Annual Financial Supplement

EX-99.3 5 dex993.htm ANNUAL FINANCIAL SUPPLEMENT Annual Financial Supplement

Exhibit 99.3

January 2006

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ANNUAL FINANCIAL SUPPLEMENT

Investment Community Member:

To assist in your financial analysis, the following supplement of most requested information concerning Fifth Third Bancorp is provided.

Numbers are unaudited for year-end information.

If you need further information, please fax or e-mail your request to Fifth Third's Investor Relations Department at (513) 534-0629 or Brad.Adams@53.com


R. Mark Graf	Matt Curoe	Brad Adams
SVP/Chief Financial Officer	VP/External Reporting	VP/Investor Relations
(513) 534-6924	(513) 534-0482	(513) 534-0983

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Yearly Data


	Years Ended December 31,
	2005		2004		2003		2002		2001		2000
Ratios (percent)
Return on average assets		1.50		1.61		1.90		2.04		1.42		1.58
Return on average equity		16.6		17.2		19.0		18.4		13.6		17.5
Average equity as a percent of average assets		9.06		9.34		10.01		11.08		10.40		9.06
Net interest margin (c)		3.23		3.48		3.62		3.96		3.82		3.73
Efficiency (c)		53.2		53.9		47.0		47.5		57.5		53.7
Net losses charged off as a percent of average loans and leases		0.45		0.45		0.63		0.43		0.54		0.26
Allowance for loan and lease losses as a percent of loans and leases (a)		1.06		1.19		1.33		1.49		1.50		1.43
Allowance for credit losses as a percent of loans and leases (a)		1.16		1.31		1.47		1.49		1.50		1.43
Nonperforming assets as a percent of loans, leases and other assets, including OREO		0.52		0.51		0.61		0.59		0.57		0.47
Underperforming assets as a percent of loans, leases and other assets, including OREO		0.74		0.74		0.89		0.95		0.96		0.77
Allowance for loan and lease losses as a percent of nonperforming assets (a)		206.03		235.32		218.85		250.62		265.45		303.85
Allowance for loan and lease losses as a percent of underperforming assets (a)		144.13		160.20		150.28		157.12		156.49		185.21
Allowance for credit losses as a percent of nonperforming assets (a)		225.33		259.05		242.01		250.62		265.45		303.85
Allowance for credit losses as a percent of underperforming assets (a)		157.64		176.36		166.19		157.12		156.49		185.21

Common Share Data
Earnings per share	$	2.79	$	2.72	$	2.91	$	2.64	$	1.74	$	1.86
Earnings per diluted share		2.77		2.68		2.87		2.59		1.70		1.83
Cash dividends per common share		1.46		1.31		1.13		0.98		0.83		0.70
Book value per share		17.00		16.00		15.29		14.98		13.31		11.83
Common shares outstanding, excluding treasury		555,623,430		557,648,989		566,685,301		574,355,247		582,674,580		569,056,843
Market price per share:
High	$	48.12	$	60.00	$	62.15	$	69.70	$	64.77	$	60.88
Low		35.04		45.32		47.05		55.26		45.69		29.33
Close		37.72		47.30		59.10		58.55		61.33		59.75
Price/earnings ratio (b)		13.57		17.65		20.59		22.61		36.08		32.65

Supplemental Data
Common dividends declared ($ in millions)	$	810	$	735	$	645	$	568	$	460	$	325
Full-time equivalent employees		21,681		19,659		18,899		19,119		18,373		20,468
Banking centers		1,119		1,011		952		930		933		963

(a) As of December 31, 2004, the reserve for unfunded commitments has been reclassified from the allowance for loan and lease losses to other liabilities. The 2003 year end reserve for unfunded commitments has been reclassified to conform to the current presentation. The allowance for credit losses is the sum of the allowance for loan and lease losses and the reserve for unfunded commitments.

(b) Based on the most recent twelve-month earnings per diluted share and end of period stock prices.

