1Q17 Earnings Presentation April 25, 2017 Refer to earnings release dated April 25, 2017 for further information. Exhibit 99.2 |
2 © Fifth Third Bancorp | All Rights Reserved 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 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,” “anticipates,” “potential,” “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 as updated from time to time by our Quarterly Reports on Form 10-Q. 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 is a risk that additional information may become known during the company’s quarterly closing process or as a result of subsequent events that could affect the accuracy of the statements and financial information contained herein. 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 or real estate market conditions, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, weaken or 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 and adequate sources of funding and liquidity 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) changes in customer preferences or information technology systems; (12) effects of critical accounting policies and judgments; (13) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (14) 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; (15) ability to maintain favorable ratings from rating agencies; (16) failure of models or risk management systems or controls; (17) fluctuation of Fifth Third’s stock price; (18) ability to attract and retain key personnel; (19) ability to receive dividends from its subsidiaries; (20) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (21) declines in the value of Fifth Third’s goodwill or other intangible assets; (22) effects of accounting or financial results of one or more acquired entities; (23) difficulties from Fifth Third’s investment in, relationship with, and nature of the operations of Vantiv Holding, LLC; (24) loss of income from any sale or potential sale of businesses (25) difficulties in separating the operations of any branches or other assets divested; (26) losses or adverse impacts on the carrying values of branches and long-lived assets in connection with their sales or anticipated sales; (27) inability to achieve expected benefits from branch consolidations and planned sales within desired timeframes, if at all; (28) ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; and (29) 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. In this presentation, we may sometimes provide non-GAAP financial information. Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. We provide GAAP reconciliations for non- GAAP measures in a later slide in this presentation as well as in our earnings release, both of which are available in the investor relations section of our website, www.53.com. Management has provided forward-looking guidance on certain non-GAAP measures in connection with this presentation in order to facilitate comparability with the Bancorp’s historical performance and financial condition as reflected in these non-GAAP measures. Such forward-looking non-GAAP measures include return on tangible common equity; net interest margin (FTE); net interest income (FTE); and adjusted noninterest income, excluding certain transactions and adjustments related to the Bancorp’s investment in Vantiv, Visa total return swap, and branch sales, closures and consolidations. Bancorp’s management does not estimate on a forward-looking basis the impact of items similar to those that it has excluded to generate these non-GAAP measures on a historical basis because the occurrence and amounts of items such as these are difficult to predict. As a result, the Bancorp has not provided reconciliations of its forward-looking non-GAAP measures. |
