Thank you all for joining us. Welcome to the Fifth Third Bancorp first quarter 2020 earnings call. I would now like to turn the call over to your host, Mr. Chris Doll. Please go ahead.

Thank you, Laura. Good morning, and thank you all for joining us. Today, we'll be discussing our financial results for the first quarter of 2020. Please review the cautionary statements on our materials, which can be found in our earnings release and presentation. These materials contain reconciliations to non-GAAP measures, along with information pertaining to the use of non-GAAP measures as well as forward-looking statements about Fifth Third's performance. We undertake no obligation to and would not expect to update any such forward-looking statements after the date of this call. This morning, I'm joined by our President and CEO, Greg Carmichael; CFO, Tayfun Tuzun; Chief Risk Officer, Jamie Leonard; and Chief Credit Officer, Richard Stein. Following prepared remarks by Greg and Tayfun, we will open the call for questions. Let me turn the call over now to Greg for his comments.

Thanks, Chris, and thank all of you for joining us this morning. Given the unprecedented nature of the environment, I will focus most of my commentary on the proactive steps we are taking to navigate this crisis due to the pandemic. And then Tayfun will provide more details related to the quarterly financial results in his remarks. As all of you are aware, the events over the past couple of months related to the COVID-19 health crisis and resulting economic fallout has led us to reprioritize our focus. We are taking significant and ongoing actions to serve our customers, protect our employees and assist our communities. We believe these proactive steps will ultimately deliver long-term sustainable value for all stakeholders, including our shareholders. Starting in early February, the executive team and the Board began actively planning and prioritizing the organization's response efforts. We quickly mobilized our workforce to accommodate remote access for a large number of employees. Currently, more than 50% of our workforce is working remotely across the company. And for many groups, that number is over 95%. For employees who are not able to do their job remotely, we have established social distancing and enhanced cleaning measures based on CDC guidelines. Throughout these uncertain times, we have been proactively communicating with our customers and employees. We have issued more than a dozen press releases, several fact sheets and numerous proactive outreaches to our customers in addition to ongoing updates on our website. We have also significantly increased the frequency of communications with our employees in order to keep them informed of the latest developments, recommendations and health precautions. From a customer perspective, we are leveraging the strength of our balance sheet to help address the economic challenges many of our customers are facing. We are prudently extending credit to customers where we support economic activity. In March alone, we extended $13 billion of new credit, including approximately $8 billion from C&I line drills. In addition to keeping our traditional lending channels open, we are also participating in government-sponsored programs established as part of the Cares Act such as the SBA PPP and the forthcoming Main Street Lending Program. With respect to PPP, we assisted approximately 10,000 clients to employ over 300,000 employees totaling nearly $3.5 billion. To maximize our support, we recently announced we suspended share repurchases. And as Tayfun will discuss in greater detail, we continue to have strong capital and equity levels to weather a prolonged downturn. In addition to utilizing our strong balance sheet, we are directly supporting consumers and businesses by keeping 99% of our branches open and fully operational with modified health protocols and amended hours as appropriate. We continue to process over 100,000 branch transactions per day, underpinning our role as an essential service provider. And for many of their banking needs, we continue to encourage our customers to use our highly rated digital platforms in addition to our network of approximately 53,000 fee-free ATMs. Furthermore, we continue to proactively engage with our customers. Our bankers have personally connected with 2 million customers over the past month to see how they are doing under these circumstances, both personally and financially, and to offer assistance as needed under our extensive financial hardship relief programs. In March, we began providing relief in the form of payment deferrals and forbearances to customers across a wide array of lending products. We also suspended vehicle repossessions and home foreclosures. Since the roll of our assistance programs, we have processed over 96,000 hardship requests, which represents approximately $1.5 billion in Fifth Third loan balances in addition to $6 billion from our mortgage servicing portfolio. As I mentioned, taking care of our employees is a top priority. In addition to our safety measures, we have announced special payments of up to $1,000 per employee for those providing essential banking services. These measures have helped maintain call center operations and branch personnel at appropriate levels. For our communities, we recently committed nearly $9 million in philanthropic funds to help address the effects of the COVID-19 pandemic. We will continue to take proactive and aggressive measures to help mitigate the effects of the downturn. From a macro perspective, while we do not know the duration or severity of the crisis, we have spent many years preparing for a downturn by strengthening our balance sheet through a disciplined approach to credit and by increasing our capital and liquidity levels. We have also improved and diversified our revenue streams in our loan portfolios. Finally, we evaluate our firm-wide resilience through stress testing our balance sheet under a range of conditions worse than the last crisis and more severe than a regulatory run stress test. Since the financial crisis, we have taken several steps, which have put us in a very strong position. We transformed our overall approach to credit risk management, centralized credit underwriting and added stringent geographic, sector and product level concentration limits. We exited certain commercial real estate segments and have remained disciplined in our existing CRE portfolio. The client selection is focused on top-tier developers and virtually no land loans. We also continue to maintain an underweight position relative to our peers. We exited businesses such as commodity trader lending and mezzanine lending. Three years ago, we exited $5 billion in commercial loans, given the risk-return profile. This has helped reduce our leveraged lending exposures by over 50%. We have also reduced our indirect commercial leasing portfolio by almost $2 billion over the past 2 years, which has significantly lowered our exposure to certain assets such as commercial aircraft and railcars. Lastly, we have maintained our credit discipline in our consumer portfolio with a weighted average FICO score above 750. We have consistently communicated our through-the-cycle principles of disciplined client selection, conservative underwriting and an overall balance sheet managed approach focused on a long-term performance horizon. Our unwavering adherence to these principles and our balance sheet strength gives us confidence as we navigate this environment. Our first quarter operating results reflect the strength of our franchise and the strategic decisions we made in managing our balance sheet, our interest rate risk and our liquidity risk exposures in light of the rapid and widespread economic deterioration we saw towards the end of the quarter. Net interest income, net interest margin, noninterest income and expenses all performed in line with or better than our January guidance, with a net charge-off ratio also consistent with our previous expectations. Tayfun will discuss the changes in our allowance in more detail. Similar to what you have seen from many of our peers, our reserves reflect the CECL adoption, the economic impacts of COVID-19, lower oil prices and the impact of loan growth during the quarter. As I mentioned earlier, we believe that we are in a very strong position from both a capital and liquidity perspective. We are continuing to evaluate potential economic scenarios, but we currently believe our capital position is strong enough to maintain our current dividend if these conditions persist through the end of the year or remain well capitalized. Before I turn it over to Tayfun to discuss our results and our outlook, I'd like to once again thank our employees. I am very proud of the way you have responded in extraordinary ways to support our customers, our communities and each other as we navigate these unprecedented times. With that, I'll turn it over to Tayfun to discuss our first quarter results and our current outlook.