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Yearly Data


	Years Ended December 31,
	2005		2004			2003			2002			2001			2000
Income Statement ($ in millions)
Interest income (FTE)	$	5,026	$	4,150		$	4,030		$	4,168		$	4,754		$	4,994
Interest expense		2,030		1,102			1,086			1,430			2,278			2,697
Net interest income (FTE)		2,996		3,048			2,944			2,738			2,476			2,297
Provision for loan and lease losses		330		268			399			246			201			126
Merger-related loan loss provision (a)		-		-			-			-			35			12
Noninterest income:
Electronic payment processing revenue		735		622			575			512			347			252
Service charges on deposits		522		515			485			431			367			298
Mortgage banking net revenue		174		178			302			188			63			256
Investment advisory revenue		355		360			332			325			298			275
Other noninterest income		568		626			546			555			520			370
Operating lease revenue		55		156			124			-			-			-
Securities (losses) gains, net		39		(37	)		81			114			28			6
Securities gains, net - non-qualifying hedges on mortgage servicing rights		-		-			3			33			143			-
Foreign exchange income		52		45			35			25			22			19
Total noninterest income		2,500		2,465			2,483			2,183			1,788			1,476
Noninterest expense:
Salaries, incentives and benefits expense		1,416		1,279			1,271			1,230			1,107			1,037
Equipment expense		105		84			82			79			91			100
Net occupancy expense		221		185			159			142			146			138
Deposit insurance expense		8		15			17			10			8			9
Operating lease expense		40		114			94			-			-			-
Other noninterest expense		1,137		1,295			928			876			752			656
Merger-related charges (a)		-		-			-			-			349			87
Total noninterest expense		2,927		2,972			2,551			2,337			2,453			2,027
Income from continuing operations before income taxes, minority interest and cumulative effect (FTE)		2,239		2,273			2,477			2,338			1,575			1,608
Taxable equivalent adjustment		31		36			39			39			45			47
Income from continuing operations before income taxes, minority interest and cumulative effect		2,208		2,237			2,438			2,299			1,530			1,561
Applicable income taxes		659		712			786			734			523			511
Income from continuing operations before minority interest and cumulative effect		1,549		1,525			1,652			1,565			1,007			1,050
Minority interest, net of tax		-		-			(20	)		(38	)		(2	)		-
Income from continuing operations before cumulative effect		1,549		1,525			1,632			1,527			1,005			1,050
Income from discontinued operations, net of tax (b)		-		-			44			4			4			5
Income before cumulative effect		1,549		1,525			1,676			1,531			1,009			1,055
Cumulative effect of change in accounting principle, net of tax		-		-			(11	)		-			(7	)		-
Net income	$	1,549	$	1,525		$	1,665		$	1,531		$	1,002		$	1,055
Net income available to common shareholders (c)	$	1,548	$	1,524		$	1,664		$	1,530		$	1,001		$	1,054

Regulatory Capital Data ($ in millions) (d)
Tier 1 capital	$	8,209	$	8,522		$	8,272		$	7,747		$	7,433		$	6,377
Tier 2 capital		2,031		1,654			1,824			1,188			1,223			1,177
Total risk-based capital	$	10,240	$	10,176		$	10,096		$	8,935		$	8,656		$	7,554
Total risk-weighted assets	$	97,399	$	82,633		$	74,477		$	65,444		$	59,491		$	55,943
Tier 1 capital ratio		8.43%		10.31%			11.11%			11.84%			12.49%			11.40%
Total risk-based capital ratio		10.51%		12.31%			13.56%			13.65%			14.55%			13.50%
Tier 1 leverage ratio		8.08%		8.89%			9.23%			9.84%			10.64%			9.49%

(a) Tax-effects of these merger-related charges were $90 million in 2001 and $32 million in 2000.

(b) Includes gain on sale of discontinued operations of $40 million, net of tax, in 2003.

(d) 2005 regulatory capital data and ratios are estimated.

