Fifth Third Bancorp 1Q20 Earnings
Presentation April 21, 2020 Refer to earnings release dated April 21, 2020 for further information. Exhibit 99.2
Cautionary statement This presentation
contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of
1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking
language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends
to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K as updated by our filings with the U.S. Securities and Exchange Commission [“SEC”]. When considering these
forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on
information then actually known to us. We undertake no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this document. There are a number of important factors that could cause
future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) effects of the global COVID-19 pandemic; (2) deteriorating credit
quality; (3) loan concentration by location or industry of borrowers or collateral; (4) problems encountered by other financial institutions; (5) inadequate sources of funding or liquidity; (6) unfavorable actions of rating agencies; (7) inability
to maintain or grow deposits; (8) limitations on the ability to receive dividends from subsidiaries; (9) cyber-security risks; (10) Fifth Third’s ability to secure confidential information and deliver products and services through the use of
computer systems and telecommunications networks; (11) failures by third-party service providers; (12) inability to manage strategic initiatives and/or organizational changes; (13) inability to implement technology system enhancements; (14) failure
of internal controls and other risk management systems; (15) losses related to fraud, theft or violence; (16) inability to attract and retain skilled personnel; (17) adverse impacts of government regulation; (18) governmental or regulatory changes
or other actions; (19) failures to meet applicable capital requirements; (20) regulatory objections to Fifth Third’s capital plan; (21) regulation of Fifth Third’s derivatives activities; (22) deposit insurance premiums; (23) assessments
for the orderly liquidation fund; (24) replacement of LIBOR; (25) weakness in the national or local economies; (26) global political and economic uncertainty or negative actions; (27) changes in interest rates; (28) changes and trends in capital
markets; (29) fluctuation of Fifth Third’s stock price; (30) volatility in mortgage banking revenue; (31) litigation, investigations, and enforcement proceedings by governmental authorities; (32) breaches of contractual covenants,
representations and warranties; (33) competition and changes in the financial services industry; (34) changing retail distribution strategies, customer preferences and behavior; (35) risks relating to Fifth Third’s ability to realize the
anticipated benefits of the merger with MB Financial, Inc.; (36) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (37) potential dilution from future acquisitions; (38) loss of
income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (39) results of investments or acquired entities; (40) changes in accounting standards or interpretation or declines in the value of Fifth
Third’s goodwill or other intangible assets; (41) inaccuracies or other failures from the use of models; (42) effects of critical accounting policies and judgments or the use of inaccurate estimates; (43) weather-related events, other natural
disasters, or health emergencies; and (44) the impact of reputational risk created by these or other developments on such matters as business generation and retention, funding and liquidity. You should refer to our periodic and current reports filed
with the Securities and Exchange Commission, or “SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements.
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. In this presentation, we may sometimes provide non-GAAP financial information. Please note that
although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. We provide a discussion of non-GAAP
measures and reconciliations to the most directly comparable GAAP measures in later slides in this presentation, as well as on pages 27 through 29 of our 1Q20 earnings release. Management does not provide a reconciliation for forward-looking
non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting
the occurrence and the financial impact of various items that have not yet occurred, are out of the Bancorp's control or cannot be reasonably predicted. For the same reasons, the Bancorp's management is unable to address the probable significance of
the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Making a difference during the pandemic
Up to $1,000 special payment to banking center, operations and call center employees providing essential banking services Established social distancing across our facilities Installed protective shields at all Bank Mart locations Enhanced cleaning