Thank you, Greg. Good morning, and thank you for joining us today. Our company is well positioned to deliver on our pledge to provide financial support to our customers, communities and employees during the current pandemic and the duration of the economic downturn. It is important to note that despite the unexpected timing and nature of the events that led to the sudden decline in economic activity, we are entering this downturn from a position of balance sheet strength that was built through the actions that we've taken during the past few years. Although it is impossible to predict the timing of inflection points in the economy with precision, since late 2018, we had been anticipating an eventual change in the economic cycle after a record expansion period. Our client selection, capital, interest rate and liquidity risk management decisions have all reflected that expectation. What makes this downturn more challenging than others is clearly the unexpected nature of the initial trigger and the ensuing low visibility surrounding the depth and duration of the downturn. All parts of the global economy are entering this cycle at the same time, but the unprecedented level of fiscal and monetary actions will undoubtedly provide a level of support to cushion a portion of the economic setback. The actions that we have taken so far and those that we will be taking in the coming months will focus on maintaining and leveraging our strength to support our clients and stand by them as we help them manage through this difficult period. As always, we incorporate all information that is available to us at the time when we provide commentary about our business and discuss our expectations. Our overall perspective on the next few quarters has been very negative at the end of the first quarter, even before the rapid deterioration in the data and market expectations that we have seen over the past couple of weeks. As we look at the economy today, we do not expect a V-shaped recovery. Our discussions on relevant factors, including credit, will be based on an assumption that it will take a number of quarters before we see visible signs of recovery. What is unclear is the interaction between the fiscal and monetary programs and the pace of the recovery, and what the new run rate will be after that point. Turning to Slide 4. With respect to the first quarter, we were pleased with our overall financial performance despite the economic disruption. Our performance in January and February was ahead of our expectations. Once again, our net interest income, net interest margin, noninterest income and noninterest expenses for the full quarter all performed in line with or better than our guidance. Credit quality remained strong during the quarter. Charge-offs were consistent with our prior expectations, and the NPA ratio decreased 2 basis points sequentially. Reported results for the quarter included a negative $0.09 impact from several notable items, including a credit valuation adjustment for client derivatives, a charge related to the valuation of the Visa total return swap, the impact of MB merger-related charges and a mark in our private equity portfolio, in addition to the $0.55 impact of the provision in excess of charge-offs. Adjusting for those items and the purchase accounting impact shown in our earnings materials, first quarter pre-provision net revenue increased 22% from the prior year. Excluding the first quarter seasonal impacts on compensation and benefits expenses, PPNR increased 2% sequentially. Our core return on tangible common equity, excluding AOCI, increased from the prior year to nearly 15%, and our efficiency ratio continues to trend towards the top quartile among peers. Moving to Slide 5. Total average loans increased 1% sequentially with growth balanced between the consumer and commercial portfolios. Prior to the market disruption in March, total loan growth was generally tracking in line with our previous guidance. Growth in average commercial loans was impacted by the line draws of approximately $8 billion in March. Since the end of the quarter, line utilization has remained very stable. Average commercial real estate loans were flat sequentially, with the construction book declining by 4%. Our CRE balances as a percentage of total risk-based capital remained very low, around 80%, which is significantly lower than our exposures prior to the last downturn, which stood at 174%. Average total consumer loans grew 1% from last quarter. In general, our consumer portfolio trends from the past year or so continued again during the first 2 months, with the auto portfolio leading the growth, reflecting strong production of $1.7 billion with healthy spreads and the same risk return parameters as before. Clearly, the origination activity significantly slowed down in March. And in the near term, we expect the weakness to continue. The quarter-over-quarter growth in auto was partially offset by a decline in home equity balances. Average deposits were up 1%. In addition, our end-of-period deposit growth exceeded our end-of-period loan growth, which enabled us to maintain very strong liquidity levels during the quarter, even when we experienced very high utilization rates. The ability to grow deposits so strongly, while reducing deposit rates by 14 basis points during the quarter shows the strength of our franchise and our relationship-based banking market. Moving on to Slide 6. Reported net interest income increased $1 million compared to the prior quarter with adjusted NII increasing $3 million. The strong NII performance reflects the impact of our $11 billion cash flow hedge portfolio as well as the wider-than-normal LIBOR/Fed fund spread near the end of the quarter. Purchase accounting adjustments benefited our first quarter net interest margin by 4 basis points this quarter compared to 5 basis points last quarter. Our reported NIM increased 1 basis point, and the adjusted NIM increased 2 basis points sequentially, which was at the upper end of our January guidance. Our NIM performance reflected the benefits of our balance sheet hedges, proactive management of deposit rates and a lower day count. The excess short-term liquidity levels in the first quarter caused a 3 basis point drag on our NIM compared to last quarter. Interest-bearing core deposit rates were down 14 basis points during the quarter, better than our previous guidance range of 8 to 10 basis points. We expect interest-bearing core deposit costs to decline another 35 to 40 basis points over the next 2 quarters and be heavily front-loaded in the second quarter. This forecast, combined with the deposit rate actions we have taken since the third quarter of last year in response to the Fed rate moves, results in a cumulative beta in the mid-30s. In the near term, we intend to maintain higher-than-normal liquidity as we continue to gauge the duration of the line draws and the corresponding deposit growth that we