![]() 1Q12 Earnings Conference Call April 19, 2012 Please refer to earnings release dated April 19, 2012 for further information. Exhibit 99.1 © Fifth Third Bank | All Rights Reserved |
![]() 2 Cautionary statement © Fifth Third Bank | All Rights Reserved 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 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 from the separation of Vantiv, LLC, formerly 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. |
![]() 3 © Fifth Third Bank | All Rights Reserved Net income available to common shareholders of $421mm ($0.45 per diluted common share), vs. $305mm ($0.33 per share) in 4Q11 and $88mm ($0.10 per share) in 1Q11 — 1Q12 return on assets (ROA) of 1.49%; 1.20% excluding items below — Pre-provision net revenue (PPNR)* of $694mm, or $569mm excluding items below Credit trends remain favorable — Net charge-offs (NCOs) of $220mm (1.08% of loans and leases) down $19mm (8 bps) vs. 4Q11; lowest since 4Q07 — Total NPAs of $1.8bn including loans HFS down $164mm or 8% sequentially; lowest since 1Q08 — NPA ratio of 2.03% down 20 bps from 4Q11, NPL ratio of 1.64% down 12 bps from 4Q11; gross NPL inflows of $351mm down 11% sequentially — Provision expense `of $91mm, up $36mm vs. 4Q11; loan loss allowance down $129mm sequentially; allowance to loan ratio of 2.59%, 127% of NPAs, 157% of nonperforming loans and leases, and 2.4x 1Q12 annualized NCOs — Total delinquencies (loans 30-89 days past due and >90 days past due) down 11% sequentially, lowest since 3Q05 — No direct European sovereign exposure; total exposure to European peripheral borrowers <$0.2bn; total exposure to European banks <$0.1bn** Strong capital ratios; exceed fully phased-in Basel III proposed standards — Tier 1 common ratio 9.64%*, up 29 bps sequentially (pro forma*** ~10.0% on a fully-phased in Basel III-adjusted basis, estimated among highest of large cap U.S. banks) — Tier 1 capital ratio 12.19%, Total capital ratio 16.06%, Leverage ratio 11.31% — Tangible common equity ratio* of 9.02% excluding unrealized gains/losses; 9.37% including them — Book value per share of $14.30, tangible book value per share* of $11.64 (up 3% from 4Q11) Significant items in 1Q12 results related to Vantiv $ in mm, except per share data Net income impact After tax EPS impact Pre-tax After tax Gains associated with Vantiv IPO $115 ~$75 ~$0.08 Vantiv debt termination-related charges (estimated) ~($36) ~($23) ~($0.02) Gains on higher valuation of Vantiv puts and warrants $46 ~$30 ~$0.03 1Q12 in review * Non-GAAP measure; See Reg. G reconciliation in appendix ** “European” includes non-Eurozone countries; “European peripheral” includes Greece, Ireland, Italy, Portugal, Spain *** Current estimate (non-GAAP), subject to final rule-making and clarification by U.S. banking regulators; currently assumes unrealized securities gains are included in common equity for purposes of this calculation |
![]() 4 Financial summary • 1Q12 earnings of $0.45 per diluted share driven by strong core performance and gains associated with Vantiv’s IPO – Included $115mm pre-tax gains associated with Vantiv’s IPO and $46mm in positive valuation adjustments on the Vantiv warrant and put option, as well as estimated $36mm pre-tax charges related to Vantiv’s bank debt refinancing and termination • 13% return on average common equity; 16% return on average tangible common equity^ • Average transaction deposits up 2%; core deposits up 1% sequentially • Average loans* up 5% from 1Q11, reflecting strength in C&I, commercial lease, residential mortgage, and auto loans Actual Seq. YOY ($ in millions) 1Q11 4Q11 1Q12 $ % $ % Average Balances Commercial loans* $43,410 $44,636 $45,913 $1,277 3% $2,503 6% Consumer loans* 34,226 35,278 35,587 309 1% 1,361 4% Total loans & leases* $77,636 $79,914 $81,500 $1,586 2% $3,864 5% Core deposits $77,524 $80,587 $81,686 $1,099 1% $4,162 5% Income Statement Data Net interest income (taxable equivalent) $884 $920 $903 ($17) (2%) $19 2% Provision for loan and lease losses 168 55 91 36 64% (77) (46%) Noninterest income 584 550 769 219 40% 185 32% Noninterest expense 918 993 973 (20) (2%) 55 6% Net Income $265 $314 $430 $116 37% $165 62% Net income available to common shareholders $88 $305 $421 $116 38% $333 377% Pre-provision net revenue^ $545 $473 $694 $221 47% $149 27% Earnings per share, diluted $0.10 $0.33 $0.45 $0.12 36% $0.35 350% Net interest margin 3.71% 3.67% 3.61% (6bps) (2%) (10bps) (3%) Return on average assets 0.97% 1.08% 1.49% 41bps 38% 52bps 54% Return on average common equity 3.1% 9.5% 13.1% 360bps 38% 1000bps 323% Return on average tangible common equity^ 4.2% 11.9% 16.2% 430bps 36% 1200bps 286% ^ Non-GAAP measure; See Reg. G reconciliation in appendix Note: Numbers may not sum due to rounding and percentages are calculated on actual dollar amounts not the rounded dollar amounts © Fifth Third Bank | All Rights Reserved |