procedures at our branches and offices ~11,000 employees working remotely (95% remote ex. front-line retail customer service) Employees Consumers Businesses Communities ~10 thousand loans under the Paycheck Protection Program providing $3.4 billion
for businesses with over 300,000 employees Leveraging strength of our balance sheet for commercial customers to draw down on ~$8 billion of existing lines of credit Temporarily increasing SBA Express program maximum to $1 million (from $350,000)
Payment Deferral Program Fee Waiver Program Small Business Association Disaster Assistance $8.75 million philanthropic commitment to help address the effects of the COVID-19 pandemic, including: $3.25 million for COVID-19 response needs in our
regions $5.5 million in Strengthening our Communities Fund grants to support long-term sustainability of our economy Leading regional task force to address COVID-19 issues in the community 99% of 1,123 banking centers remain open for business, in
addition to ~53,000 fee-free ATMs Executed >96 thousand fee waivers and loan hardship deferrals, representing $1.5 billion in Fifth Third balances and an additional $6 billion in the mortgage servicing portfolio: ~49 thousand for up to 90-day
deferrals for credit card, vehicle, and personal loan/line of credits ~34 thousand for up to 180-day payment forbearance ~13 thousand deposit fee waivers No reporting payment deferrals to credit bureaus Temporary suspension of vehicle repossessions
and home foreclosures Our bankers have personally connected with 2 million customers since the start of the COVID-19 pandemic
Supporting customers, communities, and
employees during the pandemic Maintained robust capital and liquidity levels Net interest income, NIM, noninterest income, and expense performance in-line with or better than prior guidance NCO ratio consistent with previous expectations Growth in
the allowance for credit losses reflects adoption of CECL2 and the impact of COVID-19 1Q20 highlights Reported1 1Reported ROTCE, NIM, pre-provision net revenue, and efficiency ratio are non-GAAP measures: all adjusted figures are non-GAAP measures;
see reconciliation on pages 26 and 27 of this presentation and the use of non-GAAP measures on pages 27-29 of the earnings release; 2Refers to current expected credit losses (CECL) methodology implemented as part of Bancorp’s adoption of ASU
2016-13. Adjusted1 ROA Efficiency ratio ROTCE 1.19% 14.7% NIM 3.24% 3.28% 0.11% 1.0% 59.4% 63.0% ROE 9.9% 0.6% excl. AOCI excl. PAA excl. PAA & CDI PPNR $781MM $704MM EPS $0.68 $0.04 up 22% YoY
Commercial Average balance sheet
Securities1 and short-term investments Loan & lease balances Core deposit balances Securities1 Short-term investments Commercial Consumer Total IB core deposit rate Note: Totals shown above may not foot due to rounding 1Available-for-sale debt
and other securities at amortized cost; previous disclosures included available-for-sale equity securities which are disclosed separately in the financial results; See forward looking statements on page 2 Consumer Total loan yield Taxable securities
yield Total average balance; $ billions Loan & lease balances exclude HFS
Net interest income1 1Q20 vs. 1Q19 1Q20
vs. 4Q19 Adjusted NII1 up $132 million, or 12%; Adjusted NIM1 down 4 bps Primary NII drivers: Increase in interest-earning assets including the impact from MB Financial Favorable impact of previously executed cash flow hedges Partially offset by the
declining rate environment Adjusted NII1 up $3 million; Adjusted NIM1 up 2 bps Primary NII drivers: Loan growth Favorable impact of previously executed cash flow hedges Benefit of elevated short-term LIBOR rates on yields relative to funding costs
Partially offset by seasonably strong securities portfolio income in the prior quarter as well as the impact of a lower day count 1Results are on a fully-taxable equivalent basis; non-GAAP measure: see reconciliation on pages 26 and 27 of this
presentation and use of non-GAAP measures on pages 27-29 of the earnings release; See forward-looking statements on page 2 Total net interest income; $ millions Adjusted NII (excl. PAA) NII 3.28% 3.22% 3.24% Adjusted NIM (excl. PAA)
Adjusted noninterest income (excl.
securities (gains)/losses)1 Noninterest income Adjusted noninterest income1 up $8 million, or 1% Primary drivers: Mortgage banking revenue (up 64%) Wealth and asset management revenue (up 4%) Leasing business revenue (up 3%) Partially offset by
lower card and processing revenue (down 9%) 1Non-GAAP measure: see reconciliation on pages 26 and 27 of this presentation and use of non-GAAP measures on pages 27-29 of the earnings release; See forward-looking statements on page 2 Total noninterest
income; $ millions Noninterest income Adjusted noninterest income1 up $165 million, or 29%, including the impact of MB Financial Primary drivers: Mortgage banking revenue (up 114%) Leasing business revenue (up 128%; primarily from MB) Wealth and
asset management revenue (up 20%) Commercial banking revenue (up 20%) 1Q20 vs. 1Q19 1Q20 vs. 4Q19
Adjusted noninterest expense (excl.
