Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Investor Presentation (August 2013)
39 slides from Fifth Third Bancorp's investor presentation, Aug 12, 2013
Slide 1: Investor Update
Exhibit 99.1 Investor Update August 2013 Please refer to earnings release dated July 18, 2013 and 10-Q dated August 7, 2013 for further information © Fifth Third Bank | All Rights Reserved
Slide 2: Fifth Third franchise
Fifth Third franchise $123 billion assets (#12) $93 billion total deposits (#12) Michigan $15 billion market cap (#12) 18 affiliates in 12 states Pennsylvania Ohio 1,326 banking centers Illinois Indiana West 2,433 ATMs Missouri Virginia Kentucky Leading market share in mature Midwest market; strong
Slide 3: A strong franchise with strong momentum
A strong franchise with strong momentum Net income available to Return on avg. assets Net charge-off ratio common shareholders ($MM) 1.34% 3.20% $1,541 3.02% 1.15% $1,094 0.64% 0.67% $511 1.49% $503 0.85% 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 Generated highest level of net inco
Slide 4: 2Q13 in review
2Q13 in review Net income available to common shareholders of $582MM ($0.65 per diluted share), vs. $413MM ($0.46 per share) in 1Q13 and $376MM ($0.40 per share) in 2Q12 Significant items in 2Q13 results $ in MM, except per share data Net income impact After tax EPS Pre-tax After tax impact Gain on
Slide 5: Strong revenue and profit generation
Strong revenue and profit generation 2Q13 PPNR* / Average Assets 2Q13 returns strong relative to peers Significant purchase 3.0% accounting benefit ROAA ROATCE 2.5% 2.1% 21.1% 2.0% 1.94% Peer med. 1.7% 1.5% 1.35% 14.7% 12.3% 1.08% 1.0% 0.5% FITB Peer Median FITB Peer Median 0.0% As reported Adjusted
Slide 6: NII results reflect continued moderate NIM pressure offset by balance sheet growth
NII results reflect continued moderate NIM pressure offset by balance sheet growth NII and NIM (FTE) ($MM) Fixed / Floating Portfolio Interest-Earning Funding^ 4.0% $899 $907 $903 $893 $885 $950 Assets Investment Investment $850 Portfolio 3.5% Portfolio 3% 13% 3.56% 3.56% 3.49% 3.42% $750 3.33% Floa
Slide 7: Strong loan growth, ample opportunities for ongoing growth
Strong loan growth, ample opportunities for ongoing growth Loan balances ($B) Loan composition (EOP HFI) Commercial 47% C&I / lease $87.0 11% Commercial real estate $82.4 Consumer 25% Resi. mtg. / home equity 14% Auto 3% Card / other $85.9 $86.7 $82.9 $83.9 $82.6 • Solid loan growth with disciplined
Slide 8: Strengthened deposit profile and increased value proposition to customers
Strengthened deposit profile and increased value proposition to customers Average deposit balances ($B) Simplified deposit products • Straightforward, easy to use accounts $85.5 • Reduced complexity $82.0 • Elimination of certain fees • Total relationship earns better rates and lower costs $80.2 $80
Slide 9: Diverse revenue stream
Diverse revenue stream Fee income as % of 2Q13 revenue 2Q13 Fee income distribution Card and Processing Deposit 6% Fees 13% Corporate Mortgage Banking 55% Fee income 22% 10% 45% Investment Advisors 9% NII Other^ 40% Strong momentum in key businesses: • Corporate banking: recent investments in capita
Slide 10: Disciplined expense management
Disciplined expense management Expense trend ($MM) Efficiency ratio trend $1,200 65% 64% 62% 62% $1,100 60% 61% 60% 59% 60% $1,000 53% $900 $800 $700 2Q12 3Q12 4Q12 1Q13 2Q13 $600 2Q12 3Q12 4Q12 1Q13 2Q13 Efficiency Ratio Adjusted* Reported expense $937 $1,006 $1,163 $978 $1,035 • Long-term target f
Slide 11: Strong reserve position
Strong reserve position 2Q13 coverage ratios strong Industry leading reserve levels relative to peers 3.50% $200 3.00% $150 191% 134% 2.45% 2.50% 2.32% $100 2.16% 2.08% Reserves / NPLs 1.99% 2.00% $50 $181 $156 $147 $133 $112 1.50% $0 151% 129% ($48) 1.00% ($50) ($71) ($71) Reserves / NPAs ($91) 0.5
Slide 12: Strong capital position
Strong capital position Tangible common equity ratio^* Tier 1 common equity* 10% 9.5% 9.5% 9.1% 9.3% 10% 8.9% 9% 8% 8% 7% 6% 6% 5% 9.8% 9.7% 9.5% 9.7% 9.4% 4% 9.2% 9.1% 8.8% 9.0% 8.8% 4% 3% Basel III 2% 2% Est. 9.1%** 1% 0% 0% 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 Including securities ga
