Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — 2006 Citigroup Financial Services Conference
27 slides from Fifth Third Bancorp's conference presentation, Feb 1, 2006
Slide 1: 2006 Citigroup Financial Services Conference
2006 Citigroup Financial Services Conference “Business Momentum & Remaining Challenges” George A. Schaefer, Jr. President & CEO Executive Vice President Kevin T. Kabat February 1, 2006
Slide 2: Affiliates & Markets
I Affiliates & Markets Affiliate Operating Model II. Markets
Slide 3: Affiliate Bank Operating Model
Affiliate Bank Operating Model 19 Affiliates in 7 States FITB Affiliates State Deposits % of 5/3 Assets Bkg Ctrs President Years @ 5/3 Years in Banking Cincinnati OH $ 12.3 18% $ 17.4 106 R. Sullivan 5 30 Chicago IL 8.9 13% 10.0 140 T. Zink 1 17 Western Michigan MI 7.3 11% 9.6 135 M. VanDyke 4 20 De
Slide 4: Metropolitan Market
Metropolitan Market Focus 10 of the 14 Largest Markets Have Significant Deposit Opportunity Fifth Third MSA Markets MSA Population Rank Deposits Share % Chicago, IL 9.5 5 $ 8,052 3.4 Detroit, MI 4.6 7 3,403 4.4 Tampa, FL 2.6 11 746 1.8 Cleveland-Elyria, OH 2.2 5 2,707 4.2 Cincinnati, OH-KY-IN 2.1 1
Slide 5: Deposits, Loans & Fees
Deposits, Loans & Fees I. Deposit Performance II. Loan Performance III. Noninterest Income Performance IV. Business Mix V. The Challenge
Slide 6: Transaction Deposit Performance
Transaction Deposit Performance Five-year average annualized transaction deposit growth of 16% Three-year average annualized transaction deposit growth of 10% 2005 average transaction deposit growth of 11% Average Transaction Deposits 45,000 40,000 35,000 Millions 30,000 25,000 $ 20,000 15,000 10,00
Slide 7: Core Deposit Performance
Core Deposit Performance 5-year CAGR 3-year CAGR 2005 Growth Demand 17% 16% 13% SAV & MM 18% 13% 33% NOW 15% 5% -3% CD’s -9% -1% 37% Core Deposits 9% 8% 14% 60,000 50,000 40,000 Millions 30,000 $ 20,000 10,000 2001 2002 2003 2004 2005 CD’s NOW Demand SAV & MM Recent core deposit trends consistent wi
Slide 8: Loan Growth Performance
Loan Growth Performance Five-year average annualized loan growth of 10% Three-year average annualized loan growth of 14% 2005 average loan growth of 19% Average Loans & Leases 70,000 60,000 Millions 50,000 $ 40,000 30,000 2000 2001 2002 2003 2004 2005 42,690 44,888 45,539 52,414 57,042 67,737
Slide 9: Loan Mix Improvement
Loan Mix Improvement Strong loan performance is highlighted by continued mix improvement 2001 2002 2003 2004 2005 Home Equity / Total Consumer 31% 38% 35% 34% 36% 37% C&I / Total Commercial 48% 48% 52% 51% 51% 50% Other Consumer Home Equity Other Commercial C&I 75,000 60,000 Millions 45,000 30,000 $
Slide 10: Noninterest Income Performance
Noninterest Income Performance Core Noninterest Income 2,500 2,250 Millions 2,000 1,750 1,500 $ 1,250 1,000 1,470 1,717 2,036 2,256 2,189 2,406 2000 2001 2002 2003 2004 2005 Five Year CAGR 10% Three Year CAGR 6% Growth 10% 2,500 2,250 Millions 2,000 1,750 1,500 $ 1,250 1,000 Core Noninterest Income
Slide 11: FTPS – A Growth Driver
FTPS – A Growth Driver Compound Annual Growth Rate 5-year = 24% 800 700 600 Millions $ 300 200 100 622* 2000 2001 2002 2003 2004 2005 Fin. Inst. & Card Merchant * In 2004 certain merchant processing contracts were sold (annual revenue loss of approx $93 million)
Slide 12: Revenue Diversity
Revenue Diversity 2005 Noninterest Revenues Processing Solutions 29% Investment Advisors 14% Other 20% Mortgage 7% Commercial Banking 9% Deposit Revenues 21% 2005 Total Revenues by Segment Investment Advisors 9% Processing Solutions 10% Retail 50% Commercial 31%
Slide 13: The Challenge…
The Challenge… Earnings contribution in prior years from larger securities portfolio and wider spreads can not be repeated. Comparisons are more favorable beginning in second half of 2006 Average Securities and Spreads Avg. Securities ($ Billions) 22 24 26 28 30 32 2003 2004 2005 2006* 50 100 150 20
Slide 14: The Deposit Opportunity
