Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Merger or Acquisition (August 2007)
17 slides from Fifth Third Bancorp's merger presentation, Aug 16, 2007
Slide 1: Acquisition of First Charter
Exhibit 99.2 Acquisition of First Charter August 16, 2007 Fifth Third Bank | All Rights Reserved
Slide 2: Transaction summary
Transaction summary Description Fifth Third Bancorp’s acquisition of First Charter Corporation (NC) Consideration $1.09 billion (70% FITB stock; 30% cash) Expected divestitures None Timing Expected closing 1Q08 Required approvals Standard regulatory approvals Approved by Fifth Third, First Charter b
Slide 3: Expanding the Fifth Third Franchise
Expanding the Fifth Third Franchise Entry into the Charlotte, Raleigh-Durham and Atlanta markets – Immediate presence in Charlotte, ranking 4th in deposit market share Transaction – 5 branches in Raleigh serve as a base for future growth highlights Opportunity to develop Georgia presence Helps conne
Slide 4: First Charter
First Charter First Charter founded in 1888 Acquired several large banks in the mid-to-late 1990’s, including Home Federal in 1998 and Carolina First Bancshares in 2000. Last significant purchase was GBC Bancorp in 2006. Very attractive demographics — 59 branch network (34 in Charlotte MSA, 5 in Ral
Slide 5: First Charter: superior market demographics
First Charter: superior market demographics Projected Median HH Projected Company Deposit Percent of Total Population Population HH Income HH Income Number Deposits Market National Population Change Change Income Change Change Market of in Market Share Franchise 2007 2000-2007 2007-2012 2007 2000-20
Slide 6: Bridges Fifth Third's Midwestern and Southeastern operations
Bridges Fifth Third’s Midwestern and Southeastern operations Concentration in Charlotte MSA — Scarcity value as largest community bank — Attractive demographics and rational competitors 2 branches in Atlanta 6 Fifth Third Bank | All Rights Reserved
Slide 7: Attractive transaction comparables
Attractive transaction comparables Southeastern Transactions: $200 million - $2 billion Deal Cash / Price / Book Price / EPS Prem / Buyer Seller Announced Value Stock Stated Tangible LTM Core Dep. United Community Gwinnett Commercial 5-Feb-07 $ 220 15% / 85% 3.17 x 3.77 x 20.2 x 36.3 % United Premie
Slide 8: Financial assumptions
Financial assumptions Purchase price $31.00/First Charter share (70% stock, 30% cash) EPS assumptions/growth 2008 First Call consensus estimates for FITB AND FCTR Consensus LTG rates (9.0% for FCTR, 9.4% for FITB) Expense efficiencies $35 million pre-tax ($22 million after-tax) 25% of 1Q07 annualize
Slide 9: EPS accretive transaction
EPS accretive transaction Accretion/dilution analysis ($ in millions after-tax) 2008E 2009E 2010E 1 Fifth Third cash earnings $ 1,615 $ 1,761 $ 1,922 1 First Charter cash earnings 46 66 72 Expense efficiencies 7 26 27 2 Funding costs ( 15) ( 19) ( 19) 1 Combined cash earnings $ 1,653 $ 1,834 $ 2,002
Slide 10: EPS accretive transaction
EPS accretive transaction Accretion/dilution analysis ($ in millions after-tax) 2008E 2009E 2010E 1 Combined cash earnings $ 1,653 $ 1,834 $ 2,002 Combined operating earnings 2 $ 1,620 $ 1,802 $ 1,974 3 Combined average fully diluted shares 551 556 556 1 Combined cash EPS $ 3.00 $ 3.30 $ 3.60 1 Fift
Slide 11: Solid transaction economics
Solid transaction economics IRR on First Charter purchase ($ in millions) 1Q08 2008 2009 2010 2011 2012 IRR Purchase price ($1,090) 1 Excess capital 80 After-tax cash one-times (39) Capital to fund asset growth 2 (23) (25) (27) (28) (30) First Charter cash income 3 46 66 72 78 85 Expense efficiencie
Slide 12: One-time merger-related costs
One-time merger-related costs Expect total one-time cash costs of $61 million pre-tax or $39 1 million after-tax Estimated recognition of cash costs — All assumed to be realized in 2008 through purchase accounting adjustments, although some portion will be realized in 2009 and a small portion may be
Slide 13: Achievable expense efficiencies
Achievable expense efficiencies Expect annual expense efficiencies of $35 million pre-tax ($22 million after-tax1) — 25% of First Charter 1Q07 annualized expense base — Expect to realize 37.5% in 2008; 100% in 2009 Reductions primarily in headquarters, back-office and redundant systems — Customer fa
Slide 14: Significant revenue opportunity
Significant revenue opportunity Enhance First Charter’s consumer product offerings — Fifth Third branch consumer loan production at significantly higher levels — Expect evolution toward more relationship-oriented consumer deposit products similar to Fifth Third experience New product offerings — Cre
Slide 15: Summary
Summary Unique opportunity to expand franchise — Scarcity value of entry point into Charlotte — Entry into Atlanta provides future platform for de novo growth Very attractive pricing relative to recent transactions — Price/LTM Earnings, Price/Book and Price/Tangible Book all lower than comparable de
Slide 16: 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
Slide 17: Additional information
Additional information Where You Can Additional Information About The Merger The proposed Merger will be submitted to First Charter’s shareholders for consideration. Fifth Third will file a Form S-4 Registration Statement, First Charter will file a Proxy Statement and both companies will file other
Fifth Third Bancorp — Merger or Acquisition (August 2007) on 6ix