EX-99 3 ex99.txt EXHIBIT 99 1 Exhibit 99 ----------------------------------------------- THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN Financial Statements and Supplemental Schedules for the Years Ended December 30, 1999 and December 31, 1998 and Independent Auditors' Report for Inclusion in the Annual Report (Form 5500) to the Internal Revenue Service 2 THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES FOR THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN FOR THE YEARS ENDED DECEMBER 30, 1999 AND DECEMBER 31, 1998 -------------------------------------------------------------------------------- PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 30, 1999 and December 31, 1998 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 30, 1999 and December 31, 1998 3 Notes to Financial Statements 4-8 SUPPLEMENTAL SCHEDULES: Assets Held for Investment Purposes as of December 30, 1999 9-10 Reportable Transactions - Series of Transactions for the Year Ended December 30, 1999 11 SUPPLEMENTAL SCHEDULES OMITTED - The following supplemental schedules are omitted because of the absence of conditions under which they are required: Assets Acquired and Disposed Within the Plan Year Party-in-Interest Transactions Obligations in Default Leases in Default Reportable Transactions - Single Transaction 3 INDEPENDENT AUDITORS' REPORT Fifth Third Bancorp and the Trustees of The Fifth Third Bancorp Master Profit Sharing Plan: We have audited the accompanying statements of net assets available for benefits of The Fifth Third Bancorp Master Profit Sharing Plan (the "Plan") as of December 30, 1999 and December 31, 1998, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 30, 1999 and December 31, 1998, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the accompanying index are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as whole. Deloitte & Touche LLP Cincinnati, OH June 16, 2000 4 THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 30, 1999 AND DECEMBER 31, 1998 -------------------------------------------------------------------------------
1999 1998 INVESTMENTS, At fair value (Notes 2,3,4): Common stock of Fifth Third Bancorp $ 89,284,608 $ 66,323,514 Collective Funds: Cash equivalents 5,686,989 6,161,413 Fixed income 67,024,815 64,251,504 Equity 199,732,897 160,600,189 Mutual Funds 86,624,054 50,719,582 U.S. Government and agency securities 7,326,602 5,688,562 Participant notes receivable 1,274,448 817,101 ------------ ------------ Total investments 456,954,413 354,561,865 ACCRUED INVESTMENT INCOME 389,062 296,168 CONTRIBUTIONS RECEIVABLE FROM SUBSIDIARIES OF FIFTH THIRD BANCORP 2,300,502 1,734,026 CASH 43,996 13,350 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $459,687,973 $356,605,409 ============ ============
See notes to financial statements. -2- 5 THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 30, 1999 AND DECEMBER 31, 1998 --------------------------------------------------------------------------------
1999 1998 ADDITIONS: Income from investments: Interest $ 1,078,050 $ 693,997 Dividends 922,713 1,111,903 Net appreciation in fair value of investments (Note 3) 56,756,101 58,094,738 ------------ ------------ Total income from investments 58,756,864 59,900,638 ------------ ------------ Contributions from subsidiaries of Fifth Third Bancorp (Note 1) 15,069,038 11,852,942 Contributions from participants (Note 1) 19,046,906 15,783,069 ------------ ------------ Total contributions 34,115,944 27,636,011 ------------ ------------ Other 91,286 Transfer of plan assets from acquired companies (Note 6) 61,561,792 16,604,739 ------------ ------------ Total additions 154,434,600 104,232,674 ------------ ------------ DEDUCTIONS: Benefits paid to participants (Note 1) (51,241,780) (21,593,405) Other disbursements (110,256) (99,977) ------------ ------------ Total deductions (51,352,036) (21,693,382) ------------ ------------ INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 103,082,564 82,539,292 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 356,605,409 274,066,117 ------------ ------------ End of year $459,687,973 $356,605,409 ============ ============
See notes to financial statements. -3- 6 THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN The following brief description of The Fifth Third Bancorp Master Profit Sharing Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information. GENERAL - The Plan is a defined contribution profit sharing plan with separate accounts maintained for each participant. Each regular employee of a participating Fifth Third Bancorp ("Bancorp") subsidiary, if employed before November 1, 1996, automatically became a participant on the first payroll date after becoming an employee. Employees whose employment commenced on or after November 1, 1996 shall become participants after one year of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The