3 © Fifth Third Bancorp | All Rights Reserved • Adjusted NIM 1 up 7 bps sequentially and year- over-year • Adjusted NII 1 up $2 million sequentially and $18 million year-over-year • Tightly-managed noninterest expenses; up 3% sequentially and flat year-over-year Expenses up <1% sequentially excluding $18 million expense pulled forward due to change in LTI grant date • Overall solid credit quality in-line with expectations • Executing on North Star initiatives 1Q17 highlights 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release 2 See page 4 of the presentation for impact of certain items Diluted Earnings Per Share $0.38 Included net neutral impact from certain items 2 Net Income to Common $290 million LCR 119% |
4 © Fifth Third Bancorp | All Rights Reserved Pre-tax items included in 1Q17 results had a net neutral EPS impact: A $13 million pre-tax (~$8 million after-tax) ² charge related to the valuation of the Visa total return swap A $12 million pre-tax (~$8 million after-tax) ² benefit related to the revision to the 4Q16 estimated charge to net interest income for refunds to certain bankcard customers Credit trends NCO ratio of 40 bps, up 9 bps sequentially and down 2 bps year-over-year Portfolio NPA ratio of 79 bps, down 1 bp sequentially and down 9 bps year-over-year 1Q17 in review 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release 2 Assumes a 35% tax rate ($ in millions) Average Balances Total loans & leases (ex HFS) $92,146 (1%) (1%) Core deposits $100,845 - 2% Income Statement Data Net interest income (FTE) 1 939 3% 3% Provision for loan and lease losses 74 37% (38%) Noninterest income 523 (16%) (18%) Noninterest expense 986 3% - Net income attributable to Bancorp $305 (23%) (6%) Net income available to common shareholders $290 (22%) (7%) Financial Ratios Earnings per share, diluted $0.38 (22%) (5%) Net interest margin (FTE) 1 3.02% 16bps 11bps Efficiency ratio (FTE) 1 67.4% 460bps 360bps Return on average assets 0.88% (23bps) (5bps) Return on average common equity 7.8% (190bps) (50bps) Return on average tangible common equity 1 9.3% (230bps) (60bps) Tangible book value per share 1 $16.89 2% 3% |
5 © Fifth Third Bancorp | All Rights Reserved Current Outlook: $94.7 $94.9 $94.9 $97.0 $97.0 94% 95% 95% 92% 91% 1Q16 2Q16 3Q16 4Q16 1Q17 $29.7 $30.1 $29.8 $30.8 $31.9 1Q16 2Q16 3Q16 4Q16 1Q17 Balance sheet Loan & lease balances ¹ ($ billions) Transaction deposits flat vs. 4Q16; up 2% YoY, driven by increased: Interest checking Consumer money market Average loan-to-core deposit ratio of 91% Modified LCR of 119% at 1Q17 Core deposit balances ¹ ($ billions) $100.8 $98.7 Securities and short-term investments ¹ ($ billions) Average securities up $2.2B YoY driven by: Opportunistically deployed cash in 4Q16 and 1Q17 at more attractive entry points than those experienced prior to the U.S. presidential election Securities portfolio / total assets of 22.7% compared to 21.0% in 1Q16 $31.7 $32.6 $31.6 $32.0 1 All balances are on an average basis; loans balances exclude HFS $33.2 Commercial down 1% vs. 4Q16; down 1% YoY C&I down 2% vs. 4Q16 and 3% YoY CRE up 1% vs. 4Q16 and 7% YoY Consumer down 1% vs. 4Q16; down 2% YoY Auto down 4% vs. 4Q16 and 13% YoY HE down 3% vs. 4Q16 and 8% YoY Mortgage up 2% vs. 4Q16 and 10% YoY $100.9 $98.9 $99.0 Transaction Other time Loan-to-core deposit ratio Short-term investments Average securities FY: ~2% commercial loan growth (EOP), including impact of $900 million of remaining exits expected in 2017 FY: mid-single digit consumer & mortgage loan growth (EOP), excluding auto balances $93.3 $93.9 $93.5 $93.0 $92.1 1Q16 2Q16 3Q16 4Q16 1Q17 |
