Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Q3 2024 Earnings Presentation
52 slides from Fifth Third Bancorp's earnings presentation, Oct 18, 2024
Slide 1: Fifth Third Bancorp 3Q24 Earnings Presentation
Fifth Third Bancorp 3Q24 Earnings Presentation October 18, 2024 Refer to earnings release dated October 18, 2024 for further information. © Fifth Third Bancorp | All Rights Reserved Ó 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: 3Q24 highlights
3Q24 highlights Reported1 Adjusted1 • Strong profitability resulted in CET1 increasing to 10.75% while EPS $0.78 $0.85 executing $200 million of share repurchases and raising common dividend by 6% ROA 1.06% 1.16% • Strong fee performance driven by strategic investments ROE 11.7% 12.8% • Interest-bea
Slide 4: Driving to consistently generate top quartile results
Driving to consistently generate top quartile results Return on tangible common equity1,2 Return on assets1 Efficiency ratio1 LTM 2Q24 unless otherwise noted; Adjusted basis LTM 2Q24 unless otherwise noted; Adjusted basis LTM 2Q24 unless otherwise noted; Adjusted basis FY18 LTM FY18 LTM FY18 LTM FIT
Slide 5: Net interest income
Net interest income1 2Q24 to 3Q24 adjusted NII & NIM walk NII $ in millions; NIM change in bps NII NIM $1,445 $1,445 $1,427 $1,427 $1,393 $1,398 2Q24 $1,398 2.89% Total net interest income; $ millions Net market rate impact 4 1 Loan balances / mix 6 1 Securities portfolio / other short-term investme
Slide 6: Noninterest income
Noninterest income 3Q24 vs. 2Q24 • Adjusted noninterest income1 up $31 million, or 4% $748 $715 $732 $695 $717 $711 • Primary drivers: Total noninterest income; $ millions ‒ Commercial banking revenue (up 13%) primarily due to increases in corporate bond fees and institutional brokerage revenue ‒ Se
Slide 7: Noninterest expense
Noninterest expense 3Q24 vs. 2Q24 • Adjusted noninterest expense1 up $21 million, or 2% $1,221 $1,204 $1,244 $1,225 $1,188 $1,188 • Primary drivers: ‒ Compensation and benefits (up 4%) due to higher performance- based compensation resulting from strong fee revenue Total noninterest expense; $ millio
Slide 8: 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 % change % change $121.6 $116.9 $116.8 $77.2 $78.4 $45.3 $70.0 $44.7 $45.1 QoQ YoY QoQ YoY $20.6 $21.7 $13.0 6.48% 1% — 3.27% 3.25% 5%
Slide 9: Deposits and wholesale funding
Deposits and wholesale funding Average deposit balances Average wholesale funding balances $ in billions $ in billions $165.6 $167.2 $167.2 % change % change $5.9 $4.7 $3.5 $163.7 $24.3 QoQ YoY $159.7 $162.4 QoQ YoY $24.2 $23.4 5.59% 5.52% 3.04% 3.03% (26%) (41%) 5.24% (3%) (4%) 2.76% 1% 2% 3Q23 2Q2
Slide 10: High-quality deposit franchise
High-quality deposit franchise Deposit trend vs. peers and H8 Fifth Third continues to outpace the industry in deposit share growth1 Average total deposits indexed to 100; non-seasonally adjusted total deposits Significant locational share improvement Deposit share rankings since 2018 in key SE MSAs
Slide 11: Maintaining top quartile deposit density while expanding branch network in the Southeast
Maintaining top quartile deposit density while expanding branch network in the Southeast Deposit density market rank1 Total Top 5 Peer 1 74% 10% 13% 84% Peer 2 66% 23% 7% 89% 61% 18% 17% 79% Peer 3 57% 7% 16% 64% Peer 4 48% 19% 27% 67% Peer 5 44% 23% 28% 67% Peer 6 41% 23% 20% 64% Peer 7 36% 17% 21%
Slide 12: Credit quality overview
Credit quality overview Key metrics 3Q23 4Q23 1Q24 2Q24 3Q24 NPL ratio 0.47% 0.55% 0.61% 0.52% 0.59% NPA ratio1 0.51% 0.59% 0.64% 0.55% 0.62% 30-89 days past due as a % of portfolio loans and leases 0.26% 0.31% 0.29% 0.26% 0.24% NCO ratio 0.41% 0.32% 0.38% 0.49% 0.48% ACL ratio as a % of portfolio l
Slide 13: Allowance for credit losses
Allowance for credit losses Allocation of allowance by product 3Q24 Change in rate $ in millions % of portfolio Compared to: Allowance for loan & lease losses Amount loans & leases 2Q24 3Q23 ••Drivers $18MMofincrease $18MM in ACL is decrease Commercial and industrial loans $703 1.38% (0.01%) (0.10%)