![]() 5 Net interest income NII and NIM (FTE) • Sequential net interest income trends reflected lower yields on loans and lower reinvestment rates on securities given the current interest rate environment partially offset by growth in C&I, commercial lease, residential mortgage, and auto loan balances – NII down $17mm, or 2%, sequentially and up $19mm, or 2% year-over-year – NIM down 6 bps sequentially and 10 bps year-over-year • Yield on interest-earning assets declined 5 bps sequentially and 29 bps year-over-year * Represents purchase accounting adjustments included in net interest income. Yield Analysis 1Q11 4Q11 1Q12 (bps) YoY (bps) Commercial and industrial loans 4.45% 4.28% 4.20% (8) (25) Commercial mortgage loans 4.11% 3.89% 3.95% 6 (16) Commercial construction loans 3.15% 3.04% 3.04% - (11) Commercial leases 4.17% 3.87% 3.79% (8) (38) Residential mortgage loans 4.67% 4.16% 4.17% 1 (50) Home equity 3.96% 3.87% 3.85% (2) (11) Automobile loans 5.10% 4.27% 3.99% (28) (111) Credit card 10.43% 9.66% 9.43% (23) (100) Other consumer loans and leases 18.54% 36.95% 40.13% 318 2,159 Total loans and leases 4.67% 4.41% 4.34% (7) (33) Taxable securities 3.96% 3.75% 3.68% (7) (28) Tax exempt securities 4.77% 5.42% 5.60% 18 83 Other short-term investments 0.25% 0.24% 0.26% 2 1 Total interest-earning assets 4.47% 4.23% 4.18% (5) (29) Total interest-bearing liabilities 1.02% 0.79% 0.79% - (23) Net interest spread 3.45% 3.44% 3.39% (5) (6) © Fifth Third Bank | All Rights Reserved ($mm) $903 Seq. |
![]() 6 Balance sheet • C&I loans up 5% sequentially and 15% from 1Q11 • CRE loans down 3% sequentially and 13% from 1Q11 • Consumer loans up 1% sequentially and 4% from 1Q11 • Average warehoused residential mortgage loans held-for-sale were $2.1B in 1Q12 versus $2.2B in 4Q11 +1% QoQ; +5% YoY • Core deposit to loan ratio of 100%, flat versus 1Q11 • DDAs flat sequentially and up 21% year-over-year • Consumer average transaction deposits up 1% sequentially and 7% from the previous year • Commercial average transaction deposits up 3% sequentially and 14% from the previous year Average loan growth ($B)^ Average core deposit growth ($B) (2%) QoQ; +1%YoY Average wholesale funding ($B) • Wholesale funding relatively flat year-over-year – Non-core deposits up 3% sequentially – Short term borrowings down 12% sequentially – Long-term debt up 1% sequentially ^ Excludes loans held-for-sale Note: Numbers may not sum due to rounding © Fifth Third Bank | All Rights Reserved |
![]() 7 Noninterest income • Noninterest income of $769mm increased $219mm, or 40%, from prior quarter; driven by the net benefit of Vantiv’s IPO, related debt refinancing, and warrant gains; lower charges on the Visa total return swap; and higher mortgage banking and corporate banking revenue • 1Q12 debit interchange revenue of $29mm, versus $29mm in 4Q11 and $54mm in 1Q11 • Credit costs recorded in noninterest income: Noninterest income Note: Numbers may not sum due to rounding Actual ($ in millions) 1Q11 4Q11 1Q12 Gain / (loss) on sale of loans $17 $9 $5 Commercial loans HFS FV adjustment (16) (18) (1) Gain / (loss) on sale of OREO properties (2) (22) (17) Mortgage repurchase costs (2) (1) (2) Total credit-related revenue impact ($3) ($33) ($14) Actual Seq. YOY 1Q11 4Q11 1Q12 $ % $ % ($ in millions) Service charges on deposits $124 $136 $129 ($7) (5%) $5 4% Corporate banking revenue 86 82 97 15 18% 11 13% Mortgage banking net revenue 102 156 204 48 31% 102 100% Investment advisory revenue 98 90 96 6 7% (2) (1%) Card and processing revenue 80 60 59 (1) (2%) (21) (27%) Other noninterest income 81 24 175 151 629% 94 116% Securities gains, net 8 5 9 4 80% 1 13% Securities gains, net - 5 (3) - 3 NM (5) NM non-qualifying hedges on MSRs Noninterest income $584 $550 $769 $219 40% $185 32% © Fifth Third Bank | All Rights Reserved |
![]() 8 Noninterest expense Noninterest expense • Noninterest expense of $973mm decreased $20mm, or 2%, compared with 4Q11, driven by a $23mm benefit from resolution of certain outstanding disputes for non-income tax related assessments, partially offset by seasonally high FICA and unemployment costs; additions to litigation reserves; debt termination charges; and severance expense • Credit costs recorded in noninterest expense: Note: Numbers may not sum due to rounding © Fifth Third Bank | All Rights Reserved Actual Seq. YOY 1Q11 4Q11 1Q12 $ % $ % ($ in millions) Salaries, wages and incentives $351 $393 $399 $6 2% $48 14% Employee benefits 97 84 112 28 32% 15 15% Net occupancy expense 77 79 77 (2) (2%) - - Technology and communications 45 48 47 (1) (2%) 2 4% Equipment expense 29 27 27 - (1%) (2) (6%) Card and processing expense 29 28 30 2 5% 1 3% Other noninterest expense 290 334 281 (53) (16%) (9) (3%) Noninterest expense $918 $993 $973 ($20) (2%) $55 6% Actual ($ in millions) 1Q11 4Q11 1Q12 Mortgage repurchase expense $8 $18 $15 Provision for unfunded commitments (16) (6) (2) Derivative valuation adjustments (0) (5) (4) OREO expense 13 8 5 Other problem asset related expenses 27 28 19 Total credit-related operating expenses $31 $44 $34 |