6 © Fifth Third Bancorp | All Rights Reserved Net interest income 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release $925 Adjusted 1 NII & NIM performance driven by: Improved short-term market rates Adjusted NII up $18 million Adjusted NIM up 7 bps 1Q17 vs. 4Q16 1Q17 vs. 1Q16 Adjusted 1 NII & NIM performance driven by: Improved short-term market rates Lower wholesale funding balances Day count (-$13mm, +2 bps) Adjusted NII up $2 million and adjusted NIM up 7 bps FY: NII (FTE) up 4 - 5%; Adj. NIM at high end of 2.95 – 3.00% range (w/ September & December rate hikes) Q2: NII (FTE) up 1 - 1.5% sequentially from adjusted NII; NIM up ~2 basis points from adjusted NIM Current Outlook 1 : $909 $908 $913 $909 2.91% 2.88% 2.88% 2.86% 3.02% 2.98% 1Q16 2Q16 3Q16 4Q16 1Q17 NII and NIM (FTE) 1 ($ millions) NII Adjusted NII NIM Adjusted NIM $939 $927 2.91% |
7 © Fifth Third Bancorp | All Rights Reserved • Adjusted 1 noninterest income down $42 million, or 7%; driven by: Mortgage banking net revenue and lease remarketing impairment Partially offset by increase in wealth & asset and capital markets revenue FY adjusted: up 3%, excluding mortgage Q2 adjusted: up 8%, excluding mortgage Noninterest income 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release 2 2016 excludes all items shown on page 21 of this presentation, and excludes all mortgage banking net revenue (resulting in $2.1BN); page 21 of this presentation, and excludes all mortgage banking net revenue (resulting in $484 million). • Adjusted 1 noninterest income down $72 million, or 12%; driven by: 4Q16 TRA payment, mortgage banking net revenue, and lease remarketing impairment Partially offset by increase in wealth & asset and capital markets revenue 1Q17 vs. 4Q16 1Q17 vs. 1Q16 1 Current Outlook 1,2 : $637 $599 $840 $620 $523 $578 $602 $596 $608 $536 1Q16 2Q16 3Q16 4Q16 1Q17 Noninterest income ($ millions) Noninterest income Adjusted noninterest income Q1 2017 excludes all items shown on |
8 © Fifth Third Bancorp | All Rights Reserved Noninterest expense 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 22 of this presentation and use of non-GAAP measures on page 32 of the earnings release FY: ~1% annual growth Q2: flat versus 2Q16 • Noninterest expense up 3%; driven by: Seasonally higher compensation- related expenses, and $18mm in expense pulled forward due to change in LTI grant date Partially offset by diligent expense management throughout the bank 1Q17 vs. 4Q16 1Q17 vs. 1Q16 • Noninterest expense flat; driven by: Lower losses and adjustments Lower card and processing expense due to contract renegotiations 1 Current Outlook: $986 $983 $973 $960 $986 $971 $971 $966 $951 $985 1Q16 2Q16 3Q16 4Q16 1Q17 Noninterest expense Adjusted noninterest expense Noninterest expense ($ millions) |
9 © Fifth Third Bancorp | All Rights Reserved • 1Q17 net charge-offs of 0.40%, up 9 bps from 4Q16 and down 2 bps from 1Q16 • 1Q17 portfolio NPAs down $17MM from 4Q16 and $104MM from 1Q16 • 1Q17 criticized assets relatively flat • 1Q17 allowance for loan & lease losses of 1.35% down 1 bp sequentially Credit quality overview NCOs range-bound with potential quarterly variability Provision reflective of loan growth $96 $87 $107 $73 $89 Current Outlook: $54 $46 $63 $28 $42 $42 $41 $44 $45 $47 0.42% 0.37% 0.45% 0.31% 0.40% 1Q16 2Q16 3Q16 4Q16 1Q17 Net charge-offs ($ millions) Commercial Consumer Total NCO Ratio $611 $602 $513 $564 $558 $214 $203 $185 $174 $163 0.88% 0.86% 0.75% 0.80% 0.79% $825 $805 $698 $738 $721 1Q16 2Q16 3Q16 4Q16 1Q17 Commercial Consumer Total NPA Ratio HFI non-performing assets ($ millions) $1,295 $1,299 $1,272 $1,253 $1,238 1.38% 1.38% 1.37% 1.36% 1.35% 1Q16 2Q16 3Q16 4Q16 1Q17 Reserve coverage ($ millions) Allowance for Loan & Lease Losses (ALLL) ALLL / Loans and Leases |
10 © Fifth Third Bancorp | All Rights Reserved Strong capital and liquidity position 1 Current period regulatory capital ratios are estimated Capital Update CET1 strong and improved to 10.76%, up 37 bps sequentially and 95 bps from 1Q16 Tier I risk-based capital 11.90%; Total risk-based capital 15.45%; Leverage 10.15% Potentially over 100 bps in after-tax benefit from remaining Vantiv stake 2017 CCAR request supportive of stronger levels of capital return to shareholders Liquidity Update Modified LCR of 119% in 1Q17 9.81% 9.94% 10.17% 10.39% 10.76% 1Q16 2Q16 3Q16 4Q16 1Q17 Common Equity Tier 1 Ratio (Basel III) 1 |
