FIFTH THIRD BANCORP - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - 8-K - FIFTH THIRD BANCORP	d448810d8k.htm

Goldman Sachs

U.S. Financial Services Conference

Kevin T. Kabat

Chief Executive Officer

December 5, 2012

Refer to earnings release dated October 18, 2012

and 10-Q dated November 7, 2012 for further information

Exhibit 99.1

Well-positioned for success and leadership in new banking landscape

Key themes

Strong levels of

profitability

Broad-based

credit

improvements

Exceed fully

Phased-in Basel

III capital

standards today

Well-established

franchise in key

markets

Commitment to

our customers

and our

communities

Continued

investments to

maintain and

enhance

revenue-

generation

Disciplined

expense control

Traditional

banking focus

consistent with

direction of

financial reform

A strong franchise showing momentum

Strong results underscored by

continued loan growth, solid fee

income, expense control, and ongoing

improvement in credit metrics

Traditional banking model moderate

risk profile and strong execution

contribute to above average returns

New product offerings consistent with

our mission, our customer value

proposition, and regulatory reform

Return capital from robust internal

capital generation through

appropriate dividend payout and

share repurchase plans

Current and forecasted fully phased-in

pro-forma capital ratios would

substantially exceed new fully

phased-in well-capitalized minimums

Earnings Growth

Net income available to common shareholders ($MM)

Diluted EPS

$233

$789

$1,152

$200

$400

$600

$800

$1,000

$1,200

$1,400

2010 YTD

2011 YTD

2012 YTD

$0.29

$0.86

$1.23

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

2010 YTD

2011 YTD

2012 YTD

NII results reflect continued moderate NIM

pressure offset by balance sheet growth

* Represents purchase accounting adjustments included in net interest income.

^ Estimate; funding (DDAs + interest-bearing liabilities); liabilities attributed to fixed

or floating using terms and expected beta

Fixed / Floating Portfolio

Interest-Earning

Assets

Funding^

Fixed

~55-60%

NII and NIM (FTE)

($MM)

Loans

50%

Loans

33%

Investment

Portfolio 3%

Trend: fixed rate loan origination coupons

relative to fixed portfolio weighted avg

Larger portfolio repricing effects

3.65%

3.67%

3.61%

3.56%

$450

$550

$650

$750

$850

$950

2.0%

2.5%

3.0%

3.5%

4.0%

3Q11

4Q11

1Q12

2Q12

3Q12

$902

$920

$903

$899

$907

Net Interest Income (right axis)

PAA*

NIM

Floating

Fixed

47%

Floating

53%

Investment

Portfolio

14%

Floating

45%

0.00

0.50

1.00

1.50

2.00

•

3Q12 NII included $10MM of non-recurring benefits (4

bps positive impact to NIM)

•

NIM pressure created by low rate environment, higher

prepayment speeds, repricing in securities and loan

portfolios, and modest natural asset sensitivity, but

overall is expected to be manageable

•

Spreads on new originations of variable rate assets

consistent with historical spreads

•

Coupons on new fixed rate loan originations

converging with portfolio average coupons

•

Current trends have pressured net interest income

levels, but expect to mitigate much of impact with

continued loan growth and liability management

Emphasis on variable rate C&I lending

Balance sheet growth mitigates rate environment

Average loan growth ($B)^

Average core deposit growth ($B)

^ Excludes loans held-for-sale

Note: Numbers may not sum due to rounding

•

Core deposit to loan ratio of 99% consistent with

3Q11

–

DDAs up 15% year-over-year

–

Consumer average transaction deposits up 5%

year-over-year

–

Commercial average transaction deposits up

10% year-over-year

•

Short-term wholesale borrowings represent only

7% of total funding

•

Growth driven by C&I and residential mortgage

loans; portfolios in run-off mode are of moderate

size

–

Commercial line utilization stable at 32%;

potential source of future growth

•

CRE portfolio continues to run-off, with modest

selective current origination volume

•

Managing auto volumes to ensure appropriate

returns; spread pressure due to competition

•

Branch mortgage refi product has FICO over 780,

LTV ~60% and avg. term ~15 years while yielding

above market rates due to process convenience

3Q11

4Q11

1Q12

2Q12

3Q12

3Q11

4Q11

1Q12

2Q12

3Q12

Commercial Loans

Consumer Loans

Demand

IBT/Savings/MMDA

Consumer CD/Core foreign

Strong revenue and profit generation

Source: SNL Financial and Company Reports. Peer median includes: BBT, CMA, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC, and ZION

* Excludes securities gains / losses for FITB and peers. Non-GAAP measure. See Reg. G reconciliation in the Appendix to the presentation.

