Fifth Third Bancorp · NASDAQ:FITB
Fifth Third Bancorp — Credit Suisse Financial Services Forum 2007
21 slides from Fifth Third Bancorp's conference presentation, Feb 7, 2007
Slide 1: Credit Suisse Financial Services Forum
Exhibit 99.1 Credit Suisse Financial Services Forum Chris Marshall, Chief Financial Officer Fifth Third Bank | All Rights Reserved | Credit Suisse | February 7, 2007
Slide 2: Agenda
Agenda Historical performance Strategic focus Growth opportunities — De novos — Business banking — Middle market — Credit cards Credit Capital Outlook Summary 2 Fifth Third Bank | All Rights Reserved | Credit Suisse | February 7, 2007
Slide 3: Historical context: extraordinary growth
Historical context: extraordinary growth 1990 2006 CAGR Assets $8 billion $101 billion 17% 1 Net income $120 million $1.5 billion 17% 1 Earnings per share $0.41 $2.65 12% 2 Market cap $1.3 billion $22 billion 19% Branches 214 1,150 11% ATMs 262 2,096 14% Rank, U.S. # 50 - 60 # 13 1 2006 earnings and
Slide 4: Recent performance: challenging
Recent performance: challenging 2002 2006 Stock price $68.95 Stock price $40.14* Market cap $40B Market cap $22B* ROE 18.4% ROE 15.1%# Efficiency ratio 47.5% Efficiency ratio 55.2%# NIM 3.96% NIM 3.06% * As of 2/01/07. # ROE and efficiency ratio excluding $454 million pre-tax ($291 million after-tax
Slide 5: Strong underlying performance
Strong underlying performance 1 (CAGR: 2006 vs. 2002: per share) Fifth Peer 2 Midwest 3 Third Group Peers Loan growth 14% 8% 7% Core deposit growth 8% 6% 4% Processing fee growth 21% 17% N/A Credit card loan growth 14% 2% 7% Efficiency ratio 55.2% 59.0% 61.0% ROE 15.1% 14.9% 15.0% Source: SNL Financ
Slide 6: Strategic focus: 2007–2009
Strategic focus: 2007–2009 1. Deliver growth company performance 2. Enhance the customer experience 3. Increase employee engagement 4. Institutionalize enterprise operational excellence Employee Customer Engagement Experience Banking Fifth Third Bank Processing Investments Operational Excellence 6 F
Slide 7: Growth opportunities
Growth opportunities Retail bank — De novo – accelerate new branch openings — Small business banking – leverage existing distribution channels Commercial bank — Middle market expansion – expand products, services, and sales — Healthcare – enhance product offerings, specialized channel — Commercial n
Slide 8: 2005–2006 de novo growth performance (full-service branches)
2005–2006 de novo growth performance (full-service branches) Top 10 banks by average deposit growth per new branch, within markets where Fifth Third opened branches between 6/04 and 6/05 Avg. Branch Deposit 6/06 Total 6/05 Total Number of Growth Holding Company Deposits Deposits Branches 05-06 Rank
Slide 9: Business banking: focus on the customer
Business banking: focus on the customer Business banking customers Business banking accounts 350 1200 300 1000 …could Assigning 80% 250 represent a of existing 800 200 customers… 60% increase 600 in accounts 150 100 400 50 unassigned to banker 200 assigned to banker 0 0 2006 2009 2006 2009 • Deploy
Slide 10: Middle market: leveraging our position
Middle market: leveraging our position # of Businesses with Sales of: $10mm to $100mm to $250mm to Markets $100mm $250mm $500mm Total Chicago 5,085 405 148 5,638 5/3 Middle Market Eastern Michigan 2,164 187 60 2,411 South Florida 1,662 110 35 1,807 Share Northeastern Ohio 1,532 98 33 1,663 lending o
Slide 11: Credit cards: capturing our fair share
Credit cards: capturing our fair share 13th largest bank, 24th largest credit card issuer We’ve underinvested in the credit card business relative to competitors Significant opportunity in high risk-adjusted return business — Improve retail production by deploying sales technologies to enhance ease
Slide 12: Credit quality
Credit quality Total net charge-offs 0.70% 0.60% 2007 outlook: 0.50% 50-55 0.40% bps 0.30% 0.20% 0.10% 0.00% Peer group median Fifth Third Stable net charge-off experience Consistent trends in probability of default ratings — 2003 through 2006 vintages all in 6.1-6.3 PD range Over 75% of commercial
Slide 13: Credit quality (cont.)
Credit quality (cont.) Commercial and consumer net charge-offs* 0.70% 2007 0.60% outlook: in line 0.50% with 4Q06 0.40% levels 0.30% 0.20% 0.10% 0.00% Total Commercial Total Consumer Commercial NCO ratios have historically ranged between 20-60 bps — 2006: 34 bps — 4Q06: 42 bps Consumer NCO ratios ha
Slide 14: Capital plan
Capital plan Current tangible capital levels very strong — Tangible common equity/tangible assets ratio of 7.8% — 2007 year-end target: 7% 2007 plans — Lower tangible equity levels primarily through share repurchases — Existing share repurchase authorization (1/18/07): 15.8 million shares (approxima
Slide 15: Fifth Third: 2007 outlook
Fifth Third: 2007 outlook Category Growth, percentage, or bps range Net interest income High single digits Net interest margin 3.35-3.45% Noninterest income* High single digits Noninterest expense** Mid single digits Loans High single digits Core deposits Mid single digits Net Charge-offs Low to mid
Slide 16: Fifth Third: building a better tomorrow
Fifth Third: building a better tomorrow Balancing growth and profitability Capitalizing on strengths and developing plans to address areas of weakness Communicating clearly with investors Delivering on promises Returning to above-par performance and shareholder returns 16 Fifth Third Bank | All Righ
Slide 17: Appendix
Appendix Consumer credit quality Credit card credit quality Commercial credit quality 17 Fifth Third Bank | All Rights Reserved | Credit Suisse | February 7, 2007
Slide 18: Consumer Credit Quality
Consumer Credit Quality Direct Installment - $12 billion Indirect Installment - $10 billion Mortgage - $10 billion — NCO ratio of 48 bps in 2006 vs. — 90% of portfolio is auto — Mortgage NCO ratio has been historical ratios of 40-45 bps stable for the past 3 years — Fifth Third has larger — Higher c
Slide 19: Credit Card Portfolio
Credit Card Portfolio 2005 bankruptcy reform led to a spike in NCOs in 4Q05 — Recoveries were higher than normal in following two quarters — Expect NCO ratio closer to 4% range going forward Over 85% of consumer credit card portfolio originated from our retail network — Remaining balances from agent
Slide 20: Commercial Credit Quality
Commercial Credit Quality C&I - $21 billion CRE - $16 billion Leasing - $4 billion — Loan growth reflects — Several large credits caused — Large airline-related charge- consistency in quality of increase in commercial mortgage offs source of volatility originations charge-offs, to 25 bps in 2006 fro
Slide 21: Cautionary statement
Cautionary statement This report may contain forward-lookingstatements about the Registrant and/or the company as combined withacquired entities within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act o
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