Slide 1: 3Q16 Earnings Presentation
Exhibit 99.2 3Q16 Earnings Presentation October 20, 2016 Refer to earnings release dated October 20, 2016 for further information. Fifth Third Bank | All Rights Reserved
Slide 2: Cautionary statement
Cautionary statement This presentation should be viewed in conjunction with the webcast presentation of our third quarter earnings call on October 20, 2016 and Form 8-K filed on October 20, 2016. This release contains statements that we believe are “forward-looking statements” within the meaning of
Slide 3: Third Quarter 2016 Highlights
Third Quarter 2016 Highlights • NII increased $5MM sequentially while NIM 1 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 from certain items 2 • Stable under
Slide 4: 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 (~$18MM after-tax) non-cash impairment charge related to previously an
Slide 5: Balance sheet
Balance sheet Average securities and short-term HFI Loan balances ($B) Average core deposit balances ($B) investments ($B) Avg flat YoY Core and transaction deposits flat YoY 95 35 $31.6 $32.0 $31.7 100 $98.7 $98.9 100% $30.1 $31.3 30 90 95 95% 95% 94% 95% 25 94% 95% 85 90 20 $93.9 85 $93.4 $93.6 $9
Slide 6: Net interest income
Net interest income • Sequential comparisons: – NII increase driven by improving investment portfolio yields, an increase in 1-month LIBOR, and day count, partially offset by the full quarter impact of $1.25 billion of unsecured debt issued in 2Q16 and lower average C&I loan balances – NIM stable fr
Slide 7: Noninterest income
Noninterest income 1 • Sequentially, adjusted noninterest income down $6 million, or 1 percent, primarily due to: – The change in net mortgage servicing rights (MSR) valuation adjustments – Corporate banking revenue from lower syndication revenue and foreign exchange fees 1 • Year-over-year adjusted
Slide 8: Noninterest expense
Noninterest expense • Adjusted expenses1 down 1% sequentially, primarily due to: – Decrease in compensation-related expenses due to the previously disclosed review of business units and staff functions, as well as reduced card and processing expense • Adjusted expenses1 up 3% YoY, primarily due to:
Slide 9: Credit quality overview
Credit quality overview • 3Q16 charge-offs up 8bps from 2Q16 HFI Non-performing assets ($MM) – Includes $22MM increase in C&I loan NCOs • 3Q16 portfolio NPA decrease of $122MM from 2Q16 – Broad-based improvement in commercial portfolio NPAs • 3Q16 reserve of 1.37% down 1 bp sequentially NPA ratio 0.
Slide 10: Strong capital and liquidity position
Strong capital and liquidity position 1 Capital Update CET1 remained strong at 10.16%, up 22 bps sequentially and 76 bps from 3Q15 Tier I risk-based capital 11.26%; Total risk-based capital ratio 14.87%; Leverage ratio 9.80% $240MM accelerated share repurchase transaction on August 5, 2016 retiring
Slide 11: Fifth Third: current outlook
Fifth Third: current outlook Category As of October 20, 2016 Average loans & leases FY16: average total loan growth of 1% (excl. HFS) 1 Net interest income (FTE) FY16: 2% growth; 4Q16 down slightly 1 Net interest margin (FTE) FY16: up 1 bp; 4Q16 stable to down 1 bp from 3Q16 2 Noninterest income FY1
Slide 12: Appendix
Appendix 12 Fifth Third Bank | All Rights Reserved
Slide 13: Pre-tax pre-provision earnings and efficiency ratio trend
Pre-tax pre-provision earnings and efficiency ratio trend 1 PPNR reconciliation Adjusted PPNR up 1% sequentially – Due to increases in net interest income and service charges on deposits Adjusted PPNR down 4% YoY – Driven by personnel expenses and changes in net MSR valuation adjustments 1 Non-GAAP
Slide 14: Strong liquidity profile
Strong liquidity profile Holding Company: Holding company unsecured debt maturities ($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 46% • Net unreal
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: Mortgage banking results
Mortgage banking results Mortgage Banking Revenue ($MM) Mortgage originations and gain on sale margin1 8 6 $3.5 3.5% 13 11 49 50 $3.0 3.0% 54 52 53 $2.5 2.5% 61 $2.0 2.0% 46 54 37 42 $1.5 1.5% (29) (27) $1.0 1.0% (37) (35) (35) (9) $0.5 0.5% $0.0 0.0% 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q1
Slide 18: Continued monetization of Vantiv
Continued monetization of Vantiv $331MM 3Q16 termination and settlement of estimated $331MM gross cash flows expected to be ~$800MM payable to Fifth Third from 2019 – 2035 in exchange for a $116MM payment; $116MM pre-tax gain realized by Fifth Third in 3Q16 expected gross cash $75MM Existing annual
Slide 19: Limited UK and other European exposure
Limited UK and other European exposure • Fifth Third continues to monitor developments in Europe • Portfolio well diversified, primarily global public businesses with solid credit quality (probability of default rating in-line with overall Commercial portfolio) • Exposure primarily related to trade
Slide 20: NPL rollforward
NPL rollforward 20 Fifth Third Bank | All Rights Reserved
Slide 21: Credit trends
Credit trends Commercial & Industrial Residential Mortgage Commercial Real Estate Home Equity & Automobile * Excludes loans held-for-sale. 21 Fifth Third Bank | All Rights Reserved
Slide 22: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation See page 33 of the earnings release for a discussion on the use of non-GAAP financial measures. 22 Fifth Third Bank | All Rights Reserved
Slide 23: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation See page 33 of the earnings release for a discussion on the use of non-GAAP financial measures. 23 Fifth Third Bank | All Rights Reserved