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

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8-K - FORM 8-K - FIFTH THIRD BANCORP	d927055d8k.htm

Barclays

2015 Americas Select Franchise Conference

Tayfun Tuzun

Executive Vice President & Chief Financial Officer

May 19, 2015

Please refer to earnings release dated April 21, 2015 (as amended) and

10-Q dated May 11, 2015 for further information

Exhibit 99.1

Business composition at Fifth Third

Consumer

Lending

Branch

Banking

Wealth

Management

Commercial

Banking

Retail Bank

Cards

Home Equity

Mortgage

Auto

Private Bank

Retail Brokerage

Institutional Services

Commercial Bank

Footprint

Business

Lines

In footprint markets

National consumer lending

In footprint markets

National commercial banking

37% of

Bancorp net

revenue

10% of

Bancorp net

revenue

9% of

Bancorp net

revenue

42% of

Bancorp net

revenue

For

the

year

ended

December

31,

2014.

Net

revenue

represents

net

interest

income

plus

noninterest

income.

General

Corporate

and

Other

segment

not

included

above

disclosure

and

represents

remaining

net

revenue.

Changing profile of commercial lending

Commercial Loan Portfolio

5 year BB spread at quarter end.

Includes FTE Adjustment

2010, 2011, and 2012 have not been restated for changes in the structure of reporting units that occurred in 1Q14.

Changing credit profile post-crisis directly linked

to change in our risk appetite, indirectly a result of

increased focus on mid-

and large-corporate

relationships

Combination of lower credit spreads and higher

capital ratios require significantly higher

contribution from non-credit business fees to

meet target returns

Although fee income streams may result in higher

potential volatility in revenues compared to pure

interest income, lower credit volatility should

preserve stable earnings

Commercial

Banking

Net

Revenue

2,3

Deposit momentum delivering franchise value

Naples

Source: FDIC, SNL Financial.

Note: Branches included are full service retail / brick and mortar; data excludes headquarters branches with over $250 million in deposits ($500MM for Chicago CBSA).

Cincinnati affiliate

#1 market share (23% or $11.0B

of FITB footprint deposits) and

Fifth Third’s largest affiliate

market; home of Fifth Third’s

corporate headquarters

Western Michigan and Northwestern Ohio affiliates

#1 market shares (17% and 19% of FITB footprint deposits,

respectively); incl. Grand Rapids, MI and Toledo, OH

Chicago affiliate

Fifth Third’s second largest affiliate market;

6.9% increase in deposits vs. 2013

•

Deposit growth in all 15

affiliates

•

Deposit market share

growth in 13 of 15 affiliates

–

Top 3 deposit share in 7

affiliates

–

Deposit growth

outperforming market in

13 affiliates

Strong market share in mature Midwest markets;

Southeast markets remain key focus area and source of growth

North Carolina affiliate

#4 market share in Charlotte;

8.0% increase in deposits vs.

2013

Florida region

10.3% increase in deposits vs. 2013;

one of the strongest regional growth

markets

Enhancing retail bank platform

Consumer Deposit Activity

Transaction volume by ATM and mobile channels

•

Remote deposit capture launched in 2012, now

36% of all consumer deposits

•

2,200 ATMs image-enabled broadens reach and

effective footprint

•

Testing technology-focused, smaller branch

formats with lower staffing requirements

•

Redefining roles of branch personnel and testing

hybrid roles in response to change in traffic

patterns

•

generation mobile banking platform

•

Actively pursing digital sales capabilities to

compensate for decline in branch traffic

Branch Transactions

Average monthly teller transaction in millions

Consumer lending-stable source of earning

assets

Mortgage

Auto

Home Equity

Card

–

Primarily in footprint lender

–

Flexible business model,

quickly scalable in

response to change in

environment

–

Important cornerstone

product key to strong

relationships

–

Stable portfolio balances

–

National lender; in 46

states

–

Super-prime focus with

750 plus average FICO

score; 90% or less average

advance rates

–

18,000 dealer customers

–

Valuable source of credit to

home owning customers

–

Slightly downward trends in

balances due to low demand

–

Credit trends in line with

industry, 1/3 1

lien; 1/3

behind Fifth Third 1

lien

–

In footprint card portfolio

sold to current customers

–

Stable portfolio yield

–

Focused on card activity

and utilization with current

holders

Mortgage Banking Net Revenue ($MM)

Average Auto Loans ($MM)

Average Card Loans ($MM)

