Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Lehman Brothers Financial Services Conference 2007
23 slides from Fifth Third Bancorp's conference presentation, Sep 11, 2007
Slide 1: Lehman Brothers Financial Services Conference
Exhibit 99.1 Lehman Brothers Financial Services Conference Kevin Kabat, President and CEO September 11, 2007 Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
Slide 2: Fifth Third profile
Fifth Third profile $101 billion assets (#13) Traverse City $20 billion market cap* (#12) Grand Rapids Detroit Cleveland 1,167 banking centers Chicago Toledo Pittsburgh Columbus 2,132 ATMs Indianapolis Cincinnati Evansville Florence Huntington 18 affiliates in 10 states St. Louis Louisville Lexingto
Slide 3: Diversified franchise
Diversified franchise 2007 Revenue - $6 billion* Branch Banking (38% of earnings) Retail & Business banking 2.7 million households 1,167 branches, 2,132 ATMs Consumer Lending Commercial Banking (29%) $581M Branch Corporate & Middle Market Lending, Treasury Services, International Investment Trade Fi
Slide 4: Historical context
Historical context Strong sales culture — Loan, deposit growth > industry — Affiliate/entrepreneurial drive Strong expense management — Low 50s efficiency ratio Average service/customer satisfaction — “Sold through” attrition (e.g., DDA high-teens) Internal orientation Retain and leverage historical
Slide 5: Strong underlying performance
Strong underlying performance (CAGR: YTD 2007 vs. YTD 2003: per share) Fifth Third Peer Midwest 2 3 Group Peers Loan growth 14% 9% 7% Core deposit growth 7% 5% 3% Processing fee growth 16% 14% N/A Credit card loan growth 23% 13% 17% Efficiency ratio 56.1% 58.6% 58.5% 1 ROE 15.2% 13.6% 14.9% Source:
Slide 6: Strategic focus: 2007–2009
Strategic focus: 2007–2009 Deliver growth in excess of industry Enhance the customer experience Increase employee engagement Institutionalize enterprise operational excellence Employee Customer Engagement Banking Experience Banking Fifth Third Bank Processing Processing Investments Investments Opera
Slide 7: Growth opportunities
Growth opportunities Areas of evident success — De novo – accelerate new branch openings — Healthcare – enhance product offerings, specialized channel — Credit card – increase cardholder acquisition Works in progress — Middle market expansion – expand products, services, and sales — Small business b
Slide 8: De novo activities
De novo activities 2007- 2009 planned builds • Opened 55 total new branches in the past 12 months • Continue to invest in high Chicago opportunity markets 28% • Site selection focuses on market potential, predictive modeling and IRR optimization Florida Tennessee 47% 7% • De novo activity has been,
Slide 9: Credit cards: capturing our fair share
Credit cards: capturing our fair share 13th largest bank, 24th largest credit card issuer We’ve underinvested in the credit card business relative to competitors Significant opportunity in high risk-adjusted return business — Improve retail production by deploying sales technologies to enhance ease
Slide 10: Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
10 Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
Slide 11: Fifth Third healthcare strategy
Fifth Third healthcare strategy Relationships • Primary Bank for fewer than 50 hospitals / health systems • Over 600 healthcare entities in-footprint with revenues > $100 Million • Current market share of 2.3% (12.7% gap to total commercial business market share) Relationships Promote a comprehensiv
Slide 12: Fifth Third: relative service performance
Fifth Third: relative service performance 100% 2007 Key Actions th Goal: 75 percentile 76% Financial Center service optimization 80% 74% initiative launched 58% Add KDI component to new incentive 60% 54% 51% compensation plan 55% 46% 40% Financial Center action planning in 29% 21% 3Q05 45% 36% place
Slide 13: Employee Engagement update
Employee Engagement update Ratio of Engaged to 1.41:1 2.29:1 Actively Disengaged 100% +33% 24 Engaged 32 80% – Loyal and psychologically committed 2.67:1 2007 Gallup Overall Database 60% 2.00:1 U.S. Working Population* 59 - 8% 40% 54 Not Engaged – Productive but not psychologically connected 20% -18
Slide 14: Enterprise Operational Excellence
Enterprise Operational Excellence Improve operational efficiencies — Standardize, digitize and optimize core processes — Deploy technology to eliminate manual processes and improve quality — Reducing cycle times and errors is increasing customer satisfaction Modernize servicing platforms and capabil
Slide 15: Capital plan
Capital plan Current tangible capital levels very strong — Tangible common equity/tangible assets ratio of 6.92% at 6/30/2007 — Post acquisition TCE/TA target: 6.5% (Crown = 45 bps, First Charter = 35 bps) 2007 plans — Improve efficiency of capital structure through limited substitution of hybrids f
Slide 16: Residential real estate - topical areas
Residential real estate - topical areas* Mortgage: $8.5B outstanding st — 1 liens: 100% IN IL MI KY 8% 7% — Weighted average LTV: 80%; weighted average FICO: 720 18% 6% – Origination FICO bands: <659 13%; 660-689 11%; 690-719 17%; 720-749 18%; 750+ 39% (note: loans <659 includes CRA loans and FHA/VA
Slide 17: Commercial portfolio - topical areas
Commercial portfolio - topical areas* Commercial real estate (CRE) Syndicated lending Total outstandings $16.5B Total loans ~$4B outstandings — PD rating# 5.5 vs. 6.5 for — Commercial mort $11.0B (50% owner occ’d) commercial portfolio — Construction 5.5B (20% owner occ’d) — Ave size ~$8 million Tota
Slide 18: M&A – what matters to Fifth Third
M&A – what matters to Fifth Third Markets — Expansion into demographically attractive geographies — Creation of deeper shares in existing markets Attractive business lines — Supplement existing business, addition of complementary businesses or capabilities Favorable economics — Conservative assumpti
Slide 19: Fifth Third: building a better tomorrow
Fifth Third: building a better tomorrow Balancing growth and profitability Capitalizing on strengths and developing plans to address areas of weakness Communicating clearly with investors Delivering on promises Returning to above-par performance and shareholder returns 19 Fifth Third Bank | All Righ
Slide 20: Appendix
Appendix 20 Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
Slide 21: First Charter Acquisition
First Charter Acquisition $4.9 billion in assets, $3.2 billion in deposits, 59 branches – Immediate presence in Charlotte, ranking 4th in deposit market share – Entry into the Charlotte, Raleigh-Durham and Atlanta markets Transaction – 5 branches in Raleigh serve as a base for future growth highligh
Slide 22: Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
22 Fifth Third Bank | All Rights Reserved | 2007 Lehman Brothers Financial Services Conference
Slide 23: Additional information
Additional information Where You Can Find 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 o
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