intangible amortization) 1 Noninterest expense Adjusted noninterest expense1 up $27 million, or 2% Primary drivers: Seasonally higher compensation and benefits (up 12%), including $3 million of special payments provided to employees providing
essential banking services through the COVID-19 pandemic Partially offset by lower marketing expense (down 30%) and lower technology and communications expense (down 9%) Total noninterest expense; $ millions Adjusted noninterest expense1 up $126
million, or 12%, reflecting the impact of MB Financial Primary drivers: Compensation and benefits (up 12%) Technology investments (up 25%) Leasing business expense (offset in leasing business revenue) Noninterest expense 1Excluding intangible
amortization is a non-GAAP measure: see reconciliation on pages 26 and 27 of this presentation and use of non-GAAP measures on pages 27-29 of the earnings release; See forward-looking statements on page 2 1Q20 vs. 1Q19 1Q20 vs. 4Q19
COVID-19 high impact industries $8.7
billion C&I and Leasing portfolios (7.3% of total) $5.3BN I 4.5% of total 19% in leveraged portfolio 75% shared national credits 71% utilization Totals represent percentage of Fifth Third’s total loans & leases of $119.7 billion;
leveraged: loans corresponding to commitments >$5M with leverage >3x senior debt, 4x total debt (with limited industry variations) Leisure & Recreation $1.9BN I 1.6% of total 4% in leveraged portfolio 89% shared national credits 64%
utilization Retail (non-essential) $1.0BN I 0.8% of total 19% in leveraged portfolio 37% shared national credits 60% utilization Healthcare Facilities $0.5BN I 0.4% of total 2% in leveraged portfolio 89% shared national credits 80% utilization
Travel $5.3 billion CRE portfolio (4.4% of total) $2.1BN I 1.7% of total Leisure & Recreation $1.6BN I 1.3% of total Retail (non-essential) $1.6BN I 1.4% of total Healthcare Facilities Primarily malls and lifestyle centers Underlying real estate
loans primarily with restaurants and casinos Primarily passenger water and air Primarily elective and private practices, and nursing homes Primarily clothing, electronics, furniture and general & specialty merchandise stores Primarily casinos
($2.0BN), restaurants ($1.9BN), sports ($0.5BN), fitness ($0.4BN) and hotels ($0.3BN) Ongoing portfolio surveillance $14.0 billion outstanding balances in COVID-19 high impact industries (11.7% of total) Underlying real estate loans primarily with
elective and private practices, and nursing homes Centralized team managing commercial client modifications Cross functional teams assessing credit in real time Created a credit advisory forum based on industry/risk type, led by industry and product
experts to assess long term viability of borrower (including risk mitigation, client relief, or risk rating designation) Credit principles: disciplined client selection, favoring large borrowers who have diverse revenue streams, multiple sources of
repayment, and a track record of resilience through the cycle Geographically diversified portfolios, favoring large borrowers with a track record of resilience; 75% of C&I portfolio is in shared national credits
Oil & gas portfolio remains well
positioned Oil & Gas Balance Mix Meaningful improvements from last cycle which had already exhibited strong performance Fifth Third RBL client cash flow leverage 2015 1Q20 Portfolio is less levered and more hedged than before the last downturn
$24MM total energy portfolio losses from 2015-2016 downturn RBL clients are well-hedged against lower commodity prices; By year-end, clients hedged more than 50%: 2020: ~80%; 2021: ~30% Deliberately underweight in OFS which we believe will exhibit
higher losses in a down cycle 44% 18% 79% 7% 4.7x 2.2x Fifth Third RBL balance % Fifth Third OFS balance % RBL Oil & Gas Production $2.8BN I 2.3% of total loans 65% utilization Oil / Gas Mix 56% / 44% Reserve-Based Structure 95% Midstream
Refining Oilfield Services (OFS) $0.4BN I 0.3% of total loans 28% utilization Midstream Oil / Gas Mix 63% / 37% Asset-Based Structure 10% $0.2BN I 0.2% of total loans 79% utilization Asset-Based Structure 63% Totals represent percentage of Fifth
Third’s total loans & leases of $119.7 billion; Hedge information based on proved developed producing (PDP) reserves
Consumer portfolios are well
positioned Residential mortgage 14% 758 Home equity Indirect secured Credit card Other consumer Portfolio WA FICO % of Total Loans Predominantly GreenSky 5% 761 10% 752 2% 736 2% 759 Strong credit quality throughout the consumer portfolio, focused
on prime and super prime borrowers ~90% of total consumer portfolio is secured ~85% of real estate portfolio is in 1st lien position ~10% of mortgage hardship forbearance requests have LTVs >80%2 Predominantly auto 74% Portfolio WA LTV at Orig.
