Fifth Third Bancorp at Bank of America Financial Services Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : <_ALACRA_META_ABSTRACT>So moving on to better things. Maybe I think Bryan, I mean we talked about this last night, I think continuing on a conversation. Give us a sense of your perspective around the operating outlook for the bank as you think about today versus this time last year, both in terms of how good or bad you're feeling about Fifth Third's outlook as well as what you're hearing from customers?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : And so you did end, I think it was one of the strongest 4Q in terms of loan growth of the banks we cover. Was there something one-off or idiosyncratic that drove that fourth quarter growth, or are you seeing that momentum continue so far this year?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : I want to come back to the Southeast expansion in a bit, but maybe also talk to us in terms of the interest rate backdrop. And I think it's widely expected the Fed today that the Fed may stay on the sidelines. What do rates staying where they are today mean? And thus the yield curve steepening further, is that more good news versus bad news?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : That's helpful. I guess part of the tailwind to the margin NII story is also deposit costs are coming down. Where are we in the journey of flexing deposit costs lower? At what point do things stabilize? And maybe potentially we can see competition pick up again.

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : Got it. I guess maybe let's talk about the Southeast expansion and the strategy there. I mean every bank you talk to is keen on investing in the Southeast, growing there. Fifth Third, obviously, you can go back 2 decades before you sort of make entrance into some of the North South Carolina markets. But remind us in terms of the last few years around what the strategy has been in the Southeast and early proof points of success.

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : Got it. And just talk to us when you think about client acquisition across the Southeast, is it consumer driven? Is it deposit promotion driven? Is it commercial bankers bringing in business? Just what are the one or two big areas, ways in which the bank is acquiring new clients?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : Maybe if we could follow up on those 3 businesses you mentioned, maybe starting with payments, you broke it out differently for investors to kind of have a better sense of what's happening? I think Tim talked about it during the earnings call, but what are you doing on the payments business? Is it a wallet share play? Or is it a client acquisition play? And what's the growth runway look like? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 6:50PM, FITB.OQ - Fifth Third Bancorp at Bank of America Financial Services Conference

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : And very quickly, remind us about the go-to-market strategy on this? Is there a dedicated sales force? Are the commercial bankers selling payments capabilities to their clients? Like how are you acquiring them across the 3 channels you mentioned?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : I guess maybe spending a few minutes on the other 2. You mentioned wealth is a big focus. Is this more in terms of mining your existing client base and getting their wealth assets to the start?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : And are there a lot of small wealth managers that you can acquire or I guess, the team lift out? Like what's the opportunity set look like there?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : I guess maybe, Bryan, if we can switch gears to expenses. So you're investing in the franchise. But talk to us around when you look at the bank today, efficiency opportunities, how you think about in the near term and over the medium term, just driving continued efficiencies, positive uplift, like what's the growth -- what's the runway on that front?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : Got it. Maybe switching to credit quality. I think your net charge-off guidance, 40 to 49 basis points. It felt quite precise by the way, the 49 basis point. But it seems like we saw some normalization in losses last year for the industry, and things are kind of leveling out at current level. Just give us a sense of when you look at credit quality, any areas of stress? Like what's the outlook? Is the risk more in terms of credits better than expected or worse than expected?

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : I guess maybe, finally, just talk about there is optimism in terms of a changing regulatory backdrop and maybe having a more balanced, predictable sort of regulatory regime. What are you expecting? What does it mean for Fifth Third from a -- tangibly like

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : Maybe, Bryan, just talk about how you're thinking about capital management in that construct. You mentioned you do think the AOCI opt-out goes away. So either CET1 or adjusted CET1 loan growth seems like things are picking up and momentum is continuing. Like how do you think about buybacks versus building capital? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 6:50PM, FITB.OQ - Fifth Third Bancorp at Bank of America Financial Services Conference

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : That's helpful. And talk to us whether or not inorganic growth, be it in from a bank M&A or nonbank M&A? Does -- would that be appealing? Does that make sense for the franchise? It sounds like you have growth is firing on all cylinders across the bank, but would love to hear how you're thinking about that.

Question: Ebrahim Poonawala - BofA Global Research (US) - Analyst : All right. With that, Bryan, thank you so much.