Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Citigroup 2008 Financial Services Conference
20 slides from Fifth Third Bancorp's conference presentation, Jan 30, 2008
Slide 1: Citigroup 2008 Financial Services Conference
Exhibit 99.1 Citigroup 2008 Financial Services Conference Kevin Kabat, President and CEO Chris Marshall, Executive Vice President and CFO January 30, 2008 Fifth Third Bank | All Rights Reserved
Slide 2: Agenda
Agenda 2007 in review — Difficult year, large unusual items, credit cycle overshadowed strong core performance Credit — Trends worsened, driven by residential and commercial real estate trends; drivers well-understood and actions taken 2008 outlook — Expect solid operating performance and to outperf
Slide 3: 2007 in review
2007 in review Difficult year due to economic environment and customer uncertainty — BOLI and VISA charges distorted financial results — Significant 4Q07 increase in charge-offs and provision charge Core business momentum remains strong — NII growth of 5% — Fee income growth of 9% excluding the impa
Slide 4: Fee income diversification
Fee income diversification $900 Growth Rate: 19% Y/Y $800 growth $700 Payment +16% processing $600 $500 Deposit $400 service charges +30% $300 Investment advisory +4% $200 Corporate banking +29% Mortgage $100 -14% Other +30% $0 4Q06 1Q07 2Q07 3Q07 4Q07 Excludes estimated $155 million BOLI charge and
Slide 5: Peer performance summary
Peer performance summary Large FITB (1) Midwest YTD bank peers (3) performance 2007 peers (2) 2007 vs. peers 2007 Average core deposit 3% 1% 1% Outperformed growth Average loan growth 7% 5% 6% Outperformed NII growth 5% 2% 1% Outperformed Operating fee growth 9% 3% 6% Outperformed Operating efficien
Slide 6: Diversified loan portfolio
Diversified loan portfolio Distributed by type* $46 billion commercial loan portfolio Credit Card Other Cons Auto 2% 1% 92% secured 11% C&I $954,000 average outstanding 31% Home Equity $1.8 million average exposure 15% 2007 NCOs: 43 bps Resi Mortgage Commercial 13% Mortgage $34 billion consumer loan
Slide 7: Real estate driving credit deterioration
Real estate driving credit deterioration NPAs NCOs Chicago fraud loss 1,200,000 200,000 1,000,000 Res 160,000 RE Res 800,000 RE 120,000 600,000 CRE 80,000 CRE 400,000 40,000 200,000 0 0 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 C&I/Lease Auto Credit Card C&I/Lea
Slide 8: Michigan and Florida: most stressed markets
Michigan and Florida: most stressed markets NPAs NCOs Chicago 1,200,000 200,000 fraud loss 1,000,000 160,000 Stressed Stressed 800,000 markets markets 120,000 600,000 80,000 400,000 200,000 40,000 421 - - Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Other SE Nation
Slide 9: Commercial real estate portfolio
Commercial real estate portfolio Commercial real estate (CRE) Homebuilders and residential development Total outstandings $17.4B Total outstandings $2.9B — Commercial mort $11.9B (47% owner occ’d) ~6% of commercial loans, ~16% of CRE — Construction 5.5B (19% owner occ’d) Crown contributed $339MM to
Slide 10: Home equity
Home equity Brokered Direct 10,000 30 10,000 30 8,000 25 25 8,000 20 20 6,000 6,000 15 15 4,000 4,000 10 10 2,000 5 2,000 5 0 0 0 0 Balance NCOs Balance NCOs HEA Other retail brokered FL MI OH IN IL KY Other • Brokered home equity: 22% of loans, 60% of 4Q • Michigan represented 23% of direct loans a
Slide 11: 2008 Outlook
2008 Outlook Category Growth, percentage, or bps range Net interest income Mid single digits Net interest margin 3.20-3.30% Noninterest income* High single digits Noninterest expense** Mid-to-high single digits Loans Mid-to-high single digits Core deposits Mid-to-high single digits Net charge-offs L
Slide 12: Strong tangible capital position
Strong tangible capital position 9.00% Tangible Common Equity as % of Tangible Assets 8.00% 6.46% 6.07% 5.99% Target : 6-6.5% 5.47% 5.27% 4.81% 4.74% 3.98% MI CMA KEY FITB STI BBT NCC HBAN USB WB 9.10% Tier 1 Ratio 8.30% 7.71% 7.55% 7.46% Target : 7.5-8% 7.37% 7.20% 7.19% 7.00% 6.52% BBT USB FITB HB
Slide 13: Increasing NII despite inverted yield curve
Increasing NII despite inverted yield curve Net interest income vs. market rates 800,000 6% Fwd 12/31/08 5% 4.63% 775,000 4% 3.84% 4.63% 750,000 3% 2% 2.50% 725,000 1% 700,000 0% 4Q06 1Q07 2Q07 3Q07 4Q07 Net Interest Income 10-year bond Fed funds target Average Fed Funds and 10-year rates in each qu
Slide 14: Fifth Third: building a better tomorrow
Fifth Third: building a better tomorrow Balancing growth and profitability, risks and rewards Capitalizing on strengths and addressing areas of weakness Communicating clearly with investors Delivering on promises Returning to above-par performance and shareholder returns 14 Fifth Third Bank | All Ri
Slide 15: Appendix
Appendix 15 Fifth Third Bank | All Rights Reserved
Slide 16: Nonperforming assets
Nonperforming assets Reported NPA's by loan type C&I – Total NPA’s of $1.06B, or 132 bps $184M Residential 17% – Commercial NPA’s of $695M; recent growth $339M Other driven by commercial construction and real 32% $30M estate, particularly in Michigan, Northern Ohio, and Florida 3% – Consumer NPA’s o
Slide 17: Residential real estate - topical areas
Residential real estate - topical areas* IL Mortgage: $10.5B outstanding IN 6% KY 7% 5% 1st liens: 100% ; weighted average LTV: 77%; weighted average origination FICO: 725 Origination FICO distribution: <659 13%; 660-689 11%; 690-719 17%; 720-749 18%; 750+ 41% MI (note: loans <659 includes CRA loans
Slide 18: Michigan market
Michigan market Loans % of NPAs % of NCOs % of (bn) FITB (mm) FITB (mm) FITB Economic weakness impacts C&I 4.54 18% 45 25% 8.0 17% commercial real estate market Commercial mortgage 3.69 31% 87 34% 6.4 42% Commercial construction 1.19 21% 93 36% 4.9 42% Issues: homebuilders, developers Commercial lea
Slide 19: Florida market
Florida market Loans % of NPAs % of NCOs % of (bn) FITB (mm) FITB (mm) FITB Issues: homebuilders, developers C&I 1.88 8% 21 12% 1.7 3% tied to weakening real estate market Commercial mortgage 2.03 17% 58 23% 1.4 9% Commercial construction 1.35 24% 67 26% 0.4 3% Issues: increasing severity of loss Co
Slide 20: 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
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