^ Excludes $16 million negative valuation adjustment on the Vantiv warrant in 3Q12

PPNR* / Average Assets

Peer med. 1.7%

1.9%

Deposit fees

Corporate

banking

Investment

advisors

Other

Mortgage

Card &

Processing

Fee Income Distribution

Significant purchase

accounting benefit

3Q12 returns strong relative to peers

ROAA

ROAE

•

Business mix provides higher than average

diversity among spread and fee revenues (40+%

of revenue)

•

Relatively strong margin and relatively high fee

income contribution drives strong revenue and

PPNR generation profitability despite sluggish

economy

•

Income from ownership in Vantiv $25MM in

3Q12 (full year 2011 quarterly avg ~$14MM,

despite selling ~10% in 1Q12)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

USB

WFC

MTB

BBT

FITB

PNC

KEY

HBAN

ZION

CMA

STI

19%

15%

14%

13%

30%

10%

10.4%

10.1%

10.9%

FITB

Peer Median

ROAE

Adjusted ROAE^

1.23%

1.20%

1.28%

FITB

Peer Median

ROAA

Adjusted ROAA^

Strong mortgage banking results

•

Record origination fees and gain on

loan sales in 3Q12

•

Highest ranking among all servicers

and peer groups in Fannie Mae’s

2011 STAR

Program for servicing

performance

Looking forward:

•

Stronger originations / deliveries in

4Q12 vs 3Q12

–

Results should remain robust

while rates remain low

•

Gain on sale margins benefitting

from:

–

Strong demand

–

Industry capacity constraints

–

Strong mortgage-backed securities

pricing

•

HARP 2.0 originations expected to

remain similar percentage of total

originations in 4Q12 vs 3Q12

Mortgage originations and gain-on-sale margins*

Mortgage Banking Revenue ($MM)

* Gain-on-sale margin represents margin on loans originated for sale.

119

152

174

183

226

(34)

(47)

(46)

(41)

(48)

(7)

(22)

(40)

3Q11

4Q11

1Q12

2Q12

3Q12

Orig fees and gains on loan sales

Gross servicing fees

Servicing rights amortization

MSR valuation adjustments

$178

$200

$183

$156

$204

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

3Q11

4Q11

1Q12

2Q12

3Q12

Originations for sale

Originations HFI

Margins*

($B)

Momentum building in corporate banking

Corporate banking revenue ($MM)

$87

$82

$97

$102

•

YTD corporate banking revenue up

12% versus YTD 2011

•

Continued demand in large

corporate and mid-corporate space

•

C&I loans as a percent of total

commercial loans was 71% at 3Q12

versus peer average of 63%

•

C&I production continues to be

broad based across industries and

sectors

–

Strength in manufacturing and

healthcare industries

–

Launch of Energy Lending

vertical expected to contribute to

future growth in C&I

$101

C&I Portfolio^ ($B)

^ Presented on an average basis; Excluding held-for-sale loans.

$20

$40

$60

$80

$100

$120

3Q11

4Q11

1Q12

2Q12

3Q12

Letter of Credit / FX

Institutional Sales

Interest Rate Derivatives

Business Lending Fees

Other Corporate Banking

26.3

27.3

27.9

28.8

29.9

31.4

32.7

33.1

$20

$22

$24

$26

$28

$30

$32

$34

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

•

Deposit checks, view

balances, transfer

funds, pay bills, view

alerts, and more

•

App available on

iPhone, Android, and

BlackBerry

•

The only

combined credit

and a debit card

•

Convenience, security,

and financial flexibility

•

New sales consistently

increasing; ~30% of new

consumer card accounts

•

Reloadable Prepaid Card

•

Add money anytime

without incurring a "load

fee“; low monthly fee

•

Use card anywhere Debit

MasterCard is accepted

•

Innovative, end-to-end

remote cash

management solution

•

Maximize cash flow while

boosting control over

cash handling

•

~7,000 RCM locations;

has more than doubled

since 2009

Mobile Experience

Access 360°

DUO Card

Remote Currency Manager

Providing customers with products and services they find valuable

New products developed by listening to the voice of the customer

and a

deliberate approach to mitigate regulatory and legislative impacts

Customer oriented solutions

•

Withdraw cash at any Fifth Third ATM or

Banking Center free of charge

Simplifying deposit structure:

Aligning value to our customers with value to Fifth Third

Value to our customers

Value to Fifth Third

Accounts straightforward and easy to

use

Simplified service charges with

elimination of certain fees

Greater benefits, including competitive

rates and identity theft protection, for

total relationship value

Simplifies relationship building

for our sales force by reducing

complexity across checking and

savings products

Payment and deposit fee results

and balances expected to

contribute to revenue growth

Changes are compatible with

Fifth Third’s strategic direction

and new regulatory landscape

We are committed to providing valuable products

and services at a fair price

–

25 checking products simplified to

5 segment-focused products

–

17 savings products simplified to 3

–

Elimination of daily overdraft fees

on continuing customer overdraft

positions

–

Broader and deeper banking

relationships with Fifth Third earn

better rates and lower costs

Disciplined expense management

2012 expense trend ($MM)

* Non-recurring items described on page 19 in the appendix to this presentation.

Reported expense

Increasing expense

Non-recurring items*:

Adjusted expense

Decreasing expense

$973

$937

$1,006

$23

$17

($28)

($2)

($50)

$968

$952

$961

Managing expenses carefully in response to revenue

environment; continuous process of expense evaluation

Efficiency ratio trend

$890

$910

$930

$950

$970

$990

$1,010

1Q12

2Q12

3Q12

4Q12

68%

58%

59%

64%

65%

62%

61%

4Q11

1Q12

2Q12

3Q12

Efficiency Ratio

Adjusted*

•

Expect similar adjusted efficiency ratio in

4Q12; target mid-50% in normalized

environment (with higher interest rate

environment)

–

Current impact of credit costs on

revenue and expenses; impact of

regulatory reforms (e.g., debit

interchange) not fully mitigated

–

Reflects below-capacity balance sheet

and lower revenue than we expect and

can support longer term

Credit trends continue to improve

with strong reserve coverage levels

Source: SNL Financial and Company Reports. Data as of 3Q12. HFI NPLs exclude loans held-for-sale and also exclude covered assets for BBT, USB, and ZION

* HBAN, KEY, PNC, USB, WFC include the implementation of newly issued 3Q12 OCC guidance which requires write-down of performing consumer loans restructured in bankruptcy to

collateral value. The light blue section indicates the additional charge-offs due to this guidance.

Continued

decline

problem

assets

and

corresponding

decline

charge-offs

combined

with strong reserves on an absolute and relative basis

NPLs / Loans

Loan loss reserves / Loans

Net charge-off ratio

Reserves / NPLs

0.3%

0.4%

0.5%

0.8%

0.5%

0.9%

0.7%

1.1%

0.9%

1.4%

1.6%

MTB

CMA

ZION

PNC*

FITB

KEY*

USB*

HBAN*

BBT

WFC*

STI

NCO

OCC Guidance

0.7%

1.2%

1.0%

0.9%

Peer average: 0.9%

2.7%

2.5%

2.3%

2.2%

2.1%

2.0%

1.8%

1.7%

1.5%

ZION

FITB

WFC

PNC

USB

HBAN

STI

BBT

KEY

CMA

MTB

Peer average: 2.0%

0.9%

1.1%

1.3%

1.4%

1.6%

1.9%

2.5%

2.7%

USB

HBAN

KEY

FITB

BBT

STI

MTB

CMA

PNC

ZION

WFC

Peer average: 1.6%

234%

177%

167%

136%

133%

132%

129%

118%

109%

100%

93%

83%

USB

HBAN

FITB

KEY

BBT

ZION

STI

PNC

MTB

CMA

WFC

Peer average: 131%

Capital management philosophy

* Subject to Board of Directors and regulatory approval

Organic growth opportunities

•

Support growth of core banking franchise

•

Continued loan growth despite sluggish

economy

Strategic opportunities

•

Prudently evaluate franchise including

increasing density in core markets via

disciplined acquisitions or selective de

novos

•

Expect future acquisition opportunities

although activity remains muted in near-term

•

Attain top 3 market position in 65% of

markets or more longer term

Dividends*

•

Move towards levels more consistent with

Fed’s near-term payout ratio guidance of

30%

•

Strong levels of profitability would support

higher dividend than current level

•

Quarterly dividend increased to $0.10 in

3Q12

Repurchases / Redemptions

•

Common share repurchases to limit and

manage growth of excess capital levels

•

Redeemed $1.4bn in TruPS in 3Q12

Expect capital philosophy to remain consistent

pending evaluation of results in 2013 CCAR process

Capital Deployment

Capital Return

–

Manage capital in light of regulatory

environment, other alternatives,

maintenance of desired / required buffers,

stock price

–

$600MM of potential repurchases through

1Q13 ($350MM ASR completed in October;