Slide 13: Capital management philosophy
Capital management philosophy Capital Retention / Deployment Capital Return Organic growth opportunities Dividends* • Support growth of core banking franchise • As previously indicated, target levels more • Continued loan growth despite sluggish consistent with Fed’s near-term payout ratio economy g
Slide 14: Strong liquidity profile
Strong liquidity profile Holding company unsecured debt maturities ($MM) Holding Company cash at 6/30/13: $1.8B Cash currently sufficient to satisfy all fixed obligations in a stressed environment for over 2 years (debt $2,312 maturities, common and preferred dividends, interest and other expenses)
Slide 15: Well-positioned for the future
Well-positioned for the future Diversified traditional banking platform • Traditional commercial banking franchise built on customer-oriented localized operating model • Strong market share in key markets with focus on further improving density • Fee income ~55% of total revenue Industry leader in e
Slide 16: Well-positioned for success and leadership in new banking landscape
Strong levels of profitability Traditional banking focus Broad-based consistent with credit direction of improvements financial reform Exceed fully Disciplined phased-in Basel expense control III capital standards today Continued investments to Well-established maintain and franchise in key enhance
Slide 17: Cautionary statement
Cautionary statement This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 pr
Slide 18: Appendix
Appendix © Fifth Third Bank | All Rights Reserved
Slide 19: Financial summary
Financial summary Actual Seq. YOY ($ in millions) 2Q12 1Q13 2Q13 $ % $ % Average Balances Commercial loans* $46,886 $49,611 $50,513 $902 2% $3,627 8% Consumer loans* 35,700 36,292 36,194 (98) - 494 1% Total loans & leases* $82,586 $85,903 $86,707 $804 1% $4,121 5% Core deposits $81,980 $84,920 $85,5
Slide 20: Pre-tax pre-provision earnings*
Pre-tax pre-provision earnings* PPNR trend PPNR reconciliation $800 ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 Income before income taxes (U.S. GAAP) (a) $565 $503 $540 $591 $841 Add: Provision expense (U.S. GAAP) (b) 71 65 76 62 64 $700 68 PPNR (a) + (b) $636 $568 $616 $653 $905 59 13 24 35 40 6 Adju
Slide 21: Strong mortgage banking results
Strong mortgage banking results Mortgage Banking Revenue ($MM) • Record origination fees and gain on loan $200 $258 7 $233 sales in FY12 $220 $183 62 64 42 72 – Driven by record gain on sale margins 63 61 and origination volumes 62 226 239 183 169 150 • 2Q13 mortgage volume a record – Gains down $19
Slide 22: Corporate banking business generating growth
Corporate banking business generating growth Corporate banking Commercial deposit fees C&I Portfolio^ ($B) revenue ($MM) YoY % growth $34 $430 8% +7% $32 $410 7% $390 6% $30 $370 5% $28 $350 4% $26 32.9 $330 413 3% 28.5 $310 +2% $24 350 $290 2% $22 1% $270 $20 $250 0% 2011 2012 2011 2012 2011 2012 •
Slide 23: Momentum building in consumer bank as a result of investments and strategic changes
Momentum building in consumer bank as a result of investments and strategic changes Consumer deposit activity Alternative channel delivery Transaction volume by channel % of checking households with 5% Mobile Online banking Mobile banking ATM 50% 19% 18% 47% Branch 9% 77% 2009 2Q13 2011 2Q13 More di
Slide 24: Mortgage repurchase overview
Mortgage repurchase overview 2Q13 balances of outstanding claims increased 13% from 1Q13 — Within recent range of quarterly volatility Repurchase Reserves* ($ in millions) Virtually all sold loans and the majority of new claims relate to agencies — 99% of outstanding balance of loans sold 2Q12 3Q12
Slide 25: Net charge-offs
Net charge-offs Net charge-offs ($MM) Net charge-offs by loan type Other $200 consumer $181 4% $MM % $156 Card Commercial $45 41% $150 $147 17% C&l $133 Consumer $67 59% 30% 103 $112 Total $112 100% $100 94 91 79 67 Auto 4% $50 78 62 56 54 45 Coml. $0 mortgage 2Q12 3Q12 4Q12 2Q13 Home 10% 1Q13 equit
Slide 26: Nonperforming assets
