Okay. Welcome to Day two of the 17th Annual Morgan Stanley Financial Conference. Kicking off today, we have Fifth Third. We're delighted to have with us today Bryan Preston, CFO, and Kristof Schneider, Chief Credit Officer. Thanks for joining us.
Thanks for having us.
All right, perfect. Bryan, let's get into it. Let's start off with the outlook. I know you put out a slide deck ahead of the conference, you reiterated the guide there. Do you want to share any expectations for the second quarter, or give us any more color there?
Yeah, absolutely. We're feeling really good about the trends that we're seeing out of the company right now. The economic environment, despite all the volatility that we've seen with the situation in Iran, activity remains robust. We're seeing good activity from a loan production perspective. We're seeing customers actually doing some things from an investment perspective, it's translating into financial outcomes. NII and fees are coming in right where we expected, expenses are actually coming in at the low end of our guide. We're expecting the quarter to be, from a PPNR perspective, to be slightly better than what we had originally guided to. From a credit perspective, credit performance is very strong as well. Right in the ballpark of what we had guided from a charge-off perspective.
Actually, we think we're probably leaning a little bit towards the bottom end of the range right now from a charge-off perspective. A lot of good activity that we're seeing and a lot of good trends. The integration remains on track. The expense saves remain on track. We feel very good about our ability to deliver the fourth quarter metrics that we've been talking about for some time.
All right. There's a lot to dig into there, you reiterated the guide. Expenses coming in slightly better and charge-offs coming in slightly better as well. All right, perfect. Are there any implications of that to the full-year outlook that you provided at earnings?
Yeah, it's certainly positive for the full year. A couple of other factors. The rate environment obviously has an impact. We have shifted to asset sensitivity with the Comerica acquisition. A higher-for-longer rate environment is one that is productive for our balance sheet. The idea that we're now talking about potentially a hike or two is something that would be productive for our balance sheet today. The volatility in the markets over the last six weeks has also created some opportunity for us on the balance sheet management side. Whether looking at some incremental swaps to lock in some levels, we've done a little bit of that activity in the quarter. We did realize a little bit of securities loss this quarter as we've taken advantage of some market opportunities.
The structure of our investment portfolio is such that we actually have a decent amount of cash flow that we're coming in within the next year. We took some of the disruption moments to accelerate the receipt of those cash flows to redeploy them. It'll be less than $10 million of security losses, we were able to lock in yields north of 100 basis points higher than we were expecting on a couple of billion dollars of balances. That's certainly something that's prod uctive for us. The earn back on those losses, on those locked-in levels, is three to four months. We felt like that was a pretty productive trade.
Got it. That would be in the second quarter as well?
That $10 million. It'll be no more than $10 million, but it'll be in the second quarter as well.
Got it. While we're speaking about, I guess, the asset sensitivity, and you put on some swaps as well. How are you thinking managing this interest rate positioning from here, just given you used to be neutral? Do you want to move back to neutral? Help us think through how you want to manage the balance sheet from here.
Our long-term bias is to be neutral. We just don't think that investors are paying us to take big market positions. We also want to be very disciplined on how we get there. One of our big lessons as we think about investing is that entry points matter. Your risk of having a bad entry point when you have very concentrated positions where you've entered at a very concentrated point of time is what puts you in a position to take more risk. With our rate outlook, we did have a view heading into the year that it was likely a higher-for-longer environment.
We just felt like the economic activity, the impact of the tax bill, the impact of the infrastructure spending associated with the data center build-outs, what we're seeing in the labor market, all indicated that inflation was likely to be a little bit stickier. Could the Fed have done a cut or two at the beginning of the year, or expected a cut or two at the beginning of the year? Absolutely. We just felt like the trends were higher for longer. Everything that's happened in the last six to eight weeks obviously has reinforced that view now. We're going to continue down our measured approach. If we need to, we can do some things to accelerate some of that shift, but it's going to be something that's going to progress over time.
