Attached files
| file | filename |
|---|---|
| EX-99.3 - EX-99.3 - FIFTH THIRD BANCORP | d87593dex993.htm |
| 8-K - FORM 8-K - FIFTH THIRD BANCORP | d87593d8k.htm |
| EX-99.1 - EX-99.1 - FIFTH THIRD BANCORP | d87593dex991.htm |
 Fifth
Third Bank | All Rights Reserved 3Q15 Earnings Presentation
October 20, 2015 Refer to earnings release dated October 20, 2015 for further information. Exhibit 99.2 |
 2 Fifth Third Bank | All Rights Reserved Cautionary statement This release 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 arise during the company’s close process or as a result of subsequent events that would require the company to make adjustments to the 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 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 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) 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 Fifth Third’s investment in, relationship with, and nature of the operations of Vantiv, LLC; (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)
difficulties in separating the operations of any branches or other assets divested; (23) inability to achieve expected benefits from branch consolidations and planned sales within desired timeframes, if at all; (24) ability to secure
confidential information and deliver products and services through the
use of computer systems and telecommunications networks; and (25) 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 ($ in millions) 3Q15 Seq. YOY Average Balances Total loans & leases 1 $93,373 $1,200 $2,574 Core deposits $98,717 ($1,817) $5,557 Income Statement Data Net interest income (taxable equivalent) $906 2% - Provision for loan and lease losses 156 97% NM Noninterest income 713 28% 37% Noninterest expense 943 - 6% Net income attributable to Bancorp $381 21% 12% Net income available to common shareholders $366 25% 12% Financial Ratios Earnings per share, diluted 0.45 25% 15% Net interest margin 2.89% (1bp) (21bps) Efficiency ratio 58.2% (720bps) (390bps) Return on average assets 1.07% 17bps 5bps Return on average common equity 10.0% 190bps 80bps Return on average tangible common equity 2 12.0% 230bps 90bps Tangible book value per share 2 $ 15.18 4% 9% 3Q15 in review Balancing current earnings results with prudent decisions to increase long-term shareholder value
Note: The percentages in all of the tables in this presentation are calculated on
actual dollar amounts and not the rounded dollar amounts. 1
Excludes loans held-for-sale
2 Non-GAAP measure; see Reg. G reconciliation in appendix Significant pre-tax items in 3Q15 results (~$0.06 positive after-tax EPS impact): — $130MM positive valuation adjustment on the Vantiv warrant — ($35MM) of provision expense related to restructuring of a student loan backed commercial credit originally extended in 2007 — ($9MM) charge associated with executive retirements and severance — ($8MM) charge related to valuation of the Visa total return swap 3Q15 core business trends solid despite continued low interest rate environment Credit trends — NCO ratio 80bps of loans and leases as of 3Q15 increased from 37bps in 2Q15 due to the restructuring of a student loan backed credit mentioned above — NPAs down $20MM compared with 2Q15; NPA ratio 65bps Strong capital ratios; tangible book value per share 2 up 9% from 3Q14 |
