Economic, Business & Markets Focus on Investors

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1 1//13 Economic, Business & Markets Focus on Investors John Augustine, CFA Chief Economic & Market Strategist Fifth Third Bank November 13 Fifth Third Bank All Rights Reserved Fifth Third Bank Overview (9/3/13) Headquartered in Cincinnati, Ohio Operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, Investment Advisors 18 affiliates across the Midwest and Southeast United States Missouri Illinois Michigan Indiana Pennsylvania Ohio West Virginia 1,3 banking centers;,37 ATMs Kentucky North Carolina $1 billion bank assets Tennessee $318 billion in assets under care Georgia $7 billion in managed assets for individuals, corporations and notfor-profit organizations Florida Listed on NASDAQ, Ticker: FITB Data as of Q13 unless noted otherwise; ranked among U.S. commercial banks Fifth Third Bank All Rights Reserved 1

2 1//13 1) Five Headline Macro Trends/Events into 1 3 Fifth Third Bank All Rights Reserved #1 Global Economic Focus LEI s suggest a pick-up in global GDP Top 1 Economies - YoY LEI Trends Japan =.3 US =.1 India = 3.9 Germany =.7 Brazil =.1 UK = 1. 1 Italy =.7 France =.8 China = -. Russia = '9 '1 '11 '1 '13 (% 1YR) Leading Index Total, 199=1, SA - United States Fra Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - France (% 1YR) Leading Index Total, 199=1 - China, Peoples Rep Of Ita Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - Italy Deu Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - Germany Ind Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - India (% 1YR) Leading Index, Total Composite, =1 - Japan Rus Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - Russia Gbr Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - United Kingdom Bra Cli Leading Indicator Trend Restored, Growth Rate Same Period Previous Year, Sa, % - Brazil -3 Fifth Third Bank All Rights Reserved

3 1//13 # US Fiscal Policy Focus Washington is actually doing what we want US Fiscal Balances and Interest Cost - $Billions 18, 1, 1, 1, Total Debt = Expenditures = 38.1 Receipts = 319.9,, 3, 3, 1,, 8,,, 1,, 1 1,, Interest =.1 '89'9'91'9'93'9'9'9'97'98'99''1''3''''7'8'9'1'11'1'13 Federal Debt, Total Public Debt Outstanding - United States / 1 (Left) Federal Govt Current Receipts & Expenditures, Current Expenditures, Bil. $, Saar - United States (Right) Federal Govt Current Receipts & Expenditures, Current Receipts, Bil. $, Saar - United States (Right) (MOV 1Y) Federal Budget, Monthly Treasury Statement, Fiscal Year to Date, Outlays, Dep. of the Treasury, Interest on the Public Debt, Millions of USD - United S Fifth Third Bank All Rights Reserved #3 US Monetary Policy Focus When will they start to normalize policy? Federal Reserve Balance Sheet ($ billions) and Target Rate, Fed Balance Sheet = 3813., 3, 3 Bank Deposits w/fed = Treasuries = 9.3 3,,, 1 Mortgage Bonds = Effective Fed Funds Rate =.8 '7 '8 '9 '1 '11 '1 '13 H..1- Assets of All Federal Reserve Banks, Total Assets (Mil $) - United States / 1 (Right) H..1- Assets of All Federal Reserve Banks, U.S. Treasury (Mil $) - United States / 1 (Right) H..1- Assets of All Federal Reserve Banks, Mortgage-backed Securities (Mil $) - United States / 1 (Right) US Effective Federal Funds Rate - Yield (Left) H..1- Liabilities of All Federal Reserve Banks, Deposits, Depository Institutions (Mil $) - United States / 1 (Right) 1, 1 1, Fifth Third Bank All Rights Reserved 3

4 1//13 # Business Valuations (S&P ) Getting close to long-term averages S&P Index - P/E Multiple and P/CF Multiple P/E Avg = 1.3 Current P/E = Current P/CF = 9.9 P/CF Avg = ' '7 ' '3 ' '9 '7 '7 '78 '81 '8 '87 '9 '93 '9 '99 ' ' '8 '11 AVAIL(ECON_CLIENT[SP_PE],SPEC_ID[SP:FMA_PE(LTM,'PORTAGG','MEANR')]) [Max: 31.13, Min:.8, Last: 1.8] (AVG) AVAIL(ECON_CLIENT[SP_PE],SPEC_ID[SP:FMA_PE(LTM,'PORTAGG','MEANR')]) [Max: 1.3, Min: 1.3, Last: 1.3] S&P - Price to Cash Flow (Excluding Negatives) Ratio [Max:.87, Min:.1, Last: 9.9] (AVG) S&P - Price to Cash Flow (Excluding Negatives) Ratio [Max: 9.3, Min: 9.3, Last: 9.3] 7 Fifth Third Bank All Rights Reserved # Affects of Monetary & Fiscal Policy Inflation has not lifted; US Dollar has not fallen US Dollar Index vs. Consumer Inflation YoY% CPI YoY% = 1. 1 US Dollar Index (DXY) = ' ' '8 '7 '7 '7 '7 '78 '8 '8 '8 '8 '88 '9 '9 '9 '9 '98 ' ' ' ' '8 '1 '1 AVAIL(ECON_CLIENT[DXY.Z_HISTORIC],SPEC_ID[DXY.Z:FG_PRICE]) (Left) (% 1YR) Cpi-U All Items U.S. City Average Sa 198-8=1 - United States (Right) 8 Fifth Third Bank All Rights Reserved

