Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Citi Financial Services Conference 2011
25 slides from Fifth Third Bancorp's conference presentation, Mar 9, 2011
Slide 1: Citi Financial Services Conference
Exhibit 99.1 Citi Financial Services Conference Kevin T. Kabat President & Chief Executive Officer March 9, 2011 Please refer to earnings release dated January 19, 2011 and 10-K dated February 28, 2011 for further information © Fifth Third Bank | All Rights Reserved
Slide 2: Key themes
Key themes Return to solid profitability Completely exited all in 2010, broad-based credit crisis-era government improvements, exceed fully support programs, one of phased-in Basel III capital the few large banks without standards today TLGP-guaranteed debt Continued investments in No significant bu
Slide 3: Fifth Third franchise
Fifth Third franchise Headquartered in Cincinnati, Ohio with 15 affiliates across the Midwest and Southeast United States Branch Banking Consumer Lending Michigan • 1,312 full-service banking centers • $1.1bn total revenue • 2,445 full-service ATMs • $20.5bn average loans • $2.4bn total revenue • $6
Slide 4: A foundation of continued growth
A foundation of continued growth Capital – foundation for continued growth Tier 1 common ratio (%) 1 — Tier 1 common capital has increased 313bps or $2.6bn — Capital base transformed through series of capital actions – 9.4% pro forma Tier 1 ratio excluding trust preferred securities to be phased-out
Slide 5: Diverse revenue stream
Diverse revenue stream Fee income as % of 2010 revenue 4Q10 Fee income distribution Card & Processing Deposit fees 42% Fee income Mortgage Corporate NII banking Other Investment advisors • Improving economy supportive of underlying revenue growth from loan growth and business fee income – Higher mar
Slide 6: Shift to higher quality average loan balances
Shift to higher quality average loan balances • Average commercial loan balances 56% of loans in 4Q10 • Suspended homebuilder and developer lending in 4Q07 and commercial non-owner occupied real estate lending in 2Q08 – CRE loans represented only 17% of total loan portfolio – CRE portfolio balances
Slide 7: Strong pre-provision net revenue
Strong pre-provision net revenue Core PPNR trend Core PPNR / Risk-weighted assets Core PPNR / Net charge-offs • Reported PPNR of $583mm down 34% from strong 3Q10 levels, which included higher mortgage banking revenue, and up 4% over prior year • Adjusted PPNR of $576mm, due to adjustments totaling (
Slide 8: ROAA upside remains
ROAA upside remains Fourth quarter ROA of 1.18% included Illustrative ROA calculation using historical NCO and credit-related costs — Provision expense / average loans of 87 bps 4Q10 4Q10 Actual Illustrative — $87mm of credit-related costs in PPNR ex-credit costs* $670 $670 revenue and expense Credi
Slide 9: Strong relative credit trends
Strong relative credit trends Loans 30-89 days delinquent % vs. peers Loans 90+ days delinquent % vs. peers HFI NPA ratio vs. peers Net charge-off ratio vs. peers (7.5%)*(HFS transfer) 5.0% 3.8% Before credit actions 2.3%* Before credit 1Q11 actions expect stable^ FITB problem credit metrics have mo
Slide 10: Credit metrics & reserve coverage outperform peers
Credit metrics & reserve coverage outperform peers Net Charge-off Ratio (Annualized) HFI NPA Ratio Peer average: 3.5% Peer average: 2.2% FITB credit metrics lower than peers and represent position of relative strength Reserves / NPLs Reserves / Net Charge-offs (Annualized) Peer average: 156% Peer av
Slide 11: Strong pro forma capital position
Strong pro forma capital position (Tier 1 common + reserves) / RWA (Tier 1 common + reserves) / RWA (not adjusted for Basel III) (adjusted for Basel III) Tier 1 common (peers) Reserves Tier 1 common (peers) Reserves Tier 1 common (FITB) Red: repaid TARP Tier 1 common (FITB) 12.4% 12.3% 12.1% 12.2% 1
Slide 12: Capital management philosophy
