Slide 1: Fifth Third Bancorp 3Q22 Earnings Presentation
Fifth Third Bancorp 3Q22 Earnings Presentation October 20th, 2022 Refer to earnings release dated October 20th, 2022 for further information. © Fifth Third Bancorp | All Rights Reserved © Fifth Third Bancorp | All Rights Reserved
Slide 2: Cautionary statement
Cautionary statement This presentation contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3
Slide 3: 3Q22 highlights
3Q22 highlights Reported1 Adjusted1 • Generated strong revenue, and record adjusted revenue EPS $0.91 $0.93 • Compared to 3Q21, PPNR increased 18% (adjusted PPNR ROA 1.25% 1.28% increased 24%) ROE 14.9% 15.3% • Net interest income increased 12% compared to 2Q22; NIM ROTCE 21.9% 17.7% up 30 basis poi
Slide 4: Net interest income
Net interest income1 2Q22 to 3Q22 Reported NII & NIM Walk NII $ in millions; NIM change in bps NII NIM $1,502 $1,342 2Q22 $1,342 2.92% Market rate benefit 145 31 $1,192 Loan balances / mix 32 6 Total net interest income; $ millions 3.22% Securities portfolio 11 1 2.92% Higher day count 10 (1) 2.59%
Slide 5: Noninterest income
Noninterest income 3Q22 vs. 2Q22 $836 $794 • Adjusted noninterest income1 down $5 million, or 1% Total noninterest income; $ millions $732 $727 • Primary drivers: $676 $672 ‒ Other noninterest income (down 30%) reflecting lower private equity income ‒ Service charges on deposits (down 7%) reflecting
Slide 6: Noninterest expense
Noninterest expense 3Q22 vs. 2Q22 $1,172 $1,157 • Adjusted noninterest expense1 up $55 million, or 5% $1,167 $1,167 $1,112 $1,112 • Primary drivers: ‒ Compensation and benefits (up 4%) reflecting the impact of the recent minimum wage increase as well as the full quarter impact of Total noninterest e
Slide 7: Interest earning assets
Interest earning assets Average loan & lease balances Average securities1 and short-term investments $ in billions; loan & lease balances excluding HFS $ in billions $117.7 $119.6 $80 .0 % change $108.0 % change $69.3 $70 .0 $64.2 $63.5 QoQ YoY QoQ YoY $43.3 $43.9 $60 .0 $9.6 $5.8 $41.0 +3% +1% +7%
Slide 8: Core deposits and wholesale funding
Core deposits and wholesale funding Average core deposit balances Average wholesale funding balances $ in billions $ in billions % change $25 .0 $162.3 $162.2 % change $157.2 0.5 8% $81.8 $85.9 QoQ YoY $22.1 QoQ YoY $84.5 $20 .0 0.4 8% 0.41% (2%) +3% $15 .0 $15.8 0.3 8% $13.8 40% 60% 0.2 8% 2.89% $1
Slide 9: Credit quality overview
Credit quality overview Early stage delinquencies and NPAs ACL as % of portfolio loans and leases 2.2 0% 1.2 0% 0.79% 2.00% 1.91% 1.0 0% 0.60% 0.84% 1.85% 1.85% 1.80% 1.7 0% 0.8 0% 0.72% 0.62% 0.65% 0.33% 0.61% 0.52% 0.47% 0.47% 0.49%0.47% 0.46% 0.6 0% 1.2 0% 0.33% 0.4 0% 0.29% 0.33% 0.28% 0.26% 0.2
Slide 10: Allowance for credit losses
Allowance for credit losses Allocation of allowance by product 3Q22 Change in Rate $ in millions Compared to: % of portfolio Allowance for loan & lease losses Amount loans & leases 2Q22 CECL Day 1 Commercial and industrial loans 806 1.43% 0.02% 0.21% Commercial mortgage loans 239 2.18% (0.25%) 0.61%
Slide 11: Strong capital and liquidity position