70% 93% NA NA Totals represent percentage of Fifth Third’s total loans & leases of $119.7 billion; 1FICO distributions at origination exclude certain acquired mortgages and home equity loans as well as $100 million from credit card loans
on book primarily ~15+ years, and $500 million from consumer loans associated with private wealth clients. 2hardship requests excluding those with government guarantees or mortgage insurance, and which consider the most recently-updated loan
appraisal. 56% 18% 22% 4% Consumer portfolio FICO score distribution1 755 WA FICO for total consumer portfolio
Credit quality overview 1Excludes
HFS loans Nonperforming assets1 (NPAs) Net charge-offs (NCOs) ACL as % of portfolio loans and leases NPA ratio of 0.60% down 2 bps from prior quarter NCO ratio consistent with previous expectations ACL represents: 363% of NPLs, and 331% of NPAs 76%
of 2018 supervisory DFAST Adverse losses 44% of 2018 supervisory DFAST Severe losses 50% of 2019 company run DFAST Severe losses 54% of 2020 company run DFAST Severe losses Provision 525% of NCOs Incurred Loss Method CECL
Current expected credit losses
(CECL) implementation Allowance for loan & lease losses Commercial and industrial loans Commercial mortgage loans Commercial construction loans Commercial leases Total commercial Residential mortgage Home equity loans Indirect secured consumer
loans Credit card loans Other consumer loans Total consumer Allowance for lease losses 50 19 790 81 41 59 187 44 412 1,202 144 $1,346 Reserve for unfunded commitments Allowance for credit losses 97 624 0.98% 0.56% 1.13% 0.48% 0.67% 0.51% 7.39% 1.62%
1.04% 1.10% 1.23% 1.23% 0.88% Amount % of portfolio loans & leases 53 46 1,313 259 219 129 306 122 1,035 2,348 169 $2,517 237 977 0.97% 1.47% 1.68% 1.55% 3.67% 1.07% 12.66% 4.19% 2.58% 1.99% 2.13% 1.68% 2.12% Allocation of allowance by product
$s in millions 4Q19 (Incurred) 1Q20 (CECL) Allowance for credit losses increased $1.171BN, reflecting the CECL adoption ($653MM Day 1 reserve build), worsening economic outlook due to COVID-19, the impact of lower oil prices, and loan growth Amount
% of portfolio loans & leases
Heavily core funded with ~89%
loan-to-core deposit ratio, remaining at the best level in ~15+ years Over $80 billion of available liquidity sources $4.1B in Holding Company cash, currently sufficient to satisfy all fixed obligations in a stressed environment for ~26 months (debt
maturities, common and preferred dividends, interest, and other expenses) without accessing capital markets, relying on dividends from subsidiaries or any other actions Strong capital and liquidity position 1Current period regulatory capital ratio
is estimated Common Equity Tier 1 ratio (Basel III)1 Liquidity Position Fed Reserves Unpledged Investment Securities Available FHLB Borrowing Capacity Current Fed Discount Window Availability Total $s in billions; as of 3/31/2020 ~$6 ~$29 ~$11 ~$35
~$81 Liquidity Sources 30 bps (13 bps) (18 bps) (38 bps) CET1 ratio remained strong; largest drivers of sequential change: +30 bps from earnings ex. provision (38) bps from RWA, primarily C&I line draws (18) bps from provision build $0.27 common
dividend had ~(13) bps impact Share repurchases suspended (no 1Q20 repurchases) Expect to maintain dividends unless economic outlook significantly deteriorates from here $2.5 billion in AOCI not included in regulatory capital
Current expectations Second quarter
2020 compared to first quarter 2020 1Non-GAAP measure: see forward-looking statements on page 2 of this presentation regarding forward-looking non-GAAP measures and use of non-GAAP measures on pages 27-29 of the earnings release. (average balances,
