EX-99 4 dex99.txt FINANCIAL STATEMENTS FOR MERCHANTS BANCORP, INC. Exhibit 99 The Fifth Third Bancorp Master Profit Sharing Plan Financial Statements and Supplemental Schedule for the Years Ended December 30, 2001 and 2000 and Independent Auditors' Report for Inclusion in the Annual Report (Form 5500) to the Internal Revenue Service 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, 2001 AND 2000 --------------------------------------------------------------------------------
Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Benefits as of December 30, 2001 and 2000 2 Statements of Changes in Net Assets Available for Benefits for the Years Ended December 30, 2001 and 2000 3 Notes to Financial Statements for the Years Ended December 30, 2001 and 2000 4-8 SUPPLEMENTAL SCHEDULE: Schedule H, Part IV, Line 4i- Assets Held for Investment Purposes as of December 30, 2001 9 - 10 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 Transactions Reportable Transactions - Series of Transactions
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, 2001 and 2000, 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, 2001 and 2000, 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 schedule listed in the accompanying index is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is 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. This schedule is the responsibility of the Plan's management. Such schedule has been subjected to the auditing procedures applied in the audit of the basic 2001 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as whole. /s/ Deloitte & Touche LLP Cincinnati, Ohio June 21, 2002 THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 30, 2001 AND 2000 ------------------------------------------------------------------------------- 2001 2000 INVESTMENTS, At fair value (Notes 2,3,4): Common stock of Fifth Third Bancorp $ 179,018,316 $ 112,419,625 Collective Funds: Cash equivalents 31,944,442 31,317,734 Fixed income 56,473,856 63,651,334 Equity 152,991,529 174,402,878 Mutual Funds 109,743,619 85,792,464 Participant notes receivable 1,736,337 1,570,285 ------------- ------------- Total investments 531,908,099 469,154,320 ACCRUED INVESTMENT INCOME 719,331 462,640 CONTRIBUTIONS RECEIVABLE FROM SUBSIDIARIES OF FIFTH THIRD BANCORP 21,012,321 17,010,618 CASH OVERDRAFT - (8,129) ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS $ 553,639,751 $ 486,619,449 ============= ============= See notes to financial statements. -2- THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 30, 2001 AND 2000 -------------------------------------------------------------------------------
2001 2000 ADDITIONS: Income (loss) from investments: Interest $ 1,222,321 $ 1,223,924 Dividends 2,066,647 1,297,128 Net appreciation (depreciation) in fair value of investments (Note 3) (23,081,841) 22,616,824 ------------- ------------- Total income (loss) from investments (19,792,873) 25,137,876 ------------- ------------- Contributions from subsidiaries of Fifth Third Bancorp (Note 1) 28,132,340 21,087,511 Contributions from participants (Note 1) 32,505,193 27,900,919 ------------- ------------- Total contributions 60,637,533 48,988,430 ------------- ------------- Other 246,585 119,126 Transfer of plan assets from acquired companies (Note 6) 67,399,668 - ------------- ------------- Total additions 108,490,913 74,245,432 ------------- ------------- DEDUCTIONS: Benefits paid to participants (Note 1) (41,184,779) (47,076,161) Other disbursements (285,832) (237,795) ------------- ------------- Total deductions (41,470,611) (47,313,956) ------------- ------------- INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 67,020,302 26,931,476 NET ASSETS AVAILABLE FOR BENEFITS: Beginning of year 486,619,449 459,687,973 ------------- ------------- End of year $ 553,639,751 $ 486,619,449 ============= =============
