Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — UBS Global Financial Services Conference 2010
23 slides from Fifth Third Bancorp's conference presentation, May 11, 2010
Slide 1: UBS Global Financial Services Conference
Exhibit 99.1 UBS Global Financial Services Conference Kevin T. Kabat Chairman, President & Chief Executive Officer May 11, 2010 Please refer to earnings release dated April 22, 2010 and 10-K dated May 7, 2010 for further information, including full results reported on a U.S. GAAP basis © Fifth Third
Slide 2: 1Q10 in review
1Q10 in review Continued strong operating results • Net loss of $10 million versus 4Q09 net loss of $98 million • Pre-provision net revenue of $568 million, up $6 million from 4Q09 • Net interest margin of 3.63%, up 8 bps sequentially • Average core deposits up 6% sequentially • Extended $18 billion
Slide 3: Peer performance summary
Peer performance summary Regional Midwest FITB SEQ performance bank peers (1) peers (2) 1Q10 vs. peers 1Q10 1Q10 Net interest margin / (bps) 3.63% (+8) 3.60% (+13) 3.37% (+18) Better Operating fee growth^ -1% -9% -5% Better Operating efficiency ratio^ 62% 64% 65% Better Average core deposits growth
Slide 4: Pre-tax pre-provision earnings
Pre-tax pre-provision earnings Core PPNR trend Core PPNR reconciliation 1Q09 2Q09 3Q09 4Q09 1Q10 Reported PPNR (GAAP) $511 $2,393 $844 $562 $568 Adjustments: Gain on sale of Visa shares - - (244) - - BOLI charge 54 - - - - Gain from sale of processing interest - (1,764) 6 - - Divested merchant and E
Slide 5: Net interest income
Net interest income Core NII and NIM* • Trends in net interest income and net interest margin favorably compare with peers – NIM up 8 bps in 1Q10 vs. 4Q09 • Expect continued margin benefit through 2010 from CD maturities and improved loan spreads Reported NIM and YOY growth versus peers Yields and r
Slide 6: Fee income and expenses – core trends
Fee income and expenses – core trends* Core fee income ($M) • Strong mortgage banking results continued in 1Q10, resulting in $3.5B of originations and $152M in net revenue • Investment advisory revenue up 5% from the previous quarter due to seasonality and growth in brokerage fees • Card and proces
Slide 7: Liability mix and pricing discipline drive strong net interest income/NIM results
Liability mix and pricing discipline drive strong net interest income/NIM results 1Q10 Cost of Funds Peer Comparison Peer average 1.10% C&I Spread to 1-month LIBOR • Strong, deposit rich core funding mix supports relatively low cost of funds – Low reliance on wholesale funding • Continued pricing di
Slide 8: Balance sheet: Continued growth in core funding
Balance sheet: Continued growth in core funding Average loan growth ($B)^ • Extended $18B of new and renewed credit in 1Q10 84 82 80 78 78 • CRE loans down 4% sequentially and 12% from the previous year – New homebuilder/developer, non-owner occupied CRE suspended 2008 • C&I loans down 1% sequential
Slide 9: Deposit share momentum
Deposit share momentum Affiliate 5/3 Deposit (08-09) 5/3 Market Share Name Deposit ($) (%) Share 2009 2008 • Continued focus on customer satisfaction Chicago 788,601 9.8% 4.0% 3.8% and building full Northeastern Ohio 606,708 17.0% 4.2% 3.8% relationships has South Florida 579,342 21.1% 3.1% 2.8% giv
Slide 10: Continuing to invest for the future
Continuing to invest for the future 10 © Fifth Third Bank | All Rights Reserved
Slide 11: Strong capital position
Strong capital position Tier 1 capital ratio (with and without TARP) (TCE + reserves) / Loans Peer average w/ TARP: 11.1% Peer average: 12.6% Peer average w/o TARP: 9.4% Tier 1 common ratio Tangible common equity ratio Peer average: 7.4% Peer average: 6.5% Strong capital ratios relative to peers, pa
