Fifth Third Bancorp

ladies and gentlemen thank you for standing by and welcome to the fifth third bank corp first quarter 2023 earnings conference call i would now like to turn the call over to chris doll head of investor relations please go ahead good morning everyone welcome to fifth third's first quarter 2023 earnings call

This morning, our president and CEO, Tim Spence, and CFO, Jamie Leonard, will provide an overview of our first quarter results and outlook. Our treasurer, Brian Preston, has also joined for the Q&A portion of the call. Please review the cautionary statements in our materials, which can be found in our earnings release and presentation. These materials contain information regarding to the use of non-GAAP measures and reconciliations to the GAAP results, as well as forward-looking statements about Fifth Thirds performance. These statements speak only as of April 20th, 2023, and Fifth Earth undertakes no obligation to update them. Following prepared remarks by Tim and Jamie, we will open the call out for questions. With that, let me turn it over to Tim.

Thanks, Chris, and good morning, everyone. Thank you for joining us today. The past six weeks have seen a great deal of volatility in the banking sector. Markets have been trading on narratives over fundamentals. and the term regional bank has been used to describe such a broad cross-section of business models that it has lost any real descriptive value. While we at Fifth Third take any instability in our sector very seriously, there was no crisis inside our four walls. We've been running the company with the expectation for a higher for longer rate environment for many quarters now, as we've consistently communicated in these calls and at investor conferences. As our first quarter results demonstrate, our balance sheet remains well fortified, and our capacity to generate strong profitability through the cycle is strong. Excluding items noted in the release, we reported earnings per share of 83 cents, a 20% increase compared to the year-ago quarter. We generated nine points of year-over-year positive operating leverage, driven by an 18% increase in revenue. During the quarter, we held average and period end deposits flat sequentially, despite the industry-wide impact of quantitative tightening and normal seasonal pressures. Our key credit metrics remain near historical lows, with net charge-offs of 26 basis points coming in at the low end of our guidance range. NPAs, NPLs, and early-stage delinquency ratios remained below normalized levels and criticized assets decreased modestly during the quarter. Moreover, we accomplished all this while also being recognized by Ethisphere as one of only two U.S. banks on their world's most ethical companies list. We were named by Fortune as one of America's most innovative companies, and we saw our fintech platform Provide named by Fast Company as one of the world's most innovative businesses. The strong outcomes achieved this quarter, and in particular in the month of March, highlight the strength, granularity, and well-balanced nature of our deposit franchise. In the weekend following the failure of Silicon Valley Bank alone, we opened more new commercial deposit accounts than we would in a typical month. Similarly, our consumer household growth accelerated after the March turmoil. Our commercial deposit franchise is led by our peer-leading treasury management business, where we rank in the top 10 nationally in most major commercial payment types. 88% of our commercial deposit balances are attached to relationships that utilize TM services today and the average age of our commercial deposit relationships is 24 years. These characteristics contribute strongly to stability regardless of balance size. Our consumer deposit base is granular with nearly 90% of total consumer deposits FDIC insured and is anchored by our flagship mass market momentum banking offering and strong branch presence in the markets we serve. Annual consumer household growth finished the quarter above 3%, led by our Southeast markets above 7%. During the quarter, we opened five branches in our Southeast markets on top of the 70 added in the past three years, and we expect to open an additional 30 branches by the end of 2023. All said, end of period total deposit balances ended the quarter above the level on March 8th. Looking forward, While we face the same headwinds that all banks do from increased deposit competition, economic uncertainty, and the potential for regulatory change, I am confident in Fifth Third's ability to achieve top quartile returns through the cycle with a focus on stability, profitability, and growth. Our long-term discipline managing interest rate and liquidity risks positions us well to generate differentiated outcomes in a range of economic environments. From a credit risk perspective, Our low CRE concentration in commercial, and in particular in office CRE, along with our focus on homeowners and consumer, should prove to be significant advantages. Jamie will provide more information on our forward guidance, but the implied profitability and return metrics for our full year 2023 expectations are well ahead of our core 2019 results. Considering the uncertain environment, we have elected to pause share repurchases for the second quarter. and we'll evaluate resuming them in the second half of the year. Last, but certainly not least, I want to thank our 20,000 employees for their hard work and dedication in supporting our customers, communities, and shareholders. Your commitment to living our purpose and making sure we do the right thing every day is evident. With that, I'll now hand it over to Jamie to provide more details on our financial results and outlook.