Slide 1: Fifth Third Bancorp 3Q23 Earnings Presentation
Fifth Third Bancorp 3Q23 Earnings Presentation October 19, 2023 Refer to earnings release dated October 19, 2023 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: 3Q23 highlights
3Q23 highlights Reported1 Adjusted1 • Strong deposit outcomes; average total deposits increased 4% YoY EPS $0.91 $0.92 • Continued to improve strong liquidity position; achieved full Category 1 ROA 1.26% 1.27% LCR compliance during the quarter and at quarter-end • Accreted over 30 bps to CET1 capita
Slide 4: Net interest income
Net interest income1 2Q23 to 3Q23 Reported NII & NIM Walk NII $ in millions; NIM change in bps NII NIM 2Q23 $1,463 3.10% Net market rate impact (33) (7) Total net interest income; $ millions Loan balances / mix 18 6 Securities portfolio 1 1 Excess cash growth - (8) Deposit/wholesale funding (15) (4)
Slide 5: Noninterest income
Noninterest income 3Q23 vs. 2Q23 • Adjusted noninterest income1 down $17 million, or 2% • Primary drivers: Total noninterest income; $ millions ‒ Other noninterest income (down 38%) primarily due to strong equity fund and direct investment income in 2Q23 ‒ Mortgage banking net revenue (down 3%) driv
Slide 6: Noninterest expense
Noninterest expense 3Q23 vs. 2Q23 • Adjusted noninterest expense1 down $31 million, or 3% • Primary drivers: ‒ Compensation and benefits expense (down 1%); FTE count down Total noninterest expense; $ millions 2% reflecting proactive actions taken throughout the bank ‒ Other noninterest expense (down
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 % change % change QoQ YoY QoQ YoY (1%) +3% +66% +125% (2%) +1% — (1%) Period-end loan & lease balances Period-end HFS loan & lease bal
Slide 8: Deposits and wholesale funding
Deposits and wholesale funding Average deposit balances Average wholesale funding balances $ in billions $ in billions % change % change $2.2 $5.4 $5.9 QoQ YoY QoQ YoY +10% +166% (5%) +10% +3% +2% CDs > $250K Core deposits Total interest bearing deposit costs Total wholesale funding Wholesale fundin
Slide 9: High-quality deposit franchise
High-quality deposit franchise 9 point outperformance vs. large commercial banks Fifth Third continues to outpace the industry in deposit share growth 2 Period-end total deposits indexed to 100; H8, non-seasonally adjusted total deposits Significant locational share improvement Deposit share ranking
Slide 10: Credit quality overview
Credit quality overview Key metrics 3Q22 4Q22 1Q23 2Q23 3Q23 NPL ratio 0.44% 0.42% 0.48% 0.52% 0.47% NPA ratio1 0.46% 0.44% 0.51% 0.54% 0.51% 30-89 days past due as a % of portfolio loans and leases 0.28% 0.30% 0.26% 0.28% 0.26% NCO ratio 0.21% 0.22% 0.26% 0.29% 0.41% ACL ratio as a % of portfolio l
Slide 11: Allowance for credit losses
Allowance for credit losses Allocation of allowance by product 3Q23 Change in rate $ in millions Compared to: % of portfolio Allowance for loan & lease losses Amount loans & leases 2Q23 CECL Day 1 • Drivers of $5MM decrease in Commercial and industrial loans $828 1.48% —% 0.26% ACL: Commercial mortg
Slide 12: Strong liquidity and capital position
Strong liquidity and capital position Capital position Common equity tier 1 ratio1 Liquidity position $ in billions • Achieved full Category 1 LCR on both 8/31/23 and 9/30/23 Liquidity Sources 6/30/23 9/30/23 • Loan-to-core deposit ratio of 74% Fed Reserves ~$11 ~$18 • $5.8 billion in Holding Compan
Slide 13: Securities portfolio AOCI accretion
Securities portfolio AOCI accretion Securities duration steadily declining Projected AOCI accretion1 $ in billions; 9/30 securities portfolio unrealized loss, after-tax Expect securities duration to Assuming implied forward curve2 continue to steadily decline1 ~65% capital accretion ~35% capital acc
Slide 14: Current expectations
Current expectations 4Q23 compared to 3Q23 Avg. loans & leases down 2 – 3% (including HFS) Total revenue1 flat to down 1% (3Q23 baseline: $2.170BN; Includes securities g/l) Net interest income1 down 1 – 2% (3Q23 baseline: $1.445BN) assumes fed funds remains at 5.50% for remainder of 2023 Noninterest
Slide 15: Appendix
Appendix 15 © Fifth Third Bancorp | All Rights Reserved
Slide 16: 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 Purpose well-being of 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 17: 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 ~$34BN in sustainable financing $3.5BN in lending, investments, 12MM customer outreach calls, $
Slide 18: A recognized leader in sustainability among peers
A recognized leader in sustainability among peers Actions Demonstrating Leadership Third-party recognitions Published 2022 Sustainability report Received highest overall rating possible on most Available on ir.53.com recent Community Reinvestment Act performance Announced 10-year $100BN Environmenta
Slide 19: Strong liquidity profile
Strong liquidity profile Unsecured debt maturities $ millions – excl. Retail Brokered & Institutional CDs Holding company: • Holding Company cash as of September 30, 2023: $5.8BN • Cash on hand at Holding Company currently sufficient to satisfy all fixed obligations for ~29 months (debt maturities,
Slide 20: Balance sheet positioning
Balance sheet positioning Commercial loans1,2 Consumer loans1 Investment portfolio Long-term debt 3 $25.4BN fixed | $49.7BN variable 1,2 $38.7BN fixed | $6.3BN variable 1 $8.8BN fixed | $6BN variable 3 • 63% allocation to bullet/ locked-out • 1M based: 43% 6,11 • 1M based: 1% 7,11 • 1M based: 0% 8 c
Slide 21: Limited office CRE exposure with strong credit quality
Limited office CRE exposure with strong credit quality Office represents 1.2% of total loans Office CRE portfolio stats As of 9/30/23; CRE is non-owner occupied As of 3Q23; Non-owner occupied vs. PQ Total Bancorp loans Average loan commitment $9.7 million — $121BN NCOs / average loans (LTM) 0.00% 0.
