UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 21, 2011
(Exact Name of Registrant as Specified in Its Charter)
OHIO
(State or Other Jurisdiction of Incorporation)
001-33653 | 31-0854434 | |
(Commission File Number) | (IRS Employer Identification No.) |
Fifth Third Center 38 Fountain Square Plaza, Cincinnati, Ohio |
45263 | |
(Address of Principal Executive Offices) | (Zip Code) |
(800) 972-3030
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
On July 21, 2011, Fifth Third Bancorp issued a press release and its quarterly financial supplement announcing its earnings release for the second quarter of 2011. A copy of this press release and its quarterly financial supplement are attached as Exhibits 99.1 and 99.3, respectively. This information is furnished under both Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure. The information in this Form 8-K and Exhibits attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.
Item 7.01 | Regulation FD Disclosure |
On July 21, 2011, Fifth Third Bancorp issued a press release and its quarterly financial supplement announcing its earnings release for the second quarter of 2011. A copy of this press release and its quarterly financial supplement are attached as Exhibits 99.1 and 99.3, respectively. This information is furnished under both Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure. The information in this Form 8-K and Exhibits attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.
For the benefit of its investors, Fifth Third Bancorp is furnishing information regarding its earnings conference call. A copy of this item is attached as Exhibit 99.2. The information in this Form 8-K and Exhibit attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.
Item 9.01 | Financial Statements and Exhibits |
Exhibit 99.1 Press release dated July 21, 2011
Exhibit 99.2 Second Quarter Earnings Conference Call
Exhibit 99.3 Quarterly Financial Supplement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FIFTH THIRD BANCORP | ||||||
(Registrant) | ||||||
July 21, 2011 | /s/ Daniel T. Poston | |||||
Daniel T. Poston | ||||||
Executive Vice President and | ||||||
Chief Financial Officer |
Exhibit 99.1
News Release
| ||||
CONTACTS: | Jim Eglseder (Investors) | FOR IMMEDIATE RELEASE | ||
(513) 534-8424 | July 21, 2011 | |||
Rich Rosen, CFA (Investors) | ||||
(513) 534-3307 | ||||
Debra DeCourcy, APR (Media) | ||||
(513) 534-4153 |
FIFTH THIRD BANCORP ANNOUNCES SECOND QUARTER 2011 NET INCOME TO COMMON SHAREHOLDERS OF $328 MILLION OR $0.35 PER SHARE
| 2Q11 net income available to common shareholders of $328 million or $0.35 per diluted common share |
| 1Q11 net income to common of $88 million or $0.10 per share ($241 million or $0.27 excluding the effect of accelerated TARP discount accretion) |
| 2Q10 net income to common of $130 million or $0.16 per share |
| 2Q11 net income of $337 million compared with 1Q11 net income of $265 million and 2Q10 net income of $192 million |
| 2Q11 return on assets of 1.2 percent |
| 2Q11 return on average common equity of 11.0 percent; return on average tangible common equity of 14.0 percent |
| Pre-provision net revenue (PPNR)* of $619 million |
| Net interest income of $869 million, down 2 percent sequentially; 3.62 percent net interest margin; period end loans up 1 percent driven by 3 percent growth in C&I loans |
| Noninterest income of $656 million, up 12 percent sequentially driven primarily by stronger mortgage-related revenue, card and processing revenue and corporate banking revenue |
| Noninterest expense of $901 million, down 2 percent sequentially driven primarily by seasonal decrease in FICA and unemployment costs |
| Credit trends remain favorable |
| 2Q11 net charge-offs of $304 million (1.56 percent of loans and leases), the lowest level since the first quarter of 2008, vs. 1Q11 NCOs of $367 million and 2Q10 NCOs of $434 million |
| Total nonperforming assets of $2.3 billion including held-for-sale declined $78 million or 3 percent sequentially (lowest levels since 2Q08); nonperforming assets excluding held-for-sale of $2.1 billion declined $38 million or 2 percent |
| NPA ratio of 2.66 percent down 7 bps from 1Q11, NPL ratio of 2.09 percent down 2 bps from 1Q11; NPL inflows of $449 million down 55 percent from peak in 3Q09 |
| Total delinquencies (includes loans and leases 30-89 days past due and over 90 days past due) declined 9 percent sequentially to lowest level since 2006 |
| Allowance to loan ratio of 3.35 percent, 125 percent of nonperforming assets, 160 percent of nonperforming loans and leases, and 2.1 times annualized 2Q11 net charge-offs |
| Strong capital ratios; exceed fully phased-in Basel III proposed standards |
| Tier 1 common ratio 9.20 percent, up 21 bps sequentially (pro forma** ~9.6 percent on a full-phased in Basel III adjusted basis) |
| Tier 1 ratio 11.93 percent, Total capital ratio 16.03 percent, Leverage ratio 11.03 percent |
| Tangible common equity ratio of 8.64 percent excluding unrealized gains/losses, up 25 bps; 8.96 percent including unrealized gains/losses, up 36 bps |
| Book value per share of $13.23, tangible book value per share of $10.55 |
| Tangible book value per share growth 11 percent from 2Q10, 4 percent from 1Q11 |
* | Pre-provision net revenue (PPNR): net interest income plus noninterest income minus noninterest expense and taxable equivalent adjustment |
** | Estimate, subject to final rule-making and clarification by U.S. banking regulators; currently assumes unrealized securities gains are included in common equity for purposes of this calculation |
Fifth Third Bancorp (Nasdaq: FITB) today reported second quarter 2011 net income of $337 million, compared with net income of $265 million in the first quarter of 2011 and net income of $192 million in the second quarter of 2010. After preferred dividends, second quarter 2011 net income available to common shareholders was $328 million or $0.35 per diluted share, compared with first quarter net income of $88 million or $0.10 per diluted share, and net income of $130 million or $0.16 per diluted share in the second quarter of 2010.
First quarter 2011 net income available to common shareholders was reduced by $153 million, or $0.17 per diluted share, of discount accretion recorded in preferred dividends accelerated by the February repurchase of $3.408 billion of TARP CPP Preferred Stock.
Earnings Highlights
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||||||||
Earnings ($ in millions) |
||||||||||||||||||||||||||||
Net income attributable to Bancorp |
$ | 337 | $ | 265 | $ | 333 | $ | 238 | $ | 192 | 27 | % | 75 | % | ||||||||||||||
Net income available to common shareholders |
$ | 328 | $ | 88 | $ | 270 | $ | 175 | $ | 130 | 272 | % | 153 | % | ||||||||||||||
Common Share Data |
||||||||||||||||||||||||||||
Earnings per share, basic |
0.36 | 0.10 | 0.34 | 0.22 | 0.16 | 260 | % | 125 | % | |||||||||||||||||||
Earnings per share, diluted |
0.35 | 0.10 | 0.33 | 0.22 | 0.16 | 250 | % | 119 | % | |||||||||||||||||||
Cash dividends per common share |
0.06 | 0.06 | 0.01 | 0.01 | 0.01 | | 500 | % | ||||||||||||||||||||
Financial Ratios |
||||||||||||||||||||||||||||
Return on average assets |
1.22 | % | 0.97 | % | 1.18 | % | 0.84 | % | 0.68 | % | 26 | % | 79 | % | ||||||||||||||
Return on average common equity |
11.0 | 3.1 | 10.4 | 6.8 | 5.2 | 255 | % | 112 | % | |||||||||||||||||||
Return on average tangible common equity |
14.0 | 4.2 | 13.9 | 9.4 | 7.4 | 234 | % | 89 | % | |||||||||||||||||||
Tier I capital |
11.93 | 12.20 | 13.89 | 13.85 | 13.65 | (2 | %) | (13 | %) | |||||||||||||||||||
Tier I common equity |
9.20 | 8.99 | 7.48 | 7.34 | 7.17 | 2 | % | 28 | % | |||||||||||||||||||
Net interest margin (a) |
3.62 | 3.71 | 3.75 | 3.70 | 3.57 | (2 | %) | 1 | % | |||||||||||||||||||
Efficiency (a) |
59.1 | 62.5 | 62.6 | 56.2 | 62.1 | (5 | %) | (5 | %) | |||||||||||||||||||
Common shares outstanding (in thousands) |
919,818 | 918,728 | 796,273 | 796,283 | 796,320 | | 16 | % | ||||||||||||||||||||
Average common shares outstanding (in thousands): |
||||||||||||||||||||||||||||
Basic |
914,601 | 880,830 | 791,072 | 791,017 | 790,839 | 4 | % | 16 | % | |||||||||||||||||||
Diluted |
955,478 | 894,841 | 836,225 | 797,492 | 802,255 | 7 | % | 19 | % |
(a) | Presented on a fully taxable equivalent basis |
Fifth Thirds second quarter results were strong and reflected continued improvement in credit trends, said Kevin T. Kabat, president and CEO of Fifth Third Bancorp. Bottom-line results were the best Fifth Third has generated since 2007 and drove strong returns a 1.2 percent return on assets, a 14 percent return on average tangible common equity, and 4 percent unannualized sequential growth in tangible book value per share.
Noninterest income increased 12 percent from the first quarter and expenses were well-controlled, down 2 percent. Mortgage banking revenue improved significantly from the first quarter, and card and processing revenue and corporate banking revenue were both up 10 percent or more. Period-end loan balances were up 1 percent driven by 3 percent growth in both C&I and residential mortgage loans; average transaction deposits increased 2 percent and core deposits increased 1 percent reflecting continued CD run-off.
2
Net interest income and the net interest margin were both down modestly in the quarter reflecting a flatter yield curve and heightened loan pricing competition. We expect both measures to improve in the third and fourth quarters.
Credit results continued to trend favorably. Net charge-offs were $304 million, down 17 percent from last quarter and were the lowest level weve experienced since the beginning of 2008. Nonperforming asset levels and delinquencies also declined. We expect further improvement in credit results in the second half of the year.
Overall, we expect second half 2011 results to produce similarly strong or stronger returns and build upon the 11 percent growth in tangible book value per share weve generated over the past year.
Income Statement Highlights
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||||||||
Condensed Statements of Income ($ in millions) |
||||||||||||||||||||||||||||
Net interest income (taxable equivalent) |
$ | 869 | $ | 884 | $ | 919 | $ | 916 | $ | 887 | (2 | %) | (2 | %) | ||||||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | (33 | %) | (65 | %) | |||||||||||||||||||
Total noninterest income |
656 | 584 | 656 | 827 | 620 | 12 | % | 6 | % | |||||||||||||||||||
Total noninterest expense |
901 | 918 | 987 | 979 | 935 | (2 | %) | (4 | %) | |||||||||||||||||||
Income before income taxes (taxable equivalent) |
511 | 382 | 422 | 307 | 247 | 33 | % | 107 | % | |||||||||||||||||||
Taxable equivalent adjustment |
5 | 5 | 5 | 4 | 5 | | | |||||||||||||||||||||
Applicable income taxes |
169 | 112 | 83 | 65 | 50 | 51 | % | 238 | % | |||||||||||||||||||
Net income |
337 | 265 | 334 | 238 | 192 | 27 | % | 75 | % | |||||||||||||||||||
Less: Net income attributable to noncontrolling interest |
| | 1 | | | | | |||||||||||||||||||||
Net income attributable to Bancorp |
337 | 265 | 333 | 238 | 192 | 27 | % | 75 | % | |||||||||||||||||||
Dividends on preferred stock |
9 | 177 | 63 | 63 | 62 | (95 | %) | (85 | %) | |||||||||||||||||||
Net income available to common shareholders |
328 | 88 | 270 | 175 | 130 | 272 | % | 153 | % | |||||||||||||||||||
Earnings per share, diluted |
$ | 0.35 | $ | 0.10 | $ | 0.33 | $ | 0.22 | $ | 0.16 | 250 | % | 119 | % |
Net Interest Income
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||||||||
Interest Income ($ in millions) |
||||||||||||||||||||||||||||
Total interest income (taxable equivalent) |
$ | 1,050 | $ | 1,065 | $ | 1,109 | $ | 1,130 | $ | 1,121 | (1 | %) | (6 | %) | ||||||||||||||
Total interest expense |
181 | 181 | 190 | 214 | 234 | | (23 | %) | ||||||||||||||||||||
Net interest income (taxable equivalent) |
$ | 869 | $ | 884 | $ | 919 | $ | 916 | $ | 887 | (2 | %) | (2 | %) | ||||||||||||||
Average Yield |
||||||||||||||||||||||||||||
Yield on interest-earning assets |
4.37 | % | 4.47 | % | 4.52 | % | 4.57 | % | 4.51 | % | (2 | %) | (3 | %) | ||||||||||||||
Yield on interest-bearing liabilities |
1.00 | % | 1.02 | % | 1.04 | % | 1.13 | % | 1.23 | % | (2 | %) | (19 | %) | ||||||||||||||
Net interest rate spread (taxable equivalent) |
3.37 | % | 3.45 | % | 3.48 | % | 3.44 | % | 3.28 | % | (2 | %) | 3 | % | ||||||||||||||
Net interest margin (taxable equivalent) |
3.62 | % | 3.71 | % | 3.75 | % | 3.70 | % | 3.57 | % | (2 | %) | 1 | % | ||||||||||||||
Average Balances ($ in millions) |
||||||||||||||||||||||||||||
Loans and leases, including held for sale |
$ | 79,153 | $ | 79,379 | $ | 79,148 | $ | 78,854 | $ | 78,807 | | | ||||||||||||||||
Total securities and other short-term investments |
17,192 | 17,290 | 18,066 | 19,309 | 20,891 | (1 | %) | (18 | %) | |||||||||||||||||||
Total interest-earning assets |
96,345 | 96,669 | 97,214 | 98,163 | 99,698 | | (3 | %) | ||||||||||||||||||||
Total interest-bearing liabilities |
72,503 | 72,372 | 72,657 | 75,076 | 76,415 | | (5 | %) | ||||||||||||||||||||
Bancorp shareholders equity |
12,365 | 13,052 | 14,007 | 13,852 | 13,563 | (5 | %) | (9 | %) | |||||||||||||||||||
3
Net interest income of $869 million on a taxable equivalent basis decreased $15 million from the first quarter of 2011. The decline in net interest income was attributable to lower yields on commercial and consumer loans, a flatter yield curve and lower LIBOR rates, partially offset by higher loan balances, lower deposit costs and CDs maturing or migrating into lower cost deposit categories. A higher day-count increased net interest income by $6 million, offset by higher interest expense resulting from hedge ineffectiveness and the full quarter effect of the issuance of $1 billion in fixed-rate debt in the first quarter of 2011. The net interest margin was 3.62 percent, a decrease of 9 bps from 3.71 percent in the previous quarter, and was impacted by the previously mentioned items. Of the decrease, 2 bps was attributable to hedge ineffectiveness, 2 bps to the higher day-count, and 1 bp to the increase in long-term debt.
Compared with the second quarter of 2010, net interest income decreased $18 million while the net interest margin increased 5 bps. The decrease in net interest income was largely the result of lower loan yields, partially offset by higher average loan balances and run-off in higher-priced CDs. The net interest margin improvement largely reflected deposit growth and shift in mix from higher cost term deposits to lower cost deposit products.
Securities
Average securities and other short-term investments were $17.2 billion in the second quarter of 2011, consistent with $17.3 billion in the previous quarter and down from $20.9 billion in the second quarter of 2010. Lower cash balances held at the Fed contributed to the sequential and year-over-year declines.
Loans
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | Seq | Yr/Yr | ||||||||||||||||||||||
Average Portfolio Loans and Leases ($ in millions) |
|
|||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
Commercial and industrial loans |
$ | 27,909 | $ | 27,331 | $ | 26,338 | $ | 26,344 | $ | 26,176 | 2 | % | 7 | % | ||||||||||||||
Commercial mortgage |
$ | 10,394 | $ | 10,685 | 10,985 | 11,375 | 11,659 | (3 | %) | (11 | %) | |||||||||||||||||
Commercial construction |
$ | 1,918 | $ | 2,030 | 2,171 | 2,885 | 3,160 | (6 | %) | (39 | %) | |||||||||||||||||
Commercial leases |
$ | 3,349 | $ | 3,364 | 3,314 | 3,257 | 3,336 | | | |||||||||||||||||||
Subtotal - commercial loans and leases |
43,570 | 43,410 | 42,808 | 43,861 | 44,331 | | (2 | %) | ||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Residential mortgage loans |
9,654 | 9,282 | 8,382 | 7,837 | 7,805 | 4 | % | 24 | % | |||||||||||||||||||
Home equity |
11,144 | 11,376 | 11,655 | 11,897 | 12,102 | (2 | %) | (8 | %) | |||||||||||||||||||
Automobile loans |
11,188 | 11,070 | 10,825 | 10,517 | 10,170 | 1 | % | 10 | % | |||||||||||||||||||
Credit card |
1,834 | 1,852 | 1,844 | 1,838 | 1,859 | (1 | %) | (1 | %) | |||||||||||||||||||
Other consumer loans and leases |
547 | 646 | 722 | 667 | 706 | (15 | %) | (23 | %) | |||||||||||||||||||
Subtotal - consumer loans and leases |
34,367 | 34,226 | 33,428 | 32,756 | 32,642 | | 5 | % | ||||||||||||||||||||
Total average loans and leases (excluding held for sale) |
$ | 77,937 | $ | 77,636 | $ | 76,236 | $ | 76,617 | $ | 76,973 | | 1 | % | |||||||||||||||
Average loans held for sale |
1,216 | 1,743 | 2,912 | 2,237 | 1,834 | (30 | %) | (34 | %) | |||||||||||||||||||
Average loan and lease balances (excluding loans held-for-sale) were up $301 million sequentially and increased $964 million, or 1 percent from the second quarter of 2010. Period end loan and lease balances grew $502 million, or 1 percent from the first quarter and $1.7 billion or 2 percent from a year ago.
4
Average commercial portfolio loan and lease balances were up $160 million sequentially and declined $761 million or 2 percent from the second quarter of 2010. Commercial and industrial (C&I) average loans increased 2 percent sequentially and 7 percent compared with the second quarter of 2010. Average commercial mortgage and commercial construction loan balances declined by a combined 3 percent sequentially and 17 percent from the same period the previous year, reflecting continued low customer demand and tighter underwriting standards. The year-over-year comparison was also affected by the transfer of $961 million of loans to loans held-for-sale at the end of the third quarter 2010. Commercial line usage, on an end of period basis for the second quarter, was consistent at 32.9 percent of committed lines versus 33.3 percent in the first quarter of 2011 and 32.1 percent in the second quarter of 2010.
Average consumer portfolio loan and lease balances were up $141 million sequentially and increased $1.7 billion, or 5 percent from the second quarter of 2010. Average residential mortgage loans increased 4 percent sequentially and 24 percent compared with the second quarter of 2010. Sequential and year-over-year growth reflected the continued retention of certain shorter-term fixed-rate residential mortgages, branch originated, which totaled $283 million in the second quarter. Average auto loans increased 1 percent sequentially and 10 percent year-over-year as continued strong loan origination volumes more than offset pay-downs. This growth was partially offset by lower home equity loan balances, which declined 2 percent sequentially and 8 percent year-over-year due to lower demand and production.
Average loans held-for-sale of $1.2 billion declined $527 million from first quarter levels and $618 million compared with the second quarter of 2010 driven primarily by lower balances of mortgage loans in the held-for-sale warehouse due to deliveries in excess of origination volumes.
Deposits
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June | March | December | September | June | ||||||||||||||||||||||||
2011 | 2011 | 2010 | 2010 | 2010 | Seq | Yr/Yr | ||||||||||||||||||||||
Average Deposits ($ in millions) |
||||||||||||||||||||||||||||
Demand deposits |
$ | 22,174 | $ | 21,582 | $ | 21,066 | $ | 19,362 | $ | 19,406 | 3 | % | 14 | % | ||||||||||||||
Interest checking |
18,701 | 18,539 | 17,578 | 17,142 | 18,652 | 1 | % | | ||||||||||||||||||||
Savings |
21,817 | 21,324 | 20,602 | 19,905 | 19,446 | 2 | % | 12 | % | |||||||||||||||||||
Money market |
5,009 | 5,136 | 4,985 | 4,940 | 4,679 | (2 | %) | 7 | % | |||||||||||||||||||
Foreign office (a) |
3,805 | 3,580 | 3,733 | 3,592 | 3,325 | 6 | % | 14 | % | |||||||||||||||||||
Subtotal - Transaction deposits |
71,506 | 70,161 | 67,964 | 64,941 | 65,508 | 2 | % | 9 | % | |||||||||||||||||||
Other time |
6,738 | 7,363 | 8,490 | 10,261 | 11,336 | (8 | %) | (41 | %) | |||||||||||||||||||
Subtotal - Core deposits |
78,244 | 77,524 | 76,454 | 75,202 | 76,844 | 1 | % | 2 | % | |||||||||||||||||||
Certificates - $100,000 and over |
3,955 | 4,226 | 4,858 | 6,096 | 6,354 | (6 | %) | (38 | %) | |||||||||||||||||||
Other |
2 | 1 | 9 | 4 | 5 | 77 | % | (54 | %) | |||||||||||||||||||
Total deposits |
$ | 82,201 | $ | 81,751 | $ | 81,321 | $ | 81,302 | $ | 83,203 | 1 | % | (1 | %) | ||||||||||||||
(a) | Includes commercial customer Eurodollar sweep balances for which the Bancorp pays rates comparable to other commercial deposit accounts. |
Average core deposits increased 1 percent sequentially and 2 percent from the second quarter of 2010, as transaction deposit growth was partially offset by continued runoff of consumer time deposits (CDs). Average transaction deposits, excluding consumer time deposits, increased 2 percent from the first quarter of 2011 and 9 percent year-over-year. Sequential and year-over-year growth was primarily driven by higher demand deposit account (DDA) and savings balances.