5 1//13 ) Five US Economic Trends 9 Fifth Third Bank All Rights Reserved #1 US Economic Focus GDP growth expected to improve pace into 1 Real GDP Annualized vs. Leading Economic Indicators (LEI) YoY Trend year average 1 LEI YoY% = 1.1 Avg GDP =. Current Qtr = '89 '9 '91 '9 '93 '9 '9 '9 '97 '98 '99 ' '1 ' '3 ' ' ' '7 '8 '9 '1 '11 '1 '13 Gross Domestic Product, Real %Chg P/P - United States (AVG) Gross Domestic Product, Real %Chg P/P - United States (% 1YR) Leading Index Total, =1, SA - United States Actual annualized Real GDP growth*:.% 1.8%.% Private US Economists: Federal Reserve: OECD: n/a IMF: 1.. n/a * Source = Moody s economy.com Projections = Bloomberg; IMF; Federal Reserve 1 Fifth Third Bank All Rights Reserved

6 1//13 # US Economic Building Blocks Private sector economy doing reasonably well Five Private-Sector Economic Building Blocks - YoY% Changes Housing Starts = Construction = 7.1 Vehicle Sales = 3.37 Exports = Employment = '99 ' '1 ' '3 ' ' ' '7 '8 '9 '1 '11 '1 '13 (% 1YR) Motor Vehicles Total vehicle sales, Number of, Annual Rate, SA - United States (% 1YR) Housing Starts 1 unit, Number of, Annual Rate, SA - United States (% 1YR) Net Exports Of Goods & Services, Exports, Bil. Chained $, Saar - United States (% 1YR) Employment - Persons, Sa - United States (% 1YR) Total Construction Put In Place, Mil. Usd, Sa - United States 11 Fifth Third Bank All Rights Reserved - #3 US Business Focus Record profits outpacing Capex since 9 US Corporate Profits vs. Capex Spending Trends,, 1,8 Corporate Profits = 87. Capex = 18.17,, 18 1,8 1, 1, 1, 1, 1, 1, 1, 1, 8 8 '99 ' '1 ' '3 ' ' ' '7 '8 '9 '1 '11 '1 '13 National Income, Corporate Profits With Iva & Ccadj, Bil. $, Saar - United States Nonfinancial Business - Gross Investment - Capital Expenditures, F.11 - Flows, Saar - United States Trendline: Linear Trendline: Linear 1 Fifth Third Bank All Rights Reserved

7 1//13 # State Economic Focus State LEI needs to improve Michigan - Real GDP Growth vs. State LEI State LEI Reading = '87 '88 '89 '9 '91 '9 '93 '9 '9 '9 '97 '98 '99 ' '1 ' '3 ' ' ' '7 '8 '9 '1 '11 '1 '13 (% 1YR) Real Gdp By State, All Industry Total, Chaines Prices, Mil Usd, Michigan - United States State Leading Indexes, Michigan, Index - United States 13 Fifth Third Bank All Rights Reserved -1 # State Economic Focus Labor Force is growing for first time since Michigan - Employment Summary 1,, 1,, 1,, 1 8 Labor Force = Unemployment Rate = 9.,8,,, Emmployed Persons = 3.,,,,, '89 '91 '93 '9 '97 '99 '1 '3 ' '7 '9 '11 '13 Unemployment Rate Michigan Sa - United States (Right) Labor Force Michigan Sa - United States (Left) Employment Michigan Sa - United States (Left),, 1 Fifth Third Bank All Rights Reserved 7

8 1//13 ) Five Market Trends 1 Fifth Third Bank All Rights Reserved #1 US Investor Focus It s about building future purchasing power 3% October, 13 % 19.9% 3.% 1% % 1.% 8.9%.% 11.%.9% 13.% 11.8% 11.%.% -1% -.3% -11.7% -% -3% Average inflation rate since =.% Compound average balanced fund return since = 3.78% 1 Fifth Third Bank All Rights Reserved -.9% YTD 13 Source: Lipper 8