Slide 22: 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 9/30/23 Auto manufacturing sub-sector • Limited exposure to auto manufacturing As a % of sub-sector total loans 29% 2% <2% • Re
Slide 23: Investment portfolio composition
Investment portfolio composition Total securities portfolio CMBS portfolio is AAA-rated AFS portfolio; amortized cost basis; as of 9/30/23 Agency CMBS • $29BN portfolio • ~86% in Fannie/Freddie deals risk weighted at 20% and remaining ~14% are GNMA and risk weighted at 0% • Same financial backing as
Slide 24: Managing rate risk against conservative outcomes
Managing rate risk against conservative outcomes Estimated NII sensitivity profile and ALCO policy limits % Change NII (FTE) ALCO policy limit 13 to 24 13 to 24 Change in interest rates (bps) 12 months months 12 months months +200 Ramp over 12 months (3.3%) (4.7%) (4.0%) (6.0%) Rate Risk models assu
Slide 25: Cash flow hedges
Cash flow hedges Floors and receive-fixed swaps1 EOP notional value of cash flow hedges ($ in billions) Forward starting Floors Existing receive-fixed swaps4 ($3BN @ 2.25% 1- receive-fixed swaps3 month LIBOR strike)2 5 Actual weighted average receive fixed rate swaps 2.37% 2.34% 2.34% 2.35% 2.34% 2.
Slide 26: Mortgage banking results
Mortgage banking results Mortgage banking net revenue Mortgage originations and margins $ in millions $ in billions Rate lock margin 0.95% 0.74% 1.05% 1.52% 1.45% Gain-on-sale margin 0.80% 0.86% 1.21% 1.71% 1.82% Rate lock margin represents gains recorded associated with salable rate locks divided b
Slide 27: Future TRA payment schedule
Future TRA payment schedule Estimated potential GAAP noninterest income recognition1,2 $ in millions; pre-tax 27 © Fifth Third Bancorp | All Rights Reserved For end note descriptions, see end note summary starting on page 41
Slide 28: Preferred dividend schedule
Preferred dividend schedule Upcoming preferred dividend schedule1 4Q23 1Q24 2Q24 3Q24 $ in millions Series H ~$13 ~$13 ~$13 ~$13 Floating2 Series I ~$7 ~$11 ~$11 ~$11 Floating2 Series J ~$7 ~$7 ~$7 ~$7 Floating2 Series K ~$3 ~$3 ~$3 ~$3 Series L ~$4 ~$4 ~$4 ~$4 Class B Series A ~$3 ~$3 ~$3 ~$3 Total
Slide 29: Total commercial portfolio overview
Total commercial portfolio overview Portfolio loans and leases Key statistics $ in billions Average QoQ change 3Q22 2Q23 3Q23 1.9% 1.4% 0.8% 0.4% (1.8%) NCO ratio1 0.17% 0.16% 0.34% Period-end QoQ change 30-89 Delinquencies 0.19% 0.16% 0.10% 1.0% 0.8% 1.1% (1.1%) (1.6%) 90+ Delinquencies 0.03% 0.03%
Slide 30: Commercial & industrial overview
Commercial & industrial overview Portfolio loans Key statistics $ in billions Average QoQ change 3Q22 2Q23 3Q23 2.1% 1.8% 0.9% — (2.0%) NCO ratio1 0.24% 0.22% 0.45% Period-end QoQ change 30-89 Delinquencies 0.22% 0.13% 0.08% 0.6% 1.4% 0.9% (1.4%) (1.9%) 90+ Delinquencies 0.03% 0.01% 0.01% Nonperform
Slide 31: Commercial real estate overview
Commercial real estate overview Portfolio loans Key statistics $ in billions Average QoQ change 3Q22 2Q23 3Q23 1.5% 0.8% 1.1% 1.7% (0.9%) NCO ratio1 (0.03%) 0.00% 0.00% Period-end QoQ change 30-89 Delinquencies 0.10% 0.17% 0.04% 2.6% (0.4%) 2.0% 0.1% (0.5%) 90+ Delinquencies 0.00% 0.12% 0.00% Nonper
Slide 32: Total consumer portfolio overview
