Cash and Cash Equivalents [USD, Millions]

Goodwill [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

06faaf1561ff86bc3a1437e991c29a988e0ea962ead2f4fc979837b6467556b4

| Metric / Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Home Equity Portfolio Loans Outstanding** ($ million) | 1,016  **[0000035527-23-000122_fitb-20221231.htm:148]**  | 1,003  **[0000035527-23-000190_fitb-20230331.htm:65]**  | 975  **[0000035527-23-000214_fitb-20230630.htm:77]**  | 960  **[0000035527-23-000254_fitb-20230930.htm:75]**  | 954  **[0000035527-24-000088_fitb-20231231.htm:143]**  | 942  **[0000035527-24-000166_fitb-20240331.htm:62]**  | 943  **[0000035527-24-000212_fitb-20240630.htm:67]**  | 950  **[0000035527-24-000249_fitb-20240930.htm:66]**  |
| **Net Charge-offs on Solar Energy Installation Loans** ($ million) | N/A    | N/A  **[0000035527-23-000190_fitb-20230331.htm:13]**  | N/A  **[0000035527-23-000214_fitb-20230630.htm:15]**  | N/A  **[FITB_3364326_3]**  | N/A  **[FITB_3370492_15]**  | 12  **[0000035527-24-000166_fitb-20240331.htm:68]**  | 12  **[0000035527-24-000212_fitb-20240630.htm:110]** **[0000035527-24-000212_fitb-20240630.htm:74]**  | 14  **[0000035527-24-000249_fitb-20240930.htm:111]** **[0000035527-24-000249_fitb-20240930.htm:73]**  |
| **Solar Energy Installation Loans** ($ million) | N/A  **[0000035527-23-000122_fitb-20221231.htm:128]** **[0000035527-23-000122_fitb-20221231.htm:127]**  | 3,219  **[0000035527-23-000190_fitb-20230331.htm:67]**  | 3,771  **[0000035527-23-000214_fitb-20230630.htm:79]**  | 4,191  **[0000035527-23-000254_fitb-20230930.htm:77]**  | 4,537  **[0000035527-24-000088_fitb-20231231.htm:144]**  | 3,871  **[0000035527-24-000166_fitb-20240331.htm:64]**  | 3,951  **[0000035527-24-000212_fitb-20240630.htm:69]**  | 4,078  **[0000035527-24-000249_fitb-20240930.htm:68]**  |
| **Total Assets Under Care** ($ billion) | 510  **[0000035527-23-000002_q42022earningsrelease.htm:16]**  | 542  **[0000035527-23-000153_q12023earningsrelease.htm:19]**  | 554  **[0000035527-23-000206_q22023earningsrelease.htm:17]**  | 547  **[0000035527-23-000244_q32023earningsrelease.htm:19]**  | 574  **[0000035527-24-000005_q42023earningsrelease.htm:18]**  | 634  **[0000035527-24-000154_q12024earningsrelease.htm:19]**  | 631  **[0000035527-24-000190_q22024earningsrelease.htm:17]**  | 635  **[0000035527-24-000236_q32024earningsrelease.htm:17]**  |
| **Service Charges on Commercial Deposits** ($ million) | N/A    | 100  **[0000035527-23-000190_fitb-20230331.htm:26]**  | 105  **[0000035527-23-000214_fitb-20230630.htm:31]**  | 109  **[0000035527-23-000254_fitb-20230930.htm:31]**  | 424 (annual)  **[0000035527-24-000088_fitb-20231231.htm:105]**  | 112  **[0000035527-24-000166_fitb-20240331.htm:22]**  | 118  **[0000035527-24-000212_fitb-20240630.htm:25]**  | 120  **[0000035527-24-000249_fitb-20240930.htm:24]**  |
| **Service Charges on Consumer Deposits** ($ million) | N/A  **[0000035527-23-000002_q42022earningsrelease.htm:3]**  | 37  **[0000035527-23-000190_fitb-20230331.htm:26]**  | 39  **[0000035527-23-000214_fitb-20230630.htm:31]**  | 40  **[0000035527-23-000254_fitb-20230930.htm:31]**  | 146 (annual)  **[0000035527-24-000008_q42023earningsrelease_991d.htm:3]**  | 39  **[0000035527-24-000166_fitb-20240331.htm:22]**  | 38  **[0000035527-24-000212_fitb-20240630.htm:25]**  | 41  **[0000035527-24-000249_fitb-20240930.htm:24]**  |
| **Residential Mortgage Loan Originations** ($ billion) | N/A  **[0000035527-23-000002_fifththirdbancorp4q22pre.htm:9]**  | 1.4  **[0000035527-23-000190_fitb-20230331.htm:27]**  | 1.7  **[0000035527-23-000206_a2q23fifththirdbancorppr.htm:10]**  | 1.5  **[0000035527-23-000254_fitb-20230930.htm:33]**  | 1.0  **[0000035527-24-000005_a4q23fifththirdbancorppr.htm:11]**  | 1.1  **[0000035527-24-000166_fitb-20240331.htm:23]**  | 1.6  **[0000035527-24-000190_a2q24earningspresentatio.htm:9]**  | 1.9  **[0000035527-24-000249_fitb-20240930.htm:25]**  |
| **Gross Mortgage Servicing Fees** ($ million) | N/A    | 83  **[0000035527-23-000190_fitb-20230331.htm:138]** **[0000035527-23-000190_fitb-20230331.htm:27]**  | 80  **[0000035527-23-000214_fitb-20230630.htm:33]**  | 79  **[0000035527-23-000254_fitb-20230930.htm:33]**  | 79  **[0000035527-24-000005_a4q23fifththirdbancorppr.htm:11]**  | 78  **[0000035527-24-000166_fitb-20240331.htm:23]**  | 78  **[0000035527-24-000212_fitb-20240630.htm:26]**  | 77  **[0000035527-24-000249_fitb-20240930.htm:25]**  |

