FIFTH THIRD BANCORP Q3 FY2025 earnings call

• Merger with Comerica: Believed to satisfy criteria of cash earn-back, IRR, NPV of synergies being superior to organic alternatives, resulting in a better and more profitable company. - Third-quarter earnings: Reported EPS of $0.91 (or $0.93 excluding certain items) with $200 million provision expense due to Tricolor fraud. Adjusted revenues rose 6%, PPNR up 11%. - Growth strategy: Investments in Southeast with 13 branches added in Q3 and 27 more expected by year-end; middle market sales force expanded, with middle market RM headcount up 8%, new client acquisition up 40%, and average middle market loans up 6%; wealth and asset management adviser headcount up 10%, fees up 11%, AUM at $77 billion; CIB vertical franchise finance had strong quarter with lead arranger on $3.9 billion in transactions over past year; Newline increased revenue 31% y/y and deposits by over $1 billion. - Technology and lean manufacturing: Deploying these principles to produce savings and boost scalability; total headcount down 8% since 2019 while adjusted revenues up 20%.

Average loans increased 6% year over year, marking the fourth consecutive quarter of accelerating loan growth. Average demand deposits were up 3% year over year, led by 6% consumer DDA growth. Adjusted revenues rose 6%, underpinned by 7% improvement in net interest income and 5% growth in fees. Adjusted PPNR increased 11% producing 330 basis points of positive operating leverage. On an adjusted basis, ROA was 1.25%, ROTCE was 17.7%, and the efficiency ratio was 54.1%. Tangible book value per share grew 7% year over year and 3% sequentially, with the firm repurchasing $300 million of stock and raising the common dividend by 8%.

• NII expected stable to up 1% Q4 due to loan and core deposit growth, assuming 25bp rate cuts. - Average total loan balances expected up 1% Q4 due to normal seasonal growth, strong C&I pipeline, and consumer lending momentum. - Adjusted noninterest income expected up 2-3% Q4 due to seasonal strength in capital markets and continued commercial payments growth. - Fourth-quarter adjusted noninterest expense expected up 2% due to opening of 27 financial centers in Southeast and incentive compensation. - Full-year adjusted revenue expected up nearly 5%, PPNR growth 7-8%. - Fourth-quarter net charge offs expected around 40 basis points. - Pausing share repurchases until close of Comerica acquisition, currently expected end of 2026.

• Scrutiny of NDFI lending portfolio, including consumer asset classes; however, portfolio is diversified with 70% of Comerica's NDFI portfolio in low-risk subscription facilities, and combined NDFI portfolio balances to be 7% post-close. - Tariff impacts on commercial clients, with uncertainty weighing on exposed clients but some optimism about improved sentiment and potential loan growth from clients shifting from rent to own. - Potential issues with trust business compliance at Comerica, requiring attention to ensure seamless conversion and cost savings.

Q: Tech integration approach to prevent execution issues.

A: Conversion is moment of truth; detailed work on data mapping, communication, and pre-conversion actions to ensure smooth conversion; Comerica customers and business moving to Fifth Third platforms with exception of National Dealer Service, which is a known area; no systems integration on top of each other, leveraging existing known platforms to avoid slippage in expenses or delay in synergies.