Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Barclays Global Financial Services Conference 2023
37 slides from Fifth Third Bancorp's conference presentation, Sep 12, 2023
Slide 1: Barclays Global Financial Services Conference
© Fifth Third Bancorp | All Rights Reserved © Fifth Third Bancorp | All Rights Reserved Barclays Global Financial Services Conference Tim Spence President and Chief Executive Officer September 13, 2023
Slide 2: Forward-looking statements
© Fifth Third Bancorp | All Rights Reserved 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,
Slide 3: Why Fifth Third
© Fifth Third Bancorp | All Rights Reserved Why Fifth Third Continually investing for long-term outperformance regardless of the environment Through the cycle discipline throughout the bank – liquidity/deposits, credit, rates, expenses, and capital management Focused on consistently generating top q
Slide 4: Fifth Third is well positioned relative to the industry across multiple dimensions
© Fifth Third Bancorp | All Rights Reserved Change in effective duration 3 2Q23 vs. 2Q22 Fifth Third is well positioned relative to the industry across multiple dimensions… Regulatory changes will require an evolution of bank business models to sustain returns 41 Rankings consist of US commercial ba
Slide 5: Managing the balance sheet for long-term outperformance
© Fifth Third Bancorp | All Rights Reserved Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 (6%) (4%) (2%) 0% 2% 4% 6% 8% 10% (14%) (12%) (10%) (8%) (6%) (4%) (2%) 0% 2% 4% Managing the balance sheet for long-term outperformance 5 Recent performance highlights franchise streng
Slide 6: We have grown our high-quality deposit franchise through multi-year investments
© Fifth Third Bancorp | All Rights Reserved • Chatbot (Jeanie) leverages natural language understanding and large language models to facilitate ~200K customer interactions per month We have grown our high-quality deposit franchise through multi- year investments 6 1 De novo branch openings opened si
Slide 7: Footprint is well positioned to benefit from resurgence of domestic manufacturing
© Fifth Third Bancorp | All Rights Reserved Footprint is well positioned to benefit from the resurgence of domestic manufacturing and infrastructure spending 1 Source: Wall Street Journal, Financial Times, Renewable Energy Laboratory NAATBatt Lithium-Ion Battery Supply Chain database, and https://ww
Slide 8: Disciplined expense management and productive labor force
© Fifth Third Bancorp | All Rights Reserved Retail • Branch network expansion • Ongoing Momentum Banking enhancements Treasury Management acquisitions • Big Data Healthcare • Rize / Embedded Payments (‘newline by Fifth Third’) Fintech lending platforms • Dividend & Provide investments Technology • P
Slide 9: Top tier fee contribution that is well balanced and less volatile
© Fifth Third Bancorp | All Rights Reserved Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 15% 20% 25% 30% 35% 40% Top tier fee contribution that is well balanced and less volatile Stable noninterest income accounts for higher mix of total revenue relative
Slide 10: Key takeaways: Positioned to perform well despite the environment
© Fifth Third Bancorp | All Rights Reserved ✓ Well positioned to navigate the proposed capital and liquidity regulatory changes ✓ Balanced and growing revenue streams with a resilient balance sheet profile ✓ Consistent investments while maintaining peer-leading expense discipline ✓ Multi-year track
Slide 11: Appendix
© Fifth Third Bancorp | All Rights Reserved 11 Appendix
Slide 12: #6 largest retail bank and growing in priority Southeast MSAs
© Fifth Third Bancorp | All Rights Reserved #6 largest retail bank and growing at 4x the rate of the population in priority Southeast MSAs Key Southeast MSAs Represents a FITB Southeast retail market for 10+ years 3.8% 3.2% USA SE of F 2.1% 5.7% USA SE of F Expect continued growth in the Carolinas s
Slide 13: Customer-centric, technology-led product innovation and development
