Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — BancAnalysts Association of Boston Conference 2016
19 slides from Fifth Third Bancorp's conference presentation, Nov 3, 2016
Slide 1: BancAnalysts Association of Boston Conference
Exhibit 99.1 BancAnalysts Association of Boston Conference Tayfun Tuzun Executive Vice President & Chief Financial Officer November 3, 2016 © Fifth Third Bank | All Rights Reserved
Slide 2: The banking industry continues to evolve
The banking industry continues to evolve The banking sector is continuing to undergo a significant transformation. This poses both challenges and opportunities for Fifth Third. A low interest Credit cycle Technology is rate environment continues to transforming the and tightening lengthen, partially
Slide 3: Low rates continue to pressure profitability
Low rates continue to pressure profitability • Commercial loan spreads for the industry overall continue to tighten • Fifth Third’s NIM is stabilizing and our loan yields have outperformed peers • Focused on more profitable relationships at appropriate spreads • Driving increased fee revenues and in
Slide 4: Growth is coming at the expense of returns
Growth is coming at the expense of returns • U.S. economy is growing slowly, with a corporate profit recession • Fed H8 indicating a deceleration with first monthly C&I decline in 5 years • Fifth Third is focused primarily on: Organic growth Re-positioning the portfolio Deliberately exiting less pro
Slide 5: Credit quality remains stable
Credit quality remains stable • Third longest economic recovery since the 1960s • Credit metrics across industry remain at post-recession lows • Our criticized assets continue to decline, now lowest level since 3Q07 • NPAs have stabilized and have improved • Growing loans that meet return hurdles wh
Slide 6: Capitalizing on technology changes
Capitalizing on technology changes Investments in IT have • Investments in IT infrastructure and increased back-office functions Technology & Communication expense ($MM) • Branch consolidation and digitization 62 • Mobile and digital enhancements 59 60 56 56 • Partnering with GreenSky • Joined Zelle
Slide 7: Focused on enhancing profitability through the cycle
Focused on enhancing profitability through the cycle • Project North Star expected to help us achieve our long-term financial targets of 12 – 14% ROTCE and 1.1 – 1.3% ROA • North Star is in addition to actions we had already planned • Targeting positive operating leverage in 2017 1 Achieving our Nor
Slide 8: In summary
In summary We are investing Growth prudently to grow within risk appetite We are committed to Profitability improving profitability Will create additional and driving attractive returns through cycles shareholder value We are well-positioned Stability to address market volatility and economic uncert
Slide 9: Cautionary statement
Cautionary statement This presentation contains 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 3
Slide 10: Appendix
Appendix 10 © Fifth Third Bancorp | All Rights Reserved
Slide 11: Third Quarter 2016 Highlights
Third Quarter 2016 Highlights • NII increased $5MM sequentially 1 while NIM remained stable at 2.88% Earnings Per Share • Reported noninterest income up 40% sequentially primarily driven by Vantiv TRA-related items Reported $0.65 Included $0.22 net positive impact 2 from certain items • Stable under
Slide 12: 3Q16 in review
3Q16 in review Significant pre-tax items in 3Q16 results ($0.22 net positive after-tax EPS impact): — $280MM pre-tax (~$182MM after-tax) gain from the termination and settlement of gross cash flows from Vantiv TRA — $28MM pre-tax (~$18MM after-tax) non-cash impairment charge related to previously an
Slide 13: Pre-tax pre-provision earnings and efficiency ratio trend
Pre-tax pre-provision 1 earnings and efficiency ratio trend PPNR reconciliation Adjusted PPNR up 1% sequentially – Due to increases in net interest income and service charges on deposits Adjusted PPNR down 4% YoY – Driven by personnel expenses and changes in net MSR valuation adjustments 1 Non-GAAP
Slide 14: Strong liquidity profile
Strong liquidity profile Holding Company: Holding company unsecured debt maturities ($MM) Bancorp LCR of 115% at 9/30/16 Holding Company cash at 9/30/16: $2.3B Cash currently sufficient to satisfy all fixed obligations in a stressed environment for ~20 months (debt maturities, common and preferred $
Slide 15: Balance sheet positioning
Balance sheet positioning Key Characteristics Balance Sheet Mix Fixed vs. Floating 19% Level 1 100% Fix / 0% Float • 48% allocation to bullet/locked-out 35% cash flow securities Investment • Investment portfolio yield: 3.18% Level 2A 100% Fix / 0% Float Portfolio • Duration: 4 years • Net unrealized
Slide 16: Interest rate risk management
Interest rate risk management • NII benefits from asset rate reset in a rising rate environment – 57% of total loans are floating rate (75% of commercial considering impacts of interest rate swaps and 28% of consumer) – Investment portfolio duration of 4 years – Short-term wholesale funding represen
Slide 17: Credit trends
Credit trends Commercial & Industrial Residential Mortgage Commercial Real Estate Home Equity & Automobile * Excludes loans held-for-sale. 17 © Fifth Third Bancorp | All Rights Reserved
Slide 18: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation See page 33 of the 3Q16 earnings release for a discussion on the use of non-GAAP financial measures. 18 © Fifth Third Bancorp | All Rights Reserved
Slide 19: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconciliation $ and shares in millions (unaudited) For the Three Months Ended September June March December September 2016 2016 2016 2015 2015 Net interest income (U.S. GAAP) $907 $902 $903 $899 $901 Add
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