Consumer

Wholesale

Retail Brokerage

Private Bank

Institutional Services

ClearArc Capital

Mass market and mass

affluent clients

–

Retirement, investment and

education planning,

managed money, annuities

and transactional

brokerage services

Financial elite clients

–

Teams of professionals

dedicated to helping

clients achieve their

financial goals

Consulting, investment and

record-keeping services for

corporations, financial

institutions, foundations,

endowments and not-for-profit

organizations

–

Retirement plans, endowment

management, planned giving

and custody services

Provides asset management

services to institutional

clients

–

Divested all proprietary

mutual funds in 2012 to

complete transition to open

architecture

Investment Advisors serves individual and institutional clients with all levels of wealth;

provides for significant cross-sell opportunity

Wealth management increasing contribution to

earnings

Noninterest Expense ($MM)

2014 performance at a glance

Diluted earnings per share

Strong long-term earnings growth

Nonperforming asset ratio

Problem assets at lowest

levels since before crisis

Tier I common ratio

ALLL / NPLs

Maintaining prudent reserve stance

Solid capital ratios;

above targets and requirements

Includes dividends declared and share repurchases. 2013 is net of the issuance of shares valued at $398MM related to the Series G preferred stock conversion on July 1, 2013. 2012,

2013, and 2014 also include repurchases of shares in the amount of after-tax gains on the sale of Vantiv shares.

Non-GAAP measure; see Reg. G reconciliation in appendix.

Book value per share

Creating value and sustaining

momentum in results

Total payout ratio

~$1.1B

payout to common

shareholders in 2014

Earnings per diluted share of $0.42; significant pre-tax items in 1Q15 results included a

$70MM pre-tax positive valuation adjustment on the warrant Fifth Third holds in Vantiv,

$37MM pre-tax gain on the sale of TDRs, a $17MM pre-tax charge related to the valuation of

the Visa total return swap and a $30MM operating lease impairment charge recognized as a

post-quarter adjustment (resulting in a total net ~$0.05 positive after-tax impact on EPS)

Solid operating results despite continued low interest rate environment; reflected typical 1Q

seasonality in fee income and benefits expense

Credit quality continues to improve; NCO ratio 41 bps of loans and NPA ratio 76 bps

First quarter 2015 earnings highlights

Common equity tier 1 capital ratio on a Basel III transitional basis. Under banking agencies Basel III Final Rule, assets and credit equivalent amounts of off-balance sheet exposures are

calculated based upon the standardized approach for risk-weighted assets. The resulting values are added together resulting in the Bancorp’s total risk-weighted assets.

•

Traditional commercial banking franchise utilizing an affiliate-based model supported with

strong national businesses

—

Segment and industry specialization in mid-corporate, energy, and healthcare

•

Top 3 deposit market share in key markets with focus on further improving share of wallet

•

Redesigning retail distribution strategy and prioritizing key segments in consumer bank

•

Growing regional wealth management and brokerage services

•

Common equity tier 1 capital ratio of 9.5%¹

•

Repurchased 9MM common shares in 1Q15

•

2015 CCAR plan not objected to by Federal Reserve Board, includes the potential

increase in the quarterly common stock dividend and potential repurchase of common

—

$180MM share repurchase agreement announced in 1Q15

—

$155MM share repurchase agreement announced in 2Q15

Credit quality overview

Net Charge-offs ($MM)

$91

$101

NCO ratio

0.76%

0.45%

0.50%

0.83%

0.41%

$168

HFI Nonperforming Assets ($MM)

NPAs down 7% sequentially and 27% from 1Q14;

lowest level since 2007

Reserve Coverage

Accruing 90+ Days Past Due ($MM)

Includes 1Q15 provision expense of $69MM,

reserve coverage levels remain solid

90 + delinquencies declined 17% from 1Q14

Net charge-offs down 52% sequentially and 46% year-over-year; 4Q14

included $87MM related to TDR transfer to held-for-sale

$115

$191

1Q12-1Q15 Common Equity Repurchased /

2011 Total Common Equity

Strong capital position

Non-GAAP measure; See Reg. G reconciliation in appendix.

2013 is net of the issuance of shares valued at $398MM related to the Series G preferred stock conversion on July 1, 2013

Peer average includes: BBT, CMA, HBAN, KEY, MTB, PNC, RF, STI, USB, and WFC.

Tier I common equity

Capital generation and overall capital position, sufficient to

support balance sheet growth and continued prudent capital return to shareholders

Total

Payout

Ratio

(ex.

Vantiv)

Investment thesis

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,” or may include other similar words or phrases such as “believes,” “plans,” “trend,”

“objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,”

or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not

limited to the risk factors set forth in our most recent Annual Report on Form 10-K. When considering these forward-looking statements, you

should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these

statements as speaking only as of the date they are made and based only on information then actually known to us.

