Slide 1: Fifth Third Bancorp 4Q23 Earnings Presentation
Fifth Third Bancorp 4Q23 Earnings Presentation January 19, 2024 Refer to earnings release dated January 19, 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: 4Q23 highlights
4Q23 highlights Reported1 Adjusted1 • Accreted 49 bps of CET1 capital EPS $0.72 $0.99 • Strong deposit outcomes; average total deposits increased 5% YoY ROA 0.98% 1.33% • Continued to improve strong liquidity position; maintained full Category 1 LCR compliance during the quarter ROE 12.9% 17.9% • NC
Slide 4: Net interest income
Net interest income1 $1,582 3Q23 to 4Q23 Reported NII & NIM walk NII $ in millions; NIM change in bps NII NIM $1,445 $1,423 3Q23 $1,445 2.98% 3.35% Net market rate impact (34) (7) Total net interest income; $ millions 2.98% 2.85% Loan balances / mix 2 5 Deposit/wholesale funding 6 1 balances / mix E
Slide 5: Noninterest income
Noninterest income 4Q23 vs. 3Q23 • Adjusted noninterest income1 up $19 million, or 3% $777 $735 $744 $751 $732 • Primary drivers: $715 Total noninterest income; $ millions ‒ Commercial banking revenue (up 6%) driven by higher institutional brokerage revenue, business lending fees, and corporate bond
Slide 6: Noninterest expense
Noninterest expense $1,455 4Q23 vs. 3Q23 • Adjusted noninterest expense1 up $23 million, or 2% $1,218 $1,218 $1,188 $1,188 $1,211 • Primary drivers: ‒ Compensation and benefits (up 4%) driven by the impact of NQDC mark-to-market Total noninterest expense; $ millions ‒ Other noninterest expense (up 2
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 $121.4 $121.6 $118.9 % change $78.9 % change QoQ YoY $70.0 QoQ YoY $64.8 $44.5 $45.3 $21.5 $44.6 $6.3 $13.0 (1%) — +66% +242% 6.18% 6.
Slide 8: Deposits and wholesale funding
Deposits and wholesale funding Average deposit balances Average wholesale funding balances $ in billions $ in billions $165.6 $169.4 $161.1 $5.7 % change % change $3.6 $5.9 $26.1 QoQ YoY QoQ YoY $23.4 $24.3 3.00% 2.76% (5%) +59% 5.39% 5.24% +8% +11% $157.5 $159.7 $163.8 3.83% 1.12% +3% +4% 4Q22 3Q23
Slide 9: High-quality deposit franchise
High-quality deposit franchise 8 point outperformance vs. large commercial banks Fifth Third continues to outpace the industry in deposit share growth2 Average total deposits indexed to 100; H8, non-seasonally adjusted total deposits Significant locational share Deposit share rankings improvement si
Slide 10: Credit quality overview
Credit quality overview Key metrics 4Q22 1Q23 2Q23 3Q23 4Q23 NPL ratio 0.42% 0.48% 0.52% 0.47% 0.55% NPA ratio1 0.44% 0.51% 0.54% 0.51% 0.59% 30-89 days past due as a % of portfolio loans and leases 0.30% 0.26% 0.28% 0.26% 0.31% NCO ratio 0.22% 0.26% 0.29% 0.41% 0.32% ACL ratio as a % of portfolio l
Slide 11: Allowance for credit losses
Allowance for credit losses Allocation of allowance by product 4Q23 Change in rate $ in millions % of portfolio Compared to: Allowance for loan & lease losses Amount loans & leases 3Q23 4Q22 • Drivers of $41MM decrease Commercial and industrial loans $767 1.44% (0.04%) 0.08% in ACL: Commercial mortg
Slide 12: Strong liquidity and capital position
Strong liquidity and capital position Capital position Common equity tier 1 ratio1 excludes the impact of FDIC special assessment ~31 bps ~41 bps ~3 bps 10.29% (~15 bps) 9.80% (~11 bps) 3Q23 Net income RWA Common FDIC Other 4Q23 to common dividends special assessment Liquidity position $ in billions