original Plan became effective December 31, 1954 and was last amended in its entirety effective November 1, 1996. As a result of this amendment, modifications to vesting, funding, and contributions became effective on January 1, 1997. In 1999, the Plan changed its year end to December 30. ADMINISTRATION - The Fifth Third Bank, a wholly-owned subsidiary of Bancorp, serves as the trustee of the Plan. The investment assets of the Plan are held in separate trust funds by Fifth Third Investment Advisors where such assets are managed. FUNDING AND VESTING - The Bancorp's profit sharing contribution to the Plan is an amount determined annually by the Board of Directors of the Bancorp. The profit sharing contribution by the Bancorp and any nonvested balances remaining in the accounts of participants who terminate their employment are allocated to participants in the proportion that the compensation of each participant bears to the compensation of all participants for the Plan year. Gains and losses under the Plan, including income from investments and changes in the market value of investments, are allocated to participants in proportion to their respective interests in the Plan as of the preceding valuation date, reduced by any payments to retired participants made during the period. Bancorp profit sharing contributions, as a percentage of annual salary, are allocated to eligible employees according to the following schedule: 0% - Less than one year of service 25% - One year of service, but less than two years of service 50% - Two years of service, but less than three years of service 75% - Three years of service, but less than four years of service 100% - Four years of service or more Participants are 100% vested in these contributions, subject to limited forfeiture for competition or dishonesty. The Plan permits voluntary contributions from participants up to 8% of their compensation. Such contributions are credited directly to the participants' accounts and are fully vested. Contributions may be allocated to the available investment options at the discretion of the participant. The Bancorp matches -4- 7 participants' voluntary contributions up to a maximum of 4% (6% as of January 1, 1999) of eligible annual compensation. Participants are eligible for matching after one year of service according to the following schedule: 25% match - One year of service, but less than ten years of service 50% match - Ten years of service, but less than twenty years of service 75% match - Twenty years of service or more Participants are 100% vested in matching contributions, subject to limited forfeiture for competition or dishonesty. Both voluntary contributions and Bancorp matching contributions are subject to statutory limitations. TERMINATION - Although it has not expressed its intention to do so, Fifth Third Bank has the right under the Plan to discontinue the contributions of any participating Bancorp subsidiary at any time and to amend or terminate the Plan subject to the provisions set forth in ERISA. If the Plan were to be terminated, the value of the proportionate interest of each participant would be determined as of the date of termination, and this amount would be fully vested and nonforfeitable. BENEFITS - The Plan provides for payment of normal retirement benefits of accumulated vested amounts upon reaching age 65 and has provisions for early withdrawals of vested benefits in instances of early retirement, disability, death, termination of employment, and financial hardship. Benefits are generally payable in the form of lump-sum payments or periodic payments. BENEFITS PAYABLE - Benefits payable, consisting of amounts owed but not paid as of year end for payments to terminated employees, are not recorded as a liability within the financial statements. Benefits payable as of December 30, 1999 and December 31, 1998 were $8,015,945 and $6,624,243, respectively. TAX STATUS - The Internal Revenue Service has determined and informed the Bancorp by a letter dated September 18, 1997, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan's financial statements. INVESTMENT OPTIONS - The Balanced Fund is the basic investment option which is offered to participants. The Balanced Fund contains investments in collective funds invested in money market accounts, equity securities, guaranteed investments contracts, mutual funds and other fixed income securities. The Plan also allows the common stock of Fifth Third Bancorp as an investment option within the Balanced Fund for all participants. Participants who are age 50 and older or become permanently disabled may elect, within specified time periods, to invest their accounts in a Conservative Fund which contains investments in U.S. Government Securities, and collective funds invested in money market accounts, guaranteed investment contracts, U.S. Government Securities and other fixed income