Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — UBS Global Financial Services Conferences 2008
25 slides from Fifth Third Bancorp's conference presentation, May 12, 2008
Slide 1: UBS Global Financial Services Conferences
Exhibit 99.1 UBS Global Financial Services Conferences Kevin Kabat, President and CEO May 12, 2008 Fifth Third Bank | All Rights Reserved
Slide 2: Fifth Third overview
Fifth Third overview Footprint* $111 billion assets #14 Traverse City $11 billion market cap #12^ Grand Rapids Detroit Chicago Toledo 1,232 banking centers Cleveland Pittsburgh Columbus Indianapolis 2,221 ATMs Cincinnati Huntington Florence St. Louis Evansville Louisville Lexington 18 affiliates in
Slide 3: 1Q08 in review
1Q08 in review Difficult quarter due to economic environment — BOLI charge and VISA gain distorted financial results — Significant 1Q08 increase in charge-offs and provision Core business momentum remains strong — NII growth of 11% versus 1Q07 — Fee income growth of 22% excluding the impact of signi
Slide 4: Peer performance summary
Peer performance summary Large FITB Midwest YOY bank peers (2) performance 1Q08 peers (1) 1Q08 vs. peers 1Q08 Loan growth 12% 7% 10% Outperformed Transaction deposit growth 7% 4% 5% Outperformed NII growth 11% 9% 10% Outperformed Operating fee growth* 22% 2% 7% Outperformed Operating efficiency rati
Slide 5: Increasing net interest income
Increasing net interest income 3.75% $850 $800 3.50% $750 $700 3.25% $650 $600 3.00% $550 2.75% $500 1Q07 2Q07 3Q07 4Q07 1Q08 Net interest income NIM 5 Fifth Third Bank | All Rights Reserved
Slide 6: Fee income growth and diversification
Fee income growth and diversification $900 $800 YOY growth $700 Payment processing +15% $600 $500 Deposit service +17% charges $400 Investment advisory -3% $300 Corporate banking +30% $200 Mortgage +144% $100 Secs/other +10% $0 1Q07 2Q07 3Q07 4Q07 1Q08 Reported noninterest income growth 42%. Exclude
Slide 7: FTPS: key growth engine
FTPS: key growth engine 1Q08 revenue Financial Merchant Institutions $250 Services 37% 2-Yr YOY CAGR growth 36% $200 Bankcard +17% +23% 27% $150 Merchant • 4th Largest U.S. Acquirer +16% +17% $100 • Over 37,500 merchants • $26.7B in credit/debit processing volume • Over 5.6B acquired transactions •
Slide 8: Corporate banking
Corporate banking International • Letters of credit • Foreign exchange $120 2-Yr YOY CAGR growth +9% -2% $90 Derivatives • Customer interest rate derivatives +48% +68% $60 Capital markets lending fees +12% +28% • Institutional Sales • Asset securitization/conduit fees $30 • Loan/lease syndication fe
Slide 9: Strong operating performance…
Strong operating performance… $700 $600 $500 $400 $300 $200 $100 $0 1Q07 2Q07 3Q07 4Q07 1Q08 Reported pre-tax pre-provision earnings growth 64%. Excludes $152 BOLI charge, $273 Visa IPO gain, $152 million reversal of Visa litigation expenses and $16 million in merger-related and severance charges in
Slide 10: … offset by current high credit costs
… offset by current high credit costs $700 $600 $500 $400 $300 $200 $100 $0 -$100 Net charge- -$200 offs -$300 Additional -$400 provision -$500 -$600 1Q07 2Q07 3Q07 4Q07 1Q08 Reported pre-tax pre-provision earnings growth 64%. Excludes $152 BOLI charge, $273 Visa IPO gain, $152 million reversal of V
Slide 11: Real estate driving credit deterioration
Real estate driving credit deterioration NPAs NCOs 1,800,000 320,000 1,600,000 280,000 1,400,000 Res RE 240,000 Res 1,200,000 RE 200,000 1,000,000 160,000 CRE 800,000 CRE 120,000 600,000 400,000 80,000 200,000 40,000 0 0 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008
Slide 12: Michigan and Florida: most stressed markets
Michigan and Florida: most stressed markets NPAs NCOs 1,800,000 320,000 1,600,000 280,000 1,400,000 240,000 Stressed 1,200,000 markets Stressed 200,000 markets 1,000,000 160,000 800,000 600,000 120,000 400,000 80,000 200,000 40,000 - - Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q1 2007 Q2 2007 Q3 2007
