Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Q1 2019 Earnings Presentation
24 slides from Fifth Third Bancorp's earnings presentation, Apr 23, 2019
Slide 1: Fifth Third Bancorp 1Q19 Earnings Presentation
Fifth Third Bancorp 1Q19 Earnings Presentation April 23, 2019 Refer to earnings release dated April 23, 2019 for further information. Exhibit 99.2 Fifth Third Bancorp | All Rights Reserved
Slide 2: Cautionary statement
Cautionary statement This presentation 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 3
Slide 3: 1Q19 highlights
Met or exceeded all previous guidance items on a standalone basis Successfully closed MB Financial acquisition Strong standalone loan and core deposit growth compared to 1Q18 NIM expanded 10 bps compared to 1Q18 Adjusted revenue2 up 8%; adjusted PPNR2 up 19% compared to 1Q18 Standalone2 expenses wer
Slide 4: 1Q19 adjustments and notable items
1Q19 adjustments and notable items Adjusted EPS of $0.631 1Q19 reported EPS of $1.12 included a positive $0.49 impact from the following items: $562MM pre-tax (~$433MM after-tax2) gain on sale of Worldpay shares $31MM pre-tax (~$24MM after-tax2) charge related to the valuation of the Visa total retu
Slide 5: Commercial Balance sheet
Commercial Balance sheet Securities1 and short-term investments Loan & lease balances Core deposit balances Securities1 Short-term investments Commercial Consumer Total IB core deposit rate 1Available-for-sale debt and other securities at amortized cost; previous disclosures included available-for-s
Slide 6: Net interest income
Net interest income1 1Q19 vs. 1Q18 Current outlook (consolidated; excludes purchase accounting accretion) 1Q19 vs. 4Q18 NII up $87 million, or 9%, vs. 1Q18 NIM up 10 bps vs. 1Q18 ~$16 million impact from 6 business days of MB Financial NII growth primarily driven by higher short-term market rates an
Slide 7: Noninterest income
Adjusted noninterest income (excl. securities (gains)/losses) Noninterest income 1Q19 vs. 1Q18 Current outlook (consolidated; excluding merger-related items and 4Q TRA revenue) 1Q19 vs. 4Q18 Adjusted noninterest income1 up $14 million, or 3%, including ~$12 million impact from 6 business days of MB
Slide 8: Noninterest expense
Noninterest expense 1Q19 vs. 1Q18 1Q19 vs. 4Q18 Adjusted noninterest expense1 up $73 million, or 8% ~$20 million impact of 6 business days from MB Financial Increase reflected seasonally higher compensation and benefits, increased mark-to-market on deferred compensation plan, and continued technolog
Slide 9: Credit quality overview
Credit quality overview 1Excludes HFS loans; 2Commercial criticized assets as a percentage of total commercial loans excluding HFS See forward-looking statements on page 2 Net charge-offs of 0.32%, down 4 bps compared to the year-ago quarter; down 3 bps compared to the prior quarter Commercial net c
Slide 10: Strong capital and liquidity position
Strong capital and liquidity position 1Current period regulatory capital and liquidity ratios are estimated Common Equity Tier 1 ratio (Basel III)1 Modified LCR1 CET1 ratio of 9.7%, down 117 bps compared to the year-ago quarter and down 59 bps compared to the prior quarter Continue to expect migrati
Slide 11: Current outlook
Current outlook Loans & leases Noninterest expense Effective tax rate Noninterest income NII (FTE)1 NIM (FTE)1 Credit items 1Non-GAAP measure: see forward-looking statements on page 2 of this presentation regarding forward-looking non-GAAP measures and use of non-GAAP measures on pages 27-29 of the
Slide 12: Strategic priorities
Strategic priorities Focused on top quartile through-the-cycle performance to create long-term shareholder value 1 3 2 4 Leverage technology capabilities to accelerate digital transformation Maintain credit, expense and capital discipline Expand market share in key geographies Invest to drive organi
Slide 13: Appendix
Appendix
Slide 14: MB acquisition creates a leading Chicago franchise
MB acquisition creates a leading Chicago franchise Transaction highlights Pro forma branch footprint Source: S&P Global Market Intelligence. Based on 2018 FDIC deposit data. 1Greenwich & Associates Research; 2Excludes all deposit balances above $500mm at any branch (excluded deposits are assumed to
Slide 15: MB Financial had a limited impact on 1Q19 results
MB Financial had a limited impact on 1Q19 results $ 1Non-GAAP measure: see forward-looking statements on page 2 of this presentation regarding forward-looking non-GAAP measures and use of non-GAAP measures on pages 27-29 of the earnings release; 2Assumes a 23% tax rate, except for merger-related exp
Slide 16: Tangible common equity and shares outstanding impacted by acquisition and buyback activity
Tangible common equity and shares outstanding impacted by acquisition and buyback activity 1Non-GAAP measure: see forward-looking statements on page 2 of this presentation regarding forward-looking non-GAAP measures and use of non-GAAP measures on pages 27-29 of the earnings release; Expect addition
Slide 17: Efficiency ratio trend and pre-provision net revenue
Efficiency ratio trend1 Pre-provision net revenue1 1Q19 vs. 1Q18 1Q19 vs. 4Q18 Adjusted PPNR up 19%; performance reflects: Increased NII driven primarily from earning asset growth and higher short-term rates Partially offset by 2% increase in expenses including 6 day MB carry Adjusted PPNR down 12%;
Slide 18: Strong liquidity profile
Strong liquidity profile $ millions – excl. Retail Brokered & Institutional CDs Unsecured debt maturities Heavily core funded Holding company: Modified LCR of 113% Holding Company cash as of March 31, 2019: $2.9B Cash currently sufficient to satisfy all fixed obligations in a stressed environment fo
Slide 19: Balance sheet positioning
Balance sheet positioning Investment portfolio $18.1B fixed | $53.8B variable 1,2,3 Commercial loans1,2,3 Consumer loans1 Long-term debt4 $28.4B fixed | $10.3B variable 1 $10.5B fixed | $5.0B variable 4 57% allocation to bullet/ locked-out cash flow securities Yield: 3.32% Effective duration of 4.85
Slide 20: Interest rate risk management
Interest rate risk management Estimated NII sensitivity profile and ALCO policy limits Estimated NII sensitivity with deposit beta changes Estimated NII sensitivity with demand deposit balance changes 1Effective duration of the taxable available for sale portfolio; 2Re-pricing percentage or “beta” i
Slide 21: NPL rollforward
NPL rollforward1 1Loan balances exclude nonaccrual loans HFS Commercial $ millions Consumer $ millions Total NPL $ millions Total NPL 452 $ 437 $ 403 $ 348 $ 449 $ Total new nonaccrual loans - HFI 143 $ 118 $ 102 $ 64 $ 178 $ 1Q18 2Q18 3Q18 4Q18 1Q19 306 $ 322 $ 305 $ 278 $ 228 $ Transfers to nonacc
Slide 22: Balance and credit loss trends
Balance and credit loss trends1 Commercial & industrial Residential mortgage Commercial mortgage Commercial construction Home equity Indirect secured consumer loans Average Portfolio Balance NCOs as a % of average portfolio loans 1All balances are in billions 1Q18 1Q19 2Q18 3Q18 4Q18
Slide 23: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See pages 27-29 of the earnings release for a discussion on the use of non-GAAP financial measures 1Pre-tax items: for all periods assume a 23% tax rate, except for 1Q19 non-deductible merger-related items
Slide 24: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See pages 27-29 of the earnings release for a discussion on the use of non-GAAP financial measures