Strong capital and liquidity position Regulatory capital position Common equity tier 1 ratio1 • Targeting 9.25% area CET12 at year-end ~38 bps ~2 bps 9.11% (~10 bps) 8.95% (~14 bps) Net income Common 2Q22 RWA Other 3Q22 to common dividends Liquidity position $ in billions; as of 9/30/2022 Liquidity
Slide 12: What you should expect from Fifth Third
What you should expect from Fifth Third 1 Sustained organic growth from positioning the bank to benefit from secular trends and through gaining market share Innovative, software-enabled products that simplify customers’ lives and 2 enhance the client experience Proactive balance sheet management (cr
Slide 13: Current expectations
Current expectations 4Q22 compared to 3Q22 Avg. loans & leases stable to up 1% (including HFS) Total revenue1 up ~7% (3Q22 baseline: $2.191BN; up ~6% excluding securities losses associated with legacy Includes securities g/l) venture investments Net interest income1 up ~5% (3Q22 baseline: $1.502BN)
Slide 14: Appendix
Appendix 14 © Fifth Third Bancorp | All Rights Reserved
Slide 15: Living our purpose guided by our vision and values
Living our purpose guided by our vision and values Our To improve the lives of our customers and the well-being of Purpose our communities Our Vision Be the One Bank people most value and trust Our Work as One Bank Take Accountability Core Values Be Respectful Act with Integrity Our purpose, vision,
Slide 16: Sustainability priorities and metrics
Sustainability priorities and metrics Keeping the Demonstrating our Addressing climate Promoting inclusion Strengthening our customer at the commitment to change and diversity communities center employees $12BN in sustainable financing $2.8BN accelerating racial 99% of banking centers $20/hour minim
Slide 17: A recognized leader in sustainability among peers
A recognized leader in sustainability among peers Recent actions Third-party recognitions $500,000 donated for hurricane relief in Florida Through Fifth Third Foundation in addition to other assistance programs Published 3rd ESG report Available on ir.53.com Announced 10-year $100BN Environmental &
Slide 18: Strong liquidity profile
Strong liquidity profile Unsecured debt maturities $ millions – excl. Retail Brokered & Institutional CDs $5,737 Holding company: • Holding Company cash as of September 30, 2022: $5.4BN • Cash currently sufficient to satisfy all fixed obligations in a $2,250 stressed environment for ~23 months (debt
Slide 19: Recent non-bank acquisitions
Recent non-bank acquisitions Dividend Finance Provide • Closed acquisition of Dividend Finance on May 10, 2022 • Closed acquisition of Provide on August 2, 2021 • Dividend Finance is a national tech-enabled point-of-sale finance provider • Provide is the leading fintech in the healthcare practice fi
Slide 20: Paycheck Protection Program update
Paycheck Protection Program update Average PPP loan balances Period-end PPP loan balances $ in billions $ in billions $3.1 $1.8 $2.3 $1.0 $1.3 $0.5 $0.7 $0.3 $0.4 $0.2 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 PPP interest income $ in millions $47 • Originated $7.3BN in PPP loans across all
Slide 21: GNMA forbearance loan purchase update
GNMA forbearance loan purchase update1 Average loan balances $ in billions • Third-party serviced GNMA forbearance loan purchases: $1.1 • 4Q20: $2.1BN $0.6 $0.1 • 1Q21: $0.6BN $0.3 $0.0 • 2Q21: $1.0BN 3Q22 4Q22 1Q23 2Q23 3Q23 actual • 3Q21: $0.3BN Net interest income 15. 00 • 4Q21: $0.7BN $ in milli
