Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Credit Suisse Financial Services Forum 2011
28 slides from Fifth Third Bancorp's conference presentation, Feb 9, 2011
Slide 1: Credit Suisse Financial Services Forum
Exhibit 99.1 Credit Suisse Financial Services Forum Dan Poston Executive Vice President & Chief Financial Officer February 9, 2011 Please refer to earnings release dated January 19, 2011 for further information © Fifth Third Bank | All Rights Reserved
Slide 2: A foundation of continued growth
A foundation of continued growth Capital – foundation for continued growth Tier 1 common ratio (%) — Tier 1 common capital has increased 313bps or $2.6bn1 — Capital base transformed through series of capital actions – 9.4% pro forma Tier 1 ratio excluding trust preferred securities to be phased-out
Slide 3: Net interest income
Net interest income NII and NIM (FTE) • Sequential trends in net interest income and net interest margin (FTE) reflect CD repricing, deposit mix shift out of CDs, higher average total loan balances and continued deposit pricing discipline partially offset by effect of FTPS loan refinancing – NII up
Slide 4: Core fee income growth and stable core expenses
Core fee income growth and stable core expenses Core fee income ($mm) • Core noninterest income of $632mm decreased $44mm, or 7%, compared with prior quarter, primarily due to lower mortgage banking net revenue • Strong corporate banking revenue results (+21%); mortgage banking net revenue ($149mm)
Slide 5: Pre-provision net revenue: Strong in crisis and growing since
Pre-provision net revenue: Strong in crisis and growing since Core PPNR trend Core PPNR / Risk-weighted assets 1 Significant purchase accounting benefit Peer avg.: 2.2% Core PPNR / Net charge-offs 2 Peer avg.: 135% • Reported PPNR of $583mm down 34% from strong 3Q10 levels, which included higher mor
Slide 6: Balance sheet
Balance sheet Average loan growth ($bn)^ Flat QoQ; (2%) YoY • Extended $26bn of new and renewed credit in 4Q10 78 78 77 • C&I loans flat sequentially and up 2% from the previous year • CRE loans down 8% sequentially and 18% from the previous year • Consumer loans up 2% sequentially and up 4% from th
Slide 7: Strong relative credit trends
Strong relative credit trends Loans 30-89 days delinquent % vs. peers Loans 90+ days delinquent % vs. peers HFI NPA ratio vs. peers Net charge-off ratio vs. peers (7.5%)*(HFS transfer) 5.0% 3.8% Before credit actions 2.3%* Before credit 1Q11 actions expect stable FITB credit metrics are now generall
Slide 8: Strong credit metrics compared with peers
Strong credit metrics compared with peers Net Charge-off Ratio (Annualized) HFI NPA Ratio Peer average: 3.5% Peer average: 2.2% “Texas Ratio” (HFI NPAs + Over 90s – Reserves) / TCE (HFI NPAs + Over 90s) / (Reserves + TCE) Peer average: 28% Peer average: 8% FITB credit metrics lower than peer average
Slide 9: Industry leading reserve levels
Industry leading reserve levels Reserves / Loans Reserves / NPLs Peer average: 3.0% Peer average: 111% Loan loss allowance provides significant additional loss absorption Industry-leading reserve coverage of problem loans capacity to strong capital position Reserves / HFI NPAs Reserves / Net Charge-
Slide 10: TARP repayment
TARP repayment Repaid $3.408 billion TARP CPP investment on February 2, 2011 Utilized proceeds from — $1.7 billion common equity offering — $1.0 billion debt offering — Internally available funds Intend to evaluate repurchase of warrants from U.S. Treasury; if mutually agreeable value not reached, w
Slide 11: Pro forma capital position vs. peers (not adjusted for Basel III)
Pro forma capital position vs. peers (not adjusted for Basel III) (Tier 1 common + reserves) / RWA Tier 1 capital ratio Tier 1 common (peers) Reserves Tier 1 capital ex-TPS & TARP (peers) Trust preferred Tier 1 common (FITB) Red: repaid TARP Tier 1 capital ex-TPS & TARP (FITB) TARP CPP Red: repaid P
Slide 12: Pro forma capital position including TARP repayment (adjusted for Basel III)
Pro forma capital position including TARP repayment (adjusted for Basel III*) Unlike other SCAP commercial banks, Fifth Third Tier 1 common ratio (+ reserves / RWA) does not expect adverse effect to common Tier 1 common (peers) Reserves capital ratios from Basel III Tier 1 common (FITB) — Improvemen
Slide 13: Capital management philosophy
Capital management philosophy Organic growth opportunities • Support growth of core banking franchise • Improving loan demand in recovering economy Return to more normal dividend policy* • Strong levels of profitability would support significantly higher dividend than current dividend • Subject to c
Slide 14: Well-positioned for the future