5
Retail average transaction deposits increased 4 percent sequentially and 13 percent from the second quarter of 2010 and reflected growth across all transaction deposit account categories for each comparison period, particularly DDA and savings. Consumer CDs included in core deposits declined 9 percent sequentially and 41 percent year-over-year, driven by maturities of higher-rate CDs and customer reluctance to purchase longer CD maturities given the current low rate environment.
Commercial average transaction deposits decreased 2 percent sequentially and increased 1 percent from the previous year. The sequential decline reflects seasonally higher balances in the first quarter. Growth in DDAs was offset by lower interest checking, money market and foreign office accounts. On a year-over-year basis, strong DDA growth more than offset lower public funds balances. Average public funds balances were $5.7 billion, flat sequentially and down $663 million from the second quarter of 2010 due to ongoing pricing adjustments which continue to reflect our excess liquidity position.
Noninterest Income
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||||||||
Noninterest Income ($ in millions) |
||||||||||||||||||||||||||||
Service charges on deposits |
$ | 126 | $ | 124 | $ | 140 | $ | 143 | $ | 149 | 1 | % | (16 | %) | ||||||||||||||
Corporate banking revenue |
95 | 86 | 103 | 86 | 93 | 11 | % | 2 | % | |||||||||||||||||||
Mortgage banking net revenue |
162 | 102 | 149 | 232 | 114 | 58 | % | 42 | % | |||||||||||||||||||
Investment advisory revenue |
95 | 98 | 93 | 90 | 87 | (3 | %) | 10 | % | |||||||||||||||||||
Card and processing revenue |
89 | 80 | 81 | 77 | 84 | 10 | % | 5 | % | |||||||||||||||||||
Other noninterest income |
83 | 81 | 55 | 195 | 85 | 3 | % | (2 | %) | |||||||||||||||||||
Securities gains, net |
6 | 8 | 21 | 4 | 8 | (25 | %) | (25 | %) | |||||||||||||||||||
Securities gains, net - non-qualifying hedges |
||||||||||||||||||||||||||||
on mortgage servicing rights |
| 5 | 14 | | | NM | NM | |||||||||||||||||||||
Total noninterest income |
$ | 656 | $ | 584 | $ | 656 | $ | 827 | $ | 620 | 12 | % | 6 | % | ||||||||||||||
NM: Not Meaningful |
Noninterest income of $656 million increased $72 million or 12 percent sequentially and $36 million or 6 percent compared with results a year ago. The sequential growth was driven by higher mortgage-related revenue, corporate banking revenue and card and processing revenue. The year-over-year growth reflected higher mortgage-related revenue partially offset by lower deposit service charges due to the effect of the August 2010 implementation of Regulation E.
Second quarter 2011 results included a $29 million positive valuation adjustment on warrants and puts related to the 2009 sale of an interest in our processing business, compared with $2 million in negative valuation adjustments on these instruments in the first quarter of 2011 and a $10 million positive valuation adjustment in the second quarter of 2010. Second quarter 2011 results included a $4 million reduction in income due to the increase in fair value of the liability related to the total return swap entered into as part of the 2009 sale of Visa, Inc. Class B shares. This item reduced noninterest income in the first quarter of 2011 by $9 million. Excluding these items, as well as investment securities gains in all periods, noninterest income increased $38 million, or 6 percent, from the previous quarter driven by higher mortgage-related revenue, corporate banking
6
revenue and card and processing revenue. On a year-over-year basis, noninterest income excluding the items mentioned above increased $23 million, or 4 percent, due to higher mortgage-related revenue partially offset by lower deposit service charges.
Service charges on deposits of $126 million increased 1 percent sequentially from a seasonally light first quarter and decreased 16 percent compared with the same quarter last year, due to lower retail service charges. Retail service charges were flat compared with the previous quarter and declined 34 percent compared with the second quarter of 2010, largely due to the implementation of new overdraft regulations and overdraft policies. Commercial service charges increased 2 percent sequentially and 3 percent compared with the same quarter last year.
Corporate banking revenue of $95 million increased 11 percent from the first quarter of 2011 and increased 2 percent from the same period last year. Sequential results were driven by higher lease remarketing fees, syndication fee revenue and institutional sales revenue. On a year-over-year basis, higher revenue from business lending fees primarily drove the increase.
Mortgage banking net revenue was $162 million in the second quarter of 2011, a 58 percent increase from the first quarter of 2011 and a 42 percent increase from the second quarter of 2010. Second quarter 2011 originations were $3.1 billion, a decrease from $3.9 billion in the previous quarter and $3.8 billion in the second quarter of 2010. Second quarter 2011 originations resulted in gains of $64 million on mortgages sold compared with gains of $62 million during the previous quarter and $89 million during the second quarter of 2010. Gain on sale margins increased sequentially from weak first quarter levels as interest rates were generally lower this quarter. Mortgage servicing fees this quarter were $58 million, compared with $58 million in the first quarter of 2011 and $54 million in the second quarter of 2010. Mortgage banking revenue is also affected by net servicing asset value adjustments, which include mortgage servicing rights (MSR) amortization and MSR valuation adjustments (including mark-to-market adjustments on free-standing derivatives used to economically hedge the MSR portfolio). These net servicing asset valuation adjustments were positive $40 million in the second quarter of 2011 (reflecting MSR amortization of $25 million and MSR valuation adjustments of positive $65 million); negative $18 million in the first quarter of 2011 (MSR amortization of $28 million and MSR valuation adjustments of positive $10 million); and negative $29 million in the second quarter of 2010 (MSR amortization of $25 million and negative $4 million in MSR valuation adjustments). The mortgage-servicing asset, net of the valuation reserve, was $847 million at quarter end on a servicing portfolio of $56 billion.
Investment advisory revenue of $95 million decreased 3 percent sequentially and increased 10 percent from the second quarter of 2010. The sequential decline was primarily driven by seasonally high tax-related private client services fees in the first quarter and a less active securities trading environment in the second quarter. Year-over-year improvement reflected an overall increase in equity and bond market values.
7
Card and processing revenue was $89 million in the second quarter of 2011, an increase of 10 percent sequentially and 5 percent from the second quarter of 2010. The sequential increase reflected higher transaction volumes compared with the seasonally weak first quarter, while the year-over-year comparison reflected higher transaction volumes as general improvement in the economy drove increased spending.
Other noninterest income totaled $83 million in the second quarter of 2011 compared with $81 million in the previous quarter and $85 million in the second quarter of 2010. Other noninterest income included revenue associated with the transition service agreement (TSA) entered into as part of our processing business sale, revenue from our equity interest in the processing business, effects of the valuation of warrants and puts related to the processing business sale, and changes in income related to the valuation of the total return swap entered into as part of the 2009 sale of Visa, Inc. Class B shares. For periods ending June 30, 2011, March 31, 2011, and June 30, 2010, TSA revenue was $5 million, $11 million, and $13 million, respectively; revenue from our processing business equity interest was $6 million, $9 million, and $6 million, respectively; warrant/put valuation adjustments were positive $29 million, negative $2 million, and positive $10 million, respectively; and reductions in income related to the Visa, Inc. total return swap were $4 million this quarter and $9 million in the first quarter. Excluding these items, other noninterest income decreased $25 million from the previous quarter and $9 million from the first quarter of 2010, primarily due to the effects of higher net credit-related costs recognized in other noninterest income.
Net credit-related costs recognized in other noninterest income were $28 million in the second quarter of 2011 versus $3 million last quarter and $15 million in the second quarter of 2010. Second quarter 2011 results included $8 million of net gains on sales of commercial loans held-for-sale and $9 million of fair value charges on commercial loans held-for-sale, as well as $26 million of losses on other real estate owned (OREO). First quarter 2011 results included $17 million of net gains on sales of commercial loans held-for-sale and $16 million of fair value charges on commercial loans held-for-sale, as well as $2 million of losses on OREO. Second quarter 2010 results included net gains of $6 million on the sale of loans held-for-sale, $7 million of fair value charges on commercial loans held-for-sale, and $13 million of losses on OREO.
Net gains on investment securities were $6 million in the second quarter of 2011, compared with investment securities gains of $8 million in the previous quarter and $8 million in the second quarter of 2010.
There were no gains on securities held as non-qualifying hedges for the MSR, compared with $5 million in the first quarter of 2011 and none in the second quarter of 2010.
8
Noninterest Expense
For the Three Months Ended | % Change | |||||||||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||||||||
Noninterest Expense ($ in millions) |
||||||||||||||||||||||||||||
Salaries, wages and incentives |
$ | 365 | $ | 351 | $ | 385 | $ | 360 | $ | 356 | 4 | % | 2 | % | ||||||||||||||
Employee benefits |
79 | 97 | 73 | 82 | 73 | (19 | %) | 9 | % | |||||||||||||||||||
Net occupancy expense |
75 | 77 | 76 | 72 | 73 | (3 | %) | 2 | % | |||||||||||||||||||
Technology and communications |
48 | 45 | 52 | 48 | 45 | 6 | % | 6 | % | |||||||||||||||||||
Equipment expense |
28 | 29 | 32 | 30 | 31 | (4 | %) | (9 | %) | |||||||||||||||||||
Card and processing expense |
29 | 29 | 26 | 26 | 31 | 1 | % | (8 | %) | |||||||||||||||||||
Other noninterest expense |
277 | 290 | 343 | 361 | 326 | (4 | %) | (15 | %) | |||||||||||||||||||
Total noninterest expense |
$ | 901 | $ | 918 | $ | 987 | $ | 979 | $ | 935 | (2 | %) | (4 | %) | ||||||||||||||
Noninterest expense of $901 million decreased 2 percent from the first quarter of 2011 and decreased 4 percent from the second quarter of 2010. Excluding $6 million of debt extinguishment gains in the second quarter and $3 million in the first quarter recorded as a reduction to other noninterest expense, noninterest expense declined $14 million sequentially and $28 million compared with the second quarter of 2010. The remaining sequential decline was primarily driven by lower employee benefits expense due to a decrease in FICA and unemployment costs from seasonally high first quarter levels as well as improvements in other noninterest expense, partially offset by higher salaries, wages, and incentives. The remaining year-over-year decline was due to significantly lower credit-related expenses. Each period included operating expenses related to the processing business that were largely offset by revenue under the TSA reported in other noninterest income.
Credit costs related to problem assets recorded as noninterest expense totaled $36 million in the second quarter of 2011, compared with $32 million in the first quarter of 2011 and $55 million in the second quarter of 2010. Second quarter credit-related expenses included provision expense for mortgage repurchases of $14 million, compared with $8 million in the first quarter and $18 million a year ago. (Realized mortgage repurchase losses were $22 million in the second quarter of 2011, compared with $24 million last quarter and $19 million in the second quarter of 2010.) Provision for unfunded commitments was a benefit of $14 million in the current quarter, compared with a benefit of $16 million last quarter and a benefit of $6 million a year ago. Derivative valuation adjustments related to customer credit risk were $1 million in expense this quarter versus a net of zero last quarter and $9 million in expense a year ago. OREO expense was $6 million this quarter, compared with $13 million last quarter and $7 million a year ago. Other problem asset-related expenses were $30 million in the second quarter, compared with $28 million the previous quarter and $26 million in the same period last year.
9
Credit Quality
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Total net losses charged off ($ in millions) |
||||||||||||||||||||
Commercial and industrial loans |
($ | 76 | ) | ($ | 83 | ) | ($ | 85 | ) | ($ | 237 | ) | ($ | 104 | ) | |||||
Commercial mortgage loans |
(47 | ) | (54 | ) | (80 | ) | (268 | ) | (78 | ) | ||||||||||
Commercial construction loans |
(20 | ) | (26 | ) | (11 | ) | (121 | ) | (43 | ) | ||||||||||
Commercial leases |
2 | (1 | ) | 3 | (1 | ) | | |||||||||||||
Residential mortgage loans |
(36 | ) | (65 | ) | (62 | ) | (204 | ) | (85 | ) | ||||||||||
Home equity |
(54 | ) | (63 | ) | (65 | ) | (66 | ) | (61 | ) | ||||||||||
Automobile loans |
(8 | ) | (20 | ) | (19 | ) | (17 | ) | (20 | ) | ||||||||||
Credit card |
(28 | ) | (31 | ) | (33 | ) | (36 | ) | (42 | ) | ||||||||||
Other consumer loans and leases |
(37 | ) | (24 | ) | (4 | ) | (6 | ) | (1 | ) | ||||||||||
Total net losses charged off |
(304 | ) | (367 | ) | (356 | ) | (956 | ) | (434 | ) | ||||||||||
Total losses |
(343 | ) | (397 | ) | (399 | ) | (992 | ) | (472 | ) | ||||||||||
Total recoveries |
39 | 30 | 43 | 36 | 38 | |||||||||||||||
Total net losses charged off |
($ | 304 | ) | ($ | 367 | ) | ($ | 356 | ) | ($ | 956 | ) | ($ | 434 | ) | |||||
Ratios (annualized) |
||||||||||||||||||||
Net losses charged off as a percent of average loans and leases (excluding held for sale) |
1.56 | % | 1.92 | % | 1.86 | % | 4.95 | % | 2.26 | % | ||||||||||
Commercial |
1.30 | % | 1.52 | % | 1.59 | % | 5.66 | % | 2.03 | % | ||||||||||
Consumer |
1.89 | % | 2.43 | % | 2.20 | % | 4.00 | % | 2.57 | % |
Net charge-offs were $304 million in the second quarter of 2011, or 156 bps of average loans on an annualized basis. First quarter 2011 net charge-offs were $367 million, or 192 bps of average loans on an annualized basis. Second quarter 2010 net charge-offs were $434 million, or 226 bps of average loans on an annualized basis.
Commercial net charge-offs were $141 million, or 130 bps, down $23 million versus $164 million, or 152 bps, in the first quarter. Improvement in charge-offs was broad-based. C&I net losses were $76 million, compared with net losses of $83 million in the previous quarter. Commercial mortgage net losses totaled $47 million compared with net losses of $54 million in the first quarter. Commercial construction net losses were $20 million, compared with net losses of $26 million in the prior quarter. Net losses on residential builder and developer portfolio loans across the C&I and commercial real estate categories totaled $14 million. Originations of homebuilder / developer loans were suspended in 2007 and the remaining portfolio balance is $597 million, down from a peak of $3.3 billion in the second quarter of 2008.
Consumer net charge-offs were $163 million, or 189 bps, down $40 million versus $203 million, or 243 bps, in the first quarter. Improvements were driven by trends in the residential mortgage and automobile portfolios, partially offset by the effect of charge-offs on loans from a credit relationship in the other consumer loans and leases portfolio described below. Net charge-offs on residential mortgage loans in the portfolio were $36 million, down from $65 million in the previous quarter, with lower losses in Florida driving $16 million of improvement. Home equity net charge-offs were $54 million, compared with portfolio losses of $63 million in the first quarter. Net losses on brokered home equity loans represented 36 percent of second quarter home equity losses; such loans are 14 percent of the total home equity portfolio. The home equity portfolio included $1.6 billion of brokered loans, down from a peak of $2.6 billion in 2007; originations of these loans were discontinued in 2007. Net charge-offs in the auto portfolio of $8 million declined $12 million from the prior
10
quarter. Net losses on consumer credit card loans were $28 million, down $3 million from the previous quarter. Net charge-offs in other consumer loans were $37 million, up $13 million from the previous quarter, primarily the result of a commercial loan that was foreclosed upon in the fourth quarter 2010 which was collateralized by individual consumer loans. These loans were subsequently moved to other consumer loans. We recorded $34 million and $23 million of charge-offs related to these loans in the second and first quarters of 2011, respectively, and have no remaining loss exposure following the second quarter 2011 charge-offs.
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Allowance for Credit Losses ($ in millions) |
||||||||||||||||||||
Allowance for loan and lease losses, beginning |
$ | 2,805 | $ | 3,004 | $ | 3,194 | $ | 3,693 | $ | 3,802 | ||||||||||
Total net losses charged off |
(304 | ) | (367 | ) | (356 | ) | (956 | ) | (434 | ) | ||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | |||||||||||||||
Allowance for loan and lease losses, ending |
2,614 | 2,805 | 3,004 | 3,194 | 3,693 | |||||||||||||||
Reserve for unfunded commitments, beginning |
211 | 227 | 231 | 254 | 260 | |||||||||||||||
Provision for unfunded commitments |
(14 | ) | (16 | ) | (4 | ) | (23 | ) | (6 | ) | ||||||||||
Reserve for unfunded commitments, ending |
197 | 211 | 227 | 231 | 254 | |||||||||||||||
Components of allowance for credit losses: |
||||||||||||||||||||
Allowance for loan and lease losses |
2,614 | 2,805 | 3,004 | 3,194 | 3,693 | |||||||||||||||
Reserve for unfunded commitments |
197 | 211 | 227 | 231 | 254 | |||||||||||||||
Total allowance for credit losses |
$ | 2,811 | $ | 3,016 | $ | 3,231 | $ | 3,425 | $ | 3,947 | ||||||||||
Allowance for loan and lease losses ratio |
||||||||||||||||||||
As a percent of loans and leases |
3.35 | % | 3.62 | % | 3.88 | % | 4.20 | % | 4.85 | % | ||||||||||
As a percent of nonperforming loans and leases (a) |
160 | % | 170 | % | 179 | % | 202 | % | 146 | % | ||||||||||
As a percent of nonperforming assets (a) |
125 | % | 132 | % | 138 | % | 153 | % | 124 | % |
(a) | Excludes non accrual loans and leases in loans held for sale |
Provision for loan and lease losses totaled $113 million in the second quarter of 2011, down $55 million from the first quarter of 2011 and $212 million from the second quarter of 2010. The allowance for loan and lease losses represented 3.35 percent of total loans and leases outstanding as of quarter end, compared with 3.62 percent last quarter, and represented 160 percent of nonperforming loans and leases, 125 percent of nonperforming assets, and 214 percent of second quarter annualized net charge-offs.
11
June 2011 |
March 2011 |
As of December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Nonperforming Assets and Delinquent Loans ($ in millions) |
||||||||||||||||||||
Nonaccrual portfolio loans and leases: |
||||||||||||||||||||
Commercial and industrial loans (a) |
$ | 485 | $ | 477 | $ | 473 | $ | 525 | $ | 731 | ||||||||||
Commercial mortgage loans |
417 | 415 | 407 | 464 | 773 | |||||||||||||||
Commercial construction loans |
147 | 159 | 182 | 211 | 383 | |||||||||||||||
Commercial leases |
16 | 11 | 11 | 30 | 45 | |||||||||||||||
Residential mortgage loans |
145 | 140 | 152 | 124 | 282 | |||||||||||||||
Home equity |
26 | 24 | 23 | 23 | 21 | |||||||||||||||
Automobile loans |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Other consumer loans and leases (a) |
3 | 60 | 84 | | | |||||||||||||||
Total nonaccrual loans and leases |
$ | 1,240 | $ | 1,287 | $ | 1,333 | $ | 1,378 | $ | 2,236 | ||||||||||
Restructured loans and leases - commercial (nonaccrual) |
188 | 149 | 141 | 31 | 48 | |||||||||||||||
Restructured loans and leases - consumer (nonaccrual) |
211 | 209 | 206 | 175 | 246 | |||||||||||||||
Total nonperforming loans and leases |
$ | 1,639 | $ | 1,645 | $ | 1,680 | $ | 1,584 | $ | 2,530 | ||||||||||
Repossessed personal property |
15 | 20 | 27 | 29 | 16 | |||||||||||||||
Other real estate owned (b) |
434 | 461 | 467 | 469 | 423 | |||||||||||||||
Total nonperforming assets (c) |
$ | 2,088 | $ | 2,126 | $ | 2,174 | $ | 2,082 | $ | 2,969 | ||||||||||
Nonaccrual loans held for sale |
147 | 184 | 247 | 680 | 163 | |||||||||||||||
Restructured loans - commercial (nonaccrual) held for sale |
29 | 32 | 47 | 19 | 4 | |||||||||||||||
Total nonperforming assets including loans held for sale |
$ | 2,264 | $ | 2,342 | $ | 2,468 | $ | 2,781 | $ | 3,136 | ||||||||||
Restructured Consumer loans and leases (accrual) |
$ | 1,593 | $ | 1,573 | $ | 1,560 | $ | 1,588 | $ | 1,602 | ||||||||||
Restructured Commercial loans and leases (accrual) |
$ | 266 | $ | 243 | $ | 228 | $ | 146 | $ | 113 | ||||||||||
Total loans and leases 90 days past due |
$ | 279 | $ | 266 | $ | 274 | $ | 317 | $ | 397 | ||||||||||
Nonperforming loans and leases as a percent of portfolio loans, leases and other assets, including other real estate owned (c) |
2.09 | % | 2.11 | % | 2.15 | % | 2.07 | % | 3.30 | % | ||||||||||
Nonperforming assets as a percent of portfolio loans, leases and other assets, including other real estate owned (c) |
2.66 | % | 2.73 | % | 2.79 | % | 2.72 | % | 3.87 | % |
(a) | Nonaccrual loans and leases at December 31, 2010 reflect a reclassification of $84 million in nonperforming loans from commercial and industrial loans to other consumer loans and leases which occurred after the Bancorps Form 8-K was filed on January 19, 2011. This reclassification was primarily a result of the determination that consumer loans obtained in the foreclosure of a commercial loan were more appropriately categorized as other consumer loans and leases in accordance with regulatory guidelines. |
(b) | Excludes government insured advances. |
(c) | Does not include nonaccrual loans held-for-sale. |
Total nonperforming assets, including loans held-for-sale, were $2.3 billion, a decline of $78 million, or 3 percent, from the previous quarter. Nonperforming assets held-for-investment (NPAs) at quarter end were $2.1 billion or 2.66 percent of total loans, leases and OREO, and decreased $38 million, or 2 percent, from the previous quarter. Nonperforming loans held-for-investment (NPLs) at quarter end were $1.6 billion or 2.09 percent of total loans, leases and OREO, and decreased $6 million from the first quarter. The decrease in total nonperforming assets was driven by the sale of assets from held-for-sale during the quarter and by decreases in NPLs and OREO in the held-for-investment portfolio.