Slide 14: Strong liquidity and capital position
Strong liquidity and capital position Capital position Common equity tier 1 ratio1 ~33 bps 10.62% ~6 bps ~3 bps 10.75% (~16 bps) (~13 bps) 2Q24 Net income Common Share RWA Other 3Q24 to common dividends repurchases Liquidity position $ in billions • Maintained full Category 1 LCR compliance during t
Slide 15: Current expectations
Current expectations 4Q24 compared to 3Q24 Avg. loans & leases stable to up 1% (including HFS) Total revenue1 up 1 – 2% (3Q24 baseline: $2.185 billion; Includes securities g/l) Net interest income1 up ~1% (3Q24 baseline: $1.427 billion) Noninterest income1 up 3 – 4% (3Q24 baseline: $748 million) Non
Slide 16: Appendix
Appendix 16 © Fifth Third Bancorp | All Rights Reserved
Slide 17: Top performing regional bank with local scale and national reach
Top performing regional bank with local scale and national reach Assets Leading position in the markets we compete in3 $214 billion Toronto office Deposit share rankings4 th 1 Ranked 11 in the U.S. 161 #3 Fifth Third footprint unchanged YoY Deposits 249 $168 billion 157 99 5 #2 Midwest #6 Southeast
Slide 18: Living our purpose guided by our vision and values
Living our purpose guided by our vision and values Our To be the One Bank people most value and trust. Ambition Our We make life a Fifth Third Better by inspiring our customers Purpose and communities to achieve financial well-being. Our We Commit to Excellence We are Creative Core Values We Act Cou
Slide 19: Sustainability priorities and metrics
Sustainability priorities and metrics Delivering our Keeping the Customer Strengthening our Promoting Inclusion Addressing Climate Commitment to at the Center Communities and Diversity Change Employees Empowering Black Futures Fifth Third Day Sustainable Operations Turnover Customer Outreach >$214MM
Slide 20: A recognized leader in sustainability among peers
A recognized leader in sustainability among peers 20 © Fifth Third Bancorp | All Rights Reserved For end note descriptions, see end note summary starting on page 49
Slide 21: Intentionally diversifying fee revenue to perform well in any environment
Intentionally diversifying fee revenue to perform well in any environment Fee contribution as a percent of revenue stands out favorably Fee revenue mix is well-diversified relative to peers LTM 3Q24 adjusted noninterest income mix2,3 LTM 3Q24 adjusted noninterest income as a percent of adjusted reve
Slide 22: Significant fee scale with strong organic growth
Significant fee scale with strong organic growth Commercial payments business Capital markets hedging business Median is the intersect Median is the intersect 6% FITB Peer 9 3% FITB Capital markets hedging revenue2as Commercial payments revenue1as 2Q24 LTM 2Q24 LTM Peer 5 Peer 4 2Q24 LTM unless othe
Slide 23: Mortgage banking results
Mortgage banking results Mortgage banking net revenue $66 Mortgage originations and margins $ in millions $57 $ in billions $54 $50 $50 Origination fees and Originations HFS $1.9 $2 gains on loan $1.6 Originations HFI $1.5 $0.6 sale $79 $79 $78 $77 $0.3 Gross $78 $1.1 $0.6 $1.0 servicing $1.2 $0.2 $
Slide 24: High quality Shared National Credit portfolio
High quality Shared National Credit portfolio Shared National Credit portfolio is well diversified $ in billions; as of 9/30/24 • Reduced balances 11% compared to Industry mix 3Q23 SNC $31.2BN • ~40% of SNC balances are investment portfolio ~27% of total loans Other Retail grade equivalent borrowers
Slide 25: CRE portfolio is well-positioned
CRE portfolio is well-positioned Comparing CRE portfolios relative to peers CRE loans1 / total loans CRE loans1 / total capital CRE net charge-off ratio2 As of 6/30/24 unless otherwise noted As of 6/30/24 unless otherwise noted 2Q24 LTM unless otherwise noted Peer 1 13% FITB 3Q24 73% FITB 3Q24 LTM (
Slide 26: Limited non-owner occupied exposure with very strong credit quality
Limited non-owner occupied exposure with very strong credit quality Non-owner occupied CRE represents <10% of total loans Office CRE portfolio stats As of 9/30/24 As of 3Q24; Non-owner occupied vs. PQ Total Bancorp loans Average loan commitment $11.7 million 4% $117BN NCOs / average loans (LTM) 0.00