9 1//13 # US Stock Market (S&P ) Just broke to a new high, but now needs to hold it S&P Price Index 3, years S&P =, , years 9 years 1, '8 '3 '3 ' ' '8 ' ' ' ' '8 '7 '7 '8 '8 '88 '9 '9 ' ' '8 '1 Standard & Poors Composite Index, Price Return, Close - United States 17 Fifth Third Bank All Rights Reserved 1 7 #3 Global Stock Indexes Leadership now rotating from EM to EAFE & US MSCI Stock Indexes - USA vs. EAFE vs. EM (YoY% change) 1 8 EM EAFE & US 1 8 EAFE = 7.19 US =.9 EM = ' '1 ' '3 ' ' ' '7 '8 '9 '1 '11 '1 '13 (% 1YR) MSCI USA - Price Index (% 1YR) MSCI EM (Emerging Markets) - Price Index (% 1YR) MSCI EAFE - Price Index 18 Fifth Third Bank All Rights Reserved -8 9

10 1//13 # US Bond Market What should the 1-year Treasury yield be? 1-year Treasury Yield vs. GDP Trends Nominal GDP = 3.8 1yr Treas Yield =.3 Real GDP = ' ' '8 '7 '7 '7 '7 '78 '8 '8 '8 '8 '88 '9 '9 '9 '9 '98 ' ' ' ' '8 '1 '1 Gross Domestic Product, Implicit Price Deflator, 9=1, SA - United States + Gross Domestic Product, Real %Chg P/P - United Stat Gross Domestic Product, Real %Chg P/P - United States US Benchmark Bond - 1 Year - Yield 19 Fifth Third Bank All Rights Reserved # Real Asset Markets Gold and REITs separating from CRB Real Assets - Gold, REITs and Commodities, 1, Gold = 13. S&P REIT = 87.9 CRB Index = 8.3, 1, ' ' '8 '7 '7 '7 '7 '78 '8 '8 '8 '8 '88 '9 '9 '9 '9 '98 ' ' ' ' '8 '1 '1 AVAIL(ECON_CLIENT[CRB_HISTORY],SPEC_ID[LPL1K:FG_TOTAL_RET_IDX]) S&P United States REIT - Total Return Index Gold, Nymex ($/Oz) - World Fifth Third Bank All Rights Reserved 1

11 1//13 ) Investor Recommendations 1 Fifth Third Bank All Rights Reserved Fall Investor Update Global Leading Economic Indicators (LEI s) are now moving higher in unison signaling a better economy into 1.. Fiscal policy tensions will likely rise at least once a year for the foreseeable future. Monetary policy is trying to counteract that stress on the economy & markets. 3. US economic growth leadership is positive but very narrow housing, aerospace, autos, energy and needs to broaden.. Macro headlines likely increasing financial market volatility early in the Fall include: US monetary policy inaction and timing of future changes. US fiscal policy debates.. Adjustments to 1 EPS earnings estimates for S&P companies.. Investors can E-A-S-E in to or out of markets keeping some basics in-mind: Employ a disciplined, diversified and dynamic investment strategy Accumulate a diverse base of assets continuously in an incremental manner. Simplify finances to a maximum of nine statements for couples bank, insurance (), 1k (), IRA (), online brokerage, managed investment account. Enjoy the current Bull Market in stocks (S&P higher in each of last five years). Fifth Third Bank All Rights Reserved 11

12 1//13 Disclosures and Disclaimers The opinions expressed herein are those of Fifth Third Bank, Investment Advisors Division, and may not actually come to pass. This information is current as of the date of the presentation and is subject to change at any time, based on market and other conditions. Prior to making any financial or investment decision, you should assess, or seek advice from a professional regarding, whether any particular transaction is relevant or appropriate to your individual circumstances. Index performance is used throughout this presentation to illustrate historical market trends and performance. Indexes are unmanaged and do not incur investment management fees. An investor is unable to invest in an index. Past performance is no guarantee of future results. Fifth Third Asset Management, Inc (FTAM) is an indirect, wholly owned subsidiary of Fifth Third Bancorp and an affiliated company with Fifth Third Bank Investment Advisors division. Fifth Third Bank provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a registered brokerdealer and a registered investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Securities and investments offered through Fifth Third Securities, Inc. and insurance products: Are Not FDIC Insured Offer No Bank Guarantee May Lose Value Are Not Insured By Any Federal Government Agency Are Not A Deposit Insurance products made available through Fifth Third Insurance Agency, Inc. 3 Fifth Third Bank All Rights Reserved 1