11 © Fifth Third Bancorp | All Rights Reserved Current outlook 1 Non-GAAP measure: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release 2 2016 excludes all items shown on page 21 of this presentation, and excludes all mortgage banking net revenue (resulting in $2.1BN); Q1 2017 excludes all items shown on page 21 of this presentation, and excludes all mortgage banking net revenue (resulting in $484 million). Note: Previous and current outlook excludes potential, but currently unforecasted, items, such as any potential additional Vantiv gains or losses, future capital actions, or changes in regulatory or accounting guidance Outlook as of April 25, 2017; please see cautionary statement on slide 2 regarding forward-looking statements Total loans & leases (EOP excl. HFS) Net interest income (FTE) 1 Net interest margin (FTE) 1 Noninterest income 1,2 Noninterest expense Effective tax rate Credit items • FY 2017: ~2% commercial loan growth, incl. impact of $900 million of remaining exits in 2017 • FY 2017: mid-single digit consumer & mortgage loan growth, excluding auto balances • FY 2017: Up 4 – 5% (higher-end w/ September & December hikes) • Q2 2017: Up 1 – 1.5% sequentially from the adjusted NII of $927 million • FY 2017: 2.95% - 3.00% on an adjusted basis (higher-end w/ September & December hikes) • Q2 2017: Up ~2 bps from the adjusted NIM of 2.98% • FY 2017 adjusted: up 3%, excluding mortgage • Q2 2017 adjusted: up 8%, excluding mortgage mortgage revenue excluded given volatility from significant increase in interest rates at the end of 2016 • FY 2017: ~1% annual growth • Q2 2017: flat versus Q2 2016 • FY 2017: mid 24% range • Q2 2017: 25% range assumes no Federal corporate tax rate change • NCOs range-bound with potential quarterly variability • Provision reflective of loan growth |
12 © Fifth Third Bancorp | All Rights Reserved Appendix |
13 © Fifth Third Bancorp | All Rights Reserved PPNR and efficiency ratio trends 1 1 Non-GAAP measures: See Reg G reconciliation on pages 20 and 21 of this presentation and use of non-GAAP measures on page 32 of the earnings release 2 Prior quarters include similar adjustments • Adjusted PPNR down 18% vs. 4Q16 driven by: – Vantiv TRA payment in 4Q16 – Mortgage banking net revenue – Seasonal expenses and $18MM LTI impact – Lease remarketing impairment • Adjusted PPNR down 7% YoY – Mortgage banking net revenue – Lease remarketing impairment – Offset by improvement in NII 63.8% 65.3% 55.5% 62.8% 67.4% 65.3% 64.3% 64.0% 62.0% 67.3% 1Q16 2Q16 3Q16 4Q16 1Q17 Efficiency ratio Efficiency Ratio Adjusted Efficiency Ratio ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 Net interest income (FTE) $909 $908 $913 $909 $939 Add: Noninterest income 637 599 840 620 523 Less: Noninterest expense 986 983 973 960 986 Pre-provision net revenue $560 $524 $780 $569 $476 Adjustments to remove (benefit) / detriment In net interest income: Bankcard refunds - - - 16 (12) In noninterest income: Gain on Vantiv warrant actions - - - (9) - Vantiv TRA settlement payment - - - - - Gain from termination and settlement of Vantiv TRA - - (280) - - Gain on sale from the sale of a non-branch facility - - (11) - - Branch and land valuation adjustments - - 28 - - Valuation of 2009 Visa total return swap (1) 50 12 (6) 13 Transfer of nonconforming investments under Volcker to HFS - - 9 - - Vantiv warrant valuation (47) (19) 2 - - Gain on sale of certain branches (8) (11) - - - Gain on sale of the agented bankcard loan portfolio - (11) - - - Securities (gains) / losses (3) (6) (4) 3 - In noninterest expense: Contribution to Fifth Third Foundation - - 3 5 - Severance expense 15 3 4 4 1 Retirement eligibility changes - 9 - - - Adjusted PPNR $516 $539 $543 $582 $478 PPNR reconciliation $516 $539 $543 $582 $478 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 1Q16 2Q16 3Q16 4Q16 1Q17 PPNR trend ($ millions) Adjusted PPNR Reported PPNR 2 : |