Slide 27: NPL Rollforward
NPL1 Rollforward Commercial $ in millions 3Q23 4Q23 1Q24 2Q24 3Q24 Balance, beginning of period $345 $281 $326 $372 $274 Transfers to nonaccrual status 53 93 108 51 191 Transfers to accrual status — — (1) — — Transfers to held for sale (6) — (3) — (5) Loan paydowns/payoffs (39) (20) (18) (66) (47) T
Slide 28: Historical net charge-off and NPA ratios
Historical net charge-off and NPA ratios Net charge-off ratio Non-performing assets ratio2 1.00% 10 year average excluding COVID1 1.00% 10 year average excluding COVID1 0.75% 0.75% 3Q24 3Q24 0.62% 0.48% 0.50% 0.50% 0.25% 0.25% —% —% 3Q14 3Q15 3Q16 3Q17 3Q18 3Q19 3Q20 3Q21 3Q22 3Q23 3Q24 3Q14 3Q15 3Q
Slide 29: Total commercial portfolio overview
Total commercial portfolio overview Portfolio loans and leases Key statistics $ in billions Average QoQ change 3Q23 2Q24 3Q24 (1.8%) (2.8%) (1.9%) (0.8%) (0.6%) NCO ratio1 0.34% 0.45% 0.40% Period-end QoQ change 30-89 Delinquencies 0.10% 0.09% 0.07% (1.6%) (3.2%) (1.1%) (0.2%) (0.9%) 90+ Delinquenci
Slide 30: Commercial & industrial overview
Commercial & industrial overview Portfolio loans Key statistics $ in billions Average QoQ change 3Q23 2Q24 3Q24 (2.0%) (4.2%) (2.7%) (1.6%) (1.4%) NCO ratio1 0.45% 0.61% 0.55% Period-end QoQ change 30-89 Delinquencies 0.08% 0.03% 0.06% (1.9%) (4.5%) (2.0%) (0.7%) (1.8%) 90+ Delinquencies 0.01% 0.01%
Slide 31: Commercial real estate overview
Commercial real estate overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change (0.9%) 1.9% — 1.2% 1.2% NCO ratio1 0.00% 0.01% 0.00% Period-end QoQ change 30-89 Delinquencies 0.04% 0.18% 0.04% (0.5%) 1.2% 1.4% 0.6% 0.6% 90+ Delinquencies 0.00% 0.01% 0.02% $17.5 $17.3 $
Slide 32: Total consumer portfolio overview
Total consumer portfolio overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 0.53% 0.57% 0.62% (0.7%) (1.4%) (0.2%) 0.3% 0.8% 30-89 Delinquencies 0.54% 0.52% 0.52% Period-end QoQ change 90+ Delinquencies 0.06% 0.06% 0.06% (1.2%) (1.1%) 0.2% 0.5% 1.7% No
Slide 33: Residential Mortgage overview
Residential Mortgage overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 0.00% (0.01%) (0.02%) (0.7%) (1.6%) (0.9%) 0.2% 0.2% 30-89 Delinquencies 0.12% 0.15% 0.16% Period-end QoQ change 90+ Delinquencies 0.03% 0.05% 0.05% (1.2%) (1.5%) (0.2%) 0.3% 0.7%
Slide 34: Home equity overview
Home equity overview Portfolio balances Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 0.03% (0.05%) (0.02%) (1.0%) 0.2% 0.7% (0.1%) 2.3% 30-89 Delinquencies 0.72% 0.66% 0.56% Period-end QoQ change 90+ Delinquencies 0.00% 0.00% 0.00% (0.3%) 0.5% (0.8%) 2.2% 2.6% Nonperform
Slide 35: Indirect secured consumer overview
Indirect secured consumer overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 0.47% 0.46% 0.54% (3.0%) (4.2%) 0.3% 1.3% 2.0% 30-89 Delinquencies 0.89% 0.83% 0.77% Period-end QoQ change Nonperforming Loans2 0.20% 0.23% 0.31% (4.1%) (3.0%) 2.3% 0.9% 3.2%
Slide 36: Credit card overview
Credit card overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 3.25% 3.98% 3.74% 1.4% 1.2% (3.1%) (2.5%) (1.2%) 30-89 Delinquencies 1.16% 1.10% 1.17% Period-end QoQ change 90+ Delinquencies 1.10% 0.98% 1.06% (0.1%) 2.6% (6.9%) (0.2%) (1.7%) Nonperformi
Slide 37: Solar energy installation overview
Solar energy installation overview Portfolio loans Key statistics $ in billions 3Q23 2Q24 3Q24 Average QoQ change NCO ratio1 0.91% 1.25% 1.44% 16.4% 11.9% 4.5% 3.2% 1.9% 30-89 Delinquencies 0.27% 0.33% 0.42% Period-end QoQ change Nonperforming Loans2 0.83% 1.67% 1.57% 14.3% 10.2% 3.8% 2.1% 3.2% Weig
Slide 38: Balance sheet positioning
Balance sheet positioning Commercial loans1,2 Consumer loans1 Investment portfolio Long-term debt 3 $19.6BN fixed | $51.6BN variable 1,2 $39.3BN fixed | $6.2BN variable 1 $11.BN fixed | $6.1BN variable 3 • 56% allocation to bullet/ locked- • 1M based: 48% 4,7 • 1M based: 1% 5,7 out cash flow securit
Slide 39: Strong liquidity profile