9dd32117e010f45c5b5e08b68d988603c63e5c26577e9d4461367c4d0c307560

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

a3cc1ca26f1ff9daab9b5e39c611ce110a7e106ba22493fe496cdf04b0a61f72

| Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Commercial Banking**   | N/A     | **1,313**  **[0000035527-23-000190_fitb-20230331.htm:180]**  | **1,357**  **[0000035527-23-000214_fitb-20230630.htm:205]**  | **1,360**  **[0000035527-23-000254_fitb-20230930.htm:206]**  | N/A     | **1,012**  **[0000035527-24-000166_fitb-20240331.htm:170]**  | **979**  **[0000035527-24-000212_fitb-20240630.htm:183]**  | **1,026**  **[0000035527-24-000249_fitb-20240930.htm:186]**  |
| **Consumer and Small Business Banking** | N/A | **1,530**  **[0000035527-23-000190_fitb-20230331.htm:180]**  | **1,641**  **[0000035527-23-000214_fitb-20230630.htm:205]**  | **1,664**  **[0000035527-23-000254_fitb-20230930.htm:206]**  | N/A | **1,391**  **[0000035527-24-000166_fitb-20240331.htm:170]**  | **1,327**  **[0000035527-24-000212_fitb-20240630.htm:183]**  | **1,311**  **[0000035527-24-000249_fitb-20240930.htm:186]**  |
| **Wealth and Asset Management** | N/A | **239**  **[0000035527-23-000190_fitb-20230331.htm:180]**  | **232**  **[0000035527-23-000214_fitb-20230630.htm:205]**  | **237**  **[0000035527-23-000254_fitb-20230930.htm:206]**  | N/A | **161**  **[0000035527-24-000166_fitb-20240331.htm:170]**  | **152**  **[0000035527-24-000212_fitb-20240630.htm:183]**  | **149**  **[0000035527-24-000249_fitb-20240930.htm:186]**  |
| **General Corporate and Other** | N/A | **(823)**  **[0000035527-23-000190_fitb-20230331.htm:180]**  | **(1,001)**  **[0000035527-23-000214_fitb-20230630.htm:205]**  | **(1,063)**  **[0000035527-23-000254_fitb-20230930.htm:206]**  | N/A | **(470)**  **[0000035527-24-000166_fitb-20240331.htm:170]**  | **(376)**  **[0000035527-24-000212_fitb-20240630.htm:183]**  | **(354)**  **[0000035527-24-000249_fitb-20240930.htm:186]**  |
| **Total Revenue** | N/A | **2,259**  **[0000035527-23-000190_fitb-20230331.htm:180]**  | **2,229**  **[0000035527-23-000214_fitb-20230630.htm:205]**  | **2,198**  **[0000035527-23-000254_fitb-20230930.htm:206]**  | N/A | **2,094**  **[0000035527-24-000166_fitb-20240331.htm:170]**  | **2,082**  **[0000035527-24-000212_fitb-20240630.htm:183]**  | **2,132**  **[0000035527-24-000249_fitb-20240930.htm:186]**  |

90a75df6f990206710e848343e1f02f7cd916998fa2ff813e83fc1bac3758afc

Full-time equivalent employees (count)

Weighted-average LTV for Residential Mortgage Loans (LTV ≤ 80%) (percentage)

Weighted-average LTV for Residential Mortgage Loans (LTV > 80% with mortgage insurance) (percentage)

Weighted-average LTV for Residential Mortgage Loans (LTV > 80% without mortgage insurance) (percentage)

Total Weighted-average LTV for Residential Mortgage Loans (percentage)

Weighted-average LTV for Home Equity (Senior Liens) (percentage)

Weighted-average LTV for Home Equity (Junior Liens) (percentage)

Total Weighted-average LTV for Home Equity (percentage)

e2a934fb4344b2480ec2a510fb7eadc6d44d7694b3df466fde0ada1433864e6b

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 **[0000035527-24-000249_fitb-20240930.htm:185]** **[0000035527-24-000166_fitb-20240331.htm:169]** **[0000035527-24-000088_fitb-20231231.htm:309]**. 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 **[0000035527-24-000249_fitb-20240930.htm:6]** **[0000035527-24-000166_fitb-20240331.htm:6]** **[0000035527-24-000212_fitb-20240630.htm:6]** **[0000035527-24-000225_fitbbarclaysconferencevf.htm:4]** **[0000035527-24-000236_a3q24fitbpresentationvf.htm:8]**. The company is also experiencing significant growth in its Commercial Payments business, which processes a substantial volume of payments and generates recurring fee revenue **[FITB_3401439_0]** **[FITB_3391062_12]**.

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.

4d76264e9bfe3d558724d82a2432ae1a01ceedd6d53dcfe91e41f4656f21f527

Adjustments for Non-Cash Items [USD, M]

Stock-Based Compensation [USD, M]

Changes in Working Capital [USD, M]

Capital Expenditures (CapEx) [USD, M]

Proceeds from / Repayments of Debt [USD, M]

Share Repurchases [USD, M]

Dividend Payments [USD, M]

Net Change in Cash [USD, M]

b462b8fcde9b431a48e4409f6b7f37656ecf6090257e1f5e0b5014cfd809a2a3

- **Strong Loan Growth and Record Pipelines**: Fifth Third reported strong loan growth of **3% in the fourth quarter**, driven by broad-based improvements in both consumer and commercial lending. The bank has **record pipelines in the middle market** and notes that clients are **more optimistic about 2025**, which is expected to support continued loan demand and growth.  **[FITB_3412872_7]**
- **Strategic Expansion in High-Growth Markets**: The bank's investments in **branch expansion in the Southeast** are yielding positive results. With new branches in markets like Nashville, North Carolina, Florida, South Carolina, and upcoming openings in Atlanta, these expansions are expected to drive significant **deposit and loan growth**, supporting net interest income growth in 2025.  **[FITB_3412872_11]**
- **Strong Performance in Commercial Payments Business**: Fifth Third's commercial payments revenue increased **7% year-over-year**, driven by an **11% growth in treasury management net fee equivalents**. The bank is **overweight in this business relative to peers**, indicating a strong position that contributes to diversified and growing fee income.  **[FITB_3412872_14]**

073ed8dcb52baa14695369b6359eceab0468c5ebf7dde22aca5f23a0f042dbc9

- **Potential Increase in Credit Risk**: There was an uptick in **Commercial and Industrial (C&I) nonaccrual loans** this quarter, driven by commercial loans with an average size of **$32 million**. This increase may indicate a deterioration in credit quality.  **[FITB_3412872_10]**
- **Uncertain Net Interest Margin Growth**: The anticipated improvement in net interest margin is heavily dependent on uncertain factors like the **cash position** and the **shape of the yield curve**. Any unfavorable changes in these areas could negatively impact NIM growth.  **[FITB_3412872_20]**
- **Labor Shortages Impacting Loan Demand**: **Labor availability is the single biggest concern** among middle-market clients. Structural labor shortages due to demographic trends may limit clients' ability to expand, potentially affecting FITB's loan growth opportunities.  **[FITB_3412872_7]** **[FITB_3412872_18]**

59c3bdf5a8e7c92882a2ca0dd84038cb77944228ff57487de73f8b20ca0ab964

1. **Loan Growth Outlook**  
   **Q:** Are you calling the turn for commercial loan growth?  
   **A:** Management is cautiously optimistic about loan demand, noting that the backdrop is more favorable with increased pipelines and client optimism. They expect above-market growth supported by diversified loan origination sources but caution against assuming **12% annualized growth**.  **[FITB_3412872_9]** 

2. **Rate Sensitivity**  
   **Q:** How would you characterize your rate sensitivity now?  
   **A:** The bank is fairly neutral in rate sensitivity and comfortable with its current position. They have flexibility to adjust asset and liability sensitivity depending on the environment, providing stability in various rate scenarios.  **[FITB_3412872_8]** 