$125MM ASR entered into in November)

Capital position remains strong

* The pro forma Tier I common equity ratio is management’s estimate based upon its current interpretation of the three draft Federal Register notices proposing enhancements to regulatory

capital requirements published in June 2012. The actual impact to the Bancorp’s Tier I common equity ratio may change significantly due to further clarification of the agencies proposals or

revisions to the agencies final rules, which remain subject to public comment.

Proposed new U.S. capital standards would have manageable impact, if adopted

Primary Basel III Adjustments*

Proposed

fully

phased in

buffered

minimum

of 7.0%

Basel III Impacts

•

3Q12 Tier 1 common equity ratio of

9.67% under Basel I

Current

•

Capital impact increase primarily

from inclusion of AOCI

•

RWA increase primarily from 1-4

family senior and junior lien

residential mortgages,

commitments under one year

Estimated NPR Impact

•

Pro forma 3Q12 Tier 1 common

equity ratio of ~9%* under Basel III

•

Does not include the effect of any

mitigating actions Fifth Third may

take

Pro forma Tier 1 Common Equity

NPR Capital Impact

~45 bps +/-

NPR RWA Impact

~(110 bps) +/-

Total Tier 1 Change

Tier 1 Common Equity

9.67%

Basel I

Pro forma Basel III

~9%*

~(65 bps) +/-

Fifth Third’s balance sheet and business model

relatively advantaged under new capital standards

Fifth Third’s capital position already well in excess of any established standards, likely standards, and most peers

5.0%

7.0%

4.5%

Unofficial CCAR supervisory reference minimum

3Q12 Pro forma Tier 1 common / RWA

U.S. proposed Basel III**

3Q12 Tier 1 common / RWA

Basel I

2019 Basel III buffered minimum

2015 Basel III minimum

Not disclosed

High

range

12.7%

11.4%

10.7%

10.5%

10.4%

10.3%

10.1%

9.8%

9.7%

9.5%

9.0%

7.5%

KEY

BAC

FHN

COF

JPM

CMA

HBAN

WFC

STI

ZION

FITB

BBT

PNC

USB

MTB

10.4%

9.4%

9.0%

8.8%

8.7%

8.6%

8.4%

8.2%

8.0%

7.8%

KEY

CMA

FITB

BAC

HBAN*

JPM

FHN

USB

BBT

WFC

STI

ZION*

COF

MTB

PNC

~9%

Source: SNL Financial and company reports (financial data as of 3Q12).

* Data sourced form SNL Financial 2Q12. In 2Q12, HBAN stated Basel III Tier 1 common ratio would be negatively impacted by approximately 150 basis points.

** Note: Fifth Third’s pro forma Tier I common equity ratio is management’s estimate based upon its current interpretation of the three draft Federal Register notices proposing

enhancements to regulatory capital requirements published in June 2012. The actual impact to the Bancorp’s Tier I common equity ratio may change significantly due to further clarification

of the agencies proposals or revisions to the agencies final rules, which remain subject to public comment. Not adjusted for potential mitigation efforts.

Fifth Third: A differentiated business model

Competitively well-positioned in new landscape

FITB

“Trillionaire”

Banks

Regional

Banks

Community

Banks

Investment

Banks

Diverse businesses

Efficiencies

of scale

market focus

Multi-

channel

delivery

Customer-

centric

model

Moderate risk

profile

Strong

profitability

and well-

capitalized

Local

Cautionary statement

This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of

1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and

Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future

performance or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are

expected

to,”

“is

anticipated,”

“estimate,”

“forecast,”

“projected,”

“intends

to,”

may

include

other

similar

words

phrases

such

“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

maintain

required

capital

levels

and

adequate

sources

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

critical

accounting

policies

and

judgments;

(12)

changes

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

future

acquisitions

current

shareholders’

ownership

Fifth

Third;

(19)

effects

accounting or financial results of one or more acquired entities; (20) difficulties from the separation of or the results of operations of Vantiv,

LLC 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

our

periodic

and

current

reports

filed

with

the

Securities

and

Exchange

Commission,

“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.