14 © Fifth Third Bancorp | All Rights Reserved Strong liquidity profile 1 Available and contingent borrowing capacity (1Q17): FHLB ~$12.0B available, ~$14.5B total; Federal Reserve ~$32.0B Holding Company: Modified LCR of 119% Holding Company cash at March 31, 2017: $2.1B Cash currently sufficient to satisfy all fixed obligations in a stressed environment for ~23 months (debt maturities, common and preferred dividends, interest and other expenses) without accessing capital markets, relying on dividends from subsidiaries or other actions $500MM of debt matured in 1Q17. We intend to issue debt from the Holding Company in 2017. Bank Entity: There were no debt maturities at the Bank in 1Q17 The Bank did not issue any additional debt in 1Q17 2017 Funding Plans: $650MM of debt at the Bank will mature in 2Q17 Fifth Third would not be required to replace 2017 debt maturities to maintain our current senior debt ratings under the Moody’s LGF methodology Any additional debt issuance in 2017 would result from general balance sheet management and prudent liquidity risk management S-T wholesale 3% $500 $500 $500 $1,100 $2,312 2017 2018 2019 2020 2021 2022 on Fifth Third Bancorp First Charter Capital Trust Holding company unsecured debt maturities ($ millions) $650 $1,850 $2,600 $2,100 $750 2017 2018 2019 2020 2021 2022 on Bank unsecured debt maturities ($ millions – excl. Retail Brokered & Institutional CDs) 1 1 The $500MM matured in 1Q17 Demand 25% Interest checking 19% Savings/ MMDA 25% Consumer time 3% Foreign Office 0% Non-Core Deposits 2% S-T borrowings 1% Other liabilities 3% Equity 12% L-T debt 10% Heavily core funded as of 03/31/2017 |
15 © Fifth Third Bancorp | All Rights Reserved Balance sheet positioning Commercial loans 1,2 Investment portfolio Consumer loans Data as of 03/31/17 1 Includes HFS loans & leases 2 Fifth Third had $4.48B 1ML receive-fix swaps outstanding against C&I loans, which are being included in fixed 3 Fifth Third had $2.96B 3ML receive-fix swaps outstanding against long-term debt, which are being included in floating, long-term debt with swaps outstanding reflected at fair value • Fixed: $14.1B 1, 2 • Float: $42.3B 1, 2 • 1ML based: 62% (of total commercial) • 3ML based: 8% (of total commercial) • Prime based: 4% (of total commercial) • Weighted avg. life: 1.74 years • 52% allocation to bullet/locked-out cash flow securities • Investment portfolio yield: 3.11% • Duration: 5.0 years • Net unrealized pre-tax gain: $188MM • 98% AFS • Fixed: $25.2B 1 • Float: $10.6B 1 • Prime based: 23% (of total consumer) • Weighted avg. life: 3.83 years • Auto weighted avg. life: 1.38 years Long-term debt 3 Key characteristics Balance sheet mix Fixed vs. floating Level 1 100% Fix / 0% Float Level 2A 100% Fix / 0% Float Non-HQLA /other 76% Fix / 24% Float C&I 20% Fix / 80% Float Commercial mortgage 23% Fix / 77% Float 4% Fix / 96% Float Commercial construction 100% Fix / 0% Float Commercial lease Resi mtg & construction 90% Fix / 10% Float Auto 99% Fix / 1% Float 8% Fix / 92% Float Home equity 31% Fix / 69% Float Credit card 10% Fix / 90% Float Other • Fixed: $10.1B 3 • Float: $3.5B 3 • 1ML based: <1% (of total long term debt) • 3ML based: 26% (of total long term debt) • Weighted avg. life: 4.37 years Senior debt 76% Fix / 24% Float Sub debt 64% Fix / 36% Float 99% Fix / 1% Float Auto securiz. proceeds 0% Fix / 100% Float TRUPS 100% Fix / 0% Float Other 35% 45% 20% 0 73% 12% 8% 7% 0 21% 27% 2% 6% 44% 68% 24% 6% 1% <1% 1 |
