Fifth Third at RBC Conference: Strategic Growth Amid Challenges

On Wednesday, 05 March 2025, Fifth Third Bancorp (NASDAQ: FITB) participated in the RBC Capital Markets Global Financial Institutions Conference 2025. The company highlighted its strategic focus on stability, profitability, and growth, while addressing challenges like market volatility and regulatory changes. Despite a downturn in noninterest income, Fifth Third remains optimistic about its long-term prospects.

Key Takeaways

• Fifth Third is committed to expanding in the Southeast, aiming for nearly 600 branches by 2028.
• Noninterest income is expected to fall by 9% due to capital markets volatility.
• The bank reaffirms its full-year revenue, expense, and net charge-off guidance.
• Fifth Third anticipates a more favorable regulatory environment under the new administration.

Financial Results

Fifth Third Bancorp provided insights into its financial performance:

• Noninterest income is projected to decline by 9%, a result of capital markets volatility.
• The bank maintains its outlook for net interest income and net charge-offs for the first quarter.
• Full-year guidance on revenue, expenses, and net charge-offs remains unchanged.
• Tangible book value per share increased by 19% in 2023 and by 6% in 2024, despite a rise in the ten-year treasury rate.
• Consumer deposits in the Southeast have surged, now 50% higher than in the Midwest.

Operational Updates

Fifth Third is aggressively expanding its presence in the Southeast:

• Since 2018, 138 new branches have opened, with plans to add 50 to 60 more annually through 2028.
• The bank aims for a top five location share in key Southeast markets.
• A 50% increase in middle market banking and commercial payment sales force has been achieved in the Southeast.
• The branch count has decreased by 5% from pre-COVID levels due to Midwest consolidations.

Future Outlook

Fifth Third is optimistic about future growth:

• Anticipates reduced regulatory burdens and more certainty on tax policy, potentially boosting activity.
• Expects seasonal strength in consumer deposits in March due to tax refunds.
• New Southeast branches typically reach breakeven in three years and grow faster than the market for seven years.
• Projects a 6% yield on the auto loan portfolio by the end of 2025.

Q&A Highlights

Key insights from the Q&A session included:

• Moody’s economic scenarios present significant uncertainty, potentially leading to a $50 million reserve build.
• By year-end, 35% of branches will be in the Southeast, increasing to 50% post-expansion.
• 80% of lending clients are also commercial payments customers.
• The bank foresees a slower pace of bank M&A activity but views some consolidation as beneficial.

In conclusion, Fifth Third Bancorp remains focused on strategic expansion and financial resilience. For further details, refer to the full transcript.

Full transcript - RBC Capital Markets Global Financial Institutions Conference 2025:

Gerard, Conference Host, RBC: you for coming to the second day of the RBC Financial Institutions Conference. I’m very pleased to have with us today Fifth Third Bancorp, presenting this morning. As you may know, they’re about the thirteenth largest bank in The United States with just over 212,000,000,000 in assets. The company has put up a return on changeable common equity recently of about 18.3%. Joining us today to my immediate right is Jamie Leonard, who’s currently the executive vice president and chief operating officer.

Many of you may remember Jamie as the CFO. He took over this role back in early twenty twenty four. Jamie joined Fifth Third Bank back in 1999. To his immediate right is Brian Preston, who is the executive vice president and chief financial officer. Brian took over that role when Jay Jamie moved into the current role back in January of twenty twenty four.

Prior to that, he was the treasurer for Fifth Third Bank, and he joined Fifth Third back in 02/2003. So Brian’s going to have some opening comments first, and then we’ll go into the fireside chat. Brian, take it away.

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Thank you, Gerard, and good morning, everyone. Last night, we published a slide presentation on our Investor Relations website, which I’ll reference in my prepared remarks. Afterward, Jamie and I will be happy to answer any questions you may have. At Fifth Third, we believe great banks distinguish themselves not by how they perform in benign environments, but by how they navigate uncertain ones. Despite a year of changing expectations on interest rates and loan growth, we were very pleased to deliver on financial commitments to our shareholders in 2024.

We achieved this success through a diversified business mix, deliberate balance sheet positioning and a continuous effort to find capacity for long term investment while maintaining expense discipline. As a result, Fifth Third continues to deliver top quartile profitability and strong long term returns for shareholders. And with a reasonable PE ratio on 2025 earnings, we aim to continue that performance for our shareholders. These results stem not from chasing competitor trends, but from our consistent investments over the years. Driven by our belief in better products and service, granular retail deposit funding and diversified fee and loan production would generate stronger long term outcomes.