Appendix

637

531

582

596

593

$100

$200

$300

$400

$500

$600

$700

$800

3Q11

4Q11

1Q12

2Q12

3Q12

Noninterest Expense Credit Items

Fee Income Credit Items

Adjusted

PPNR $617 $473 $694 $636 $568

Pre-tax pre-provision earnings*

PPNR trend

•

PPNR of $568MM down 11% from 2Q12 levels and

8% from prior year

•

Adjusted PPNR of $593MM, including positive

adjustments totaling $25MM, down 1% sequentially

and 7% year-over-year

—

Including 3Q12 mortgage repurchase reserve

build, PPNR of $617MM

PPNR reconciliation

Efficiency ratio

60%

59%

64%

59%

62%

3Q11

2Q12

3Q12

Efficiency Ratio

Adjusted

* Non-GAAP measure. See Reg. G reconciliation on pages 21 and 22.

** 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.

^ Prior quarters include similar adjustments.

^^ See page 20 for detailed breakout of credit-related items.

# 61% also excluding $22MM 3Q12 mortgage repurchase reserve build

($ in millions)

3Q11

4Q11

1Q12

2Q12

3Q12

Income before income taxes (U.S. GAAP) (a)

$530

$418

$603

$565

$503

Add: Provision expense (U.S. GAAP) (b)

PPNR (a) + (b)

$617

$473

$694

$636

$568

Adjustments to remove (benefit) / detriment^:

In noninterest income:

Vantiv IPO gain

(115)

Vantiv debt refinancing

Valuation of 2009 Visa total return swap

Vantiv warrants & puts

(3)

(10)

(46)

(56)

Valuation of bank premises moved to HFS

Litigation reserve additions in revenue

Sale of certain Fifth Third funds

(13)

Securities (gains) / losses

(26)

(5)

(9)

(3)

(2)

In noninterest expense:

Debt extinguishment (gains) / losses

Non-income tax related assessment resolution

(23)

Sale of certain Fifth Third funds

Termination of certain borrowing & hedging transactions

Severance expense

FDIC insurance expense

(9)

Gain on sale of affordable housing

(8)

(5)

Litigation reserve additions in expense

Adjusted PPNR

$637

$531

$582

$596

$593

Credit-related items^^:

In noninterest income

In noninterest expense

Credit-adjusted PPNR**

$707

$608

$630

$653

$666

Credit-related costs

In noninterest income ($MM)

In noninterest expense ($MM)

Note: Numbers may not sum due to rounding

$10

$15

$20

$25

$30

$35

3Q11

4Q11

1Q12

2Q12

3Q12

$10

$20

$30

$40

$50

$60

$70

3Q11

4Q11

1Q12

2Q12

3Q12

Actual

($ in millions)

3Q11

4Q11

1Q12

2Q12

3Q12

Mortgage

repurchase expense

$19

$18

$15

$18

$36

Provision for unfunded commitments

(10)

(6)

(2)

(1)

(2)

Derivative valuation adjustments

(5)

(4)

(0)

(2)

OREO expense

Other problem asset related expenses

Total credit-related operating expenses

$45

$44

$34

$40

$59

Actual

($ in millions)

3Q11

4Q11

1Q12

2Q12

3Q12

Gain / (loss) on sale of loans

Commercial loans HFS FV adjustment

(6)

(18)

(1)

(5)

(3)

Gain / (loss) on sale of OREO properties

(21)

(22)

(17)

(19)

(11)

Mortgage repurchase costs

(2)

(1)

(2)

Total credit-related revenue impact

($25)

($33)

($14)

($17)

($14)

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

2012

2011

Income before income taxes (U.S. GAAP)

$503

$565

$603

$418

$530

Add:

Provision expense (U.S. GAAP)

Pre-provision net revenue (a)

568

636

694

473

617

Pre-provision net revenue (annualized) (b)

2,260

2,530

2,791

1,877

2,448

Net income available to common shareholders (U.S. GAAP)

354

376

421

305

373

Add:

Intangible amortization, net of tax

Tangible net income available to common shareholders

356

378

424

308

376

Tangible net income available to common shareholders (annualized) (c)

1,416

1,520

1,705

1,222

1,492

Average Bancorp shareholders' equity (U.S. GAAP)

13,887

13,628

13,366

13,147

12,841

Less:

Average preferred stock

(398)

Average goodwill

(2,417)