3. **Deposit Rate Outlook**  
   **Q:** What's your outlook for deposit rates in 2025?  
   **A:** Management expects deposit costs to decrease slightly if the Fed is done cutting rates. They anticipate some tailwind in the first quarter due to the full-quarter impact of December cuts and **$8 billion** in maturing CDs at a weighted average rate of **4.3%**, but overall deposit competition could increase if loan growth picks up.  **[FITB_3412872_10]** 

4. **Capital Management & CET1**  
   **Q:** Do you have a CET1 target including AOCI?  
   **A:** The bank aims to keep CET1 including AOCI above **8%** and expects this to increase over time with accretion from the investment portfolio. They feel confident in meeting capital rules and will prioritize organic growth, a strong dividend, and then buybacks based on maintaining a reported CET1 of **10.5%**.  **[FITB_3412872_12]** 

5. **Asset Quality**  
   **Q:** Can you explain the uptick in C&I nonaccruals?  
   **A:** The increase was driven by commercial credits with no specific industry or geographic concentration. The bank remains within a few basis points of its **10-year average** in nonperforming assets and expects some of the largest NPA inflows to pay down in the first half of the year.  **[FITB_3412872_10]** 

6. **Branch Investments Payoff**  
   **Q:** What is the payoff from new branch investments?  
   **A:** The new branches, averaging **3 years** in age, are still in early ramp-up stages. Management expects significant deposit growth and customer acquisition from these investments, with increased loan growth supported by sales force additions in new markets, particularly in the Southeast and Atlanta.  **[FITB_3412872_11]** 

7. **Fee Revenue Growth**  
   **Q:** How dependent is fee revenue growth on loan growth?  
   **A:** Wealth management revenue is not dependent on loans, while commercial payments are partially dependent. Capital markets fees are largely cross-sold to existing clients, and management believes there's room to grow fees faster than the balance sheet by improving penetration with existing customers.  **[FITB_3412872_11]** 

8. **Commercial Payments vs. Peers**  
   **Q:** How does your commercial payments business compare to peers?  
   **A:** Management believes they are outperforming peers in commercial payments, with higher market share and growth rates. They have a higher turnover ratio and are overweight in this business relative to others, with commercial payments representing **20%** of fees and growing **8%** year-over-year.  **[FITB_3412872_13]** 

9. **Risks to Guidance**  
   **Q:** What are the upside and downside risks to your guidance?  
   **A:** The primary risks are loan growth and deposit costs. Net interest income is a concern due to market volatility, and market-based fees could see variability based on market activity. However, management feels good about their trajectory and has built flexibility into their plans.  **[FITB_3412872_13]** 

10. **M&A Outlook**  
    **Q:** How are you thinking about M&A?  
    **A:** The bank sees value in consolidation but is cautious about pursuing scale at any cost. They prioritize organic growth and have the ability to grow without mergers. They are interested in adding capabilities through nonbank acquisitions in managed services and commercial payments, focusing on proven products lacking distribution.  **[FITB_3412872_16]** 

e41177b27f381e85a85c3c1e7ef37b102b113f73745b96a6d89a7aa8bb8d955f

9423991fd24764301973403f3bb2148e47ca7e0df89fcbf04c466042a5fb5233

2d3f8ba972b2c8dfe26b56d98ac6d485ba6157286c1d1b279feae126db647549

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?  **[FITB_3403067_19]** **[FITB_3403067_8]** 

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?  **[FITB_3403067_2]** **[FITB_3403067_9]** 

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?  **[FITB_3403067_18]** 

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?  **[FITB_3403067_16]** 

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?  **[FITB_3403067_15]** 

916bafcaaffc278ff67f0ce72cafc338806f59c022fc89edcfbf942b969ff41d

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | **June 18, 2019**  **[0000035527-24-000249_fitb-20240930.htm:95]**  |
| End Date/Duration        | **No expiration date**  **[0000035527-24-000249_fitb-20240930.htm:95]**  |
| Total additional amount  | **100 million shares**  **[0000035527-24-000249_fitb-20240930.htm:95]**  |
| Remaining authorization amount | **23,733,535 shares**  **[0000035527-24-000249_fitb-20240930.htm:95]**  |
| Details                  | Part of capital management strategy, reflects earnings outlook, desired payout ratios, and regulatory compliance  **[0000035527-24-000088_fitb-20231231.htm:172]** **[0000035527-24-000212_fitb-20240630.htm:94]** **[0000035527-24-000249_fitb-20240930.htm:94]**  |