Our focus remains on stability, profitability and growth in that order. These priorities are not mutually exclusive concepts. An often overlooked driver of stability is investment and where you choose to grow. To grow sustainably faster than the industry, we positioned our branch footprint to benefit from the Southeast rapid population growth. This region grows two to three times faster than the rest of The United States and six times faster than our legacy Midwest markets.

Since 2018, we have opened 138 branches in the Southeast, nearly matching the national total branch builds of all of our peers combined. We are now accelerating our investment pace to 50 to 60 branches per year through 2028 to achieve our desired market density. These investments will give us nearly 600 branches in the Southeast and a top five location share in nearly every focus market. We capitalize on our strengths when investing, avoiding unknown or unproven areas. Our new branches consistently outperform both our models and the peer average.

We ground our retail business in analytical disciplines, for location selection and marketing, product innovation like momentum banking and disciplined sales execution, and years of hard work and lessons learned. When our branch expansion program is complete, over half our Southeast branch network will be less than ten years old, and we expect substantial deposit growth from the seasoning of these investments for years to come. Our Southeast investments extend beyond branches. Since 2018, we have increased our middle market banking and commercial payment sales force by 50% in our Southeast markets. Combined with our Texas and California market investments, these high growth markets now account for nearly half of our middle market focused sales teams.

On the wealth front, our Southeast sales headcount has doubled during the same period. Our stability is also supported by over $30,000,000,000 in commercial operating deposits driven by our commercial payments business. Nearly 95% of our total commercial balances come from relationships that utilize commercial payment services, including 82% coverage of our uninsured deposits. Over 80% of our C and I lending clients maintain a commercial payments relationship with Fifth Third. The net interest income benefit from these deposits combined with our commercial payments fees generate $2,000,000,000 of annualized revenue in the current rate environment.

The future of payments is software enabled solutions that solve operational problems associated with revenue or expense cycle management. Our strategy is to innovate through focused product solutions in our managed service offerings and provide payments infrastructure to the technology innovators. This area is another known capability for Fifth Third given our payments heritage and scale as a top five treasury management provider across most major cash management products. In 2024, we processed $17,000,000,000,000 in payments for our customers. And annually, we originate ACH send credits in line with volumes for all other Category four banks combined.

We strive to be resilient to changes in rate and credit environments to generate peer leading results with lower volatility. We have spoken for many years about the need for a credit cycle to clear out undisciplined originators. We believe we’re in the early to middle innings for our credit cycle for commercial real estate. Contractual lease payments have supported many buildings with high vacancies, but these leases will continue to mature. These cycles can have a long tail, and we expect heightened losses in the banking industry and the non bank lending space for the next several years.

On Slide nine, we compare Fifth Third’s net charge off ratio for CRE to other large banks. After the two thousand and eight financial crisis, our approach to commercial real estate lending changed. It is a specialty lending business that requires expertise. To be successful through the cycle, we want bankers and credit specialists who spend every day thinking about real estate. We focus on recourse lending with strong project sponsors.

Even during the low rate environment, when there were plentiful lending opportunities, we did not consider CRE to be a growth asset class. We remain disciplined in underwriting, requiring recourse and strong loan to values. In return, our customers know they have a lender committed through the cycle. This discipline has led to zero net charge offs over the last three years. For interest rate risk, we try to manage our balance sheet primarily through our business lines and diversified loan originations.

Origination platforms like indirect auto, provide and dividend give us access to granular fixed rate loans at various interest rate term points with minimal prepayment risk. The mix of these fixed rate loans with varied maturities and our investment securities portfolio helps us maintain our neutrally positioned balance sheet. Given our focus on maintaining optionality, we try to position the balance sheet to deliver consistent predictable cash flows from year to year. In addition to the certainty of cash flows for fixed rate asset repricing, structured securities have more predictable accretion schedules for AOCI to benefit tangible book value. Our tangible book value per share increased 19% from the end of twenty twenty two to the end of twenty twenty three as the ten year treasury rate remained the same.

