Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Barclays Capital Global Financial Services Conference 2009
21 slides from Fifth Third Bancorp's conference presentation, Sep 16, 2009
Slide 1: Barclays Capital Global Financial Services Conference
Exhibit 99.1 Barclays Capital Global Financial Services Conference Kevin Kabat Chairman, President & CEO September 16, 2009 Please refer to earnings release dated July 23, 2009 and 10-Q dated August 10, 2009 for further information, including full results reported on a U.S. GAAP basis © Fifth Third
Slide 2: 2Q09 in review
2Q09 in review Continued core business momentum • Net income of $882M, diluted EPS of $1.15 • Net interest margin of 3.26%, up 20 bps sequentially • Noninterest income up 11% from 2Q08 excluding processing JV gain and investment securities gains/losses, on strong mortgage banking and payments proces
Slide 3: Net interest income
Net interest income Core NII and NIM • Net interest income increased 7% sequentially 4.0% $900 and net interest margin increased 20 bps, driven $800 by: 3.44% 3.37% 3.5% 3.15% 3.13% $700 2.92% – Wider spreads on loan originations 3.0% $600 – Deposit mix shift to lower cost core $500 2.5% deposits as
Slide 4: Fee income – core trends
Fee income – core trends* YOY $900 growth +11% $800 $700 Payment 4% processing $600 $500 Deposit service 2% charges $400 Investment (21%) advisory $300 Corporate (11%) banking $200 Mortgage** 119% $100 Other NM $0 2Q08 3Q08 4Q08 1Q09 2Q09 Payment Processing: Investment Advisory: • Strong transaction
Slide 5: Fee income recap
Fee income recap* • Historical electronic payment processing revenue includes EFT revenue and Merchant Processing revenue as well as debit card and business credit card interchange – EFT Revenue and Merchant Processing Revenue now part of Fifth Third Processing Solutions, LLC – Debit and business ca
Slide 6: Balance sheet: continued shift back toward core funding
Balance sheet: continued shift back toward core funding Extended nearly $39B of new and renewed credit in 1H09 Average loan growth ($B) Commercial loans (2%) • Reduced exposure to homebuilder/developer and other non- 83 84 86 84 owner occupied loans; sale or transfer to held-for-sale of 82 $1.3B in
Slide 7: Portfolio performance drivers
Portfolio performance drivers No participation in Performance largely driven by • Subprime Geography • Option ARMs • Florida and Michigan most stressed, Michigan beginning to stabilize • Remaining Midwest and Southeast performance reflect economic trends Discontinued or suspended lending Discontinue
Slide 8: Aggressive loss mitigation
Aggressive loss mitigation Loss mitigation activities Reset policies and guidelines Loss mitigation and containment — Eliminated all brokered home equity — Implemented Watch and Criticized production Asset Reduction initiative — Significantly tightened underwriting — Major expansion of commercial an
Slide 9: 2Q09 credit results
2Q09 credit results NPA ratio versus peers Net charge-off ratio versus peers 4.0% 3.2% 2.7% 3.0% 2.4% 2.0% 1.5% 1.0% 0.0% 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 2008 1H09 FITB Peer Average FITB Peer Average NPA formation* NPA formation* versus peers 2Q09 YOY change SEQ change 80% 1. MTB 21% (4
Slide 10: 3Q09 credit outlook
3Q09 credit outlook Current expectations: — Approximately $775 million in 3Q09 net charge-offs (versus $626 million in 2Q09) — Approximately $3.4 billion in nonperforming assets* at 9/30/09, up ~20% from 6/30/09, primarily driven by commercial Net charge-offs: — Commercial: ~$500-525 million; growth
Slide 11: Net loan losses vs. SCAP adverse scenario
Net loan losses vs. SCAP adverse scenario Net charge-offs ($B) Total net charge-offs for 1H09 were $1.1B, much lower than the assumption under $9.1 the SCAP adverse scenario Loan losses are not expected to approach the losses assumed under the SCAP adverse scenario Through three of eight quarters (~
Slide 12: Strong reserve position
Strong reserve position Industry leading reserve level Reserves / Loans 1 FHN 4.91% $2,500 2 FITB 4.28% 3 JPM 4.27% $2,000 729 4.28% 4. BAC 3.59% 3.72% 5. KEY 3.53% 6. ZION 3.01% $1,500 3.31% 7. MI 2.86% 2.41% 8. WFC 2.80% $1,000 1.85% 9. PNC 2.77% 1,627 415 10. USB 2.40% 478 283 11. HBAN 2.38% $500
Slide 13: Strong capital position
Strong capital position Tier 1 common ratio Peer average: 7.0% 9.5% 8.4% 8.1% 7.7% 7.7% 7.4% 7.3% 6.9% 6.9% 6.8% 6.7% 6.7% 6.1% 6.0% 5.3% 4.5% FHN BBT RF CMA JPM STI KEY FITB BAC HBAN MI USB ZION MTB* PNC WFC Tier 1 capital ratio Peer average: 11.0% 15.6% 12.9% 12.4% 12.3% 12.2% 11.9% 11.9% 11.6% 10
Slide 14: Strong capital position continued
Strong capital position continued Tangible common equity ratio Peer average: 5.6% 7.6% 7.4% 7.3% 7.1% 6.6% 6.5% 6.0% 6.0% 5.7% 5.5% 5.0% 4.8% 4.7% 4.4% 3.6% 3.2% CMA KEY FHN MI RF FITB STI BBT ZION HBAN USB JPM BAC MTB WFC PNC TCE + Reserves / Loans Peer average: 11.4% 18.2% 15.5% 14.3% 13.6% 13.6%
Slide 15: Summary
Summary Aggressive management of Core franchise is sound Capital further strengthened credit issues • Everyday Great Rates strategy • Strong reserve coverage of • Strong liquidity profile driving core deposit growth problem loans • Advent sale completed capital • Consistent fee income • Aggressive m
Slide 16: Appendix
Appendix 16 © Fifth Third Bank | All Rights Reserved
Slide 17: Pre-tax pre-provision earnings: Impact of FTPS
Pre-tax pre-provision earnings: Impact of FTPS Net interest income Fee income $1,100 $900 $1,000 $800 ~($177M) $900 net ~ +$30M $700 ($140M) $800 ~ +$37M) $700 $600 $600 $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $0 $0 2Q08 3Q08 4Q08 1Q09 2Q09 2Q09 Pro 2Q08 3Q08 4Q08 1Q09 2Q09 2Q09 Pro Forma
Slide 18: Strong liquidity profile
Strong liquidity profile Holding company unsecured debt maturities ($M) Holding Company cash at 6/30/09: $3.5B 4,956 Expected cash obligations over the next 12 months — $0 debt maturities — ~$39M common dividends — ~$205M preferred dividends — ~$270M interest and other expenses 750 0 0 0 0 Cash curr
Slide 19: Shared national credits
Shared national credits* Loan type (as of 6/30/09): $7 billion Examination covered approximately 550 borrowers with $7 billion in outstandings (average $13.2 million) Construction Lease 1% 8% — 2008 examination covered approximately 450 Mortgage borrowers with $5.4 billion in outstandings 3% — Disru
Slide 20: Comparison with SCAP “more adverse” scenario
Comparison with SCAP “more adverse” scenario SCAP pro-forma 2010 capital exceeds well-capitalized thresholds even after assuming repayment of TARP and assuming realization of remaining “more adverse” SCAP two-year losses Capital under SCAP “more adverse” scenario ($ in billions) $5.5 total SCAP reso
Slide 21: Cautionary statement
Cautionary statement This report may contain statements that we believe are “forward-lookingstatements” 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
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