6dab0904d774dc0b1ca851de776e94e39423ab55cec386306648df1c193fe027

**Home Equity Portfolio Loans Outstanding** ($ million)

**Net Charge-offs on Solar Energy Installation Loans** ($ million)

**Solar Energy Installation Loans** ($ million)

**Service Charges on Commercial Deposits** ($ million)

**Service Charges on Consumer Deposits** ($ million)

**Residential Mortgage Loan Originations** ($ billion)

**Gross Mortgage Servicing Fees** ($ million)

026688dc0756aca7bcebe3f9e89a1ffb5acac8902a10069e2c2d33aed91032eb

Commercial Banking

- Net Interest Income

- Noninterest Income

- Total Revenue

Consumer and Small Business Banking

Branch Banking

Consumer Lending

Wealth and Asset Management

General Corporate and Other

Eliminations

Total Revenue

547a8428e1ef70e0c38a87b03ab1892c928e67872c6a8a1604b3e6ddd81adac1

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** Q4 2024 and FY 2025
- **Guidance:**
  1. **Net Interest Income (NII) and Net Interest Margin (NIM):** NII expected to increase by **1% sequentially**.
  2. **Loan Balances:** Stable to up **1%** from Q3 2024.
  3. **Noninterest Income:** Expected to rise **3% to 4%** compared to Q3 2024.
  4. **Noninterest Expenses:** Expected to be stable compared to Q3 2024.
  5. **Net Charge-Offs:** Similar or slightly down from Q3 2024.
  6. **Allowance for Credit Losses (ACL):** Build of **$20 million to $40 million**.
  7. **Share Repurchases:** Increase to **$300 million**.
  8. **Tangible Book Value:** Increase by **6%** by end of 2025.
  9. **Capital Markets Revenue and Commercial Payments:** Continued rebound and growth expected.
  10. **TRA Revenue:** Expected to be **$10 million**.
  11. **Operating Leverage:** Positive on both sequential and year-over-year basis  **[FITB_3403067_5]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** Q3 2024, Q4 2024, and FY 2024
- **Guidance:**
  1. **Net Interest Income (NII) and Net Interest Margin (NIM):** NII up **2% sequentially** in Q3 2024.
  2. **Deposit Costs:** Increase by **4 basis points** sequentially.
  3. **Loan Balances:** Stable to up **1%** from Q2 2024.
  4. **Noninterest Income:** Up **1% to 2%** in Q3 2024.
  5. **Noninterest Expenses:** Up **1%** in Q3 2024.
  6. **Net Charge-Offs:** **40 to 45 basis point** range in Q3 2024.
  7. **Provision Build:** Around **$25 million** in Q3 2024.
  8. **Share Repurchases:** **$200 million per quarter** in H2 2024.
  9. **Capital Ratios:** CET1 ratio of **10.6%**.
  10. **Loan Growth:** Down **3%** for FY 2024.
  11. **Core Deposit Growth:** **2% to 3%** in Q4 2024.
  12. **Noninterest Income for FY 2024:** Stable to down **1%**.
  13. **Noninterest Expense for FY 2024:** Stable.
  14. **Efficiency Ratio:** Around **57%** for FY 2024.
  15. **Net Charge-Offs for FY 2024:** **35 to 45 basis point** range.
  16. **Provision for FY 2024:** **0 to $10 million** release  **[FITB_3393651_6]** **[FITB_3393651_5]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024
- **Guidance:**
  1. **Loan Balances:** Down **2%** for FY 2024.
  2. **Deposit Growth:** Increase **2% to 3%**.
  3. **Net Interest Income (NII):** Decrease **2% to 4%**.
  4. **Noninterest Income:** Up **1% to 2%**.
  5. **Noninterest Expense:** Up **1%**.
  6. **Net Charge-Offs:** **35 to 45 basis point** range.
  7. **Share Repurchases:** **$300 million to $400 million** in H2 2024.
  8. **Efficiency Ratio:** Around **57%**.
  9. **Capital:** CET1 ratio to **10.5%** by June 2024.
  10. **Interest Rate Assumptions:** No additional rate hikes, **55%** beta by Q4 2024  **[FITB_3380110_6]** **[FITB_3380110_7]** **[FITB_3370492_4]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** FY 2024
- **Guidance:**
  1. **Net Interest Income (NII):** Decrease **2% to 4%**.
  2. **Interest-Bearing Core Deposit Costs:** Increase **5 to 10 basis points** in Q1 2024.
  3. **Adjusted Noninterest Income:** Up **1% to 2%**.
  4. **Adjusted Noninterest Expense:** Up **1%**.
  5. **Efficiency Ratio:** Around **57%**.
  6. **Net Charge-Offs:** **35 to 45 basis point** range.
  7. **Provision Build:** **$100 million to $150 million** for FY 2024.
  8. **Loan Growth:** Down **2%** for FY 2024.
  9. **Deposit Growth:** Increase **2% to 3%**.
  10. **Dividend Finance Originations:** **$2.5 billion to $3 billion** for FY 2024.
  11. **Loan-to-Deposit Ratio:** Mid-70s long-term.
  12. **Capital Ratios:** CET1 ratio to **10.5%** by mid-2024.
  13. **Share Repurchases:** Resume in H2 2024  **[FITB_3370492_4]** **[FITB_3370492_5]** **[FITB_3370492_13]** .

4df115df8749e376b678a478761897e4c7ea4eaae0f826f51a7a2a5153df77a5

| Name                  | Position                                           | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------|----------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Timothy N. Spence     | Chairman, CEO, and President                       | Chairman: Jan 2024, CEO: Jul 2022, President: Oct 2020 | Timothy 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  **[0000035527-24-000088_fitb-20231231.htm:69]** **[0001193125-24-058164_d548826ddef14a.htm:25]** . |
| Kristine R. Garrett   | EVP, Group Regional President & Head of Wealth & Asset Management | Jul 2022            | Kristine 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  **[0000035527-24-000088_fitb-20231231.htm:69]** .                                      |
| Kala J. Gibson        | EVP & Chief Corporate Responsibility Officer       | EVP: Jun 2019, Chief Corporate Responsibility Officer: Feb 2022 | Kala 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  **[0000035527-24-000088_fitb-20231231.htm:69]** **[0000035527-23-000122_fitb-20221231.htm:72]** .                      |
| Mark D. Hazel         | EVP & Controller                                   | Feb 2010            | Mark D. Hazel has been EVP and Controller since **February 2010**. He became an EVP in **September 2021** and was previously Assistant Bancorp Controller  **[0000035527-24-000088_fitb-20231231.htm:69]** **[0000035527-23-000122_fitb-20221231.htm:72]** .                                                                                 |
| Kevin P. Lavender     | EVP & Head of Commercial Bank                      | Jan 2020            | Kevin P. Lavender has been EVP and Head of Commercial Bank since **January 2020**. He was previously Head of Corporate Banking  **[0000035527-24-000088_fitb-20231231.htm:69]** **[0000035527-23-000122_fitb-20221231.htm:72]** .                                                                                                          |
| James C. Leonard      | EVP & Chief Operating Officer                      | EVP: Sep 2015, COO: Jan 2024 | James C. Leonard has been EVP since **September 2015** and COO since **January 2024**. He was previously CFO from November 2020 to December 2023  **[0000035527-24-000088_fitb-20231231.htm:69]** .                                                                                             |
| Nancy C. Pinckney     | EVP & Chief Human Resource Officer                 | Sep 2021            | Nancy C. Pinckney has been EVP and Chief Human Resources Officer since **September 2021**. She was previously SVP and Director of Human Capital Business Consulting  **[0000035527-24-000088_fitb-20231231.htm:69]** .                                                                         |
| Bryan D. Preston      | EVP & Chief Financial Officer                      | Jan 2024            | Bryan D. Preston has been EVP and CFO since **January 2024**. He was previously Treasurer from February 2020 to January 2024  **[0000035527-24-000088_fitb-20231231.htm:70]** .                                                                                                                |
| Jude A. Schramm       | EVP & Chief Information Officer                    | Mar 2018            | Jude A. Schramm has been EVP and CIO since **March 2018**. He was previously CIO for GE Aviation  **[0000035527-24-000088_fitb-20231231.htm:70]** **[0000035527-23-000122_fitb-20221231.htm:73]** .                                                                                                                                         |
| Robert P. Shaffer     | EVP & Chief Risk Officer                           | Nov 2020            | Robert P. Shaffer has been EVP and Chief Risk Officer since **November 2020**. He was previously Chief Human Resource Officer  **[0000035527-24-000088_fitb-20231231.htm:70]** **[0000035527-23-000122_fitb-20221231.htm:73]** .                                                                                                           |
| Melissa S. Stevens    | EVP & Chief Marketing Officer                      | Feb 2023            | Melissa 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  **[0000035527-24-000088_fitb-20231231.htm:70]** **[0000035527-23-000122_fitb-20221231.htm:74]** .                                                     |
| Susan B. Zaunbrecher  | EVP & Chief Legal Officer                          | May 2018            | Susan B. Zaunbrecher has been EVP and Chief Legal Officer since **May 2018**. She resumed the role of Corporate Secretary in March 2023  **[0000035527-24-000088_fitb-20231231.htm:71]** **[0000035527-23-000122_fitb-20221231.htm:74]** .                                                                                                   |
| Jeffrey A. Lopper     | SVP & Chief Accounting Officer                     | Oct 6, 2024         | Jeffrey 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  **[0000035527-24-000229_fitb-20240802.htm:1]** **[0000035527-24-000213_fitb-20240802.htm:1]** .                                                      |

