Slide 1: 2005 CSFB Financial Services Conference
2005 CSFB Financial Services Conference “Positioning for Better Performance” George A. Schaefer, Jr. R. Mark Graf President Senior Vice President Chief Executive Officer Chief Financial Officer February 10, 2005
Slide 2: Affiliate Banking
Affiliate Banking I. Affiliate Operating Model II. Markets III. Deposit Performance IV. Loan Performance
Slide 3: Affiliate Bank Operating Model
Affiliate Bank Operating Model FITB Affiliates State Deposits % of 5/3 Assets Bkg Ctrs President Years @ 5/3 Cincinnati OH $12.4 20% $25.2 107 G. Schaefer, Jr. 34 Chicago IL 8.8 14% 9.9 129 T. Zink 1 Western Michigan MI 6.8 11% 9.8 135 M. VanDyke 4 Florida* FL 5.0 8% 6.8 93 K. Hale 1 Detroit MI 3.6
Slide 4: Metropolitan Market Focus
Metropolitan Market Focus Distribution, Convenience & Price Are Competitive Advantages in Metro Markets Detroit Chicago Toledo Cleveland Columbus Indianapolis Dayton Cincinnati Huntington Lexington Louisville St. Louis Evensville Nashville Orlando Tampa Sarasota Naples Fifth Third MSA Markets MSA Po
Slide 5: Improving Deposit Performance
Improving Deposit Performance 2004 average transaction deposit growth of 7% compared to 13% in the prior year 50,000 45,000 Millions 40,000 35,000 $ 30,000 25,000 Average Transaction Deposits 26,363 41,851 41,397 7 1 % 42,287 1 5 % * 43,861 1 2 45,126 % * 2001 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 * Annuali
Slide 6: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 35,000 30,000 Millions 25,000 20,000 $ 15,000 10,000 1999 2000 2001 2002 2003 2004 Avg Demand & NOW 5-year CAGR Interest Checking 18% Demand Deposits 15% 5-year CAGR Loans & Leases 8% Earning Assets 9% 90,000 80,000 Millions 70,000 60,000 50,000 $ 40,000 30,000 19
Slide 7: Affiliate Loan Performance
Affiliate Loan Performance 40% 35% 30% 25% 20% 15% 10% 5% 0% 2004 Average Total Loan & Lease Growth Florid a Nashville Lexington OH Valley Chicago Cleveland Indianapolis Detroit Columbus 9% growth in average loans & leases in 2004 55,000 Millions 45,000 $35,000 25,000 Nine affiliates grew loans by m
Slide 8: Business Lines
Business Lines 2004 Revenues Processing Solutions Retail 11% 51% Investment Advisors 10% Commercial 28% 8 Processing revenues exclude gain-on-sale
Slide 9: Retail Banking
Retail Banking “Positioned for Better Performance in 2005…” I. Retail Deposit Strategy II. Initiatives III. Small Business IV. The Opportunity
Slide 10: Investing In a Retail Franchise
Investing In a Retail Franchise Centers Banking New 10 5 11 10 9 9 6 6 6 4 4 4 4 4 3 3 2 Chicago Detroit W. Mich Cleveland Indianapolis Cincinnati Florida Columbus Tennessee Ohio Valley Lexington Louisville N. KY Toledo S. Indiana Dayton N. Mich 133 new banking centers opened from Jan 2002 through D
Slide 11: Driving Deposit Growth
Driving Deposit Growth Consumer deposits—Targeting 10% plus growth in 2005 Small business deposits—Targeting 50% growth in 2005 Initiatives Quarterly deposit campaigns De-novo banking center expansion Increased retention and service focus Segmentation focus Right price Right product
Slide 12: Substantial Small Business Growth Opportunity
Substantial Small Business Growth Opportunity 13 of 17 affiliates have less than 15% small business deposit market share 11 of 17 markets have less than 15% small business lending market share 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Small Business Checking Performance Bubble Size Represe
Slide 13: Commercial Banking
Commercial Banking “Hitting on All Cylinders…” I. Revenue & Net Income Performance II. Loan Performance III. Deposit Performance IV. Credit Performance
Slide 14: Commercial Banking Performance
Commercial Banking Performance 1,700 1,600 1,500 Millions 1,400 1,300 $ 1,200 1,100 1,000 Revenue Net Income 1632 648 1474 563 2003 2004 Millions $ 500 450 11% revenue growth & 15% net income growth in 2004 Sales force additions still gaining momentum Superior loan growth through recent cycle will c
Slide 15: Superior Commercial Loan Growth