![]() 9 Pre-tax pre-provision earnings* PPNR trend *Non-GAAP measure. See Reg. G reconciliation in appendix. ^ Prior quarters include similar adjustments. ^^ See Slide 7 and Slide 8 for detailed breakout of credit-related items. • PPNR of $694mm up 47% from 4Q11 levels and up 27% over prior year reflecting increased noninterest income and decreased noninterest expense, partially offset by lower net interest income • Adjusted PPNR of $584mm, including negative adjustments totaling $110mm, up 10% sequentially and 7% year-over-year PPNR reconciliation © Fifth Third Bank | All Rights Reserved ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 Income before income taxes (U.S. GAAP) (a) $377 $506 $530 $418 $603 Add: Provision expense (U.S. GAAP) (b) 168 113 87 55 91 PPNR (a) + (b) $545 $619 $617 $473 $694 Adjustments to remove (benefit) / detriment^: Vantiv IPO gain - - - - (115) Vantiv debt refinancing - - - - 36 Valuation of 2009 Visa total return swap 9 4 17 54 19 Securities (gains) / losses (8) (6) (26) (5) (9) Non-income tax related assessment resolution - - - - (23) Vantiv warrants & puts 2 (29) (3) (10) (46) Extinguishment (gains) / losses (3) (6) - - 9 Termination of certain borrowings and hedging transactions - - 28 - - Severance expense - - - - 6 Litigation reserve additions 1 - 4 19 13 Adjusted PPNR $546 $582 $637 $531 $584 Credit-related items^^: In noninterest income 3 28 25 33 14 In noninterest expense 31 36 45 44 34 Credit-adjusted PPNR** $580 $646 $707 $608 $632 ** There are limitations on the usefulness of credit-adjusted PPNR, including the significant degree to which changes in credit and fair value are integral, recurring components of the Bancorp’s core operations as a financial institution. This measure has been included herein to facilitate a greater understanding of the Bancorp’s financial condition. |
![]() 10 Strong capital position Strong capital ratios under Basel I; estimated Basel III Tier 1 common ratio of 10.0%* Tangible common equity ratio^** Tier I capital ratio Total risk-based capital ratio Tier 1 common equity** © Fifth Third Bank | All Rights Reserved C urrent period regulatory capital data ratios are estimated. ^ Tangible common equity ratio excluding (dark blue) and including (light blue) unrealized securities gains / losses after-tax * Estimate, subject to final rule-making and clarification by U.S. banking regulators; currently assumes unrealized securities gains are included in common equity for purposes of this calculation **Non-GAAP measure. See Reg. G reconciliation in appendix. |
![]() 11 Net charge-offs Net charge-offs by loan type Net charge-offs by geography Net charge-offs ($mm) $mm % Commercial $102 46% Consumer $118 54% Total $220 100% Actual Seq. YOY ($ in millions) 1Q11 4Q11 1Q12 $ % $ % C&I $83 $62 $54 ($8) (13%) ($29) (35%) Commercial mortgage 54 47 30 (17) (36%) (24) (44%) Commercial construction 26 4 18 14 350% (8) (31%) Commercial lease 1 - - - NM (1) (100%) Commercial $164 $113 $102 ($11) (10%) ($62) (38%) Residential mortgage loans 65 36 37 1 3% (28) (43%) Home equity 63 50 46 (4) (8%) (17) (27%) Automobile 20 13 9 (4) (31%) (11) (55%) Credit card 31 21 20 (1) (5%) (11) (35%) Other consumer 24 6 6 - - (18) (75%) Consumer $203 $126 $118 ($8) (6%) ($85) (42%) Total net charge-offs $367 $239 $220 ($19) (8%) ($147) (40%) Year-over-year charge-offs down significantly due to improving credit trends $mm % Florida $47 22% Michigan 46 21% Subtotal $93 43% Other 127 57% Total $220 100% © Fifth Third Bank | All Rights Reserved $239 $220 $367 $304 $262 |
![]() © Fifth Third Bank | All Rights Reserved Nonperforming assets • NPAs of $1.7B excluding held-for-sale down 21% year-over-year • Commercial NPAs of $1.2B, down 23% from the previous year – Homebuilder / developer NPAs of $123mm; represent 10% of total commercial NPAs • Consumer NPAs of $449mm, down 17% from the previous year • NPAs in held-for-sale of $117mm C&I / Lease $485mm, 29% CRE $739mm, 44% Residential $393mm, 24% Other Consumer $56mm, 3% ILLINOIS INDIANA FLORIDA TENNESSEE KENTUCKY OHIO MICHIGAN NORTH CAROLINA OTHER / NATIONAL NPAs exclude loans held-for-sale. Nonperforming assets ($mm) $1,944 $1,816 Nonperforming assets continue to improve $1,673 $2,126 $2,088 12 |