Average intangible assets

(31)

(34)

(38)

(42)

(47)

Average tangible common equity (d)

11,041

10,779

10,513

10,290

9,979

Total Bancorp shareholders' equity (U.S. GAAP)

13,718

13,773

13,560

13,201

13,029

Less:

Preferred stock

(398)

Goodwill

(2,417)

Intangible assets

(30)

(33)

(36)

(40)

(45)

Tangible common equity, including unrealized gains / losses (e)

10,873

10,925

10,709

10,346

10,169

Less: Accumulated other comprehensive income / loss

(468)

(454)

(468)

(470)

(542)

Tangible common equity, excluding unrealized gains / losses (f)

10,405

10,471

10,241

9,876

9,627

Total assets (U.S. GAAP)

117,483

117,543

116,747

116,967

114,905

Less:

Goodwill

(2,417)

Intangible assets

(30)

(33)

(36)

(40)

(45)

Tangible assets, including unrealized gains / losses (g)

115,036

115,093

114,294

114,510

112,443

Less: Accumulated other comprehensive income / loss, before tax

(720)

(698)

(720)

(723)

(834)

Tangible assets, excluding unrealized gains / losses (h)

114,316

114,395

113,574

113,787

111,609

Common shares outstanding (i)

897

919

920

Securities gains, net

Securities gains, net (annualized) (j)

Average assets (k)

118

Ratios:

Return on average tangible common equity (c) / (d)

12.8%

14.1%

16.2%

11.9%

15.0%

Tangible common equity (excluding unrealized gains/losses) (f) /

(h)

9.10%

9.15%

9.02%

8.68%

8.63%

Tangible common equity (including unrealized gains/losses) (e) /

(g)

9.45%

9.49%

9.37%

9.04%

Tangible book value per share (e) / (i)

12.12

11.89

11.64

11.25

11.05

Pre-provision net revenue / Average assets (b-j) / (k)

1.92%

For the Three Months Ended

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

2012

2011

Total Bancorp shareholders' equity (U.S. GAAP)

$13,718

$13,773

$13,560

$13,201

$13,029

Goodwill and certain other intangibles

(2,504)

(2,512)

(2,518)

(2,514)

Unrealized gains

(468)

(454)

(468)

(470)

(542)

Qualifying trust preferred securities

810

2,248

2,273

Other

Tier I capital

11,594

13,093

12,860

12,503

12,266

Less:

Preferred stock

(398)

Qualifying trust preferred securities

(810)

(2,248)

(2,273)

Qualifying noncontrolling interest in consolidated subsidiaries

(51)

(50)

(30)

Tier I common equity (a)

10,335

10,396

10,164

9,807

9,565

Risk-weighted assets, determined in accordance with

prescribed regulatory requirements¹ (b)

106,858

106,398

105,412

104,945

102,562

Ratio:

Tier I common equity (a) / (b)

9.67%

9.77%

9.64%

9.35%

9.33%

Basel III - Estimated Tier 1 common equity ratio

September

2012

Tier 1 common equity (Basel I)

$10,333

Add:

Adjustment related to AOCI for AFS securities

507

Estimated Tier 1 common equity under Basel III rules²

10,840

Estimated risk-weighted assets under Basel III rules³

120,308

Estimated Tier 1 common equity ratio under Basel III rules

9.01%

(1)

(2)

(3)

For the Three Months Ended

Tier I common equity under Basel III includes the unrealized gains and losses for AFS securities. Other adjustments include mortgage servicing rights and deferred tax assets subject to threshold

limitations and deferred tax liabilities related to intangible assets.

Key differences under Basel III in the calculation of risk-weighted assets compared to Basel I include: (1) risk weighting for commitments under 1 year; (2) higher risk weighting for exposures to

residential mortgage, home equity, past due loans, foreign banks and certain commercial real estate; (3) higher risk weighting for mortgage servicing rights and deferred tax assets that are under

certain thresholds as a percent of Tier I capital; (4)incremental capital requirements for stress VaR; and (5) derivatives are differentiated between exchange clearing and over-the-counter and the

50% risk-weight cap is removed. The estimated Basel III risk-weighted assets are based upon the Bancorp’s interpretations of the three draft Federal Register notices proposing enhancements to

the regulatory capital requirements that were published in June of 2012. These amounts are preliminary and subject to change depending on the adoption of final Basel III capital rules by the

Regulatory Agencies.

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.

Attached files

Stock widget

Investing forum