 4 Fifth Third Bank | All Rights Reserved Balance sheet Loan balances ($B) • Continuing to target prudent risk/reward profile in lending • Average commercial loans HFI up 2% sequentially and up 5% year-over-year – Year-over-year growth primarily driven by C&I and commercial construction, partially offset by lower commercial mortgage balances – End of period commercial line utilization 32% • Average consumer loans HFI increased 1% sequentially and were flat year-over- year • Average transaction deposits down $1.8B sequentially with decreases in interest checking and savings account balances, partially offset by higher money market account balances – Consumer average transaction deposits down 2% sequentially and up 4% year-over-year – Commercial average transaction deposits down 2% sequentially and up 9% year-over-year • Average core deposit to loan ratio of 106% Average core deposit balances ($B) $98.7 $93.2 0 5 10 15 20 25 30 3Q14 4Q14 1Q15 2Q15 3Q15 Average securities and short-term investments ($B) • Average securities up $5.7B from 3Q14 driven by LCR requirements • Securities portfolio / total assets of 20.7% in 3Q15, up from 17.5% a year ago • Average other short-term investments decreased $0.5B year-over-year $30.1 $24.9 $27.6 $29.0 $30.6 Note: Numbers may not sum due to rounding. $22.6 $22.4 $23.2 $27.4 $28.3 $90.8 $91.0 $90.5 $92.2 $93.4 $89.4 $92.4 $94.2 $96.5 $94.7 103% 106% 108% 109% 106% Average securities Short -term investments 95% 100% 105% 110% 115% 65 70 75 80 85 90 95 100 3Q14 4Q14 1Q15 2Q15 3Q15 Transaction deposits Other time deposits Core deposit to loan ratio $90.6 $93.6 70 75 80 85 90 95 3Q14 4Q14 1Q15 2Q15 3Q15 EOP loans HFI Avg loans HFI |
 5 Fifth Third Bank | All Rights Reserved $908 $888 $852 $892 $906 3.10% 2.96% 2.86% 2.90% 2.89% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 3Q14 4Q14 1Q15 2Q15 3Q15 Net Interest Income ($MM) NIM Net interest income NII and NIM (FTE) • Net interest income up $14MM from 2Q15 – Increase driven by loan growth, partially offset by interest expense associated with the $1.1 billion of holding
company debt and $1.3 billion of bank-level debt issued in the third quarter of 2015
that pre-funded a portion of our 2016 maturities at attractive spreads
before the widening –
NIM decreased 1 bp from the previous quarter, primarily driven by the impact of debt
issuances discussed above, day count, and loan yield compression, partially
offset by the benefit of the slightly lower short-term cash position
during the quarter •
Year-over-year NII decreased $2MM and NIM decreased 21 bps
– NII decrease driven by a $24MM decline due to the changes to the Bancorp’s deposit advance product effective
January 1, 2015, higher interest expense due to increased long-term debt balances, as
well as continued loan repricing, partially offset by the impact of higher
investment securities balances –
NIM decrease primarily driven by an 8 bps impact due to the changes to the deposit
advance product and loan repricing
Yield Analysis 3Q14 2Q15 3Q15 Seq. (bps) YoY (bps) Commercial and industrial loans 3.25% 3.14% 3.11% (3) (14) Commercial mortgage loans 3.34% 3.22% 3.17% (5) (17) Commercial construction loans 3.49% 3.17% 3.13% (4) (36) Commercial leases 2.96% 2.83% 2.72% (11) (24) Residential mortgage loans 3.84% 3.69% 3.63% (6) (21) Home equity 3.69% 3.66% 3.61% (5) (8) Automobile loans 2.72% 2.65% 2.62% (3) (10) Credit card 9.87% 10.33% 10.38% 5 51 Other consumer loans and leases 36.98% 8.49% 6.81% (168) (3,017) Total loans and leases 3.61% 3.41% 3.36% (5) (25) Taxable securities 3.32% 3.20% 3.23% 3 (9) Tax exempt securities 5.34% 4.82% 5.20% 38 (14) Other short-term investments 0.26% 0.25% 0.23% (2) (3) Total interest-earning assets 3.49% 3.28% 3.29% 1 (20) Total interest-bearing liabilities 0.56% 0.56% 0.58% 2 2 Net interest spread 2.93% 2.72% 2.71% (1) (22) |