In 2024, the ten year rate increased by 70 basis points and the tangible book value per share still grew by 6%. Assuming the forward curve is realized, our tangible book value per share should grow by 4% per year through 2028 due only to AOCI accretion as the securities pulls to par. Earnings will further add to this tangible book value growth. For capital, our priorities remain a strong and stable dividend, supporting organic growth and finally share repurchases. We believe organic growth and investing in our company is the best way to deliver strong shareholder returns.

Our strong profitability and ability to grow capital provides us with a tremendous amount of flexibility. Turning to the outlook. The last few weeks have been a good reminder of the volatile and unpredictable nature of the macroeconomic and geopolitical environments. Heading into 2024, we believe that reduced regulatory burdens and more certainty on future tax policy would be drivers of increased activity. We continue to believe these factors will boost economic growth.

However, the risk of the geopolitical environment and the impact of tariffs on various aspects of the economy may offset some of these benefits. In February, we began to see how these risks manifest in reduced capital markets activities and in economic forecasts. Noninterest income is now expected to be down 9% compared to earlier guidance of down 7% to 8% due to capital markets transactions being pushed out of the first quarter given the recent volatility. We are not changing our net interest income outlook for the first quarter. We have continued to see good activity in loan production, but that has been mostly offset by tightening loan spreads and some seasonal weakness in commercial deposits.

Consumer deposits continue to perform well, and we expect to see the normal seasonal strength in March associated with tax refunds. Given the continued loan production, the build in ACL attributable to loan growth and mix is now expected to be $25,000,000 to $30,000,000 Additionally, the Moody’s economic scenarios for the quarter present a significant uncertainty. Using our loan portfolio as of December 31, the modeled ACL output from the Moody’s scenarios would indicate an additional $50,000,000 reserve build. This result is driven by Moody’s forecasted deterioration in corporate profits, credit spreads and home prices. The ultimate provision for the quarter will be dependent on the ending March loan portfolio, the March macroeconomic scenarios and our qualitative assessments of our loan portfolio.

Lastly, for the quarter, we continue to expect net charge offs in line with our guidance from January. For the full year, we are reaffirming our revenue, expense and net charge off guides from January. We continue to expect record NII, a return to loan growth and positive operating leverage. ACL increases for the remainder of the year will be dependent on loan growth and Moody’s economic outlook. With that, Jamie and I are happy to take your questions.

Thank you.

Gerard, Conference Host, RBC: Brian, thank you very much. Maybe following up on the guide that you just gave, the Moody’s comments were unique, that you’re the first to mention the, you know, the February outlook. Can you share with us based on history, because you guys have been doing this now since January of twenty twenty, how much subjectivity you have in interpreting their recommended economic outlook?

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Yeah. There are there are a couple components of that. You know, first and foremost, the guidance update associated with credit, there’s nothing idiosyncratic from a credit perspective happening there. That is a function of the balance sheet growing. When the balance when loans grow, you should expect to see reserve builds and then the impact the formulaic impact of the Moody’s economic scenario.

We always have some process associated with being able to look at the portfolio and make adjustments where necessary if the modeled outcomes don’t make sense. For example, on the $50,000,000 about $30,000,000 of that is associated with the commercial portfolio and 20,000,000 with the consumer portfolio. The consumer is actually driven by HPI. The Moody’s outlook is actually for a weaker HPI performance, and that’s impacting residential mortgages and home equity loans through our models. We would not expect significant impact in our resi mortgage or home equity loan portfolio in this environment just given how much is included, how much equity there is in those loans today.

But it is an impact out of the modeled outcome. So we just want to make sure that people understand that these scenarios and the volatility that we’re seeing around them certainly is a risk for us in the industry. This is just a function of how the models react to some of those changes.

Gerard, Conference Host, RBC: Very good. Maybe we’ll kick off Jamie. Obviously, you’re overseeing the growth of the Southeast franchise on the consumer side. Can you share with us, you know, when you build out the new branches, how long does it take to get the profitability or breakeven? And Brian pointed out that I think the average age of branches in the system are less than ten years.

Obviously, the Southeast is a lot younger. So maybe some color there as well.

Jamie Leonard, Executive Vice President and Chief Operating Officer, Fifth Third Bank: Sure. The Southeast currently, we’re actually less than five year average age. Brian’s ten year comment was fast forward to the end of our 200 branch build initiative. That age will still be the youngest branch network of size in the Southeast. And we’re really excited about the opportunity in the Southeast, why we picked the Southeast.