See notes to financial statements. -3- THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 30, 2001 AND 2000 -------------------------------------------------------------------------------- 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 a 401(k) feature, 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. With regard to the profit sharing feature, employees whose employment commenced on or after November 1, 1996 shall become participants after one year of service. For the 401(k) feature, employees are eligible to participate immediately upon employment by the Bancorp. 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 December 31, 2000. As a result of this amendment, modifications to funding and contributions became effective on December 31, 2000. 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 and allocated to participants in accordance with the provisions of the Plan. The profit sharing contribution by the Bancorp and any forfeitable 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. Until October 1, 2000 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. After October 1, 2000, gains and losses under the Plan are valued on a daily basis. Bancorp profit sharing contributions 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 20% 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- participants' voluntary pre-tax contributions up to a maximum of 6% 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, the Bancorp 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 benefits of accumulated vested amounts upon termination of employment. 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, 2001 and 2000 were $6,630,361 and $4,150,063, 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 per the Related Prospectus - . Fifth Third Balanced Fund contains investments in common stock with a smaller percentage in bonds and cash equivalents. . Fifth Third Prime Money Market Fund contains investments in high quality commercial paper. . Fifth Third Stock Fund contains shares of the Fifth Third Bancorp common stock and short-term liquid investments. . Fifth Third Quality Growth Fund contains investments in common stocks that are perceived to be high quality. . Fifth Third Mid Cap Fund contains investments in middle capitalization companies. . Fifth Third International Equity Fund contains investments in common stocks headquartered outside of the United States. -5- . Fifth Third Technology Fund contains investments in stocks of established and emerging technology companies. . Fifth Third Value Fund contains investments in a highly diversified portfolio of stocks that are perceived to be undervalued in the market. . Fifth Third Fixed Income Fund contains investments in investment grade securities. Participant Notes Receivable - Effective as of November 1, 1996, participants may borrow from 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. 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 2001 and 2000 were 7.0-10.5% and 10.5% (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. 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. The Plan invests in various securities, which may include U.S. Governmental securities, corporate debt instruments and corporate stocks. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for plan benefits. -6- 3. INVESTMENTS Investments representing more than five percent of net assets at December 30, 2001 and 2000 are as follows:
Fair Value ---------------------------------- 2001 2000 Fifth Third Bank Common Stock Fund for Employee Benefit Plans $ 107,796,179 $ 129,140,125 Fifth Third Bank Fixed Income Fund for Employee Benefit Plans 56,473,856 63,651,334 Fifth Third Bank Middle Capitalization Fund for Employee Benefit Plans 40,717,963 45,262,753 Fifth Third International Equity Fund 28,190,488 32,289,699 Fifth Third Quality Growth Fund 55,302,448 37,786,742 Fifth Third Bancorp common stock 179,018,316 112,419,625
The following table represents the net appreciation (depreciation) in fair value of investments for the Plan for the years ended:
Year Ended December 30, ---------------------------------- 2001 2000 Net appreciation (depreciation) in fair value of investments: Common stock of Fifth Third Bancorp $ 7,422,430 $ 22,210,469 Collective funds - fixed income and equity (14,783,583) 7,798,856 Mutual funds (15,720,688) (8,255,326) U.S. Government, agency securities and other 862,825 -------------- ------------- Total $ (23,081,841) $ 22,616,824 ============== =============