 6 Fifth Third Bank | All Rights Reserved 3Q14 2Q15 3Q15 Seq. YOY ($ in millions) $145 $139 $145 4% - 100 113 104 (8%) 4% 61 117 71 (39%) 16% 103 105 103 (2%) - revenue 75 77 77 - 3% income 33 1 213 NM NM gains, net 3 4 - (100%) (100%) noninterest income $520 $556 $713 28% 37% Vantiv warrant valuation 53 (14) (130) Valuation of Visa total return swap 3 2 8 Branch / Land valuation adjustments - 97 - Securities (gains) / losses (3) (4) - Adjusted noninterest income $573 $637 $591 (7%) 3% Noninterest income Compared with 2Q15 • Service charges on deposits sequential increase was due to seasonally higher overdraft occurrences as well as higher commercial service charges • Corporate banking revenue results were primarily due to seasonally lower institutional sales revenue, business lending fees, and foreign exchange fees, partially offset by higher interest rate derivative fees and syndications revenue • Mortgage banking revenue results reflect lower mortgage servicing revenues and seasonally lower originations in 3Q15 Compared with 3Q14 • Corporate banking revenue results driven by higher institutional sales revenue and loan syndications, partially offset by lower foreign exchange fees. Components of noninterest income 5 quarter trend ($MM) $566 $637 $573 $612 $591 $- $200 $400 $600 $800 3Q14 4Q14 1Q15 2Q15 3Q15 Adjusted noninterest income Mortgage banking net revenue Reported noninterest income |
 7 Fifth Third Bank | All Rights Reserved Noninterest expense Compared with 2Q15 • Expenses were flat sequentially, reflecting a reversal of litigation reserves, partially offset by higher compensation primarily associated with executive retirements and severance Compared with 3Q14 • Expenses were up 6% year-over-year due to higher compensation expense, the change in provision for unfunded commitments and marketing expense 3Q14 2Q15 3Q15 Seq. YOY ($ in millions) Salaries, wages and incentives $357 $383 $387 1% 8% Employee benefits 75 78 72 (8%) (4%) Net occupancy expense 78 83 77 (7%) (1%) Technology and communications 53 54 56 4% 6% Equipment expense 30 31 31 - 3% Card and processing expense 37 38 40 5% 8% Other noninterest expense 258 280 280 - 9% Noninterest expense $888 $947 $943 - 6% Severance (2) (2) (3) Executive Retirements (6) Adjusted noninterest expense $886 $945 $934 (1%) 5% Components of noninterest expense $886 $912 $922 $945 $934 $- $200 $400 $600 $800 $1,000 3Q14 4Q14 1Q15 2Q15 3Q15 Adjusted noninterest expense Reported noninterest expense 5 quarter trend ($MM) Note: Provision for unfunded commitments was an expense of $2M in 3Q15, an expense of $2M in 2Q15, a benefit of $4M in 1Q15, an expense of $1M in 4Q14, and a benefit of $8M in 3Q14. |
 8 Fifth Third Bank | All Rights Reserved Credit quality overview Net charge-offs ($MM) $86 $115 NCO ratio 0.50% 0.83% 0.41% 0.37% 0.80% $188 HFI Nonperforming assets ($MM) $691 $626 $606 $744 $796 NPAs down 3% sequentially and 24% from 3Q14; lowest level since 2007 Reserve Coverage Accruing 90+ Days Past Due ($MM) 3Q15 provision expense of $156MM, reserve coverage levels remain solid 90 + delinquencies declined 20% from 3Q14 NPA ratio 0.88%
0.82% 0.76% 0.67%
0.65% Net charge-offs increased $102M from 2Q15 due
to restructuring of 2007 student loan backed commercial
credit $191
$91 102 1 1 Charge-off related to restructuring of a student loan backed commercial credit originally extended in 2007
60 49 52 41 46 55 55 39 45 40 87 $0 $25 $50 $75 $100 $125 $150 $175 $200 3Q14 4Q14 1Q15 2Q15 3Q15 Consumer Commercial Related to TDR Transfer to HFS 487 461 421 376 370 309 283 270 250 236 $0 $200 $400 $600 $800 $1,000 3Q14 4Q14 1Q15 2Q15 3Q15 Commercial Consumer $87 $87 $78 $70 $70 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 3Q14 4Q14 1Q15 2Q15 3Q15 $1,414 $1,322 $1,300 $1,293 $1,261 1.56% 1.47% 1.42% 1.39% 1.35% $0 $500 $1,000 $1,500 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3Q14 4Q14 1Q15 2Q15 3Q15 Allowance for Loan & Lease Losses (ALLL) ($MM) ALLL / Loans and Leases |