Commercial portfolio NPAs at quarter-end were $1.6 billion, or 3.68 percent of commercial loans, leases and OREO, and increased $24 million, or 2 percent, from the first quarter. Commercial portfolio NPLs were $1.3 billion, or 2.86 percent of commercial loans and leases, and increased $42 million from last quarter. Commercial construction portfolio NPAs were $240 million, a decline of $8 million from the previous quarter. Commercial mortgage portfolio NPAs were $710 million, up $14 million from the prior quarter. Commercial real estate loans in Michigan and Florida represented 44 percent of commercial real estate NPAs and 37 percent of our total commercial real estate portfolio. C&I portfolio NPAs of $638 million increased $18 million from the previous quarter. Within the overall commercial loan portfolio, residential real estate builder and developer portfolio NPAs declined $6 million from the first quarter to $243 million, of which $68 million were commercial construction assets, $159 million were commercial mortgage assets and $16 million were C&I
12
assets. Commercial portfolio NPAs included $188 million of nonaccrual troubled debt restructurings (TDRs), compared with $149 million last quarter.
Consumer portfolio NPAs of $476 million, or 1.37 percent of consumer loans, leases and OREO, decreased $63 million from the first quarter. Consumer portfolio NPLs were $387 million, or 1.12 percent of consumer loans and leases, and decreased $48 million from last quarter. Of consumer NPAs, $410 million were in residential real estate portfolios. Residential mortgage NPAs were $338 million, consistent with the previous quarter, with Florida representing 47 percent of residential mortgage NPAs and 18 percent of total residential mortgage loans. Home equity NPAs were consistent with last quarter at $71 million. Credit card NPAs declined $4 million from the previous quarter to $50 million. Other consumer NPAs declined $57 million to $3 million, primarily due to charge-offs on loans that collateralized the previously mentioned commercial loan foreclosed upon in the fourth quarter 2010. Consumer nonaccrual TDRs were $211 million in the second quarter of 2011, compared with $209 million in the first quarter.
Second quarter OREO balances included in portfolio NPA balances described above were $434 million compared with $461 million in the first quarter, and included $355 million in commercial OREO and $79 million in consumer OREO. Repossessed personal property of $15 million consisted largely of autos.
Loans still accruing over 90 days past due were $279 million, up $13 million, or 5 percent, from the first quarter of 2011. Commercial balances 90 days past due of $68 million increased $29 million sequentially. Consumer balances 90 days past due of $211 million declined $16 million from the previous quarter. Loans 30-89 days past due of $466 million decreased $83 million, or 15 percent, from the previous quarter. Commercial balances 30-89 days past due of $135 million declined $54 million, or 29 percent, sequentially and consumer balances 30-89 days past due of $331 million declined $29 million, or 8 percent, from the first quarter.
At quarter-end, we held $176 million of commercial nonaccrual loans for sale, compared with $216 million at the end of the first quarter. During the quarter, we transferred approximately $15 million of commercial loans from the portfolio to loans held-for-sale, and we transferred approximately $10 million of loans from loans held-for-sale to OREO. We recorded negative valuation adjustments of $9 million on held-for-sale loans and we recorded net gains of $8 million on loans that were sold or settled during the quarter.
13
Capital Position
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Capital Position |
||||||||||||||||||||
Average shareholders equity to average assets |
11.12 | % | 11.77 | % | 12.52 | % | 12.38 | % | 12.04 | % | ||||||||||
Tangible equity (a) |
9.01 | % | 8.76 | % | 10.42 | % | 10.04 | % | 9.89 | % | ||||||||||
Tangible common equity (excluding unrealized gains/losses) (a) |
8.64 | % | 8.39 | % | 7.04 | % | 6.70 | % | 6.55 | % | ||||||||||
Tangible common equity (including unrealized gains/losses) (a) |
8.96 | % | 8.60 | % | 7.30 | % | 7.06 | % | 6.91 | % | ||||||||||
Tangible common equity as a percent of risk-weighted assets (excluding unrealized gains/losses) (a) (b) |
9.28 | % | 9.09 | % | 7.56 | % | 7.40 | % | 7.23 | % | ||||||||||
Regulatory capital ratios: (c) |
||||||||||||||||||||
Tier I capital |
11.93 | % | 12.20 | % | 13.89 | % | 13.85 | % | 13.65 | % | ||||||||||
Total risk-based capital |
16.03 | % | 16.27 | % | 18.08 | % | 18.28 | % | 17.99 | % | ||||||||||
Tier I leverage |
11.03 | % | 11.21 | % | 12.79 | % | 12.54 | % | 12.24 | % | ||||||||||
Tier I common equity (a) |
9.20 | % | 8.99 | % | 7.48 | % | 7.34 | % | 7.17 | % | ||||||||||
Book value per share |
13.23 | 12.80 | 13.06 | 12.86 | 12.65 | |||||||||||||||
Tangible book value per share (a) |
10.55 | 10.11 | 9.94 | 9.74 | 9.51 |
(a) | The tangible equity, tangible common equity, tier I common equity and tangible book value per share ratios, while not required by accounting principles generally accepted in the United States of America (U.S. GAAP), are considered to be critical metrics with which to analyze banks. The ratios have been included herein to facilitate a greater understanding of the Bancorps capital structure and financial condition. See the Regulation G Non-GAAP Reconciliation table for a reconciliation of these ratios to U.S. GAAP. |
(b) | Under the banking agencies risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together resulting in the Bancorps total risk weighted assets. |
(c) | Current period regulatory capital data ratios are estimated. |
Capital ratios remained strong during the quarter. Compared with the prior quarter, the Tier 1 common equity ratio increased 21 bps to 9.20 percent. The tangible common equity to tangible assets ratio increased 25 bps to 8.64 percent excluding unrealized gains/losses, and increased 36 bps to 8.96 percent including unrealized gains/losses. These ratios increased primarily due to higher retained earnings. The Tier 1 capital ratio decreased 27 bps to 11.93 percent, the Total capital ratio decreased 24 bps to 16.03 percent, and the Leverage ratio decreased 18 bps to 11.03 percent. These decreases were primarily due to the redemption of $452 million in Trust Preferred Securities (TruPS), partially offset by higher retained earnings.
Book value per share at June 30, 2011 was $13.23 and tangible book value per share was $10.55, compared with March 31, 2011 book value per share of $12.80 and tangible book value per share of $10.11.
Average diluted common shares of 955.5 million shares increased 60.7 million shares from 894.8 million shares in the first quarter of 2011. This increase was due primarily to first quarter capital actions and the dilution treatment of our Series G convertible preferred shares. First, the average fully diluted share count increased due to the full quarter effect of our first quarter 2011 issuance of 122 million common shares in connection with the redemption of TARP preferred stock. The average effect of the issuance of these shares increased the quarterly average share count by 32.7 million shares. Second, our repurchase of the warrants associated with the TARP preferred stock late in the first quarter eliminated their dilutive effect to the fully diluted share count, whereas they represented an average of 7.2 million shares in the first quarter fully diluted
14
share count. Finally, the higher level of earnings reported in the second quarter resulted in our Series G convertible preferred shares being included in the fully diluted common share count in the second quarter under the if converted method. In the first quarter, fully diluted earnings per share was calculated using the preferred dividend rather than including these shares in the common share count, as their impact would have been anti-dilutive to EPS. This increased average fully diluted common shares by 35.5 million versus the first quarter. Period end common shares outstanding were 919.8 million in the second quarter of 2011, compared with 918.7 million in the first quarter of 2011. The inclusion or exclusion of the fully dilutive effect of the common shares underlying the Series G shares has no impact on end of period shares.
The Bank for International Settlements (BIS) has proposed new capital rules for Internationally Active banks, known as Basel III. Fifth Third is subject to U.S. bank regulations for capital, which have not yet been issued in response to the Basel proposals. Fifth Thirds capital levels exceed current U.S. well-capitalized standards and proposed Basel III standards, and we expect Fifth Thirds capital levels to continue to exceed U.S. well-capitalized standards including the adoption of U.S. rules that incorporate changes contemplated under Basel III and/or the Dodd-Frank Act.
Fifth Thirds Tier 1 and Total capital levels at June 30, 2011 included $2.3 billion of TruPS, or 2.3 percent of risk weighted assets compared with $2.8 billion at March 31, 2011. During the quarter, the Bancorp redeemed at par $452 million of its TruPS, including $400 million 8.875% retail TruPS, and $52 million in floating rate capital securities. Under the Dodd-Frank financial reform legislation, these TruPS are intended to be phased out of Tier 1 capital over three years beginning in 2013. The BIS also issued proposals that would include a phase-out of these securities, although over a longer period. We will continue to evaluate the role of these types of securities in our capital structure, based on regulatory developments. To the extent these types of securities remain outstanding during and after the phase-in period, they would be expected to continue to be included in Total capital, subject to prevailing U.S. capital standards. The BIS has also proposed adjustments to definitions of capital, including what is to be included in the definition of Tier 1 common, and to risk weightings applied to certain types of assets. We do not currently expect these proposed adjustments to negatively affect Fifth Thirds Tier 1 common capital levels and for any positive effect to be modest.
We expect to manage our capital structure including the components represented by common equity and non-common equity over time to adapt to the effect of legislation, changes in U.S. bank capital regulations reflecting changes to BIS capital rules, and our goals for capital levels and capital composition as appropriate given any changes in rules.
Other
Fifth Third Bank owns a 49 percent interest in Vantiv, LLC, formerly Fifth Third Processing Solutions, LLC. (Advent International owns the remaining 51 percent interest.) The 49 percent interest is recorded on Fifth Thirds balance sheet as an equity method investment with a book value of $534 million. Additionally, Fifth Third has a warrant to purchase additional shares in Vantiv which is carried as a derivative asset at a fair
15
market value of $104 million, and Advent has a contingent put option to sell shares in Vantiv to Fifth Third which is carried as a derivative liability at a fair market value of $7 million.
Conference Call
Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. This conference call will be webcast live by Thomson Financial and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on About Fifth Third then Investor Relations). The webcast also is being distributed over Thomson Financials Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Financials individual investor center at www.earnings.com or by visiting any of the investor sites in Thomson Financials Individual Investor Network. Institutional investors can access the call via Thomson Financials password-protected event management site, StreetEvents (www.streetevents.com).
Those unable to listen to the live webcast may access a webcast replay or podcast through the Fifth Third Investor Relations website at the same web address. Additionally, a telephone replay of the conference call will be available beginning approximately two hours after the conference call until Thursday, August 4th by dialing 800-642-1687 for domestic access and 706-645-9291 for international access (passcode 77050659#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of June 30, 2011, the Company had $111 billion in assets and operated 15 affiliates with 1,316 full-service Banking Centers, including 103 Bank Mart® locations open seven days a week inside select grocery stores and 2,456 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third also has a 49% interest in Vantiv, LLC, formerly Fifth Third Processing Solutions, LLC. Fifth Third is among the largest money managers in the Midwest and, as of June 30, 2011, had $276 billion in assets under care, of which it managed $25 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed at www.53.com. Fifth Thirds common stock is traded on the NASDAQ® National Global Select Market under the symbol FITB.
Forward-Looking Statements
This news release 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
16
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 Thirds ability to maintain required capital levels and adequate sources of funding and liquidity; (7) maintaining capital requirements may limit Fifth Thirds 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 recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain favorable ratings from rating agencies; (15) fluctuation of Fifth Thirds 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 in separating Vantiv, LLC, formerly Fifth Third Processing Solutions from Fifth Third; (21) loss of income from any sale or potential sale of businesses that could have an adverse effect on Fifth Thirds earnings and future growth; (22) ability to secure confidential information 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.
# # #
17
Quarterly Financial Review for June 30, 2011
Table of Contents
Financial Highlights |
19-20 | |||
Consolidated Statements of Income |
21 | |||
Consolidated Statements of Income (Taxable Equivalent) |
22 | |||
Consolidated Balance Sheets |
23-24 | |||
Consolidated Statements of Changes in Equity |
25 | |||
Average Balance Sheet and Yield Analysis |
26-28 | |||
Summary of Loans and Leases |
29 | |||
Regulatory Capital |
30 | |||
Summary of Credit Loss Experience |
31 | |||
Asset Quality |
32 | |||
Regulation G Non-GAAP Reconciliation |
33 | |||
Segment Presentation |
34 |
18
Fifth Third Bancorp and Subsidiaries
Financial Highlights
$ in millions, except per share data
(unaudited)
For the Three Months Ended | % Change | Year to Date | % Change | |||||||||||||||||||||||||||||
June 2011 |
March 2011 |
June 2010 |
Seq | Yr/Yr | June 2011 |
June 2010 |
Yr/Yr | |||||||||||||||||||||||||
Income Statement Data |
||||||||||||||||||||||||||||||||
Net interest income (a) |
$ | 869 | $ | 884 | $ | 887 | (2 | %) | (2 | %) | $ | 1,752 | $ | 1,788 | (2 | %) | ||||||||||||||||
Noninterest income |
656 | 584 | 620 | 12 | % | 6 | % | 1,240 | 1,247 | (1 | %) | |||||||||||||||||||||
Total revenue (a) |
1,525 | 1,468 | 1,507 | 4 | % | 1 | % | 2,992 | 3,035 | (1 | %) | |||||||||||||||||||||
Provision for loan and lease losses |
113 | 168 | 325 | (33 | %) | (65 | %) | 281 | 915 | (69 | %) | |||||||||||||||||||||
Noninterest expense |
901 | 918 | 935 | (2 | %) | (4 | %) | 1,819 | 1,891 | (4 | %) | |||||||||||||||||||||
Net income attributable to Bancorp |
337 | 265 | 192 | 27 | % | 75 | % | 602 | 182 | 231 | % | |||||||||||||||||||||
Net income available to common shareholders |
328 | 88 | 130 | 272 | % | 153 | % | 417 | 57 | 625 | % | |||||||||||||||||||||
Common Share Data |
||||||||||||||||||||||||||||||||
Earnings per share, basic |
$ | 0.36 | $ | 0.10 | $ | 0.16 | 260 | % | 125 | % | $ | 0.46 | $ | 0.07 | 557 | % | ||||||||||||||||
Earnings per share, diluted |
0.35 | 0.10 | 0.16 | 250 | % | 119 | % | 0.46 | 0.07 | 557 | % | |||||||||||||||||||||
Cash dividends per common share |
0.06 | 0.06 | 0.01 | | 500 | % | 0.12 | 0.02 | 500 | % | ||||||||||||||||||||||
Book value per share |
13.23 | 12.80 | 12.65 | 3 | % | 5 | % | 13.23 | 12.65 | 5 | % | |||||||||||||||||||||
Market price per share |
12.75 | 13.89 | 12.29 | (8 | %) | 4 | % | 12.75 | 12.29 | 4 | % | |||||||||||||||||||||
Common shares outstanding (in thousands) |
919,818 | 918,728 | 796,320 | | 16 | % | 919,818 | 796,320 | 16 | % | ||||||||||||||||||||||
Average common shares outstanding (in thousands): |
||||||||||||||||||||||||||||||||
Basic |
914,601 | 880,830 | 790,839 | 4 | % | 16 | % | 897,808 | 790,657 | 14 | % | |||||||||||||||||||||
Diluted |
955,478 | 894,841 | 802,255 | 7 | % | 19 | % | 907,484 | 795,454 | 14 | % | |||||||||||||||||||||
Market capitalization |
$ | 11,728 | $ | 12,761 | $ | 9,787 | (8 | %) | 20 | % | $ | 11,728 | $ | 9,787 | 20 | % | ||||||||||||||||
Financial Ratios |
||||||||||||||||||||||||||||||||
Return on assets |
1.22 | % | 0.97 | % | 0.68 | % | 26 | % | 79 | % | 1.09 | % | 0.32 | % | 241 | % | ||||||||||||||||
Return on average common equity |
11.0 | % | 3.1 | % | 5.2 | % | 255 | % | 112 | % | 7.2 | % | 1.2 | % | 500 | % | ||||||||||||||||
Return on average tangible common equity (b) |
14.0 | % | 4.2 | % | 7.4 | % | 233 | % | 89 | % | 9.3 | % | 3.9 | % | 138 | % | ||||||||||||||||
Noninterest income as a percent of total revenue |
43 | % | 40 | % | 41 | % | 7 | % | 5 | % | 41 | % | 41 | % | | |||||||||||||||||
Average equity as a percent of average assets |
11.12 | % | 11.77 | % | 12.04 | % | (6 | %) | (8 | %) | 11.44 | % | 11.98 | % | (5 | %) | ||||||||||||||||
Tangible common equity (c) (d) |
8.64 | % | 8.39 | % | 6.55 | % | 3 | % | 32 | % | 8.64 | % | 6.55 | % | 32 | % | ||||||||||||||||
Net interest margin (a) |
