Fifth Third Bank | All Rights Reserved Annual Meeting of Shareholders April 19, 2011 Please refer to earnings release dated January 19, 2011 and 10-K dated February 28, 2011 for further information, including full results reported on a U.S. GAAP basis Exhibit 99.1 |
2 Fifth Third Bank | All Rights Reserved Agenda • Fifth Third today • 2010 results • Regulatory and economic environment • The customer experience • Share price performance • Looking ahead |
3 Fifth Third Bank | All Rights Reserved Key themes – Fifth Third Well-positioned for success and leadership in new banking landscape |
4 Fifth Third Bank | All Rights Reserved Fifth Third franchise Kentucky Tennessee Georgia Florida North Carolina West Virginia Pennsylvania Ohio Michigan Illinois Indiana Missouri $111 billion assets (#13) $82 billion deposits (#13) $12 billion market cap (#13) 1,312 banking centers 2,445 ATMs Headquartered in Cincinnati, Ohio with 15 affiliates across the Midwest and Southeast United States |
5 Fifth Third Bank | All Rights Reserved A foundation of continued growth Capital – foundation for continued growth — Capital base transformed through series of capital actions, including the repayment of TARP in early February 2011 – Tier 1 common capital has increased ~450bps — Capital levels supplemented by strong reserve levels – Loan loss reserves 3.88% of loans and 179% of NPLs — 9.0% pro forma Tier 1 common ratio is $1.0bn in excess of internal 8.0% target – 9.4% pro forma Tier 1 ratio excluding trust preferred securities to be phased-out beginning 2013 Credit – ongoing discipline driving steady improvement — Broad-based improvements in problem loans – 72% reduction in 90+ day delinquent loans since 3Q09 – NCO ratio of 1.86%, first time below 2.0% since 2Q08 – 164% PPNR / NCOs in 4Q10 — Balance sheet risk lowered through asset sales, resolutions – $1.3bn (43%) decline in NPLs since 4Q09 Profitability – recent results support positive momentum — PPNR remained stable throughout cycle — 5 consecutive quarters of increasing earnings with 3 consecutive profitable quarters — Return on assets 1.18%; return on average common equity 10.4% in 4Q10 1 Since December 31, 2008 2 Pre-provision net revenue (PPNR): net interest income plus noninterest income minus noninterest expense 3 Nonperforming loans and leases as a percent of portfolio loans, leases and other assets, including other real estate owned (excludes nonaccrual loans held-for-sale) 4 Excluding $510mm net charge-offs attributable to credit actions and $127mm in net BOLI settlement gains 1 2 |
6 Fifth Third Bank | All Rights Reserved Peer performance summary Continue to outperform peers on key value drivers FITB 2010 Large bank peers (2) 2010 Midwest peers (3) 2010 2010 performance vs. peers Avg core deposit growth, YoY 6% 1% 2% Outperformed Avg loan growth, YoY (2%) (5%) (7%) Outperformed NII growth, YoY 4% 0% 2% Outperformed Operating fee growth, YoY (1) 0% 2% 4% Underperformed Operating efficiency ratio (1) 63% 65% 64% Outperformed Operating ROE (1) 5% 4% 4% Outperformed NPA growth, YoY (33%) (18%) (28%) Outperformed (1) Excludes certain previously reported one-time charges from fee growth, efficiency ratio, and ROE . Reported fee growth was -43% (2009 included FTPS gain of $1.7 billion), reported efficiency ratio was 60.7%, reported ROE was 5.0%. (2) Large bank peer average consists of BBT, CMA, HBAN, KEY, MI, MTB, PNC, RF, STI, USB, WFC and ZION; (3) Midwest peer average consists of CMA, HBAN, KEY, MI, and USB. Source: SNL and company reports |
7 Fifth Third Bank | All Rights Reserved Credit metrics & reserve coverage outperform peers Source: SNL Financial and company reports. Data as of 4Q10. HFI NPAs and NPLs exclude loans held-for-sale and also exclude covered assets for BBT, USB, and ZION Reserve coverage strong relative to problem assets and losses FITB credit metrics lower than peers and represent position of relative strength |
8 Fifth Third Bank | All Rights Reserved Majority of footprint beginning to recover (Early cycle impact; strong industrial base) Source: Map from Moody’s Analytics. Categories based on Moody’s Analytics’ Adversity Index, which is a composite index of unemployment, industrial production, home prices and housing starts. Declining values lead to labeling as Recession, rising indicators are labeled as Recovery, rising indicators past previous growth peaks are labeled as Expansion, and mixed indicators are labeled as At Risk As of January 2011 In recession At risk Recovering Expanding |
