Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Q3 2019 Earnings Presentation
21 slides from Fifth Third Bancorp's earnings presentation, Oct 22, 2019
Slide 1: Fifth Third Bancorp 3Q19 Earnings Presentation
Fifth Third Bancorp 3Q19 Earnings Presentation October 22, 2019 Refer to earnings release dated October 22, 2019 for further information. Exhibit 99.2
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: Strategic priorities
Strategic priorities 1 2 Maintain credit, expense and capital discipline Invest to drive organic growth and profitability 3 Expand market share in key geographies 4 Leverage technology capabilities to accelerate digital transformation
Slide 4: 3Q19 highlights
Revenue and expense results better than previous expectations Strong fee revenue, particularly in mortgage and corporate banking (including record capital markets revenue) Achieved our previously stated 4Q19 financial targets sooner than expected Stable credit quality given the benign environment Re
Slide 5: 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 Note: Totals shown above may not foot due to rounding 1Available-for-sale debt and other securities at amortiz
Slide 6: Net interest income
Net interest income1 3Q19 vs. 3Q18 Current outlook (excludes purchase accounting accretion) 3Q19 vs. 2Q19 Adjusted NII1 up $171 million, or 16%; Adjusted NIM1 up 2 bps NII and NIM performance drivers: Increase in interest earning assets including the impact from MB Financial Lower long-term debt Adj
Slide 7: Noninterest income
Adjusted noninterest income (excl. securities (gains)/losses)1 Noninterest income 3Q19 vs. 3Q18 Current outlook 3Q19 vs. 2Q19 Adjusted noninterest income1 up $72 million, or 11% Primary drivers of growth: Mortgage banking revenue (up 51%) Corporate banking revenue (up 23%) 1Non-GAAP measure: see rec
Slide 8: Noninterest expense
Adjusted noninterest expense (excl. intangible amortization) 1 Noninterest expense 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Adjusted noninterest expense1 down $3 million Primarily reflecting lower compensation and benefits (down 5%), partially offset by higher other noninterest expense (up 8%) FY19: Up ~13% from
Slide 9: Credit quality overview
Credit quality overview 1Excludes HFS loans; See forward-looking statements on page 2 Net charge-offs of 0.36%, up 6 bps compared to the year-ago quarter; up 7 bps compared to the prior quarter Commercial net charge-offs down 1 bp compared to the year-ago quarter; up 5 bps compared to the prior quar
Slide 10: Strong capital and liquidity position
CET1 ratio of 9.6%, down ~110 bps compared to the year-ago quarter, and stable relative to the prior quarter Returned 96% of earnings to shareholders through common dividends and repurchase ($350 million in share repurchases, which decreased common shares outstanding by approximately 13.4 million sh
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 26-28 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: Efficiency ratio trend and pre-provision net revenue
Efficiency ratio trend1 Pre-provision net revenue1 3Q19 vs. 3Q18 3Q19 vs. 2Q19 Adjusted PPNR up $58 million, or 7% Growth driven by mortgage banking revenue, corporate banking revenue Growth partially offset by lower NII given lower short-term rates and other noninterest expense growth 1PPNR, Adjust
Slide 15: Strong liquidity profile
Strong liquidity profile $ millions – excl. Retail Brokered & Institutional CDs Unsecured debt maturities Heavily core funded Holding company: Modified LCR of 116% Holding Company cash as of September 30, 2019: $3.5B Cash currently sufficient to satisfy all fixed obligations in a stressed environmen
Slide 16: Balance sheet positioning
Balance sheet positioning Investment portfolio $19.1B fixed | $51.4B variable 1,2,3 Commercial loans1,2,3 Consumer loans1 Long-term debt4 $29.8B fixed | $10.4B variable 1 $10.5B fix | $4.0B variable4 60% allocation to bullet/ locked-out cash flow securities Yield: 3.24% Effective duration of 4.75 Ne
Slide 17: 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 1 Effective duration of the taxable available for sale portfolio; 2Re-pricing percentage or “beta”
Slide 18: NPL rollforward
NPL rollforward1 1Loan balances exclude nonaccrual loans HFS Commercial $ millions Consumer $ millions Total NPL $ millions
Slide 19: 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 2Q18 2Q19 3Q18 4Q18 1Q19
Slide 20: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See pages 26-28 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 Fifth Third Bancorp and Subsidiaries Regulation G Non-GA
Slide 21: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See pages 26-28 of the earnings release for a discussion on the use of non-GAAP financial measures Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconciliation $ and shares in millions September June March December September (unaudited) 2019 2019 201