![]() 13 NPL Rollforward Significant improvement in NPL inflows over past year Note: Numbers may not sum due to rounding © Fifth Third Bank | All Rights Reserved NPL HFI Rollforward Commercial 1Q11 2Q11 3Q11 4Q11 1Q12 Beginning NPL Amount 1,214 1,211 1,253 1,155 1,058 Transfers to nonperforming 329 340 217 189 168 Transfers to performing (2) (10) (11) - (1) Transfers to performing (restructured) - - (1) - (2) Transfers from held for sale - - - 4 - Transfers to held for sale (16) (15) (58) (3) (3) Loans sold from portfolio (12) (7) (17) (21) (8) Loan paydowns/payoffs (108) (91) (77) (149) (94) Transfer to other real estate owned (37) (39) (20) (14) (36) Charge-offs (164) (141) (136) (113) (101) Draws/other extensions of credit 7 5 5 10 7 Ending Commercial NPL 1,211 1,253 1,155 1,058 988 Consumer 1Q11 2Q11 3Q11 4Q11 1Q12 Beginning NPL Amount 466 434 386 383 380 Transfers to nonperforming 232 214 201 205 184 Transfers to performing (35) (34) (33) (28) (36) Transfers to performing (restructured) (50) (41) (39) (39) (36) Transfers to held for sale - - - - - Loans sold from portfolio (1) (21) - - (4) Loan paydowns/payoffs (18) (27) (27) (26) (28) Transfer to other real estate owned (18) (15) (16) (30) (18) Charge-offs (144) (126) (91) (87) (80) Draws/other extensions of credit 2 2 2 2 2 Ending Consumer NPL 434 386 383 380 364 Total NPL 1,645 1,639 1,538 1,438 1,352 Total new nonaccrual loans - HFI 561 554 418 394 352 |
![]() 14 Continued improvement in credit trends FITB credit metrics are in line with or better than peers NPA ratio vs. peers Net charge-off ratio vs. peers Loans 90+ days delinquent % vs. peers Loans 30-89 days delinquent % vs. peers (7.5%)* (HFS transfer) 3.8% Before credit actions 5.0%* 2.3% Before credit actions © Fifth Third Bank | All Rights Reserved Peer average includes: BBT, CMA, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC, and ZION Source: SNL Financial and company filings. All ratios exclude loans held-for-sale and covered assets for peers where appropriate. * 4Q08 NCOs included $800mm in NCOs related to commercial loans moved to held-for-sale; 3Q10 NCOs included $510mm in NCOs related to loans sold or moved to held-for-sale |
![]() 15 Strong reserve position Peer average includes: BBT, CMA, HBAN, KEY, MTB, PNC, RF,STI, USB, WFC, and ZION Source: SNL and company reports. NPAs / NPLs exclude held-for-sale portion for all banks as well as covered assets for BBT, USB, and ZION 1Q12 coverage ratios strong relative to peers (4Q11) Industry leading reserve levels Fifth Third (1Q12) Peer Average (4Q11) © Fifth Third Bank | All Rights Reserved |
![]() 16 Mortgage repurchase overview 18% rise in 1Q12 outstanding claims balance from prior quarter — Within recent norms of quarterly increases and decreases Virtually all sold loans and the majority of new claims relate to agencies Majority of outstanding balances of the serviced for others portfolio relates to origination activity in 2009 and later Private claims and exposure relate to whole loan sales (no outstanding first mortgage securitizations) Repurchase Reserves* ($ in millions) Outstanding Counterparty Claims ($ in millions) Outstanding Balance of Sold Loans ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 Beginning balance 101 87 80 69 72 Net reserve additions 10 15 20 20 17 Repurchase losses (23) (23) (31) (17) (17) Ending balance 87 80 69 72 71 2005 and prior GSE GNMA Private Total $6,680 $273 $492 $7,445 2006 1,550 55 250 1,855 2007 2,509 80 215 2,804 2008 2,406 633 0.3 3,039 2009 9,462 3,563 0.7 13,026 2010 and later 26,338 5,884 0.3 32,222 Total $48,945 $10,488 $958 $60,391 *Includes reps and warranty reserve ($55mm) and reserve for loans sold with recourse ($17mm) % Current 40% 42% 49% 41% 37% © Fifth Third Bank | All Rights Reserved 135 110 64 47 60 17 21 19 18 $145 $127 $85 $66 $78 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 1Q11 2Q11 3Q11 4Q11 1Q12 Agencies Private Total Claims 10 98% of outstanding balance of loans sold 77% of current quarter outstanding claims Preponderance of private sales prior to 2006 Note: Numbers may not sum due to rounding |
![]() 17 *“European” includes non-Eurozone countries; “European peripheral” includes Greece, Ireland, Italy, Portugal, Spain Traditional banking focus consistent with direction of financial reform Business profile positions Fifth Third well – today and in the future • Do not require substantial changes to Fifth Third’s business model or asset mix with attendant execution risk • Fifth Third’s business model is driven by traditional banking activities, consistent with direction of financial reform Dodd-Frank / Basel III • International activity primarily related to trade finance and lending to U.S. subsidiaries of foreign companies (e.g. Fifth Third loss in Lehman bankruptcy expected to be less than $2mm) Financial system interconnectedness • Little to no impact (de minimis market maker in derivatives, proprietary trading) – Low trading business activity; daily VaR ~$1mm or less – Small private equity portfolio <$200mm Volcker rule • Other large firms facing significant litigation related to mortgage securitizations, GSE repurchases, and private label mortgage repurchases • Fifth Third’s mortgage risks are manageable – Quarterly mortgage repurchase costs ~$20mm – Total mortgage securitizations outstanding $19mm (2003 HELOC performing well) Mortgage Putback / Litigation risk • No significant business at Fifth Third impaired during crisis Effect of crisis on core business • No direct European sovereign exposure European banks and sovereign debt exposure © Fifth Third Bank | All Rights Reserved No originations of CDOs, securitizations on behalf of others – Didn’t originate or sell subprime mortgages or Option ARMs Total exposure to European peripheral borrowers less than $0.2 billion* Total exposure to European banks less than $0.1B |
