Fifth Third Bancorp at Morgan Stanley US Financials, Payments & CRE Conference Transcript

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

Question: Manan Gosalia - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So Bryan, I wanted to start off with your Southeast expansion strategy. I know Fifth Third was one of the early movers into the Southeast and now you're accelerating your build from 25 branches a year to 50%. Give us a great update in November. So I thought it would be a great time for you to give us a quick update on your progress there.

Question: Manan Gosalia - Morgan Stanley - Analyst : So can you talk a little bit about the competitive landscape in the -- over the past couple of years, several of your competitors have also leaned in there. Can you talk a little bit about the competitor landscape and how Fifth Third is navigating there?

Question: Manan Gosalia - Morgan Stanley - Analyst : So when you build a branch in a market in the Southeast, can you talk a little bit about your go-to-market strategy and what you do the effectively take share and what you have been doing over the past three years?

Question: Manan Gosalia - Morgan Stanley - Analyst : So talking a little bit more about that coordination because it's not just deposits, right? It's also the commercial bank, it's also wealth management. Can you give us a little color there?

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. Bryan, before we move into some near-term stuff, I wanted to ask on another topic, which is Fifth Third crypto strategy. There's been some press recently on the bank exploring more ways to offer services for crypto customers using stable coins. Can you elaborate on that for us and talk about what Fifth Third plans are for the next few years?

Question: Manan Gosalia - Morgan Stanley - Analyst : And you've been looking at this for a while. This is not new. It's just that the regulations or the rules have been made more clear.

Question: Manan Gosalia - Morgan Stanley - Analyst : Perfect. So maybe pivoting over to near-term stuff. On the environment, Tim gave a great overview at earnings and what you're seeing from both commercial and consumer clients. Can you give us an update on the trends you've been seeing more recently?

Question: Manan Gosalia - Morgan Stanley - Analyst : So that's interesting. So you're saying that -- on the inventory side, corporates are willing to let the inventories move lower, but you're still seeing utilization rates to be fairly stable that points to a lot of core demand.

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. And then with pipeline is picking up again, it feels like you're a lot more comfortable around loan growth.

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. So as you think about your loan growth for 2025, are you starting to be a little bit more optimistic than what you guided to maybe a little bit a while back in April?

Question: Manan Gosalia - Morgan Stanley - Analyst : Fair enough. You also put out a deck this morning, you reiterated the second quarter guide. Can you unpack that for us a little bit?

Question: Manan Gosalia - Morgan Stanley - Analyst : So higher volatility in June would be better for fees lower volatility would be?

Question: Manan Gosalia - Morgan Stanley - Analyst : All right. Perfect. Maybe digging into loan growth a little bit. Fifth Third has seen some nice C&I growth over the past couple of quarters. You've seen strong middle market growth. You spoke about some of the trends on inventories and that front loading has gone away. Can you talk about the other side, on the consumer side, what are you seeing on auto? What are you seeing in the other parts of the consumer book? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 11:30AM, FITB.OQ - Fifth Third Bancorp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Manan Gosalia - Morgan Stanley - Analyst : And even as you mentioned earlier that corporates would have to pass on some of the price increases from tariffs to the consumer. So the consumer still looks good and do you think still able to absorb the price increases?

Question: Manan Gosalia - Morgan Stanley - Analyst : All right. Perfect. And then on another part of the loan portfolio, there has been a fair amount of competition from private credit. Can you talk about how Fifth Third is set up to service private credit, which areas do you partner with them? Which areas do you compete with them and how that's going?

Question: Manan Gosalia - Morgan Stanley - Analyst : So you keep the fee relationship, you keep the deposit relationship. Got it. Maybe pivoting over to deposits then. Can you update us on some of the deposit trends you're seeing in the second quarter?

Question: Manan Gosalia - Morgan Stanley - Analyst : But it would be a good thing if you actually saw loan growth and saw deposit competition pick up overall from the NIM perspective, that would be better.

Question: Manan Gosalia - Morgan Stanley - Analyst : And as you think about your deposit pricing strategy across the franchise, we've noticed you've been adjusting your rates across different regions. Can you talk about how you're thinking about pricing across different geographies in the Southeast versus the Midwest?

Question: Manan Gosalia - Morgan Stanley - Analyst : So when you think about bringing those deposit costs down, how do you think about what happens in an environment where rates don't come down versus what happens in an environment where you see a few rate cuts this year?

Question: Manan Gosalia - Morgan Stanley - Analyst : So maybe bringing that all together for NII, you've spoken about being fairly comfortable with your NII guide even without loan growth or rate cuts that you are seeing a fair amount of loan growth. Can you walk through what the drivers for NII growth are this and why you believe it's so resilient on the different scenarios? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 11:30AM, FITB.OQ - Fifth Third Bancorp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. All right. Perfect. So let's talk a little bit about fees. Maybe treasury management is a good place to start. You've talked about leading with products that don't require credit extension to win a client relationship. Can you dig more into the strategy there?

Question: Manan Gosalia - Morgan Stanley - Analyst : And then on the other hand, on fees, wealth is a big opportunity as well. Can you talk about where that growth is coming from and what your plans are there?

Question: Manan Gosalia - Morgan Stanley - Analyst : And then to round out the fee conversation on capital markets, can you talk a little bit about both the near-term outlook? And what do you think the core growth of the business can be over the next few years?

Question: Manan Gosalia - Morgan Stanley - Analyst : Great. So let's talk a little bit about expenses. You're guiding to about 2% to 3% expense growth in 2025. What do you see as the most important strategic investments you're making right now? And where -- like what innings are you in on those investments?

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. Perfect. I'm going to turn the audience in just a sec, but I do want to cover credit before I do that. Can you talk about how credit holding up in the second quarter? I know you reiterated the NCO guide. Are there any areas of stress that you're particularly focused on? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 11:30AM, FITB.OQ - Fifth Third Bancorp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Manan Gosalia - Morgan Stanley - Analyst : Got it. The other point I wanted to touch on the credit side is shared national credits. They're about 27% of the total portfolio. It's been coming down a little bit over the past couple of years. But what are you seeing in that book? Any signs of stress there? Anything that we should be considering as investors and analysts?

Question: Manan Gosalia - Morgan Stanley - Analyst : All right. Perfect. Any questions in the room? So Bryan, maybe to end here, a question on capital. You've talked about targeting about $400 million to $500 million of buybacks for the rest of the year, mostly in the second half of the year. How are you thinking about managing capital levels given the volatility that we're seeing in the long end of the curve? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 11:30AM, FITB.OQ - Fifth Third Bancorp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Manan Gosalia - Morgan Stanley - Analyst : All right. Perfect. With that, we're out of time. Bryan, thanks so much. Thanks for joining us.