Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Bank of America Merrill Lynch Fixed Income Bank & Finance Conference (March 2010)
19 slides from Fifth Third Bancorp's conference presentation, Mar 4, 2010
Slide 1: Bank of America Merrill Lynch Fixed Income Bank & Finance Conference
Exhibit 99.1 Bank of America Merrill Lynch Fixed Income Bank & Finance Conference Daniel T. Poston EVP & Chief Financial Officer March 4, 2010 Please refer to earnings release dated January 21, 2010 and 10-K dated February 26, 2010 for further information, including full results reported on a U.S. G
Slide 2: 4Q09 in review
4Q09 in review Continued core business momentum • Net loss of $98 million vs. 3Q09 net loss of $97 million (3Q included Visa benefit of $206 million after-tax) – Pre-tax net loss of $210 million, vs. 3Q09 pre-tax $420 million loss excluding Visa benefit • Net interest margin of 3.55%, up 12 bps sequ
Slide 3: Net interest income and net interest margin trends
Core Net $859 $847 $801 $746 $816 3Q09 2Q09 1Q09 Peer FITB ($Ms) $300 $400 $500 $600 $700 $800 $900 2.5% 3.5% 3.45% 3.33% 3.13% 2.92% 3.15% Reported NIM Yields 4Q08 Asset Liability (Spread 0 100 200 300 400 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Peers Source: *Core 4Q09 Trends Expect – © 3bps) Approximately
Slide 4: Continued balance sheet shift: core deposit and loan growth
Balance Continued 86 (10%) Commercial 53 33 64 +11% Consumer Savings/MMDA Demand/IBT 28 21 15 Average 4Q08 22 26 31 35 40 (44%) Non-core 14 ST LT 13 Extended CRE C&I Strong Core Everyday Reduced – Portion © 4 Reduced New DDAs Commercial Retail Non-core Short Long-term Fifth 84 50 34 67 30 21 16 12 1
Slide 5: Fee income and expenses – core trends
Fee income and expenses – core trends* Core fee income ($M) • Strong mortgage banking results continued in 4Q09, resulting in $4.4B of originations and $132M in net revenue • Investment advisory revenue up 4% from the previous quarter driven by higher market values • Card and processing revenue incr
Slide 6: Pre-provision net revenue and noninterest expense
Pre-tax $700 $600 $500 $400 $300 $200 $100 $0 450 Fee 22 Noninterest 106 4Q08 Reported Adjustments: BOLI Gain Securities Visa Other FTPS Goodwill Seasonal FDIC Divested Core OREO Problem 4Q09 Credit Peer 1.4% 1.5% 1.6% 1.8% 2.4% 2.9% 3.5% 4.1% 4.7% 4.8% MI STI KEY CMA RF ZION HBAN MTB FITB BBT PNC U
Slide 7: Portfolio performance drivers
Portfolio performance drivers No participation in exotic mortgages 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 4Q09 NCO Ratios Coml Cons T
Slide 8: Troubled debt restructurings and mortgage redefault performance
Troubled Successive Other Total Included TDR Outperforming Mortgage Months Volume 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3 0% 10% 20% 30% 40% 50% 60% 70% 6 9 12 Fannie Freddie Industry Fifth Source: © 8 4Fifth months months 5 Third Third’s 6performance charge-offs $69M $135M $146M $176M $221M $257M mortgage
Slide 9: Manageable CRE exposure relative to peers
Manageable 9% 11% 12% 14% 16% 23% 24% 25% 30% 34% 192% 197% 203% 206% 212% 218% 247% 264% 295% 418% 419% 420% 632% 15% 17% 18% 19% 20% 21% 26% 32% 33% 38% 41% 44% Peer CRE 140% 142% 148% 151% 154% 160% 175% 181% 244% 279% 304% 316% 500% FITB PNC WFC BBT STI KEY HBAN USB CMA ZION RF MI MTB Source: ©
Slide 10: NPA and net charge-off trends versus peers
4Q09 NPA 3Q07 0.5% 1.5% 3.5% 4.5% Net 216% 207% 192% 105% 97% 75% 67% 62% 37% 36% 31% 27% Year-over-year 2.5% 2009 1.4% 3.2% 2008 Peer Source: 403% 198% 132% 113% 108% 107% 100% 95% 84% 49% 46% 34% (5%) PNC ZION WFC USB BBT STI KEY HBAN CMA MI RF MTB FITB © 10 Fifth charge-off Average average: ratio
Slide 11: Strong industry-leading reserve position
Strong Industry $2,500 729 283 4Q08 Net Coverage 127% Reserves/NPLs FITB Source: Reserves 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 11 WFC FITB KEY HBAN ZION RF MI PNC STI PeerCharge-offs 3.31% 415 USB Peer 1Q09 3.36% 3.43% 90% 2.74% reserve BBT$2,000 3.22% 4.31% SNL 3.13% 4.88% 196 leading 3.81% Average/r
Slide 12: 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 Stress case scenario key economic assumptions (Moody’s Economy.com “Longer Recession and Weaker Recovery Case”) — Unemployment of 12.1%
Slide 13: Updated credit loss expectations vs. SCAP scenarios
Updated credit loss expectations vs. SCAP scenarios Fifth Third’s realized credit losses have been significantly below its SCAP submitted baseline and more adverse scenarios – In SCAP submissions, we incorporated significant conservatism, given then- prevailing negative economic and industry trends
Slide 14: Strong capital position relative to peers
8.5% Tier 11.2%13.3% 11.5% BBT Tangible 8.1% MI (TCE Peer 16.2% KEY Strong Source: © 14 Fifth CMA 1average: average CMA FITB 8.2% 8.0% +capital common 9.9% 14.5% capital Third reserves) SNL common KEY KEY STI 7.7% 7.6% MI 9.8% 12.8% w/ w/o and ratio Bank 7.1% 6.2% 12.0% 13.8% position ratios CMA STI
Slide 15: Strong stock performance relative to banks since capital actions
Strong From 7/09 110% 6/08 5/09 June TARP SCAP FTPS FITB SP BKX Source: © 15 Fifth Banks 8/09 7/08 6/09 2008 (21%) June 41% announcement 90% investment results relative Third Bloomberg. 9/09 8/08 7/09 (9%) capital 2008 70% Bank 10/09 9/08 8/09 equity 50% capital actions |9/09 10/08 Total All 11/09 3
Slide 16: Strong liquidity and debt maturities
Strong $5.018 Bank $800 2010 Fifth Retail Holding Expected – — Cash Heavily Long Other Equity12% ST Non-core Consumer Foreign Savings Interest © Demand16% 16Institutional ~$35M ~$170M Fifth $0 ~$39M ~$205M ~$221M Borrowings3% Third $500 2011 currently Term unsecured debt liabilities4% Brokered liqui
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