3.62 | % | 3.71 | % | 3.57 | % | (2 | %) | 1 | % | 3.66 | % | 3.60 | % | 2 | % | ||||||||||||||||
Efficiency (a) |
59.1 | % | 62.5 | % | 62.1 | % | (5 | %) | (5 | %) | 60.8 | % | 62.3 | % | (2 | %) | ||||||||||||||||
Effective tax rate |
33.3 | % | 29.7 | % | 20.5 | % | 12 | % | 62 | % | 31.8 | % | 17.3 | % | 84 | % | ||||||||||||||||
Credit Quality |
||||||||||||||||||||||||||||||||
Net losses charged off |
$ | 304 | $ | 367 | $ | 434 | (17 | %) | (30 | %) | $ | 671 | $ | 1,016 | (34 | %) | ||||||||||||||||
Net losses charged off as a percent of average loans and leases |
1.56 | % | 1.92 | % | 2.26 | % | (19 | %) | (31 | %) | 1.74 | % | 2.64 | % | (34 | %) | ||||||||||||||||
Allowance for loan and lease losses as a percent of loans and leases |
3.35 | % | 3.62 | % | 4.85 | % | (7 | %) | (31 | %) | 3.35 | % | 4.85 | % | (31 | %) | ||||||||||||||||
Allowance for credit losses as a percent of loans and leases |
3.61 | % | 3.89 | % | 5.18 | % | (7 | %) | (30 | %) | 3.61 | % | 5.18 | % | (30 | %) | ||||||||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned (e) |
2.66 | % | 2.73 | % | 3.87 | % | (3 | %) | (31 | %) | 2.66 | % | 3.87 | % | (31 | %) | ||||||||||||||||
Average Balances |
||||||||||||||||||||||||||||||||
Loans and leases, including held for sale |
$ | 79,153 | $ | 79,379 | $ | 78,807 | | | $ | 79,265 | $ | 79,468 | | |||||||||||||||||||
Total securities and other |
17,192 | 17,290 | 20,891 | (1 | %) | (18 | %) | 17,241 | 20,726 | (17 | %) | |||||||||||||||||||||
Total assets |
111,200 | 110,844 | 112,613 | | (1 | %) | 111,023 | 113,021 | (2 | %) | ||||||||||||||||||||||
Transaction deposits (f) |
71,506 | 70,161 | 65,508 | 2 | % | 9 | % | 70,838 | 64,859 | 9 | % | |||||||||||||||||||||
Core deposits (g) |
78,244 | 77,524 | 76,844 | 1 | % | 2 | % | 77,887 | 76,555 | 2 | % | |||||||||||||||||||||
Wholesale funding (h) |
16,433 | 16,430 | 18,977 | | (13 | %) | 16,430 | 19,591 | (16 | %) | ||||||||||||||||||||||
Bancorp shareholders equity |
12,365 | 13,052 | 13,563 | (5 | %) | (9 | %) | 12,706 | 13,541 | (6 | %) | |||||||||||||||||||||
Regulatory Capital Ratios (i) |
||||||||||||||||||||||||||||||||
Tier I capital |
11.93 | % | 12.20 | % | 13.65 | % | (2 | %) | (12 | %) | 11.95 | % | 13.65 | % | (12 | %) | ||||||||||||||||
Total risk-based capital |
16.03 | % | 16.27 | % | 17.99 | % | (1 | %) | (11 | %) | 16.05 | % | 17.99 | % | (11 | %) | ||||||||||||||||
Tier I leverage |
11.03 | % | 11.21 | % | 12.24 | % | (2 | %) | (10 | %) | 11.02 | % | 12.24 | % | (10 | %) | ||||||||||||||||
Tier I common equity (d) |
9.20 | % | 8.99 | % | 7.17 | % | 2 | % | 28 | % | 9.21 | % | 7.17 | % | 28 | % | ||||||||||||||||
Operations |
||||||||||||||||||||||||||||||||
Banking centers |
1,316 | 1,310 | 1,309 | | 1 | % | 1,316 | 1,309 | 1 | % | ||||||||||||||||||||||
ATMs |
2,456 | 2,453 | 2,362 | | 4 | % | 2,456 | 2,362 | 4 | % | ||||||||||||||||||||||
Full-time equivalent employees |
20,953 | 20,837 | 20,479 | 1 | % | 2 | % | 20,953 | 20,479 | 2 | % |
(a) | Presented on a fully taxable equivalent basis |
(b) | The return on average tangible common equity is calculated as tangible net income available to common shareholders (net income available to common shareholders excluding tax effected amortization of intangibles) divided by average tangible common equity, (average common equity less goodwill and intangible assets). |
(c) | The tangible common equity ratio is calculated as tangible common equity (shareholders equity less preferred stock, goodwill, intangible assets and tax effected accumulated other comprehensive income) divided by tangible assets (total assets less goodwill, intangible assets and tax effected accumulated other comprehensive income.) |
(d) | The tangible common equity and tier I common equity ratios, while not required by U.S. GAAP, are considered to be important metrics with which to analyze a banks position. The ratios have been included herein to facilitate a greater understanding of the Bancorps capital structure and financial condition. |
(e) | Excludes nonaccrual loans held for sale |
(f) | Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers |
(g) | Includes transaction deposits plus other time deposits |
(h) | Includes certificates $100,000 and over, other deposits, federal funds purchased, short-term borrowings and long-term debt |
(i) | Current period regulatory capital ratios are estimates |
19
Fifth Third Bancorp and Subsidiaries
Financial Highlights
$ in millions, except per share data
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Income Statement Data |
||||||||||||||||||||
Net interest income (a) |
$ | 869 | $ | 884 | $ | 919 | $ | 916 | $ | 887 | ||||||||||
Noninterest income |
656 | 584 | 656 | 827 | 620 | |||||||||||||||
Total revenue (a) |
1,525 | 1,468 | 1,575 | 1,743 | 1,507 | |||||||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | |||||||||||||||
Noninterest expense |
901 | 918 | 987 | 979 | 935 | |||||||||||||||
Net income attributable to Bancorp |
337 | 265 | 333 | 238 | 192 | |||||||||||||||
Net income available to common shareholders |
328 | 88 | 270 | 175 | 130 | |||||||||||||||
Common Share Data |
||||||||||||||||||||
Earnings per share, basic |
$ | 0.36 | $ | 0.10 | $ | 0.34 | $ | 0.22 | $ | 0.16 | ||||||||||
Earnings per share, diluted |
0.35 | 0.10 | 0.33 | 0.22 | 0.16 | |||||||||||||||
Cash dividends per common share |
0.06 | 0.06 | 0.01 | 0.01 | 0.01 | |||||||||||||||
Book value per share |
13.23 | 12.80 | 13.06 | 12.86 | 12.65 | |||||||||||||||
Market price per share |
12.75 | 13.89 | 14.68 | 12.03 | 12.29 | |||||||||||||||
Common shares outstanding (in thousands) |
919,818 | 918,728 | 796,273 | 796,283 | 796,320 | |||||||||||||||
Average common shares outstanding (in thousands): |
||||||||||||||||||||
Basic |
914,601 | 880,830 | 791,072 | 791,017 | 790,839 | |||||||||||||||
Diluted |
955,478 | 894,841 | 836,225 | 797,492 | 802,255 | |||||||||||||||
Market capitalization |
$ | 11,728 | $ | 12,761 | $ | 11,689 | $ | 9,579 | $ | 9,787 | ||||||||||
Financial Ratios |
||||||||||||||||||||
Return on assets |
1.22 | % | 0.97 | % | 1.18 | % | 0.84 | % | 0.68 | % | ||||||||||
Return on average common equity |
11.0 | % | 3.1 | % | 10.4 | % | 6.8 | % | 5.2 | % | ||||||||||
Return on average tangible common equity (b) |
14.0 | % | 4.2 | % | 13.9 | % | 9.4 | % | 7.4 | % | ||||||||||
Noninterest income as a percent of total revenue |
43 | % | 40 | % | 42 | % | 47 | % | 41 | % | ||||||||||
Average equity as a percent of average assets |
11.12 | % | 11.77 | % | 12.52 | % | 12.38 | % | 12.04 | % | ||||||||||
Tangible common equity (c) (d) |
8.64 | % | 8.39 | % | 7.04 | % | 6.70 | % | 6.55 | % | ||||||||||
Net interest margin (a) |
3.62 | % | 3.71 | % | 3.75 | % | 3.70 | % | 3.57 | % | ||||||||||
Efficiency (a) |
59.1 | % | 62.5 | % | 62.6 | % | 56.2 | % | 62.1 | % | ||||||||||
Effective tax rate |
33.3 | % | 29.7 | % | 20.0 | % | 21.5 | % | 20.5 | % | ||||||||||
Credit Quality |
||||||||||||||||||||
Net losses charged off |
$ | 304 | $ | 367 | $ | 356 | $ | 956 | $ | 434 | ||||||||||
Net losses charged off as a percent of average loans and leases |
1.56 | % | 1.92 | % | 1.86 | % | 4.95 | % | 2.26 | % | ||||||||||
Allowance for loan and lease losses as a percent of loans and leases |
3.35 | % | 3.62 | % | 3.88 | % | 4.20 | % | 4.85 | % | ||||||||||
Allowance for credit losses as a percent of loans and leases |
3.61 | % | 3.89 | % | 4.17 | % | 4.51 | % | 5.18 | % | ||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned (e) |
2.66 | % | 2.73 | % | 2.79 | % | 2.72 | % | 3.87 | % | ||||||||||
Average Balances |
||||||||||||||||||||
Loans and leases, including held for sale |
$ | 79,153 | $ | 79,379 | $ | 79,148 | $ | 78,854 | $ | 78,807 | ||||||||||
Total securities and other short-term investments |
17,192 | 17,290 | 18,066 | 19,309 | 20,891 | |||||||||||||||
Total assets |
111,200 | 110,844 | 111,858 | 111,854 | 112,613 | |||||||||||||||
Transaction deposits (f) |
71,506 | 70,161 | 67,964 | 64,941 | 65,508 | |||||||||||||||
Core deposits (g) |
78,244 | 77,524 | 76,454 | 75,202 | 76,844 | |||||||||||||||
Wholesale funding (h) |
16,433 | 16,430 | 17,269 | 19,236 | 18,977 | |||||||||||||||
Bancorp shareholders equity |
12,365 | 13,052 | 14,007 | 13,852 | 13,563 | |||||||||||||||
Regulatory Capital Ratios (i) |
||||||||||||||||||||
Tier I capital |
11.93 | % | 12.20 | % | 13.89 | % | 13.85 | % | 13.65 | % | ||||||||||
Total risk-based capital |
16.03 | % | 16.27 | % | 18.08 | % | 18.28 | % | 17.99 | % | ||||||||||
Tier I leverage |
11.03 | % | 11.21 | % | 12.79 | % | 12.54 | % | 12.24 | % | ||||||||||
Tier I common equity (d) |
9.20 | % | 8.99 | % | 7.48 | % | 7.34 | % | 7.17 | % | ||||||||||
Operations |
||||||||||||||||||||
Banking centers |
1,316 | 1,310 | 1,312 | 1,309 | 1,309 | |||||||||||||||
ATMs |
2,456 | 2,453 | 2,445 | 2,390 | 2,362 | |||||||||||||||
Full-time equivalent employees |
20,953 | 20,837 | 20,838 | 20,667 | 20,479 |
(a) | Presented on a fully taxable equivalent basis |
(b) | The return on average tangible common equity is calculated as tangible net income available to common shareholders (net income available to common shareholders excluding tax effected amortization of intangibles) divided by average tangible common equity, (average common equity less goodwill and intangible assets). |
(c) | The tangible common equity ratio is calculated as tangible common equity (shareholders equity less preferred stock, goodwill, intangible assets and tax effected accumulated other comprehensive income) divided by tangible assets (total assets less goodwill, intangible assets and tax effected accumulated other comprehensive income.) |
(d) | The tangible common equity and tier I common equity ratios, while not required by U.S. GAAP, are considered to be important metrics with which to analyze a banks position. The ratios have been included herein to facilitate a greater understanding of the Bancorps capital structure and financial condition. |
(e) | Excludes nonaccrual loans held for sale |
(f) | Includes demand, interest checking, savings, money market and foreign office deposits of commercial customers |
(g) | Includes transaction deposits plus other time deposits |
(h) | Includes certificates $100,000 and over, other deposits, federal funds purchased, short-term borrowings and long-term debt |
(i) | Current period regulatory capital ratios are estimates |
20
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Income
$ in millions
(unaudited)
For the Three Months Ended | % Change | Year to Date | % Change | |||||||||||||||||||||||||||||
June 2011 |
March 2011 |
June 2010 |
Seq | Yr/Yr | June 2011 |
June 2010 |
Yr/Yr | |||||||||||||||||||||||||
Interest Income |
||||||||||||||||||||||||||||||||
Interest and fees on loans and leases |
$ | 893 | $ | 910 | $ | 951 | (2 | %) | (6 | %) | $ | 1,803 | $ | 1,910 | (6 | %) | ||||||||||||||||
Interest on securities |
151 | 149 | 163 | 1 | % | (7 | %) | 300 | 345 | (13 | %) | |||||||||||||||||||||
Interest on other short-term investments |
1 | 1 | 2 | 3 | % | (42 | %) | 2 | 4 | (31 | %) | |||||||||||||||||||||
Total interest income |
1,045 | 1,060 | 1,116 | (1 | %) | (6 | %) | 2,105 | 2,259 | (7 | %) | |||||||||||||||||||||
Interest Expense |
||||||||||||||||||||||||||||||||
Interest on deposits |
97 | 106 | 161 | (9 | %) | (40 | %) | 203 | 332 | (39 | %) | |||||||||||||||||||||
Interest on short-term borrowings |
1 | 1 | 1 | (18 | %) | (19 | %) | 2 | 2 | (11 | %) | |||||||||||||||||||||
Interest on long-term debt |
83 | 74 | 72 | 11 | % | 15 | % | 157 | 146 | 7 | % | |||||||||||||||||||||
Total interest expense |
181 | 181 | 234 | | (23 | %) | 362 | 480 | (25 | %) | ||||||||||||||||||||||
Net Interest Income |
864 | 879 | 882 | (2 | %) | (2 | %) | 1,743 | 1,779 | (2 | %) | |||||||||||||||||||||
Provision for loan and lease losses |
113 | 168 | 325 | (33 | %) | (65 | %) | 281 | 915 | (69 | %) | |||||||||||||||||||||
Net interest income after provision for loan and lease losses |
751 | 711 | 557 | 6 | % | 35 | % | 1,462 | 864 | 69 | % | |||||||||||||||||||||
Noninterest Income |
||||||||||||||||||||||||||||||||
Service charges on deposits |
126 | 124 | 149 | 1 | % | (16 | %) | 250 | 291 | (14 | %) | |||||||||||||||||||||
Corporate banking revenue |
95 | 86 | 93 | 11 | % | 2 | % | 181 | 174 | 4 | % | |||||||||||||||||||||
Mortgage banking net revenue |
162 | 102 | 114 | 58 | % | 42 | % | 264 | 266 | (1 | %) | |||||||||||||||||||||
Investment advisory revenue |
95 | 98 | 87 | (3 | %) | 10 | % | 193 | 177 | 9 | % | |||||||||||||||||||||
Card and processing revenue |
89 | 80 | 84 | 10 | % | 5 | % | 169 | 158 | 8 | % | |||||||||||||||||||||
Other noninterest income |
83 | 81 | 85 | 3 | % | (2 | %) | 164 | 160 | 3 | % | |||||||||||||||||||||
Securities gains, net |
6 | 8 | 8 | (25 | %) | (25 | %) | 14 | 21 | (33 | %) | |||||||||||||||||||||
Securities gains, net - non-qualifying hedges on mortgage servicing rights |
| 5 | | NM | NM | 5 | | NM | ||||||||||||||||||||||||
Total noninterest income |
656 | 584 | 620 | 12 | % | 6 | % | 1,240 | 1,247 | (1 | %) | |||||||||||||||||||||
Noninterest Expense |
||||||||||||||||||||||||||||||||
Salaries, wages and incentives |
365 | 351 | 356 | 4 | % | 2 | % | 716 | 686 | 4 | % | |||||||||||||||||||||
Employee benefits |
79 | 97 | 73 | (19 | %) | 9 | % | 176 | 159 | 11 | % | |||||||||||||||||||||
Net occupancy expense |
75 | 77 | 73 | (3 | %) | 2 | % | 152 | 150 | 1 | % | |||||||||||||||||||||
Technology and communications |
48 | 45 | 45 | 6 | % | 6 | % | 93 | 90 | 3 | % | |||||||||||||||||||||
Equipment expense |
28 | 29 | 31 | (4 | %) | (9 | %) | 57 | 60 | (6 | %) | |||||||||||||||||||||
Card and processing expense |
29 | 29 | 31 | 1 | % | (8 | %) | 58 | 56 | 3 | % | |||||||||||||||||||||
Other noninterest expense |
277 | 290 | 326 | (4 | %) | (15 | %) | 567 | 690 | (18 | %) | |||||||||||||||||||||
Total noninterest expense |
901 | 918 | 935 | (2 | %) | (4 | %) | 1,819 | 1,891 | (4 | %) | |||||||||||||||||||||
Income before income taxes |
506 | 377 | 242 | 34 | % | 109 | % | 883 | 220 | 301 | % | |||||||||||||||||||||
Applicable income taxes |
169 | 112 | 50 | 51 | % | 238 | % | 281 | 38 | 639 | % | |||||||||||||||||||||
Net Income |
337 | 265 | 192 | 27 | % | 75 | % | 602 | 182 | 231 | % | |||||||||||||||||||||
Less: Net income attributable to noncontrolling interest |
| | | NM | NM | | NM | NM | ||||||||||||||||||||||||
Net income attributable to Bancorp |
337 | 265 | 192 | 27 | % | 75 | % | 602 | 182 | 231 | % | |||||||||||||||||||||
Dividends on preferred stock |
9 | 177 | 62 | (95 | %) | (85 | %) | 185 | 125 | 48 | % | |||||||||||||||||||||
Net income available to common shareholders |
$ | 328 | $ | 88 | $ | 130 | 272 | % | 153 | % | $ | 417 | $ | 57 | 625 | % | ||||||||||||||||
21
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Income (Taxable Equivalent)
$ in millions
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Interest Income |
||||||||||||||||||||
Interest and fees on loans and leases |
$ | 893 | $ | 910 | $ | 950 | $ | 962 | $ | 951 | ||||||||||
Interest on securities |
151 | 149 | 152 | 161 | 163 | |||||||||||||||
Interest on other short-term investments |
1 | 1 | 2 | 3 | 2 | |||||||||||||||
Total interest income |
1,045 | 1,060 | 1,104 | 1,126 | 1,116 | |||||||||||||||
Taxable equivalent adjustment |
5 | 5 | 5 | 4 | 5 | |||||||||||||||
Total interest income (taxable equivalent) |
1,050 | 1,065 | 1,109 | 1,130 | 1,121 | |||||||||||||||
Interest Expense |
||||||||||||||||||||
Interest on deposits |
97 | 106 | 118 | 141 | 161 | |||||||||||||||
Interest on short-term borrowings |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Interest on long-term debt |
83 | 74 | 71 | 72 | 72 | |||||||||||||||
Total interest expense |
181 | 181 | 190 | 214 | 234 | |||||||||||||||
Net interest income (taxable equivalent) |
869 | 884 | 919 | 916 | 887 | |||||||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | |||||||||||||||
Net interest income (taxable equivalent) after provision for loan and lease losses |
756 | 716 | 753 | 459 | 562 | |||||||||||||||
Noninterest Income |
||||||||||||||||||||
Service charges on deposits |
126 | 124 | 140 | 143 | 149 | |||||||||||||||
Corporate banking revenue |
95 | 86 | 103 | 86 | 93 | |||||||||||||||
Mortgage banking net revenue |
162 | 102 | 149 | 232 | 114 | |||||||||||||||
Investment advisory revenue |
95 | 98 | 93 | 90 | 87 | |||||||||||||||
Card and processing revenue |
89 | 80 | 81 | 77 | 84 | |||||||||||||||
Other noninterest income |
83 | 81 | 55 | 195 | 85 | |||||||||||||||
Securities gains, net |
6 | 8 | 21 | 4 | 8 | |||||||||||||||
Securities gains, net - non-qualifying hedges on mortgage servicing rights |
| 5 | 14 | | | |||||||||||||||
Total noninterest income |
656 | 584 | 656 | 827 | 620 | |||||||||||||||
Noninterest Expense |
||||||||||||||||||||
Salaries, wages and incentives |
365 | 351 | 385 | 360 | 356 | |||||||||||||||
Employee benefits |
79 | 97 | 73 | 82 | 73 | |||||||||||||||
Net occupancy expense |
75 | 77 | 76 | 72 | 73 | |||||||||||||||
Technology and communications |
48 | 45 | 52 | 48 | 45 | |||||||||||||||
Equipment expense |
28 | 29 | 32 | 30 | 31 | |||||||||||||||
Card and processing expense |
29 | 29 | 26 | 26 | 31 | |||||||||||||||
Other noninterest expense |
277 | 290 | 343 | 361 | 326 | |||||||||||||||
Total noninterest expense |
901 | 918 | 987 | 979 | 935 | |||||||||||||||
Income before income taxes (taxable equivalent) |
511 | 382 | 422 | 307 | 247 | |||||||||||||||
Taxable equivalent adjustment |
5 | 5 | 5 | 4 | 5 | |||||||||||||||
Income before income taxes |
506 | 377 | 417 | 303 | 242 | |||||||||||||||
Applicable income taxes |
169 | 112 | 83 | 65 | 50 | |||||||||||||||
Net Income |
337 | 265 | 334 | 238 | 192 | |||||||||||||||
Less: Net Income attributable to noncontrolling interest |
| | 1 | | | |||||||||||||||
Net income attributable to Bancorp |