I think you've guided to approximately a 340 NIM by the end of this year. Any thoughts on how you can back that?
No, we still feel very good about that. Like I said, a lot of the things we did from an investment portfolio perspective were a little bit of just pulling forward earlier into the year some of the things that were pricing that was going to occur. We do feel good that from a trajectory perspective, that exiting near 340 is still, we have high confidence we're going to be able to deliver that.
All right. Perfect. We should pivot over to loan growth. 1Q growth was really strong. Legacy C&I was up, I think, 6% year-over-year. Consumer and small business was up 7%. Can you tell us what the trends have been there on the loan growth side since?
Yeah, absolutely. You want to touch on it?
Sure. Yeah, I can touch on that. Look, the loan growth has really been broad-based. It's been a combination of a lot of things happening that were set up coming into the beginning of the year, with last year being really a year of another set of volatile factors that clients were dealing with. I think they've gotten to the point now where the sentiment is generally that volatility is the new normal, and they're just going to have to get on with investing. It's a mix of working capital. It's a mix of CapEx. It's a mix of some M&A that's more strategic in nature. We're seeing that broad-based across the company. I think everybody's aware we've been investing in RMs across the Southeast. We are seeing gains in just continued momentum from the addition of new bankers.
With Comerica being added on with that, there's some exuberance amongst the client base early on with the prospect of using some of the new products we're bringing to bear with those clients. Overall, I think the environment's pretty constructive, especially looking rearward. Charge-offs have been pretty well behaved. Delinquencies are still behaved. Consumers are still spending. The one question we keep getting is, when might that end? Our portfolio's predominantly tilted toward homeowners who are sitting on low interest rates, and they're feeling relatively confident from the stock market being up and their 401(k)s and other investment accounts being stronger. They're spending through and looking through to the other end of this potential uptick here in gas prices and some of the volatility that we're seeing with the geopolitical environment.
It's been good to see that we've continued to see stability in utilization as well. Our portfolio is in the commercial side, and C&I in particular, is pretty heavy revolver. That is, we're a working capital lender. It's a big part of what we do as we serve our customers. It's nice that this year, and despite all the volatility in the market, we've seen good stability. Utilization is a little bit above where we entered the quarter. What we're seeing is just normal fluctuations in utilization. That was a big headline for us in the industry last year as we were seeing a significant pullback in utilization in response to the tariff policy.
Got it. Kristof, one of the things you guys spoke about on the 1Q earnings call was that loan spreads were coming in a little bit. It's been a consistent theme across the space. Is that something you guys are still seeing in the second quarter, and how are you thinking about competition for loans overall?
I think mild spread compression is still an environmental factor right now. It's just there's a lot of competition and there's some new demand for loans now. The one thing that we haven't seen is anybody being super undisciplined in their risk-taking. Structures are not being destroyed in the environment we're in right now as a competitive force. It's mostly on the pricing side that we're seeing primarily.
Part of that narrative is mix as well. In an environment where you're seeing a little bit more high-quality credit being originated, those tend to originate at a slightly tighter spread. It's not that you're seeing this dramatic reduction in pricing across all credit spectrums. What you're seeing is just a little bit of a mix shift as well.
Is that a comment for C&I or across?
For C&I.
Okay, for C&I. Got it. Bryan, maybe on the deposit side, I guess same question, right? We're hearing deposit competition picking up across different regions. You've highlighted that the Midwest has been more competitive than the Southeast which was a surprise to me when you said that at earnings. Can you give us an update on that and I guess how conditions are shaping up in Texas?
Yeah. We feel very good about what we're seeing from a deposit perspective. It's clearly competitive, but it's rational. The Midwest has always been competitive from a consumer deposit perspective. The Southeast has typically been, say, 10-15 basis points behind it from a market offer perspective. That theme is continuing to hold out and continue. There's always a little bit of volatility there, just depending on if a particular bank has a need for funding. You'll see some movement depending on what a bank might need. In the Southwest, it continues to be a pretty productive environment. We talked about deposit growth from the Comerica marketing campaigns that we did for their markets in the Southwest. We had talked about delivering $1 billion of deposits.