![]() 18 Appendix © Fifth Third Bank | All Rights Reserved |
![]() 19 Well-positioned for the future • Holding company cash currently sufficient for more than 3 years of obligations; no holding company and minimal Bank unsecured debt maturities until 2013 • Fifth Third has completely exited all crisis-era government support programs Superior capital and liquidity position • NCOs of 1.1%; 2.4x reserves / annualized NCOs • Substantial reduction in exposure to CRE since 1Q09; relatively low CRE exposure versus peers • Very low relative exposure to areas of concern, e.g. European financials, mortgage repurchase risk Proactive approach to risk management • 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 ~46% of total revenues Diversified traditional banking platform • PPNR has remained strong throughout the credit cycle • PPNR substantially exceeds annual net charge-offs (315% PPNR / NCOs^ in 1Q12) • 1.5% ROAA; 16% return on average tangible common equity^ Industry leader in earnings power ^ Non-GAAP measure. See Reg. G reconciliation on slides 34-35. © Fifth Third Bank | All Rights Reserved Fifth Third is one of the few large banks that have no TLGP-guaranteed debt to refinance in 2012 |
![]() 20 Balance Sheet: Average loans & leases (excl. HFS) Average transaction deposits Income Statement: Net interest income* Net interest margin* Noninterest income Noninterest expense Pre-provision net revenue** ROA Effective tax rate Asset Quality: Net charge-offs Loan loss allowance Nonperforming assets^ Capital Ratios # : Tier I common equity** (Basel III) Tier I leverage Tier I capital Total risk-based capital Category Fifth Third: Outlook 2Q12 Outlook $81.5bn $77.1bn ~$895mm +/- Down ~5-6 bps +/- vs.1Q12 ~$625mm +/- Down ~$15mm vs. 1Q12 ~1Q12 levels (ex-Vantiv) +/- ~1.1 -1.2% ~32-33% for 2Q12 (29% FY2012) *Presented on a fully-taxable equivalent basis. ** Non-GAAP measure. See Reg. G reconciliation on slides 34-35. ^ Ratio as a percent of loans excluding held-for-sale; allowance expectation assumes current expectation for credit and economic trends and is subject to review at quarter-end. ^^ Annualized net charge-offs as a percentage of average loans and leases # Current period regulatory capital data ratios are estimated; see slide 35 for estimation of Basel III phased-in Tier 1 common 1Q12 Actual Outlook as of April 19, 2012 Solid growth vs. 1Q12 Stable vs. 1Q12 Down ~$25mm vs. 1Q12 (<1.00%^^) Lower vs. 1Q12 Down ~$75-100mm vs. 1Q12 $903mm 3.61% $769mm ($644mm ex-Vantiv) $973mm $694mm ($569mm ex-Vantiv) 1.5% (1.2% ex-Vantiv) 29% 9.6% (~10.0%) 11.3% 12.2% 16.1% $220mm(1.08%^^) $2.1bn (2.59%) $1.7bn (2.03%) Please see cautionary statement on slide 2 for risk factors related to forward-looking statements © Fifth Third Bank | All Rights Reserved |
![]() 21 Total Exposure Funded Exposure Total Exposure Funded Exposure Total Exposure Funded Exposure Total Exposure Funded Exposure (amounts in $mm) Peripheral Europe - - 11 - 168 124 179 124 Other Eurozone - - 44 34 1,275 742 1,319 776 Total Eurozone - - 55 34 1,443 866 1,498 900 Other Europe - - 23 18 820 496 843 514 Total Europe - - 77 52 2,263 1,362 2,340 1,414 Sovereigns Financial Institutions Non-Financial Entities Total European Exposure Total exposure includes funded and unfunded commitments, net of collateral; funded exposure excludes unfunded exposure Peripheral Europe includes Greece, Ireland, Italy, Portugal and Spain Eurozone includes countries participating in the European common currency (Euro) Other Europe includes European countries not part of the Euro (primarily the United Kingdom and Switzerland) Data above includes exposure to U.S. subsidiaries of Europe-domiciled companies Note: Numbers may not sum due to rounding z • International exposure primarily related to trade finance and financing activities of U.S. companies with foreign parent or overseas activities of U.S. customers • No European sovereign exposure (total international sovereign exposure $3mm) • Total exposure to European financial institutions <$80mm • Total exposure to five peripheral Europe countries <$200mm • $900mm in funded exposure to Eurozone-related companies (~1% of total loan portfolio) z z © Fifth Third Bank | All Rights Reserved |