Total consumer portfolio overview Portfolio loans Key statistics $ in billions 3Q22 2Q23 3Q23 Average QoQ change NCO ratio1 0.28% 0.50% 0.53% 1.3% 1.5% 1.9% 0.5% (0.7%) 30-89 Delinquencies 0.43% 0.48% 0.54% Period-end QoQ change 90+ Delinquencies 0.07% 0.05% 0.06% 1.0% 2.0% 1.2% (0.2%) (1.2%) Nonper
Slide 33: Residential mortgage overview
Residential mortgage overview Portfolio loans Key statistics $ in billions 3Q22 2Q23 3Q23 Average QoQ change NCO ratio1 (0.02%) 0.00% 0.00% 1.5% (0.2%) — (0.4%) (0.7%) 30-89 Delinquencies 0.10% 0.11% 0.12% Period-end QoQ change 90+ Delinquencies 0.04% 0.04% 0.03% 0.2% 0.2% (0.1%) (0.6%) (1.2%) Nonpe
Slide 34: Home equity overview
Home equity overview Portfolio balances Key statistics $ in billions 3Q22 2Q23 3Q23 Average QoQ change NCO ratio1 (0.08%) 0.06% 0.03% 1.6% 1.7% (0.5%) (1.7%) (1.0%) 30-89 Delinquencies 0.55% 0.61% 0.72% Period-end QoQ change 90+ Delinquencies 0.03% 0.03% 0.00% 2.4% 1.0% (2.0%) (1.2%) (0.3%) Nonperfo
Slide 35: Indirect secured consumer overview
Indirect secured consumer overview Portfolio loans Key statistics $ in billions 3Q22 2Q23 3Q23 Average QoQ change NCO ratio1 0.24% 0.38% 0.47% (2.8%) (1.3%) 0.4% (1.9%) (3.0%) 30-89 Delinquencies 0.65% 0.76% 0.89% Period-end QoQ change 90+ Delinquencies 0.06% 0.00% 0.00% (2.2%) (0.6%) (0.4%) (2.3%)
Slide 36: Credit card overview
Credit card overview Portfolio loans Key statistics $ in billions 3Q22 2Q23 3Q23 Average QoQ change NCO ratio1 2.69% 3.61% 3.25% 3.1% 2.2% (0.8%) 0.2% 1.4% 30-89 Delinquencies 1.02% 1.10% 1.16% Period-end QoQ change 90+ Delinquencies 0.79% 0.94% 1.10% 0.4% 5.9% (6.0%) 3.2% (0.1%) Nonperforming Loans
Slide 37: NPL Rollforward
NPL1 Rollforward Commercial $ in millions 3Q22 4Q22 1Q23 2Q23 3Q23 Balance, beginning of period $319 $298 $263 $334 $345 Transfers to nonaccrual status 91 68 121 185 53 Transfers to accrual status — (5) (1) (58) — Transfers to held for sale (19) — — (4) (6) Loan paydowns/payoffs (48) (63) (22) (77)
Slide 38: 3Q23 notable item
3Q23 notable item Adjusted EPS of $0.921 3Q23 reported EPS of $0.91 included a negative $0.01 impact from the following notable item: • $10 million pre-tax (~$8 million after-tax2) charge related to the valuation of the Visa total return swap 38 © Fifth Third Bancorp | All Rights Reserved For end no
Slide 39: Non-GAAP reconciliation
Non-GAAP reconciliation Fifth Third Bancorp and Subsidaries For the Three Months Ended $ and shares in millions September June March December September (unaudited) 2023 2023 2023 2022 2022 Net income (U.S. GAAP) (a) $660 $601 $558 $737 $653 Net income (U.S. GAAP) (annualized) (b) $2,618 $2,411 $2,26
Slide 40: 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) 2023 2023 2023 2022 2022 Average interest-earning assets (a) $192,216 $189,060 $187,407 $187,640 $185,378 Net interest income (U.S. GAAP) (
Slide 41: 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 39 and 40 of this presentation and the use of non-GAAP measures on pages 27-29 of t
Slide 42: Earnings presentation end notes
Earnings presentation end notes Slide 17 end notes Data is for fiscal year 2022, unless otherwise noted. 1. Data is through 9/30/2023 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 Bla
Slide 43: Earnings presentation end notes
Earnings presentation end notes Slide 27 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 44: Earnings presentation end notes
Earnings presentation end notes Slide 36 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