth management franchise remains a key growth driver.

      Risks and Opportunities

      • Risks: Potential volatility in deposit costs and market-based businesses, as well as macroeconomic uncertainties, could impact performance.
      • Opportunities: Continued investments in high-growth markets and strategic initiatives in commercial payments and wealth management position the bank for long-term growth.