Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Corporate Update (November 2006)
9 slides from Fifth Third Bancorp's corporate update, Nov 20, 2006
Slide 1: Balance Sheet Actions/4Q06 Mid-Quarter Update
Exhibit 99.2 Balance Sheet Actions/ 4Q06 Mid-Quarter Update November 20, 2006
Slide 2: Topics
Topics Balance sheet actions Considerations Securities sales, reduction of borrowings Net interest income and net interest margin Interest rate sensitivity Capital ratios 4Q06 mid-quarter update Summary of 8-k discussion 2 4Q06 Repositioning/Mid-Quarter Update: November 20, 2006
Slide 3: Considerations
Considerations Securities portfolio determined to be larger than needed for liquidity, collateral, asset/liability management needs — Required securities portfolio a function of: liquidity and collateral requirements; composition of assets, liability and equity; structure of hedging strategy (cash p
Slide 4: Securities sales, reduction of borrowings
Securities sales, reduction of borrowings Selling approximately $11.5 billion of available-for-sale (AFS) securities — Weighted average yield of approximately 4.30%; duration about 3 years — Pre-tax loss approximately $460 million ($300 million after-tax, or $0.53/share) Terminating $1.1 billion of
Slide 5: Net interest income and net interest margin
Net interest income and net interest margin Annualized benefit of approximately $110-120 million pre-tax to net interest income — Given current market rate expectations — Reflects benefits of net reduction in fixed-rate positions and elimination of negative carry from wholesale funding Annualized be
Slide 6: Interest rate sensitivity
Interest rate sensitivity New positioning results in relatively neutral interest rate sensitivity positioning — Appropriate given flat yield curve and uncertainty on direction of rates and yield curve Adding interest rate derivatives in the form of swaps, caps and floors — Expected to reduce net int
Slide 7: Capital ratios
Capital ratios Capital ratios Adj. 3Q06 Actions* 3Q06 Tangible equity/tangible assets 7.40% 0.65% 8.05% Leverage ratio 8.52% 0.40%# 8.92% Tier 1 ratio 8.60% (0.20%) 8.40% Total capital ratio 10.56% (0.15%) 10.41% Tangible equity/tier one-based ratios remain very strong — Expect to take action to imp
Slide 8: 4Q06 mid-quarter update
4Q06 mid-quarter update* Net interest income expected to grow in low-single digit range from 3Q06 — Net interest margin expected to expand 4-6 bps Charge-offs expected in high 40s to low 50s bps range vs. 43 bps in 3Q06 — Includes two large commercial charge-offs totaling $11 million, representing 6
Slide 9: Cautionary statement
Cautionary statement 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 E
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