Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Corporate Update (July 2008)
14 slides from Fifth Third Bancorp's corporate update, Jul 22, 2008
Slide 1: Capital Planning: Credit Scenario Analysis
Exhibit 99.3 June 2008 Capital Planning: Credit Scenario Analysis Fifth Third Bank | All Rights Reserved
Slide 2: Statement of purpose
Statement of purpose These scenarios do not constitute a forecast or otherwise reflect Fifth Third’s outlook for 2009 expected results. This exercise was designed for evaluating capital plans rather than for forecasting purposes. Therefore, it was intended to evaluate what could happen under signifi
Slide 3: Capital planning: credit scenario analysis
Capital planning: credit scenario analysis A key driver of the capital planning process was an analysis of potential credit losses under variety of economic and credit market conditions Analysis involved a detailed process that segregated our loan portfolio into approximately 50 granular pools of si
Slide 4: Consumer charge-off scenario methodology
Consumer charge-off scenario methodology Three-month moving average roll-rates used to project baseline charge-offs through the end of 2009 Used forecasts for relevant economic indicators to predict loss severities — Relied upon Moody’s Economy.com/Case-Shiller Home Price Index Forecast* for real es
Slide 5: Consumer charge-off scenario methodology (cont.)
Consumer charge-off scenario methodology (cont.) High stress case added incremental losses related to severity and roll- rate shocks — For Florida and lot exposures, used Moody’s Florida severe recession home price forecast anticipating an additional 27% decline in home prices through the end of 200
Slide 6: Home price appreciation trends and forecasts
Home price appreciation trends and forecasts Florida US 280 280 260 260 240 240 220 220 200 200 180 180 160 160 140 140 120 120 100 100 Baseline Recession Severe Recession Baseline Recession Severe Recession Ohio Michigan 280 280 260 260 240 240 220 220 200 200 180 180 160 160 140 140 120 120 100 10
Slide 7: Consumer segmentation for applying stress factors
Consumer segmentation for applying stress factors Mortgage — Florida other than lots — Lots — All other Home Equity — Delivery channel (Retail, retail brokered, HEA) — Loan-to-value (greater than and less than 85% LTV) — Type (loan or line) Auto — New and used — SUV/truck and other Credit card Other
Slide 8: Illustration of impact of roll rate and severity stresses
Illustration of impact of roll rate and severity stresses Loss severities stressed as described earlier Due to compounding effects, roll rate shocks can have a dramatic effect on losses — In the example below, a 7% shock to each roll rate results in a 30% increase in losses holding all else equal —
Slide 9: Capital planning: 2008 commercial charge-off scenario methodology
Capital planning: 2008 commercial charge-off scenario methodology Commercial loan portfolio was segmented into 30 portfolios — 10 industries segregated into 3 geographies (Florida, Michigan, and Other) Asset quality trends over last 3 and 6 quarters extrapolated to project baseline charge-off scenar
Slide 10: Capital planning: 2009 commercial charge-off scenario methodology
Capital planning: 2009 commercial charge-off scenario methodology Builds upon 2008 methodology Utilized Moody’s Economy.com Industry Workstation Net Income Forecasts by industry to project baseline criticized assets (watch, classified, nonaccrual loans) — Moody’s industry net income forecast calls f
Slide 11: Illustration of commercial scenario methodology
Illustration of commercial scenario methodology $100,000 3 Quarter Trend $90,000 6 Quarter Trend Scenario - Low Stress $80,000 Baseline $70,000 Scenario - High Stress $60,000 $50,000 $40,000 $30,000 $20,000 2009 2008 methodology $10,000 methodology range range $0 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09
Slide 12: Commercial portfolio segmentation
Commercial portfolio segmentation Industries Geographies — Accommodation — Florida — Auto — Michigan Manufacturing — Other — Construction — Finance and Insurance — Manufacturing — Real Estate — Retail Trade — Auto Retailers — Wholesale Trade — Other 12 © Fifth Third Bank | All Rights Reserved As of
Slide 13: Outcome of loan loss scenarios for capital plan
Outcome of loan loss scenarios for capital plan FY 2008 FY 2009 Outlook (as of July 22, 2008) 160-170 bps $1.3-1.4 billion TBD in 2009 budget process Scenarios (not projections or forecast) bps $ bps $ bps $ Actual Actual Scenarios Scenarios Scenarios Scenarios # # 1H08 1H08 FY2008 FY2008 FY2009 FY2
Slide 14: Cautionary Statement
Cautionary Statement This report may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined 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