16 © Fifth Third Bancorp | All Rights Reserved Interest rate risk management Data as of 03/31/17 1 Actual 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 strategies. 2 Re-pricing percentage or “beta” is the estimated change in yield over 12 months as a result of a shock or ramp 100 bps parallel shift in the yield curve • NII benefits from asset rate reset in a rising rate environment – 57% of total loans are floating rate considering impacts of interest rate swaps (75% of total commercial and 30% of total consumer) – Investment portfolio duration of 5.0 years – Short-term borrowings represent approximately 12% of total wholesale funding, or 2% of total funding – Approximately $11 billion in non-core funding matures beyond one year • Interest rate sensitivity tables are based on conservative deposit assumptions – 70% beta on all interest-bearing deposit and sweep balances (~50% betas experienced in 2004 – 2006 Fed tightening cycle) – No modeled re-pricing lag – Modeled non-interest bearing commercial DDA runoff of approximately $2.5 billion (about 10%) for each 100 bps increase in rates – DDA runoff rolls into an interest bearing product with a 100% beta Change in Interest Rates (bps) +200 Shock Change in Interest Rates (bps) +100 Shock +200 Ramp over 12 months 2.05% 6.98% (4.00%) (6.00%) +25 Shock +100 Ramp over 12 months 1.20% 4.37% - - -100 Shock -50 Ramp over 6 months (3.48%) (6.37%) (6.00%) (8.00%) Betas 25% Higher Betas 25% Lower Change in Interest Rates (bps) 12 Months 13-24 Months 12 Months 13-24 Months Change in Interest Rates (bps) 12 Months 13-24 Months 12 Months 13-24 Months +200 Ramp over 12 months 1.79% 6.45% 2.31% 7.50% +200 Ramp over 12 months (0.96%) 0.95% 5.06% 13.00% +100 Ramp over 12 months 1.07% 4.11% 1.33% 4.64% +100 Ramp over 12 months (0.30%) 1.36% 2.71% 7.39% (12.00%) % Change in NII (FTE) $1B Balance Decrease $1B Balance Increase (5.45%) - - - Estimated NII Sensivity with Deposit Beta Changes (2.21%) (0.40%) (0.19%) 12 Months Estimated NII Sensitivity with Demand Deposit Balance Changes % Change in NII (FTE) 13-24 Months 12 Months 13-24 Months Estimated NII Sensitivity Profile and ALCO Policy Limits Estimated EVE Sensitivity Profile and ALCO Policy Limits % Change in NII (FTE) ALCO Policy Limits Change in EVE ALCO Policy Limit |
17 © Fifth Third Bancorp | All Rights Reserved Mortgage banking results • $1.9B in originations, up 10% YoY; 51% purchase volume • 1Q17 mortgage banking drivers: – Origination fees and gain on sale revenue down $1MM, or 3%, sequentially – Gain on sale margin up 29 bps sequentially – Net MSR valuation adjustments of positive $3MM; servicing rights amortization of $27MM – $47MM in gross servicing fees • YoY decline in mortgage banking revenue driven primarily by lower origination fees and gains on loan sales • Purchased $2.4 billion MSR portfolio in 1Q 2017 1 Gain on sale margin represents gains on all loans originated for sale $1.06 $1.70 $1.79 $1.66 $1.25 $0.70 $1.05 $1.09 $1.06 $0.68 3.47% 2.62% 3.01% 1.69% 1.98% 1Q16 2Q16 3Q16 4Q16 1Q17 Originations for sale Originations HFI Margin Mortgage originations and gain-on-sale margins 1 ($ billions) 42 54 61 30 29 52 50 49 48 47 (27) (35) (35) (35) (27) 11 6 (9) 23 3 1Q16 2Q16 3Q16 4Q16 1Q17 Mortgage banking revenue ($ millions) Orig fees and gains on loan sales Gross servicing fees Net MSR valuation adjustments Servicing rights amortization |
18 © Fifth Third Bancorp | All Rights Reserved NPL rollforward NPL HFI Rollforward Commercial 1Q16 2Q16 3Q16 4Q16 1Q17 341 $ 543 $ 539 $ 460 $ 523 $ Transfers to nonaccrual status 306 104 145 161 128 Transfers to accrual status (3) (6) - (4) - Transfers from held for sale - - - - - Transfers to held for sale (3) - (36) (3) (3) Loans sold from portfolio (6) (2) (3) - - Loan paydowns/payoffs (39) (52) (112) (53) (80) Transfers to OREO (1) (3) (1) (3) (2) Charge-offs (60) (51) (81) (40) (46) Draws/other extensions of credit 8 6 9 5 3 543 $ 539 $ 460 $ 523 $ 523 $ Consumer 1Q16 2Q16 3Q16 4Q16 1Q17 165 $ 158 $ 154 $ 141 $ 137 $ Transfers to nonaccrual status 55 56 45 44 42 Transfers to accrual status (33) (31) (28) (21) (19) Transfers from held for sale - - - - - Transfers to held for sale - - - - - Loans sold from portfolio - - - - - Loan paydowns/payoffs (9) (11) (10) (8) (10) Transfers to OREO (6) (7) (7) (5) (4) Charge-offs (14) (11) (13) (14) (12) Draws/other extensions of credit - - - - - 158 $ 154 $ 141 $ 137 $ 134 $ Total NPL 701 $ 693 $ 601 $ 660 $ 657 $ Total new nonaccrual loans - HFI 361 $ 160 $ 190 $ 205 $ 170 $ Beginning NPL amount Ending Commercial NPL Beginning NPL amount Ending Consumer NPL |
