Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — BancAnalysts Association of Boston Conference 2010
25 slides from Fifth Third Bancorp's conference presentation, Nov 4, 2010
Slide 1: BancAnalysts Association of Boston Conference
Exhibit 99.1 BancAnalysts Association of Boston Conference Daniel T. Poston Executive Vice President & Chief Financial Officer November 4, 2010 Please refer to earnings release dated October 21, 2010 for further information © Fifth Third Bank | All Rights Reserved
Slide 2: 3Q10 in review
3Q10 in review Continued strong operating • Net income available to common shareholders of $175mm, or $0.22 per diluted results share – Includes $127mm pre-tax net impact of BOLI settlement and 3Q10 credit actions described below • Return on average assets of 0.84%; return on average common equity o
Slide 3: Strong profitability results
Strong profitability results Core PPNR / Average assets (Annualized)* Core PPNR / NCOs* Lighter portion excludes charge-offs on loans sold or moved to held-for-sale ROAA • Strong PPNR profitability creates higher than average loss absorption capacity • Profitability not dependent on reserve releases
Slide 4: Stable net interest income trends
Stable net interest income trends NII and NIM (FTE) • Sequential trends in net interest income and net interest margin (FTE) reflect CD runoff and repricing, lower securities premium amortization, and a mix shift towards higher-yielding loans – NII up $29 million, or 3%, sequentially and up $42 mill
Slide 5: Liability mix and pricing discipline drive strong net interest income/NIM results
Liability mix and pricing discipline drive strong net interest income/NIM results Deposits / Assets 3Q10 Cost of Funds Peer Comparison Peer average 1.01% Peer average 70% C&I Spread to 1-month LIBOR • Strong, deposit rich core funding mix supports relatively low cost of funds – Low reliance on whole
Slide 6: Stable loan trends and strong core funding
Stable loan trends and strong core funding Average loan growth ($B)^ Flat QoQ; (4%) YoY • Extended $22 billion of new and renewed credit in 3Q10 80 78 78 77 • C&I loans up 1% sequentially largely due to higher originations of ~$1.1 billion per month during the quarter • CRE loans down 4% sequentiall
Slide 7: Core fee income growth and stable core expenses
Core fee income growth and stable core expenses Core fee income ($mm) • Core noninterest income of $676mm increased $74mm, or 13%, compared with prior quarter, primarily due to increased mortgage banking net revenue • Sequential strength in mortgage banking revenue (+104%) and investment advisory re
Slide 8: Impact of portfolio actions
Impact of portfolio actions • Residential mortgage loan sale Residential mortgages sold Balances NCO – $228 million of balances sold Florida $141 $72 – $205 million of balances were Ohio 25 15 Illinois 15 9 nonaccrual Michigan 15 8 – $123 million of NCO realized Indiana 10 6 Other 23 13 • Commercial
Slide 9: Strong relative credit trends
Strong relative credit trends Loans 30-89 days delinquent % vs. peers Loans 90+ days delinquent % vs. peers NPA ratio vs. peers Net charge-off ratio vs. peers* (7.5%) (HFS transfer) 3.80% Before credit 4Q10 expect actions below 2%* 2.33% Before credit 4Q10 expect stable* actions FITB credit metrics
Slide 10: Non-performing loans
Non-performing loans FITB NPL inflows (relative to loans) vs. peers Non-performing loans ($mm) $2.9B $2.9B $2.7B $2.5B $1.6B Non-performing loans improving with lower severity mix; benefit of sale/transfer New non-performing loan flows ($mm) FITB Fifth Third’s non-performing loan inflows (relative t
Slide 11: Strong credit metrics compared with peers
Strong credit metrics compared with peers Net Charge-off Ratio* (Annualized) HFI NPA Ratio Peers Peers 3Q10 3Q10 Peer average: 3.8% Peer average: 2.3% “Texas Ratio” (HFI NPAs + Over 90s – Reserves) / TCE (HFI NPAs + Over 90s) / (Reserves + TCE) Peers Peers 2Q10 2Q10 Peer average: 11% FITB credit met
Slide 12: Strong reserve position