43865e4c7fdc502fe3b5f78da88f30db7e0b335a5d429c59c18b563a6b2ccb24

FITB's Q4 saw 3% loan growth and record pipelines, with robust expansions in the Southeast fueling deposit growth. Commercial payments revenue jumped 7% yoy, offset by a spike in C&I nonaccruals. Watch credit quality and uncertain NIM in 2025.

c10273942c0c383612a0ef08c2c27fd9f62720820bc608a76d56088cb85e21d6

**Annual guidance for FY 2025:**
- **Net Interest Income (NII)**: 5% to 6%  **[FITB_3412872_5]**  (no prior guidance)  
- **Average Total Loans**: 3% to 4%  **[FITB_3412872_5]**  (no prior guidance)  
- **Adjusted Noninterest Income**: 3% to 6%  **[FITB_3412872_5]**  (no prior guidance)  
- **Adjusted Noninterest Expense**: 3% to 4%  **[FITB_3412872_5]**  (no prior guidance)  
- **Adjusted Revenue**: 4% to 6%  **[FITB_3412872_5]**  (no prior guidance)  
- **Pre-Provision Net Revenue (PPNR)**: 6% to 7%  **[FITB_3412872_5]**  (no prior guidance)  
- **Positive Operating Leverage**: ~2%  **[FITB_3412872_5]**  (no prior guidance)  
- **Net Charge-Offs**: 40–49 bps  **[FITB_3412872_5]**  (no prior guidance)  
- **Provision for Credit Losses**: $50M–$100M  **[FITB_3412872_5]**  (no prior guidance)  
- **Capital Position**: CET1 ratio of 10.5%  **[FITB_3412872_5]**  (no prior guidance)  

No other metrics from the latest guidance period (Q4 2024 issuance) matched metrics from the prior guidance period (Q3 2024 issuance) on a like-for-like (quarterly vs. quarterly or annual vs. annual) basis.

b3f8f40b62028a8f340eaa4aaeafa149db345dfca0a3c273e31d69222a9188d3

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 1970  **[0000035527-24-000088_fitb-20231231.htm:175]**    | Present  | Current auditor   |

4c356a8905db51b837ddcb9b45c148e100ea66fcadc407cdc0dffe6eb5233e84

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $2,175 million (-32% YoY)  **[0000035527-24-000088_fitb-20231231.htm:177]** **[0000035527-25-000002_q42024earningsrelease.htm:21]**   
- Interest Expense: $1,091 million (-11% YoY)  **[0000035527-24-000088_fitb-20231231.htm:177]** **[0000035527-25-000002_q42024earningsrelease.htm:23]**   
- Net Income: $620 million (**+1,070% YoY**)  **[0000035527-24-000088_fitb-20231231.htm:177]** **[0000035527-25-000002_q42024earningsrelease.htm:23]**   
- EPS (Basic): $0.86 (+19% YoY)  **[0000035527-24-000088_fitb-20231231.htm:177]** **[0000035527-25-000002_q42024earningsrelease.htm:21]**   

f775a7925e105df561771bf4dbbad5082ce5bc42a605536e2fb2ed7366ff6420

1. **NII Outlook and NIM Trajectory**  
   **Q:** How can you maintain NII outlook despite fewer rate cuts?  
   **A:** We expect net interest income to decline by **2% to 4%** this year, consistent with previous guidance, even though the forward curve now includes only **three rate cuts** instead of five or six.  **[FITB_3380110_17]**  This is due to strong benefits from fixed-rate asset repricing, which will generate over **$350 million to $400 million** in annualized NII benefit.  **[FITB_3380110_17]**  We anticipate a modest increase in net interest margin from here, supported by these repricing benefits.  **[FITB_3380110_17]** 

2. **Deposit Costs and Sustainability**  
   **Q:** How are you keeping deposit costs low? Is it sustainable?  
   **A:** By aggressively growing deposits early last year, we've been able to keep interest-bearing deposit costs up only **1 basis point** quarter-over-quarter, compared to around **10%** for the group.  **[FITB_3380110_8]**  We did this by pulsing offers through different markets and efficiently managing interest expense. While competition may reaccelerate, overall deposit competition has softened recently.  **[FITB_3380110_8]** 

3. **Credit Migration and Charge-offs**  
   **Q:** What's driving the increase in NPAs, and are you confident in your charge-off guidance?  
   **A:** Non-performing assets increased by **$59 million** this quarter, primarily due to two commercial names in retail trade and senior living.  **[FITB_3380110_18]**  We're not seeing trends by geography or industry; issues are more episodic.  **[FITB_3380110_18]**  We remain confident in our **35 to 45 basis point** charge-off guidance for the year.  **[FITB_3380110_18]** 

4. **Macro Outlook and Share Buybacks**  
   **Q:** Has your macro outlook changed, and how does it impact buybacks?  
   **A:** Our cautious macro outlook hasn't significantly changed due to unsustainable fiscal policies and the prospect of higher rates for longer.  **[FITB_3380110_15]**  Despite this, we plan to buy back between **$300 million and $400 million** in shares in the second half of the year, supported by strong capital generation.  **[FITB_3380110_15]** 

5. **Reserve Outlook and Economic Forecast**  
   **Q:** What's the outlook for reserve building or releasing?  
   **A:** Assuming no change in the economic outlook provided by Moody's, we expect reserves to be stable or see a modest build tied to loan growth.  **[FITB_3380110_11]**  Moody's baseline scenario has improved, with no significant slowdown expected in 2024.  **[FITB_3380110_12]** 

6. **Deposit Competition**  
   **Q:** How do you view deposit competition going forward?  
   **A:** While deposit competition is a key concern, the overall liquidity environment has stabilized compared to last year.  **[FITB_3380110_24]**  Unless there's significant loan growth industry-wide, we expect competition to remain lighter, and we believe the industry will focus on maintaining profitability.  **[FITB_3380110_24]** 

7. **Southeast Expansion Strategy**  
   **Q:** Do you need higher rates to gain share in the Southeast?  
   **A:** Our growth in the Southeast is driven by household growth and momentum banking relationships, primarily with noninterest-bearing deposit products.  **[FITB_3380110_9]**  We've been able to gain share without aggressively pricing deposits, as relationships are often payments-led rather than rate-driven.  **[FITB_3380110_9]** 

8. **Middle Market Growth**  
   **Q:** Can you discuss non-demand trends and middle market growth?  
   **A:** Clients are cautious but not pessimistic; growth will come from taking market share, especially in areas where we've invested like the Southeast and Texas.  **[FITB_3380110_10]**  We expect growth in middle market C&I, benefiting from federal stimulus programs and expanded sales forces in key regions.  **[FITB_3380110_10]** 