 9 Fifth Third Bank | All Rights Reserved Strong capital position 1 Non-GAAP measure; See Reg. G reconciliation in appendix. 2 Represents Basel III common equity tier 1 ratio under the final capital rule, subject to phase-in periods. Fifth Third made a one-time
permanent election to not include AOCI in common equity tier 1 capital in
the March 31, 2015 regulatory filings. Tier 1 Common Ratio
1 (Basel I) Avg. Diluted Shares Outstanding (MM) and Tangible Book Value per share 1 EOP share impact (MM) Average share impact (MM) 2Q15 3Q15 2Q15 3Q15 4Q15 Oct. 20, 2014 $180MM ASR - - 0.1 - - Jan. 22, 2015 $180MM ASR 1.1 - 3.4 0.3 - April 27, 2015 $155MM ASR 6.7 0.8 4.5 2.8 0.3 July 29, 2015 $150MM ASR - 7.3 - 4.6 2.8 Sept. 3, 2015 $150MM ASR - 6.5 - 1.9 4.6 Total 7.8 14.6 8.0 9.6 7.7 Capital Actions Impact of Share Repurchases Common Equity Tier 1 Ratio 2 (Basel III) Announced $155MM share repurchase transaction in 2Q15; completed on July 31, 2015 Announced two additional share repurchase transactions totaling $300MM 9.6% 9.7% 9.5% 9.4% 9.4% 0% 2% 4% 6% 8% 10% 3Q14 4Q14 1Q15 2Q15 3Q15 838 828 819 813 805 $13.95 $14.40 $14.85 $14.62 $15.18 625 675 725 775 825 875 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 3Q14 4Q14 1Q15 2Q15 3Q15 Common Shares O/S TBV per share — Settled the first on August 31, 2015 for a total repurchase of 7.4MM shares — Executed second repurchase on September 3, 2015 for an initial 6.5MM shares |
 10 Fifth Third Bank | All Rights Reserved Appendix |
 11 Fifth Third Bank | All Rights Reserved 62.1% 59.6% 62.3% 58.2% 59.5% 60.9% 64.9% 61.9% 62.7% 3Q14 4Q14 1Q15 2Q15 3Q15 Efficiency Ratio Adjusted Efficiency Ratio Pre-tax pre-provision earnings 1 PPNR trend 1 Non-GAAP measure; see Reg. G reconciliation in appendix. 2 Prior quarters include similar adjustments. PPNR increased 35% sequentially, reflecting impact of a $118MM in net benefit in 3Q15. Excluding those items, adjusted PPNR decreased 4% sequentially, reflecting lower mortgage banking net revenue in 3Q15 PPNR reconciliation Efficiency ratio 65.4% ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 Income before income taxes (U.S. GAAP) (a) $464 $519 $485 $417 $515 Add: Provision expense (U.S. GAAP) (b) 71 99 69 79 156 PPNR (a) + (b) $535 $618 $554 $496 $671 Adjustments to remove (benefit) / detriment 2 : In noninterest income: Vantiv warrant valuation 53 (56) (70) (14) (130) Branch and land valuation adjusments - - - 97 - Gain from sales of troubled debt restructurings - - (37) - - Impairment associated with aircraft leases - - 30 - - Valuation of 2009 Visa total return swap 3 19 17 2 8 Securities (gains) / losses (3) (4) (4) (4) - In noninterest expense: Severance expense 2 6 1 2 3 Litigation reserve charges 4 (3) 2 (1) (5) Executive Retirements - - - - 6 Adjusted PPNR $594 $580 $493 $578 $553 $594 $580 $493 $578 $553 $0 $100 $200 $300 $400 $500 $600 $700 3Q14 4Q14 1Q15 2Q15 3Q15 Adjusted PPNR Reported PPNR |
 Fifth
Third Bank | All Rights Reserved •
$2.3B in originations; 58% purchase volume
• 3Q15 mortgage drivers: – Origination fees and gain on sale revenue up $3MM – Gain on sale margin up 10 bps sequentially – Retaining conforming ARMs and shorter-term fixed-rate production on balance sheet
– MSR valuation adjustments of positive $8MM; servicing rights amortization of $37MM