We're actually expecting to now deliver $2 billion of deposits from the Comerica marketing campaigns in the second quarter. We expect to have that in the door by June 30th. We're seeing really strong response from the direct mail campaigns that we've done, and it helps reinforce to us that the tactics that we've been relying on, the things that have been proven winners for us across the Southeast, across the Midwest markets, those same tactics are working in the Comerica markets. What's exciting about that for us is we're doing that without all the tools that we have from a Fifth Third perspective. We're still doing that on the Comerica brand.
We're still doing that with the Comerica processes without the same digital experience that you have from Fifth Third, and we're doing it without the ability to originate digital accounts. All the things that we felt like we knew that our processes would work there, that's proving out, and we're seeing great results from an early-stage perspective.
We'll talk about the conversion in just a sec. I guess as you get the digital conversion there's more to come there as everything moves to the Fifth Third systems.
Yeah, there's more to come because we can actually sell the whole bank. We're seeing good experience from a household growth and a primary checking perspective even with some of the older processes they have. We're excited about the opportunity when we're able to actually originate digitally a checking account. Fifth Third, you can originate a digital checking account in less than two minutes. It's a much longer process from a Comerica side. We're excited about what that brings, and we're excited about what the branch investment is going to bring. You think about all the branch investments that we've made the last couple of years, and those branch investments have been working, right? We've got a very well-defined playbook.
They're growing very well. We're getting good economics out of them. We opened 55 branches in 2025. I think that puts us in a pretty elite club. Maybe one other member, and they've got $4 trillion of assets. We are going to open 60 branches this year, and we're going to open 100 branches in 2027. We're excited about the ability to continue to execute on that playbook and what it means for us from a deposit growth opportunity. We think the branch play is a $20 billion deposit growth play for us as those branches season. $10 billion from the seasoning of the Southeast branches and $10 billion from the Southwest branches we're going to be building.
Got it. This is a playbook you've already deployed in the Southeast, it's wash, rinse, repeat in a different region.
That's right. What's good is that those early indicators are supporting that we can continue to rely on that same playbook. We're continuing to learn, and that's been one of the fun parts of our experience as well, is we've learned how to make every vintage of those branches better. All of those learnings from the last eight years. The 2025 branches we've opened have been one of the strongest vintages that we've had. So now 55 branches as being one of the strongest vintages. We're confident that the 60 branches in 2026 and the 100 branches in 2027 are going to be just as strong, if not stronger.
Got it. All right, perfect. Before we dig in on the integration side, I just want to take a step back and talk about the macro environment. Kristof, you alluded to this a little bit in the loan growth question, but I guess, what are you seeing across the client base in terms of overall activity levels? Any risks that you're seeing on the credit side? Anything you're focused on here?
Not rearward-looking, certainly forward-looking perspective, right? We do a variety of stress tests across the portfolio where we stress macro factors, and we can do isolated shock analyses to see how these things would play out across our portfolio as a transmission mechanism for risks. One of the things we're obviously watching right now is oil and commodities with the volatile situation over in the Middle East. While that is a long way away from here, the prices for a lot of those commodities are global in nature, and so they will affect some level of domestic industry, either through transportation costs or commodity prices as a critical input to products. We have thought about that. We think it will play out and be passed through largely through the industries we cover.
Ultimately that's going to play into something Bryan mentioned earlier around inflation stickiness. We think that that is something that's going to be here to stay for a while just because there's no way for the economy to absorb the sharp increase in prices, and with that getting passed through without it showing up in real day-to-day things like food prices and things like that. We're not overly concerned about it right now, given the fact that consumers remain resilient. The performance of that portfolio is still very strong. We think borrowers in general have gotten used to this level of volatility. They've been through a sequence of these things really starting before COVID with the first Trump regime when tariffs, and have a lot of practice at managing through these situations, both from a liquidity and a leverage standpoint.
