Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — 2005 Lehman Brothers Financial Services Conference
32 slides from Fifth Third Bancorp's conference presentation, Sep 14, 2005
Slide 1: Fifth Third Bancorp 2005 Lehman Brothers Financial Services Conference
Fifth Third Bancorp 2005 Lehman Brothers Financial Services Conference “Investing in a Franchise” Kevin T. Kabat Neal E. Arnold Executive Vice President Executive Vice President September 14, 2005
Slide 2: Affiliates & Markets
Affiliates & Markets I. Affiliate Operating Model II. Markets III. Deposit Performance IV. Loan Performance
Slide 3: Affiliate Bank Operating Model
Affiliate Bank Operating Model FITB Affiliates State Deposits % of 5/3 Assets Bkg Ctrs President Years @ 5/3 Cincinnati OH $11.6 18% $19.2 106 R. Sullivan 4 Chicago IL 8.4 13% 9.9 133 T. Zink 1 Western Michigan MI 7.1 11% 9.3 134 M. VanDyke 4 Florida FL 4.8 8% 8.8 85 K. Hale 1 Detroit MI 4.2 7% 6.8
Slide 4: Metropolitan Market Focus
Metropolitan Market Focus Distribution, Convenience & Price Are Competitive Advantages in Metro Markets Fifth Third MSA Markets MSA Population Rank Deposits Share% Chicago, IL 9.4 5 $7,139 3.2 Detroit, MI 4.5 7 2,817 3.7 Tampa, FL 2.6 10 786 2.0 Cleveland-Lorain, OH 2.1 6 2,585 4.2 Cincinnati, OH-KY
Slide 5: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Avg Demand & NOW 1996 1997 1998 1999 2000 2001 2002 2003 2004 Q2-05 5-year CAGR Interest Checking 18% Demand Deposits 15% 5-year CAGR Loans & Leases 8% Earning Assets 9% $ Millions 95,000 85,000 75,000 65,000 55,000
Slide 6: Continued Strong Affiliate Loan Results
Continued Strong Affiliate Loan Results 25% 20% 15% 10% 5% 0% Q2-05 YTD Average Total Loan & Lease Growth Florida Chicago Cleveland North Mich North Ky Nashville Detroit Cincinnati Columbus Lexington Louisville OH Valley Toledo Indianapolis Grand Rapids S. Indiana Dayton 9% growth in average loans &
Slide 7: Retail Banking
Retail Banking I. Funding Balance Sheet Growth II. The Challenge III. Deposit Base IV. Retail Deposit Strategy
Slide 8: Funding Balance Sheet Growth
Funding Balance Sheet Growth 10 of 17 affiliates have grown loans faster than core deposits in 2005 Q2-05 YTD Average Loan & Core Deposit Growth 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Florida Chicago Cleveland North Mich North Ky Nashville Detroit Cincinnati Columbus Lexington Louisville OH Valley To
Slide 9: The Challenge…
The Challenge… Good growth in smaller balance segments is being mitigated by high balance account attrition Consumer Transaction Deposits Q2-05 YOY Growth Rates by Avg. Balance 12% 8% 4% 0% -4% -8% < $1,000 $1,000 to $5,000 $5,000 to $10,000 $10,000 to $25,000 $25,000 to $50,000 $50,000 to $100,000
Slide 10: Fifth Third's Deposit Base is Granular
Fifth Third’s Deposit Base is Granular Top 25 Banks ranked by % of Total Deposits in accounts greater than $100K $ Amt of Deposit Accts >$100K 03/05 Q ($000) Total Deposits 03/05 Q ($000) % of Deposit Base in Accounts > $100K 1 Huntington Bancshares Incorporated 15,777,753 21,937,763 72% 2 Comerica
Slide 11: Driving Deposit Growth
Driving Deposit Growth Initiatives Quarterly deposit campaigns De-novo banking center expansion Increased retention and service focus Segmentation focus Right price Right product
Slide 12: Affiliate Updates
Affiliate Updates I. Fifth Third (Chicago) “Back on Track” II. Fifth Third (Florida) ... @ 7 months “It’s Early…but Promising”
Slide 13: Fifth Third (Chicago)…Regaining Traction
Fifth Third (Chicago)…Regaining Traction Almost 40 de-novo banking centers opened in Chicago area since efforts began in late 2002. 133 banking centers $9.3 billion in assets and $8.4 billion in deposits Year-to-date 2005 Fifth Third (Chicago) highlights: Loan growth of 18% Deposit growth of 11% Rev
Slide 14: Fifth Third (Chicago) Balance Sheet Trends
Fifth Third (Chicago) Balance Sheet Trends Average Commercial Loans $600 million in growth YTD 4,500 4,000 Millions 3,500 $ 3,000 2,500 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Average Consumer Loans $260 million in growth YTD 3,500 3,250 Millions 3,000 $ 2,750 2,500 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 A
Slide 15: Fifth Third (Chicago)…A Year Look Back
Fifth Third (Chicago)…A 4 Year Look Back Construction 10% Comm Mtg 24% Comm Lease 0% Resi Mtg 18% Cons Lease 0% Card 0% Consumer 23% C&I 25% June 2001 (conversion) NOW 20% Savings & MM 24% CD’s 43% Demand 13% Construction 8% Comm Mtg 16% Comm Lease 1% Resi Mtg Cons Lease 4% 2% C&I 31% Consumer 37% C
Slide 16: Fifth Third (Florida) Revenues
