Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Barclays Global Financial Services Conference 2012
27 slides from Fifth Third Bancorp's conference presentation, Sep 11, 2012
Slide 1: Barclays Global Financial Services Conference
Exhibit 99.1 Barclays Global Financial Services Conference Kevin T. Kabat President & Chief Executive Officer September 11, 2012 Refer to earnings release dated July 19, 2012 and 10-Q dated August 8, 2012 for further information © Fifth Third Bank | All Rights Reserved
Slide 2: Key themes
Key themes 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 k
Slide 3: Continued momentum
Continued momentum Earnings Growth 1 Strong first half 2012 results underscored by $450 $421 continued loan growth, solid fee income, expense control, and ongoing improvement $400 $373 $376 in credit metrics $350 2 Traditional banking model and moderate risk $328 profile contribute to above average
Slide 4: Balance sheet growth mitigates rate environment
Balance sheet growth mitigates rate environment Average loan growth ($B)^ • Sustained growth driven by C&I and residential mortgage loans; portfolios in run-off mode of 83 moderate size 79 80 82 78 – Commercial line utilization stable at 32%; 36 36 potential source of future growth 34 35 35 • CRE po
Slide 5: Strength in loan growth
Strength in loan growth Continued solid demand in large corporate and C&I Portfolio*^ ($B) mid-corporate space $34.0 32.7 31.4 Mix shift toward higher-quality loans and $32.0 portfolio effects of repricing have resulted in 29.9 $30.0 28.8 reduction in portfolio yields 27.9 $28.0 27.3 C&I loans as a
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 Fixed / Floating Portfolio NII and NIM (FTE) Interest-Earning Funding^ $920 4.0% $869 $902 $903 $899 $950 Assets Investment Investment Portfolio 3% Portfolio $850 14% 3.5% 3.65% 3.67% 3.62% 3.61% 3.56% $750 3.0% $650
Slide 7: Strong revenue and profit generation
Strong revenue and profit generation Revenue / Avg. Int. Earning Assets* Returns strong relative to peers • Business mix provides higher than average PPNR** / Avg. Int. Earning Assets* diversity among spread and fee revenues (40+% of revenue) • Relatively strong margin and relatively high fee income
Slide 8: Strong mortgage banking results
Strong mortgage banking results Mortgage Banking Revenue ($MM) • Record origination fees and gain on loan sales in 2Q12 • Highest ranking among all servicers and peer groups in Fannie Mae’s TM 2011 STAR Program for servicing performance Looking forward: • Continued strong originations / deliveries i
Slide 9: Momentum building in corporate banking
Momentum building in corporate banking Corporate banking revenue ($mm) $120 $97 $102 $100 $95 $87 17 16 $82 19 $80 11 7 30 28 $60 28 29 31 7 8 7 6 $40 12 9 6 9 11 14 $20 31 32 30 29 33 $0 2Q11 3Q11 4Q11 1Q12 2Q12 Letter of Credit / FX Institutional Sales Interest Rate Derivatives Business Lending Fe
Slide 10: Customer oriented solutions
Customer oriented solutions Providing customers with products and services they find valuable Mobile Experience Remote Currency Manager • View balances, • Innovative, end-to-end transfer money, pay remote cash bills, view alerts, management solution and more • Maximize cash flow while boosting contr
Slide 11: Simplifying deposit structure
Simplifying deposit structure: Aligning value to our customers with value to Fifth Third Value to our customers Value to Fifth Third Accounts straightforward and easy to Simplifies relationship building 1 1 use for our sales force by reducing – 25 checking products simplified to complexity across ch
Slide 12: Credit trends continue to improve with strong reserve coverage levels
Credit trends continue to improve with strong reserve coverage levels Net charge-off ratio NPLs / Loans Peer average: 1.8% Peer average: 0.8% Reserves / NPLs Loan loss reserves / Loans Peer average: 2.1% Peer average: 129% Continued decline in problem assets and corresponding decline in charge-offs
Slide 13: Capital management philosophy
Capital management philosophy Capital Deployment Capital Return Organic growth opportunities Return to more normal dividend policy* • Support growth of core banking franchise • Strong levels of profitability would support higher dividend than current level • Continued loan growth despite sluggish ec