We feel pretty confident in the client base being able to navigate their way through the environment despite there being a lot of uncertainty out on the horizon with it.
Have you been surprised by the resilience of the consumer so far? You have confidence in the ability for them to navigate through this environment, I guess you might have a little bit more inflation. You could have a hike in rates as well. Is there anything that you worry about in that kind of an environment?
Obviously the lower side of the K when we talk about the K-shaped economy is concerning. That's not a large exposure for us. It's less than a percent of our portfolio. That's not a huge concern. Obviously, if conditions were to remain such that it would cause a tipping point in the economy where maybe there's a retraction in the stock market where people are feeling a little less affluent, that would cause them to drastically cut back on things. That would be a bit more concerning for us, and we do track that as part of our behavior-based metrics we have in the consumer portfolio, along with credit scores and trended utilization metrics and things like that. That shows up in the DDA information that we have in our internal models that we watch and monitor.
Yeah. We've had a view for a while that demographics were going to be a support for the labor market. You throw on top of that some of the immigration policies and the impact that it's had on the immigration into the labor force. Every year now we're talking about a new record of people turning 65 years old. We've already hit a peak of 18-year-olds. We think that the labor force will likely remain tight for some time, which that should help some of the lower income consumers as they're able to spend, or able to continue to maintain employment so that they can spend. The people that are driving all the spending in the country, asset owners like the equity markets, what's happened from a home price perspective.
It's hard to see anything but a dramatic pullback in the equity markets. That would be the only thing that would likely slow them down from a spending perspective. The market continues to feel somewhat stable on that. Medium term, if AI disrupts a bunch of white-collar workers, that is obviously something that is a risk that's out there that we're thinking about. Broadly speaking right now, it does still feel somewhat productive in that the consumers that are the most impacted aren't the consumers that are borrowers in the banking industry.
I guess from the AI impact on white-collar workers, I guess that's a risk we're all thinking about, but is there a way to embed it into underwriting standards? Is that something you're thinking about right now?
Yeah. We're absolutely trying to, and I'll actually let Kristof go into a little bit more detail on this one. We're actually trying to figure out how do you actually bring AI risk into underwriting today. It's something that we'll have to continue to evolve our thinking as we see those trends.
Because of the nature of it's so hard to predict when it will happen. It's this unquantifiable risk right now. It'd be really hard to add it as an element to underwriting and be precise on it. You'll either misprice or you'll avoid a risk that you probably should've taken. We're not to the point where it would cause us to materially change how we're approaching doing things. It's definitely something we're thinking about. We're trying to run them through all the various scenarios that we think about that would be really tail risks, that we would try to manage more with a recession kind of playbook or something like that. That would be more hands-on active risk management than it would be on the passive side of things.
All right. That's great color. Let's move over to the Comerica integration. I think you did your first full mock conversion this quarter. Can you talk about how that went, what some of your learnings have been? I think you're doing the full systems conversion on Labor Day weekend.
Labor Day weekend.
How is that going?
We have two more mocks to go. Mock one went really well. I am a person that loves to use sports analogies. For me, it is a lot like when I used to play football. Any sport where you have set pieces. The coach basically drew up the play on the board, and then you are out on the field to run it the first time. You know you are going to have problems. You know you are going to have players running into each other. You know you are going to have issues like figuring out the real timing. That was exactly what we expected to occur in mock one, and we got all of the learnings that we expected to get out of it.
We found the gaps where we thought we would find them from a data perspective. One of the big ones, Comerica did not have a master customer file. We have had to go through a process of building a master customer file for them. Then testing whether we had it comprehensive enough. The other component is a lot of learnings around sequencing. You think about ultimately what is hydration of this data all through your systems, and making sure that you are sequencing them in a particular way to make sure that systems are running accurately, but also running timely. Our commercial loan system processing in nCino. There was a learning that we had on nCino where we needed to refine some things in its sequencing.