![]() 22 Available and contingent borrowing capacity (1Q12): – FHLB ~$11B – Federal Reserve ~$24B Holding Company cash at 3/31/12: $3.2B Cash currently sufficient to satisfy all fixed obligations in a stressed environment for more than 3 years (debt maturities, common and preferred dividends, interest and other expenses) without accessing capital markets; relying on dividends from subsidiaries; proceeds from asset sales Expected cash obligations over the next 24 months — ~$591mm common dividends — ~$70mm Series G preferred dividends — ~$889mm interest and other expenses Holding company unsecured debt maturities ($mm) Bank unsecured debt maturities ($mm – excl. Brokered CDs) Heavily core funded Strong liquidity profile S-T wholesale 6% © Fifth Third Bank | All Rights Reserved |
![]() 23 Non-performing assets and net charge-offs: Product view* Total NPAs Total NCOs *NPAs exclude loans held-for-sale. © Fifth Third Bank | All Rights Reserved |
![]() Total NPAs Total NCOs Non-performing assets and net charge-offs: Geographic view* *NPAs exclude loans held-for-sale. 24 © Fifth Third Bank | All Rights Reserved |
![]() 25 Troubled debt restructurings overview Successive improvement in vintage performance during 2008 and 2009 as volume of modification increased Fifth Third’s mortgage portfolio TDRs have redefaulted at a lower rate than GSE composites Of $1.8B in consumer TDRs, $1.6B were on accrual status and $201mm were nonaccruals — $1.2B of TDRs are current and have been on the books 6 or more months; within that, ~$1B of TDRs are current and have been on the books for more than a year As current TDRs season, their default propensity declines significantly — We see much lower defaults on current loans after a vintage approaches 12 months since modification TDR performance has improved in newer vintages Redefault benchmarks Source: Fifth Third and OCC/OTS data through 3Q11 Mortgage TDR 60+ redefault trend by vintage* 1Q08 3% 2Q08 7% 3Q08 7% 4Q08 8% 1Q09 11% 2Q09 12% Months since modification Mortgage TDR 60+ redefault rate: Fifth Third comparison (January 1, 2008 through December 2011)* Fannie Mae Industry portfolio loans Fifth Third Volume by vintage Freddie Mac 3Q09 12% $1.3B current consumer TDRs (%) 4Q09 7% 2008 2009- 2011 1Q10 7% 2Q10 5% * Fifth Third data includes changes made to align with OCC/OTS methodology (i.e. excludes government loans, closed loans and OREO from calculations) © Fifth Third Bank | All Rights Reserved |
![]() 26 Commercial & industrial* Loans by geography Credit trends Loans by industry Comments • Commercial & Industrial loans represented 39% of total loans and 24% of net charge-offs • 25% of 1Q12 losses on loans to companies in real estate related industries – Loans to real estate related industries of $2.5B (8%); 1Q12 NCO ratio of 0.53% • FL represented 8% of 1Q12 losses, 6% of loans; MI represented 14% of losses, 10% of loans *NPAs exclude loans held-for-sale. © Fifth Third Bank | All Rights Reserved ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $27,344 $28,099 $29,258 $30,783 $32,155 Avg Loans $27,331 $27,909 $28,777 $29,891 $31,371 90+ days delinquent $8 $7 $9 $4 $2 as % of loans 0.03% 0.02% 0.03% 0.01% 0.01% NPAs $620 $638 $588 $509 $474 as % of loans 2.27% 2.27% 2.01% 1.65% 1.47% Net charge-offs $83 $76 $55 $62 $54 as % of loans 1.22% 1.10% 0.76% 0.82% 0.69% C&I Accommodation 2% Construction 4% Finance & Insurance 13% Manufacturing 24% Real Estate 4% Retail Trade 4% Auto Retailers 2% Other 35% MI 10% OH 17% IN 4% IL 14% KY 4% TN 4% NC 3% Other / National 38% FL 6% Auto Manufacturing 1% Wholesale Trade 11% |
![]() ![]() 27 Commercial mortgage* Loans by geography Credit trends Loans by industry Comments *NPAs exclude loans held-for-sale. • Commercial mortgage loans represented 12% of total loans and 13% of net charge-offs • Owner occupied 1Q12 NCO ratio of 0.9%, non-owner occupied 1Q12 NCO ratio of 1.5% • Loans from FL/MI represented 38% of portfolio loans, 57% of portfolio losses in 1Q12 ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $10,510 $10,233 $10,330 $10,138 $9,909 Avg Loans $10,685 $10,394 $10,050 $10,262 $10,007 90+ days delinquent $8 $12 $9 $3 $30 as % of loans 0.08% 0.11% 0.09% 0.03% 0.30% NPAs $696 $710 $630 $637 $568 as % of loans 6.63% 6.94% 6.10% 6.28% 5.73% Net charge-offs $54 $47 $47 $47 $30 as % of loans 2.04% 1.83% 1.86% 1.82% 1.18% Commercial mortgage © Fifth Third Bank | All Rights Reserved |
![]() ![]() 28 ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $1,980 $1,778 $1,213 $1,020 $901 Avg Loans $2,030 $1,918 $1,752 $1,132 $992 90+ days delinquent $23 $48 $43 $1 $0 as % of loans 1.16% 2.71% 3.65% 0.09% 0.05% NPAs $248 $240 $238 $179 $171 as % of loans 12.53% 13.52% 19.60% 17.60% 19.02% Net charge-offs $26 $20 $35 $4 $18 as % of loans 5.24% 4.09% 7.90% 1.37% 7.30% Commercial construction Commercial construction* Loans by geography Credit trends Loans by industry Comments *NPAs exclude loans held-for-sale. • Commercial construction loans represented 1% of total loans and 8% of net charge-offs • Loans from FL/MI represented 27% of portfolio loans, 97% of portfolio losses in 1Q12 © Fifth Third Bank | All Rights Reserved |