337 | 265 | 333 | 238 | 192 | |||||||||||||||
Dividends on preferred stock |
9 | 177 | 63 | 63 | 62 | |||||||||||||||
Net income available to common shareholders |
$ | 328 | $ | 88 | $ | 270 | $ | 175 | $ | 130 | ||||||||||
22
Fifth Third Bancorp and Subsidiaries
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
As of | % Change | |||||||||||||||||||
June 2011 |
March 2011 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||
Assets |
||||||||||||||||||||
Cash and due from banks |
$ | 2,380 | $ | 2,121 | $ | 2,216 | 12 | % | 7 | % | ||||||||||
Available-for-sale and other securities (a) |
15,502 | 15,135 | 16,021 | 2 | % | (3 | %) | |||||||||||||
Held-to-maturity securities (b) |
344 | 346 | 354 | (1 | %) | (3 | %) | |||||||||||||
Trading securities |
217 | 216 | 270 | | (20 | %) | ||||||||||||||
Other short-term investments |
1,370 | 2,481 | 4,322 | (45 | %) | (68 | %) | |||||||||||||
Loans held for sale |
1,185 | 1,291 | 2,150 | (8 | %) | (45 | %) | |||||||||||||
Portfolio loans and leases: |
||||||||||||||||||||
Commercial and industrial loans |
28,099 | 27,344 | 26,008 | 3 | % | 8 | % | |||||||||||||
Commercial mortgage loans |
10,233 | 10,510 | 11,481 | (3 | %) | (11 | %) | |||||||||||||
Commercial construction loans |
1,778 | 1,980 | 2,965 | (10 | %) | (40 | %) | |||||||||||||
Commercial leases |
3,326 | 3,367 | 3,271 | (1 | %) | 2 | % | |||||||||||||
Residential mortgage loans |
9,849 | 9,530 | 7,707 | 3 | % | 28 | % | |||||||||||||
Home equity |
11,048 | 11,222 | 11,987 | (2 | %) | (8 | %) | |||||||||||||
Automobile loans |
11,315 | 11,129 | 10,285 | 2 | % | 10 | % | |||||||||||||
Credit card |
1,856 | 1,821 | 1,841 | 2 | % | 1 | % | |||||||||||||
Other consumer loans and leases |
463 | 562 | 687 | (18 | %) | (33 | %) | |||||||||||||
Portfolio loans and leases |
77,967 | 77,465 | 76,232 | 1 | % | 2 | % | |||||||||||||
Allowance for loan and lease losses |
(2,614 | ) | (2,805 | ) | (3,693 | ) | (7 | %) | (29 | %) | ||||||||||
Portfolio loans and leases, net |
75,353 | 74,660 | 72,539 | 1 | % | 4 | % | |||||||||||||
Bank premises and equipment |
2,395 | 2,389 | 2,374 | | 1 | % | ||||||||||||||
Operating lease equipment |
492 | 513 | 489 | (4 | %) | 1 | % | |||||||||||||
Goodwill |
2,417 | 2,417 | 2,417 | | | |||||||||||||||
Intangible assets |
49 | 55 | 83 | (11 | %) | (40 | %) | |||||||||||||
Servicing rights |
847 | 894 | 646 | (5 | %) | 31 | % | |||||||||||||
Other assets |
8,254 | 7,967 | 8,144 | 4 | % | 1 | % | |||||||||||||
Total assets |
$ | 110,805 | $ | 110,485 | $ | 112,025 | | (1 | %) | |||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand |
$ | 22,589 | $ | 22,066 | $ | 19,256 | 2 | % | 17 | % | ||||||||||
Interest checking |
18,072 | 18,597 | 17,759 | (3 | %) | 2 | % | |||||||||||||
Savings |
21,764 | 21,697 | 19,646 | | 11 | % | ||||||||||||||
Money market |
4,859 | 5,184 | 4,666 | (6 | %) | 4 | % | |||||||||||||
Foreign office |
3,271 | 3,569 | 3,430 | (8 | %) | (5 | %) | |||||||||||||
Other time |
6,399 | 7,043 | 10,966 | (9 | %) | (42 | %) | |||||||||||||
Certificates - $100,000 and over |
3,642 | 4,160 | 6,389 | (12 | %) | (43 | %) | |||||||||||||
Other |
2 | 1 | 3 | 223 | % | (26 | %) | |||||||||||||
Total deposits |
80,598 | 82,317 | 82,115 | (2 | %) | (2 | %) | |||||||||||||
Federal funds purchased |
403 | 332 | 240 | 21 | % | 68 | % | |||||||||||||
Other short-term borrowings |
2,702 | 1,297 | 1,556 | 108 | % | 74 | % | |||||||||||||
Accrued taxes, interest and expenses |
1,067 | 844 | 721 | 26 | % | 48 | % | |||||||||||||
Other liabilities |
3,282 | 2,948 | 2,703 | 11 | % | 21 | % | |||||||||||||
Long-term debt |
10,152 | 10,555 | 10,989 | (4 | %) | (8 | %) | |||||||||||||
Total liabilities |
98,204 | 98,293 | 98,324 | | | |||||||||||||||
Equity |
||||||||||||||||||||
Common stock |
2,051 | 2,051 | 1,779 | | 15 | % | ||||||||||||||
Preferred stock |
398 | 398 | 3,631 | | (89 | %) | ||||||||||||||
Capital surplus |
2,769 | 2,824 | 1,696 | (2 | %) | 63 | % | |||||||||||||
Retained earnings |
7,024 | 6,752 | 6,289 | 4 | % | 12 | % | |||||||||||||
Accumulated other comprehensive income |
396 | 263 | 440 | 50 | % | (10 | %) | |||||||||||||
Treasury stock |
(66 | ) | (125 | ) | (134 | ) | (47 | %) | (51 | %) | ||||||||||
Total Bancorp shareholders equity |
12,572 | 12,163 | 13,701 | 3 | % | (8 | %) | |||||||||||||
Noncontrolling interest |
29 | 29 | | | NM | |||||||||||||||
Total Equity |
12,601 | 12,192 | 13,701 | 3 | % | (8 | %) | |||||||||||||
Total liabilities and equity |
$ | 110,805 | $ | 110,485 | $ | 112,025 | | (1 | %) | |||||||||||
(a) Amortized cost |
$ | 14,889 | $ | 14,707 | $ | 15,356 | 1 | % | (3 | %) | ||||||||||
(b) Market values |
344 | 346 | 354 | (1 | %) | (3 | %) | |||||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): |
||||||||||||||||||||
Authorized |
2,000,000 | 2,000,000 | 2,000,000 | | | |||||||||||||||
Outstanding, excluding treasury |
919,818 | 918,728 | 796,320 | | 16 | % | ||||||||||||||
Treasury |
4,074 | 5,165 | 5,184 | (21 | %) | (21 | %) | |||||||||||||
23
Fifth Third Bancorp and Subsidiaries
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
As of | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Assets |
||||||||||||||||||||
Cash and due from banks |
$ | 2,380 | $ | 2,121 | $ | 2,159 | $ | 2,215 | $ | 2,216 | ||||||||||
Available-for-sale and other securities (a) |
15,502 | 15,135 | 15,414 | 15,975 | 16,021 | |||||||||||||||
Held-to-maturity securities (b) |
344 | 346 | 353 | 354 | 354 | |||||||||||||||
Trading securities |
217 | 216 | 294 | 320 | 270 | |||||||||||||||
Other short-term investments |
1,370 | 2,481 | 1,515 | 3,271 | 4,322 | |||||||||||||||
Loans held for sale |
1,185 | 1,291 | 2,216 | 2,733 | 2,150 | |||||||||||||||
Portfolio loans and leases: |
||||||||||||||||||||
Commercial and industrial loans |
28,099 | 27,344 | 27,191 | 26,302 | 26,008 | |||||||||||||||
Commercial mortgage loans |
10,233 | 10,510 | 10,845 | 10,985 | 11,481 | |||||||||||||||
Commercial construction loans |
1,778 | 1,980 | 2,048 | 2,349 | 2,965 | |||||||||||||||
Commercial leases |
3,326 | 3,367 | 3,378 | 3,304 | 3,271 | |||||||||||||||
Residential mortgage loans |
9,849 | 9,530 | 8,956 | 7,975 | 7,707 | |||||||||||||||
Home equity |
11,048 | 11,222 | 11,513 | 11,774 | 11,987 | |||||||||||||||
Automobile loans |
11,315 | 11,129 | 10,983 | 10,738 | 10,285 | |||||||||||||||
Credit card |
1,856 | 1,821 | 1,896 | 1,832 | 1,841 | |||||||||||||||
Other consumer loans and leases |
463 | 562 | 681 | 750 | 687 | |||||||||||||||
Portfolio loans and leases |
77,967 | 77,465 | 77,491 | 76,009 | 76,232 | |||||||||||||||
Allowance for loan and lease losses |
(2,614 | ) | (2,805 | ) | (3,004 | ) | (3,194 | ) | (3,693 | ) | ||||||||||
Portfolio loans and leases, net |
75,353 | 74,660 | 74,487 | 72,815 | 72,539 | |||||||||||||||
Bank premises and equipment |
2,395 | 2,389 | 2,389 | 2,377 | 2,374 | |||||||||||||||
Operating lease equipment |
492 | 513 | 479 | 470 | 489 | |||||||||||||||
Goodwill |
2,417 | 2,417 | 2,417 | 2,417 | 2,417 | |||||||||||||||
Intangible assets |
49 | 55 | 62 | 72 | 83 | |||||||||||||||
Servicing rights |
847 | 894 | 822 | 599 | 646 | |||||||||||||||
Other assets |
8,254 | 7,967 | 8,400 | 8,704 | 8,144 | |||||||||||||||
Total assets |
$ | 110,805 | $ | 110,485 | $ | 111,007 | $ | 112,322 | $ | 112,025 | ||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand |
$ | 22,589 | $ | 22,066 | $ | 21,413 | $ | 20,109 | $ | 19,256 | ||||||||||
Interest checking |
18,072 | 18,597 | 18,560 | 17,225 | 17,759 | |||||||||||||||
Savings |
21,764 | 21,697 | 20,903 | 20,260 | 19,646 | |||||||||||||||
Money market |
4,859 | 5,184 | 5,035 | 5,064 | 4,666 | |||||||||||||||
Foreign office |
3,271 | 3,569 | 3,721 | 3,807 | 3,430 | |||||||||||||||
Other time |
6,399 | 7,043 | 7,728 | 9,379 | 10,966 | |||||||||||||||
Certificates - $100,000 and over |
3,642 | 4,160 | 4,287 | 5,515 | 6,389 | |||||||||||||||
Other |
2 | 1 | 1 | 3 | 3 | |||||||||||||||
Total deposits |
80,598 | 82,317 | 81,648 | 81,362 | 82,115 | |||||||||||||||
Federal funds purchased |
403 | 332 | 279 | 368 | 240 | |||||||||||||||
Other short-term borrowings |
2,702 | 1,297 | 1,574 | 1,775 | 1,556 | |||||||||||||||
Accrued taxes, interest and expenses |
1,067 | 844 | 889 | 869 | 721 | |||||||||||||||
Other liabilities |
3,282 | 2,948 | 2,979 | 3,082 | 2,703 | |||||||||||||||
Long-term debt |
10,152 | 10,555 | 9,558 | 10,953 | 10,989 | |||||||||||||||
Total liabilities |
98,204 | 98,293 | 96,927 | 98,409 | 98,324 | |||||||||||||||
Equity |
||||||||||||||||||||
Common stock |
2,051 | 2,051 | 1,779 | 1,779 | 1,779 | |||||||||||||||
Preferred stock |
398 | 398 | 3,654 | 3,642 | 3,631 | |||||||||||||||
Capital surplus |
2,769 | 2,824 | 1,715 | 1,707 | 1,696 | |||||||||||||||
Retained earnings |
7,024 | 6,752 | 6,719 | 6,456 | 6,289 | |||||||||||||||
Accumulated other comprehensive income |
396 | 263 | 314 | 432 | 440 | |||||||||||||||
Treasury stock |
(66 | ) | (125 | ) | (130 | ) | (132 | ) | (134 | ) | ||||||||||
Total Bancorp shareholders equity |
12,572 | 12,163 | 14,051 | 13,884 | 13,701 | |||||||||||||||
Noncontrolling interest |
29 | 29 | 29 | 29 | | |||||||||||||||
Total Equity |
12,601 | 12,192 | 14,080 | 13,913 | 13,701 | |||||||||||||||
Total liabilities and equity |
$ | 110,805 | $ | 110,485 | $ | 111,007 | $ | 112,322 | $ | 112,025 | ||||||||||
(a) Amortized cost |
$ | 14,889 | $ | 14,707 | $ | 14,919 | $ | 15,308 | $ | 15,356 | ||||||||||
(b) Market values |
344 | 346 | 353 | 354 | 354 | |||||||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): |
||||||||||||||||||||
Authorized |
2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||||||||
Outstanding, excluding treasury |
919,818 | 918,728 | 796,273 | 796,283 | 796,320 | |||||||||||||||
Treasury |
4,074 | 5,165 | 5,232 | 5,221 | 5,184 | |||||||||||||||
24
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Changes in Equity
$ in millions
(unaudited)
For the Three Months Ended | Year to Date | |||||||||||||||
June 2011 |
June 2010 |
June 2011 |
June 2010 |
|||||||||||||
Total equity, beginning |
$ | 12,192 | $ | 13,408 | $ | 14,080 | $ | 13,497 | ||||||||
Net income attributable to Bancorp |
337 | 192 | 602 | 182 | ||||||||||||
Other comprehensive income, net of tax: |
||||||||||||||||
Change in unrealized gains and (losses): |
||||||||||||||||
Available-for-sale securities |
121 | 164 | 77 | 215 | ||||||||||||
Qualifying cash flow hedges |
10 | (14 | ) | 1 | (20 | ) | ||||||||||
Change in accumulated other comprehensive income related to employee benefit plans |
2 | 2 | 4 | 4 | ||||||||||||
Comprehensive income |
470 | 344 | 684 | 381 | ||||||||||||
Cash dividends declared: |
||||||||||||||||
Common stock |
(55 | ) | (8 | ) | (110 | ) | (16 | ) | ||||||||
Preferred stock |
(9 | ) | (51 | ) | (33 | ) | (103 | ) | ||||||||
Issuance of common stock |
| | 1,648 | | ||||||||||||
TARP repayment |
| | (3,408 | ) | | |||||||||||
Stock-based awards exercised, including treasury shares issued |
| (3 | ) | 1 | (3 | ) | ||||||||||
Loans repaid (issued) related to exercise of stock-based awards, net |
| | 1 | | ||||||||||||
Redemption of preferred stock warrants issued under TARP CPP |
| | (280 | ) | | |||||||||||
Stock-based compensation expense |
3 | 11 | 18 | 22 | ||||||||||||
Impact of cumulative effect of change in accounting principle |
| | | (77 | ) | |||||||||||
Total equity, ending |
$ | 12,601 | $ | 13,701 | $ | 12,601 | $ | 13,701 | ||||||||
25
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
For the Three Months Ended | % Change | |||||||||||||||||||
June 2011 |
March 2011 |
June 2010 |
Seq | Yr/Yr | ||||||||||||||||
Assets |
||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 27,970 | $ | 27,404 | $ | 26,179 | 2 | % | 7 | % | ||||||||||
Commercial mortgage loans |
10,491 | 10,816 | 11,772 | (3 | %) | (11 | %) | |||||||||||||
Commercial construction loans |
1,950 | 2,085 | 3,258 | (6 | %) | (40 | %) | |||||||||||||
Commercial leases |
3,349 | 3,364 | 3,336 | | | |||||||||||||||
Residential mortgage loans |
10,655 | 10,736 | 9,390 | (1 | %) | 13 | % | |||||||||||||
Home equity |
11,144 | 11,376 | 12,102 | (2 | %) | (8 | %) | |||||||||||||
Automobile loans |
11,188 | 11,070 | 10,170 | 1 | % | 10 | % | |||||||||||||
Credit card |
1,834 | 1,852 | 1,859 | (1 | %) | (1 | %) | |||||||||||||
Other consumer loans and leases |
572 | 676 | 741 | (15 | %) | (23 | %) | |||||||||||||
Taxable securities |
15,115 | 15,156 | 16,451 | | (9 | %) | ||||||||||||||
Tax exempt securities |
96 | 197 | 154 | (51 | %) | (60 | %) | |||||||||||||
Other short-term investments |
1,981 | 1,937 | 4,285 | 2 | % | (54 | %) | |||||||||||||
Total interest-earning assets |
96,345 | 96,669 | 99,698 | | (3 | %) | ||||||||||||||
Cash and due from banks |
2,356 | 2,268 | 2,163 | 4 | % | 9 | % | |||||||||||||
Other assets |
15,298 | 14,897 | 14,550 | 3 | % | 5 | % | |||||||||||||
Allowance for loan and lease losses |
(2,799 | ) | (2,990 | ) | (3,798 | ) | (6 | %) | (26 | %) | ||||||||||
Total assets |
$ | 111,200 | $ | 110,844 | $ | 112,613 | | (1 | %) | |||||||||||
Liabilities |
||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Interest checking |
$ | 18,701 | $ | 18,539 | $ | 18,652 | 1 | % | | |||||||||||
Savings |
21,817 | 21,324 | 19,446 | 2 | % | 12 | % | |||||||||||||
Money market |
5,009 | 5,136 | 4,679 | (2 | %) | 7 | % | |||||||||||||
Foreign office |
3,805 | 3,580 | 3,325 | 6 | % | 14 | % | |||||||||||||
Other time |
6,738 | 7,363 | 11,336 | (8 | %) | (41 | %) | |||||||||||||
Certificates - $100,000 and over |
3,955 | 4,226 | 6,354 | (6 | %) | (38 | %) | |||||||||||||
Other |
2 | 1 | 5 | 77 | % | (54 | %) | |||||||||||||
Federal funds purchased |
344 | 310 | 264 | 11 | % | 30 | % | |||||||||||||
Other short-term borrowings |
1,605 | 1,638 | 1,478 | (2 | %) | 9 | % | |||||||||||||
Long-term debt |
10,527 | 10,255 | 10,876 | 3 | % | (3 | %) | |||||||||||||
Total interest-bearing liabilities |
72,503 | 72,372 | 76,415 | | (5 | %) | ||||||||||||||
Demand deposits |
22,174 | 21,582 | 19,406 | 3 | % | 14 | % | |||||||||||||
Other liabilities |
4,129 | 3,809 | 3,229 | 8 | % | 28 | % | |||||||||||||
Total liabilities |
98,806 | 97,763 | 99,050 | 1 | % | | ||||||||||||||
Equity |
12,394 | 13,081 | 13,563 | (5 | %) | (9 | %) | |||||||||||||
Total liabilities and equity |
$ | 111,200 | $ | 110,844 | $ | 112,613 | | (1 | %) | |||||||||||
Yield Analysis |
||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||
Commercial and industrial loans |
4.35 | % | 4.45 | % | 4.75 | % | ||||||||||||||
Commercial mortgage loans |
4.00 | % | 4.11 | % | 4.10 | % | ||||||||||||||
Commercial construction loans |
3.01 | % | 3.15 | % | 3.15 | % | ||||||||||||||
Commercial leases |
4.06 | % | 4.17 | % | 4.51 | % | ||||||||||||||
Residential mortgage loans |
4.54 | % | 4.67 | % | 4.77 | % | ||||||||||||||
Home equity |
3.91 | % | 3.96 | % | 4.01 | % | ||||||||||||||
Automobile loans |
4.81 | % | 5.10 | % | 6.01 | % | ||||||||||||||
Credit card |
9.91 | % | 10.43 | % | 10.91 | % | ||||||||||||||
Other consumer loans and leases |
22.02 | % | 18.54 | % | 13.65 | % | ||||||||||||||
Total loans and leases |
4.54 | % | 4.67 | % | 4.86 | % | ||||||||||||||
Taxable securities |
3.97 | % | 3.96 | % | 3.93 | % | ||||||||||||||
Tax exempt securities |
6.41 | % | 4.77 | % | 6.98 | % | ||||||||||||||
Other short-term investments |
0.25 | % | 0.25 | % | 0.20 | % | ||||||||||||||
Total interest-earning assets |
4.37 | % | 4.47 | % | 4.51 | % | ||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Interest checking |
0.26 | % | 0.28 | % | 0.30 | % | ||||||||||||||
Savings |
0.33 | % | 0.43 | % | 0.60 | % | ||||||||||||||
Money market |
0.29 | % | 0.32 | % | 0.42 | % | ||||||||||||||
Foreign office |
0.29 | % | 0.31 | % | 0.36 | % | ||||||||||||||
Other time |
2.40 | % | 2.36 | % | 2.70 | % | ||||||||||||||
Certificates - $100,000 and over |
2.05 | % | 1.99 | % | 2.13 | % | ||||||||||||||
Other |
0.02 | % | 0.05 | % | 0.10 | % | ||||||||||||||
Federal funds purchased |
0.11 | % | 0.14 | % | 0.17 | % | ||||||||||||||
Other short-term borrowings |
0.16 | % | 0.19 | % | 0.21 | % | ||||||||||||||
Long-term debt |
3.16 | % | 2.95 | % | 2.64 | % | ||||||||||||||
Total interest-bearing liabilities |
1.00 | % | 1.02 | % | 1.23 | % | ||||||||||||||
Ratios: |
||||||||||||||||||||
Net interest margin (taxable equivalent) |
3.62 | % | 3.71 | % | 3.57 | % | ||||||||||||||
Net interest rate spread (taxable equivalent) |
3.37 | % | 3.45 | % | 3.28 | % | ||||||||||||||
Interest-bearing liabilities to interest-earning assets |
75.25 | % | 74.87 | % | 76.65 | % | ||||||||||||||
26
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
Year to Date | % Change | |||||||||||
June 2011 |
June 2010 |
Yr/Yr | ||||||||||
Assets |
||||||||||||
Interest-earning assets: |
||||||||||||
Commercial and industrial loans |
$ | 27,689 | $ | 26,239 | 6 | % | ||||||
Commercial mortgage loans |
10,652 | 11,804 | (10 | %) | ||||||||
Commercial construction loans |
2,017 | 3,518 | (43 | %) | ||||||||
Commercial leases |
3,356 | 3,402 | (1 | %) | ||||||||
Residential mortgage loans |
10,695 | 9,434 | 13 | % | ||||||||
Home equity |
11,259 | 12,219 | (8 | %) | ||||||||
Automobile loans |
11,130 | 10,178 | 9 | % | ||||||||
Credit card |
1,843 | 1,899 | (3 | %) | ||||||||
Other consumer loans and leases |
624 | 775 | (19 | %) | ||||||||
Taxable securities |
15,135 | 16,843 | (10 | %) | ||||||||
Tax exempt securities |
147 | 165 | (12 | %) | ||||||||
Other short-term investments |
1,959 | 3,718 | (47 | %) | ||||||||
Total interest-earning assets |
96,506 | 100,194 | (4 | %) | ||||||||
Cash and due from banks |
2,313 | 2,205 | 5 | % | ||||||||
Other assets |
15,098 | 14,407 | 5 | % | ||||||||
Allowance for loan and lease losses |
(2,894 | ) | (3,785 | ) | (24 | %) | ||||||
Total assets |
$ | 111,023 | $ | 113,021 | (2 | %) | ||||||
Liabilities |
||||||||||||
Interest-bearing liabilities: |