Slide 12: Strong reserve position
Strong reserve position Industry leading reserve level Reserves / Loans 1. FITB 4.91% 2. KEY 4.34% 3. ZION 4.05% 4. HBAN 4.00% 5. RF 3.61% 6. MI 3.55% 7. PNC 3.38% 8. WFC 3.22% 9. USB 2.80% 10. STI 2.79% 11. BBT 2.65% 12. CMA 2.42% 13. MTB 1.75% Peer Average 3.21% Coverage ratios are strong relative
Slide 13: Portfolio performance drivers
Portfolio performance drivers No Participation In Performance Largely Driven By • Subprime Geography • Option ARMs • Florida and Michigan most stressed • Remaining Midwest and Southeast performance reflect economic trends Discontinued or Suspended Lending 1Q10 NCO Ratios Coml Cons Total Discontinued
Slide 14: 1Q10 credit results
1Q10 credit results NPA ratio versus peers Year-over-year NPA growth versus peers Net charge-off ratio versus peers Year-over-year NCO growth versus peers Source: SNL and company reports. NPAs exclude loans held-for-sale and covered assets. 14 © Fifth Third Bank | All Rights Reserved
Slide 15: Nonperforming loan rollforward
Nonperforming loan rollforward Commercial ($ in millions) Beginning NPL amount $1,406 $1,937 $2,110 $2,430 $2,392 New nonaccrual loans 799 544 832 602 405 Paydowns, transfers, and sales (157) (190) (246) (332) (425) Charge-offs (111) (181) (266) (308) (200) Ending Commercial NPL $1,937 $2,110 $2,430
Slide 16: Manageable commercial real estate exposure
Manageable commercial real estate exposure CRE / Assets CRE / Loans Peer average: 18% Peer average: 26% CRE / TCE CRE / (TCE + Reserves) Peer average: 216% Peer average: 290% CRE exposure lower than peer average; problems relatively more manageable given capital and reserves Source: SNL and company
Slide 17: 2010 developments
2010 developments Macro themes Fifth Third response • Sluggish loan demand • Leverage existing customer relationships at the local level to offer our full portfolio of products and services across all of our lines of business • Deposits to grow but expect some diminution as later liquidity drawn • I
Slide 18: Summary
Summary Aggressive management of Core franchise remains strong Robust capital levels credit issues • Dedicated to serving the needs • Strong reserve coverage of • Successfully completed June of families and businesses for problem loans 2008 capital plan and SCAP more than 150 years capital actions •
Slide 19: Cautionary statement
Cautionary statement This report may contain 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
Slide 20: Updated stress testing - process overview
Updated stress testing - process overview Similar process to that used in 2008 and SCAP processes; updated for actual performance and current economic expectations Moody’s “Base” and “Longer Recession and Weaker Recovery” case scenarios key economic assumptions Base Adverse Economic Assumptions* 201
Slide 21: Updated credit loss expectations vs. SCAP scenarios
Updated credit loss expectations vs. SCAP scenarios $5,500 Fifth Third Fifth Third’s realized credit losses $5,250 capitalized for this have been significantly below its level of credit losses SCAP submitted baseline and $5,000 under SCAP (plus more adverse scenarios $5.0B surplus raised vs. – In SC
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 Fifth Third’s mortgage portfolio TDRs have redefaulted at a lower Mortgage TDR 60+ redefault trend b
Slide 23: Strong liquidity profile
Strong liquidity profile Holding Company cash at 3/31/10: $1.35B Holding company unsecured debt maturities ($M) Expected cash obligations over the next 12 months (assuming no TARP repayment) — $0 debt maturities — ~$39M common dividends — ~$205M preferred dividends – ~$35M Series G dividend – ~$170M
Fifth Third Bancorp — UBS Global Financial Services Conference 2010 on 6ix