The Deposit Opportunity Fifth Third has only a 5% market share in the core seven-state footprint Fifth Third has a 7% market share on a combined basis in MSA’s greater than 1 million in population FITB State Market Share Michigan Ohio Kentucky Indiana Illinois Florida Tennessee 7 State Total 9% 8% 7
Slide 15: Affiliate Results
Affiliate Results I Loan Performance II Deposit Performance III. Noninterest Income Performance
Slide 16: Continued Strong Affiliate Loan Results
Continued Strong Affiliate Loan Results Nine of 17 Affiliates grew average loans by more than 10% in 2005 Loan Growth Scorecard Florida 23% Chicago 20% Nashville 20% Cleveland 17% Detroit 15% North Mich 13% OH Valley 13% S. Indiana 12% Cincinnati 10% 25% 20% 15% 10% 5% 0% Florida* Chicago Nashville
Slide 17: Affiliate Deposit Performance
Affiliate Deposit Performance 11 of 17 affiliates grew average deposits by more than 8% in 2005 Deposit Growth Scorecard Lexington 30% Detroit 21% Nashville 18% OH Valley 16% Indianapolis 10% Columbus 9% Toledo 9% Chicago 8% North Mich 8% Cleveland 8% Louisville 8% 30% 25% 20% 15% 10% 5% 0% Lexingto
Slide 18: Affiliate Noninterest Income Performance
Affiliate Noninterest Income Performance Nine of 17 affiliates grew noninterest income by more than 9% in 2005 Noninterest Income Growth Scorecard Nashville 48% Florida 33% Indianapolis 13% Lexington 12% Louisville 11% Detroit 10% Toledo 10% Chicago 9% Columbus 9% 50% 40% 30% 20% 10% 0% Nashville Fl
Slide 19: 2006 Initiatives
2006 Initiatives I. Core Funding II. Deposit Growth III. Customer Service IV. Continued Loan Performance V. Improve Balance Sheet Mix
Slide 20: Funding Balance Sheet Growth
Funding Balance Sheet Growth Focused on growing core deposits to reduce reliance on wholesale funding and fund future loan growth of 17 affiliates grew loans faster than deposits in 2005 30% 25% 20% 15% 10% 5% 0% Lexington Detroit Nashville OH Valley Indianapolis Columbus Toledo Chicago North Mich C
Slide 21: Driving Core Deposit Growth
Driving Core Deposit Growth Deposit balance and account production growth Bundled product sales and pricing – loyalty rewards Enhanced product offerings Competitive everyday rates Quarterly deposit campaigns Improved distribution through de-novo expansion 2006 Planned De-novo Banking Centers by Mark
Slide 22: Meeting De-novo Performance Expectations
Meeting De-novo Performance Expectations De-novo Loan & Deposit Targets Millions 20 $ Year 1 Year 2 Year 3 Year 4 Year Year 6 Total Loans Total Deposits De-novo Site Selection Daytime employment Business market density Residential household demographics Competitive demographics Performance Expectati
Slide 23: Increased Retention and Service Focus
Increased Retention and Service Focus Right price & right product Automation at customer touch points Improving call center service levels Standardized and automated account opening procedures with preset follow-up points Listen to the customer Customer surveys – “Voice of the Customer” 14% improvem
Slide 24: Maintain Loan Growth Momentum
Maintain Loan Growth Momentum 5-year CAGR Loans & Leases 10% Earning Assets 9% 95,000 85,000 75,000 Millions 65,000 55,000 $ 45,000 35,000 25,000 Avg Loans & Leases Avg Earning Assets
Slide 25: Improving Balance Sheet Risk Profile
Improving Balance Sheet Risk Profile Continued cash flow reductions in the securities portfolio through through the first half of the year Depending on other balance sheet trends, targeting securities at 15-20% of total assets Avg. Securities as % of Avg. Earning Assets Billions $ 2001 2002 2003 200
Slide 26: In 2006, Fifth Third is targeting
In 2006… Fifth Third is targeting: 10-12% loan growth 10-12% core deposit growth Double-digit core noninterest income growth Low to mid single digit expense growth Continued balance sheet mix improvement Improving margin trends in the second half of 2006 Sequential quarter EPS growth throughout the
Slide 27: Questions
Questions This presentation may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined with acquired entities within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act
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