Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Bank of America Merrill Lynch Banking & Financial Services Conference 2009
22 slides from Fifth Third Bancorp's conference presentation, Nov 9, 2009
Slide 1: Bank of America Merrill Lynch Banking & Financial Services Conference
Exhibit 99.1 Bank of America Merrill Lynch Banking & Financial Services Conference Kevin Kabat Chairman, President & CEO November 10, 2009 Please refer to earnings release dated October 22, 2009 and 10-Q dated November 6, 2009 for further information, including full results reported on a U.S. GAAP b
Slide 2: Fifth Third overview
Fifth Third overview $111 billion assets #13* 1,306 banking centers Over 2,372 ATMs 16 affiliates in 12 states Fifth Third Bank has been dedicated to serving the needs of Midwestern families and businesses for more than 150 years Top 10 Superregional Bank for 8 consecutive years** * As of 3Q09 ** Fo
Slide 3: 3Q09 results vs. peers
3Q09 results vs. peers Metric Range Rank / 13 Peer average 4.5% Seq. net interest income growth (4.2%) 9.2% 3 2.3% 1 17 bps 2 Seq. net interest margin growth (18 bps) 18 bps 2 7 bps 3.43% 3 Net interest margin 2.68% 4.36% 7 3.36% 6.7% 4 Tangible common equity ratio 3.2% 8.0% 5 5.9% 13.2% 5 Tier 1 ra
Slide 4: Net interest income
Net interest income Core NII and NIM 4.0% $900 • Trends in net interest income and net $800 interest margin compare favorably with 3.5% 3.37% 3.15% 3.33% peers 3.13% $700 2.92% 3.0% $600 – Stable NII in 4Q09 $500 2.5% • Expect continued expansion in NIM in $400 4Q09 2.0% $300 3Q08 4Q08 1Q09 2Q09 3Q0
Slide 5: Deposit share momentum
Deposit share momentum Affiliate 5/3 Deposit (08-09) 5/3 Market Share Name Deposit ($) (%) Share 2009 2008 • Continued focus on customer satisfaction Chicago 788,601 9.8% 4.0% 3.8% and building full Northeastern Ohio 606,708 17.0% 4.2% 3.8% relationships has given South Florida 579,342 21.1% 3.1% 2.
Slide 6: Pre-tax pre-provision earnings
Pre-tax pre-provision earnings Core PPNR trend Reconciliation to core PPNR 4Q08 1Q09 2Q09 3Q09 $700 Reported PPNR (GAAP) (488) 511 2,393 844 Adjustments: 100 $600 46 Gain on sale of Visa shares - - - (244) 8 87 45 BOLI charges 34 54 - - 106 $500 3 Gain from sale of processing interest - - (1,764) 6
Slide 7: Loss mitigation effort impact on PPNR
Loss mitigation effort impact on PPNR • Commercial Special Assets Group — Approximately 275 full-time employees, compared with 100 at the beginning of 2009 — Special vertical teams and “war rooms” dedicated to existing and emerging problem areas 3Q07 3Q08 2Q09 3Q09 Credit related fee income: – Const
Slide 8: Portfolio performance drivers
Portfolio performance drivers No Participation In Performance Largely Driven By • Subprime Geography • Option ARMs • Florida and Michigan most stressed • Remaining Midwest and Southeast performance reflect economic trends Discontinued or Suspended Lending 3Q09 NCO Ratios Coml Cons Total Discontinued
Slide 9: 3Q09 credit results
3Q09 credit results NPA ratio versus peers Net charge-off ratio versus peers 5.0% 3.2% 3.0% 4.0% 2.4% 3.0% 1.4% 2.0% 1.0% 0.0% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 2008 2009 YTD FITB Peer Average FITB Peer Average Sequential NPA growth versus peers Year-over-year NPA growth versus peers 28%
Slide 10: Commercial credit summary
Commercial credit summary Portfolio comments Delinquency trends Loss trends 4.0% • 18% of 3Q09 losses on loans to auto dealers and companies in NPAs 30-89 90+ 5.03% real estate related industries 3.0% 3.70% – Loans to auto dealers of $1.2B, of which $0.8B are C&I loans; YTD NCO ratio on C&I portion:
Slide 11: Consumer credit summary
Consumer credit summary Portfolio comments Delinquency trends Loss trends • 29% FL concentration driving 66% of total losses 7.0% NPAs 30-89 90+ 5.17% 6.0% 4.38% • FL lots ($299M) running at 32% annualized loss rate (YTD) 5.0% 3.30% • Mortgage company originations targeting 95% salability 4.0% 3.16%
Slide 12: Net loan losses vs. SCAP adverse scenario
Net loan losses vs. SCAP adverse scenario Net charge-offs ($B) Total net charge-offs YTD 2009 were $1.9B, much lower than the assumption under the $9.1 SCAP adverse scenario Loan losses are not expected to approach the losses assumed under the SCAP adverse scenario Through half of assessment period
Slide 13: Strong reserve position
Strong reserve position Industry leading reserve level Reserves / Total Loans 1. FITB 4.69 $2,500 2. KEY 4.00 4.69% 3. ZION 3.44 $2,000 729 4.28% 4. MI 3.07 5. WFC 3.00 3.72% 3.31% 6. PNC 2.99 $1,500 7. RF 2.83 2.41% 8. HBAN 2.77 $1,000 9. USB 2.64 1,627 415 196 478 10. STI 2.60 283 $500 11. BBT 2.2
Slide 14: Capital management activities
Capital management activities Fifth Third’s capital levels strengthened through prudent actions in 2008 and 2009 intended to maintain ratios within or above target ranges — In 2Q08, issued $1.1 billion of Tier 1 capital in the form of convertible preferred securities — In 2Q08 and 4Q08, reduced quar
Slide 15: Strong capital position
Strong capital position Tier 1 capital ratio Tangible common equity ratio Peer average: 11.0% Peer average: 5.9% 13.2% 13.0% 12.6% 12.6% 8.0% 7.6% 12.2% 12.1% 6.9% 6.9% 6.7% 6.6% 11.1% 10.8% 10.6% 6.3% 5.9% 9.7% 9.6% 9.5% 5.4% 5.3% 8.4% 4.8% 4.2% 3.2% FITB HBAN KEY STI CMA RF BBT PC WFC ZION MI USB
Slide 16: Summary
Summary Aggressive management of Core franchise is solid Strong capital levels credit issues • Dedicated to serving the needs • Strong reserve coverage of • Successfully completed June of Midwestern families and problem loans 2008 capital plan and post- businesses for more than 150 SCAP capital acti
Slide 17: Cautionary statement
Cautionary statement This report may contain statements that we believe are “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6
Slide 18: Appendix
Appendix 18 © Fifth Third Bank | All Rights Reserved
Slide 19: Strong liquidity profile
Strong liquidity profile Holding company unsecured debt maturities ($M) Holding Company cash at 9/30/09: $2.1B Expected cash obligations over the next 12 months 5,018 — $0 debt maturities — ~$32M common dividends — ~$205M preferred dividends – ~$35MM Series G dividend – ~$170MM TARP dividend 750 — ~
Slide 20: Consumer portfolio
Consumer portfolio Home Equity Mortgage Other Balance $12.4B Balance $8.2B Auto NPA + 90+ Ratio: 1.4% NPA + 90+ Ratio: 8.2% NCO Ratio: 2.6% NCO Ratio: 4.5% $9.0B NPA + 90+ Ratio 0.5% NCO Ratio 1.7% Brokered Direct Lots Resi Construct Card $2.0B $10.4B $0.7B $0.1B $2.0B NPA + 90+ Ratio NPA + 90+ Rati
Slide 21: Commercial portfolio
Commercial portfolio C&I Commercial Mortgage Commercial Construction Balance $26.2B Balance $12.1B Balance $4.1B NPA Ratio: 3.0% NPA Ratio: 8.0% NPA Ratio: 18.1% NCO Ratio: 2.5% NCO Ratio: 3.0% NCO Ratio: 8.1% Owner Occ’d Non-owner Occ’d Owner Occ’d Non-owner Occ’d $5.6B $6.5B $0.6B $3.5B NPA Ratio
Slide 22: Share dilution vs. TCE creation since 1Q09
Share dilution* vs. TCE creation since 1Q09 Capital raise Efficiency- Dilution TCE Growth required? TCE creation C -74% 104% 1.4x RF -45% 24% 0.5x KEY -39% 13% 0.3x STI -29% 19% 0.7x BAC -25% 40% 1.6x FITB -19% 29% 1.5x BBT -19% 32% 1.7x COF -12% 28% 2.4x WFC -9% 63% 7.1x USB -8% 41% 5.2x JPM -5% 19