Well-positioned for the future Diversified traditional banking platform • Traditional commercial banking franchise built on customer-oriented localized operating model • Strong market share in key markets with focus on further improving density • Fee income ~40% of total revenues Strong industry lea
Slide 15: Cautionary statement
Cautionary statement This report contains statements that we believe are “forward-looking statements” 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 pr
Slide 16: Appendix
Appendix Fifth Third Bank | All Rights Reserved
Slide 17: Well-positioned for changed financial landscape
Well-positioned for changed financial landscape Fifth Third’s business model is driven by traditional banking activities — Largest bank headquartered within Fifth Third’s core Midwest footprint — Focused on expansion and development of businesses where regional leadership matters — Capital investmen
Slide 18: Potential impact of key elements of Dodd-Frank Act and other recent financial legislation
Potential impact of key elements of Dodd-Frank Act and other recent financial legislation* Scope of activity Potential impact** • 2010 debit interchange revenue of $204mm • Fed has proposed limits on debt interchange; proposal Debit • 2010 debit interchange $ volume: $15.7B currently out for comment
Slide 19: Pro forma capital ratios
Pro forma capital ratios 4Q10 4Q10 TARP 4Q10 $1.7bn offering redemption Peer 4Q10 pro forma1 pro forma 2 Median 4 Consolidated TCE / TA (incl. unrealized gains) 7.3% 8.8% 8.7% 7.1% TCE / TA (excl. unrealized gains) 7.0% 8.6% 8.4% 7.1% Tier 1 common 7.5% 9.1% 9.0% 8.7% Tier 1 capital 13.9% 15.6% 12.2
Slide 20: Effects of capital plan and TARP repayment on income statement and earnings per share
Effects of capital plan and TARP repayment on income statement and earnings per share Fifth Third has not provided earnings or earnings per share guidance The comments below relate to the effects of our capital plan on our earnings and earnings per share. — Write-off of discount accretion and avoida
Slide 21: Mortgage repurchase overview
Mortgage repurchase overview Demand requests and repurchase losses remain volatile and near-term repurchase losses are expected to remain elevated Repurchase Reserves* ($ in millions) — Number of outstanding demand requests (units) down 9% from Q3 2010, outstanding demand requests ($) down13% Q4 Q1
Slide 22: Troubled debt restructurings (TDR) overview
Troubled debt restructurings (TDR) overview Successive improvement in vintage performance during 2008 and 2009, even as volume of modification increased TDR performance has improved in newer vintages Mortgage TDR 60+ redefault trend by vintage Fifth Third’s mortgage portfolio TDRs have redefaulted a
Slide 23: NPL Rollforward
NPL Rollforward NPL HFI Rollforward Commercial 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 * 4Q10 Beginning NPL Amount 1,406 1,937 2,110 2,430 2,392 2,172 1,980 1,261 New nonaccrual loans 799 544 832 602 405 310 290 308 Paydowns, payoffs, sales and net other activity (157) (190) (246) (332) (425) (401) (631)
Slide 24: Non-performing loans
Non-performing loans FITB NPL inflows (relative to loans) vs. peers Non-performing loans ($mm) $2.9B $2.7B $2.5B $1.6B $1.7B Non-performing loans improving with lower severity mix; benefit of sales/transfers New HFI non-performing loan flows ($mm) FITB FITB ex-HFS Fifth Third’s non-performing loan i
Slide 25: Pre-provision net revenue reconciliation
Pre-provision net revenue reconciliation 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Reported PPNR $511 $2,393 $844 $562 $568 $567 $760 $583 Adjustments: BOLI 54 - - - - - (127) - Gain on sale of Visa shares - - (244) - 9 - - - Gain from sale of processing interest - (1,764) 6 - - - - - Divested merchan
Slide 26: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation For the Three Months Ended $ and shares in millions Proforma Proforma (unaudited) CS Issue, TARP CS Issuance December December December September June March December 2010 2010 2010 2010 2010
Slide 27: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Common offering and TARP repay 4Q10 Common share offering only 4Q10 Tier 1 Capital ratio Tier 1 Capital ratio Tier 1 capital $ 13,964,857 Tier 1 capital $ 13,964,857 TARP repay $ (3,408,000) Equity raise $ 1,648,830 Equity raise $ 1,648,830 $ 12,205,687 $ 15,613,
Slide 28: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Common share offering only 4Q10 Phase out of TRUPs (Equity raise) 4Q10 Phase out of TRUPs (TARP, Equity raise) 4Q10 Tangible Common Equity ratio Tier 1 Capital ratio Tier 1 Capital ratio Tangible CE $ 7,603,486 Tier 1 capital $ 13,964,857 Tier 1 capital $ 13,964,
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