||||||||||||
Interest checking |
$ | 18,621 | $ | 19,090 | (2 | %) | ||||||
Savings |
21,572 | 18,960 | 14 | % | ||||||||
Money market |
5,072 | 4,651 | 9 | % | ||||||||
Foreign office |
3,693 | 3,043 | 21 | % | ||||||||
Other time |
7,049 | 11,696 | (40 | %) | ||||||||
Certificates - $100,000 and over |
4,090 | 6,700 | (39 | %) | ||||||||
Other |
2 | 6 | (72 | %) | ||||||||
Federal funds purchased |
327 | 242 | 35 | % | ||||||||
Other short-term borrowings |
1,622 | 1,464 | 11 | % | ||||||||
Long-term debt |
10,389 | 11,179 | (7 | %) | ||||||||
Total interest-bearing liabilities |
72,437 | 77,031 | (6 | %) | ||||||||
Demand deposits |
21,880 | 19,115 | 14 | % | ||||||||
Other liabilities |
3,970 | 3,334 | 19 | % | ||||||||
Total liabilities |
98,287 | 99,480 | (1 | %) | ||||||||
Equity |
12,736 | 13,541 | (6 | %) | ||||||||
Total liabilities and equity |
$ | 111,023 | $ | 113,021 | (2 | %) | ||||||
Yield Analysis |
||||||||||||
Interest-earning assets: |
||||||||||||
Commercial and industrial loans |
4.40 | % | 4.68 | % | ||||||||
Commercial mortgage loans |
4.06 | % | 4.15 | % | ||||||||
Commercial construction loans |
3.08 | % | 3.03 | % | ||||||||
Commercial leases |
4.12 | % | 4.53 | % | ||||||||
Residential mortgage loans |
4.60 | % | 4.98 | % | ||||||||
Home equity |
3.94 | % | 4.01 | % | ||||||||
Automobile loans |
4.95 | % | 6.13 | % | ||||||||
Credit card |
10.17 | % | 10.83 | % | ||||||||
Other consumer loans and leases |
20.14 | % | 12.73 | % | ||||||||
Total loans and leases |
4.61 | % | 4.87 | % | ||||||||
Taxable securities |
3.96 | % | 4.08 | % | ||||||||
Tax exempt securities |
5.31 | % | 7.03 | % | ||||||||
Other short-term investments |
0.25 | % | 0.19 | % | ||||||||
Total interest-earning assets |
4.42 | % | 4.56 | % | ||||||||
Interest-bearing liabilities: |
||||||||||||
Interest checking |
0.27 | % | 0.29 | % | ||||||||
Savings |
0.38 | % | 0.64 | % | ||||||||
Money market |
0.30 | % | 0.44 | % | ||||||||
Foreign office |
0.30 | % | 0.35 | % | ||||||||
Other time |
2.38 | % | 2.73 | % | ||||||||
Certificates - $100,000 and over |
2.02 | % | 2.14 | % | ||||||||
Other |
0.03 | % | 0.05 | % | ||||||||
Federal funds purchased |
0.12 | % | 0.15 | % | ||||||||
Other short-term borrowings |
0.18 | % | 0.22 | % | ||||||||
Long-term debt |
3.05 | % | 2.64 | % | ||||||||
Total interest-bearing liabilities |
1.01 | % | 1.26 | % | ||||||||
Ratios: |
||||||||||||
Net interest margin (taxable equivalent) |
3.66 | % | 3.60 | % | ||||||||
Net interest rate spread (taxable equivalent) |
3.41 | % | 3.30 | % | ||||||||
Interest-bearing liabilities to interest-earning assets |
75.06 | % | 76.88 | % | ||||||||
27
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Assets |
||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 27,970 | $ | 27,404 | $ | 26,509 | $ | 26,348 | $ | 26,179 | ||||||||||
Commercial mortgage loans |
10,491 | 10,816 | 11,276 | 11,462 | 11,772 | |||||||||||||||
Commercial construction loans |
1,950 | 2,085 | 2,289 | 2,955 | 3,258 | |||||||||||||||
Commercial leases |
3,349 | 3,364 | 3,314 | 3,257 | 3,336 | |||||||||||||||
Residential mortgage loans |
10,655 | 10,736 | 10,693 | 9,897 | 9,390 | |||||||||||||||
Home equity |
11,144 | 11,376 | 11,655 | 11,897 | 12,102 | |||||||||||||||
Automobile loans |
11,188 | 11,070 | 10,825 | 10,517 | 10,170 | |||||||||||||||
Credit card |
1,834 | 1,852 | 1,844 | 1,838 | 1,859 | |||||||||||||||
Other consumer loans and leases |
572 | 676 | 743 | 683 | 741 | |||||||||||||||
Taxable securities |
15,115 | 15,156 | 15,367 | 15,580 | 16,451 | |||||||||||||||
Tax exempt securities |
96 | 197 | 268 | 273 | 154 | |||||||||||||||
Other short-term investments |
1,981 | 1,937 | 2,431 | 3,456 | 4,285 | |||||||||||||||
Total interest-earning assets |
96,345 | 96,669 | 97,214 | 98,163 | 99,698 | |||||||||||||||
Cash and due from banks |
2,356 | 2,268 | 2,284 | 2,283 | 2,163 | |||||||||||||||
Other assets |
15,298 | 14,897 | 15,449 | 15,088 | 14,550 | |||||||||||||||
Allowance for loan and lease losses |
(2,799 | ) | (2,990 | ) | (3,089 | ) | (3,680 | ) | (3,798 | ) | ||||||||||
Total assets |
$ | 111,200 | $ | 110,844 | $ | 111,858 | $ | 111,854 | $ | 112,613 | ||||||||||
Liabilities |
||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Interest checking |
$ | 18,701 | $ | 18,539 | $ | 17,578 | $ | 17,142 | $ | 18,652 | ||||||||||
Savings |
21,817 | 21,324 | 20,602 | 19,905 | 19,446 | |||||||||||||||
Money market |
5,009 | 5,136 | 4,985 | 4,940 | 4,679 | |||||||||||||||
Foreign office |
3,805 | 3,580 | 3,733 | 3,592 | 3,325 | |||||||||||||||
Other time |
6,738 | 7,363 | 8,490 | 10,261 | 11,336 | |||||||||||||||
Certificates - $100,000 and over |
3,955 | 4,226 | 4,858 | 6,096 | 6,354 | |||||||||||||||
Other |
2 | 1 | 9 | 4 | 5 | |||||||||||||||
Federal funds purchased |
344 | 310 | 376 | 302 | 264 | |||||||||||||||
Other short-term borrowings |
1,605 | 1,638 | 1,728 | 1,880 | 1,478 | |||||||||||||||
Long-term debt |
10,527 | 10,255 | 10,298 | 10,954 | 10,876 | |||||||||||||||
Total interest-bearing liabilities |
72,503 | 72,372 | 72,657 | 75,076 | 76,415 | |||||||||||||||
Demand deposits |
22,174 | 21,582 | 21,066 | 19,362 | 19,406 | |||||||||||||||
Other liabilities |
4,129 | 3,809 | 4,099 | 3,544 | 3,229 | |||||||||||||||
Total liabilities |
98,806 | 97,763 | 97,822 | 97,982 | 99,050 | |||||||||||||||
Equity |
12,394 | 13,081 | 14,036 | 13,872 | 13,563 | |||||||||||||||
Total liabilities and equity |
$ | 111,200 | $ | 110,844 | $ | 111,858 | $ | 111,854 | $ | 112,613 | ||||||||||
Yield Analysis |
||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||
Commercial and industrial loans |
4.35 | % | 4.45 | % | 4.64 | % | 4.81 | % | 4.75 | % | ||||||||||
Commercial mortgage loans |
4.00 | % | 4.11 | % | 4.17 | % | 3.97 | % | 4.10 | % | ||||||||||
Commercial construction loans |
3.01 | % | 3.15 | % | 2.90 | % | 3.06 | % | 3.15 | % | ||||||||||
Commercial leases |
4.06 | % | 4.17 | % | 4.21 | % | 4.34 | % | 4.51 | % | ||||||||||
Residential mortgage loans |
4.54 | % | 4.67 | % | 4.64 | % | 4.81 | % | 4.77 | % | ||||||||||
Home equity |
3.91 | % | 3.96 | % | 3.98 | % | 3.99 | % | 4.01 | % | ||||||||||
Automobile loans |
4.81 | % | 5.10 | % | 5.41 | % | 5.71 | % | 6.01 | % | ||||||||||
Credit card |
9.91 | % | 10.43 | % | 10.55 | % | 10.70 | % | 10.91 | % | ||||||||||
Other consumer loans and leases |
22.02 | % | 18.54 | % | 18.68 | % | 18.59 | % | 13.65 | % | ||||||||||
Total loans and leases |
4.54 | % | 4.67 | % | 4.78 | % | 4.85 | % | 4.86 | % | ||||||||||
Taxable securities |
3.97 | % | 3.96 | % | 3.88 | % | 4.06 | % | 3.93 | % | ||||||||||
Tax exempt securities |
6.41 | % | 4.77 | % | 4.27 | % | 4.05 | % | 6.98 | % | ||||||||||
Other short-term investments |
0.25 | % | 0.25 | % | 0.25 | % | 0.36 | % | 0.20 | % | ||||||||||
Total interest-earning assets |
4.37 | % | 4.47 | % | 4.52 | % | 4.57 | % | 4.51 | % | ||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Interest checking |
0.26 | % | 0.28 | % | 0.28 | % | 0.29 | % | 0.30 | % | ||||||||||
Savings |
0.33 | % | 0.43 | % | 0.45 | % | 0.48 | % | 0.60 | % | ||||||||||
Money market |
0.29 | % | 0.32 | % | 0.34 | % | 0.39 | % | 0.42 | % | ||||||||||
Foreign office |
0.29 | % | 0.31 | % | 0.34 | % | 0.38 | % | 0.36 | % | ||||||||||
Other time |
2.40 | % | 2.36 | % | 2.39 | % | 2.57 | % | 2.70 | % | ||||||||||
Certificates - $100,000 and over |
2.05 | % | 1.99 | % | 1.94 | % | 1.95 | % | 2.13 | % | ||||||||||
Other |
0.02 | % | 0.05 | % | 0.26 | % | 0.09 | % | 0.10 | % | ||||||||||
Federal funds purchased |
0.11 | % | 0.14 | % | 0.19 | % | 0.17 | % | 0.17 | % | ||||||||||
Other short-term borrowings |
0.16 | % | 0.19 | % | 0.19 | % | 0.21 | % | 0.21 | % | ||||||||||
Long-term debt |
3.16 | % | 2.95 | % | 2.72 | % | 2.61 | % | 2.64 | % | ||||||||||
Total interest-bearing liabilities |
1.00 | % | 1.02 | % | 1.04 | % | 1.13 | % | 1.23 | % | ||||||||||
Ratios: |
||||||||||||||||||||
Net interest margin (taxable equivalent) |
3.62 | % | 3.71 | % | 3.75 | % | 3.70 | % | 3.57 | % | ||||||||||
Net interest rate spread (taxable equivalent) |
3.37 | % | 3.45 | % | 3.48 | % | 3.44 | % | 3.28 | % | ||||||||||
Interest-bearing liabilities to interest-earning assets |
75.25 | % | 74.87 | % | 74.74 | % | 76.48 | % | 76.65 | % | ||||||||||
28
Fifth Third Bancorp and Subsidiaries
Summary of Loans and Leases
$ in millions
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Average Loans and Leases |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 27,909 | $ | 27,331 | $ | 26,338 | $ | 26,344 | $ | 26,176 | ||||||||||
Commercial mortgage loans |
10,394 | 10,685 | 10,985 | 11,375 | 11,659 | |||||||||||||||
Commercial construction loans |
1,918 | 2,030 | 2,171 | 2,885 | 3,160 | |||||||||||||||
Commercial leases |
3,349 | 3,364 | 3,314 | 3,257 | 3,336 | |||||||||||||||
Subtotal - commercial |
43,570 | 43,410 | 42,808 | 43,861 | 44,331 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Residential mortgage loans |
9,654 | 9,282 | 8,382 | 7,837 | 7,805 | |||||||||||||||
Home equity |
11,144 | 11,376 | 11,655 | 11,897 | 12,102 | |||||||||||||||
Automobile loans |
11,188 | 11,070 | 10,825 | 10,517 | 10,170 | |||||||||||||||
Credit card |
1,834 | 1,852 | 1,844 | 1,838 | 1,859 | |||||||||||||||
Other consumer loans and leases |
547 | 646 | 722 | 667 | 706 | |||||||||||||||
Subtotal - consumer |
34,367 | 34,226 | 33,428 | 32,756 | 32,642 | |||||||||||||||
Total average loans and leases (excluding held for sale) |
$ | 77,937 | $ | 77,636 | $ | 76,236 | $ | 76,617 | $ | 76,973 | ||||||||||
Average loans held for sale |
1,216 | 1,743 | 2,912 | 2,237 | 1,834 | |||||||||||||||
End of Period Loans and Leases |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 28,099 | $ | 27,344 | $ | 27,191 | $ | 26,302 | $ | 26,008 | ||||||||||
Commercial mortgage loans |
10,233 | 10,510 | 10,845 | 10,985 | 11,481 | |||||||||||||||
Commercial construction loans |
1,778 | 1,980 | 2,048 | 2,349 | 2,965 | |||||||||||||||
Commercial leases |
3,326 | 3,367 | 3,378 | 3,304 | 3,271 | |||||||||||||||
Subtotal - commercial |
43,436 | 43,201 | 43,462 | 42,940 | 43,725 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Residential mortgage loans |
9,849 | 9,530 | 8,956 | 7,975 | 7,707 | |||||||||||||||
Home equity |
11,048 | 11,222 | 11,513 | 11,774 | 11,987 | |||||||||||||||
Automobile loans |
11,315 | 11,129 | 10,983 | 10,738 | 10,285 | |||||||||||||||
Credit card |
1,856 | 1,821 | 1,896 | 1,832 | 1,841 | |||||||||||||||
Other consumer loans and leases |
463 | 562 | 681 | 750 | 687 | |||||||||||||||
Subtotal - consumer |
34,531 | 34,264 | 34,029 | 33,069 | 32,507 | |||||||||||||||
Total portfolio loans and leases |
$ | 77,967 | $ | 77,465 | $ | 77,491 | $ | 76,009 | $ | 76,232 | ||||||||||
Core business activity |
1,009 | 1,076 | 1,922 | 2,034 | 1,983 | |||||||||||||||
Portfolio management activity |
176 | 216 | 294 | 699 | 167 | |||||||||||||||
Total loans held for sale |
1,185 | 1,291 | 2,216 | 2,733 | 2,150 | |||||||||||||||
Operating lease equipment |
492 | 513 | 479 | 470 | 489 | |||||||||||||||
Loans and Leases Serviced for Others (a): |
||||||||||||||||||||
Commercial and industrial loans |
602 | 547 | 490 | 452 | 492 | |||||||||||||||
Commercial mortgage loans |
304 | 328 | 337 | 335 | 315 | |||||||||||||||
Commercial construction loans |
67 | 56 | 55 | 55 | 43 | |||||||||||||||
Commercial leases |
104 | 118 | 125 | 133 | 143 | |||||||||||||||
Residential mortgage loans |
56,026 | 55,447 | 54,234 | 52,433 | 51,325 | |||||||||||||||
Home equity |
| | | | | |||||||||||||||
Automobile loans |
| | | | | |||||||||||||||
Credit card |
| | | | | |||||||||||||||
Other consumer loans and leases |
| | | | | |||||||||||||||
Total loans and leases serviced for others |
57,103 | 56,496 | 55,241 | 53,408 | 52,318 | |||||||||||||||
Total loans and leases serviced |
$ | 136,747 | $ | 135,765 | $ | 135,427 | $ | 132,620 | $ | 131,189 | ||||||||||
(a) | Fifth Third sells certain loans and leases and obtains servicing responsibilities |
29
Fifth Third Bancorp and Subsidiaries
Regulatory Capital (a)
$ in millions
(unaudited)
As of | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Tier I capital: |
||||||||||||||||||||
Bancorp shareholders equity |
$ | 12,572 | $ | 12,163 | $ | 14,051 | $ | 13,884 | $ | 13,701 | ||||||||||
Goodwill and certain other intangibles |
(2,536 | ) | (2,546 | ) | (2,546 | ) | (2,525 | ) | (2,537 | ) | ||||||||||
Unrealized (gains) losses |
(396 | ) | (263 | ) | (314 | ) | (432 | ) | (440 | ) | ||||||||||
Qualifying trust preferred securities |
2,312 | 2,763 | 2,763 | 2,763 | 2,763 | |||||||||||||||
Other |
20 | 12 | 11 | 8 | (25 | ) | ||||||||||||||
Total tier I capital |
$ | 11,972 | $ | 12,129 | $ | 13,965 | $ | 13,698 | $ | 13,462 | ||||||||||
Total risk-based capital: |
||||||||||||||||||||
Tier I capital |
$ | 11,972 | $ | 12,129 | $ | 13,965 | $ | 13,698 | $ | 13,462 | ||||||||||
Qualifying allowance for credit losses |
1,275 | 1,266 | 1,283 | 1,265 | 1,267 | |||||||||||||||
Qualifying subordinated notes |
2,837 | 2,780 | 2,930 | 3,114 | 3,012 | |||||||||||||||
Total risk-based capital |
$ | 16,084 | $ | 16,175 | $ | 18,178 | $ | 18,077 | $ | 17,741 | ||||||||||
Risk-weighted assets (b) |
$ | 100,319 | $ | 99,392 | $ | 100,561 | $ | 98,904 | $ | 98,604 | ||||||||||
Ratios: |
||||||||||||||||||||
Average shareholders equity to average assets |
11.12 | % | 11.77 | % | 12.52 | % | 12.38 | % | 12.04 | % | ||||||||||
Regulatory capital: |
||||||||||||||||||||
Fifth Third Bancorp |
||||||||||||||||||||
Tier I capital |
11.93 | % | 12.20 | % | 13.89 | % | 13.85 | % | 13.65 | % | ||||||||||
Total risk-based capital |
16.03 | % | 16.27 | % | 18.08 | % | 18.28 | % | 17.99 | % | ||||||||||
Tier I leverage |
11.03 | % | 11.21 | % | 12.79 | % | 12.54 | % | 12.24 | % | ||||||||||
Tier I common equity |
9.20 | % | 8.99 | % | 7.48 | % | 7.34 | % | 7.17 | % | ||||||||||
Fifth Third Bank |
||||||||||||||||||||
Tier I capital |
13.26 | % | 13.61 | % | 13.13 | % | 14.48 | % | 14.23 | % | ||||||||||
Total risk-based capital |
15.13 | % | 15.49 | % | 15.12 | % | 16.49 | % | 16.24 | % | ||||||||||
Tier I leverage |
12.25 | % | 12.49 | % | 12.08 | % | 13.10 | % | 12.75 | % | ||||||||||
Tier I common equity |
13.26 | % | 13.61 | % | 13.13 | % | 14.48 | % | 14.23 | % |
(a) | Current period regulatory capital data and ratios are estimated. |
(b) | Under the banking agencies risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together resulting in the Bancorps total risk weighted assets. |
30
Fifth Third Bancorp and Subsidiaries
Summary of Credit Loss Experience
$ in millions
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Average loans and leases (excluding held for sale): |
||||||||||||||||||||
Commercial and industrial loans |
$ | 27,909 | $ | 27,331 | $ | 26,338 | $ | 26,344 | $ | 26,176 | ||||||||||
Commercial mortgage loans |
10,394 | 10,685 | 10,985 | 11,375 | 11,659 | |||||||||||||||
Commercial construction loans |
1,918 | 2,030 | 2,171 | 2,885 | 3,160 | |||||||||||||||
Commercial leases |
3,349 | 3,364 | 3,314 | 3,257 | 3,336 | |||||||||||||||
Residential mortgage loans |
9,654 | 9,282 | 8,382 | 7,837 | 7,805 | |||||||||||||||
Home equity |
11,144 | 11,376 | 11,655 | 11,897 | 12,102 | |||||||||||||||
Automobile loans |
11,188 | 11,070 | 10,825 | 10,517 | 10,170 | |||||||||||||||
Credit card |
1,834 | 1,852 | 1,844 | 1,838 | 1,859 | |||||||||||||||
Other consumer loans and leases |
547 | 646 | 722 | 667 | 706 | |||||||||||||||
Total average loans and leases (excluding held for sale) |
$ | 77,937 | $ | 77,636 | $ | 76,236 | $ | 76,617 | $ | 76,973 | ||||||||||
Losses charged off: |
||||||||||||||||||||
Commercial and industrial loans |
($ | 86 | ) | ($ | 90 | ) | ($ | 98 | ) | ($ | 247 | ) | ($ | 111 | ) | |||||
Commercial mortgage loans |
(51 | ) | (58 | ) | (83 | ) | (271 | ) | (85 | ) | ||||||||||
Commercial construction loans |
(21 | ) | (27 | ) | (15 | ) | (126 | ) | (45 | ) | ||||||||||
Commercial leases |
| (1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||
Residential mortgage loans |
(37 | ) | (67 | ) | (63 | ) | (205 | ) | (85 | ) | ||||||||||
Home equity |
(58 | ) | (66 | ) | (68 | ) | (69 | ) | (64 | ) | ||||||||||
Automobile loans |
(18 | ) | (28 | ) | (28 | ) | (27 | ) | (32 | ) | ||||||||||
Credit card |
(31 | ) | (33 | ) | (35 | ) | (38 | ) | (44 | ) | ||||||||||
Other consumer loans and leases |
(41 | ) | (27 | ) | (8 | ) | (8 | ) | (5 | ) | ||||||||||
Total losses |
(343 | ) | (397 | ) | (399 | ) | (992 | ) | (472 | ) | ||||||||||
Recoveries of losses previously charged off: |
||||||||||||||||||||
Commercial and industrial loans |
10 | 7 | 13 | 10 | 7 | |||||||||||||||
Commercial mortgage loans |
4 | 4 | 3 | 3 | 7 | |||||||||||||||
Commercial construction loans |
1 | 1 | 4 | 5 | 2 | |||||||||||||||
Commercial leases |
2 | | 4 | | 1 | |||||||||||||||
Residential mortgage loans |
1 | 2 | 1 | 1 | | |||||||||||||||
Home equity |
4 | 3 | 3 | 3 | 3 | |||||||||||||||
Automobile loans |
10 | 8 | 9 | 10 | 12 | |||||||||||||||
Credit card |
3 | 2 | 2 | 2 | 2 | |||||||||||||||
Other consumer loans and leases |
4 | 3 | 4 | 2 | 4 | |||||||||||||||
Total recoveries |
39 | 30 | 43 | 36 | 38 | |||||||||||||||
Net losses charged off: |
||||||||||||||||||||
Commercial and industrial loans |
(76 | ) | (83 | ) | (85 | ) | (237 | ) | (104 | ) | ||||||||||
Commercial mortgage loans |
(47 | ) | (54 | ) | (80 | ) | (268 | ) | (78 | ) | ||||||||||
Commercial construction loans |
(20 | ) | (26 | ) | (11 | ) | (121 | ) | (43 | ) | ||||||||||
Commercial leases |
2 | (1 | ) | 3 | (1 | ) | | |||||||||||||
Residential mortgage loans |
(36 | ) | (65 | ) | (62 | ) | (204 | ) | (85 | ) | ||||||||||
Home equity |
(54 | ) | (63 | ) | (65 | ) | (66 | ) | (61 | ) | ||||||||||
Automobile loans |
(8 | ) | (20 | ) | (19 | ) | (17 | ) | (20 | ) | ||||||||||
Credit card |