9. **Texas Strategy**  
   **Q:** What's your strategy for expansion in Texas?  
   **A:** We have a significant presence in Texas with around **175 employees**, focusing on C&I and value-added services.  **[FITB_3380110_16]**  Currently, there's no retail banking presence, but we may consider building branches in the future, which would be a significant investment communicated in advance.  **[FITB_3380110_16]** 

10. **Preparing for Liquidity Rules**  
    **Q:** How are you preparing for new liquidity rules?  
    **A:** We're already positioned for any pending liquidity rules and won't need material changes to the balance sheet.  **[FITB_3380110_20]**  As the investment portfolio's loss position burns off, liquidity contributions will increase, allowing us to reduce cash positions over time.  **[FITB_3380110_20]** 

11. **Bank Model Evolution**  
    **Q:** How will your business model evolve amid tougher regulations?  
    **A:** We'll focus on increasing labor productivity through technology investments like cloud platforms and AI.  **[FITB_3380110_25]**  Some businesses where regional banks can't compete may be exited. We anticipate industry consolidation and will focus on markets where we can neutralize the scale advantages of larger banks.  **[FITB_3380110_25]** 

12. **Solar Loan Growth and Credit**  
    **Q:** What's the outlook for solar loan originations and credit?  
    **A:** As the **#2** financer in the residential solar market, we're seeing growth slowing due to higher rates and market conditions.  **[FITB_3380110_23]**  We expect originations to be down **30% year-over-year**, totaling around **$1.7 billion to $2 billion** this year.  **[FITB_3380110_23]**  Credit losses are performing as modeled, around **1.3%**, and we feel positive about future performance.  **[FITB_3380110_23]** 

ab44abaf40ccb98a5e9bc73cf99d6c1213b5afc65ccbf76ac92da82d4fd6e1ce

1. **Net Interest Income Outlook**  
   **Q:** Will rate cuts benefit NII, and how will deposit betas impact this?  
   **A:** Rate cuts are positive for Fifth Third's NII. With **64%** of deposits in higher beta categories—including index deposits and CDs maturing by year-end—the bank can reprice deposits lower. They only need a mid-50s to low-60s deposit beta to be neutral to liability sensitive, and they're confident they can achieve this. ** **[FITB_3393651_7]** **[FITB_3393651_11]** **[FITB_3393651_12]** **

2. **Credit Quality and Charge-offs**  
   **Q:** What's the outlook for charge-offs and credit quality?  
   **A:** Despite some episodic charge-offs this quarter, overall credit metrics remain strong. Non-performing assets (NPAs) are down **13%** quarter-over-quarter to **55 basis points**, below the 10-year average. They expect charge-offs to normalize but feel good about the portfolio, projecting **40–45 basis points** for the rest of the year. Rate cuts would further improve asset quality. ** **[FITB_3393651_13]** **[FITB_3393651_15]** **[FITB_3393651_22]** **

3. **Loan Growth Expectations**  
   **Q:** What will drive future loan growth, and what are the triggers?  
   **A:** Loan growth is expected to be about average if economic conditions improve. Rate cuts would be positive for loan demand, but management remains cautious due to broader macro concerns like fiscal deficits and treasury issuance. They're focusing on proven strategies and not stretching into unfamiliar areas. Pipelines are improving, suggesting potential growth opportunities ahead. ** **[FITB_3393651_8]** **[FITB_3393651_12]** **[FITB_3393651_20]** **

4. **Fee Income Trajectory**  
   **Q:** How is fee income expected to trend?  
   **A:** Fee income is expected to see modest growth in the third quarter, with continued performance in wealth and asset management and commercial payments. Seasonal headwinds from the mortgage business will not repeat, setting up well for growth into the fourth quarter, where additional seasonal benefits are anticipated. **[FITB_3393651_9]**

5. **Managing Liquidity and Cash Position**  
   **Q:** How are you managing your elevated cash position and liquidity?  
   **A:** The bank is maintaining high liquidity levels to deal with market uncertainty and potential regulatory changes, with an LCR of **137%**. They don't plan to extend asset duration due to the inverted yield curve, believing it doesn't make sense to do so currently. Excess cash provides confidence in liability management and interest rate risk management. ** **[FITB_3393651_17]** **[FITB_3393651_19]** **

6. **CFPB Issues and Compliance Costs**  
   **Q:** What is the impact of recent CFPB actions on expenses?  
   **A:** The CFPB issues were old matters, nearly **5** and **10** years old, identified and reported by the bank. They elected to settle to avoid further litigation costs, resulting in a one-time expense this quarter with no expected ongoing expenses. ** **[FITB_3393651_10]** **[FITB_3393651_18]** **

7. **Exposure to Commercial Real Estate**  
   **Q:** How are you managing risks in commercial real estate, specifically non-agency CMBS?  
   **A:** Fifth Third has a cautious outlook on commercial real estate and participates via structured products with credit enhancements. They have minimal exposure to single-asset, single-borrower structures (about **$150 million**), and their bonds are performing strongly with about **40%** credit enhancement and a weighted average loan-to-value of **60%**. They regularly stress-test the portfolio. **[FITB_3393651_21]**

8. **Home Equity Loan Growth**  
   **Q:** Is there an opportunity for growth in home equity lending?  
   **A:** While there has been a small uptick in home equity loans, significant growth isn't anticipated in the near term due to subdued home improvement spending. However, it's a strategic area they'd like to grow, as homeowners with low-rate mortgages may prefer to improve rather than move. **[FITB_3393651_23]**

9. **Shared National Credit Exposure**  
   **Q:** Do you have exposure to private equity or private credit in shared national credits?  
   **A:** The bank has subscription lines to highly rated private equity firms, over-collateralized by LP capital. They're not active in leverage-on-leverage lending and have minimal direct lending exposure, totaling about **$30 million**. **[FITB_3393651_14]**

10. **Yield Curve Positioning**  
    **Q:** How are you positioned for changes in the yield curve?  
    **A:** The bank is currently about **75%** sensitive to the front end of the curve. Relief on the front end through rate cuts would positively impact asset sensitivity. Even if long-term rates decline, they expect a pickup from the repricing of fixed-rate assets originated at low rates. **[FITB_3393651_16]**

91f128e17c8bf6463c2c42c28684035233ee0c2916ca7b4a467a82f088e6ddbb

1. **Impact of Yield Curve Changes on NII**  
   **Q:** How would a normal yield curve affect NII growth in 2025?  
   **A:** Bryan Preston stated that if the yield curve steepens and the inversion ends, it would significantly boost their net interest income (NII) in 2025.  **[FITB_3403067_8]**  They expect relief on liability costs and potential benefits from fixed-rate asset spreads.  **[FITB_3403067_8]**  A normal curve would also allow them to enhance economics from their securities and swap portfolios, leading to a significant expansion of net interest margin (NIM).  **[FITB_3403067_8]**  Timothy Spence added that such an environment would be very favorable for their balance sheet revenue.  **[FITB_3403067_8]** 