If you just looked at the 2024 population migration in The United States, Four of the top five winners in population migration were in the Southeast, North Carolina, South Carolina, Florida, Tennessee. And if you look, the next two were Alabama and Georgia. So the Southeast is winning in terms of population and we need to be there. At the end of this year, we’ll be about 35% of our branch network will be in the Southeast. At the end of this initiative, we will be at roughly 50% of the branch network in the Southeast.

And the good news for us is we’ve done 138 and we’ve locked in actually the 138 of the 200 sites. So we feel really good about our location selection, what that can bring to the company and the profitability we model achieving breakeven within three years and we’ve been running ahead of that and you see that in the FDIC data as well as we’ve garnered share in 15 of the 16 markets that we operate.

Gerard, Conference Host, RBC: And typically when you get to breakeven, what kind of deposit levels generally do you see in the branches to get to that, breakeven point? Well, it depends on what the big guys’ FTP rates are. But if we just use a fed funds

Jamie Leonard, Executive Vice President and Chief Operating Officer, Fifth Third Bank: Yep. Model on the deposits, when we get $30,000,000 or more, we’re definitely going to be profitable. We have adopted about a 1,900 square foot footprint and continue to be very lean on the cost of the builds. But post breakeven, you tend to get a seven year runway of accelerated growth above market growth. And then obviously getting to 7% or 8% location share in market gives you the density that you need in order to optimize your profits.

Given geography. Got it. And one of

Gerard, Conference Host, RBC: the other interesting parts of the growth story is how you’re combining that with shrinking the Midwest footprint and identifying branches that are not needed. Tell us about that strategy, how you identify them and has there been much customer loss once you decide to close

Jamie Leonard, Executive Vice President and Chief Operating Officer, Fifth Third Bank: a branch? So over the one hundred and sixty seven years, the world has changed. And so that Midwest footprint, especially where it’s a little bit more mature, we do analyze and move locations and we’ll do two for one consolidations or we’ll do closures. Our branch count is actually down 5% from our pre COVID levels before we started this. And our approach is let’s consolidate branches and use that consolidation to pay for the Southeast.

And that has been a very effective strategy for us. The attrition has been much better than what we model. We model a 1% attrition, and it’s actually been significantly below that in part because of the digital adoption and certainly COVID accelerated digital adoption. Our customers were roughly 75% digitally adopted. And so therefore, the biggest factor on attrition is just drive time when you want to have lending activity or get advice.

Right.

Gerard, Conference Host, RBC: Yes. Brian, you touched on in your opening remarks about payments. What distinguishes Fifth Third from some of its peers is the growth strategy in the Southeast, of course, but also the payments business. Can you elaborate, you know, how do you get the payments group working with the commercial lenders and how do they kind of, this is a bad word, cross sell, but, you know, how do they collaborate together to to really drive it?

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Yeah. In general, I think we have done a nice job through the years with our one bank model to really, institutionalize banking relationships and deepen those relationships. That that occurs both, from commercial to payments, but also in our wealth business as well as the capital markets business that we support. As I mentioned in the prepared remarks, about 80% of our lending clients are payments customers. And we think that is best in class when we look at peer statistics on that front.

And first and foremost, our One Bank regional model where the sales teams actually all report to local, local leadership does make a big difference. They do a good job of working together to really understand what our client needs are and how to then solve their problems. That has been a huge component of it. Obviously, products make a big difference. We’ve done a nice job on product development that actually creates problem solving solutions for customers in terms of operational costs.

That gives us an opportunity to compete in a different way. When you can talk about how your product is going to have a hard cost save in terms of the actual activities to deliver payments, that’s different than just saying, hey, we’re going to reduce your pricing a little bit relative to what you’re paying today. So those two things together, that has taken us from what is typically a 3% to 4% growth market. When you think about the transactional revenue activity, that gets us to that 6% or 7%. And then the investment in new line, which is the embedded payments business, This is a high growth area where we think that there is going to continue to be really strong trends.