Slide 13: Securities portfolio AOCI accretion
Securities portfolio AOCI accretion Projected AOCI accretion1 $ in billions; 12/31 securities portfolio unrealized loss, after-tax Assuming implied forward curve2 Assuming static rates $2.7 $2.3 $2.4 $1.8 $2.0 $1.6 $1.3 $0.8 $1.1 $0.5 ($1.4) ($1.8) ($1.7) ($2.3) ($2.1) ~66% ($2.5) ($2.8) ~59% ($3.3)
Slide 14: Current expectations: FY 2024 vs FY 2023
Current expectations FY 2024 compared to FY 2023 Avg. loans & leases down ~2% (including HFS) Total revenue1 down 1 – 2% (FY23 baseline: $8.826BN; Includes securities g/l) Net interest income1 down 2 – 4% (FY23 baseline: $5.852BN) assumes 12/31/24 Fed funds rate of 4.00% Noninterest income1 up 1 – 2
Slide 15: Current expectations: 1Q24 vs 4Q23
Current expectations 1Q24 compared to 4Q23 Avg. loans & leases down ~1% (including HFS) Total revenue1 down 4 – 5% (4Q23 baseline: $2.189BN; down 3 - 4% excluding TRA impact Includes securities g/l) Net interest income1 down 2 – 3% (4Q23 baseline: $1.423BN) assumes 3/31/24 Fed funds rate of 5.25% No
Slide 16: Appendix
Appendix 16 © Fifth Third Bancorp | All Rights Reserved
Slide 17: 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 our Purpose 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 18: Sustainability priorities and metrics
Sustainability priorities and metrics Demonstrating our Addressing climate Promoting inclusion Keeping the customer Strengthening our commitment to change and diversity at the center communities employees >$36BN in sustainable financing $3.7BN in lending, investments, 12MM customer outreach calls, $
Slide 19: A recognized leader in sustainability among peers
A recognized leader in sustainability among peers Actions Demonstrating Leadership Third-party recognitions Published 2022 Sustainability report Available on ir.53.com Received highest overall rating possible on most recent Announced 10-year $100BN Environmental & Social Finance Target "OUTSTANDING"
Slide 20: Strong liquidity profile
Strong liquidity profile Unsecured debt maturities $ millions – excl. retail brokered & institutional CDs • Holding company: $3,912 ‒ Holding Company cash as of December 31, 2023: $6.3BN $2,500 ‒ Cash on hand at Holding Company currently sufficient to $2,250 $2,050 $1,850 satisfy all fixed obligatio
Slide 21: Balance sheet positioning
Balance sheet positioning Commercial loans1,2 Consumer loans1 Investment portfolio Long-term debt 3 $20.6BN fixed | $52.2BN variable 1,2 $38.2BN fixed | $6.2BN variable 1 $10.3BN fixed | $6BN variable 3 7,10 • 61% allocation to bullet/ locked- • 1M based: 49% 6,10 • 1M based: 1% • SOFR based: 37% ou
Slide 22: 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 12/31/23 As of 4Q23; Non-owner occupied vs. PQ Total Bancorp loans Average loan commitment $10.5 million 8% $118BN NCOs / average loans (LTM) 0.0
Slide 23: Continued strong credit quality within portfolios of interest
Continued strong credit quality within portfolios of interest High quality Shared National Credit portfolio with limited exposure to leveraged lending1 $ in billions; as of 12/31/23 $32.9 $2.5 $2.0 Shared National Credits portfolio Leveraged lending portfolio Both SNC & leveraged lending As a % of t
Slide 24: Investment portfolio composition
