Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Bank of America Merrill Lynch Banking & Financials Conference 2012
24 slides from Fifth Third Bancorp's conference presentation, Nov 14, 2012
Slide 1: Bank of America Merrill Lynch Banking & Financials Conference
Exhibit 99.1 Bank of America Merrill Lynch Banking & Financials Conference Daniel T. Poston Executive Vice President & Chief Financial Officer November 14, 2012 Refer to earnings release dated October 18, 2012 and 10-Q dated November 7, 2012 for further information © Fifth Third Bank | All Rights Re
Slide 2: A strong franchise showing momentum
A strong franchise showing momentum Earnings Growth Strong results underscored by Net income available to common shareholders ($MM) continued loan growth, solid fee income, expense control, and ongoing improvement in credit metrics Traditional banking model moderate risk profile and strong execution
Slide 3: Environment characterized by low growth expectations and low interest rates
Environment characterized by low growth expectations and low interest rates Characteristics of current environment Fifth Third’s response / position • Continued strong loan production • Prolonged low-rate environment, coupled with modest economic growth – Rates on loan originations lower but loan in
Slide 4: NII results reflect continued moderate NIM pressure offset by balance sheet growth
NII results reflect continued moderate NIM pressure offset by balance sheet growth Fixed / Floating Portfolio NII and NIM (FTE) Interest-Earning Funding^ Investment Assets Investment Portfolio 3% Portfolio 14% Loans Fixed 50% ~55-60% Loans 33% ($MM) Trend: fixed rate loan origination coupons • 3Q12
Slide 5: Balance sheet growth mitigates rate environment
Balance sheet growth mitigates rate environment Average loan growth ($B)^ • Growth driven by C&I and residential mortgage loans; portfolios in run-off mode are of moderate 83 83 size 80 82 79 – Commercial line utilization stable at 32%; potential source of future growth • CRE portfolio continues to
Slide 6: Strength in C&I loan growth
Strength in C&I loan growth C&I Portfolio^ ($B) Continued demand in large corporate and mid- corporate space Reduction in portfolio yields driven by mix shift toward higher-quality loans, portfolio effects of repricing, and pressure on new origination yields C&I loans as a percent of total commercia
Slide 7: Strong revenue and profit generation
Strong revenue and profit generation Revenue^ / Avg. Int. Earning Assets 3Q12 returns strong relative to peers 7.0% 6.33% 6.25% ROAA ROAE 6.18% 6.02% 6.00% 6.0% 5.82% 1.28% 5.0% 2.68% 2.57% 2.69% 10.9% 2.15% 2.46% 2.42% 4.0% 3.0% 1.23% 1.20% 10.4% 10.1% 2.0% 3.65% 3.67% 3.61% 3.56% 3.56% 3.58% 1.0%
Slide 8: Strong mortgage banking results
Strong mortgage banking results Mortgage Banking Revenue ($MM) $200 • Record origination fees and gain on $204 15 $183 62 loan sales in 3Q12 $178 $156 63 34 58 61 • Highest ranking among all servicers 59 and peer groups in Fannie Mae’s TM 174 183 226 2011 STAR Program for servicing 152 119 performan
Slide 9: Disciplined expense management
Disciplined expense management 2012 expense trend ($MM) Efficiency ratio trend • Expect similar adjusted efficiency ratio in Reported expense $973 $937 $1,006 4Q12; target mid-50% in normalized Non-recurring items*: environment (with higher interest rate environment) Decreasing expense $23 $17 $5 In
Slide 10: Credit trends continue to improve with strong reserve coverage levels
Credit trends continue to improve with strong reserve coverage levels Net charge-off ratio NPLs / Loans Peer average: 0.9% Peer average: 1.6% Reserves / NPLs Loan loss reserves / Loans Peer average: 2.0% Peer average: 131% Continued decline in problem assets and corresponding decline in charge-offs
Slide 11: Capital management philosophy