All of those things worked very well in terms of identifying the spots where we need to refine the playbook. The things that we thought were going to be issues that we said, "Hey, these are things that we are going to need to learn." We learned what we needed to learn. Mock two, what is interesting is that will be the first time as part of this process we are having to build some new capabilities. There are some things that Comerica offered its customers, whether in the consumer bank, in the commercial bank, where there is some product enhancements. Mock two will be about testing all of those product enhancements and ensuring that the fixes that we have put in post mock one for all the data things and sequencing work effectively.
Then mock three is that real dry run to make sure that we can deliver it within the timeline that we would expect. Mock two and three obviously are two big events for us, but we feel very good about what we're seeing from a progress perspective.
Kristof, you've been helping lead the credit risk management effort at Fifth Third, obviously. What are your thoughts on the credit culture at Comerica relative to Fifth Third's?
Yeah. Look, culture is foundational to everything we do, right? It's not something we can compromise on, and it's how we take risk. What we saw in diligence and what we expected to see was a very credit-centric, a client-focused culture. That has panned out since legal day one. I think about culture as how you train what you do and how you talk, right? Comerica had a robust credit training program. I think they did a great job training their bankers and their credit professionals in the fundamentals. What they do, they were very client-focused and relationship-based, very similar to us. I think one of the things that was very apparent after we all started meeting each other and spending time together is that we have a lot more alike than we are dissimilar.
Where we are different, maybe in process management and things like that, our RWA focus and things more around optimizing the business. We're being very deliberate about being transparent and consistent in the messaging. We can translate and at times where there might be a disconnect, we're offering escalation to get to the right decisions very quickly. We think that that will then refocus and reinforce the one team, one standard approach that we've had across the company that will really homogenize the two cultures into one that I think will be better together.
Yeah. We're more convicted today about the cultural alignment, the credit alignment, and the opportunity in front of us. Things that we expected to be strong at Comerica, their middle market franchise, their ability to deliver expertise to their clients is proving out to be true. The expertise that they bring in some of their specialty verticals is very strong. We're excited about the opportunity in their dealer finance business. Environmental services working very well as well. The tech and life sciences business is one we've talked about a fair amount. We're excited about the quality of the team and the relationships that they're bringing as well. There's real opportunity in their commercial real estate business.
They had a very similar mentality to us from a commercial real estate perspective, and they have some very strong relationships that we think we're going to be able to leverage. We're excited about what it means for our platform.
As you think about the two teams coming together on the commercial side and you spoke about the middle-market bankers at Comerica. When you think about Fifth Third's balance sheet and product set and the ability to offer that, how is that coming along as you think about the integration?
Yeah. Again, another thing that just as we've been very happy with what we're seeing from a collaboration perspective on that front as well. The incremental product sets that we bring, just the things as simple as an ABL capability. With Comerica's customer set, it's a product that works very well, and we just bring a different level of capability on that front. What we can do from a capital markets perspective.
Are there any portions of the Comerica portfolio that you're looking to run off? Anything material that we should be thinking about there?
No. In fact, one of the businesses that we acquired through this deal was the National Dealer Services business. We were in that business before. It was pretty small, and we exited it to recycle the capital into things that we had more interest in doing that had more scale. We're back in that business. In fact, we've had clients ask to come back prior to integration day because they're excited to hear that we're back in the business. No, we're not looking to run any of the businesses off. In fact, there are a few of them we think we could really lever into being growth catalysts for the next leg of our journey as a company, including the Tech and Life Sciences business Bryan mentioned.
There's a lot of buzz about the innovation economy, there's a lot of new things happening in there. We think our product suite and capabilities overlap really nicely with that client base, we believe we can bring more value to the table there. Over there.
That's a very deposit-centric business as well. Traditionally, that's a three to four times deposits to loan business. When we think about deposit growth opportunities, you'll hear, we talk so much about deposits because to us, deposits are the lifeblood of the bank, right? This is how we generate differentiated outcomes is being great at deposits.
