Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Fox-Pitt Kelton Cochran Caronia Waller Financial Services Conference (November 2007)
22 slides from Fifth Third Bancorp's conference presentation, Nov 29, 2007
Slide 1: Fox-Pitt Kelton Cochran Caronia Waller Financial Services Conference
Exhibit 99.1 Fox-Pitt Kelton Cochran Caronia Waller Financial Services Conference Chris Marshall, EVP and Chief Financial Officer November 29, 2007 Fifth Third Bank | All Rights Reserved
Slide 2: Agenda
Agenda Profile Geographic diversification De novo activities Business mix diversification Payments processing Credit Capital and liquidity Appendix 2 Fifth Third Bank | All Rights Reserved
Slide 3: Geographic diversification
Geographic diversification First quarter 2004 First quarter 2008 Traverse Traverse City City Grand Rapids Grand Rapids Detroit Detroit Chicago Chicago Toledo Cleveland Toledo Cleveland Pittsburgh Columbus Indianapolis Columbus Indianapolis Cincinnati Cincinnati Huntington Florence Florence St. Louis
Slide 4: Changing our profile
Changing our profile 23% in high growth* markets 38% in high growth* markets 45% in high growth* markets 1,005 branches 1,329 branches 1,552 branches 2004 1Q08 pro forma 2010 plan# 10% 25% 55% 27% 99 13% 327 128 421 175 778 branches 827 branches 858 branches 273 62% 13% 18% 77% Southeast Chicago Oth
Slide 5: De novo activities
De novo activities • Opened 58 total new branches in 2007- 2009 planned builds the past 12 months (expect 80 per year for the next few years) • Continue to invest in high Chicago opportunity markets 28% • Site selection focuses on market potential, predictive modeling and IRR optimization Florida Te
Slide 6: De novo performance
De novo performance growth markets 40000 $35 mm $35 mm 40000 pace goal 35000 35000 30000 30000 25000 25000 20000 20000 15000 15000 10000 10000 5000 5000 0 0 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y0 Y1 Y2 Y3 Y4 Y5 Y6 40000 40000 $38 mm 2003 Average 04-05 Goal $35 mm 35000 2004 Average 04-05 Goal 35000 goal goal 30000
Slide 7: Diversified franchise
Diversified franchise 2007 Revenue - $6 billion* Branch Banking (40% of earnings) Retail & Business banking 2.8 million households 1,181 branches, 2,153 ATMs Consumer Lending $561MM Commercial Banking (39%) Investment Corporate & Middle Market Lending, Treasury Services, 9% Advisors International Tr
Slide 8: Fee income diversification
Fee income diversification ($ in millions) $750 2006-2007 CAGR Growth Category $650 Payment 18% 16% $550 processing $450 Deposit service 4% 13% $350 charges Investment $250 advisory 3% 7% Corporate $150 banking 19% 15% Mortgage -19% -28% Other -7% 6% $50 3Q-2004 3Q-2005 3Q-2006 3Q-2007 42% of 45% of
Slide 9: FTPS: key growth engine
FTPS: key growth engine 2007 YTD revenue* Financial Merchant Institutions $250 CAGR 18% Services 32% 47% Bankcard $200 CAGR 21% 19% $150 Merchant • 4th Largest U.S. Acquirer • Over 35,000 merchants CAGR $100 22% • $150B in processing volume • Over 4.4B acquired transactions • e.g. Nordstrom, Saks, W
Slide 10: Credit cards: capturing our fair share
Credit cards: capturing our fair share 13th largest bank, 23rd largest credit card issuer Significant opportunity in high risk-adjusted return business — Improve retail production by deploying sales technologies to enhance ease of sale — Move from “ultra” conservative underwriting to “conservative”
Slide 11: Payments business value to FITB