Capital management philosophy Organic growth opportunities • Support growth of core banking franchise • Improving loan demand in recovering economy Return to more normal dividend policy* • Strong levels of profitability would support significantly higher dividend than current dividend • Subject to c
Slide 13: Continuing to invest for the future
Continuing to invest for the future 13 © Fifth Third Bank | All Rights Reserved
Slide 14: Customer-centric traditional banking model: well-positioned for changed financial landscape
Customer-centric traditional banking model: well-positioned for changed financial landscape Fifth Third’s business model is driven by traditional banking activities — Largest bank headquartered within Fifth Third’s core Midwest footprint — Focus on expansion and development of businesses where regio
Slide 15: Well-positioned for the future
Well-positioned for the future Diversified traditional banking platform • Traditional commercial banking franchise built on customer-oriented localized operating model • Strong market share in key markets with focus on further improving density • Fee income ~40% of total revenues Strong industry lea
Slide 16: Cautionary statement
Cautionary statement This report contains statements that we believe are “forward-lookingstatements” 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 pro
Slide 17: 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** • 2010 debit interchange revenue of $204mm • Fed has proposed limits on debt interchange; proposal Debit • 2010 debit interchange $ volume: $15.7B currently out for comment
Slide 18: Mortgage repurchase overview
Mortgage repurchase overview Demand requests and repurchase losses remain volatile and near-term repurchase losses are expected to remain elevated Repurchase Reserves* ($ in millions) — Number of outstanding demand requests (units) down 9% from 3Q10, outstanding demand requests ($) down 13% 4Q09 1Q1
Slide 19: 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 Mortgage TDR 60+ redefault trend by vintage Fifth Third’s mortgage portfolio TDRs have redefaulted a
Slide 20: Criticized / Classified commercial assets
Criticized / Classified commercial assets $9,961 $8,442 $7,906 Doubtful Substandard $3,690 OAEM Criticized assets have declined significantly in all categories since the peak in 2009 * Criticized / Classified assets also include $2mm, $9mm, and $2mm of loss assets in 2007, 2008, and 2009, respective
Slide 21: NPL Rollforward
NPL Rollforward NPL HFI Rollforward Commercial 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 * 4Q10 Beginning NPL Amount 1,406 1,937 2,110 2,430 2,392 2,172 1,980 1,261 New nonaccrual loans 799 544 832 602 405 310 290 308 Paydowns, payoffs, sales and net other activity (157) (190) (246) (332) (425) (401) (631)
Slide 22: Non-performing loans
Non-performing loans FITB NPL inflows (relative to loans) vs. peers Non-performing loans ($mm) $2.9bn $2.7bn $2.5bn $1.6bn $1.7bn Non-performing loans improving with lower severity mix; benefit of sales/transfers New HFI non-performing loan flows ($mm) FITB FITB ex-HFS Fifth Third’s non-performing l
Slide 23: Pre-provision net revenue reconciliation
Pre-provision net revenue reconciliation 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Reported PPNR $511 $2,393 $844 $562 $568 $567 $760 $583 Adjustments: BOLI 54 - - - - - (127) - Gain on sale of Visa shares - - (244) - 9 - - - Gain from sale of processing interest - (1,764) 6 - - - - - Divested merchan
Slide 24: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation For the Three Months Ended $ and shares in millions Proforma (unaudited) CS Issue, TARP December December September June March December 2010 2010 2010 2010 2010 2009 Total Bancorp shareholde
Slide 25: Regulation G Non-GAAP reconciliation
Regulation G Non-GAAP reconciliation Phase out of TRUPs (TARP, Equity raise) 4Q10 Tier 1 Capital ratio Tier 1 capital $ 13,964,857 TARP repay $ (3,408,000) TRUPs (2,762,782) Equity raise $ 1,648,830 $ 9,442,905 RWA $ 100,193,435 Asset increase $ - $ 100,193,435 Tier 1 13.9% Tier 1 pro forma 9.4% 25
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