incl. HFS) As of April 21, 2020; please see cautionary statement on page 2 Due to the current economic uncertainty, we are withdrawing the Company’s financial outlook for the full-year 2020 that was issued on January 22, 2020 NII (FTE)1 Loans
& leases Up high-single to low-double digits Relatively stable Noninterest income1 Down high-single to low-double digits Noninterest expense1 Down high-single to low-double digits (excluding PAA) (1Q20 baseline: $1.217BN) (1Q20 baseline: $708MM)
(excl. merger-related and CDI expenses; 1Q20 baseline: $1.144BN) Net charge-off ratio 45 to 50 bps range Effective tax rate ~22% range
Remain well-positioned to navigate
the uncertain economic environment Resilient Balance Sheet Proactive Management Diversified Revenue Mix 1 2 3
Appendix
100% Fix | 0% Variable 71% Fix | 29%
Variable Balance sheet positioning Investment portfolio $19.3B fixed | $58.8B variable 1,2,3 Commercial loans1,2,3 Consumer loans1 Long-term debt4 $31.1B fixed | $10.5B variable 1 $12.3B fix | $3.9B variable 4 1ML based: 60%6 3ML based: 7%6 Prime
based: 7%6 Other based: 2%6,9 Weighted avg. life: 1.4 years 1ML based: 1%7 12ML based: 2%7 Prime based: 18%7 Weighted avg. life: 2.8 years Data as of 03/31/20; 1Includes HFS Loans & Leases; 2Fifth Third had $8.0B of variable loans classified as
fixed given the 1ML receive-fix swaps outstanding against C&I loans; 3Excludes forward starting swaps; 4Fifth Third had $1.46B 3ML receive-fix swaps and $1.25B 1ML receive-fix swaps outstanding against long-term debt, which are being included in
floating, long-term debt with swaps outstanding reflected at fair value; 5Effective duration of the taxable available for sale portfolio; 6As a percent of total commercial; 7As a percent of total consumer; 8As a percent of total long-term debt;
9Includes 12ML, 6ML, and Fed Funds based loans 1ML based: 8%8 3ML based: 16%8 Weighted avg. life: 4.12 years C&I 23% Fix | 77% Variable Coml. mortgage 22% Fix | 78% Variable Coml. lease 100% Fix | 0% Variable Resi mtg.& construction 87% Fix
| 13% Variable Auto/Indirect 100% Fix | 0% Variable Home equity 10% Fix | 90% Variable Senior debt 73% Fix | 27% Variable Sub debt 78% Fix | 22% Variable Auto securiz. proceeds 97% Fix | 3% Variable Coml. construction 0% Fix | 100% Variable Credit
card 23% Fix | 77% Variable Other 68% Fix | 32% Variable Other 82% Fix | 18% Variable 60% allocation to bullet/ locked-out cash flow securities Yield: 3.13% Effective duration of 4.75 Net unrealized pre-tax gain: $2.2B 99% AFS Level 1 100% Fix | 0%
Variable Level 2A Non-HQLA/ Other Information above incorporates $8B in C&I receive fixed swaps and ~$3B in LTD received fixed swaps In addition, $3B fixed rate floors of 2.25% are not incorporated above
Interest rate risk management
Estimated NII sensitivity profile and ALCO policy limits Estimated NII sensitivity with deposit beta changes Estimated NII sensitivity with demand deposit balance changes 1 Effective duration of the taxable available for sale portfolio; 2Re-pricing
percentage or “beta” is the estimated change in yield over 12 months as a result of a shock or ramp 100 bps parallel shift in the yield curve, Note: data as of 03/31/20; actual results may vary from these simulated results due to
differences between forecasted and actual balance sheet composition, timing, magnitude, and frequency of interest rate changes, as well as other changes in market conditions and management strategies. NII is asset sensitive over the next 12-24
months to rising rates. As of March 31, 2020, 58% of loans were variable rate net of existing swaps (75% of total commercial; 25% of total consumer) Investment portfolio effective duration of 4.71 Short-term borrowings represent approximately 24% of