© Fifth Third Bancorp | All Rights Reserved 13 Example Fifth Third Solutions: Product innovation and development: Market leadership: • #3 residential solar national market share • #2 practice finance national market share • Top 5 market share in 6 Treasury Management product categories 1 • ~1.2 mill
Slide 14: Commercial deposit franchise led by peer-leading treasury management business
© Fifth Third Bancorp | All Rights Reserved 1.4% 2.0% 2.0% 2.4% 2.4% 2.4% 2.4% 2.4% 3.8% 4.2% 4.5% 4.5% 4.8% Peer 12 Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 Peer 1 x Led by Expert AP, Expert AR, and Cash Logistics • Digitize and automate manual “order-to-cash” and “pr
Slide 15: Rize acquisition accelerates long standing embedded payments capabilities
© Fifth Third Bancorp | All Rights Reserved Rize acquisition accelerates long standing embedded payments capabilities 15 Combining over a decade of embedded payments expertise with acquisition of Rize Money to form Newline TM by Fifth Third Client list includes a broad range of category leaders • Ex
Slide 16: Capital Markets business overview
© Fifth Third Bancorp | All Rights Reserved FY15 2Q23 LTM ~$410 ~$220 Capital Markets business overview Growing fees across the Capital Markets business $ in millions Expanding Capital Markets capabilities to create value for our clients, focusing on the middle market segment 9% CAGR 26% CAGR 8% CAG
Slide 17: Wealth & Asset Management overview
© Fifth Third Bancorp | All Rights Reserved 52% 48% $10.5BN As of 6/30/23 $419 $444 $487 $520 $586 $570 $583 FY17 FY18 FY19 FY20 FY21 FY22 2Q23 Ann. $3 $8 $15 $18 $20 $23 $36 $47 $48 $48 $72 $119 $148 Peer 12 Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 X Peer 3 Peer 2 Peer 1 $6 $25 $48
Slide 18: Significantly improved credit profile
© Fifth Third Bancorp | All Rights Reserved 0.50% 0% 1% 2% 3% 4% 5% 1Q04 1Q08 4Q12 1Q20 2Q23 0.29% 0% 2% 4% 6% 8% 1Q04 1Q08 4Q12 1Q20 2Q23 0.52% 0% 1% 2% 3% 4% 5% 1Q04 1Q08 4Q12 1Q20 2Q23 0.16% 0% 4% 8% 12% 1Q04 1Q08 4Q12 1Q20 2Q23 Significantly improved credit profile Non-Performing Loans 1 Total N
Slide 19: Conservative consumer loan portfolio concentrated in super prime borrowers and homeowners
© Fifth Third Bancorp | All Rights Reserved 19 Conservative consumer loan portfolio highly concentrated in super prime borrowers and homeowners Totals may not foot due to rounding; 1 July 2023 vs. July 2020 Additional information: • ~85% of total consumer portfolio balances represented by homeowners
Slide 20: Disciplined client selection throughout commercial
© Fifth Third Bancorp | All Rights Reserved 16% 14% 13% 8%7% 7% 6% 6% 5% 4% 4% 10% Real Estate Manufacturing Financial Services & Insurance Business Services Health Care Wholesale Trade Retail Trade Accommodation & Food Communication & Information Mining Construction Other 20 Disciplined client sele
Slide 21: Lowest CRE concentration relative to peers
© Fifth Third Bancorp | All Rights Reserved 14.8% 13.8% 13.7% 8.7% 8.0% 7.5% 7.2% 6.1% 5.4% 5.1% 4.8% 4.5% 3.0% Peer 12 Peer 11 Peer 10 Peer 9 Peer 8 Peer 7 Peer 6 Peer 5 Peer 4 Peer 3 Peer 2 Peer 1 x 6.0% 4.9% 4.9% 4.5% 4.5% 3.4% 3.2% 3.2% 2.7% 2.5% 2.2% 1.6% 0.9% Peer 12 Peer 11 Peer 10 Peer 9 Pee
Slide 22: Among the lowest in the industry on Interagency CRE concentration metrics
© Fifth Third Bancorp | All Rights Reserved 59% 80% 82% 89% 95% 98% 107% 110% 130% 136% 154% 201% 208% X Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Banks <$100BN Among the lowest in the industry with respect to the Interagency CRE concentration risk management met
Slide 23: Limited office CRE exposure with strong credit quality
© Fifth Third Bancorp | All Rights Reserved 23 Office represents 1.3% of total loans Office CRE portfolio stats $ billions $ balance % of total loans Multifamily $3.1 2.5% Office 1.6 1.3 Hospitality 1.5 1.2 Retail 1.2 1.0 Industrial 1.1 0.9 Other 2.0 1.6 Total non-owner occupied CRE $10.5 8.5% As of
Slide 24: Strong liquidity and capital position
© Fifth Third Bancorp | All Rights Reserved Liquidity Sources 24 Strong liquidity and capital position • 2Q23 Loan-to-core deposit ratio of 77% • $5.1 billion in Holding Company cash as of 6/30/23, sufficient to satisfy all fixed obligations for ~24 months • For several years, we have performed: ◦ D