Nonperforming assets Nonperforming assets ($MM) • NPAs of $1.2B excluding held-for-sale down $2,000 $1,619 29% year-over-year $1,446 $1,500 $1,286 $1,210 • Commercial NPAs of $794MM, down 33% from 437 $1,150 429 the previous year $1,000 403 382 356 – Homebuilder / developer NPAs of 1,182 $500 1,017
Slide 27: Troubled debt restructurings overview
Troubled debt restructurings overview Successive improvement in vintage performance during TDR performance has improved in newer vintages 2008 and 2009 as volume of modification increased Mortgage TDR Volume by Vintage Of $1.8B in consumer TDRs, $1.7B were on accrual 1% status and $162MM were nonacc
Slide 28: NPL Rollforward
NPL Rollforward NPL HFI Rollforward Commercial 2Q12 3Q12 4Q12 1Q13 2Q13 Beginning NPL amount 988 983 806 697 639 Transfers to nonperforming 203 120 68 80 151 Transfers to performing 0 (17) (4) (1) (6) Transfers to performing (restructured) (4) (20) (5) (4) (7) Transfers to held-for-sale (3) (7) - (1
Slide 29: Commercial & industrial
Commercial & industrial Credit trends Loans by geography C&I FL MI 6% 8% ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 EOP Balance* $32,612 $33,344 $36,038 $36,757 $37,856 OH Avg Loans* $32,734 $33,111 $34,301 $36,395 $37,630 14% 90+ days delinquent $2 $1 $1 $1 - as % of loans 0.01% NM NM NM NM NPAs* $47
Slide 30: Commercial mortgage
Commercial mortgage Credit trends Loans by geography Commercial mortgage FL ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 13% MI EOP Balance* $9,662 $9,348 $9,103 $8,766 $8,443 24% Other / Avg Loans* $9,810 $9,567 $9,193 $8,965 $8,618 National 90+ days delinquent $22 $22 $22 - - 11% as % of loans 0.23% 0
Slide 31: Commercial construction
Commercial construction Credit trends Loans by geography Commercial construction FL MI 10% 12% ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 EOP Balance* $822 $672 $698 $694 $754 Avg Loans* $873 $742 $686 $695 $713 90+ days delinquent - - $1 - - OH as % of loans NM NM 0.14% NM NM 21% Other / NPAs* $141 $
Slide 32: Homebuilders/developers
Homebuilders/developers (included in previous slides) Credit trends Loans by geography Homebuilders/developers Other / National FL ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 <1% 2% MI NC 18% EOP Balance* $376 $376 $318 $309 $285 10% 90+ days delinquent - - - - - TN as % of loans NM NM NM NM NM 6% NPAs
Slide 33: Residential mortgage
Residential mortgage Credit trends Loans by geography Residential mortgage FL ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 MI 13% EOP Balance* $11,429 $11,708 $12,017 $12,091 $12,400 15% Avg Loans* $11,274 $11,578 $11,846 $12,096 $12,260 Other / 90+ days delinquent $80 $76 $75 $74 $71 National as % of l
Slide 34: Home equity
Home equity Credit trends Brokered loans by geography Direct loans by geography Home equity - brokered FL Other FL ($ in millions) 2Q12 3Q12 4Q12 1Q13 2Q13 3% 2% 9% MI Other MI EOP Balance* $1,458 $1,414 $1,366 $1,321 $1,275 17% 20% 22% NC 90+ days delinquent $17 $16 $14 $13 $11 TN 5% as % of loans
Slide 35: Florida market*
Florida market* Deterioration in real estate values having effect on credit trends as evidenced by elevated NPA/NCOs in real estate related products Florida % of NPAs % of NCOs % of Loans ($B) FITB ($MM) FITB ($MM) FITB Commercial loans 2.4 6% 39 11% 3 10% Commercial mortgage 1.1 13% 93 26% 1 6% Com
Slide 36: Michigan market*
Michigan market* Deterioration in home price values coupled with weak economy impacted credit results due to frequency of defaults and severity Michigan % of NPAs % of NCOs % of Loans ($B) FITB ($MM) FITB ($MM) FITB Commercial loans 3.2 8% 33 9% - NM Commercial mortgage 2.1 24% 93 26% 5 43% Commerci
Slide 37: 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 June March December September June 2013 2013 2012 2012 2012 Income before income taxes (U.S. GAAP) $841 $591 $540 $503 $565 Ad
Slide 38: 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 June March December September June 2013 2013 2012 2012 2012 Total Bancorp shareholders' equity (U.S. GAAP) $14,239 $13,882 $13
Slide 39: 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 Year Ended 2012 2011 2010 2009 Total Bancorp shareholders' equity (U.S. GAAP) $13,716 $13,201 $14,051 $13,497 Goodwill and certain other intangib
Fifth Third Bancorp — Investor Presentation (August 2013) on 6ix