We think the Tech and Life Sciences business represents another $10 billion growth opportunity for us over the next couple of years as we bring back and grow the relationships in the TLS business, some that Comerica lost, but some that have ended up in other places because of the disruption that happened to all the banks that service that industry in 2023.
I think that feeds in nicely into the synergies that you expect from the acquisition. Can you just remind us about the revenue and the expense synergies that you're thinking about here and the timeline for that?
Yeah. Expense synergies, we've talked about were $850 million of run rate expense synergies. We will hit that run rate in the fourth quarter of this year, highly confident in our ability to deliver that. Trajectory is good, and we actually believe that we're going to be able to outperform that number. We actually are looking to basically use any outperformance to accelerate growth investments. Whether it's con tinued marketing, whether it's potentially looking at branch build accelerations, whether it's looking at digital marketing in new ways. We want to invest to grow the company. Ultimately, when we think about what is going to create the most value for shareholders over time, we're basically at the top of our peer group, near the top of the industry from a return on capital perspective.
Once we get to the fourth quarter, we want to be in a position to compound book value growth faster because we think that is what's ultimately going to deliver the best outcome for our shareholders. Feel really good from an expense perspective and the revenue synergies. It's the opportunity and the incremental products that we've talked about, whether it's the balance sheet products like ABL, whether it's balance sheet capacity, because we actu ally have the liquidity and the capital to deploy into our customers at a heavier level. Comerica was having to ration balance sheet capacity. Imagine as an investor, if you weren't able to follow your best winning investments. That was the position that Comerica was in. We now have an opportunity to follow those customers as they're successful.
We do think there's opportunity to grow the balance sheet as a result of that. The capabilities in the fee businesses, both on capital markets, wealth and asset management, as well as in payments. All of those areas. Our product capabilities, our ability to invest in sales force and distribution are just at a different level that are going to drive great outcomes for us over time. In the consumer business, it's the investment in the branches, it's the investment in the deposit growth that's working today. Then throw on top of that the product partners and actually being able to bring a whole consumer franchise to that customer base, bringing mortgage originators, bringing investment professionals at a different level than what Comerica was able to support.
That is what's feeding when we talk about $500 million of cumulative revenue opportunities over the next three to five years. That is the kind of opportunity that we're looking at, none of that is embedded in the profitability guidance that we've given for 2027.
Things are going well with more room for upside?
Yes.
All right. Perfect. Let's talk about capital return. We spoke about capital deployment. You're targeting a CET1 ratio of about 10%-10.5%, I think you mentioned that there'll likely be some buybacks in the second half of the year. Any updated thoughts there or how you're thinking about capital return as we get further into 2026?
No, our capital priorities remain the same, which is we're going to pay and maintain a stable and strong dividend. We're going to fund organic growth next. We do think from a returns perspective that why do we bias towards organic growth? Organic growth gives us an opportunity to outperform our cost of capital. Then share repurchases next. Share repurchases are our last because ultimately what it represents is delivering our cost of capital back to our shareholders. We do want to manage that over time. Our bias right now is for organic growth.
We think there's enough opportunity out there, we think that the platform that we have today, the markets that we cover today, we're in the best markets in the country. We're in the best markets from a population growth perspective, the best markets from an investment perspective. Where do we think the investment in the country is going to go over the next decade? We want to lean into that because we think there is real opportunity to create some differentiated outcomes on that.
As you get some of this growth, is that 10%-10.5% CET1 the right governor or are there TCE to TA ratios or rating agency actions or anything else to think about?
Capital is always a relative game. I don't think regionals are going to be able to get too far away from the largest banks. I do think that will be one governor. I do think that rating agencies will have a point of view. That's not been something that has been a binding constraint for Fifth Third. I think 10%-10.5% right now is a good spot to be on a fully phased-in perspective. That is what puts it. We'll be around 9%, and that puts us on a trajectory to be in what was probably a 9.5%-10% range from a long-term perspective. That was where we had historically talked about running the bank, was between 9.5% and 10% or was around 9.5.
