Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Barclays Global Financial Services Conference 2017
25 slides from Fifth Third Bancorp's conference presentation, Sep 13, 2017
Slide 1: Barclays Global Financial Services Conference 2017
Barclays Global Financial Services Conference 2017 Greg D. Carmichael President & Chief Executive Officer September 13, 2017 Exhibit 99.1
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: Well-positioned franchise and focused footprint
$141B Total Assets (#13)2 $92B Total Loans 62% Commercial 38% Consumer $100B Core Deposits $34B AUM 115% Modified LCR CET1: 10.6% Over 45,000 fee-free ATMs 12Q17 earnings release, average balances for assets, loans and core deposits; 2SNL Financial as of 2Q17; EOP loans including loans HFS 3EY 2016
Slide 4: The broader landscape remains uncertain
The broader landscape remains uncertain Many key macroeconomic indicators remain largely positive Lowered inflation expectations are dampening the possibility of future rate hikes The political atmosphere continues to be a significant contributor to the overall uncertainty, which has resulted in low
Slide 5: Managing for long term outperformance
Managing for long term outperformance Balance sheet actions reflect commitment to through-the-cycle performance Balanced capital management; industry leading capital return while still maintaining strong capital ratios Prudent management of interest rate risk in recognition of uncertain environment
Slide 6: Expect to generate positive operating leverage in 2017
Expect to generate positive operating leverage in 2017 Continue to focus on maintaining expense discipline in this environment Focusing on sustainable revenue growth by emphasizing profitable long-term relationships over near-term financial benefits Core ROA exceeds peer median and has improved more
Slide 7: North Star plans
North Star plans Middle Market, Vertical & Specialty Lending Capital Markets Wholesale Payments Personal Lending Mortgage Credit Card Consumer Households Insurance Wealth & Asset Management Commercial Consumer 2019 4Q annualized Example Projects: Middle Market expansion Asset-based lending New verti
Slide 8: Improving the efficiency of the Commercial lending processes
Improving the efficiency of the Commercial lending processes Initiative overview Objective: To become the premier middle market bank lender. Focusing on streamlining processes to enhance customer experience and improve employee productivity by: Reducing cycle times (by over 25%) Increasing scalabili
Slide 9: Enhancing capital markets capabilities
Enhancing capital markets capabilities Focused on new financial risk management capabilities Enhanced electronic delivery Proactive client analytics Digital client and relationship manager experience Optimizing clients’ credit and liquidity Scalable and flexible operations and technology Industry ch
Slide 10: Focused on return optimization to profitably grow the consumer portfolio
Focused on return optimization to profitably grow the consumer portfolio Objective: To profitably grow the consumer loan portfolio within targeted risk/return profile Major components of the initiative include: Consumer Credit Optimization Credit Card Home Equity Auto GreenSky Partnership Targeting
Slide 11: Vantiv update
Executed a sale of Vantiv shares in August 2017 resulting in after-tax gain of ~$650MM, retiring ~25MM FITB common shares (~3.4% of outstanding1) Sale triggered ~$650MM2 in additional future gross Tax Receivable Agreement (“TRA”) cash flows to be recognized over next 15+ years (see appendix) Expect
Slide 12: Targeting growth in strategic areas within risk appetite
Targeting growth in strategic areas within risk appetite Committed to higher profitability and attractive returns relative to peer group Building a more resilient bank to outperform through the cycle In summary Will create additional shareholder value Profitability Growth Stability
Slide 13: Appendix
Appendix © Fifth Thied Bancorp |All Rights Reserved FIFTH THIRD BANCORP
Slide 14: Vantiv TRA details
Vantiv TRA details Estimated GAAP income recognition – existing TRA2 (within noninterest income) ($s in millions; pre-tax) Estimated TRA cash flows – existing TRA2 ($s in millions; pre-tax) 25% (hypothetical post-tax reform) ~$820MM 4 1 Existing unrecognized gross TRA beginning 1/1/2018. 2 Existing
Slide 15: Second quarter 2017 highlights
Net interest income up $18 million versus adjusted Q1 NII1, and up $37 million year-over-year NIM up 3 bps versus adjusted Q1 NIM1, and up 13 bps year-over-year Tightly-managed noninterest expenses; down 3% sequentially and down 3% year-over-year Solid credit performance CCAR non-objection, includin
Slide 16: Second quarter 2017 in review
Pre-tax item included in 2Q17 results had a negative $0.01 EPS impact: A $9 million pre-tax (~$6 million after-tax)2 charge related to the valuation of the Visa total return swap Credit trends NCO ratio of 28 bps, down 12 bps sequentially and down 9 bps year-over-year Portfolio NPA ratio of 72 bps,
Slide 17: PPNR and efficiency ratio trends
PPNR and efficiency ratio trends1 1Non-GAAP measures: See Reg G reconciliation on pages 22 and 23 of this presentation and use of non-GAAP measures on page 32 of the 2Q17 earnings release 2Prior quarters include similar adjustments Adjusted PPNR up 17% vs. 1Q17 driven by: Diligent expense management
Slide 18: Strong liquidity profile
Strong liquidity profile 1 Available and contingent borrowing capacity (2Q17): FHLB ~$8.0B available, ~$13.7B total Federal Reserve ~$31.6B 1 The $500MM matured in 1Q17 2 The $650MM matured in 2Q17 Holding Company: Modified LCR of 115% Holding Company cash at June 30, 2017: $2.6B Cash currently suff
Slide 19: Balance sheet positioning
Balance sheet positioning Commercial Loans1,2 Investment Portfolio $127.1B; $68.6B Fixed, $58.5B Floating Consumer Loans1 Data as of 06/30/17 1Includes HFS Loans & Leases 2Fifth Third had $4.48B 1ML receive-fix swaps outstanding against C&I loans, which are being included in fixed 3Fifth Third had $
Slide 20: Interest rate risk management
Interest rate risk management Data as of 06/30/17 1Actual results may vary from these simulated results due to differences between forecasted and actual balance sheet composition, timing, magnitude, and frequency of interest rate changes, as well as other changes in market conditions and management
Slide 21: Limited exposure to certain retail subsectors
Limited exposure to certain retail subsectors ~33% to regional malls ~82% A/B properties ~43% underlying to large box/general retailer Stringent customer selection and large diversified portfolios that are conservatively leveraged Actively managing with monthly reviews ~98% of Specialty & general C&
Slide 22: Credit trends
Residential Mortgage Commercial & Industrial Home Equity & Automobile Commercial Real Estate *Excludes loans held-for-sale Credit trends
Slide 23: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See page 32 of the 2Q17 earnings release for a discussion on the use of non-GAAP financial measures
Slide 24: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation See page 32 of the 2Q17 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 (unaudited) June March December September June 2017 2017 2016 20
Slide 25: Regulation G non-GAAP reconciliation
Regulation G non-GAAP reconciliation LTM (last twelve months) corresponds to 3Q16 through 2Q17 1 See Reg G reconciliation on page 23 of this presentation and use of non-GAAP measures on page 32 of the 2Q17 earnings release 2Core average tangible common equity was used for peer core ROTCE comparisons
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