That takes product capabilities, it takes compliance capabilities and technology capabilities, all things that we had developed through the years from our legacy payments relationship with the FTPS business that we spun out that became Vantiv and now Worldpay. We had to learn how to externalize capabilities in a unique way, and we figured out that we could turn that into a business. And what we now bring is industrial scale to an area where it had been serviced by smaller banks. And what you’re seeing are these large, fintech modern payment companies saying they need a partner like Fifth Third that they can count on that’s not going to get them in a put them in a problem from a compliance perspective where they where they can’t grow. And that’s why you see names like Stripe and Trustly and Blackbaud and Toast coming to our platform because we have the products, the technology, and they have they have a lot of confidence in us on the compliance front.

That’s going to be a very high growth business from here. It’s a, you know, 30%, forty %, fifty % growth business now, albeit that’s a pretty small base. But that’s what gets us into that high single digit, low double digit growth rate. And the thing we like about that business is their sales force becomes our sales force. We make money as they grow.

We make money as they take share from the banking sector. So we just think it is a good strategic position to be in.

Gerard, Conference Host, RBC: Brian, you also mentioned in your comments and maybe Jamie you could touch on this as well about the uncertainties in the geopolitical environment and we’ve seen it obviously manifest itself this week with the tariffs. In talking to your clients, commercial customers, maybe even some consumers, what are they feeling? Is it more uncertainty? You mentioned the investment banking revenues seem to be delayed. But then second, if you could also tie in your auto lending business because obviously if this Canadian tariff stays in place, autos is one of the sectors that’s likely to be impacted by it.

So any color you guys would like to offer on it?

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Yeah. And I’ll start with the commercial front and then I’ll let Jamie talk about the auto business. In general, it is it’s kind of a mixed area right now from, what does it mean to our customers? It does create some pause for them as they think about investment and capital investment, and they’re reevaluating what they actually need from here and what the risks are for them. I think what has been interesting is that the lessons that were learned from COVID were the importance of supply chain diversification, and that is being reinforced to these customers.

So you have some customers looking at it and saying that maybe I need to go and be a little bit proactive on rev on inventory build in this environment just to get in front of the tariff risk. You also have others that are saying I need to continue to invest in onshoring my supply chain to help protect myself from a COVID from a tariff perspective. And so what we’re seeing right now are actually fairly robust pipelines still. You know, we would you know, our middle market teams would tell you that we’re still seeing record pipelines from a lending perspective. We’re certainly seeing some things where people are potentially being a little bit cautious given some of the volatility in the environment.

But what we are seeing are people saying that, yes, I have to continue to invest in my business to protect myself from a long term perspective. So we still think even with that volatility, you’re going to see investment. It may slow some things from an acquisition transactional perspective that some of what we’ve seen is it really has been the bond and loan capital markets activities that started to slow in February and have been slow at the beginning of this month as well. But we continue

Jamie Leonard, Executive Vice President and Chief Operating Officer, Fifth Third Bank: to expect to see investments in our customers investing in their businesses. On the consumer side, obviously, the health of the consumer has been in the media and a topic of debate over the past couple of weeks with the retailers and then FHA delinquencies. I think the key differential between those stories and what we’re seeing at Fifth Third is if you look at the left hand side of the balance sheet for us, we’re prime, super prime lender and therefore the stress that others are quoting are really in the lower income, lower FICO, swaths of The U. S. Consumer.

What we see on the lending side is actually an improvement in delinquencies in January and February. We finished the 2024 at a 54 basis point delinquency rate in the 30 to 89 bucket, that’s actually down to 50 basis points at the February. So because our focus and we talked about this several years ago, our focus is lending to the homeowner. The homeowner is in a continued healthy state. So on our balance sheet, we’re underweight homeowners.

So when Brian talks about the ACL and the HPI impacts, you might think we’d be less impacted than others just homeowner perspective. But when it comes to the other asset classes, card and auto, we are very heavily focused on lending to the homeowners such that our entire left hand side of the consumer balance sheet is about 85% lent to the homeowner and the homeowner continues to be in good shape. The renters continue to be squeezed and that is the challenged group. Now if you move to the right hand side of the balance sheet, we analyze and obviously we bank everyone. And so you get a broader swath of the consumer analytics when you look at our deposit activity.

We don’t see anything, from an overdraft perspective, a My Advance perspective. All of the more stressed activity is actually running fairly flat, fairly consistent. The only data point we could find as we scrub our data was that the buy now pay later activity that customers do away from Fifth Third because we don’t offer that product was up mid single digits in December and January. But I’m not sure that’s a significant enough data point. From our perspective, the consumer continues to do well and in particular the homeowner because the labor market is so strong.