witnessed over the past month. Excluding the impact of PPP loans, we expect our loan to core deposit ratio to remain stable in the second quarter. As a reminder, our margin is approximately two-thirds sensitive to the front end of the curve, which results in a 3 to 4 basis point reduction in NIM per 25 basis points move in Fed funds and one-third to the long end, which results together in a cumulative 4 to 5 basis point impact. It's worth noting once again that our differentiated hedge and securities portfolios are expected to provide strong NIM protection on a relative basis. We executed our hedges early when the 10-year was around 3% and also structured them to provide protection for much longer than most peers with hedge protection against lower rates through 2024. And as we have discussed before, our securities portfolio is also structured in a way that is meaningfully different than peers, which results in significantly lower cash flows and less stress on the portfolio yield. Our net premium amortization was under $1 million during the quarter. Moving on to Slide 7. We had a stronger quarter in fee income than we guided in January. The resilience in our fees continues to highlight the level of revenue diversification that we have achieved. Adjusted noninterest income increased by 1% sequentially despite the March headwinds compared to our previous expectation of down 3% coming into the quarter. The strong performance was driven by mortgage banking, client financial risk management and wealth and asset management revenues. Mortgage banking revenue of $120 million increased $47 million sequentially, reflecting the widening of primary secondary spreads and strong volumes, combined with the impact of the MSR valuation net of hedges. Origination volume of $4 billion increased 6% sequentially and 145% from the year ago quarter as customers took advantage of the lower rate environment to refinance. We expect second quarter mortgage revenue to be adversely impacted by COVID-19. In our commercial business, we generated another strong quarter of capital markets revenues, which were up over 25% from the year ago quarter. Client financial risk management revenue was very strong this quarter, reflecting investments in talent and technology, the continued focus to deepen client relationships as well as the market volatility during the end of the quarter. Wealth and asset management revenue increased 4% from the prior quarter due to higher brokerage and seasonally strong tax prep fees. We continued the AUM flow momentum again this quarter despite the broader market dynamics. Given the current portfolio allocations, we expect our wealth and asset management revenue to experience approximately a 50 beta relative to the S&P 500 on about a month lag. Deposit service charges declined slightly this quarter. Commercial deposit fees were positively impacted by deductions in earnings credit rate and solid gross TM revenue, which was offset by seasonal declines in consumer fees. Moving on to Slide 8. First quarter reported pretax expenses included merger-related items totaling $7 million and intangible amortization expense of $13 million. Adjusted for these items and prior period items shown in our materials, noninterest expense increased 2% sequentially, well below our previous guidance of 5%. In line with previous years, our first quarter expenses were impacted by seasonal items associated with the timing of compensation awards and payroll taxes. Excluding these seasonal items, our total expenses in the first quarter would have been down approximately 4% sequentially. In the current environment, there will be a natural decline in expense items that are directly tied to business performance and activity. In addition, we recognize that as we navigate this environment, investments and projects with lower returns will need to be reprioritized, which gives us the ability to evaluate a wide range of potential actions. As we develop better visibility on the extent and duration of the downturn, several of these items will be actionable. We will provide more details on our expense management in this environment in the coming months. In March at the RBC Conference, we provided a snapshot picture of our exposures to COVID-19 high-impact sectors. Slide 9 provides an update for quarter end exposures and also expands our scope of highly impacted industries to include nonessential retail and exposures to health care facilities. We are also adding more information on the utilization rates and the percentage of the portfolio that is described as highly leveraged. The totals on this page represent 12% of our total loans, approximately 1/3 of our total leveraged loan portfolio, which at the end of the quarter was just over $4 billion in outstandings. We believe that in these segments, our client selection has been very disciplined with a focus on larger companies that have access to capital in stressed environments. 75% of our total C&I loans in the industries most stressed by COVID-19 are shared national credits. In addition, on Slide 10, we give you a snapshot of our energy portfolio. This portfolio is less levered and more hedged than the portfolio before the last downturn in oil prices. Nearly 80% of the portfolio is in reserve-based lending. During the 2015 disruption, we experienced approximately $25 million in losses. In the current environment, we estimate that the production breakeven is about $18 per barrel. On Slide 11, we give you an updated view of the consumer and mortgage portfolios. The FICO scores clearly indicate the high credit quality of the portfolio, with over 55% of the portfolio containing FICO scores of 750 or higher on a balance-weighted basis. Approximately 90% of the consumer portfolio is secured. And as you can see by our FICO band distributions, our portfolio is heavily weighted in the high prime super-prime space. From a hardship perspective, only 10% of the mortgage forbearance requests have LTVs greater than 80%, except for those with guarantees or insurance. Also in February, we further tightened our underwriting standards, specifically on minimum FICO scores and maximum LTV levels. Turning to credit results on Slide 12. Net charge-offs remained near historically low levels during the quarter. The consumer net charge-off ratio was down 12 basis points, and commercial was up 12 basis points sequentially, resulting in a total net charge-off ratio of 44 basis points, consistent with our previous expectations. NPAs continue to be well-behaved, up just 4% sequentially. Given the loan portfolio dynamics I mentioned earlier, the NPA ratio was down 2 basis points sequentially. Obviously, with the adoption of CECL, we substantially increased our reserves at the beginning of the quarter. And given the COVID-19 impact and loan growth, our provision was 525% of charge-offs. Slide 13 provides an overview of the major changes in our loan. Our day 1 build was $653 million, consistent