– $54MM in gross servicing fees Mortgage originations ($B) and gain on sale margin 1 Mortgage Banking Net Revenue ($MM) Note: Numbers may not sum due to rounding. 1 Gain on sale margin represents gains on all loans originated for sale. $117 $61 $71 $61 1 $86 12 61 60 59 56 54 (33) (32) (34) (39) (37) (1) (2) 17 57 8 3Q14 4Q14 1Q15 2Q15 3Q15 Orig fees and gains on loan sales Gross servicing fees Servicing rights amortization MSR valuation adjustments 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 3Q14 4Q14 1Q15 2Q15 3Q15 Originations for sale Originations HFI Margin 34 36 44 43 46 Mortgage banking results |
 Fifth
Third Bank | All Rights Reserved $350
$2,475 $650 $1,850 $850 $850 2015 2016 2017 2018 2019 2020 2021 On Available and contingent borrowing capacity (3Q15): – FHLB ~$9.3B available, ~$14.6B total – Federal Reserve ~$26.8B Holding Company cash at 9/30/15: $3.2B Cash currently sufficient to satisfy all fixed obligations in a stressed environment for ~23 months (debt maturities, common and preferred dividends, interest and other expenses) without accessing capital markets; relying on dividends from subsidiaries or any other discretionary actions Holding company unsecured debt maturities ($MM) Bank unsecured debt maturities ($MM – excl. Retail Brokered CDs) Heavily core funded Strong liquidity profile S-T wholesale 3% $1,250 $500 $500 $500 $1,100 $2,312 2015 2016 2017 2018 2019 2020 2021 on Fifth Third Bancorp Fifth Third Capital Trust (Bancorp) Demand 25% Interest checking 18% Savings/ MMDA 24% Consumer time 3% Foreign Office 0% Non-Core Deposits 2% S-T borrowings 1% Other liabilities 5% Equity 11% L-T debt 11% 13 |
 14 Fifth Third Bank | All Rights Reserved Interest Rate Risk Management 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 Well-positioned for rising rates
• NII benefits from asset re-pricings in a rising rate environment – 64% of total loans are floating rate (82% of commercial and 37% of consumer) – Investment portfolio duration of approximately 5.1 years – Short-term wholesale funding represents approximately 3.25% - 3.75% of total funding – Approximately $14BN in non-core funding matures beyond one year • Interest rate sensitivities 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 $2.5BN (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 +200 bps Shock Change in Interest Rates +100 bps Shock +200 bps Ramp 1.63% 5.40% (4.00%) +25 bps Shock +100 bps Ramp 0.87% 3.49% - -25 bps Shock Betas 25% Higher Betas 25% Lower Change in Interest Rates 12 Months 13 to 24 Months 12 Months Change in Interest Rates 12 Months 13 to 24 Months 12 Months 13 to 24 Months +200 bps Ramp 1.35% 4.83% 1.92% +200 bps Ramp (1.46%) (0.79%) 4.73% 11.58% +100 bps Ramp 0.73% 3.21% 1.01% +100 bps Ramp (0.68%) 0.40% 2.41% 6.58% 13 to 24 Months 5.97% 3.78% ESTIMATED NII SENSITIVITY with DEMAND DEPOSIT BALANCE CHANGES ESTIMATED NII SENSITIVITY with DEPOSIT BETA CHANGES Percent Change in NII (FTE) Percent Change in NII (FTE) $1B Balance Decrease $1B Balance Increase (12.00%) (1.92%) (6.00%) (0.37%) - 0.28% 12 Months 13 to 24 Months 12 Months 13 to 24 Months (4.75%) ESTIMATED NII SENSITIVITY PROFILE ESTIMATED EVE SENSITIVITY PROFILE Percent Change in NII (FTE) ALCO Policy Limits Change in EVE ALCO Policy Limit |
 15 Fifth Third Bank | All Rights Reserved NPL rollforward NPL HFI Rollforward Commercial 3Q14 4Q14 1Q15 2Q15 3Q15 396 385 367 325 287 Transfers to nonperforming 116 99 80 66 194 Transfers to performing - (1) (1) (3) (2) Transfers from held for sale
- - - - - Transfers to held for sale (3) - - - - Loans sold from portfolio (12) (5) (5) (3) (1) Loan paydowns/payoffs
(39) (45) (62) (44) (46) Transfers to other real estate owned (9) (7) (9) (10) - Charge-offs (66) (62) (45) (49) (148) Draws/other extensions of credit 2 3 - 5 2 385 367 325 287 286 Consumer 3Q14 4Q14 1Q15 2Q15 3Q15 244 235 212 201 188 Transfers to nonperforming 90 86 54 55 55 Transfers to performing
