Fifth Third Bancorp (FITB) Q1 2023 Earnings Call Transcript

Fifth Third Bancorp. (NASDAQ:FITB) Q1 2023 Earnings Conference Call April 20, 2023 9:00 AM ET

Company Participants

Chris Doll - Director-Investor Relations

Timothy Spence - President and Chief Executive Officer

James Leonard - Executive Vice President and Chief Financial Officer

Bryan Preston - Treasurer

Conference Call Participants

Scott Siefers - Piper Sandler

Gerard Cassidy - RBC Capital Markets

Ken Usdin - Jefferies

Erika Najarian - UBS

Michael Mayo - Wells Fargo Securities

John Pancari - Evercore

Manan Gosalia - Morgan Stanley

Ebrahim Poonawala - Bank of America

Christopher Marinec - Janney Montgomery Scott

Chris Doll

Good morning everyone. Welcome to Fifth Third’s First Quarter 2023 Earnings Call. This morning our President and CEO, Tim Spence and CFO, Jamie Leonard will provide an overview of our first quarter results and outlook. Our Treasurer, Bryan Preston has also joined for the Q&A portion of the call. Please review the cautionary statements and our materials which can be found on our earnings release and presentation. These materials contain information regarding to the use of non-GAAP measures and reconciliations to the GAAP results, as well as forward-looking statements about Fifth Third’s performance.

These statements speak only as of April 20th 2023 and Fifth Third undertakes no obligation to update them. Following prepared remarks by Tim and Jamie, we will open the call up for questions.

With that, let me turn it over to Tim.

Timothy Spence

Thanks, Chris. And good morning, everyone. Thank you for joining us today. The past six weeks have seen a great deal of volatility in the banking sector. Markets have been trading on narratives over fundamentals and the term regional bank has been used to describe such a broad cross section of business models that it has lost any real descriptive value. While we at Fifth Third take any instability in our sector very seriously, there was no crisis inside our four walls. We’ve been running the company with the expectation for a higher, for a longer rate environment for many quarters now. We’ve consistently communicated in these calls and at investor conferences. As our first quarter results demonstrate our balance sheet remains well fortified, and our capacity to generate strong profitability through the cycle is strong.

Excluding items noted in the release, we reported earnings per share of $0.83, a 20% increase compared to the year ago quarter. We generated nine points of year-over-year positive operating leverage driven by an 18% increase in revenue. During the quarter we held average and period end deposits flat sequentially despite the industry wide impact of quantitative tightening and normal seasonal pressures. Our key credit metrics remain near historical lows with net charge-offs of 26 basis points coming in at the low end of our guidance range. NPAs NPLs and early stage delinquency ratios remained below normalized levels, and criticized assets decrease modestly during the quarter.