Capital management philosophy Capital Deployment Capital Return Organic growth opportunities Return to more normal dividend policy* • Support growth of core banking franchise • Strong levels of profitability would support higher dividend than current level • Continued loan growth despite sluggish ec
Slide 12: Capital position remains strong
Capital position remains strong Primary Basel III Adjustments* Basel III Impacts Current NPR Capital Impact ~45 bps +/- NPR RWA Impact ~(110 bps) +/- • 3Q12 Tier 1 common equity ratio of Total Tier 1 Change ~(65 bps) +/- 9.67% under Basel I Estimated NPR Impact Tier 1 Common Equity • Capital impact
Slide 13: Fifth Third's balance sheet and business model relatively advantaged under new capital standards
Fifth Third’s balance sheet and business model relatively advantaged under new capital standards 3Q12 Tier 1 common / RWA Basel I Unofficial CCAR supervisory reference minimum 5.0% 3Q12 Pro forma Tier 1 common / RWA U.S. proposed Basel III** 2015 Basel III minimum 2019 Basel III buffered minimum Hig
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 ~43% of total revenue Industry leader in e
Slide 15: Cautionary statement
Cautionary statement This report contains statements that we believe are “forward-lookingstatements” 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 pro
Slide 16: Appendix
Appendix 16 Fifth Third Bank | All Rights Reserved
Slide 17: Core funded balance sheet and pricing discipline
Core funded balance sheet and pricing discipline Transaction Deposits / Total Deposits Cost of Funds Peer average 85% Peer average 0.51% DDA/Total Deposits • Deposit-rich core funding mix supports relatively low cost of funds Peer average 32% – High percentage of funding base in low cost transaction
Slide 18: Pre-tax pre-provision earnings
Pre-tax pre-provision earnings* PPNR reconciliation PPNR trend ($ in millions) 3Q11 4Q11 1Q12 2Q12 3Q12 Income before income taxes (U.S. GAAP) (a) $530 $418 $603 $565 $503 Add: Provision expense (U.S. GAAP) (b) 87 55 91 71 65 PPNR (a) + (b) $617 $473 $694 $636 $568 Adjustments to remove (benefit) /
Slide 19: Credit-related costs
Credit-related costs In noninterest income ($MM) Actual ($ in millions) 3Q11 4Q11 1Q12 2Q12 3Q12 Gain / (loss) on sale of loans $3 $9 $5 $8 $2 Commercial loans HFS FV adjustment (6) (18) (1) (5) (3) Gain / (loss) on sale of OREO properties (21) (22) (17) (19) (11) Mortgage repurchase costs (2) (1) (
Slide 20: Continued improvement in credit trends
Continued improvement in credit trends Loans 30-89 days delinquent % vs. peers Loans 90+ days delinquent % vs. peers NPA ratio vs. peers Net charge-off ratio vs. peers (7.5%)*(HFS transfer) 5.0%* 3.8% 2.3% before before credit credit actions actions FITB credit metrics are in line with or better tha
Slide 21: Mortgage repurchase overview
Mortgage repurchase overview 3Q12 balances of outstanding claims decreased 24% from 2Q12 — Within recent range of quarterly volatility Virtually all sold loans and the majority of new claims relate to Repurchase Reserves* ($ in millions) agencies — 99% of outstanding balance of loans sold 3Q11 4Q11
Slide 22: European Exposure
European Exposure European Exposure Sovereigns Financial Institutions Non-Financial Entities Total Total Funded Total Funded Total Funded Total Funded exposure exposure exposure exposure exposure exposure exposure exposure (amounts in $MM) Peripheral Europe - - 15 - 152 119 167 119 Other Eurozone -
Slide 23: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation $ and shares in millions (unaudited) For the Three Months Ended September June March December September 2012 2012 2012 2011 2011 Income before income taxes (U.S. GAAP) $503 $565 $603 $418 $5
Slide 24: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation $ and shares in millions (unaudited) For the Three Months Ended September June March December September 2012 2012 2012 2011 2011 Total Bancorp shareholders' equity (U.S. GAAP) $13,718 $13,77
Fifth Third Bancorp — Bank of America Merrill Lynch Banking & Financials Conference 2012 on 6ix