19 © Fifth Third Bancorp | All Rights Reserved ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $3,428 $3,706 $3,905 $3,903 $4,283 Avg Balance* $3,297 $3,551 $3,848 $3,890 $3,987 NPAs* $8 $7 $5 - - as % of loans 0.23% 0.19% 0.13% NM NM Net charge-offs - - - - - as % of loans (0.06%) NM NM NM NM Commercial construction Residential Mortgage Commercial & Industrial Home Equity & Automobile Commercial Real Estate *Excludes loans held-for-sale ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $8,112 $7,988 $7,864 $7,695 $7,469 Avg Balance* $8,217 $8,054 $7,918 $7,779 $7,581 90+ days delinquent - - - - - as % of loans NM NM NM NM NM Net charge-offs $8 $6 $7 $6 $6 as % of loans 0.36% 0.30% 0.32% 0.35% 0.33% Home equity ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $11,128 $10,671 $10,349 $9,983 $9,572 Avg Balance* $11,283 $10,887 $10,508 $10,162 $9,786 90+ days delinquent $8 $7 $8 $9 $6 as % of loans 0.07% 0.07% 0.08% 0.09% 0.06% Net charge-offs $9 $8 $9 $11 $11 as % of loans 0.32% 0.26% 0.35% 0.40% 0.48% Automobile ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $13,895 $14,307 $14,643 $15,051 $15,336 Avg Balance* $13,788 $14,046 $14,455 $14,854 $15,200 90+ days delinquent $44 $38 $43 $49 $45 as % of loans 0.32% 0.27% 0.29% 0.33% 0.29% NPAs* $77 $69 $58 $53 $48 as % of loans 0.55% 0.48% 0.40% 0.35% 0.31% Net charge-offs $2 $2 $2 $2 $5 as % of loans 0.07% 0.06% 0.07% 0.06% 0.13% Residential mortgage ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $43,433 $43,558 $42,727 $41,676 $41,074 Avg Balance* $43,089 $43,876 $43,116 $42,548 $41,854 90+ days delinquent $3 $2 $7 $4 $3 as % of loans 0.01% NM 0.02% 0.01% 0.01% NPAs* $473 $477 $419 $488 $490 as % of loans 1.09% 1.10% 0.98% 1.17% 1.19% Net charge-offs $46 $39 $61 $25 $36 as % of loans 0.43% 0.36% 0.56% 0.24% 0.34% C&I Credit trends ($ in millions) 1Q16 2Q16 3Q16 4Q16 1Q17 EOP Balance* $6,864 $6,875 $6,856 $6,899 $6,924 Avg Balance* $6,886 $6,831 $6,888 $6,957 $6,941 NPAs* $126 $114 $86 $72 $64 as % of loans 1.84% 1.66% 1.25% 1.04% 0.92% Net charge-offs $6 $6 $2 $2 $5 as % of loans 0.35% 0.38% 0.08% 0.11% 0.29% Commercial mortgage |
20 © Fifth Third Bancorp | All Rights Reserved Regulation G non-GAAP reconciliation See page 32 of the 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) March December September June March 2017 2016 2016 2016 2016 Net income available to common shareholders (U.S. GAAP) $290 $372 $501 $305 $311 Add: Intangible amortization, net of tax - - - - - Tangible net income available to common shareholders $290 $372 $501 $305 $311 Tangible net income available to common shareholders (annualized) (a) $1,176 $1,480 $1,993 $1,227 $1,251 Average Bancorp shareholders' equity (U.S. GAAP) $16,429 $16,545 $16,883 $16,584 $16,376 Less: Average preferred stock (1,331) (1,331) (1,331) (1,331) (1,331) Average goodwill (2,416) (2,416) (2,416) (2,416) (2,416) Average intangible assets and other servicing rights (11) (10) (10) (11) (12) Average tangible common equity (b) $12,671 $12,788 $13,126 $12,826 $12,617 Total Bancorp shareholders' equity (U.S. GAAP) $16,430 $16,205 $16,776 $16,726 $16,323 Less: Preferred stock (1,331) (1,331) (1,331) (1,331) (1,331) Goodwill (2,419) (2,416) (2,416) (2,416) (2,416) Intangible assets and other servicing rights (11) (10) (10) (11) (12) Tangible common equity, including unrealized gains / losses (c) $12,669 $12,448 $13,019 $12,968 $12,564 Less: Accumulated other comprehensive income (68) (59) (755) (889) (684) Tangible common equity, excluding unrealized gains / losses (d) $12,601 $12,389 $12,264 $12,079 $11,880 Total assets (U.S. GAAP) $140,200 $142,177 $143,279 $143,625 $142,430 Less: Goodwill (2,419) (2,416) (2,416) (2,416) (2,416) Intangible assets and other servicing rights (11) (10) (10) (11) (12) Tangible assets, including unrealized gains / losses (e) $137,770 $139,751 $140,853 $141,198 $140,002 Less: Accumulated other comprehensive income / loss, before tax (105) (91) (1,162) (1,368) (1,052) Tangible assets, excluding unrealized gains / losses (f) $137,665 $139,660 $139,691 $139,830 $138,950 Common shares outstanding (g) 750 750 756 766 770 Ratios: Return on average tangible common equity (a) / (b) 9.3% 11.6% 15.2% 9.6% 9.9% Tangible common equity (excluding unrealized gains/losses) (d) / (f) 9.15% 8.87% 8.78% 8.64% 8.55% Tangible common equity (including unrealized gains/losses) (c) / (e) 9.20% 8.91% 9.24% 9.18% 8.97% Tangible book value per share (c) / (g) $16.89 $16.60 $17.22 $16.93 $16.32 For the Three Months Ended |
21 © Fifth Third Bancorp | All Rights Reserved Regulation G non-GAAP reconciliation See page 32 of the 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) March December September June March 2017 2016 2016 2016 2016 CET 1 capital (transitional) $12,636 $12,426 $12,299 $12,112 $11,914 Less: Adjustments to CET 1 capital from transitional to fully phased-in (1) (2) (4) (4) (4) (5) CET 1 capital (fully phased-in) (h) 12,634 12,422 12,295 12,108 11,909 Risk-weighted assets (transitional) 117,407 119,632 120,954 121,824 121,432 Add: Adjustments to risk-weighted assets from transitional to fully phased-in (2) 1,164 1,115 929 932 1,027 Risk-weighted assets (fully phased-in) (i) $118,571 $120,747 $121,883 $122,756 $122,459 Estimated CET 1 capital ratio under Basel III Final Rule (fully phased-in) (h) / (i) 10.66% 10.29% 10.09% 9.86% 9.72% (1) Primarily relates to disallowed intangible assets (other than goodwill and MSRs, net of associated deferred tax liabilities) (2) Primarily relates to higher risk-weighting for MSRs Net interest income (U.S. GAAP) $933 $903 $907 $902 $903 Add: FTE Adjustment 6 6 6 6 6 Net interest income (FTE) (j) $939 $909 $913 $908 $909 Net interest income (FTE) (annualized) (k) $3,808 $3,616 $3,632 $3,652 $3,656 Net interest income (FTE) $939 $909 $913 $908 $909 Bankcard refunds / (reversal) (12) 16 - - - Adjusted net interest income (FTE) (l) $927 $925 $913 $908 $909 Adjusted net interest income (FTE) (annualized) (m) $3,760 $3,680 $3,632 $3,652 $3,656 Noninterest income (U.S. GAAP) (n) $523 $620 $840 $599 $637 Gain on Vantiv warrant actions - (9) - - - Vantiv TRA-related transactions - - (280) - - Gain from the sale of a non-branch facility - - (11) - - Branch / land impairment charge - - 28 - - Valuation of 2009 Visa total return swap 13 (6) 12 50 (1) Transfer of certain nonconforming investments under Volcker to held-for-sale - - 9 - - Vantiv warrant valuation - - 2 (19) (47) Gain on sale of certain branches - - - (11) (8) Gain on sale of the non-strategic agented bankcard loan portfolio - - - (11) - Securities (gains) / losses - 3 (4) (6) (3) Adjusted noninterest income (o) $536 $608 $596 $602 $578 Noninterest expense (U.S. GAAP) (p) $986 $960 $973 $983 $986 Contribution for Fifth Third Foundation - (5) (3) - - Severance expense (1) (4) (4) (3) (15) Retirement eligibility changes - - - (9) - Adjusted noninterest expense (q) $985 $951 $966 $971 $971 Average interest-earning assets (r) 125,968 126,548 126,092 126,847 125,651 Ratios: Net interest margin (k) / (r) 3.02% 2.86% 2.88% 2.88% 2.91% Adjusted net interest margin (m) / (r) 2.98% 2.91% 2.88% 2.88% 2.91% Efficiency ratio (p) / [(n) + (j)] 67.4% 62.8% 55.5% 65.3% 63.8% Adjusted efficiency ratio (q) / [(o) + (l)] 67.3% 62.0% 64.0% 64.3% 65.3% For the Three Months Ended |