-7- 4. NONPARTICIPANT - DIRECTED INVESTMENTS The Balanced Fund was considered to be nonparticipant-directed in 2000 because the Fifth Third Bank's discretionary match in 2000 for the 1999 Plan Year was made in the Balanced Fund and the employee and employer amounts have not been separately determined. The Balanced Fund is considered to be participant directed in 2001 because the company's discretionary match in 2001 for the 2000 Plan Year was made directly into the employee's investment allocations. 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, 2000 ------------------------ Net assets - Balanced Fund $ 320,025,881 Year Ended December 30, 2000 ------------------------ Changes in net assets of Balanced Fund: Contributions $ 7,926,783 Income from investments 9,390,464 Transfer of Plan assets from acquired companies Distributions to participants (28,982,070) Other (154,923) Interfund transfer (1,747,611) -------------- Total changes in net assets of Balanced Fund $ (13,567,357) ==============
5. TRANSACTIONS WITH RELATED PARTIES The Fifth Third Bank provides the Plan with certain accounting and administrative services for which no fees are charged. At December 30, 2001 and 2000, the Plan held 2,888,790 and 1,881,500 shares of the Bancorp's common stock, respectively, with fair values of $179,018,316 and $112,419,625, respectively (see Note 1). 6. PLAN ASSETS FROM ACQUIRED COMPANIES During 2001, $57,709,307 was transferred to the Plan as a result of the merger of the Citizens Incentive Savings Plan into the Plan. During 2001, $9,690,361 was transferred to the Plan as a result of the merger of the Ottawa Financial Corporation Employee Stock Ownership Plan into the Plan. 7. SUBSEQUENT EVENT Effective as of the close of business on December 31, 2001, the Old Kent Thrift Plan was completely amended, restated and merged into the Plan. ****** -8- SUPPLEMENTAL SCHEDULE THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN SCHEDULE H, PART IV, LINE 4i ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 30, 2001 -------------------------------------------------------------------------------
Par Value/ No.of Current Shares Asset Description Market BALANCED FUND: COLLECTIVE FUNDS - CASH EQUIVALENTS: $ 3,913,554 ------------- 3,913,480 Fifth Third Banksafe Trust COLLECTIVE FUNDS - FIXED INCOME: 1,077,418 Fifth Third Bank Fixed Income Fund for Employee Benefit Plans 52,082,382 ------------- COLLECTIVE FUNDS - EQUITY: 329,813 Fifth Third Bank Common Stock Fund for Employee Benefit Plans 107,796,179 433,446 Fifth Third Bank Middle Capitalization Fund for Employee Benefit Plans 40,717,963 ------------- Total Collective Funds - Equity 148,514,142 ------------- 683,425 COMMON STOCK - Fifth Third Bancorp 42,351,847 ------------- 2,679,195 MUTUAL FUNDS - Fifth Third International Equity Fund 22,398,070 ------------- Total Balanced Fund 269,259,995 -------------
-9- SUPPLEMENTAL SCHEDULE THE FIFTH THIRD BANCORP MASTER PROFIT SHARING PLAN SCHEDULE H, PART IV, LINE 4i ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 30, 2001 (Continued)
---------------------------------------------------------------------------------------------------------------- Par Value/ No. of Current Shares Asset Description Market PRIME MONEY MARKET FUND: 24,253,319 Prime Money Market Fund $ 24,253,319 ------------- Total Prime Money Market Fund 24,253,319 ------------- STOCK FUND: 3,777,569 Fifth Third Banksafe Trust 3,777,569 2,205,365 Common Stock - Fifth Third Bancorp 136,666,469 ------------- Total Stock Fund 140,444,038 ------------- QUALITY GROWTH FUND: 3,045,289 Mutual Funds - Fifth Third Quality Growth Fund 55,302,448 ------------- Total Quality Growth Fund 55,302,448 ------------- MID CAP FUND: 1,592,892 Mutual Funds - Fifth Third Middle Capitalization Fund 23,208,437 ------------- Total Mid Cap Fund 23,208,437 ------------- INTERNATIONAL EQUITY FUND: 692,873 Mutual Funds - Fifth Third International Equity Fund 5,792,418 ------------- Total International Equity Fund 5,792,418 ------------- TECHNOLOGY FUND: 302,711 Mutual Funds - Fifth Third Technology Fund 3,042,246 ------------- Total Technology Fund 3,042,246 ------------- VALUE FUND: 91,787 Collective Funds - Fifth Third Value Fund for Employee 4,477,387 Benefit Plans ------------- Total Value Fund 4,477,387 ------------- FIXED INCOME FUND: 90,846 Collective Funds - Fifth Third Fixed Income Fund 4,391,474 ------------- Total Fixed Income Fund 4,391,474 ------------- LOAN FUND: Participant Notes Receivable (Interest Rate 7.00-10.50%) 1,736,337 ------------- Total Loan Fund 1,736,337 ------------- TOTAL $ 531,908,099 =============
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