securities. In 1990, a fund was established to hold the assets of the merged First Ohio Bancshares Profit Sharing Plan. This Stock Fund contains investments in money market accounts and Fifth Third Bancorp common stock. In 1993, two new funds were established, the Fifth Third Quality Growth Fund and the Fifth Third Mid Cap Fund. In 1994, the Fifth Third International Equity Fund was established. The addition of these funds was made to allow Bancorp employees to choose from six investment options, (Balanced, Conservative, Stock, Quality Growth, Mid Cap, and International Equity) with their contributions. The Quality Growth, Mid Cap and International Equity funds are mutual funds. During 1996, the Participant Loan Fund was established. -5- 8 PARTICIPANT NOTES RECEIVABLE - Effective as of November 1, 1996, participants may borrow from certain of their fund accounts a minimum of $1,000 up to the lesser of $50,000 or 50% of the nonforfeitable portion of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loan Fund. Each loan, by its terms, is required to be repaid within five years. The loans are secured by the balance in the participant's account and bear interest at a rate equal to the rate charged by the Bank on a similar loan as determined quarterly by the Plan administrator. Interest rates on loans originated during 1999 and 1998 were 9.50 (prime + 1%) and 8.75% (prime + 1%) respectively. Principal and interest is paid by the participant through payroll deductions authorized by the participant. WITHDRAWALS - Subject to the Plan administrator's sole and absolute discretion, participants are allowed to withdraw an amount not to exceed the total amount of that participant's voluntary contributions for financial hardship purposes. ADOPTION OF STATEMENT OF POSITION 99-3 - The Plan has adopted Statement of Position 99-3 "Accounting for and Reporting of Certain Defined Contribution Plan Investments and Disclosure Matters." As a result, the by-fund disclosure of participant-directed investments and significant components of the changes in net assets relating to participant-directed investments has been eliminated. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following are the significant accounting policies followed by the Plan: GENERAL - The accounting records of the Plan are maintained on the accrual basis of accounting. VALUATION OF INVESTMENTS - Quoted market prices are used to value equity securities and mutual funds. The fair values of bonds are based on yields currently available on comparable securities of issuers with similar credit ratings. The fair value of collective funds is based on the fair market value of investments in the fund. USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. INVESTMENTS Investments representing more than five percent of net assets at December 30, 1999 and December 31, 1998 are as follows:
FAIR VALUE -------------------------------- 1999 1998 Fifth Third Bank Common Stock Fund for Employee Benefit Plans $147,452,418 $121,542,903 Fifth Third Bank Fixed Income Fund for Employee Benefit Plans 67,024,815 64,251,504 Fifth Third Bank Middle Capitalization Fund for Employee Benefit Plans 52,280,479 39,057,286 Fifth Third International Equity Fund 41,584,811 26,258,785 Fifth Third Quality Growth Fund 32,456,567 15,581,588 Fifth Third Bancorp common stock 89,284,608 66,323,514
-6- 9 The following table represents the net appreciation in fair value of investments for the Plan for the years ended:
DECEMBER 30, DECEMBER 31, 1999 1998 Net appreciation in fair value of investments: Common stock of Fifth Third Bancorp $ 5,154,576 $15,271,331 Collective funds - fixed income and equity 37,108,502 35,965,834 Mutual funds 14,673,288 6,799,332 U.S. Government, agency securities and other (180,265) 58,241 ----------- ----------- Total $56,756,101 $58,094,738 =========== ===========
4. NONPARTICIPANT - DIRECTED INVESTMENTS The Balanced Fund is considered to be nonparticipant-directed because the Company's discretionary match in 1999 and 1998 was made in the Balanced Fund and the employee and employer amounts have not been separately determined. Information about the net assets and the significant components of the changes in net assets relating to the Balanced Fund is as follows:
DECEMBER 30, DECEMBER 31, 1999 1998 Net assets - Balanced Fund $335,649,434 $280,704,196
YEAR ENDED YEAR ENDED DECEMBER 30, DECEMBER 31, 1999 1998 Changes in net assets of Balanced Fund: Contributions $ 14,683,051 $ 13,169,830 Income from investments 45,567,666 47,273,902 Transfer of Plan assets from acquired companies 35,841,814 16,604,739 Distributions to participants (35,964,175) (16,425,322) Other -- 91,286 Interfund transfer (5,183,118) (999,633) ------------ ------------ Total changes in net assets of Balanced Fund $ 54,945,238 $ 59,714,802 ============ ============