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Yearly Data


	As of December 31,
	2005			2004			2003			2002			2001			2000
Balance Sheet ($ in millions, except share data)
Assets
Cash and due from banks	$	3,078		$	2,561		$	2,359		$	1,891		$	2,031		$	1,706
Available-for-sale securities		21,924			24,687			28,999			25,464			20,507			19,029
Held-to-maturity securities		389			255			135			52			16			553
Trading securities		117			77			55			18			-			-
Other short-term investments		158			532			268			294			225			232
Total cash and securities		25,666			28,112			31,816			27,719			22,779			21,520

Loans held for sale		1,304			559			1,881			3,358			2,180			1,655
Portfolio loans and leases		69,925			59,808			52,308			45,928			41,548			42,530
Total loans and leases		71,229			60,367			54,189			49,286			43,728			44,185
Allowance for loan and lease losses		(744	)		(713	)		(697	)		(683	)		(624	)		(609	)
Operating lease equipment		143			304			767			-			-			-
Goodwill		2,169			979			738			740			720			545
Intangible assets		208			150			195			236			267			235
Servicing rights		441			352			299			263			426			429
Other real estate owned		54			63			55			27			30			28
Other assets		6,059			4,842			3,892			3,344			3,738			3,338
Total assets	$	105,225		$	94,456		$	91,254		$	80,932		$	71,064		$	69,671
Liabilities
Deposits:
Demand	$	14,609		$	13,486		$	12,142		$	10,095		$	9,243		$	7,152
Interest checking		18,282			19,481			19,757			17,878			13,474			10,320
Savings		11,276			8,310			7,375			10,056			7,065			5,991
Money market		6,129			4,321			3,201			1,044			1,352			923
Other time		9,313			6,837			6,201			7,638			11,301			14,231
Certificates - $100,000 and over		4,343			2,121			1,856			1,723			2,197			5,049
Foreign office		3,482			3,670			6,563			3,774			1,222			4,694
Total deposits		67,434			58,226			57,095			52,208			45,854			48,360
Federal funds purchased		5,323			4,714			6,928			4,748			2,544			2,178
Short-term bank notes		-			775			500			-			34			-
Other short-term borrowings		4,246			4,537			5,742			4,075			4,875			4,166
Convertible subordinated debentures		-			-			-			-			-			173
Other liabilities		3,549			3,297			3,259			2,657			2,553			1,993
Long-term debt		15,227			13,983			9,063			8,179			7,030			6,066
Total liabilities		95,779			85,532			82,587			71,867			62,890			62,936
Minority interest		-			-			-			461			422			-
Shareholders’ Equity
Common and preferred equity		11,138			10,507			9,749			8,779			7,748			6,708
Additional minimum pension liability		(5	)		(64	)		(63	)		(52	)		-			-
Net unrealized (losses) gains on available-for-sale securities and qualifying cash flow hedges		(408	)		(105	)		(57	)		421			8			28
Treasury stock, at cost		(1,279	)		(1,414	)		(962	)		(544	)		(4	)		(1	)
Total shareholders’ equity	$	9,446		$	8,924		$	8,667		$	8,604		$	7,752		$	6,735
Share Data
Preferred shares outstanding		9,250			9,250			9,250			9,250			9,250			9,250
Common shares outstanding, excluding treasury		555,623,430			557,648,989			566,685,301			574,355,247			582,674,580			569,056,843
Treasury shares held		27,803,674			25,802,702			16,766,390			9,071,857			80,000			21,875