total wholesale funding, or 4% of total funding Approximately $13 billion in non-core funding matures beyond one year Interest rate sensitivity tables leverage the following deposit assumptions: Beta on all interest-bearing deposit and sweep
balances: 71% up and 42% down2 No modeled re-pricing lag on deposits Utilizes forecasted balance sheet with $750MM DDA runoff and growth (per 100 bps rate movement) assumed in up rate and down rate scenarios, respectively Weighted interest-bearing
deposit floor of 8 bps
NPL rollforward1 1Loan balances
exclude nonaccrual loans HFS Commercial Consumer Total NPL $ millions $ millions $ millions
Balance and credit loss trends1
Commercial & industrial Residential mortgage Commercial mortgage Home equity Indirect secured consumer loans Average portfolio balance NCOs as a % of average portfolio loans 1All balances are in billions Commercial construction
Expected impacts of MB purchase
accounting1 2Q20 ($ in millions) Reflects purchase accounting impacts exclusively related to the MB Financial acquisition Projected purchase accounting accretion from the non-PCI loan portfolio represents scheduled amortization, and does not include
impact of any accelerated payoffs $38 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 1See forward-looking statements on page 2 of this presentation.
Strong liquidity profile $ millions
– excl. Retail Brokered & Institutional CDs Unsecured debt maturities Heavily core funded Holding company: Holding Company cash as of March 31, 2020: $4.1B Cash currently sufficient to satisfy all fixed obligations in a stressed
environment for ~26 months (debt maturities, common and preferred dividends, interest, and other expenses) without accessing capital markets, relying on dividends from subsidiaries or any other actions The Holding Company did not issue any long-term
debt in 1Q20 Bank entity: The Bank issued $650MM of three-year and $600MM of seven-year senior notes in 1Q20 Available and contingent borrowing capacity (1Q20): FHLB ~$10.6B available, ~$14.2B total Federal Reserve ~$35.6B 2020 funding plans In
2020, Fifth Third expects to issue sufficient long-term debt to maintain its current ratings under the Moody’s LGF methodology As of 3/31/2020 $2,150 $3,150 $650
Mortgage banking results $ millions
Mortgage banking net revenue $ billions Mortgage originations and gain-on-sale margin1 1Gain-on-sale margin represents gains on all loans originated for sale Mortgage banking revenue increased $64 million from year-ago quarter and $47 million from
prior quarter $4B in originations, up 145% compared to the year-ago quarter and up 6% from prior quarter; 28% purchase volume 1Q20 mortgage banking drivers: Origination fees and gain on sale revenue up $32MM sequentially Gain on sale margin up 67
bps sequentially $3MM securities gain compared to $1MM securities loss in the prior quarter (not included in mortgage banking) Originations HFS Originations HFI Margin Origination fees and gains on loan sale Gross servicing fees Net MSR valuation
1Q20 adjustments and notable items
Adjusted EPS of $0.681 1Q20 reported EPS of $0.04 included a negative $0.55 impact from: $518 million pre-tax (~$399 million after-tax2) provision in excess of net charge-offs Also included a negative $0.09 impact from the following notable items:
$36 million pre-tax (~$28 million after-tax2) negative credit valuation adjustment (CVA) within other noninterest expense $22 million pre-tax (~$17 million after-tax2) charge related to the valuation of the Visa total return swap $15 million pre-tax
(~$12 million after-tax2) net impairment on private equity investments $7 million pre-tax (~$5 million after-tax2) merger charges 1Average diluted common shares outstanding (thousands); 720,363; 2Assumes a 23% tax rate; : all adjusted figures are