with our previous guidance and includes $171 million from the MB portfolio, as we discussed previously, which was significantly impacted by the disparate manner in which purchase accounting discounts were treated under the incurred model versus the CECL model. The post-day one incremental allowance during the quarter was based on several factors: a significantly weaker economic outlook, including a lower oil price, higher funded loan balances and the impact of unprecedented fiscal and monetary stimulus. The overall approach is a combination of quantitative model-based estimates and qualitative overlays. We use a three-year reasonable and supportable period, followed by a two-year reversion to historic losses. The quantitative process is based on multiple economic scenarios. The expectation for the two predominant macroeconomic factors is a sharp downturn in GDP and a rise in unemployment in the next two quarters, the impacts of which are partially cushioned by the aggressive levels of fiscal and monetary stimulus, leading to a very weak recovery in the fourth quarter. The challenge associated with calibrating our expectations is, as other banks have discussed, the speed at which the real-time updates to the economic forecasts are changing. The base scenario assumes that GDP growth will slowly start to recover in the fourth quarter and will reach a year-over-year growth of approximately 3% in 2021, with the unemployment rate remaining above 6% throughout 2021. The more stressful scenario has GDP continuing to decline through the first quarter of 2021 and unemployment staying about 7% for almost the entire three-year reasonable and supportable forecast period. The oil price under the base case reaches $33 in the fourth quarter, but under the more stressful scenario remains below $30 through 2021. As a reference point, we compare our current reserve level with a nine-quarter total loss estimates within the two most recent severe stress test runs that we ran, including the 2019 stress test that we ran last year despite the fact that we were not required to submit, and the 2020 stress test that we recently submitted to the Fed, in addition to the most recent Fed-run adverse and severe stress tests from 2018. Our current reserves stand at 76% of the nine-quarter cumulative losses projected under the 2018 Fed adverse scenario, 44% of the nine-quarter losses under the 2018 Fed severe scenario, 50% of the nine-quarter losses under the 2019 severe scenario, and 54% of the nine-quarter losses under the 2020 severe scenario that we just submitted. In the absence of better visibility on future levels of economic activity, these reference points give you some guidance on the strength of our current ACL ratio of 2.13%. In addition, we still have approximately $200 million or 17 basis points of our total loans and remaining discounts associated to the MB portfolio. As other management teams have mentioned during their earnings calls, most of the economic scenarios published since the end of the quarter are forecasting a weaker outlook compared to previous forecasts. As more quantitative and qualitative information becomes available, we will incorporate them into our reserve analysis. As the significant fiscal and monetary support is likely to reduce the impact of both the near-term decline in the GDP and the increase in unemployment, the more meaningful impact on reserve levels will be the shape of the recovery and the level of the economic activity in the post-recovery period. Turning to Slide 14. Our capital and liquidity positions remained very strong during the quarter. Our CET1 ratio ended the quarter at 9.4%, over 280 basis points above the well-capitalized minimum. Given the various dynamics during the quarter, we are providing you a CET1 reconciliation between net income, RWA growth, CECL adoption and the impact of dividends. As a reminder, we did not repurchase shares during the first quarter. As you can see, the majority of the 39 basis point change in CET1 was attributable to line draws from the commercial book, along with the impact of CECL. Dividend payouts constitute a smaller portion of the change in fees. Understandably, the topic of dividend sustainability is of major interest to our shareholders. We believe that we are similar to other banks in that we are entering this downturn from a position of strength, and that strength will be able to withstand severe downturns. That does not mean that dividends will be sustainable in all scenarios, but at this time, we expect to maintain our dividends, which our Board will continue to evaluate based on the data available. Our tangible book value per share was $22.02 this quarter, up 18% year-over-year. We have grown our book value for five consecutive quarters. At the end of the quarter, our unrealized pretax gain in our securities and hedge portfolios was approximately $3.3 billion, which is not included in our regulatory capital ratios. From a liquidity perspective, we have over $80 billion in readily available and contingent liquidity. Although we are no longer subject to the LCR, we have since continued to stress test our positions on a monthly basis under seven different types of liquidity scenarios, and we then hold ourselves to the most stressful scenario. Our liquid securities positions have not changed since our phase-outs of the LCR. Slide 15 provides a summary of our current outlook. Given the uncertain environment, we are withdrawing our previous full year guidance until we get more visibility on the economic environment. For the second quarter, based on the line draws at the end of the first quarter and PPP activities, we expect low double-digit growth in average commercial loans and relatively stable consumer loans. Net interest income should grow slightly as a result of higher loan outstandings, while NIM tightens based on my earlier discussion on our interest rate sensitivity. In addition to the impact of the rate environment, NIM will also be impacted by the PPP loans and the amount of short-term liquidity on the balance sheet. Noninterest income and expenses are both expected to decline by high single to low double digits from their current levels, reflecting the impact of COVID-19-related impacts. Total net charge-offs are expected to be in the 45 to 50 basis points range. In summary, our first quarter results were strong and continue to demonstrate the progress we've made over the past few years, improving our resiliency, diversifying our revenues and proactively managing the balance sheet. That being said, we are in an unprecedented environment right now and have limited visibility with respect to the economic path forward. We will continue to rely on the same principles, disciplined client selection, and service underwriting and a focus on a long-term performance horizon, which gives us confidence as we navigate this environment. With that, let me turn it over to Chris to open the call up for Q&A.