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-

looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic conditions and

weakening in the economy, specifically the real estate market, either nationally or in the states in which Fifth Third, one or more acquired

entities and/or the combined company do business, are less favorable than expected; (2) deteriorating credit quality; (3) political

developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (4) changes in

the interest rate environment reduce interest margins; (5) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss

provisions; (6) Fifth Third’s ability to maintain required capital levels and adequate sources of funding and liquidity; (7) maintaining capital

requirements 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) ability to secure confidential information and deliver products and services through the

use of computer systems and telecommunications networks; and (23) the impact of reputational risk created by these developments on such

matters as business generation and retention, funding and liquidity.

You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC,” for further information on

other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking

statements.

Appendix

Available and contingent borrowing capacity

(1Q15):

–

FHLB ~$14.2B available, ~$16.0B total

–

Federal Reserve ~$26.6B

Holding Company cash at 3/31/15: $2.5B

Cash currently sufficient to satisfy all fixed

obligations in a stressed environment for

more than 18 months (debt maturities,

common and preferred dividends, interest and

other expenses) without accessing capital

markets, relying on future dividends from

subsidiaries, or any other discretionary

actions

Holding company unsecured debt maturities ($MM)

Bank

unsecured

debt

maturities

($MM

–

excl.

Brokered

CDs)

Heavily core funded

Strong liquidity profile

S-T

wholesale

Interest rate risk management

Well-positioned for rising rates

•

NII benefits from asset re-pricings in a rising rate environment

–

64% of total loans are floating rate (81% of commercial and 39% of consumer)

–

Investment portfolio duration of approximately 4.3 years

–

Short-term wholesale funding represents only about 1.5% of total funding

–

Approximately $12B in non-core funding re-prices beyond one year

•

Interest rate sensitivities are based on conservative deposit assumptions

–

70%

beta

all

interest-bearing

deposit

and

sweep

balances

(~50%

betas

experienced

2004

–

2006

Fed

tightening

cycle)

–

No modeled re-pricing lag

–

Modeled non-interest bearing commercial DDA runoff of approximately $2.5B (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

1.54%

6.80%

(4.00%)

+25 bps Shock

+100

bps Ramp

0.83%

4.26%

-25 bps Shock

Betas 25% Higher

Betas 25% Lower

Change in Interest Rates

Months

13 to 24

Months

Change in Interest Rates

Months

13 to 24

Months

13 to 24

Months

+200

bps Ramp

1.26%

6.23%

1.82%

+200

bps Ramp

(1.54%)

0.47%

4.62%

13.12%

+100

bps Ramp

0.69%

3.98%

0.97%

+100

bps Ramp

(0.67%)

1.29%

2.32%

7.24%

ALCO Policy Limits

13 to 24 Months

(6.00%)

ALCO Policy Limit

(12.00%)

Change in EVE

(3.85%)

(1.33%)

(0.20%)

ESTIMATED NII SENSITIVITY PROFILE

ESTIMATED EVE SENSITIVITY PROFILE

Percent Change in

NII (FTE)

Months

13 to 24

Months

ESTIMATED NII SENSITIVITY with DEPOSIT BETA ASSUMPTION CHANGES

4.55%

0.11%

$1B Balance Increase

13 to 24 Months

7.36%

ESTIMATED

NII

SENSITIVITY

with

DEMAND

DEPOSIT

BALANCE

RUN-OFF

ASSUMPTION

CHANGES

Percent Change in NII (FTE)

$1B Balance Decrease

Percent Change in NII (FTE)

Note: In ramp scenarios, rate changes occur evenly over the first four quarters. Estimated results as of 1Q15, 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 changes in market conditions and

management strategies. Repricing 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.

Regulation G Non-GAAP reconciliation

Fifth Third Bancorp and Subsidiaries

Regulation G Non-GAAP Reconcilation

$ and shares in millions

(unaudited)

March

December

September

June

March

2015

2014

Income before income taxes (U.S. GAAP)

485

519

464

606

438

Add:

Provision expense (U.S. GAAP)

Pre-provision net revenue

554

618

535

682

507

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

346

362

328

416

309

Add:

Intangible amortization, net of tax

Tangible net income available to common shareholders

346

363

329

417

310

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

1,403

1,440

1,305

1,673

1,257

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

15,820

15,644

15,486

15,157

14,862

Less:

Average preferred stock

(1,331)

(1,119)

(1,034)

Average goodwill

(2,416)