9 Fifth Third Bank | All Rights Reserved Current operating environment • Emerging clarity on regulatory and capital environment as Dodd-Frank Act enters rule-making and implementation phase – Mitigation approaches will further differentiate banks • Expect continued improvements in asset quality – Real estate recovery slowed due to foreclosure delays and effect on home prices • Heightened competition for loans given customer deleveraging and sluggish borrower demand • Industry moving toward “more normalized” earnings, improved efficiency, reductions in required loan loss reserves, and higher capital ratios • Reinstatement of dividends and consolidation expected in 2011 and thereafter as firms manage capital positions and face a slowly recovering economy • Global economic environment will continue to impact near-term valuation |
10 Fifth Third Bank | All Rights Reserved Continuing to invest for the future |
11 Fifth Third Bank | All Rights Reserved Customer experience For the first time, Fifth Third’s score was higher than the ACSI Banks industry average (Bank of America, Citi, Wells Fargo, J.P. Morgan Chase and an aggregate of smaller banks)” Fifth Third Bank engaged the American Customer Satisfaction Index (ACSI) in custom research projects surveying Fifth Third Bank customers in the 3 quarter of 2010. In the surveys, ACSI used the same statistical methodology as the independently measured banks, Bank of America, J.P. Morgan Chase, Wells Fargo, and Citigroup Fifth Third posted its highest score ever, increasing its score by four points Consistently achieving leading customer satisfaction scores through focus on providing valuable products and services at fair prices Fifth Third finished second among large banks (CXPi 2010) Third-Party Recognition Fifth Third recipient of “Great Workplace Award” (March 2011) Fifth Third improved consistently over last 3 years rd |
12 Fifth Third Bank | All Rights Reserved 2010 total return (price appreciation plus dividends) Source: Bloomberg, 12/31/09-12/31/10 Market recognizes Fifth Third’s progress FITB +51% S&P Banks Index +20% S&P 500 Index +15% |
13 Fifth Third Bank | All Rights Reserved Key themes Well-positioned for success and leadership in new banking landscape |
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15 Fifth Third Bank | All Rights Reserved Cautionary statement This report 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 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic conditions and weakening in the economy, specifically the real estate market, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, are less favorable than expected; (2) deteriorating credit quality; (3) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (4) changes in the interest rate environment reduce interest margins; (5) prepayment speeds, loan origination and sale volumes, charge- offs and loan loss provisions; (6) Fifth Third’s ability to maintain required capital levels and adequate sources of funding and liquidity; (7) maintaining capital requirements may limit Fifth Third’s operations and potential growth; (8) changes and trends in capital markets; (9) problems encountered by larger or similar financial institutions may adversely affect the banking industry and/or Fifth Third (10) competitive pressures among depository institutions increase significantly; (11) effects of critical accounting policies and judgments; (12) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (13) legislative or regulatory changes or actions, or significant litigation, adversely affect Fifth Third, one or more acquired entities and/or the combined company or the businesses in which Fifth Third, one or more acquired entities and/or the combined company are engaged, including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain favorable ratings from rating agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to attract and retain key personnel; (17) ability to receive dividends from its subsidiaries; (18) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (19) effects of accounting or financial results of one or more acquired entities; (20) difficulties in separating Fifth Third Processing Solutions from Fifth Third; (21) loss of income from any sale or potential sale of businesses that could have an adverse effect on Fifth Third’s earnings and future growth;(22) ability to secure confidential information through the use of computer systems and telecommunications networks; and (23) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity. You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. |