(40) (33) (23) (26) (30) Transfers from held for sale - - 5 - - Transfers to held for sale - (24) - - (1) Loans sold from portfolio
- - - - - Loan paydowns/payoffs (5) (5) (8) (14) (11) Transfers to OREO/other repossessed property (21) (20) (17) (10) (11) Charge-offs (33) (27) (22) (18) (18) Draws/other extensions of credit - - - - - 235 212 201 188 172 Total NPL 620 579 526 475 458 Total new nonaccrual loans - HFI 206 185 134 121 249 Beginning NPL amount Ending Commercial NPL Beginning NPL amount Ending Consumer NPL |
  16 © Fifth Third Bank | All Rights Reserved Commercial & industrial Loans by geography Credit trends Loans by industry Comments * Excludes loans held-for-sale. • Commercial & industrial loans represented 46% of total loans • C&I loans were flat sequentially and up 5% since 3Q14 • SNC portfolio $26.2B • Non-power producer Energy portfolio $1.6B, down slightly from 2Q15 • Net charge-offs increased $94 million from 2Q15 primarily due to the $102 million net charge-off related to the restructuring of a 2007 student loan based credit ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $41,072 $40,765 $42,052 $42,800 $42,948 Avg Loans* $41,477 $41,277 $41,426 $42,550 $43,149 90+ days delinquent - - $2 $2 $3 as % of loans NM NM NM NM 0.01% NPAs* $278 $246 $216 $193 $183 as % of loans 0.68% 0.60% 0.58% 0.45% 0.43% Net charge-offs $50 $44 $38 $34 $128 as % of loans 0.48% 0.43% 0.38% 0.32% 1.17% C&I MI 7% OH 13% IN 5% IL 11% KY 3% TN 5% NC 5% Other / National 44% FL 7% Accommodation 3% Auto Manufacturing 1% Construction 3% Finance & Insurance 13% Manufacturing 22% Real Estate 3% Retail Trade 5% Auto Retailers 2% Wholesale Trade 9% Other 39% |
  17 Fifth Third Bank | All Rights Reserved Commercial real estate Loans by geography Credit trends Loans by industry Comments • Commercial mortgage loans represented 8% of total loans • Commercial construction loans represented 3% of total loans — Portfolio focused on large professional developers — Top 3 categories: Apartments, office and REIT * Excludes loans held-for-sale. ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $7,564 $7,399 $7,209 $7,150 $7,061 Avg Loans* $7,633 $7,480 $7,241 $7,148 $7,023 NPAs* $186 $195 $186 $166 $165 as % of loans 2.43% 2.62% 2.56% 2.31% 2.34% Net charge-offs $5 $10 $1 $11 $11 as % of loans 0.24% 0.53% 0.05% 0.62% 0.66% Commercial mortgage MI 14% OH 24% IN 5% IL 11% KY 2% TN 2% NC 6% Other / National 24% FL 12% Accommodation 8% Construction 6% Finance & insurance 2% Auto Manufacturing 0% Manufacturing 5% Real estate 46% Retail Trade 3% Auto Retailers 3% Wholesale Trade 3% Other 24% ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $1,702 $2,069 $2,302 $2,709 $3,101 Avg Loans* $1,563 $1,909 $2,197 $2,549 $2,965 NPAs* $19 $16 $16 $14 $19 as % of loans 1.09% 0.75% 0.67% 0.51% 0.61% Net charge-offs - - - - $3 as % of loans (0.11%) (0.01%) (0.06%) 0.00% 0.43% Commercial construction |
 18 Fifth Third Bank | All Rights Reserved Residential mortgage 1 st liens: 100%; weighted average LTV: 73.2% Weighted average origination FICO: 757 Origination FICO distribution: <660 5%; 660-689 5%; 690-719 9%;
720-749 14%; 750+ 61%; Other^ 6%
(note: loans <660 includes CRA loans and FHA/VA loans)
Origination LTV distribution: <=70 39%; 70.1-80 36%; 80.1-90 7%;
90.1-95 5%; >95 13%
Vintage distribution: 2015: 20%, 2014: 16%, 2013: 17%; 2012 16%;
2011 9%; 2010 5%; 2009 3%; 2008 2%; 2007 2%; 2006 2%; 2005