Fifth Third (Florida) Revenues Florida Non-interest Income 30% growth Q1 Q2 YTD 7-30 45 35 Millions 25 $ Highlights Investment Adv. 44% FTPS 134% Deposit Revenues 23% Mortgage 201% Insurance & Other (21%) Year-to-date Revenues up 14% 11% growth Florida Net Interest Income 140 120 100 Millions 80 $ 6
Slide 17: Fifth Third (Florida) Balance Sheet Trends
Fifth Third (Florida) Balance Sheet Trends Average Commercial Loans $144 million in growth YTD 3,500 3,400 Millions 3,300 3,200 $ 3,100 3,000 Jan Feb March April May June July Average Consumer Loans $353 million in growth YTD 2,000 1,750 Millions $ 1,500 1,250 Jan Feb March April May June July Avera
Slide 18: Business Lines
Business Lines 2004 Revenues Processing Solutions 11% Investment Advisors 10% Commercial 28% Retail 51% Q2-05 Noninterest Revenues Processing Solutions 28% Investment Advisors 14% Deposit Revenues 21% Other 22% Commercial Banking 8% Mortgage 7% Processing revenues exclude gain-on-sale
Slide 19: Commercial Banking
Commercial Banking I. Revenue & Net Income Performance II. Loan Performance III. Deposit Performance
Slide 20: Commercial Banking Performance
Commercial Banking Performance 2,000 1,900 1,800 1,700 1,600 Millions 1,500 1,400 $ 1,300 1,200 1,100 1,000 Revenue Net Income 750 700 650 600 Millions $ 500 450 400 1232 425 1474 563 739 1860 Q2-05 annualized 11% revenue growth & 15% net income growth in 2004 Sales force additions still gaining mom
Slide 21: Commercial Service Revenues
Commercial Service Revenues Inst. Sales & Pub Fin 10% International 24% Corporate Fin 6% Other 13% Deposit Revenue 38% Loan & Lease 9% Deposit-based revenues made up 38% of service revenues in 2004 compared to 33% in 2002 Selected Q2-05 Growth Rates Foreign exchange 23% Letters of credit 14% Derivat
Slide 22: Superior Commercial Loan Growth
Superior Commercial Loan Growth 2004 Average Commercial Loan & Lease Growth 30% 25% 20% 15% 10% 5% 0% Florida Lexington OH Valley Indianapolis Chicago Nashville Louisville Detroit N. Mich. Toledo Period end commercial loans & leases up 21% over last year 5-year CAGR = 10% 10 affiliates grew commerci
Slide 23: Commercial Deposit Focused
Commercial Deposit Focused 2004 Average Commercial Demand Deposit Growth 60% 50% 40% 30% 20% 10% 0% Florida Cleveland Cincinnati Chicago Columbus Nashville Indianapolis S IN Detroit Lexington Dayton Commercial demand deposits increased by 29% in 2004 5-year CAGR = 19% 11 affiliates grew commercial d
Slide 24: Fifth Third Processing Solutions
Fifth Third Processing Solutions I. Business Mix II. Revenue History III. Initiatives
Slide 25: Total FTPS Revenue Mix
Total FTPS Revenue Mix FTPS Revenue 2002 2003 2004 Financial Institution $206 $216 $250 Merchant Services 261 306 305 Card Services 76 87 102 TOTAL $543 $609 $657 Card Services 16% Merchant 46% Services 38% Financial Institution Includes 2004 impact of sold contacts totaling $70 million in comparabl
Slide 26: FTPS Revenue History
FTPS Revenue History Compound Annual Growth Rate 5-year = 26% $ Millions 800 700 600 500 400 300 200 100 Projected 609 543 372 272 204 1999 2000 2001 2002 2003 2004 2005 Includes 2004 impact of sold contacts totaling $70 million in comparable lost annual revenue Fin. Inst. & Card Merchant
Slide 27: Initiatives
Initiatives Cross-sell Merchant Card Processing into existing Commercial & Small Business Customers Improving overall merchant offering to small and middle market customers 2 X revenue and 4 X net income opportunity 33% increase in middle market sales representatives in 2005 Improve per sales rep pr
Slide 28: Investment Advisors
Investment Advisors I. Business Mix II. Initiatives
Slide 29: Fifth Third Investment Advisors
Fifth Third Investment Advisors 2004 Revenues Asset Mgmt 4% Retail Brokerage 16% Institutional 16% Private Client 64% 2004 Accomplishment 15% revenue growth compared to 4% expense growth 2005 & Beyond Revenue growth is Job 1 Improving mix of IA revenue to be less dependent on overall market
Slide 30: Initiatives
Initiatives Expand sales of investment management nationally through Fifth Third Asset Management (FTAM) Taft-Hartley, Corporate and Public pension client focus Penetrate commercial and small business client base with 401K Retirement Plans Continued Expansion of Private Client and Retail Brokerage S
Slide 31: The Deposit Opportunity
The Deposit Opportunity Fifth Third has only an 8% market share in the core six-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 Ohio 11% Michigan 9% Kentucky 7% Indiana 6% Illinois 3% Florida 2% 6 State Total
Slide 32: 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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