Slide 14: Capital position remains strong
Capital position remains strong Primary Basel III Adjustments* Basel III Impacts Current NPR Capital Impact ~50 bps +/- NPR RWA Impact ~(125 bps) +/- • 2Q12 Tier 1 common equity ratio of Total Tier 1 Change 9.77% under Basel I ~(75 bps) +/- Estimated NPR Impact Tier 1 Common Equity • Capital impact
Slide 15: Fifth Third's balance sheet and business model relatively advantaged under new capital standards
Fifth Third’s balance sheet and business model relatively advantaged under new capital standards 2Q12 Tier 1 common / RWA Basel I Unofficial CCAR supervisory reference minimum 2Q12 Pro forma Tier 1 common / RWA U.S. proposed Basel III* 2019 Basel III minimum 2019 Basel III buffered minimum Not discl
Slide 16: Fifth Third: A differentiated business model
Fifth Third: A differentiated business model “Trillionaire” Regional Community Investment FITB Banks Banks Banks Banks Diverse businesses Efficiencies of scale Local market focus Multi-channel delivery Customer-centric model Moderate risk profile Strong profitability and well-capitalized Competitive
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 18 © Fifth Third Bank | All Rights Reserved
Slide 19: Diverse business mix
Diverse business mix Branch Banking Consumer Lending • Holistic approach to branch • Professionals committed to banking combined with understanding customers’ mobile convenience to unique needs, providing improve the banking options and identifying the experience and be the right solution trusted fi
Slide 20: Deposit simplification: Checking product design and offerings
Deposit simplification: Checking product design and offerings All-new, redesigned Fifth Third accounts Special Access Just the Basics Full Relationship Programs Premium Relationships Essential Established Enhanced Preferred eAccess Checking Checking Checking Checking For those who want For those who
Slide 21: Deposit simplification: Savings product design and offerings
Deposit simplification: Savings product design and offerings Simplified and rewarding Fifth Third accounts Our best rates for larger balances Relationship Money Check access – write up to 6 checks per month Market An even better rate when you have checking best rates - $25,000+ Tiered interest rates
Slide 22: Relatively strong NIM results due to balance sheet and business mix
Relatively strong NIM results due to balance sheet and business mix • NIM supported by balance sheet and business NIM mix Peer average: 3.55% – Heavy emphasis on traditional C&I lending, much of which is variable • Pricing discipline on commercial loans – Spreads have narrowed from post-crisis level
Slide 23: Core funded balance sheet and pricing discipline
Core funded balance sheet and pricing discipline Transaction Deposits / Total Deposits Cost of Funds Peer average 83% Peer average 0.57% DDA/Total Deposits • Strong, deposit-rich core funding mix supports Peer average relatively low cost of funds 32% – High percentage of funding base in low cost tra
Slide 24: Continued improvement in credit trends
Continued improvement in credit trends Loans 30-89 days delinquent % vs. peers Loans 90+ days delinquent % vs. peers NPA ratio vs. peers Net charge-off ratio vs. peers (7.5%)* (HFS transfer) 5.0%* 3.8% before credit 2.3% actions before credit actions FITB credit metrics are in line with or better th
Slide 25: Mortgage repurchase overview
Mortgage repurchase overview 2Q12 balances of outstanding claims increased 23% from 1Q12 Repurchase Reserves* ($ in millions) — Within recent norms of quarterly increases and decreases Virtually all sold loans and the majority of new claims relate to agencies 2Q11 3Q11 4Q11 1Q12 2Q12 — 99% of outsta
Slide 26: 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 2012 2012 2011 2011 2011 Income before income taxes (U.S. GAAP) $565 $603 $418 $530 $506 Ad
Slide 27: 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 2012 2012 2011 2011 2011 Total Bancorp shareholders' equity (U.S. GAAP) $13,773 $13,560 $13
Fifth Third Bancorp — Barclays Global Financial Services Conference 2012 on 6ix