Thanks, Tayfun. Laura, please open the call for questions.

Your first question comes from the line of Saul Martinez from UBS.

I wanted to inquire about the outlook for credit and how it relates to your reserving practices. As you mentioned, Tayfun, your reserve levels are quite high compared to your peers, specifically at 213 basis points. This figure is significantly elevated not only among other regional banks but also when examining product categories, with C&I at 168 basis points, which stands out, especially when compared to reserve ratios for residential and home equity loans, even though they involve a high-quality portfolio. I understand you have detailed estimations and assumptions regarding this. However, I would like your thoughts on whether your reserving strategy is a reflection of a more cautious approach compared to others within reasonable scenarios, or if it indicates a riskier portfolio that could be more vulnerable to downturns affecting lifetime losses.

Thanks, Saul. That's a great question. It's a broad one, and the challenge lies in how quickly the environment has changed, making it tough to compare the ratios and coverage of one bank to another. However, as noted on Page 12 of our slide presentation, we provided a comparable set of coverage numbers from stress tests of other banks. Our coverage levels are clearly higher than the losses predicted through our models compared to those of other banks. We have adjusted our expectations as the environment worsened in March towards the end of the quarter, reflecting a significant shift in the economic landscape not just for the second and third quarters, but also projecting a slower recovery in the following years since we're considering a three-year R&S period. I shared some statistics outlining our assumptions. We believe that the current fiscal and monetary policies will likely mitigate impacts in the second and third quarters but will not provide substantial support in the subsequent years. Therefore, our reserve levels, although conservative at 2.35%, indicate a gradual recovery rather than a rapid rebound. Additionally, the quality of our portfolio plays a crucial role. We've shared statistics on our consumer and mortgage portfolios, and we will also provide details on the commercial side. As Jamie and Richard can elaborate, the commercial segment affected by COVID-19 includes more large corporate and heavily impacted exposures. Given all these factors, it's challenging to draw direct comparisons to others, but we are confident that we've adequately factored in a weak outlook, a slow recovery, and the quality of our current portfolio. Jamie or Richard, do you want to add anything?