2. **Record NII in 2025 and Loan Growth**  
   **Q:** Can you update us on achieving record NII in 2025 and required loan growth?  
   **A:** Bryan Preston expressed confidence in generating record NII in 2025 without needing "heroic loan growth".  **[FITB_3403067_7]**  They are seeing increased activity and believe that commercial loan decreases are behind them, with strong tailwinds in consumer businesses driving loan growth.  **[FITB_3403067_7]**  While some loan growth would be helpful, the NII outcome is dependent on the environment and shape of the yield curve.  **[FITB_3403067_7]** 

3. **Loan Growth Expectations and Drivers**  
   **Q:** Why was loan growth flat despite highest production in five quarters?  
   **A:** Bryan Preston explained that loan paydowns of about **$900 million** and a **1% utilization headwind** (approximately **$800 million**) offset their loan production.  **[FITB_3403067_10]**  They do not expect these pressures to continue and have seen utilization stabilize, anticipating loan growth moving forward.  **[FITB_3403067_10]**  Earlier capital markets activity contributed to paydowns, but they expect a return to normalized levels, which should support loan growth.  **[FITB_3403067_10]** 

4. **Deposit Betas and Repricing**  
   **Q:** What's the expected cadence of deposit beta repricing over the next quarters?  
   **A:** Bryan Preston noted that achieving their target cumulative deposit beta in the high **50%** range will take about two quarters due to the maturity of certificates of deposit (CDs).  **[FITB_3403067_14]**  **75%** of their CDs, amounting to **$13 billion**, will mature between now and the end of the first quarter.  **[FITB_3403067_14]**  Retail deposit repricing lags commercial deposits due to promotional guarantee periods and CD maturities.  **[FITB_3403067_14]**  Maintaining a **150 to 200 basis points** deposit spread seems achievable, depending on curve shape and loan growth opportunities.  **[FITB_3403067_14]** 

5. **Capital Allocation and Share Buybacks**  
   **Q:** How will capital returns to shareholders be managed under new regulations?  
   **A:** Bryan Preston stated their target dividend payout ratio is **35% to 45%** in a normalized environment.  **[FITB_3403067_8]**  Share buybacks depend on capacity relative to organic growth opportunities.  **[FITB_3403067_8]**  Currently, **$200 million to $300 million** in share buybacks feels appropriate.  **[FITB_3403067_8]**  With expected loan growth next year, they might reduce buybacks to invest more in organic opportunities.  **[FITB_3403067_8]** 

6. **Competition from Non-bank Lenders**  
   **Q:** Are you seeing increased competition from private credit lenders?  
   **A:** Timothy Spence acknowledged competition at the margins, mainly in leveraged lending.  **[FITB_3403067_12]**  Private lenders are engaging in practices like payment-in-kind lending, which comprises **25% to 33%** of portfolios at major private credit shops.  **[FITB_3403067_12]**  Fifth Third avoids such practices, focusing on maintaining portfolio quality.  **[FITB_3403067_12]** 

7. **Credit Quality and Risks**  
   **Q:** What's causing NPAs to reach normalized levels, and are there credit concerns?  
   **A:** Greg Schroeck noted that non-performing assets increased due to five loans across five different industries.  **[FITB_3403067_17]**  Delinquencies remain at all-time low levels, and criticized assets decreased by **$8 million** quarter-over-quarter.  **[FITB_3403067_17]**  In consumer lending, there is some softness in auto and RV portfolios, particularly in the **2022 and 2023** vintages, but they are outperforming securitization data by **50 to 60 basis points**.  **[FITB_3403067_17]**  Overall, they are not seeing signs of credit weakening.  **[FITB_3403067_17]** 

b6aacfb764254bf61cfda607e854752ea85794bc3453a8285a0bc3822ab6574a

50d567c11b0bb72d8ba12c684f81ce17cc26469d947b1fd4ac4bb44ef1ab25b4

- **Loan growth is expected to be limited due to cautious customer sentiment and lack of robust loan demand, potentially putting pressure on earnings growth.**  **[FITB_3370492_8]**
- **The bank anticipates operating with a lower loan-to-deposit ratio in the mid-70s, down from pre-pandemic levels in the mid-80s, which may impact profitability due to less efficient use of deposits.**  **[FITB_3370492_4]**
- **Higher deposit betas in commercial and wealth segments (ranging from low to high 80%), could lead to increased deposit costs and further net interest margin compression.**  **[FITB_3370492_13]**

dc6cd632b658378c581a7274ba0f924f7a836b68da8b353ab2f60edee9538021

- **Fifth Third Bancorp anticipates improving loan growth, with pipelines looking better than 3 to 6 months ago, indicating potential for growth in the second half of the year.**  **[FITB_3393651_20]**
- **Credit quality is stabilizing, with criticized assets leveling off and no material signs of broad-based industry or geographic weakness, reducing concerns about future credit losses.**  **[FITB_3393651_22]**
- **Strategic investments in long-term secular trends, such as renewable energy financing through Dividend, position Fifth Third for future growth in key areas.**  **[FITB_3393651_18]**

e8933524520f99d432b921f96e28446f7e646b6cb97aaa87d169cd9df784d3e9

- **Strong Credit Quality with Disciplined Underwriting:** FITB has maintained excellent asset quality, especially in commercial real estate, with underwriting at below **60% loan-to-value ratios**, **90% recourse** on the portfolio, and no significant wall of maturities, leading to confidence in their marks and overall asset quality.  **[FITB_3370492_16]**
- **Positioned to Benefit from Potential Interest Rate Cuts:** The bank expects deposit costs to decrease throughout 2024, especially if rate cuts occur, which could improve net interest income and net interest margin, leveraging their ability to reprice deposits lower and benefit from fixed-rate asset repricing of about **$300 million** of annualized run rate NII improvement.  **[FITB_3370492_9]** **[FITB_3370492_7]**
- **Strategic Growth Through Market Share Gains:** FITB is gaining market share by investing in high-growth Southeast markets, expanding their middle-market relationships by **11% year-over-year**, adding nearly **100 new quality relationships** in Chicago alone, and growing deposits in the Southeast by **5%** in the fourth quarter, driving deposit growth and customer acquisition beyond regional peers.  **[FITB_3370492_8]** **[FITB_3370492_10]** **[FITB_3370492_14]**

8cdc9944dfe7a1cac714ab2c2aa8be4982abb1398fd3efb72e68a5d101768038

1. **NII Outlook and Deposit Betas**  
   **Q:** What's the NII outlook and assumed deposit betas?  
   **A:** We expect deposit betas on the way down to be similar to recent hikes, in the **60-70% range**.  **[FITB_3370492_15]**  This assumption supports our NII outlook, anticipating that as rates fall, deposit costs will decrease accordingly.  **[FITB_3370492_15]** 