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Yearly

Data


	Years Ended December 31,
	2005			2004			2003			2002			2001			2000
Average Balance Sheet ($ in millions, except share data)
Assets
Interest-earning assets:
Loans and leases	$	67,737		$	57,042		$	52,414		$	45,539		$	44,888		$	42,690
Taxable securities		24,017			29,365			27,584			22,145			18,482			17,246
Tax exempt securities		789			917			1,056			1,101			1,255			1,384
Other short-term investments		193			315			307			339			201			200
Total interest-earning assets		92,736			87,639			81,361			69,124			64,826			61,520
Cash and due from banks		2,758			2,216			1,600			1,551			1,482			1,456
Other assets		8,102			5,763			5,250			5,007			5,000			4,229
Allowance for loan and lease losses		(720	)		(722	)		(730	)		(645	)		(625	)		(594	)
Total assets	$	102,876		$	94,896		$	87,481		$	75,037		$	70,683		$	66,611
Liabilities
Interest-bearing liabilities:
Interest checking	$	18,884		$	19,434		$	18,679		$	16,239		$	11,489		$	9,531
Savings		10,007			7,941			8,020			9,465			4,928			5,799
Money market		5,170			3,473			3,189			1,162			2,552			939
Other time		8,491			6,208			6,426			8,855			13,473			13,716
Certificates - $100,000 and over		4,001			2,403			3,832			2,237			3,821			4,283
Foreign office		3,967			4,449			3,862			2,018			1,992			3,896
Short-term borrowings		9,511			13,539			12,373			7,191			8,799			9,725
Long-term debt		16,384			13,323			8,747			7,640			6,301			4,707
Total interest-bearing liabilities		76,415			70,770			65,128			54,807			53,355			52,596
Demand deposits		13,868			12,327			10,482			8,953			7,394			6,257
Other liabilities		3,276			2,939			2,883			2,520			2,556			1,725
Total liabilities		93,559			86,036			78,493			66,280			63,305			60,578
Minority interest		-			-			234			440			30			-
Shareholders’ equity		9,317			8,860			8,754			8,317			7,348			6,033
Total liabilities & shareholders’ equity	$	102,876		$	94,896		$	87,481		$	75,037		$	70,683		$	66,611

Average loans and leases (excluding held for sale)	$	66,685		$	55,951		$	49,700		$	43,529		$	42,339		$	41,303

Average common shares outstanding:
Basic		554,410,581			561,258,539			571,590,128			580,326,693			575,253,508			565,685,977
Diluted		558,442,819			568,234,313			580,003,074			592,020,246			591,316,210			578,973,325

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Yearly Data


	Years Ended December 31,
	2005			2004			2003			2002			2001			2000
Asset Quality ($ in millions)
Nonaccrual loans and leases	$	294		$	228		$	242		$	247		$	216		$	174
Renegotiated loans and leases		-			1			8			-			-			2
Other assets, including other real estate owned		67			74			69			26			19			25
Total nonperforming assets		361			303			319			273			235			201
Ninety days past due loans and leases		155			142			145			162			164			128
Total underperforming assets	$	516		$	445		$	464		$	435		$	399		$	329

End of Period Loans and Leases ($ in millions)^{(net of unearned discount)}
Commercial:
Commercial loans	$	19,299		$	16,058		$	14,226		$	12,786		$	10,909		$	10,734
Commercial mortgage		9,188			7,636			6,894			5,885			6,085			6,227
Commercial construction		6,342			4,348			3,301			3,009			3,103			2,819
Commercial leases		3,698			3,426			3,264			3,019			2,487			2,571
Subtotal - commercial		38,527			31,468			27,685			24,699			22,584			22,351
Consumer:
Consumer mortgage		8,296			7,533			5,530			6,804			6,563			7,167
Consumer construction		695			378			335			319			252			403
Credit card		866			843			762			537			448			361
Home equity		12,000			10,508			8,993			8,675			7,974			6,792
Other consumer loans		9,250			7,586			8,436			5,909			4,164			4,457
Consumer leases		1,595			2,051			2,448			2,343			1,743			2,654
Subtotal - consumer		32,702			28,899			26,504			24,587			21,144			21,834
Total loans and leases	$	71,229		$	60,367		$	54,189		$	49,286		$	43,728		$	44,185

Nonperforming Loans ($ in millions)^{(non-accrual plus renegotiated)}
Commercial construction loans	$	31		$	13		$	19		$	14		$	26		$	11
Commercial mortgage		51			51			42			41			57			42
Commercial loans and leases		146			111			136			159			122			75
Residential mortgage and construction		30			24			26			18			11			42
Other consumer loans and leases		36			30			27			15			-			6
Total nonperforming loans	$	294		$	229		$	250		$	247		$	216		$	176

Credit Charge-Offs ($ in millions)
Gross charge-offs	$	(373	)	$	(321	)	$	(380	)	$	(273	)	$	(273	)	$	(164	)
Merger related charge-offs		-			-			-			-			(36	)		(12	)
Recoveries		74			69			68			86			82			67
Net losses charged off	$	(299	)	$	(252	)	$	(312	)	$	(187	)	$	(227	)	$	(109	)