5% 3% Payments business value to FITB LTM earnings 2007 P/E Market value Total Fifth Third $ 1,471 X 10.1 = $ 14.9B Standalone payments processing^ $ 164 X 24.0* = $ 3.9 B Rest of Fifth Third $ 1,307 X 8.4 = $ 11.0 B # Top 15 U.S. Regionals - Average 11.5 - Median 10.5 Standalone payments processing
Slide 12: Diversified loan portfolio
5% 3% Diversified loan portfolio $42 billion commercial loan portfolio Third quarter YTD 93% secured average loan portfolio Other Consumer $880,000 average outstanding 2% $1.7 million average exposure Auto Loans Commercial YTD NCOs: 35 bps and Industrial Credit Card 14% 2% 28% $35 billion consumer l
Slide 13: Credit quality
Credit quality 0.90% Net charge-offs 0.80% 0.70% 0.60% 0.50% FITB 3Q Midwest 0.40% Loan mix 0.30% 0.20% 0.10% 0.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Fifth Third Bank Normalized Peer Group Average # Peer Group Average* *Peer group includes Top 15 U.S. regional banks: BBT, CMA, FHN, H
Slide 14: Strong capital position
Strong capital position Tangible Common Equity as 8.26 % of Tangible Assets 6.83 6.78 6.42 Target 6.5% 6.32 5.42 5.42 5.38 5.28 4.20 CMA FITB KEY MI STI HBAN BBT NCC USB WB 9.30 Tier 1 Ratio 8.60 8.46 8.35 7.92 7.67 7.45 7.20 7.19 6.88 BBT USB FITB HBAN KEY CMA STI WB MI NCC *Peer group: U.S. banks
Slide 15: Strong liquidity position
Strong liquidity position Strong core funding* Relatively low wholesale borrowings* Fed funds, 100% other ST Tangible borrowings 90% equity Wholesale Other funding 80% deposits 9% 7% 8% 70% 60% Long-term debt 12% 50% 40% TCE & 4% Core deposits Other 60% 30% core liabilities deposits 20% 10% 0% MI US
Slide 16: Fifth Third: building a better tomorrow
Fifth Third: building a better tomorrow Balancing growth and profitability Capitalizing on strengths and developing plans to address areas of weakness Communicating clearly with investors Delivering on promises Returning to above-par performance and shareholder returns 16 Fifth Third Bank | All Righ
Slide 17: 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
Slide 18: Appendix
Appendix 18 Fifth Third Bank | All Rights Reserved
Slide 19: De novo performance
De novo performance 40000 all markets $35 mm 40000 $35 mm 35000 pace pace 35000 30000 30000 25000 25000 20000 20000 15000 15000 10000 10000 5000 5000 0 0 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y0 Y1 Y2 Y3 Y4 Y5 Y6 40000 2002 Average 04-05 Goal 2003 Average 04-05 Goal 40000 35000 35000 30000 $35 mm goal 30000 $35 mm 2
Slide 20: Nonperforming assets
Nonperforming assets Reported NPA's by loan type –Total NPA’s of $706M, or 92 bps Residential C&I $179M –Commercial NPA’s of $446M; recent $238M 26% growth driven by commercial constraint 34% and real estate, particularly in Eastern Michigan, Northeastern Ohio, and Southern Florida Other $27M –Consu
Slide 21: Commercial portfolio - topical areas
Commercial portfolio - topical areas* Commercial real estate (CRE) Syndicated lending Total outstandings $16.6B Total loans ~$4B O/S — PD rating# 5.5 vs. 6.7 for — Commercial mort $11.1B (50% owner occ’d) commercial portfolio — Construction 5.5B (20% owner occ’d) — Ave size ~$8 million Total CRE 16.
Slide 22: Residential real estate - topical areas
Residential real estate - topical areas* Mortgage: $9.1B outstanding IN IL st MI KY 1 liens: 100% ; weighted average LTV: 80%; weighted average origination FICO: 720 8% 7% 18% 6% Origination FICO distribution: <659 12%; 660-689 10%; 690-719 15%; 720-749 16%; 750+ 47% (note: loans <659 includes CRA l