Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Goldman Sachs U.S. Financial Services Conference 2022
32 slides from Fifth Third Bancorp's conference presentation, Dec 6, 2022
Slide 1: Goldman Sachs U.S. Financial Services Conference
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Goldman Sachs U.S. Financial Services Conference Tim Spence President and Chief Executive Officer December 7, 2022
Slide 2: Forward-looking statements
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 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 Sec
Slide 3: Our purpose, vision, and core values support our commitment to sustainable value
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 3 Our purpose, vision, and core values support our commitment to generating sustainable value for stakeholders Our Vision Be the One Bank people most value and trust Our Core Values Our Purpose To improve the lives of our custo
Slide 4: Generating sustainable value through the cycle
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 4 Generating sustainable value through the cycle Expanding share in high-growth geographies, product categories, and customer segments Through the cycle discipline throughout the bank – credit, liquidity, rates, expense, and ca
Slide 5: Improved returns and profitability
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 60.5% Peer 10 Peer 9 x Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 Peer 1 17.7% Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 x Peer 1 14.0% Peer 10 Peer 9 x Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer
Slide 6: Resilient balance sheet well-positioned in uncertain economic environment
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 1.93% 0.67% 0.55% 0.54% 0.53% 0.51% 0.51% 0.46% 0.37% 0.35% 0.28% Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 x Peer 3 Peer 2 Peer 1 1.09% 1.15% 1.21% 1.31% 1.41% 1.42% 1.46% 1.63% 1.67% 1.89% 1.91% Peer 10 Peer 9 Peer 8
Slide 7: Portfolio focused on prime and super prime borrowers
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 56% 18% 22% 4% 63% 16% 18% 3% 12/31/19 7 Portfolio focused on prime and super prime borrowers 9/30/22 Consumer Loan Portfolio FICO at origination Consumer NPA % 1 0.44% 0.65% X Peer Median 0.35% 0.49% X Peer Median Consumer ear
Slide 8: Well diversified commercial portfolio favoring large borrowers
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 8 Well diversified commercial portfolio favoring large borrowers with a track record of resilience 15% 15% 13% 7%7% 7% 6% 6% 5% 5% 4% 10% Manufacturing Real estate Financial services and insurance Healthcare Business services W
Slide 9: Differentiated securities portfolio with peer-leading yields
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Securities portfolio mix 1,2 51% 12% 11% 11% 9% 5% Differentiated securities portfolio has generated peer- leading yields for 7+ years and provides stable cash flows Consistent securities yield outperformance 1 FY15 FY16 FY17 F
Slide 10: Strong deposit franchise in consumer and commercial
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Strong deposit franchise in consumer and commercial 10 Leading consumer deposit franchise – stable and granular 35% 37% 37% 37% 41% 42% 44% 49% 49% 50% 55% Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 X Peer 2 Peer
Slide 11: Next-generation branch transformation
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use • Expect to open 30 - 35 de novo locations in 2023 – Targeting to close ~25 branches in 2023 primarily in the Midwest • Key in-footprint markets of focus: • Expected breakeven of ~2.5 years • Next-gen branch design in >90% of n
Slide 12: Proprietary data analytics drive targeted marketing and digital engagement
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Value proposition Customer recommendation engine helps acquire, deepen, and retain relationships • Customer recommendation engine utilizes 200+ supervised machine learning algorithms to produce optimal consumer customer outcome
Slide 13: Growing middle market relationships to improve profitability
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 36% 15% 36% 13% Midwest Chicago Southeast CA/TX Expansion 13 Investing in talent and adding value to clients • FY22 middle market loan production expected to increase ~72% vs. FY20 (increase ~5% vs. 2021) 1 • Key highlights: •
Slide 14: Dividend Finance growth outpacing original expectations
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use $1.3B $2.3B $2.5B ~$2.6B ~$4.5B ~$5.6B 2022E 2023E 2024E Dividend Finance growth outpacing original expectations with strong return profile 14 Origination forecast significantly exceeds original expectations 1 1 See forward-loo
Slide 15: Key strategic priorities
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 15 1 Innovative, software-enabled products that simplify customers’ lives and enhance the client experience Sustained organic growth from positioning the bank to benefit from secular trends and through gaining market share Proa
Slide 16: Appendix
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Appendix 16
Slide 17: Anticipated timeline of application and platform upgrades