(28 | ) | (31 | ) | (33 | ) | (36 | ) | (42 | ) | ||||||||||
Other consumer loans and leases |
(37 | ) | (24 | ) | (4 | ) | (6 | ) | (1 | ) | ||||||||||
Total net losses charged off |
($ | 304 | ) | ($ | 367 | ) | ($ | 356 | ) | ($ | 956 | ) | ($ | 434 | ) | |||||
Net charge-off Ratios: |
||||||||||||||||||||
Commercial and industrial loans |
1.10 | % | 1.22 | % | 1.27 | % | 3.57 | % | 1.58 | % | ||||||||||
Commercial mortgage loans |
1.83 | % | 2.04 | % | 2.86 | % | 9.34 | % | 2.68 | % | ||||||||||
Commercial construction loans |
4.09 | % | 5.24 | % | 1.88 | % | 16.58 | % | 5.46 | % | ||||||||||
Commercial leases |
(0.25 | %) | 0.04 | % | (0.34 | %) | 0.10 | % | (0.01 | %) | ||||||||||
Residential mortgage loans |
1.50 | % | 2.82 | % | 2.93 | % | 10.37 | % | 4.35 | % | ||||||||||
Home equity |
1.94 | % | 2.23 | % | 2.20 | % | 2.19 | % | 2.03 | % | ||||||||||
Automobile loans |
0.29 | % | 0.73 | % | 0.68 | % | 0.65 | % | 0.80 | % | ||||||||||
Credit card |
6.08 | % | 6.60 | % | 7.12 | % | 7.68 | % | 9.05 | % | ||||||||||
Other consumer loans and leases |
26.47 | % | 17.16 | % | 4.09 | % | 3.88 | % | 0.31 | % | ||||||||||
Total net charge-off ratio |
1.56 | % | 1.92 | % | 1.86 | % | 4.95 | % | 2.26 | % | ||||||||||
31
Fifth Third Bancorp and Subsidiaries
Asset Quality
$ in millions
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Allowance for Credit Losses |
||||||||||||||||||||
Allowance for loan and lease losses, beginning |
$ | 2,805 | $ | 3,004 | $ | 3,194 | $ | 3,693 | $ | 3,802 | ||||||||||
Total net losses charged off |
(304 | ) | (367 | ) | (356 | ) | (956 | ) | (434 | ) | ||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | |||||||||||||||
Allowance for loan and lease losses, ending |
$ | 2,614 | $ | 2,805 | $ | 3,004 | $ | 3,194 | $ | 3,693 | ||||||||||
Reserve for unfunded commitments, beginning |
$ | 211 | $ | 227 | $ | 231 | $ | 254 | $ | 260 | ||||||||||
Provision for unfunded commitments |
(14 | ) | (16 | ) | (4 | ) | (23 | ) | (6 | ) | ||||||||||
Reserve for unfunded commitments, ending |
$ | 197 | $ | 211 | $ | 227 | $ | 231 | $ | 254 | ||||||||||
Components of allowance for credit losses: |
||||||||||||||||||||
Allowance for loan and lease losses |
$ | 2,614 | $ | 2,805 | $ | 3,004 | $ | 3,194 | $ | 3,693 | ||||||||||
Reserve for unfunded commitments |
197 | 211 | 227 | 231 | 254 | |||||||||||||||
Total allowance for credit losses |
$ | 2,811 | $ | 3,016 | $ | 3,231 | $ | 3,425 | $ | 3,947 | ||||||||||
Nonperforming Assets and Delinquent Loans |
||||||||||||||||||||
Nonaccrual portfolio loans and leases: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 485 | $ | 477 | $ | 473 | $ | 525 | $ | 731 | ||||||||||
Commercial mortgage loans |
417 | 415 | 407 | 464 | 773 | |||||||||||||||
Commercial construction loans |
147 | 159 | 182 | 211 | 383 | |||||||||||||||
Commercial leases |
16 | 11 | 11 | 30 | 45 | |||||||||||||||
Residential mortgage loans |
145 | 140 | 152 | 124 | 282 | |||||||||||||||
Home equity |
26 | 24 | 23 | 23 | 21 | |||||||||||||||
Automobile loans |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Other consumer loans and leases |
3 | 60 | 84 | | | |||||||||||||||
Total nonaccrual portfolio loans and leases |
1,240 | 1,287 | 1,333 | 1,378 | 2,236 | |||||||||||||||
Restructured loans and leases - commercial (non accrual) |
188 | 149 | 141 | 31 | 48 | |||||||||||||||
Restructured loans and leases - consumer (non accrual) |
211 | 209 | 206 | 175 | 246 | |||||||||||||||
Total nonperforming portfolio loans and leases |
1,639 | 1,645 | 1,680 | 1,584 | 2,530 | |||||||||||||||
Repossessed property |
15 | 20 | 27 | 29 | 16 | |||||||||||||||
Other real estate owned |
434 | 461 | 467 | 469 | 423 | |||||||||||||||
Total nonperforming assets (a) |
2,088 | 2,126 | 2,174 | 2,082 | 2,969 | |||||||||||||||
Nonaccrual loans held for sale |
147 | 184 | 247 | 680 | 163 | |||||||||||||||
Restructured loans - commercial (non accrual) held for sale |
29 | 32 | 47 | 19 | 4 | |||||||||||||||
Total nonperforming assets including loans held for sale |
$ | 2,264 | $ | 2,342 | $ | 2,468 | $ | 2,781 | $ | 3,136 | ||||||||||
Restructured portfolio consumer loans and leases (accrual) |
$ | 1,593 | $ | 1,573 | $ | 1,560 | $ | 1,588 | $ | 1,602 | ||||||||||
Restructured portfolio commercial loans and leases (accrual) |
$ | 266 | $ | 243 | $ | 228 | $ | 146 | $ | 113 | ||||||||||
Ninety days past due loans and leases: |
||||||||||||||||||||
Commercial and industrial loans |
$ | 7 | $ | 8 | $ | 16 | $ | 29 | $ | 48 | ||||||||||
Commercial mortgage loans |
12 | 8 | 11 | 29 | 53 | |||||||||||||||
Commercial construction loans |
48 | 23 | 3 | 5 | 37 | |||||||||||||||
Commercial leases |
1 | | | 1 | 4 | |||||||||||||||
Total commercial loans and leases |
68 | 39 | 30 | 64 | 142 | |||||||||||||||
Residential mortgage loans |
87 | 98 | 100 | 111 | 107 | |||||||||||||||
Home equity |
84 | 84 | 89 | 87 | 90 | |||||||||||||||
Automobile loans |
10 | 9 | 13 | 13 | 12 | |||||||||||||||
Credit card |
30 | 36 | 42 | 42 | 46 | |||||||||||||||
Other consumer loans and leases |
| | | | | |||||||||||||||
Total consumer loans and leases |
211 | 227 | 244 | 253 | 255 | |||||||||||||||
Total ninety days past due loans and leases |
$ | 279 | $ | 266 | $ | 274 | $ | 317 | $ | 397 | ||||||||||
Ratios |
||||||||||||||||||||
Net losses charged off as a percent of average loans and leases |
1.56 | % | 1.92 | % | 1.86 | % | 4.95 | % | 2.26 | % | ||||||||||
Allowance for loan and lease losses: |
||||||||||||||||||||
As a percent of loans and leases |
3.35 | % | 3.62 | % | 3.88 | % | 4.20 | % | 4.85 | % | ||||||||||
As a percent of nonperforming loans and leases (a) |
160 | % | 170 | % | 179 | % | 202 | % | 146 | % | ||||||||||
As a percent of nonperforming assets (a) |
125 | % | 132 | % | 138 | % | 153 | % | 124 | % | ||||||||||
Nonperforming loans and leases as a percent of portfolio loans, leases and other assets, including other real estate owned (a) |
2.09 | % | 2.11 | % | 2.15 | % | 2.07 | % | 3.30 | % | ||||||||||
Nonperforming assets as a percent of portfolio loans, leases and other assets, including other real estate owned (a) |
2.66 | % | 2.73 | % | 2.79 | % | 2.72 | % | 3.87 | % | ||||||||||
Nonperforming assets as a percent of total loans, leases and other assets, including other real estate owned |
2.84 | % | 2.96 | % | 3.08 | % | 3.51 | % | 3.98 | % | ||||||||||
(a) | Does not include nonaccrual loans held for sale |
32
Fifth Third Bancorp and Subsidiaries
Regulation G Non-GAAP Reconcilation
$ and shares in millions
(unaudited)
For the Three Months Ended | ||||||||||||||||||||
June 2011 |
March 2011 |
December 2010 |
September 2010 |
June 2010 |
||||||||||||||||
Net income available to common shareholders (U.S. GAAP) |
328 | 88 | 270 | 175 | 130 | |||||||||||||||
Add: Intangible amortization, net of tax |
4 | 5 | 7 | 7 | 7 | |||||||||||||||
Tangible net income available to common shareholders |
332 | 93 | 277 | 182 | 137 | |||||||||||||||
Tangible net income available to common shareholders (annualized) (a) |
1,332 | 377 | 1,099 | 722 | 550 | |||||||||||||||
Average Bancorp shareholders equity (U.S. GAAP) |
12,365 | 13,052 | 14,007 | 13,852 | 13,563 | |||||||||||||||
Less: Average preferred stock |
398 | 1,557 | 3,648 | 3,637 | 3,626 | |||||||||||||||
Average goodwill |
2,417 | 2,417 | 2,417 | 2,417 | 2,417 | |||||||||||||||
Average intangible assets |
52 | 59 | 67 | 78 | 88 | |||||||||||||||
Average tangible common equity (b) |
9,498 | 9,019 | 7,875 | 7,720 | 7,432 | |||||||||||||||
Total Bancorp shareholders equity (U.S. GAAP) |
12,572 | 12,163 | 14,051 | 13,884 | 13,701 | |||||||||||||||
Less: Preferred stock |
(398 | ) | (398 | ) | (3,654 | ) | (3,642 | ) | (3,631 | ) | ||||||||||
Goodwill |
(2,417 | ) | (2,417 | ) | (2,417 | ) | (2,417 | ) | (2,417 | ) | ||||||||||
Intangible assets |
(49 | ) | (55 | ) | (62 | ) | (72 | ) | (83 | ) | ||||||||||
Tangible common equity, including unrealized gains / losses (c) |
9,708 | 9,293 | 7,918 | 7,753 | 7,570 | |||||||||||||||
Less: Accumulated other comprehensive income / loss |
(396 | ) | (263 | ) | (314 | ) | (432 | ) | (440 | ) | ||||||||||
Tangible common equity, excluding unrealized gains / losses (d) |
9,312 | 9,030 | 7,604 | 7,321 | 7,130 | |||||||||||||||
Add back: Preferred stock |
398 | 398 | 3,654 | 3,642 | 3,631 | |||||||||||||||
Tangible equity (e) |
9,710 | 9,428 | 11,258 | 10,963 | 10,761 | |||||||||||||||
Total assets (U.S. GAAP) |
110,805 | 110,485 | 111,007 | 112,322 | 112,025 | |||||||||||||||
Less: Goodwill |
(2,417 | ) | (2,417 | ) | (2,417 | ) | (2,417 | ) | (2,417 | ) | ||||||||||
Intangible assets |
(49 | ) | (55 | ) | (62 | ) | (72 | ) | (83 | ) | ||||||||||
Tangible assets, including unrealized gains / losses (f) |
108,339 | 108,013 | 108,528 | 109,833 | 109,525 | |||||||||||||||
Less: Accumulated other comprehensive income / loss, before tax |
(609 | ) | (405 | ) | (483 | ) | (665 | ) | (677 | ) | ||||||||||
Tangible assets, excluding unrealized gains / losses (g) |
107,730 | 107,608 | 108,045 | 109,168 | 108,848 | |||||||||||||||
Total Bancorp shareholders equity (U.S. GAAP) |
12,572 | 12,163 | 14,051 | 13,884 | 13,701 | |||||||||||||||
Goodwill and certain other intangibles |
(2,536 | ) | (2,546 | ) | (2,546 | ) | (2,525 | ) | (2,537 | ) | ||||||||||
Unrealized gains |
(396 | ) | (263 | ) | (314 | ) | (432 | ) | (440 | ) | ||||||||||
Qualifying trust preferred securities |
2,312 | 2,763 | 2,763 | 2,763 | 2,763 | |||||||||||||||
Other |
20 | 12 | 11 | 8 | (25 | ) | ||||||||||||||
Tier I capital |
11,972 | 12,129 | 13,965 | 13,698 | 13,462 | |||||||||||||||
Less: Preferred stock |
(398 | ) | (398 | ) | (3,654 | ) | (3,642 | ) | (3,631 | ) | ||||||||||
Qualifying trust preferred securities |
(2,312 | ) | (2,763 | ) | (2,763 | ) | (2,763 | ) | (2,763 | ) | ||||||||||
Qualifying noncontrolling interest in consolidated subsidiaries |
(30 | ) | (30 | ) | (30 | ) | (30 | ) | | |||||||||||
Tier I common equity (h) |
9,232 | 8,938 | 7,518 | 7,263 | 7,068 | |||||||||||||||
Common shares outstanding (i) |
920 | 919 | 796 | 796 | 796 | |||||||||||||||
Risk-weighted assets, determined in accordance with prescribed regulatory requirements (j) |
100,319 | 99,392 | 100,561 | 98,904 | 98,604 | |||||||||||||||
Ratios: |
||||||||||||||||||||
Return on average tangible common equity (a) / (b) |
14.02 | % | 4.18 | % | 13.95 | % | 9.35 | % | 7.40 | % | ||||||||||
Tangible equity (e) / (g) |
9.01 | % | 8.76 | % | 10.42 | % | 10.04 | % | 9.89 | % | ||||||||||
Tangible common equity (excluding unrealized gains/losses) (d) / (g) |
8.64 | % | 8.39 | % | 7.04 | % | 6.70 | % | 6.55 | % | ||||||||||
Tangible common equity (including unrealized gains/losses) (c) / (f) |
8.96 | % | 8.60 | % | 7.30 | % | 7.06 | % | 6.91 | % | ||||||||||
Tangible common equity as a percent of risk-weighted assets (excluding unrealized gains/losses) (d) / (j) |
9.28 | % | 9.09 | % | 7.56 | % | 7.40 | % | 7.23 | % | ||||||||||
Tangible book value per share (c) / (i) |
10.55 | 10.11 | 9.94 | 9.74 | 9.51 | |||||||||||||||
Tier I common equity (h) / (j) |
9.20 | % | 8.99 | % | 7.48 | % | 7.34 | % | 7.17 | % |
33
Fifth Third Bancorp and Subsidiaries
Segment Presentation
$ in millions
(unaudited)
For the three months ended June 30, 2011 |
Commercial Banking |
Branch Banking |
Consumer Lending |
Investment Advisors |
Other/ Eliminations |
Total | ||||||||||||||||||
Net interest income (a) |
339 | 359 | 81 | 28 | 62 | 869 | ||||||||||||||||||
Provision for loan and lease losses |
(147 | ) | (98 | ) | (55 | ) | (4 | ) | 191 | (113 | ) | |||||||||||||
Net interest income after provision for loan and lease losses |
192 | 261 | 26 | 24 | 253 | 756 | ||||||||||||||||||
Total noninterest income |
163 | 213 | 167 | 95 | 18 | 656 | ||||||||||||||||||
Total noninterest expense |
(280 | ) | (393 | ) | (147 | ) | (104 | ) | 23 | (901 | ) | |||||||||||||
Net income before taxes |
75 | 81 | 46 | 15 | 294 | 511 | ||||||||||||||||||
Applicable income taxes (a) |
11 | (29 | ) | (16 | ) | (5 | ) | (135 | ) | (174 | ) | |||||||||||||
Net income |
86 | 52 | 30 | 10 | 159 | 337 | ||||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
| | | | | | ||||||||||||||||||
Net income attributable to Bancorp |
86 | 52 | 30 | 10 | 159 | 337 | ||||||||||||||||||
Dividends on preferred stock |
| | | | 9 | 9 | ||||||||||||||||||
Net income available to common shareholders |
86 | 52 | 30 | 10 | 150 | 328 | ||||||||||||||||||
For the three months ended March 31, 2011 |
Commercial Banking |
Branch Banking |
Consumer Lending |
Investment Advisors |
Other/ Eliminations |
Total | ||||||||||||||||||
Net interest income (a) |
333 | 336 | 93 | 28 | 94 | 884 | ||||||||||||||||||
Provision for loan and lease losses |
(152 | ) | (113 | ) | (97 | ) | (5 | ) | 199 | (168 | ) | |||||||||||||
Net interest income after provision for loan and lease losses |
181 | 223 | (4 | ) | 23 | 293 | 716 | |||||||||||||||||
Total noninterest income |
175 | 201 | 116 | 98 | (6 | ) | 584 | |||||||||||||||||
Total noninterest expense |
(274 | ) | (392 | ) | (157 | ) | (107 | ) | 12 | (918 | ) | |||||||||||||
Net income before taxes |
82 | 32 | (45 | ) | 14 | 299 | 382 | |||||||||||||||||
Applicable income taxes (a) |
7 | (11 | ) | 16 | (5 | ) | (124 | ) | (117 | ) | ||||||||||||||
Net income |
89 | 21 | (29 | ) | 9 | 175 | 265 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
| | | | | | ||||||||||||||||||
Net income attributable to Bancorp |
89 | 21 | (29 | ) | 9 | 175 | 265 | |||||||||||||||||
Dividends on preferred stock |
| | | | 177 | 177 | ||||||||||||||||||
Net income available to common shareholders |
89 | 21 | (29 | ) | 9 | (2 | ) | 88 | ||||||||||||||||
For the three months ended December 31, 2010 |
Commercial Banking |
Branch Banking |
Consumer Lending |
Investment Advisors |
Other/ Eliminations |
Total | ||||||||||||||||||
Net interest income (a) |
390 | 357 | 108 | 29 | 35 | 919 | ||||||||||||||||||
Provision for loan and lease losses |
(135 | ) | (117 | ) | (93 | ) | (11 | ) | 190 | (166 | ) | |||||||||||||
Net interest income after provision for loan and lease losses |
255 | 240 | 15 | 18 | 225 | 753 | ||||||||||||||||||
Total noninterest income |
170 | 225 | 159 | 90 | 12 | 656 | ||||||||||||||||||
Total noninterest expense |
(266 | ) | (390 | ) | (157 | ) | (108 | ) | (66 | ) | (987 | ) | ||||||||||||
Net income before taxes |
159 | 75 | 17 | | 171 | 422 | ||||||||||||||||||
Applicable income taxes (a) |
(17 | ) | (26 | ) | (6 | ) | | (39 | ) | (88 | ) | |||||||||||||
Net income |
142 | 49 | 11 | | 132 | 334 | ||||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
| | | | 1 | 1 | ||||||||||||||||||
Net income attributable to Bancorp |
142 | 49 | 11 | | 131 | 333 | ||||||||||||||||||
Dividends on preferred stock |
| | | | 63 | 63 | ||||||||||||||||||
Net income available to common shareholders |
142 | 49 | 11 | | 68 | 270 | ||||||||||||||||||
For the three months ended September 30, 2010 |
Commercial Banking |
Branch Banking |
Consumer Lending |
Investment Advisors |
Other/ Eliminations |
Total | ||||||||||||||||||
Net interest income (a) |
389 | 381 | 105 | 35 | 6 | 916 | ||||||||||||||||||
Provision for loan and lease losses |
(559 | ) | (150 | ) | (235 | ) | (12 | ) | 499 | (457 | ) | |||||||||||||
Net interest income after provision for loan and lease losses |
(170 | ) | 231 | (130 | ) | 23 | 505 | 459 | ||||||||||||||||
Total noninterest income |
139 | 227 | 225 | 88 | 148 | 827 | ||||||||||||||||||
Total noninterest expense |
(246 | ) | (387 | ) | (146 | ) | (101 | ) | (99 | ) | (979 | ) | ||||||||||||
Net income (loss) before taxes |
(277 | ) | 71 | (51 | ) | 10 | 554 | 307 | ||||||||||||||||
Applicable income taxes (a) |
132 | (25 | ) | 18 | (4 | ) | (190 | ) | (69 | ) | ||||||||||||||
Net income (loss) |
(145 | ) | 46 | (33 | ) | 6 | 364 | 238 | ||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
| | | | | | ||||||||||||||||||
Net income (loss) attributable to Bancorp |
(145 | ) | 46 | (33 | ) | 6 | 364 | 238 | ||||||||||||||||
Dividends on preferred stock |
| | | | 63 | 63 | ||||||||||||||||||
Net income (loss) available to common shareholders |
(145 | ) | 46 | (33 | ) | 6 | 301 | 175 | ||||||||||||||||
For the three months ended June 30, 2010 |
Commercial Banking |
Branch Banking |
Consumer Lending |
Investment Advisors |
Other/ Eliminations |
Total | ||||||||||||||||||
Net interest income (a) |
390 | 385 | 93 | 36 | (17 | ) | 887 | |||||||||||||||||
Provision for loan and lease losses |
(188 | ) | (125 | ) | (114 | ) | (8 | ) | 110 | (325 | ) | |||||||||||||
Net interest income after provision for loan and lease losses |
202 | 260 | (21 | ) | 28 | 93 | 562 | |||||||||||||||||
Total noninterest income |
164 | 229 | 122 | 87 | 18 | 620 | ||||||||||||||||||
Total noninterest expense |
(241 | ) | (397 | ) | (132 | ) | (100 | ) | (65 | ) | (935 | ) | ||||||||||||
Net income (loss) before taxes |
125 | 92 | (31 | ) | 15 | 46 | 247 | |||||||||||||||||
Applicable income taxes (a) |
(9 | ) | (33 | ) | 13 | (5 | ) | (21 | ) | (55 | ) | |||||||||||||
Net income (loss) |
116 | 59 | (18 | ) | 10 | 25 | 192 | |||||||||||||||||
Net income (loss) attributable to noncontrolling interest |
| | | | | | ||||||||||||||||||
Net income (loss) attributable to Bancorp |
116 | 59 | (18 | ) | 10 | 25 | 192 | |||||||||||||||||
Dividends on preferred stock |
| | | | 62 | 62 | ||||||||||||||||||
Net income (loss) available to common shareholders |
116 | 59 | (18 | ) | 10 | (37 | ) | 130 |
(a) | Includes taxable equivalent adjustments of $5 million for the three months ended June 30, 2011, March 31, 2011 and December 31, 2010, $4 million for the three months ended September 30, 2010 and $5 million for the three months ended June 30, 2010. |
34
![]() ©
Fifth Third Bank | All Rights Reserved
2Q11 Earnings Conference Call
July 21, 2011
Please
refer
to
earnings
release
dated
July
21,
2011
for
further
information.