![]() 29 ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $651 $597 $578 $512 $423 90+ days delinquent $1 $1 $3 $0 $1 as % of loans 0.16% 0.19% 0.59% 0.03% 0.15% NPAs $249 $243 $207 $155 $123 as % of loans 38.30% 40.67% 35.87% 30.34% 29.06% Net charge-offs $22 $14 $18 $2 $14 as % of loans 13.04% 8.91% 11.50% 1.28% 11.95% Homebuilders/developers Homebuilders/developers* (included in previous slides) Loans by geography Credit trends Loans by industry Comments • Originations of builder/developer loans suspended in 2007 • Remaining portfolio balance of $423mm, down 87% from peak of $3.3B in 2Q08; represents approximately 0.5% of total loans and 0.9% of commercial loans • $14mm of NCOs (17% commercial mortgage, 81% commercial construction, 2% C&I) • $123mm of NPAs (53% commercial mortgage, 38% commercial construction, 9% C&I) *NPAs exclude loans held-for-sale. © Fifth Third Bank | All Rights Reserved |
![]() 30 © Fifth Third Bank | All Rights Reserved Residential mortgage 1 liens: 100%; weighted average LTV: 73.6% Weighted average origination FICO: 749 Origination FICO distribution: <660 7%; 660-689 6%; 690-719 10%; 720-749 13%; 750+ 52%; Other^ 12% (note: loans <660 includes CRA loans and FHA/VA loans) Origination LTV distribution: <=70 36%; 70.1-80 38%; 80.1-90 7%; 90.1-95 4%; >95 15% Vintage distribution: 2012 8%; 2011 28%; 2010 17%; 2009 5%; 2008 6%; 2007 7%; 2006 7%; 2005 11%; 2004 and prior 11% % through broker: 14%; performance similar to direct Loans by geography Credit trends Portfolio details Comments ^ Includes acquired loans where FICO at origination is not available • Residential mortgage loans represented 14% of total loans and 17% of net charge-offs • FL portfolio 16% of residential mortgage loans and 50% of portfolio losses ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $9,530 $9,849 $10,249 $10,672 $11,094 Avg Loans $9,282 $9,654 $10,006 $10,464 $10,828 90+ days delinquent $98 $87 $91 $79 $73 as % of loans 1.03% 0.88% 0.89% 0.74% 0.66% NPAs $338 $338 $337 $350 $331 as % of loans 3.55% 3.43% 3.29% 3.28% 2.98% Net charge-offs $65 $36 $36 $36 $37 as % of loans 2.82% 1.50% 1.41% 1.38% 1.39% Residential mortgage MI 15% OH 25% IN 7% IL 12% KY 6% TN 2% NC 5% Other / National 12% FL 16% st |
![]() ![]() ![]() 31 Home equity loans represented 13% of total loans and 21% of net charge-offs Approximately 14% of portfolio in broker product generated 33% total loss Approximately one third of Fifth Third 2 liens are behind Fifth Third 1 liens 2005/2006 vintages represent approximately 28% of portfolio; account for 50% of losses Aggressive home equity line management strategies in place ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $9,585 $9,462 $9,380 $9,038 $8,986 90+ days delinquent $59 $61 $62 $56 $55 as % of loans 0.62% 0.64% 0.66% 0.62% 0.62% Net charge-offs $39 $34 $35 $30 $31 as % of loans 1.64% 1.46% 1.50% 1.33% 1.39% Home equity - direct ($ in millions) 1Q11 2Q11 3Q11 4Q11 1Q12 EOP Balance $1,637 $1,586 $1,540 $1,455 $1,507 90+ days delinquent $25 $23 $21 $18 $19 as % of loans 1.51% 1.46% 1.37% 1.24% 1.23% Net charge-offs $24 $20 $18 $16 $15 as % of loans 5.88% 4.95% 4.53% 4.27% 4.01% Home equity - brokered Home equity 1 liens: 32%; 2 liens: 68% Weighted average origination FICO: 750 Origination FICO distribution^: <660 4%; 660-689 7%; 690-719 13%; 720-749 17%; 750+ 51%; Other 8% Average CLTV: 74%; Origination CLTV distribution: <=70 40%; 70.1-80 22%; 80.1-90 18%; 90.1-95 7%; >95 13% Vintage distribution: 2012 1%; 2011 5%; 2010 4%; 2009 4%; 2008 11%; 2007 11%; 2006 14%; 2005 13%; 2004 and prior 37% % through broker channels: 14% WA FICO: 735 brokered, 753 direct; WA CLTV: 88% brokered; 71% direct Portfolio details Comments Brokered loans by geography Direct loans by geography Credit trends Note: Brokered and direct home equity net charge-off ratios are calculated based on end of period loan balances ^ Includes acquired loans where FICO at origination is not available © Fifth Third Bank | All Rights Reserved st st nd nd |
![]() Florida market* Deterioration in real estate values having effect on credit trends as evidenced by elevated NPA/NCOs in real estate related products COML MORTGAGE C&I RESI MORTGAGE OTHER CONS COML CONST COML LEASE HOME EQUITY AUTO CREDIT CARD Total Loans NPAs NCOs *NPAs exclude loans held-for-sale. Weak commercial real estate market Losses due to significant declines in valuations Valuations; relatively small home equity portfolio 32 © Fifth Third Bank | All Rights Reserved Loans ($B) % of FITB NPAs ($M) % of FITB NCOs ($M) % of FITB Commercial loans 2.1 7% 62 13% 4 8% Commercial mortgage 1.2 12% 80 14% 6 21% Commercial construction 0.2 19% 78 46% 11 59% Commercial lease 0.0 1% - 0% - 0% Commercial 3.5 8% 221 18% 21 21% Mortgage 1.7 16% 150 46% 19 50% Home equity 0.8 8% 9 15% 5 10% Auto 0.5 5% 0 4% 1 5% Credit card 0.1 5% 3 6% 2 8% Other consumer 0.0 6% - 0% 1 18% Consumer 3.2 9% 163 36% 26 22% Total 6.7 8% 384 23% 47 21% |