3%; 2004 and prior 5% 15% originated through 3 rd party; performance similar to direct Loans by geography Credit trends Portfolio details Comments ^ Includes acquired loans where FICO at origination is not available * Excludes loans held-for-sale • Residential mortgage loans represented 14% of total loans and 2% of net charge-offs • Net charge-offs decreased by $2MM sequentially — MI, IL and OH account for 22%, 18%, and 13% of residential mortgage net charge-offs, respectively ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $12,941 $12,389 $12,569 $12,933 $13,392 Avg Loans* $12,785 $13,046 $12,433 $12,831 $13,144 90+ days delinquent $57 $56 $48 $43 $40 as % of loans 0.44% 0.44% 0.38% 0.33% 0.30% NPAs* $164 $126 $113 $101 $91 as % of loans 1.27% 1.01% 0.91% 0.78% 0.68% Net charge-offs $9 $94 $6 $5 $3 as % of loans 0.28% 2.87% 0.19% 0.16% 0.10% Residential mortgage MI 14% OH 23% IN 7% IL 14% KY 6% TN 2% NC 5% Other / National 18% FL 11% |
 19 Fifth Third Bank | All Rights Reserved Home equity loans represented 9% of total loans and 5% of net charge-offs Approximately 12% of portfolio in broker product generated 33% total loss 38% of Fifth Third 2 nd liens are behind Fifth Third 1 st liens 2005/2006 vintages represent approximately 22% of portfolio; account for 40% of losses Home equity 1 st liens: 35%; 2 nd liens: 65% Weighted average origination FICO: 754 Origination FICO distribution^: <660 3%; 660-689 7%; 690-719 12%; 720-749 16%; 750+ 55%; Other 7% Average CLTV: 72%; Origination CLTV distribution: <=70 42%; 70.1- 80 24%; 80.1-90 18%; 90.1-95 5%; >95 11% Vintage distribution: 2015: 6%; 2014: 8%, 2013: 6%; 2012 3%; 2011 2%; 2010 2%; 2009 3%; 2008 8%; 2007 8%; 2006 12%; 2005 11%; 2004 and prior 31% % through broker channels: 12% WA FICO: 734 brokered, 757 direct; WA CLTV: 87% brokered; 70% direct Portfolio details Brokered loans by geography Direct loans by geography Credit trends Note: Brokered and direct home equity net charge-off ratios are calculated based on end of period loan balances
^ Includes acquired loans where FICO at origination is not available
* Excludes loans held-for-sale
MI 22% OH 26% IN 9% FL 3% MI 20% OH 32% IN 9% IL 14% KY 8% TN 1% NC 5% Other 2% FL 9% ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $1,094 $1,062 $1,028 $987 $950 90+ days delinquent - - - - - as % of loans NM NM NM NM NM Net charge-offs $4 $3 $3 $3 $3 as % of loans 1.42% 1.05% 1.11% 1.06% 1.22% Home equity - brokered ($ in millions) 3Q14 4Q14 1Q15 2Q15 3Q15 EOP Balance* $7,893 $7,824 $7,686 $7,560 $7,477 90+ days delinquent - - - - - as % of loans NM NM NM NM NM Net charge-offs $10 $8 $11 $6 $6 as % of loans 0.51% 0.42% 0.59% 0.34% 0.32% Home equity - direct Comments IL 13% KY 6% TN 2% NC 1% Other 18% |
 20 Fifth Third Bank | All Rights Reserved Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation $ and shares in millions (unaudited) September June March December September 2015 2015 2015 2014 2014 Income before income taxes (U.S. GAAP) 515 417 485 519 464 Add: Provision expense (U.S. GAAP) 156 79 69 99 71 Pre-provision net revenue 671 496 554 618 535 Net income available to common shareholders (U.S. GAAP) 366 292 346 362 328 Add: Intangible amortization, net of tax - - - 1 1 Tangible net income available to common shareholders 366 292 346 363 329 Tangible net income available to common shareholders (annualized) (a) 1,452 1,171 1,403 1,440 1,305 Average Bancorp shareholders' equity (U.S. GAAP) 15,815 15,841 15,820 15,644 15,486 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 (14) (15) (15) (17) (16) Average tangible common equity (b) 12,054 12,079 12,058 11,880 11,723 Total Bancorp shareholders' equity (U.S. GAAP) 15,826 15,605 15,864 15,626 15,404 Less: Preferred stock (1,331) (1,331) (1,331) (1,331) (1,331) Goodwill (2,416) (2,416) (2,416) (2,416) (2,416) Intangible assets and other servicing rights (13) (14) (15) (16) (16) Tangible common equity, including unrealized gains / losses (c) 12,066 11,844 12,102 11,863 11,641 Less: Accumulated other comprehensive income (522) (291) (588) (429) (301) Tangible common equity, excluding unrealized gains / losses (d) 11,544 11,553 11,514 11,434 11,340 Total assets (U.S. GAAP) 141,918 141,658 140,470 138,706 134,188 Less: Goodwill (2,416) (2,416) (2,416) (2,416) (2,416) Intangible assets and other servicing rights (13) (14) (15) (16) (16) Tangible assets, including unrealized gains / losses (e) 139,489 139,228 138,039 136,274 131,756 Less: Accumulated other comprehensive income / loss, before tax (803) (448) (905) (660) (463) Tangible assets, excluding unrealized gains / losses (f) 138,686 138,780 137,134 135,614 131,293 Common shares outstanding (g) 795 810 815 824 834 Ratios: Return on average tangible common equity (a) / (b) 12.0% 9.7% 11.7% 12.1% 11.1% Tangible common equity (excluding unrealized gains/losses) (d) / (f) 8.32% 8.33% 8.40% 8.43% 8.64% Tangible common equity (including unrealized gains/losses) (c) / (e) 8.65% 8.51% 8.77% 8.71% 8.84% Tangible book value per share (c) / (g) $15.18 $14.62 $14.85 $14.40 $13.95 For the Three Months Ended |
 21 Fifth Third Bank | All Rights Reserved Regulation G Non-GAAP reconciliation Fifth Third Bancorp and Subsidiaries Regulation G Non-GAAP Reconcilation $ and shares in millions (unaudited) September June March December September 2015 2015 2015 2014 2014 Total Bancorp shareholders' equity (U.S. GAAP) N/A N/A N/A 15,626 15,404 Goodwill and certain other intangibles N/A N/A N/A (2,476) (2,484) Unrealized gains N/A N/A N/A (429) (301) Qualifying trust preferred securities N/A N/A N/A 60 60 Other N/A N/A N/A (17) (18) Tier I capital N/A N/A N/A 12,764 12,661 Less: Preferred stock N/A N/A N/A (1,331) (1,331) Qualifying trust preferred securities N/A N/A N/A (60) (60) Qualifying noncontrolling interest in consolidated subsidiaries N/A N/A N/A (1) (1) Tier I common equity (a) N/A (2) N/A (2) N/A (2) 11,372 11,269 Risk-weighted assets (actual) (b) (1) 123,140 122,986 121,310 117,878 116,917 Ratio: Tier I common equity (a) / (b) N/A (2) N/A (2) N/A (2) 9.65% 9.64% Basel III Final Rule - Transitional to fully phased-in CET 1 capital (transitional) 11,574 11,582 11,543 Less: Adjustments to CET 1 capital from transitional to fully phased-in (3) (11) (12) (13) CET 1 capital (fully phased-in) (c) 11,563 11,570 11,530 Risk-weighted assets (transitional) 123,140 122,986 121,310 Add: Adjustments to risk-weighted assets from transitional to fully phased-in
(4) 1,136 1,280 1,182 Risk-weighted assets (fully phased-in) (d) 124,276 124,266 122,492 Estimated CET 1 capital ratio under Basel III Final Rule (fully phased-in) (c) / (d)
9.30% 9.31% 9.41% (1) (2) The Bancorp became subject to the Basel III Final Rule on January 1, 2015. This codified in the federal banking regulations the risk-based
capital ratios the Bancorp is now subject to, as such these ratios are no longer considered Non-GAAP measures. (3) Primarily relates to disallowed intangible assets (other than goodwill and MSRs, net of associated deferred tax liabilities).
(4) Primarily relates to higher risk-weighting for MSRs. For the Three Months Ended Under the banking agencies’ risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet
exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk-weight of the category. The resulting weighted values are added together, along with the measure for market
risk, resulting in the Bancorp’s total risk-weighted assets.
Basel I Basel III Transitional |