Fifth Third Bancorp

Good morning, everyone. Welcome to Fifth Third's Third Quarter 2023 Earnings Call. This morning, our President and CEO, Tim Spence, and CFO, Jamie Leonard, will provide an overview of our Third Quarter results and outlook. Our Treasurer, Brian Preston, and Chief Credit Officer, Greg Schreck, have also joined us 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 the use of non-GAAP measures and reconciliations to the GAAP results. as well as forward-looking statements about Fifth Third's performance. These statements speak only as of October 19, 2023, and Fifth Third 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.

We believe that great banks distinguish themselves not by how they perform in benign environments, but rather by how they navigate challenging ones. That is why we focus on stability, profitability, and growth in that order. It is also why I am so pleased that our key return and profitability metrics remain resilient despite the market-related headwinds that all banks are facing. Earlier today, we reported earnings per share of $0.91 or $0.92, excluding a one-set impact from our Visa swap. reflecting strong PPNR results and favorable credit outcomes. We generated an adjusted return on tangible common equity, XAOCI, of nearly 16%, which increased 50 basis points sequentially, and a return on assets of 1.26%. We generated strong fee growth compared to the year-ago quarter, supported by a more diverse range of fee income streams than peers, and our investments in treasury management, capital markets, and wealth management. Our third quarter total non-interest expense increased less than 2% compared to the year-ago quarter, and we generated an adjusted efficiency ratio below 55%. In the last four years, we have managed expenses to the lowest growth rate among peers, despite also investing in growth by building more new branches, raising our minimum wage, modernizing our technology platforms, and acquiring four fintech companies. Expense management at Fifth Third is a continuous process and not a program. Since March of this year, full-time equivalent employee headcount is down 3.5%. Turning to the balance sheet, we generated 4% average deposit growth compared to the year-ago quarter versus a 5% decline for the industry. New relationship growth remains strong. Consumer households grew more than 2%, led by 6% growth in the Southeast. a continuation of our multi-year growth base. Numinal market relationships added year-to-date remain 25% ahead of last year's record base. Thanks to the release of the annual FDIC Summary of Deposits, the third quarter provides a unique opportunity to understand market share gains and losses on a metro area by metro area basis. This year, Fifth Third maintained or improved our market rank in every single one of our 40 largest MSAs. In the Midwest, we maintained our number two overall position behind JPMorgan Chase. In the Southeast, where we are just four years removed from opening our first next-gen branch, we have reached or are approaching target locational share in eight of our original 11 focus markets. We intend to continue to open approximately 35 branches per year through 2028, at which time nearly 50% of our branches will be in Southeast markets. These market share gains are the byproduct of multi-year strategies that are not easily replicable by competitors. They include innovative operational deposit-oriented products like momentum banking, AI-driven customer acquisition strategies, and a top-core style customer service model in addition to our investments in new branches. Our key credit metrics remain strong during the quarter. Charge-offs were in line with our July expectations. and both early-stage delinquencies and non-performing assets improved sequentially. The ACL increased three basis points given slight changes to Moody's macroeconomic forecast. Turning to liquidity and capital, we made significant progress against our goal to adapt early to expected changes in the regulatory framework. Our focused efforts throughout the bank enabled us to end the quarter with $103 billion in total liquidity sources. and to achieve full category one LCR compliance at the end of both August and September. During the quarter, we also made significant progress on our RWA optimization initiative. Total RWA declined 1% compared to the prior quarter. Our exercise should be complete by the end of the fourth quarter so we can return to growing loans next year. We created over 30 basis points of CET1 capital during the quarter, reflecting our strong earnings power while we also raised our quarterly dividend by 6%. With respect to the economy, while aggregate figures on spending and employment remain strong and market sentiment has shifted more in favor of a soft landing, we continue to be more cautious given concerning signals disguised beneath the aggregates. For example, while the most recent headline payroll numbers were strong, most, if not all, the job growth is a byproduct of more people working part-time jobs. Real average weekly earnings flipped every month during the quarter, and the lower end of the consumer spectrum now maintains deposit balances below pre-COVID levels. Anecdotally, the last time Google searches for soft landing were this high was in May of 2008. Before I turn it over, I want to say thank you to our employees for everything you do to take care of our customers, strengthen our communities, and support one another. Your efforts are why Time Magazine recently recognized Fifth Third as one of the world's best companies and why I am as confident as ever in Fifth Third's ability to outperform through the cycle and to deliver innovations that improve lives for all our stakeholders. With that, Jamie will provide more details on our third quarter financial results and outlook.