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 17 Anticipated timeline of application and platform upgrades Enhanced mobile app rollout Workday GL conversion FIS: CDs & ATM conversions 4Q22 2H23 4Q24 FIS: checking & savings conversions AFS: commercial loan system conversion
Slide 18: Outstanding commercial revolving lines of credit
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 18 $16 $13 $11 $11 $11 $11 $11 $13 $14 $15 $15 $15 52% 40% 35% 34% 32% 32% 31% 33% 36% 37% 37% 37% 0 2 4 6 8 10 12 14 16 18 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 11/30 Commercial utilization rate $35 $28 $25 $2
Slide 19: Diversified commercial loan portfolios
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Diversified commercial loan portfolios 19 17% 14% 12% 10% 8% 7% 7% 6% 5% 4% 4% 2% 2% 2% Metal Other Transportation equipment Chemical Machinery Food Computer & Electronic Beverage & Tobacco Plastics & Rubber Electrical Equipmen
Slide 20: Fixed and variable rate balance sheet composition
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 72% 24% 1% 3% 38% 39% 9% 10% 4% 75% 14% 7% 4% • 67% allocation to bullet/ locked- out cash flow securities • AFS yield: 2.87% 5 • Effective duration of 5.5 6 • Net unrealized pre-tax loss: $6.1BN • 99% AFS 11 $26.5BN fixed 3 |
Slide 21: Estimated NII sensitivity profile and ALCO policy limits
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 21 Estimated NII sensitivity profile and ALCO policy limits Estimated NII sensitivity at specific betas Managing rate risk against conservative outcomes Note: Data as of 09/30/22; actual results may vary from these simulated re
Slide 22: Recent non-bank acquisition - Provide
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use $0.4B $0.7B ~$1.2B 2021 2022E Recent non-bank acquisition - Provide 22 Provide • Closed acquisition of Provide on August 2, 2021 • Provide is the leading fintech in the healthcare practice finance segment • Post-acquisition, ad
Slide 23: Commercial & industrial overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use $47.8 $49.6 $52.6 $55.5 $56.6 $47.8 $51.7 $53.9 $56.1 $56.4 0 0.2 0.4 0.6 0.8 1 1.2 $0. 0 $10 .0 $20 .0 $30 .0 $40 .0 $50 .0 $60 .0 3Q21 4Q21 1Q22 2Q22 3Q22 Portfolio loans $ in billions (3.1%) 0.6% 8.0% 4.4% 4.1% Period-end Qo
Slide 24: Commercial real estate overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Commercial real estate overview Non-Owner Occupied 54% Owner Occupied 46% Multifamily 30% Home Builder 20% Industrial 9% Hospitality 8% Office 10% Retail 3% Other 20% NCO ratio 1 30-89 Delinquencies 90+ Delinquencies Nonperform
Slide 25: Residential mortgage overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Residential mortgage overview $16.2 $16.2 $16.5 $17.4 $17.6 $16.2 $16.4 $17.1 $17.6 $17.6 3Q21 4Q21 1Q22 2Q22 3Q22 2Q21 1Q22 2Q22 NCO ratio 1 30-89 Delinquencies 0.12% 0.09% 0.09% 90+ Delinquencies 0.35% 0.08% 0.05% Nonperformi
Slide 26: Home equity overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q21 1Q22 2Q22 NCO ratio 1 (0.09%) (0.07%) (0.06%) 30-89 Delinquencies 0.44% 0.64% 0.56% 90+ Delinquencies 0.02% 0.03% 0.05% Nonperforming Loans 2 1.87% 1.97% 1.84% Weighted average FICO at origination 3 762 764 765 Weighted av
Slide 27: Indirect secured consumer overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Indirect secured consumer overview $15.6 $16.3 $17.1 $17.2 $16.8 $16.0 $16.8 $17.4 $17.0 $16.6 3Q21 4Q21 1Q22 2Q22 3Q22 5.4% 6.0% 4.8% 4.8% 0.6% 2% 22% 17% 60% 2Q21 1Q22 2Q22 NCO ratio 1 0.01% 0.17% 0.13% 30-89 Delinquencies 0.
Slide 28: Credit card overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Credit card overview $1.7 $1.7 $1.7 $1.7 $1.8$1.7 $1.8 $1.7 $1.8 $1.8 3Q21 4Q21 1Q22 2Q22 3Q22 (5.8%) (1.2%) (0.5%) (2.8%) 0.8% (0.9%) (2.7%) 1.3% (4.3%) 4.3% Average Period-End 4% 29% 20% 47% 2Q21 1Q22 2Q22 NCO ratio 1 4.52% 3
Slide 29: Digital channel usage and engagement
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 249 263 3Q21 3Q22 29 1.3 1.6 3Q21 3Q22 2.76 2.92 3Q21 3Q22 +6% Year-over year growth Active digital banking users Digital sales (includes deposits, card, & loans) +23% Year-over year growth 3Q21 3Q22 37% Year-over year growth M
Slide 30: ESG and community commitments
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Addressing climate change Promoting inclusion and diversity Demonstrating our commitment to employees Strengthening our communities Keeping the customer at the center $180MM Neighborhood Investment Program in nine majority-Blac
Slide 31: Recent actions and third-party recognitions
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use Recent actions Third-party recognitions $500,000 donated for hurricane relief in Florida Through Fifth Third Foundation in addition to other assistance programs Published 3 rd ESG report Available on ir.53.com Announced 10-year
Slide 32: Non-GAAP reconciliation
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 32 Non-GAAP reconciliation Note: For specific adjustments refer to non-GAAP reconciliations in the 1Q19 and 3Q22 earnings presentations; 1 Assumes 23% tax rate Fifth Third Bancorp and Subsidiaries For the Last Twelve Months End
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