Investment portfolio composition Total securities portfolio CMBS portfolio is AAA-rated AFS portfolio; amortized cost basis; as of 12/31/23 Agency CMBS • $29BN portfolio • ~86% in Fannie/Freddie deals risk weighted at 20% and remaining ~14% are GNMA and risk weighted at 0% • Same financial backing a
Slide 25: Managing rate risk against conservative outcomes
Managing rate risk against conservative outcomes Estimated NII sensitivity profile and ALCO policy limits % Change NII (FTE) ALCO policy limit Rate Risk models assume ~75% effective up betas and ~65% 13 to 24 13 to 24 down betas in our baseline NII sensitivity used in IRR Change in interest rates (b
Slide 26: Cash flow hedges
Cash flow hedges Floors and receive-fixed swaps1 EOP notional value of cash flow hedges ($ in billions) Forward starting Floors Existing receive-fixed swaps4 ($3BN @ 2.25% 1- receive-fixed swaps3 Terminated $4BN of month LIBOR strike)2 CRE cash flow hedges in 4Q23 5 $15 $14 $11 $11 $11 $11 $11 $10 $
Slide 27: Mortgage banking results
Mortgage banking results Mortgage banking$63 net revenue $69 $66 Mortgage originations and margins $59 $57 $ in millions $ in billions Origination fees and Originations HFS $2.3 $3 $2 $2 gains on loan Originations HFI $0.4 sale $1.7 $79 $83 $80 $79 $79 $1.9 $1.5 Gross $1.4 $0.5 $0.3 servicing $0.3 $
Slide 28: Future TRA payment schedule
Future TRA payment schedule Estimated potential GAAP noninterest income recognition1,2 $ in millions; pre-tax $22 $10 4Q23 4Q24 Actual 28 © Fifth Third Bancorp | All Rights Reserved For end note descriptions, see end note summary starting on page 42
Slide 29: Preferred dividend schedule
Preferred dividend schedule Upcoming preferred dividend schedule1 1Q24 2Q24 3Q24 4Q24 $ in millions Series H ~$13 ~$12 ~$12 ~$11 Floating2 Series I ~$11 ~$10 ~$10 ~$9 Floating2 Series J ~$7 ~$6 ~$6 ~$6 Floating2 Series K ~$3 ~$3 ~$3 ~$3 Series L ~$4 ~$4 ~$4 ~$4 Class B Series A ~$3 ~$3 ~$3 ~$3 Total
Slide 30: Total commercial portfolio overview
Total commercial portfolio overview Portfolio loans and leases Key statistics $ in billions Average QoQ change 4Q22 3Q23 4Q23 1.4% 0.8% 0.4% (1.8%) (2.8%) NCO ratio1 0.13% 0.34% 0.13% Period-end QoQ change 30-89 Delinquencies 0.14% 0.10% 0.11% 0.8% 1.1% (1.1%) (1.6%) (3.2%) 90+ Delinquencies 0.02% 0
Slide 31: Commercial & industrial overview
Commercial & industrial overview Portfolio loans Key statistics $ in billions Average QoQ change 4Q22 3Q23 4Q23 1.8% 0.9% — (2.0%) (4.2%) NCO ratio1 0.14% 0.45% 0.20% Period-end QoQ change 30-89 Delinquencies 0.14% 0.08% 0.09% 1.4% 0.9% (1.4%) (1.9%) (4.5%) 90+ Delinquencies 0.02% 0.01% 0.02% $57.6
Slide 32: Commercial real estate overview
Commercial real estate overview Portfolio loans Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change 0.8% 1.1% 1.7% (0.9%) 1.9% NCO ratio1 0.00% 0.00% (0.07%) Period-end QoQ change 30-89 Delinquencies 0.16% 0.04% 0.09% (0.4%) 2.0% 0.1% (0.5%) 1.2% 90+ Delinquencies 0.00% 0.00% 0.00% $16.6
Slide 33: Total consumer portfolio overview
Total consumer portfolio overview Portfolio loans Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change NCO ratio1 0.38% 0.53% 0.64% 1.5% 1.9% 0.5% (0.7%) (1.4%) 30-89 Delinquencies 0.57% 0.54% 0.63% Period-end QoQ change 90+ Delinquencies 0.06% 0.06% 0.06% 2.0% 1.2% (0.2%) (1.2%) (1.1%) No
Slide 34: Residential mortgage overview
Residential mortgage overview Portfolio loans Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change NCO ratio1 0.01% 0.00% (0.01%) (0.2%) — (0.4%) (0.7%) (1.6%) 30-89 Delinquencies 0.17% 0.12% 0.18% Period-end QoQ change 90+ Delinquencies 0.04% 0.03% 0.04% 0.2% (0.1%) (0.6%) (1.2%) (1.5%) N