Slide 25: Investment portfolio composition
© Fifth Third Bancorp | All Rights Reserved Agency CMBS 53% Non-Agency CMBS 9% All Other 38% 25 Investment portfolio composition as of 6/30/23 Total securities portfolio CMBS portfolio is AAA-rated Total securities portfolio $55BN ~29% of interest earning assets Agency CMBS • $29BN portfolio • ~86%
Slide 26: Floors and receive-fixed swaps continue to protect NIM
© Fifth Third Bancorp | All Rights Reserved Cash flow hedges ($3BN @ 2.25% 1- month LIBOR strike) 2 Floors and receive-fixed swaps continue to protect NIM 1 EOP notional value of cash flow hedges ($ in billions) Actual Note: Above graph excludes CME short-dated swaps; 1 Represents forward looking st
Slide 27: Balance sheet positioning as of 6/30/23
© Fifth Third Bancorp | All Rights Reserved • 64% allocation to bullet/ locked- out cash flow securities • AFS yield: 3.04% 5 • Effective duration of 5.17 6 • Net unrealized pre-tax loss: $6.1BN • 98% AFS 11 $25.2BN fixed 3 | $51.2BN variable 1,2 Commercial loans 1,2,3 Balance sheet positioning as o
Slide 28: Total commercial portfolio overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 0.19% 0.17% 0.16% 30-89 Delinquencies 0.16% 0.17% 0.16% 90+ Delinquencies 0.01% 0.02% 0.03% Nonperforming Loans 2 0.43% 0.43% 0.45% 28 Portfolio loans and leases $ in billions Period-end QoQ change Av
Slide 29: Commercial & industrial overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 0.24% 0.21% 0.22% 30-89 Delinquencies 0.19% 0.17% 0.13% 90+ Delinquencies 0.01% 0.03% 0.01% Nonperforming Loans 2 0.48% 0.49% 0.57% 29 Portfolio loans $ in billions Period-end QoQ change Average QoQ c
Slide 30: Commercial real estate overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 0.07% 0.04% 0.00% 30-89 Delinquencies 0.07% 0.04% 0.17% 90+ Delinquencies 0.00% 0.00% 0.12% Nonperforming Loans 2 0.30% 0.29% 0.13% Commercial real estate overview CRE Mortgage Balance by occupancy CR
Slide 31: Total consumer portfolio overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 0.24% 0.42% 0.50% 30-89 Delinquencies 0.40% 0.44% 0.48% 90+ Delinquencies 0.07% 0.06% 0.05% Nonperforming Loans 2 0.50% 0.57% 0.62% Weighted average FICO at origination 3 765 765 765 Weighted average
Slide 32: Residential Mortgage overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 (0.02%) 0.00% 0.00% 30-89 Delinquencies 0.09% 0.10% 0.11% 90+ Delinquencies 0.05% 0.05% 0.04% Nonperforming Loans 2 0.60% 0.73% 0.78% Weighted average FICO at origination 3 765 764 764 Weighted averag
Slide 33: Home equity overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 (0.06%) (0.04%) 0.06% 30-89 Delinquencies 0.56% 0.58% 0.61% 90+ Delinquencies 0.05% 0.03% 0.03% Nonperforming Loans 2 1.84% 1.72% 1.56% Weighted average FICO at origination 3 765 767 767 Weighted aver
Slide 34: Indirect secured consumer overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 0.13% 0.34% 0.38% 30-89 Delinquencies 0.59% 0.67% 0.76% 90+ Delinquencies 0.05% 0.00% 0.00% Nonperforming Loans 2 0.11% 0.16% 0.14% Indirect secured consumer overview 34 Portfolio FICO score at origin
Slide 35: Credit card overview
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 2Q22 1Q23 2Q23 NCO ratio 1 3.26% 3.43% 3.61% 30-89 Delinquencies 0.96% 1.02% 1.10% 90+ Delinquencies 0.74% 1.02% 0.94% Nonperforming Loans 2 1.30% 1.65% 1.65% Credit card overview 35 Portfolio FICO score at origination 3 750+72
Slide 36: Commitment to employees, communities and customers
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 36 Addressing climate change Promoting inclusion and diversity Demonstrating our commitment to employees Strengthening our communities Keeping the customer at the center $168MM in lending, investments, and philanthropy towards
Slide 37: Actions demonstrating leadership
© Fifth Third Bancorp | All Rights Reserved Classification: Internal Use 37 Actions Demonstrating Leadership Third-party recognitions Published 2022 Sustainability report Available on ir.53.com Announced 10-year $100BN Environmental & Social Finance Target Expansion of the original $8BN renewable en
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