Average intangible assets and other servicing rights

(15)

(17)

(16)

(17)

(19)

Average tangible common equity (b)

12,058

11,880

11,723

11,605

11,393

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

15,864

15,626

15,404

15,469

14,826

Less:

Preferred stock

(1,331)

(1,034)

Goodwill

(2,416)

Intangible assets and other servicing rights

(15)

(16)

(17)

(18)

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

12,102

11,863

11,641

11,705

11,358

Less: Accumulated other comprehensive income

(588)

(429)

(301)

(382)

(196)

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

11,514

11,434

11,340

11,323

11,162

Total assets (U.S. GAAP)

140,470

138,706

134,188

132,562

129,654

Less:

Goodwill

(2,416)

Intangible assets and other servicing rights

(15)

(16)

(17)

(18)

Tangible assets, including unrealized gains / losses (e)

138,039

136,274

131,756

130,129

127,220

Less: Accumulated other comprehensive income / loss, before tax

(905)

(660)

(463)

(588)

(302)

Tangible assets, excluding unrealized gains / losses (f)

137,134

135,614

131,293

129,541

126,918

Common shares outstanding (g)

815

824

834

844

848

Ratios:

Return on average tangible common equity (a) / (b)

11.6%

12.1%

11.1%

14.4%

11.0%

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

8.40%

8.43%

8.64%

8.74%

8.79%

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

8.77%

8.71%

8.84%

9.00%

8.93%

Tangible book value per share (c) / (g)

$14.85

$14.40

$13.95

$13.86

$13.40

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)

March

December

September

June

March

2015

2014

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

N/A

15,626

15,404

15,469

14,826

Goodwill and certain other intangibles

N/A

(2,476)

(2,484)

(2,490)

Unrealized gains

N/A

(429)

(301)

(382)

(196)

Qualifying trust preferred securities

N/A

Other

N/A

(17)

(18)

(19)

(18)

Tier I capital

N/A

12,764

12,661

12,644

12,182

Less:

Preferred stock

N/A

(1,331)

(1,034)

Qualifying trust preferred securities

N/A

(60)

Qualifying noncontrolling interest in consolidated subsidiaries

N/A

(1)

Tier I common equity (a)

N/A

11,372

11,269

11,252

11,087

Risk-weighted assets, determined in accordance with

Basel III

prescribed regulatory requirements (b)

121,310

117,878

116,917

117,117

116,622

Ratio:

Tier I common equity (a) / (b)

N/A

9.65%

9.64%

9.61%

9.51%

Basel III Final Rule - Transitional to fully phased-in

Common equity tier 1 capital (transitional)

11,543

Less: Adjustments to common equity tier 1 capital from transitional to fully phased-in (1)

(13)

Common equity tier 1 capital (fully phased-in) (c)

11,530

Risk-weighted assets (transitional)

121,310

Add: Adjustments to risk-weighted assets from transitional to fully phased-in (2)

1,182

Risk-weighted assets (fully phased-in) (d)

122,492

Estimated common equity tier 1 capital ratio under Basel III Final Rule (fully phased-in) (c) / (d)

9.41%

(1)

(2)

Primarily relates to disallowed intangible assets (other than goodwill and MSRs, net of associated deferred tax liabilities)

Primarily relates to higher risk weighting for MSRs.

For the Three Months Ended

Basel I

Regulation G Non-GAAP reconciliation

Fifth Third Bancorp and Subsidiaries

Regulation G Non-GAAP Reconcilation

$ and shares in millions

(unaudited)

2014

2013

2012

2011

2010

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

$15,626

$14,589

$13,716

$13,201

$14,051

Goodwill and certain other intangibles

(2,476)

(2,492)

(2,499)

(2,514)

(2,546)

Unrealized gains

(429)

(82)

(375)

(470)

(314)

Qualifying trust preferred securities

810

2,248

2,763

Other

(17)

Tier I capital

12,764

12,094

11,685

12,503

13,965

Less:

Preferred stock

1,331

(1,034)

(398)

(3,654)

Qualifying trust preferred securities

(60)

(810)

(2,248)

(2,763)

Qualifying noncontrolling interest in consolidated subsidiaries

(1)

(37)

(48)

(50)

(30)

Tier I common equity (a)

11,372

10,963

10,429

9,807

7,518

Risk-weighted assets, determined in accordance with

prescribed regulatory requirements (b)

117,878

115,969

109,301

104,219

100,561

Ratio:

Tier I common equity (a) / (b)

9.65%

9.45%

9.54%

9.41%

7.48%

For the Year Ended

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