Fifth Third Bancorp (NASDAQ:FITB) Q4 2023 Earnings Call Transcript

Bryan Preston: Yes, absolutely. We would expect DDAs to especially the migration to stop migrating into interest-bearing and begin growing as rates cuts begin to occur. We talked about that a little bit in the scripted remarks that if we were to see more aggressive cuts, we’d see some opportunity there. We’ve typically modeled somewhere between $500 million and $1 billion of DDA migration per 100 basis points of rate hikes or rate cuts. We’d expect that to be a fairly similar migration level on up or down, just positive or negative. We would tell you that probably the beginning cut or two, maybe it’s a little bit slower, but if you were to see a much more aggressive path, and if the Fed funds rate got down into the 3s, we would expect a decent reversal.

Christopher Marinac: Got it. That makes sense. Thank you, Bryan, and then just a quick follow-up on reserve build — would you still build reserves kind of within the current level we have today? I’m just trying to compare the guide of 35 to 40 basis points in the average life of the portfolio is less than four. There’s really strong coverage. So just curious if you would build that same level.

Bryan Preston: Yes. As long as the economic scenario is similar and the mix of the portfolio, obviously, is very important in terms of what drives a build. Certainly, dividend, some of the things that we’re talking about from an auto perspective, where can carry a little bit more reserve that has an impact from a build perspective that drives more of the dollar built than anything else at this point.

Christopher Marinac: Great. Thank you for taking my questions.

Bryan Preston: Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Matt Curoe for some closing remarks.

Matt Curoe: Thank you, JL and thanks, everyone, for your interest in Fifth Third. Please contact the Investor Relations department if you have any follow-up questions. JL, you can now disconnect the call.

Operator: This concludes today’s conference call. You may now disconnect.