Slide 35: Home equity overview
Home equity overview Portfolio balances Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change NCO ratio1 0.02% 0.03% 0.05% 1.7% (0.5%) (1.7%) (1.0%) 0.2% 30-89 Delinquencies 0.74% 0.72% 0.72% Period-end QoQ change 90+ Delinquencies 0.02% 0.00% 0.00% 1.0% (2.0%) (1.2%) (0.3%) 0.5% Nonperform
Slide 36: Indirect secured consumer overview
Indirect secured consumer overview Portfolio loans Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change NCO ratio1 0.32% 0.47% 0.64% (1.3%) 0.4% (1.9%) (3.0%) (4.2%) 30-89 Delinquencies 0.86% 0.89% 1.00% Period-end QoQ change 90+ Delinquencies 0.00% 0.00% 0.00% (0.6%) (0.4%) (2.3%) (4.1%)
Slide 37: Credit card overview
Credit card overview Portfolio loans Key statistics $ in billions 4Q22 3Q23 4Q23 Average QoQ change NCO ratio1 2.85% 3.25% 3.90% 2.2% (0.8%) 0.2% 1.4% 1.2% 30-89 Delinquencies 1.12% 1.16% 1.13% Period-end QoQ change 90+ Delinquencies 0.96% 1.10% 1.13% 5.9% (6.0%) 3.2% (0.1%) 2.6% Nonperforming Loans
Slide 38: NPL Rollforward
NPL1 Rollforward Commercial $ in millions 4Q22 1Q23 2Q23 3Q23 4Q23 Balance, beginning of period $298 $263 $334 $345 $281 Transfers to nonaccrual status 68 121 185 53 93 Transfers to accrual status (5) (1) (58) — — Transfers to held for sale — — (4) (6) — Loan paydowns/payoffs (63) (22) (77) (39) (20
Slide 39: 4Q23 notable items
4Q23 notable items Adjusted EPS of $0.991 4Q23 reported EPS of $0.72 included a negative $0.27 impact from the following notable items: • $224 million pre-tax (~$172 million after-tax2) charge related to the FDIC special assessment • $22 million pre-tax (~$17 million after-tax2) charge related to th
Slide 40: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidaries For the Three Months Ended For the Year Ended $ and shares in millions December September June March December (unaudited) 2023 2023 2023 2023 2022 2023 Net income (U.S. GAAP) (a) $530 $660 $601 $558 $737 $2,349 Net income (U.S. GAAP) (annua
Slide 41: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries For Three Months Ended For the Year Ended $ and shares in millions December September June March December (unaudited) 2023 2023 2023 2023 2022 2023 Average interest-earning assets (a) $198,166 $192,216 $189,060 $187,407 $187,640 $191,743 N
Slide 42: 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 40 and 41 of this presentation and the use of non-GAAP measures on pages 27-29 of t
Slide 43: Earnings presentation end notes
Earnings presentation end notes Slide 18 end notes Data is for fiscal year 2022, unless otherwise noted. 1. Data is through 12/31/2023 2. Three-year $2.8BN commitment to Accelerate Racial Equity, Equality and Inclusion initiative timeframe is from 1/1/21 - 12/31/23 3. Three-year $180MM Empowering Bl
Slide 44: Earnings presentation end notes
Earnings presentation end notes Slide 28 end notes 1. Assumes FIS will have sufficient taxable income to utilize TRA related deductions and have a marginal tax rate of 25%. 2. Represents forward looking statement, please refer to page 2 of this presentation regarding forward-looking non-GAAP measure
Slide 45: Earnings presentation end notes
Earnings presentation end notes Slide 37 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. FICO distributions at origination exclude ~$80