Superior Commercial Loan Growth 30% 25% 20% 15% 10% 5% 0% 2004 Average Commercial Loan & Lease Growth Florida Lexington OH Valley Indianapolis Chicago Nashville Louisville Detroit N. Mich. Toledo affiliates grew commercial loans by more than 10% in 2004 6 affiliates grew by more than 20% in 2004 Per
Slide 16: People Make the Difference
People Make the Difference… In a period of declining commercial and industrial loan demand: Fifth Third increased C&I balances by 49% since Dec 2001 Over 250 commercial sales people hired during this time frame, an increase in excess of 30% 580 560 540 520 ‘s in Billions 500 $480 Industry 460 440 42
Slide 17: Commercial Deposit Focused Growth
Commercial Deposit Focused 60% 50% 40% 30% 20% 10% 0% 2004 Average Commercial Demand Deposit Growth Florida Cleveland Cincinnati Chicago Columbus Nashville Indianapolis S IN Detroit Lexington Dayton $Millions 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 11 affiliates grew commercial demand deposi
Slide 18: Superior Credit Culture
Superior Credit Culture NPAs / Loans & OREO 1.4 1.2 1 0.8 0.6 0.57 0.4 0.2 1.25 1.29 1.25 1.22 1.17 1.15 1.07 0.94 0.75 0.64 0.65 0.63 0.62 0.62 0.61 0.62 0.56 0.59 0.57 0.53 0.50 0.48 0.51 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 Fifth Third Top 25 Bank Average Favorable Industry
Slide 19: Fifth Third Processing Solutions
Fifth Third Processing Solutions “A Growth Story…” I. Business Mix II. Revenue History III. 2005 Initiatives
Slide 20: Total FTPS Revenue Mix
Total FTPS Revenue Mix FTPS Revenue 2002 2003 2004 Financial Institution $206 $216 $250 Merchant Services 261 306 305* Card Services 76 87 102 TOTAL $543 $609 $657 Card Services 16% Merchant 46% Services 38% Financial Institution * Includes 2004 impact of sold contacts totaling $70 million in compar
Slide 21: FTPS Revenue History
FTPS Revenue History 750 650 550 Millions 450 $ 250 150 50 Compound Annual Growth Rate 5-year = 26% 657* 1999 2000 2001 2002 2003 2004 Fin. Inst. & Card Merchant * Includes 2004 impact of sold contacts totaling $70 million in comparable lost annual revenue
Slide 22: 2005 Initiatives
2005 Initiatives Cross-sell Merchant Card Processing into existing Commercial & Small Business Customers 2 X revenue and 4 X net income opportunity 33% increase in middle market sales representatives in 2005 80% increase in Retail Telesales representatives in 2005 Improve per sales rep production fr
Slide 23: Investment Advisors
Investment Advisors “Refocused, Realigned and Positioned for Growth” I. Business Mix & Accomplishments II. Revenue and Net Income Performance III. 2005 Initiatives
Slide 24: Fifth Third Investment Advisors
Fifth Third Investment Advisors 2004 Revenues Asset Mgmt 4% Retail Brokerage 16% Private Client 64% Institutional 16% 2004 Accomplishments 15% revenue growth compared to 4% expense growth 10 affiliates with greater than 50% net income growth
Slide 25: Turning the Corner
Turning the Corner… Investment Advisors Performance Millions $ Revenue Net Income 477 119 434 80 75 2003 2004 Millions 100 $ 15% revenue growth & 49% net income growth in 2004 Sales force and product set largely in place Incentives aligned with performance Enhanced profitability
Slide 26: 2005 Initiatives
2005 Initiatives Expand sales of investment management nationally through Fifth Third Asset Management (FTAM) Taft-Hartley, Corporate and Public pension client focus $40 billion investment assets by 2008 Penetrate commercial and small business client base with 401K Retirement Plans 5,185 existing co
Slide 27: The Deposit Opportunity
The Deposit Opportunity Fifth Third has only an 8% market share in the core six-state footprint Fifth Third has a 7% market share on a combined basis in MSA’s greater than 1 million in population FITB State Market Share Ohio Michigan Kentucky Indiana Illinois Florida 6 State Total 11% 9% 7% 6% 3% 2%
Slide 28: Questions
Questions This presentation may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined with acquired entities within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act