Add, let's say, 50 to 75 basis points to that for AOCI volatility with the changing capital rules. We're kind of thinking that 9.5%-10% is probably the long-term range where you might run the bank. I also think that TCE is a real binding constraint for the industry today, and I don't think many people are going to want to run with a TCE below 7%. I think that's going to be another factor that people look at when they're managing capital.
Got it. All right, perfect. Bryan, I want to end with a discussion around AI. We always look forward to Tim's shareholder letter, and AI was a clear focus area there. Tim mentioned the ways that you're applying AI to software engineering. 30% of new code is AI-generated. More than half of your employees are using AI tools. Can you elaborate on how you see AI use cases evolving over time at Fifth Third, and where the greatest opportunities are there?
Yeah. We're very excited about the opportunity that's in front of us from an AI perspective. We think it has a real ability to change how we deliver products and experiences to our customers and how for us, an ability to deliver it on a more efficient and more productive way. We think it really is a game changer. Out of the gate, there's been obviously a lot of discussion around the cyber risk associated with AI. It really gives you an opportunity to identify weaknesses and vulnerabilities that you have in basically your cyber ecosystem today. That is something that out of the gate, the industry is now starting to see benefits from. We were invited into Project Glasswing over the last several weeks.
We think it was a reflection of just the role we play in the payments ecosystem in the country today, whether it's the Direct Express business, some of the processing that we do for U.S. Customs, as well as just the magnitude of payroll processing that we do for the country. Those things, there have been real learnings that have come from that, and we're excited about what the future represents and our ability to address vulnerabilities today. The idea that basically across the global economy, that these capabilities are allowing people to identify vulnerabilities that have been in existence for 20 years. There is real opportunity to enhance the security for our customers today, and we're seeing those benefits today.
Then what we're thinking, what it's going to be able to allow us to deliver from a productivity perspective. The company, Tim is obviously very excited about what it means for us. Matt and I spend a lot of time with Tim as he's trying to build his own agent to basically be agentic Tim to help with all of the public comments that he makes. He sees it. Having a CEO that is focused on actually going through and testing and experimenting on his own gives a mentality to our company around just the excitement of what this represents. If you're going to work at Fifth Third, you've got to lean into AI because it is the future.
We look forward to hearing that. Okay. Maybe I'll wrap up with a question that's been coming up a lot recently around agentic AI, cash sweeping, the impact on deposit costs over time. Can you give us your quick views there?
Yeah. There is no doubt that agentic commerce and agentic financial services is going to be part of the future. We think there is real value in creating agents to do the jobs for our customers. We think that the AI is going to impact the financial system and the economy in ways that no one is expecting today, and that you've got to be always forward-thinking to make sure you take advantage of those opportunities. We also think that this conversation around deposit sorting is potentially a little bit in front of the actual realities of the economics of the situation. The median deposit account in the consumer business is less than $5,000. The idea that a customer picking up 100 to 200 basis points, which equates to $50 to $100 a year.
That they're actually going to do a lot of work to create complexity in their financial lives. We don't think that that is quite the narrative that's out in the market right now, and it's also forgetting that we sell on a lot more than just rate with our customers. We're providing a lot of services and capabilities and security and trust for our custo mers. I think that's one of the things that's missing from that argument. It doesn't mean that we're not paying attention, and we're not trying to understand where the market's going or trying to lead what our customers need. We just don't think that that is the biggest risk today. Honestly, we're more concerned around how do you think about marketing to an agent.
We know how to digitally market to through paid search with Google. We know how to do mail campaigns. How do you actually think about marketing when a customer searches by asking an AI agent? Those are the things that we're trying to test today to figure out how to be better.
All right. Lots more to discuss. I'm sure we'll have an interesting disc ussion on that on the next earnings call. I really appreciate the time. Bryan, Kristof, thanks very much.
Thanks, Manan.