non-GAAP measures; see reconciliation on pages 26 and 27 of this presentation and the use of non-GAAP measures on pages 27-29 of the earnings release;
Regulation G non-GAAP reconciliation
Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconciliation $ and shares in millions March December September June March (unaudited) 2020 2019 2019 2019 2019 Net income (U.S. GAAP) (a) $46 $734 $549 $453 $775 Net income (U.S. GAAP)
(annualized) (b) $185 $2,912 $2,178 $1,817 $3,143 Net income available to common shareholders (U.S. GAAP) (c) $29 $701 $530 $427 $760 Add: Intangible amortization, net of tax 10 11 11 11 2 Tangible net income available to common shareholders (d) $39
$712 $541 $438 $762 Tangible net income available to common shareholders (annualized) (e) $157 $2,825 $2,146 $1,757 $3,090 Net income available to common shareholders (annualized) (f) $117 $2,781 $2,103 $1,713 $3,082 Average Bancorp shareholders'
equity (U.S. GAAP) (g) $21,713 $21,304 $21,087 $20,135 $17,025 Less: Average preferred stock (h) (1,770) (1,770) (1,445) (1,331) (1,331) Average goodwill (4,251) (4,260) (4,286) (4,301) (2,682) Average intangible assets and other servicing rights
(193) (194) (208) (215) (58) Average tangible common equity (i) $15,499 $15,080 $15,148 $14,288 $12,954 Less: average accumulated other comprehensive income ("AOCI") (1,825) (1,416) (1,444) (619) - Average tangible common equity, excluding AOCI (j)
$13,674 $13,664 $13,704 $13,669 $12,954 Adjustments (pre-tax items) CECL reserve build 518 - - - - Valuation of Visa total return swap 22 44 11 22 31 GreenSky securities losses (gains) - - - - (9) Provision impact from conversion to a national
charter - 9 - - - Private equity write-down 15 - - - - Merger-related expense 7 9 28 109 76 Contribution for Fifth Third Foundation - 20 - - - Gain recognized from Worldpay TRA transaction - (345) - - - Unfavorable credit calculation adjustment
(CVA) 36 - - - - Merger-related branch network impairment charge - - - - 13 Gain on sale of Vantiv/Worldpay shares - - - - (562) Adjustments - after-tax 1 (k) 461 ($202) $30 101 ($341) Adjustments - tax-related Acquisition impact on state deferred
taxes - - - - 9 Adjustments - tax-related (l) - - - - 9 Adjusted net income [(a) + (k) + (l)] $507 $532 $579 $554 $443 Adjusted net income (annualized) (m) $2,039 $2,111 $2,297 $2,222 $1,797 Adjusted net income available to common shareholders [(c)
+ (k) + (l)] $490 $499 $560 $528 $428 Adjusted net income available to common shareholders (annualized) (n) $1,971 $1,980 $2,222 $2,118 $1,736 Adjusted tangible net income available to common shareholders [(d) + (k) + (l)] $500 $510 $571 $539 $430
Adjusted tangible net income available to common shareholders (annualized) (o) $2,011 $2,023 $2,265 $2,162 $1,744 Average assets (p) $171,871 $169,327 $169,585 $167,578 $148,968 Metrics: Return on assets (b) / (p) 0.11% 1.72% 1.28% 1.08% 2.11%
Adjusted return on assets (m) / (p) 1.19% 1.25% 1.35% 1.33% 1.21% Return on average common equity (f) / [(g) + (h)] 0.6% 14.2% 10.7% 9.1% 19.6% Adjusted return on average common equity (n) / [(g) + (h)] 9.9% 10.1% 11.3% 11.3% 11.1% Return on average
tangible common equity (e) / (i) 1.0% 18.7% 14.2% 12.3% 23.9% Adjusted return on average tangible common equity (o) / (i) 13.0% 13.4% 15.0% 15.1% 13.5% Adjusted return on average tangible common equity, excluding AOCI (o) / (j) 14.7% 14.8% 16.5%
15.8% 13.5% For the Three Months Ended See pages 27-29 of the earnings release for a discussion on the use of non-GAAP financial measures; 1Pre-tax items: for all periods assume a 23% tax rate, except for 1Q19 non-deductible merger-related items
Regulation G non-GAAP reconciliation
See pages 27-29 of the earnings release for a discussion on the use of non-GAAP financial measures