But in terms I guess you asked on auto, we see auto as a continued driver of that fixed asset repricing benefit this year. We finished the fourth quarter at a 5.5% yield. We expect that to get up to a 6% yield, just through normal repricing at the end of twenty twenty five. From a credit perspective, there’ll be a near term benefit on auto charge offs if tariffs continue and used car prices fluctuate higher because those residual values much like we saw at the beginning of COVID will help reduce charge offs. The bigger challenge will be in the long run, are you able to adapt your underwriting standards to ensure that your LTVs aren’t getting sideways from a credit perspective.

Gerard, Conference Host, RBC: Very good. Maybe shifting over to regulatory, when you think about the changes with the election, we’re looking at maybe a softer touch with the regulatory environment. We saw just this week or yesterday, the Consumer Financial Protection Bureau dropped the Zelle lawsuit against the bigger banks. Then, of course, we had the rollback of the 2024 FDIC M and A kind of guidelines. What are you guys sensing as we go through and that new heads of the agencies come in?

More constructive environment, do you think, with the regulators and the banks and your bank as well?

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Yes. We do think that it is going to be a more constructive environment. Obviously, a lot of uncertainty around some of the final appointments, but the feedback that we’re hearing about the people that have been named or will potentially be named, has been very positive. You know, we think that, you know, the Trump administration understands that the banking sector can be very strong in helping support economic growth, and I think they’re viewing it as if we can actually lighten some of this burden that has been holding banks back from a growth perspective, that could that could be very powerful for helping the economy because we need the private sector to continue to grow for them to achieve their objective. And so, we do think that it is going to be a better regulatory environment.

Does that mean that we’re gonna see a 10% or 20% reduction in expenses because of a decreased regulatory burden? No. But it definitely means that it’s not gonna get worse from here, that it will be, at a minimum, stabilized with some opportunity to to not be overburdened from a supervision perspective.

Gerard, Conference Host, RBC: And and tying into the regulatory environment, it seems like, there’s expectations for greater bank M and A activity. And the last couple of years has been somewhat subdued. If you guys have any thoughts on what you see happening possibly in the consolidation of the industry and the acceptance or the support from the regulators for this to happen.

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: Yeah. It’s a lot of uncertainty on that front, obviously. It’s the classic line. Banks are sold, not bought. So that obviously is gonna be a driver.

I think most people are basically looking at the outlook and saying that the next two to four years look better than the last two to four years. So I think this is gonna be a much slower environment than than anyone is expecting on that front. But certainly, some consolidation would be healthy for the industry. And it appears that with the the rollback on potentially the the bank merger, just changes that might have come from the DOJ and the FDIC, it definitely appears the administration is gonna be more friendly for M and A.

Gerard, Conference Host, RBC: Yeah. Jamie, coming back to the consumer side, do you guys see any differences geographically speaking? Are consumers more risk takers in the South versus the Midwest? Or how do you guys or can you see any differences between the consumers?

Jamie Leonard, Executive Vice President and Chief Operating Officer, Fifth Third Bank: I don’t see differences in the behavior of the consumers by geography. What we do see in the data is that the Southeast, our average deposit level per household is about 50% higher than the average household deposit level in the Midwest. But I don’t from economic activity, I think both where mass affluent, affluent continue to spend, lower income segments continue to be a little more pressured and are now below the twenty nineteen deposit levels. Got it. And we’re running out of time here.

We’re in the

Gerard, Conference Host, RBC: red zone. But one last question on capital. You guys are obviously well capitalized. There’s the likelihood possibility that stressed capital buffers could change over the next couple of years. How are you guys approaching how you manage your CET1

Brian Preston, Executive Vice President and Chief Financial Officer, Fifth Third Bank: levels? Yeah. We we continue to believe that the 10.5% operating target that we’ve been utilizing is the right place to be. All of the stress analysis that we’ve done through the years, including even the most severe COVID scenarios, would tell you from a credit perspective that nine percent for us was the right long term capital levels. With AOCI opt out going away because we do think that will happen, you know, we would probably hold an extra 50 to 75 basis points just for AFS volatility.

So ending up in the high nines, low tens on a fully phased in basis down the road feels like a reasonable spot to be.

Gerard, Conference Host, RBC: With that, like I said, we’ve run out of time. Please join me in a round of applause thanking the guys from Fifth Third.

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