Slide 13: Credit containment
Credit containment Eliminated all brokered home equity production Suspended all new developer lending Significantly tightened underwriting limits and exception authorities Major expansion of commercial and consumer workout teams Aggressive write downs in stressed geographies Significant addition to
Slide 14: Strong capital positioning
Strong capital positioning Tangible Common Equity as % of Tangible Assets 9.46% Leverage 9.01% 8.96% 8.86% 7.64% 8.28% 8.10% 6.85% 6.53% Target : 6-6.5% 6.22% 7.30% 7.20% 5.46% 5.30% 6.82% 5.00% 6.49% 4.66% 6.20% 4.35% MI CMA KEY STI FITB BBT USB NCC HBAN WB MI KEY CMA FITB USB BBT STI HBAN NCC WB T
Slide 15: Fifth Third differentiators
Fifth Third differentiators Integrated affiliate delivery model Aggressive sales culture Operational efficiency Streamlined decision making Integrated payments platform (FTPS) Acquisition integration Customer satisfaction 15 Fifth Third Bank | All Rights Reserved
Slide 16: Fifth Third: building a better tomorrow
Fifth Third: building a better tomorrow Consistently outperform the U.S. banking industry Deliver growth in excess of industry Enhance the customer experience Increase employee engagement Institutionalize enterprise operational excellence 16 Fifth Third Bank | All Rights Reserved
Slide 17: Appendix
Appendix 17 Fifth Third Bank | All Rights Reserved
Slide 18: Diversified loan portfolio
Diversified loan portfolio Distributed by type* $48 billion commercial loan portfolio Credit Card Other Cons Auto 2% 1% 91% secured 10% C&I $1.0 million average outstanding 33% Home Equity $1.9 million average exposure 15% 1Q08 NCOs: 121 bps Resi Mortgage 12% Commercial Coml Lease Mortgage $33 billi
Slide 19: Nonperforming assets
Nonperforming assets Reported NPAs by loan type Other Total NPAs of $1.6B, or 196 bps $39M Commercial NPAs of $1.1B; recent growth C&I 2% driven by commercial construction and real $315M estate, particularly in Michigan, Northern Ohio, 20% and Florida CRE Consumer NPAs of $534M; recent growth $743M
Slide 20: Commercial real estate portfolio
Commercial real estate portfolio Commercial real estate (CRE) Homebuilders and residential development Total outstandings $17.8B Total outstandings $2.7B — Commercial mort $12.2B (45% owner occ’d) ~6% of commercial loans, ~15% of CRE — Construction 5.6B (19% owner occ’d) Crown contributed $313MM to
Slide 21: Residential real estate - topical areas
Residential real estate - topical areas* Home equity: $11.8B outstanding Other 1st liens: 23%; 2ndliens: 77% (17% of 2ndliens behind FITB 1st s) FL 7% 7% Weighted average origination FICO: 742 OH KY 33% Origination FICO distribution: <659 5%; 660-689 10%; 690-719 16%; 720-749 20%; 750+ 50% 9% Weight
Slide 22: Home equity
Home equity Brokered Direct 10,000 30 10,000 30 8,000 25 25 8,000 20 20 6,000 6,000 15 15 4,000 4,000 10 10 2,000 2,000 5 5 0 0 0 0 Balance NCOs Balance NCOs HEA Other retail brokered FL MI OH IN IL KY Other • Brokered home equity: 22% of loans, 56% of 1Q08 • Michigan represented 23% of direct loans
Slide 23: Michigan market
Michigan market Loans % of NPAs % of NCOs % of (bn) FITB (mm) FITB (mm) FITB Economic weakness impacts C&I 4.83 18% 69 23% 8.5 24% commercial real estate market Commercial mortgage 3.76 31% 114 35% 21.0 64% Commercial construction 1.16 21% 119 29% 47.1 65% Issues: homebuilders, developers Commercial
Slide 24: Florida market
Florida market Loans % of NPAs % of NCOs % of (bn) FITB (mm) FITB (mm) FITB Issues: homebuilders, developers C&I 1.95 7% 39 13% 5.8 16% tied to weakening real estate market Commercial mortgage 1.94 16% 75 23% 6.0 18% Commercial construction 1.30 23% 147 35% 17.1 24% Issues: increasing severity of lo
Slide 25: Cautionary Statement
Cautionary Statement This report may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined 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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