![]() Michigan market* Deterioration in home price values coupled with weak economy impacted credit results due to frequency of defaults and severity COML MORTGAGE C&I RESI MORTGAGE OTHER CONS COML CONST COML LEASE HOME EQUITY AUTO CREDIT CARD Total Loans NPAs NCOs *NPAs exclude loans held-for-sale. Negative impact from housing valuations, economy, unemployment Economic weakness impact on commercial real estate market 33 © Fifth Third Bank | All Rights Reserved Loans ($B) % of FITB NPAs ($M) % of FITB NCOs ($M) % of FITB Commercial loans 3.2 10% 94 20% 7 14% Commercial mortgage 2.6 26% 139 24% 10 36% Commercial construction 0.1 9% 11 7% 7 38% Commercial lease 0.2 5% 2 21% (0) 0% Commercial 6.0 13% 247 20% 25 24% Mortgage 1.7 15% 39 12% 6 16% Home equity 2.2 21% 6 10% 11 23% Auto 0.9 8% 1 9% 1 13% Credit card 0.3 15% 9 20% 3 14% Other consumer 0.1 21% - 0% 1 14% Consumer 5.1 14% 55 12% 21 18% Total 11.2 301 46 14% 18% 21% |
![]() 34 Regulation G Non-GAAP reconciliation © Fifth Third Bank | All Rights Reserved $ and shares in millions (unaudited) March December September June March 2012 2011 2011 2011 2011 Income before income taxes (U.S. GAAP) $603 $418 $530 $506 $377 Add: Provision expense (U.S. GAAP) 91 55 87 113 168 Pre-provision net revenue (a) 694 473 617 619 545 Net income available to common shareholders (U.S. GAAP) 421 305 373 328 88 Add: Intangible amortization, net of tax 3 3 3 4 5 Tangible net income available to common shareholders 424 308 376 332 93 Tangible net income available to common shareholders (annualized) (b) 1,705 1,222 1,492 1,332 377 Average Bancorp shareholders' equity (U.S. GAAP) 13,366 13,147 12,841 12,365 13,052 Less: Average preferred stock 398 398 398 398 1,557 Average goodwill 2,417 2,417 2,417 2,417 2,417 Average intangible assets 38 42 47 52 59 Average tangible common equity (c) 10,513 10,290 9,979 9,498 9,019 Total Bancorp shareholders' equity (U.S. GAAP) 13,560 13,201 13,029 12,572 12,163 Less: Preferred stock (398) (398) (398) (398) (398) Goodwill (2,417) (2,417) (2,417) (2,417) (2,417) Intangible assets (36) (40) (45) (49) (55) Tangible common equity, including unrealized gains / losses (d) 10,709 10,346 10,169 9,708 9,293 Less: Accumulated other comprehensive income / loss (468) (470) (542) (396) (263) Tangible common equity, excluding unrealized gains / losses (e) 10,241 9,876 9,627 9,312 9,030 Total assets (U.S. GAAP) 116,747 116,967 114,905 110,805 110,485 Less: Goodwill (2,417) (2,417) (2,417) (2,417) (2,417) Intangible assets (36) (40) (45) (49) (55) Tangible assets, including unrealized gains / losses (f) 114,294 114,510 112,443 108,339 108,013 Less: Accumulated other comprehensive income / loss, before tax (720) (723) (834) (609) (405) Tangible assets, excluding unrealized gains / losses (g) 113,574 113,787 111,609 107,730 107,608 Common shares outstanding (h) 920 920 920 920 919 Net charge-offs (i) 220 239 262 304 367 Ratios: Return on average tangible common equity (b) / (c) 16.2% 11.9% 15.0% 14.0% 4.2% Tangible common equity (excluding unrealized gains/losses) (e) / (g) 9.02% 8.68% 8.63% 8.64% 8.39% Tangible common equity (including unrealized gains/losses) (d) / (f) 9.37% 9.04% 9.04% 8.96% 8.60% Tangible book value per share (d) / (h) 11.64 11.25 11.05 10.55 10.11 Pre-provision net revenue / net charge-offs (a) / (i) 315% 198% 235% 204% 149% For the Three Months Ended |
![]() 35 Regulation G Non-GAAP reconciliation © Fifth Third Bank | All Rights Reserved $ and shares in millions (unaudited) March December September June March 2012 2011 2011 2011 2011 Total Bancorp shareholders' equity (U.S. GAAP) $13,560 $13,201 $13,029 $12,572 $12,163 Goodwill and certain other intangibles (2,518) (2,514) (2,514) (2,536) (2,546) Unrealized gains (468) (470) (542) (396) (263) Qualifying trust preferred securities 2,248 2,248 2,273 2,312 2,763 Other 38 38 20 20 12 Tier I capital 12,860 12,503 12,266 11,972 12,129 Less: Preferred stock (398) (398) (398) (398) (398) Qualifying trust preferred securities (2,248) (2,248) (2,273) (2,312) (2,763) Qualifying noncontrolling interest in consolidated subsidiaries (50) (50) (30) (30) (30) Tier I common equity (a) 10,164 9,807 9,565 9,232 8,938 Unrealized gains 468 Disallowed deferred tax assets - Disallowed MSRs 78 Other 11 Less: 10% of individual deferred tax assets, MSRs, investment in financial entities - 15% of aggregate deferred tax assets, MSRs, investment in financial entities - Tier 1 common equity, Basel III proforma (b) 10,721 Risk-weighted assets, determined in accordance with prescribed regulatory requirements (c) 105,451 104,945 102,562 100,320 99,392 Regulatory deductions not deducted from Tier 1 common equity, risk-weighted at 250% 1,582 Risk-weighted assets, Basel III proforma (d) 107,033 Ratios: Tier I common equity (a) / (c) 9.64% 9.35% 9.33% 9.20% 8.99% Tier I common equity, Basel III proforma (b) / (d) 10.02% Add: For the Three Months Ended 9.74% 9.80% 1,453 1,377 106,398 103,939 470 542 - - 70 64 12 10 - - - - 10,359 10,181 9.43% 9.16% 101,794 100,964 1,474 1,572 - - - - 9 396 263 (113) (41) 70 90 (7) 9,594 9,243 |