Yes, Saul, so as I stepped into this chair and started looking at the portfolio, the one thing that stands out to me is just how intentional we have been about where we do business with the clients that we select, that should be resilient in times of stress. And frankly, the focus for us has been on companies with larger scale that should be able to persevere in this environment. And so our loan book, I would tell you, is comprised of high-quality liquid resilient names, and the best data we could use to prove that point is the shared national credit information that we included on the page. And as you can see, it's a very high percentage of 75%.

No, this suggests that we continue to evaluate the data as it arrives. We are assessing these new programs, and by the end of this quarter, we will conduct that evaluation again, just like every other bank will. After that, we will share the results of our analysis with you.

And I know this gets into the weeds but some elements of your modeling, three-year reasonable supportable and why not maybe on the more conservative side than in some other peers. But one follow-up question. You did have the second consecutive quarter where you had a pretty elevated amount of nonperforming loan formation in your commercial book. If you can talk to that, and was any of that related to sort of piece of accounting noise with PCI moving to PCD and then getting reclassified into nonaccrual? Or was there actually something underlying that suggesting some worsening credit trend in some parts of your book?

Yes. Regarding the first part of your question, the transition from PCI to PCD has had very little impact. The NPA inflows of approximately $175 million were influenced by several factors. About a third of the inflow was due to a single real estate mall exposure. Additionally, around a quarter of the NPA formation came from smaller businesses, specifically business banking in the lower middle market. The remainder of the inflows can be attributed to various industries and locations, with the commonality being that they are mostly in the service sector, including professional, medical, education, and financial advisory services. Thus, the distribution is quite broad.

Your next question comes from the line of Matt O'Connor from Deutsche Bank.

I was wondering if you could comment at all in terms of the PPP loans going to, I guess, those small businesses that need them the most. I mean, obviously, this is kind of a broader question than just Fifth Third, but it seems like a little bit of a free for all, and there's just been some articles out there about maybe some bigger companies getting the loans and not really kind of criteria for deciding who gets it and just wondering if you could comment on that, on your thoughts.

Yes, Matt, this is Greg. As I mentioned, we processed around 10,000 loans for our customers, totaling approximately $3.5 billion. The average loan size is about $350,000 to $370,000. For our portfolio, it was pretty diverse, and we effectively serviced both the low-to-moderate income community businesses and small businesses in general, with very few of our loans in the $9 million to $10 million range. I believe we did a commendable job of maximizing opportunities within the limited time available. We're hopeful that funding will be replenished soon. We definitely see a significant demand for the PPP program. Overall, regarding Fifth Third, I think we effectively supported a large portion of smaller businesses compared to larger companies. I've read about the challenges other banks have faced in prioritizing loans, but we did not take that approach. We worked diligently to process as many loans as possible, although the request complexity and company ownership structures affected how quickly we could process them. We have already submitted a substantial number of additional applications and are optimistic that the application window will reopen soon, allowing us to process those loans.

And any sense on, call it, what the pipeline is for when there's additional funding?

Yes. Well, obviously, I think most bankers would agree, and most people would agree that the additional $300 billion is not going to be adequate to serve the total demand that's out there right now. We expect that $300 billion to $350 billion to be absorbed pretty quickly, even faster than the last 350 were absorbed. So we think it's going to be very fast, and we don't think it's going to be adequate. We think the demand is going to continue to outpace the available funds.

Your next question comes from the line of Erika Najarian from Bank of America.

So just to piggyback off of Saul's question. You took a significant reserve build and still earned $0.04, with the stock at $16.75 and tangible book value per share of $22, so clearly, the market is fearful of tangible book erosion. And I guess my question here is, in the realistic scenarios for economic stress that you see, and it seems like your band of expectations are reasonable, do you see yourself continuing to earn positive earnings during the duration of this downturn?

Good question. I won’t comment on that. I believe that aside from reserve builds and loss expectations, our underlying pre-provision net revenue activity will continue to perform well. We plan to manage our expenses appropriately relative to the environment. We have strong protection against a lower rate environment, and we have diversified revenue streams. This gives the company a strong capability to generate capital from earnings in the current situation. As I mentioned, it's somewhat challenging to predict what will happen with the provision and charge-offs. However, our goal is to continue to exceed the impact of credit issues. Unfortunately, forecasting beyond one or two quarters is very difficult in this environment. We will provide a more detailed update as we gain a clearer perspective on the situation. Nevertheless, we are confident in our ability to manage the company at profitable levels.

And just my follow-up question is, you noted that there would be a total impact of 4 to 5 basis points on the net interest margin. If we consider each 25 basis point of decline in the short end plus what's happened to the long end. And I'm wondering, does that include the PPP impact? And does that include the reduction in deposit cost that you anticipate? And how do you plan to fund the PPP loans that are coming on balance sheet?