Strong liquidity profile Unsecured debt maturities $ millions – excl. Retail Brokered & Institutional CDs Holding company: $5,662 • Holding Company cash as of September 30, 2024: $3.9BN • Cash on hand at Holding Company currently sufficient to satisfy all fixed obligations for ~36 months (debt matur
Slide 40: Managing rate risk against conservative outcomes
Managing rate risk against conservative outcomes Estimated NII sensitivity profile and ALCO policy limits % Change NII (FTE) ALCO policy limit 13 to 24 13 to 24 Change in interest rates (bps) 12 months months 12 months months +200 Ramp over 12 months (3.9%) (5.2%) (5.0%) (6.0%) Rate Risk models assu
Slide 41: Interest-bearing deposit mix
Interest-bearing deposit mix Stable deposit portfolio well positioned for lower rates Interest-bearing deposit mix As of 9/30/24 • Mostly low-rate and stable consumer & relationship-based deposits • Beta in falling rate environment: ~0% Low beta / low cost1 25% • Accounts with an intermediate rate 2
Slide 42: Investment portfolio composition
Investment portfolio composition Securities portfolio Investment portfolio characteristics AFS and HTM portfolio; amortized cost basis; as of 9/30/24 Amortized cost basis; as of 9/30/24 Held-to-maturity portfolio • $11.4BN portfolio • Reclassification during 1Q24 aimed to de-risk potential AOCI vola
Slide 43: Securities portfolio AOCI accretion
Securities portfolio AOCI accretion AOCI accretion1 $ in billions; 9/30/24 AFS and HTM portfolio unrealized loss, after-tax; assuming implied forward curve2 Historical AOCI accretion Projected AOCI accretion $2.5 $2.0 $1.6 $1.6 $1.6 $1.7 $1.2 $0.8 $0.3 ($1.3) ($1.7) ($2.1) ~61% ($2.5) capital accret
Slide 44: Cash flow hedges
Cash flow hedges Receive-fixed swaps1 EOP notional value of cash flow hedges ($ in billions) Forward starting Existing receive-fixed swaps4 receive-fixed swaps3 $15 $14 5 $11 $11 $8 $10 $8 $9 $3 $3 $8 $8 $8 $8 $8 $7 $6 $5 $2 $1 3Q24 4Q24 1Q25 1Q30 4Q30 2Q31 3Q31 4Q31 Actual weighted average receive
Slide 45: Preferred dividend schedule
Preferred dividend schedule Upcoming preferred dividend schedule1 4Q24 1Q25 2Q25 3Q25 $ in millions Series H ~$12 ~$11 ~$11 ~$10 Floating2 Series I ~$10 ~$9 ~$9 ~$8 Floating2 Series J ~$6 ~$6 ~$5 ~$5 Floating2 Series K ~$3 ~$3 ~$3 ~$3 Series L ~$4 ~$4 ~$4 ~$4 Class B Series A ~$3 ~$3 ~$3 ~$3 Total ~
Slide 46: 3Q24 adjustments and notable items
3Q24 adjustments and notable items Adjusted EPS of $0.851 3Q24 reported EPS of $0.78 included a negative $0.07 impact from the following notable items: • $47 million pre-tax (~$36 million after-tax2) charge related to the valuation of the Visa total return swap • $10 million pre-tax (~$8 million aft
Slide 47: 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) 2024 2024 2024 2023 2023 Net income (U.S. GAAP) (a) $573 $601 $520 $530 $660 Net income (U.S. GAAP) (annualized) (b) $2,280 $2,417 $2,0
Slide 48: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries For Three Months Ended $ and shares in millions September June March December September (unaudited) 2024 2024 2024 2023 2023 Average interest-earning assets (a) $195,836 $194,499 $195,349 $198,166 $192,216 Net interest income (U.S. GAAP) (
Slide 49: 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 47 and 48 of this presentation and the use of non-GAAP measures on pages 27-29 of t
Slide 50: End notes
Earnings presentation end notes Slide 17 end notes Note: Assets, deposits, and branches as of 9/30/24 1. Rankings as of 6/30/24 and consist of US commercial banks and exclude foreign, trust, & traditional investment banks 2. Includes MSAs with $5BN+ in deposits on a capped basis (deposits per branch
Slide 51: End notes
Earnings presentation end notes Slide 30 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
Slide 52: End notes
Earnings presentation end notes Slide 40 end notes Note: Data as of 9/30/24; actual results may vary from these simulated results due to differences between forecasted and actual balance sheet composition, timing, magnitude, and frequency of interest rate changes, as well as other changes in market