Strong reserve position Industry leading reserve level Reserves / Loans 1. FITB 4.20% 2. ZION 4.07% 3. KEY 3.81% 4. RF 3.77% 5. HBAN 3.56% 6. MI 3.51% 7. PNC 3.48% 8. WFC 3.18% 9. USB 2.83% 10. STI 2.68% 11. BBT 2.56% 12. CMA 2.38% 13. MTB 1.76% Peer Average 3.13% Coverage ratios are strong relative
Slide 13: Strong capital position
Strong capital position Tier 1 capital ratio (with and without TARP) (TCE + reserves) / Loans 14.2% 14.3% 13.9% 13.6% TARP 12.8% 12.1% 10.8% Peer average: 13.8% 9.2% Peer average w/o TARP: 10% (Tier 1 common ratio + reserves) / RWA^ Tangible common equity ratio 12.0% 12.0% Reserves 11.6% 11.2% 11.0%
Slide 14: Strong liquidity profile
Strong liquidity profile Holding Company cash at 9/30/10: $1.2B Holding company unsecured debt maturities ($mm) — Total Fed deposits ~$2.9B Expected cash obligations over the next 12 months (assuming no TARP repayment) — $0 debt maturities — ~$32mm common dividends — ~$205mm preferred dividends (~$3
Slide 15: Continuing to invest for the future
Continuing to invest for the future 15 © Fifth Third Bank | All Rights Reserved
Slide 16: Peer performance summary – YoY Comparison
Peer performance summary – YoY Comparison FITB Regional bank Performance peer average(1) 3Q10 vs. peers 3Q10 Core pre-tax pre-provision earnings* / 2.2% 1.9% Better average assets (annualized) Operating efficiency ratio* 60% 64% Better Net interest margin / (bps) 3.70% (+27) 3.62% (+26) Better NPA r
Slide 17: Cautionary statement
Cautionary statement This report may contain 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
Slide 18: Appendix
Appendix 18 © Fifth Third Bank | All Rights Reserved
Slide 19: Pre-tax pre-provision earnings
Pre-tax pre-provision earnings Core PPNR trend Adjusted PPNR +31%; Credit adjusted PPNR +28% • Reported PPNR of $760 million up 34% from strong 2Q10 levels driven by strong net interest income growth, higher fees reflecting mortgage results and litigation settlement • Adjusted PPNR of $634 million,
Slide 20: NPL Rollforward
NPL Rollforward NPL Rollforward Commercial 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Beginning NPL Amount 1,406 1,937 2,110 2,430 2,392 2,172 1,980 New nonaccrual loans 799 544 832 602 405 310 290 Paydowns, payoffs, sales and net other activity (157) (190) (246) (332) (425) (401) (631) Charge-offs (111) (1
Slide 21: Troubled debt restructurings (TDR) overview
Troubled debt restructurings (TDR) overview Successive improvement in vintage performance during 2008 and 2009, even as volume of modification increased TDR performance has improved in newer vintages Fifth Third’s mortgage portfolio TDRs have redefaulted at a Mortgage TDR 60+ redefault trend by vint
Slide 22: Industry leading reserve levels
Industry leading reserve levels Reserves / Loans Reserves / NPLs Peer average: 3.1% Peer average: 107% Reserves / NPAs Reserves / Net Charge-offs* (Annualized) Lighter portion excludes charge-offs on loans sold or moved to held-for-sale Peer average: 157% Peer average: 89% Reserve coverage strong re
Slide 23: Potential impact of key elements of Dodd-Frank Act and other recent financial legislation
Potential impact of key elements of Dodd-Frank Act and other recent financial legislation* Scope of activity Potential impact** Debit • LTM^ debit interchange revenue of $197mm • Will not know what “reasonable” and “proportional” mean Interchange • LTM debit interchange $ volume: $15.3B until after
Slide 24: Well-positioned for changed financial landscape
Well-positioned for changed financial landscape Fifth Third’s business model is driven by traditional banking activities — Making loans, taking deposits, treasury management — Largest bank headquartered within core Midwest footprint No significant business at Fifth Third impaired during crisis; core
Slide 25: Mortgage repurchase overview
Mortgage repurchase overview Demand requests and repurchase losses remain volatile and near-term repurchase losses are expected to remain elevated Repurchase Reserves* ($ in millions) — Number of outstanding demand requests (units) down 10% from Q2 2010, outstanding demand requests ($) up 11% Q3 Q4
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