We did not provide any guidance on net interest margin this quarter intentionally. The overall dynamics around net interest margin, influenced by lower short-term rates and a flatter yield curve at these lower rates, are fairly established for us. As I noted, there's a typical impact of 4 to 5 basis points per rate movement. The decision to withhold guidance this quarter stems from three significant factors. First, we are currently maintaining very high levels of liquidity on our balance sheet. I highlighted that in March, we carried much more liquidity, and as we move into early April, that amount has increased further due to government programs injecting cash. The second factor is the Paycheck Protection Program. Lastly, we anticipate that the LIBOR and Fed fund spread will narrow throughout the quarter from its present levels. Additionally, we believe the substantial liquidity on our balance sheet will enhance our ability to adjust deposit rates downward during the quarter. Consequently, the second quarter is expected to be quite active. However, after this quarter, the relationship between interest rate changes, the shape of the yield curve, and our net interest margin impact remains consistent. The 4 to 5 basis points figure is a reliable estimate to consider.

Your next question comes from the line of John Pancari from Evercore ISI.

For the detail on Slide 12, I think it's very helpful. And I acknowledge that similar to the prior comments that your reserves are booked to a level that's higher than peers. Can you discuss your confidence in your reserve relative to the DFAST numbers that you cited? I guess they're approximating around 50% of DFAST, severe. Given that you are factoring in a U shape essentially versus a V, why wouldn't you think that those numbers should be higher? Not that I've got a problem with it or anything. I'm just saying if it is factoring in a U, should that warrant possibly a level that's higher than about 50% of the severe DFAST?

To achieve greater precision, we need more information about this environment. We are providing these reference points for comparison. The scenarios that support the DFAST are understood and are quite severe, but no two stress scenarios are the same. This particular situation will be different, especially since the support programs still need to be assessed regarding their impact on the recovery path and where we will ultimately land. This is a significant distinction because in most traditional stress tests, the economy usually returns to its original state at some point. What we are uncertain about today is where this economy will end up and how long the recovery period will take. I'm hesitant to answer your question because we lack sufficient information about the nature of this downturn. However, presenting the DFAST results allows you to compare us with others, and as the economy evolves, we will be able to adjust our expectations accordingly.

No. Great. Okay. And then another question on the reserve. Do you have the allocation of the reserve to the high-impact areas that you mentioned?

So we did not provide that, John. So relative to the 2.1%, one would assume it's north of that number, but we did not disclose that percentage.

Okay. All right. That's fine. And then one last question, if I could. Just on the loan modifications. How much of your loan modifications have been done on the commercial side of the portfolio? And do you have any industry concentrations really where you're starting to see those deferrals?

Yes. So within the commercial segment, we've actually had a fairly limited number of requests in the commercial side to the consumer side. We've only had about 400 or so, and it's predominantly covenant waivers for terms in 2020, and that's roughly $2 billion of outstandings, and that's led by car dealers, hotels and restaurants. When it comes to restructured or modified actual dollars, that's very small to date, with only $200 million in loan balances. And probably the one sector with the most activity would be restaurants. You see that on Slide 9, our $1.9 billion in outstandings. The good news is we're favorably weighted with only 35% is in dining and 65% fast food quick service. So about 80% of the book continues to remain open. Those that are closed are predominantly in the in-dining category. So overall, some activity here in the modifications, but it's still a little early. We'll see how it plays out over the course of the year.

Your next question comes from the line of Gerard Cassidy from RBC.

You gave us very good detail on a number of your different risks that you have on the portfolios today. And in the opening comments, Greg, you mentioned that I think about 96,000 fee waivers have been executed, also deferrals on loans up to $1.5 billion. That, I think, represents just under 5% of the consumer loan portfolio. Do you guys have any expectations of where those deferrals may peak out at as a percentage of your portfolio?

Yes. Let me start and I'll hand it over to Jamie here. First off, it's 96,000 requests, not fee waivers. So it's 96,000 requests in total, which includes both forbearances and deferrals in our loan book, but the fee waivers are actually much smaller now. Jamie, what's that number for waivers?

About $0.5 million in fee waivers.

Yes.

And so Gerard, in terms of the hardship relief to date by product, and this is through the end of last week, so a little bit updated for April activity. What we're seeing is a lot of the fixed rate or fixed payment products have the higher request levels. So autos at 5%. Mortgages in our owned portfolio are at 4% of the portfolio. And then as you see the minimum monthly payments lower in home equity and credit card, they're at 2% and 3%. So as we model, obviously, we expect this to rise as unemployment rises, but the ultimate amount of hardship relief that we give will ultimately depend on where unemployment picks out. And for us, right now on most products, we're offering 90-day loan payment deferrals. And then in mortgage, we offer the 6-month forbearance. So we'll continue to update you as the quarter transpires.

And then obviously, the focus this quarter for you and others has always been on credit quality, the provisions. Equally as important, Tayfun, as you pointed out, is PPNR, can you share with us your outlook for PPNR from the standpoint that, obviously, the second quarter end-of-period first quarter loans from the industry was extremely high due to the drawdowns and revenues, obviously, will benefit from that in the second quarter. But as we get into the third and fourth quarters and the unemployment rate goes up, underwriting standards tighten, should we anticipate that PPNR revenues start to shrink for you guys just because of the environment we're in?