Slide 22: Balance sheet positioning
Balance sheet positioning Commercial loans1,2,3 Consumer loans1 Investment portfolio Long-term debt4 $26.5BN fixed 3 | $49.1BN variable 1,2 $37.1BN fixed | $7.1BN variable 1 $7.7BN fixed | $4.0BN variable4 • 67% allocation to bullet/ locked- • 1M based: 43%7, 12 • 1M based: 2%8,12 out cash flow secu
Slide 23: Managing rate risk against conservative outcomes
Managing rate risk against conservative outcomes Estimated NII sensitivity profile and ALCO policy limits Dynamic beta models assume approximately 75% - 80% % Change in NII (FTE) ALCO policy limit effective betas in our baseline NII sensitivity used in IRR 13 to 24 13 to 24 simulations.1 Change in i
Slide 24: Cash flow hedges
Cash flow hedges Cash flow hedges continue to protect NIM1 EOP notional value of cash flow hedges ($ in billions) Gross receive fixed rate of swaps: • 3Q22-4Q22: 2.35% • 1Q23-3Q23: 2.37% • 4Q23-1Q24: 2.34% • 2Q24: 2.35% • 3Q24: 2.34% • 4Q24: 2.50% 2 • 1Q25-4Q29: 3.17% $15 $15 $15 $15 $15 $15 $15 $15
Slide 25: Mortgage banking results
Mortgage banking results Mortgage banking net revenue$200 Mortgage originations and margins $ in millions $ in billions $175 $5.0 $150 $9 $4.3 $4.3 $1.2 $4.0 Origination $125 $63 Originations $1.6 $3.5 $1.3 fees and $9 $0.7 HFI $100 gains on loan $3.8 $75 $67 $1.2 $3.3 sale $71 $81 $81 $3.0 Originat
Slide 26: Future TRA payment schedule
Future TRA payment schedule Estimated potential GAAP noninterest income recognition1,2 $ in millions; pre-tax $45 $22 $11 4Q22 4Q23 4Q24 26 © Fifth Third Bancorp | All Rights Reserved For end note descriptions, see end note summary starting on page 38
Slide 27: Preferred dividend schedule
Preferred dividend schedule Upcoming preferred dividend schedule1 $ in millions 4Q22 1Q23 2Q23 3Q23 Series H2 ~$15 - ~$15 ~$12 Series I ~$8 ~$8 ~$8 ~$8 Series J ~$5 ~$6 ~$6 ~$6 Floating (3ML + 3.129%)2 Series K ~$3 ~$3 ~$3 ~$3 Series L ~$4 ~$4 ~$4 ~$4 Class B Series A ~$3 ~$3 ~$3 ~$3 Total ~$38 ~$23
Slide 28: Commercial & industrial overview
Commercial & industrial overview Portfolio loans Key statistics $ in billions Average QoQ change 3Q21 2Q22 3Q22 (2.1%) (1.7%) 3.8% (2.1%) 6.0% 3.8% 5.5% 6.0% 2.1% 5.5% NCO ratio1 0.04% 0.11% 0.24% 0.07% 0.24% 0.24% Period-end QoQ change 30-89 Delinquencies 0.15% 0.22% 0.19% 0.16% 0.22% 0.19% 0.6% (3
Slide 29: Commercial real estate overview
Commercial real estate overview Portfolio loans Key statistics $ in billions 3Q21 2Q22 3Q22 Average QoQ change NCO ratio1 (0.02%) 0.07% (0.03%) (2.8%) (2.9%) 2.0% 1.1% 1.5% Period-end QoQ change 30-89 Delinquencies 0.23% 0.07% 0.10% (2.8%) (1.3%) 3.6% (0.1%) 2.6% 90+ Delinquencies 0.01% 0.00% 0.00%
Slide 30: Residential mortgage overview
Residential mortgage overview Portfolio loans Key statistics $ in billions 2Q21 3Q21 1Q22 2Q22 2Q22 3Q22 Average QoQ change NCO ratio1 (0.02%) (0.02%) (0.02%) 2.1% 0.5% (0.2%) 2.1% 1.9% (0.2%) 5.2% 1.9% 1.5% 5.2% 30-89 Delinquencies 0.12% 0.12% 0.09% 0.09% 0.09% 0.10% Period-end QoQ change 90+ Delin
Slide 31: Home equity overview