5. TRANSACTIONS WITH RELATED PARTIES The Fifth Third Bank provides the Plan with certain accounting and administrative services for which no fees are charged. -7- 10 At December 30, 1999 and December 31, 1998, the Plan held 1,216,826 and 930,034 shares of Fifth Third Bancorp common stock, respectively, with fair values of $89,284,608 and $66,323,514, respectively (see Note 1). 6. PLAN ASSETS FROM ACQUIRED COMPANIES During 1998, approximately $16,605,000 was transferred to the Plan as a result of the acquisition of The Ohio Company. During 1999, approximately $61,562,000 was transferred to the Plan as a result of the acquisition of Citfed Bancorp, Inc., State Savings Company, and The Ohio Company in prior years. * * * * * * -8- 11 SUPPLEMENTAL SCHEDULE THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 30, 1999 --------------------------------------------------------------------------------
PAR VALUE/ NO. OF CURRENT SHARES ASSET DESCRIPTION COST MARKET BALANCED FUND COLLECTIVE FUNDS - CASH EQUIVALENTS: 266,751 Fifth Third Banksafe Trust $ 266,751 $ 266,751 ------------ ------------ COLLECTIVE FUNDS - FIXED INCOME: Fifth Third Bank Fixed Income Fund 1,461,975 for Employee Benefit Plans 47,046,969 61,329,851 ------------ ------------ COLLECTIVE FUNDS - EQUITY: Fifth Third Bank Common Stock Fund 384,351 for Employee Benefit Plans 46,091,644 147,452,418 Fifth Third Bank Middle Capitalization Fund 564,828 for Employee Benefit Plans 27,372,539 52,280,479 ------------ ------------ Total Collective Funds - Equity 73,464,183 199,732,897 ------------ ------------ 475,650 COMMON STOCK - Fifth Third Bancorp 10,489,077 34,900,819 ------------ ------------ 2,665,399 MUTUAL FUNDS - Fifth Third International Equity Fund 29,970,328 37,235,626 ------------ ------------ Total Balanced Fund 161,237,308 333,465,944 ------------ ------------
(Continued) -9- 12 SUPPLEMENTAL SCHEDULE THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 30, 1999 (CONTINUED) --------------------------------------------------------------------------------
PAR VALUE/ NO. OF CURRENT SHARES ASSET DESCRIPTION MARKET CONSERVATIVE FUND COLLECTIVE FUNDS - CASH EQUIVALENTS: 393,159 Fifth Third Banksafe Trust $ 393,159 4,838,050 Fifth Third Bank Stable Value Fund for Employee Benefit Plans 4,838,050 ------------ Total Collective Funds - Cash Equivalents 5,231,209 ------------ COLLECTIVE FUNDS - FIXED INCOME: 135,756 Fifth Third Bank Fixed Income Fund for Employee Benefit Plans 5,694,964 ------------ BONDS: 500,000 U.S. Treasury Note, 5.5%, due April 15, 2000 500,000 500,000 U.S. Treasury Note, 5.5%, due December 31, 2000 497,030 600,000 U.S. Treasury Note, 5.625%, due February 28, 2001 596,436 400,000 U.S. Treasury Note, 6.375%, due March 31, 2001 400,876 500,000 U.S. Treasury Note, 6.25%, due April 30, 2001 500,470 500,000 U.S. Treasury Note, 5.875%, due November 30, 2001 496,875 500,000 U.S. Treasury Note, 5.875%, due February 15, 2000 500,315 400,000 U.S. Treasury Note, 5.5%, due January 31, 2003 390,500 500,000 U.S. Treasury Note, 5.75%, due April 30, 2003 490,780 600,000 U.S. Treasury Note, 5.625%, due May 15, 2001 595,500 600,000 U.S. Treasury Note, 5.25%, due August 15, 2003 578,250 600,000 U.S. Treasury Note, 5.125%, due August 31, 2003 596,814 1,200,000 U.S. Treasury Note, 4.625%, due December 31, 2000 1,182,756 ------------ Total Bonds 7,326,602 ------------ Total Conservative Fund 18,252,775 ------------ STOCK FUND: 189,029 Collective Funds - Cash Equivalents - Fifth Third Banksafe Trust 189,029 741,176 Common Stock - Fifth Third Bancorp 54,383,789 ------------ Total Stock Fund 54,572,818 ------------ QUALITY GROWTH FUND: 1,281,855 Mutual Funds - Fifth Third Quality Growth Fund 32,456,567 ------------ Total Quality Growth Fund 32,456,567 ------------ MIDDLE CAPITALIZATION FUND: 741,466 Mutual Funds - Fifth Third Middle Capitalization Fund 12,582,676 ------------ Total Middle Capitalization Fund 12,582,676 ------------ INTERNATIONAL EQUITY FUND: 311,323 Mutual Funds - Fifth Third International Equity Fund 4,349,185 ------------ Total International Equity Fund 4,349,185 ------------ LOAN FUND: Participant Notes Receivable (Interest Rate 8.75%) 1,274,448 ------------ Total Loan Fund 1,274,448 ------------ TOTAL $456,954,413 ============
-10- 13 FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN SCHEDULE OF REPORTABLE TRANSACTIONS - SERIES OF TRANSACTIONS (A) FOR THE YEAR ENDED DECEMBER 30, 1999 --------------------------------------------------------------------------------
NUMBER OF PURCHASE SELLING NET TRANSACTIONS PRICE PRICE COST GAIN SERIES OF TRANSACTIONS: 12 $8,845,318 $ 9,423,520 $9,423,520 $ -- Balanced Fund - Fifth Third Banksafe Trust (7 purchases, 5 sales) Balanced Fund - Fifth Third Bank Common 9 9,099,391 13,126,250 4,229,139 8,897,111 Stock Fund for Employee Benefits Plans (3 purchase, 6 sales)
(A) "Reportable Transactions" are as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations. -11-