2. **Capital Levels and Share Buybacks**  
   **Q:** Are you sure about share buybacks amid capital requirements?  
   **A:** We are confident in our capital levels and expect to reach a **CET1 ratio of 10.5% by mid-year**.  **[FITB_3370492_11]**  If proposed regulatory rules are eased, particularly around operational risk and credit risk RWAs, we could have additional capacity for share buybacks beyond the planned **$300-400 million**.  **[FITB_3370492_11]** 

3. **Commercial Real Estate Exposure**  
   **Q:** Why is your CRE exposure performing so well?  
   **A:** We are confident in our marks and asset quality.  **[FITB_3370492_16]**  Our disciplined client selection includes underwriting office loans at below **60% loan-to-value** with **90% recourse**.  **[FITB_3370492_16]**  Borrowers are supporting their projects, and we have evenly split maturities over the next 4-5 years, avoiding a wall of maturities.  **[FITB_3370492_16]** 

4. **Loan Demand and Growth Strategy**  
   **Q:** What's your expectation for loan demand this year?  
   **A:** Our customers are cautious but not pessimistic.  **[FITB_3370492_8]**  We don't expect a big pickup in loan demand, so growth will come from market share gains.  **[FITB_3370492_8]**  We're investing in middle market expansion, with our sales force in these areas up **20%** over a three-year period.  **[FITB_3370492_8]** 

5. **Economic Outlook Impact**  
   **Q:** How would a stronger economy affect your plans?  
   **A:** A stronger economy isn't a remote scenario.  **[FITB_3370492_9]**  If rates stay higher due to robust growth, the long end of the curve could move up, benefiting us with **$300 million** of annualized NII improvement from fixed-rate asset repricing.  **[FITB_3370492_9]** 

6. **Loan-to-Deposit Ratio Expectations**  
   **Q:** Is a 70% loan-to-deposit ratio the new normal?  
   **A:** We don't see **72%** as our long-term target.  **[FITB_3370492_13]**  Due to heightened liquidity expectations, we expect to operate in the **mid-70s** loan-to-deposit ratio over the long term.  **[FITB_3370492_13]** 

7. **Commercial DDA Behavior in Rate Cuts**  
   **Q:** How will commercial DDAs behave when rates fall?  
   **A:** We expect DDAs to stop migrating into interest-bearing accounts and begin growing as rates are cut.    Typically, we model **$500 million to $1 billion** of DDA migration per **100 basis points** of rate changes.   

8. **Increase in Consumer Loan NPLs**  
   **Q:** Why did other consumer loan NPLs increase?  
   **A:** The increase is mainly due to **Dividend Finance**.  **[FITB_3370492_15]**  We've made decisions to support borrowers experiencing delays with solar panel installations, resulting in deferments or modifications.  **[FITB_3370492_15]**  While there is some loss content, it's appropriately reserved and not expected to impact income significantly.  **[FITB_3370492_15]** 

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- **Fifth Third Bancorp (FITB) is capturing market share in its payments business by moving clients from other banks due to its superior services, including embedded payments and managed services.**  **[FITB_3380110_14]**  This has led to **one-third of new treasury management relationships being payments-led and not driven by deposit rates or credit.**  **[FITB_3380110_9]**
- **FITB expects significant net interest income (NII) improvement due to the repricing of fixed-rate assets, generating $350 million to $400 million of annualized NII benefit over the next 12 months, even in a higher rate environment.**  **[FITB_3380110_17]**  This supports a positive net interest margin (NIM) trajectory and offsets increases in deposit costs.
- **Strategic investments in growth markets, particularly in the Southeast and Texas, are driving strong household and deposit growth without the need to offer higher rates.**  **[FITB_3380110_10]** **[FITB_3380110_16]** **[FITB_3380110_9]**  In the Southeast, household growth rates are **25% year-over-year in the Research Triangle and 17-18% in Florida markets like Broward County.**  **[FITB_3380110_9]**  **Middle-market commercial and industrial (C&I) lending is strong, benefiting from federal stimulus programs, and FITB is expanding its sales force to capture market share.**  **[FITB_3380110_10]**

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- **Increased competition in the Southeast** from recovered competitors and big banks investing heavily in technology and digital services may make it tougher for Fifth Third Bancorp to expand and take market share.  **[FITB_3403067_23]**
- The company acknowledges that **a low and flat yield curve is a challenging environment for the banking system**, potentially impacting profitability.  **[FITB_3403067_21]**
- Fifth Third may be **losing lending opportunities to private credit lenders** who are willing to engage in riskier lending practices, potentially affecting loan growth.  **[FITB_3403067_12]**

79e6320398014f6b646f0954d59609798c9da696ebd4b728be288a54d6c66f77

- **High cash position could pressure margins if rates fall**: Fifth Third's cash position is **twice that of last year**, making it more sensitive to short-term interest rate declines, which could negatively impact net interest income and net interest margin.  **[FITB_3393651_17]**
- **Challenges in deploying excess liquidity due to yield curve inversion**: The bank is unable to effectively deploy its excess liquidity into longer-duration assets because the **yield curve is inverted**, limiting potential returns on investing this cash.  **[FITB_3393651_19]**
- **Concerns about macroeconomic risks impacting growth**: CEO Tim Spence expressed worries about broader macroeconomic issues such as **geopolitical conflicts**, **upcoming elections**, **fiscal deficits**, and **pressure on long-term interest rates**, which could negatively affect the bank's performance and loan growth.  **[FITB_3393651_8]**

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- **Branches in the Southeast are generating strong returns, with IRRs of 18% to 20% and break-even times of a couple of years; Fifth Third plans to accelerate investments in this proven strategy.**  **[FITB_3403067_22]**
- **A normalization of the yield curve, particularly a steepening, would be very powerful for Fifth Third's net interest income, enhancing the balance sheet portion of their revenue.**  **[FITB_3403067_8]**
- **Fifth Third maintains confidence in their earnings trajectory, enabling them to dynamically allocate capital, including share buybacks, while continuing to generate necessary capital for organic growth.**  **[FITB_3403067_13]**

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- **Solar loan originations are expected to decline by 30% year-over-year due to high interest rates and changes in net metering policies, potentially impacting Fifth Third's growth in this sector.**  **[FITB_3380110_22]**
- **Nonperforming assets increased by $59 million in the quarter, primarily in commercial loans within the retail trade and senior living sectors, indicating emerging credit stress in these areas.**  **[FITB_3380110_18]**
- **Management remains cautious about the macroeconomic outlook due to concerns about inflation, unsustainable fiscal and monetary policies, and potential adverse consequences on asset prices and credit performance, which could negatively impact the bank's future results.**  **[FITB_3380110_15]**

fd9f4208a30f92b9c5905ab5a7a043e4b7d8198805c8f68aa20b51d175af6c57

Fifth Third Bancorp (FITB)

Financials