Home equity overview Portfolio loans Key statistics $ in billions 2Q21 3Q21 1Q22 2Q22 2Q22 3Q22 Average QoQ change NCO ratio1 (0.13%) (0.09%) (0.06%) (0.07%) (0.08%) (0.06%) (5.7%) (6.7%) (5.2%) (5.7%) (4.1%) (5.2%) (2.8%) (4.1%) 1.6% (2.8%) 30-89 Delinquencies 0.54% 0.44% 0.56% 0.64% 0.55% 0.56% Pe
Slide 32: Indirect secured consumer overview
Indirect secured consumer overview Portfolio loans Key statistics $ in billions 2Q21 3Q21 1Q22 2Q22 2Q22 3Q22 Average QoQ change NCO ratio1 (0.02%) 0.01% 0.13% 0.17% 0.24% 0.13% 6.0% 5.4% 4.8% 6.0% 4.8% 4.8% 0.6% 4.8% (2.8%) 0.6% 30-89 Delinquencies 0.52% 0.45% 0.59% 0.62% 0.64% 0.65% 0.59% Period-e
Slide 33: Credit card overview
Credit card overview Portfolio loans Key statistics $ in billions 3Q21 2Q21 2Q22 1Q22 3Q22 2Q22 Average QoQ change NCO ratio1 4.52% 2.70% 3.13% 3.26% 3.26% 2.69% (1.2%) (5.8%) (0.5%) (1.2%) (2.8%) (0.5%) 0.8% (2.8%) 0.8% 3.1% Period-end QoQ change 30-89 Delinquencies 0.84% 0.97% 1.01% 0.96% 0.96% 1.
Slide 34: NPL Rollforward
NPL1 Rollforward Commercial $ in millions 3Q21 4Q21 1Q22 2Q22 3Q22 Balance, beginning of period $ 409 $ 349 $ 337 $ 323 $ 319 Transfers to nonaccrual status 47 62 54 49 91 Transfers to accrual status - (26) (2) - - Transfers to held for sale (1) (2) (4) - (19) Loan paydowns/payoffs (97) (21) (52) (1
Slide 35: 3Q22 adjustments and notable items
3Q22 adjustments and notable items Adjusted EPS of $0.931 3Q22 reported EPS of $0.91 included a negative $0.02 impact from the following notable item: • $17 million pre-tax (~$13 million after-tax2) charge related to the valuation of the Visa total return swap 35 © Fifth Third Bancorp | All Rights R
Slide 36: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries For the Three Months Ended $ and shares in millions September June March December September (unaudited) 2022 2022 2022 2021 2021 Net income (U.S. GAAP) (a) $653 $562 $494 $662 $704 Net income (U.S. GAAP) (annualized) (b) $2,591 $2,254 $2,0
Slide 37: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries For the Three Months Ended $ and shares in millions September June March December September (unaudited) 2022 2022 2022 2021 2021 Average interest-earning assets (a) $185,378 $184,406 $187,894 $187,045 $182,801 Net interest income (U.S. GAA
Slide 38: Earnings presentation end notes
Earnings presentation end notes Slide 3 end notes 1. Reported ROTCE, NIM, pre-provision net revenue, and efficiency ratio are non-GAAP measures: all adjusted figures are non-GAAP measures; see reconciliation on pages 36 and 37 of this presentation and the use of non-GAAP measures on pages 27-29 of t
Slide 39: Earnings presentation end notes
Earnings presentation end notes Slide 19 end notes 1. See forward-looking statements on page 2 of this presentation regarding forward-looking non-GAAP measures and use of non-GAAP measures on pages 27-29 of the earnings release. Slide 20 end notes 1. See forward-looking statements on page 2 of this
Slide 40: Earnings presentation end notes
Earnings presentation end notes Slide 28 end notes 1. Net losses charged-off as a percent of average portfolio loans and leases presented on an annualized basis. 2. Nonperforming portfolio loans and leases as a percent of portfolio loans and leases. 3. Total commercial portfolio line utilization. Sl