I think, Gerard, here's my take on the year. I believe that if these drawdowns persist for a while, the higher loan balances will provide some support against the lower rate environment. If we effectively manage our deposit rates and liquidity positions, the balance sheet should still support a healthy level of net interest income, even in a challenging scenario that extends beyond just negative interest rates for banks. As for the progression from the second quarter to the third and fourth quarters, we will likely see changes in fee income because the economy has slowed down, which will adversely affect fees in the second quarter due to changes in spending, asset management linked to equity levels, and some capital markets activities. We expect that if things start to normalize in the latter half of the second quarter or into the third quarter, we should see a healthier fee scenario in the latter part of the year. Additionally, we anticipate benefiting from reduced expenses related to activity. We'll start making decisions based on the current environment. Overall, the second quarter will certainly be a transition period. However, I believe that as we move into the third and fourth quarters, we should start to see some normalizing levels of pre-provision net revenue activity.

Your next question comes from the line of Vivek Juneja from JPMorgan.

Couple of questions. Firstly, on your oil and gas exposure, can you talk a little bit about where you are in your reserve-based redetermination and what that could mean for the loans?

Yes, it's Richard. We're about one-third of the way through the redeterminations. And at this point, we've seen about a 16% drop in oil-based borrowing basis and about a 12% drop-through those that are gas-based producers.

Okay. And then I think, you said you've got a breakeven, Tayfun, you said of $18 production price?

Yes. What Tayfun described was our review of the portfolio regarding the average breakeven lifting cost. This involves considering the expenses necessary to extract resources and the costs associated with servicing interest for that portfolio, which is approximately $18 when compared to NYMEX. Additionally, it's important to note that our portfolio is 80% hedged for 2020, as mentioned on Slide 10. These hedges provide our producers with a net benefit of about $14.5. Therefore, when factoring in the hedges, the breakeven cost is around $4 or $5.

Okay. And those hedges, it sounds like a lot of them mature by the end of 2020.

What we've described on Slide 10 is the percentage of production that is hedged is 80% in '20, and then it rolls down to 30% in '21.

Okay, okay. And then what happens to those loans as those hedges roll off? Do you get to be done and the borrower has to figure out how to handle the funding? Or how does it work? Can you walk us through that?

For those under reserve-based structure, the borrowing base is redetermined every 6 months. So there will be a fall redetermination that will be based on current production, current reserves and the outlook from prices at that time. So the borrowing base and the loan amount that we're willing to lend gets reset every 6 months. So to the extent prices improve, that will change the borrowing base. To the extent they don't, the borrowing base would come down.

Okay. Great. And Jamie, any color on the casino exposure of $2 billion?

The casino exposure discussed on Slide 9 pertains to our lending to the operating companies within the casino, while the commercial real estate aspect involves the construction of the hotel associated with it. The entities involved are large, high-quality, and resilient companies. Therefore, we believe we are in a good position. Although there may be some losses in this portfolio, we consider those potential losses to be quite manageable.

It's Richard again. I want to emphasize that, in addition to our focus on high-quality companies, we also have a diverse range of operator types, including global operators, some Native American, and some regional. In each instance, we are dealing with high-quality operators who usually have strong franchise areas, whether due to regulatory advantages or favorable demographics, which provide them with significant resilience and reduced competition.

Your next question comes from the line of Scott Siefers from Piper Sandler.

I guess, first of all, I just want to echo some of the prior comments, really good detail and appreciate the disclosure. And I think at this point, just one small question, sort of a follow-up on the deferrals. I guess I'm just curious on the commercial side. And even though it's early, I was hoping you might be able to give a little insight as to how you would expect sort of the, I guess, the re-due diligence process to go as we come up on the end of the deferral time period and how will that go? Sort of willingness to defer again? Or how does that entire process work through?

Yes. So the commercial side will just continue on a case-by-case basis with each client. The covenant relief period expire. As we're executing on these covenant waivers, we have been adding some additional liquidity capital retention requirements as well. So we feel like the process has been productive. It's been a good dialogue with clients. And so that will just continue over the course of the year.

Yes. Hey, it's Richard. So we review the portfolio actively and for the names that are going to be more impacted at least quarterly. But there is active management, active dialogue. And so as new information comes in, we adjust our internal risk ratings. And then as we have financial reporting, that would be the other driver that would change our view on our risk. To the extent that borrowers continue to perform in line with expectations, we would expect to continue the deferrals and the forbearance that we've agreed to.

There are no questions at this time. You may now continue, Chris.

Thank you, Kyle, and thank you all for your interest in Fifth Third. If you have any follow-up questions, please contact the Investor Relations department, and we'll be happy to assist you.

That concludes today's conference call. You may now disconnect. Thank you for your participation.