Exhibit 99.2 |
![]() 2
©
Fifth Third Bank | All Rights Reserved
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 Thirds ability to maintain required capital levels and adequate sources of
funding and liquidity; (7) maintaining capital requirements may limit Fifth Thirds 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 recently
enacted Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain
favorable ratings from rating agencies; (15) fluctuation of Fifth Thirds 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 in separating Vantiv, LLC, formerly Fifth Third Processing Solutions from Fifth
Third; (21) loss of income from any sale or potential sale of businesses that could have an adverse
effect on Fifth Thirds earnings and future growth; (22) ability to secure confidential
information 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. |
![]() 3
©
Fifth Third Bank | All Rights Reserved
2Q11 in review
Credit continuing to improve
Net charge-offs of $304mm (1.56% of loans and leases) declined
$63mm, or 17%, sequentially to lowest level since 1Q08
Total NPAs of $2.3B including held-for-sale declined $78mm or 3%
sequentially to
lowest levels since 2Q08
Total delinquencies down 9% sequentially (lowest level since
2006)
Provision expense of $113mm, reduction in allowance of $191mm
Loan loss allowance 3.35% of loans; coverage 125% of NPAs, 160% of
NPLs, and 2.1x
annualized second quarter net charge-offs
Actions driving progress
Focus on credit quality, portfolio management, and loss mitigation
strategies
Executing on customer experience and employee engagement
initiatives
Enhancing breadth and profitability of offerings and relationships
Exit from all crisis-era government programs
Continued strong operating results
Net income available to common shareholders of $328mm, or $0.35
per diluted share
Pre-provision net revenue^ of $619mm, up 14% sequentially and up
9% compared with prior year
Period end loans and leases* up $502mm (1%); average loans and
leases* up $301mm sequentially
1.2% ROA; 14% ROTCE
Strong capital ratios: Tier 1 common 9.2%, Tier 1 capital ratio 11.9%,
Total capital ratio 16.0%**
^ Pre-provision net revenue (PPNR): net interest income plus noninterest income
minus noninterest expense and taxable equivalent adjustment * Excluding loans
held-for-sale ** Current period regulatory capital data ratios are
estimated |
![]() 4
©
Fifth Third Bank | All Rights Reserved
Financial summary
2Q11 earnings of $0.35 per diluted share driven by strong noninterest income and
improved credit results
1.2% return on average assets; 14% return on average tangible common equity
Average transaction deposits up 2%; core deposits up 1% sequentially reflecting
continued CD runoff
Average loans* up 1% from 2Q10, reflecting strength in C&I and auto loans
Actual
Seq.
YOY
($ in millions)
2Q10
1Q11
2Q11
$
%
$
%
Average Balances
Commercial loans
$44,331
$43,410
$43,570
$160
-
($761)
(2%)
Consumer loans
32,642
34,226
34,367
141
-
1,725
5%
Total loans & leases (excl. held-for-sale)
$76,973
$77,636
$77,937
$301
-
$964
1%
Core deposits
$76,844
$77,524
$78,244
$720
1%
$1,400
2%
Income Statement Data
Net interest income (taxable equivalent)
$887
$884
$869
($15)
(2%)
($18)
(2%)
Provision for loan and lease losses
325
168
113
(55)
(33%)
(212)
(65%)
Noninterest income
620
584
656
72
12%
36
6%
Noninterest expense
935
918
901
(17)
(2%)
(34)
(4%)
Net Income
$192
$265
$337
$72
27%
$145
75%
Net income available to common shareholders
$130
$88
$328
$240
272%
$198
153%
Pre-provision net revenue^
$567
$545
$619
$74
14%
$52
9%
Earnings per share, basic
$0.16
$0.10
$0.36
$0.26
260%
$0.20
125%
Earnings per share, diluted
$0.16
$0.10
$0.35
$0.25
250%
$0.19
119%
Net interest margin
3.57%
3.71%
3.62%
(9bps)
(2%)
5bps
1%
Return on average assets
0.68%
0.97%
1.22%
25bps
26%
54bps
79%
Return on average tangible common equity
7.4%
4.2%
14.0%
-
234%
-
89%
^ Pre-provision net revenue (PPNR): net interest income plus noninterest income
minus noninterest expense and taxable equivalent adjustment * Excluding loans
held-for-sale |
![]() 5
©
Fifth Third Bank | All Rights Reserved
Net interest income
NII and NIM (FTE)
Sequential net interest income and net interest margin (FTE) trends reflected lower
mortgage warehouse balances, lower LIBOR rates and loan spreads, and a flatter
yield curve
NII down $15mm, or 2%, sequentially and down $18mm, or 2%,
year-over-year
NIM down 9 bps sequentially and up 5 bps year-over-year
Yield on interest-earning assets declined 10 bps sequentially and 14 bps
year-over-year
Investment
of
excess
cash
in
bankers
acceptances
($555mm,
up
$142mm
sequentially)
reduces reported C&I loan yields by ~6bps
* Represents purchase accounting adjustments included in net interest income.
Yield Analysis
Interest-earning assets
2Q10
1Q11
2Q11
Seq.
(bps)
YoY
(bps)
Commercial and industrial loans
4.75%
4.45%
4.35%
(10)
(40)
Commercial mortgage loans
4.10%
4.11%
4.00%
(11)
(10)
Commercial construction loans
3.15%
3.15%
3.01%
(14)
(14)
Commercial leases
4.51%
4.17%
4.06%
(11)
(45)
Residential mortgage loans
4.77%
4.67%
4.54%
(13)
(23)
Home equity
4.01%
3.96%
3.91%
(5)
(10)
Automobile loans
6.01%
5.10%
4.81%
(29)
(120)
Credit card
10.91%
10.43%
9.91%
(52)
(100)
Other consumer loans and leases
13.65%
18.54%
22.02%
348
837
Total loans and leases
4.86%
4.67%
4.54%
(13)
(32)
Taxable securities
3.93%
3.96%
3.97%
1
4
Tax exempt securities
6.98%
4.77%
6.41%
164
(57)
Other short-term investments
0.20%
0.25%
0.25%
-
5
Total interest-earning assets
4.51%
4.47%
4.37%
(10)
(14) |
![]() 6
©
Fifth Third Bank | All Rights Reserved
Balance sheet
C&I loans up 2% sequentially and 7% from 2Q10
CRE loans down 3% sequentially and 17% from 2Q10
Consumer loans flat sequentially and up 5% from 2Q10
Warehoused residential mortgage loans held-for-sale were $1B
at quarter end versus $1.5B at 1Q11
Flat QoQ; +1% YoY
+1% QoQ; +2% YoY
Core deposit to loan ratio of 100%, flat from 2Q10
DDAs up 3% sequentially and 14% year-over-year
Retail average transaction deposits up 4% sequentially and 13%
from the previous year, driven by growth in demand deposit,
savings, and interest checking account balances
Commercial average transaction deposits down 2% sequentially
and up 1% from the previous year
Average loan growth ($B)^
Average core deposit growth ($B)
Average wholesale funding ($B)
Reduced wholesale funding by $2.5B from 2Q10
Non-core deposits down 6% sequentially and 38% from 2Q10
Short term borrowings flat sequentially and up 12% from
2Q10
Long-term debt up 3% sequentially and down 3% from 2Q10
^ Excludes loans held-for-sale
Note: Numbers may not sum due to rounding |
![]() 7
©
Fifth Third Bank | All Rights Reserved
Noninterest income
Noninterest income of $656mm increased $72mm, or 12%, from prior
quarter; driven by higher mortgage-related
revenue, corporate banking revenue, and card and processing revenue
Sequential and year-over-year increase in mortgage banking revenue primarily
driven by net benefit of MSR valuation adjustments
2Q11 debit interchange revenue of $60mm
2Q11 debit interchange $ volume: $4.5B (Signature $3.6B, PIN $0.9B)
2Q11 debit interchange transaction volume: 121mm (Signature 99mm, PIN 22mm)
Credit costs recorded in noninterest income:
Noninterest income
Note: Numbers may not sum due to rounding
Actual
($ in millions)
2Q10
1Q11
2Q11
Gain / (loss) on sale of loans
$6
$17
$8
Commercial loans HFS FV adjustment
(7)
(16)
(9)
Gain / (loss) on sale of OREO properties
(13)
(2)
(26)
Mortgage repurchase costs
(1)
(2)
-
Total credit-related revenue impact
($15)
($3)
($28)
Actual
Seq.
YOY
2Q10
1Q11
2Q11
$
%
$
%
($ in millions)
Service charges on deposits
$149
$124
$126
$2
1%
($23)
(16%)
Corporate banking revenue
93
86
95
9
11%
2
2%
Mortgage banking revenue
114
102
162
60
58%
48
42%
Investment advisory services
87
98
95
(3)
(3%)
8
10%
Card and processing revenue
84
80
89
9
10%
5
5%
Other noninterest income
85
81
83
2
3%
(2)
(2%)
Securities gain (losses), net
8
8
6
(2)
(25%)
(2)
(25%)
Securities gains, net -
-
5
-
(5)
NM
-
NM
non-qualifying hedges on MSRs
Noninterest income
$620
$584
$656
$72
12%
$36
6% |
![]() 8
©
Fifth Third Bank | All Rights Reserved
Noninterest expense
Noninterest expense
Noninterest expense of $901mm decreased $17mm, or 2%, compared with 1Q11, driven by a
decrease in FICA and unemployment costs partially offset by higher salaries,
wages and incentives.
Credit costs recorded in noninterest expense:
Note: Numbers may not sum due to rounding
Actual
Seq.
YOY
2Q10
1Q11
2Q11
$
%
$
%
($ in millions)
Salaries, wages and incentives
$356
$351
$365
$14
4%
$9
2%
Employee benefits
73
97
79
(18)
(19%)
6
9%
Net occupancy expense
73
77
75
(2)
(3%)
2
2%
Technology and communications
45
45
48
3
6%
3
6%
Equipment expense
31
29
28
(1)
(4%)
(3)
(9%)
Card and processing expense
31
29
29
-
1%
(2)
(8%)
Other noninterest expense
326
290
277
(13)
(4%)
(49)
(15%)
Noninterest expense
$935
$918
$901
($17)
(2%)
($34)
(4%)
Actual
($ in millions)
2Q10
1Q11
2Q11
Mortgage repurchase expense
$18
$8
$14
Provision for unfunded commitments
(6)
(16)
(14)
Derivative valuation adjustments
9
-
1
OREO expense
7
13
6
Other problem asset related expenses
26
28
30
Total credit-related operating expenses
$55
$32
$36 |
![]() 9
©
Fifth Third Bank | All Rights Reserved
Pre-tax pre-provision earnings
Core PPNR trend
Pre-provision net revenue (PPNR): net interest income plus noninterest income
minus noninterest expense and taxable equivalent adjustment Core PPNR
reconciliation 2Q10
3Q10
4Q10
1Q11
2Q11
Reported PPNR
$567
$760
$583
$545
$619
Adjustments remove (benefit) / detriment:
BOLI
-
(127)
-
-
-
Valuation of 2009 Visa total return swap
-
-
5
9
4
Securities (gains) / losses
(8)
(4)
(21)
(8)
(6)
Other litigation reserve expense
3
-
-
-
-
FTPS warrants + puts
(10)
5
(3)
2
(29)
Extinguishment (gains) / losses
-
-
17
(3)
(6)
Adjusted PPNR
$552
$634
$581
$545
$582
Credit-related items:
In noninterest income
15
42
34
3
28
In noninterest expense
55
67
53
32
36
Credit-adjusted PPNR
$622
$743
$668
$581
$646
Reported PPNR of $619mm up 14% from 1Q11 levels and up 9% over prior year reflecting
improved noninterest income and noninterest expense, partially offset by a decrease in
net interest income
Adjusted PPNR of $582mm, including negative adjustments totaling $37mm, resulting in
sequential increase of 7% and year-over-year increase of 5% |
![]() 10
©
Fifth Third Bank | All Rights Reserved
Strong capital position
Strong capital ratios under Basel I; estimated Basel III Tier 1 common ratio of
9.6%* Tangible common equity ratio^
Tier I common equity
Tier I capital ratio
Total risk-based capital ratio
Current period regulatory capital data ratios are estimated.
^ Tangible common equity ratio excluding (dark blue) and including (light blue) unrealized securities
gains / losses after-tax * Estimate, subject to final rule-making and clarification by
U.S. banking regulators; currently assumes unrealized securities gains are included in common equity for purposes of this calculation
|
![]() Net
charge-offs Net charge-offs by loan type
Net charge-offs by geography
$434
Net charge-offs ($mm)
$956
$356
NCOs
due to
3Q10
credit
actions
$mm
%
Commercial
$141
46%
Consumer
$163
54%
Total
$304
100%
$367
Actual
Seq.
YOY
($ in millions)
2Q10
1Q11
2Q11
$
%
$
%
C&I
$104
$83
$76
($7)
(8%)
($28)
(27%)
Commercial mortgage
78
54
47
(7)
(13%)
(31)
(40%)
Commercial construction
43
26
20
(6)
(23%)
(23)
(53%)
Commercial lease
-
1
(2)
(3)
(300%)
(2)
-
Commercial
$225
$164
$141
($23)
(14%)
($84)
(37%)
Residential mortgage loans
85
65
36
(29)
(45%)
(49)
(58%)
Home equity
61
63
54
(9)
(14%)
(7)
(11%)
Automobile
20
20
8
(12)
(60%)
(12)
(60%)
Credit card
42
31
28
(3)
(10%)
(14)
(33%)
Other consumer
1
24
37
13
54%
36
NM
Consumer
$209
$203
$163
($40)
(20%)
($46)
(22%)
Total net charge-offs
$434
$367
$304
($63)
(17%)
($130)
(30%)
Year-over-year charge-offs down significantly due to improving credit
trends and effect of 3Q10 credit actions $mm
%
Florida
$68
22%
Michigan
51
17%
Subtotal
$118
39%
Other
185
61%
Total
$304
100%
©
Fifth Third Bank | All Rights Reserved
11 |
![]() 12
©
Fifth Third Bank | All Rights Reserved
Nonperforming assets
NPAs of $2.1B excluding held-for-sale down
30% year-over-year
Commercial NPAs of $1.6B, down 29% from
the previous year
Homebuilder / developer NPAs of
$243mm; represent 15% of total
commercial NPAs
Consumer NPAs of $476mm, down 32% from
the previous year
NPAs in held-for-sale of $176mm
C&I / Lease
$662mm, 32%
CRE
$950mm, 45%
Residential
$410mm, 20%
Other Consumer
$66mm, 3%
ILLINOIS
INDIANA
FLORIDA
TENNESSEE
KENTUCKY
OHIO
MICHIGAN
NORTH
CAROLINA
OTHER /
NATIONAL
NPAs exclude loans held-for-sale.
Nonperforming assets ($mm)
Nonperforming assets continue to improve |
![]() 13
©
Fifth Third Bank | All Rights Reserved
NPL Rollforward
Significant improvement in NPL inflows over past two years
Consumer NPL inflows restated to conform with call report guidelines
NPL
HFI
Rollforward
Commercial
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
Beginning NPL Amount
1,937
2,110
2,430
2,392
2,172
1,980
1,261
1,214
1,211
New nonaccrual loans
544
832
602
405
310
290
224
299
309
Paydowns, payoffs, sales and net other activity
(190)
(246)
(332)
(425)
(402)
(630)
(168)
(199)
(177)
Charge-offs
(181)
(266)
(308)
(200)
(100)
(379)
(103)
(103)
(90)
Ending Commercial NPL
2,110
2,430
2,392
2,172
1,980
1,261
1,214
1,211
1,253
Consumer
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
Beginning NPL Amount
459
477
517
555
561
550
323
466
434
New nonaccrual loans
157
166
193
170
238
182
283
153
140
Net other activity
(139)
(126)
(155)
(164)
(249)
(409)
(140)
(185)
(188)
Ending Consumer NPL
477
517
555
561
550
323
466
434
386
Total NPL
2,587
2,947
2,947
2,733
2,530
1,584
1,680
1,645
1,639
Total
new
nonaccrual
loans
-
HFI
701
998
795
575
548
472
507
452
449 |
![]() 14
Non-performing loans
Non-performing loans ($mm)
$2.5B
$1.6B
Non-performing loans improving with lower
severity mix; benefit of sales/transfers
$1.6B
Fifth Thirds non-performing loan inflows (relative to loans) have been
proportionally lower than peers
FITB NPL inflows (relative to loans) vs. peers
FITB
Source: SNL Financial and company filings. Peers include: BAC, BBT, C, CMA, HBAN,
JPM, KEY, MTB, PNC, RF, STI, USB, and WFC New HFI non-performing loan
flows ($mm) NPL inflows down significantly
$1.7B
* 3Q10 inflows into NPLs HFS were $217mm, reflecting performing loans moved to
held-for-sale in 3Q10 that were deemed impaired as a result of the decision to sell these loans
See slide 13 for more information
Consumer NPL inflows restated to conform with call report guidelines
$1.6B
FITB
ex-HFS
©
Fifth Third Bank | All Rights Reserved |
![]() 15
©
Fifth Third Bank | All Rights Reserved
Troubled debt restructurings overview
Successive improvement in vintage performance during
2008 and 2009 as volume of modification increased
Fifth Thirds mortgage portfolio TDRs have redefaulted
at a lower rate than GSE composites
Of $1.8B in consumer TDRs, $1.6B were on accrual
status and $211mm were nonaccruals
$1.1B of TDRs are current and have been on the
books 6 or more months; within that, nearly
$920mm of TDRs are current and have been on
the books for more than a year
As current TDRs season, their default propensity
declines significantly
We see much lower defaults on current loans after
a vintage approaches 12 months since
modification
TDR performance has improved in newer vintages
Outperforming redefault benchmarks
Source: Fifth Third and OCC/OTS data through 4Q10
Mortgage TDR 60+ redefault trend by vintage*
1Q08 4%
2Q08 7%
3Q08 8%
4Q08 9%
1Q09 12%
2Q09 13%
Months since modification
Mortgage TDR 60+ redefault rate: Fifth Third comparison
(January 1, 2008 through March 2011)*
Fannie Mae
Industry
portfolio loans
Fifth Third
Volume by
vintage
Freddie Mac
3Q09 13%
$1.3B current consumer TDRs (%)
4Q09 8%
2008
2009
1Q10 7%
2Q10 5%
* Fifth Third data includes changes made to align with OCC/OTS methodology (i.e.
excludes government loans, closed loans and OREO from calculations)
2010
$1.1
billion |
![]() 16
©
Fifth Third Bank | All Rights Reserved
Strong relative credit trends
FITB credit metrics are now generally better than peers
Loans 90+ days delinquent % vs. peers
Loans 30-89 days delinquent % vs. peers
NPA ratio vs. peers
Net charge-off ratio vs. peers
Peer average includes: BBT, CMA, HBAN, KEY, MTB, PNC, RF, STI, USB, WFC, and ZION
Source: SNL Financial and company filings. NPA and NCO ratios exclude loans held-for-sale and
covered assets for peers where appropriate. * 4Q08 NCOs included $800mm in NCOs related to
commercial loans moved to held-for-sale; 3Q10 NCOs included $510mm in NCOs related to loans sold or moved to held-for-sale
|
![]() 17
©
Fifth Third Bank | All Rights Reserved
Strong reserve position
Peer
average
includes:
BBT,
CMA,
HBAN,
KEY,
MTB,
PNC,
RF,STI,
USB,
WFC,
and
ZION
Source: SNL and company reports. NPAs / NPLs exclude held-for-sale portion
for all banks as well as covered assets for BBT, USB, and ZION 2Q11 coverage
ratios strong relative to peers (1Q11)
Industry leading reserve levels
Fifth Third
(2Q11)
Peer Average
(1Q11) |
![]() 18
©
Fifth Third Bank | All Rights Reserved
Well-positioned for the future
Holding company cash currently sufficient for nearly 2 years of obligations; no
holding company or Bank debt maturities until 2013
Fifth Third has completely exited all crisis-era government support
programs
Fifth Third is one of the few large banks that have no TLGP-guaranteed debt to
refinance in 2012 Superior capital and liquidity position
NCOs below 1.6%; 2.1x reserves / annualized NCOs
$1.2B problem assets addressed through loan sales and transfer to HFS in 3Q10
Substantial reduction in exposure to CRE since 1Q09; relatively low CRE exposure
versus peers Proactive approach to risk management
Traditional commercial banking franchise built on customer-oriented localized
operating model
Strong market share in key markets with focus on further improving density
Fee income ~40% of total revenues
Diversified traditional banking platform
PPNR has remained strong throughout the credit cycle
PPNR substantially exceeds annual net charge-offs (204% PPNR / NCOs in
2Q11)
1.2% ROAA; 14% return on average tangible common equity
Industry leader in earnings power |
![]() 19
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Fifth Third Bank | All Rights Reserved
Appendix |
![]() 20
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Fifth Third Bank | All Rights Reserved
Balance Sheet:
Average loans & leases
Average transaction deposits
Income Statement:
Net interest income*
Net interest margin*
Noninterest income
Noninterest expense
Pre-provision net revenue
ROA
Asset Quality:
Net charge-offs
Loan loss allowance
Nonperforming assets^
Capital
Ratios
#
:
Tier I common equity
Tier I leverage
Tier I capital
Total risk-based capital
Category
Fifth Third: Outlook
3Q11 Outlook
$77.9 billion
$71.5 billion
Up ~$20mm +/-
vs. 2Q11
Up ~5 bps vs. 2Q11
~$600mm+
Up ~$25mm vs. 2Q11
~$560-$570mm
~1.2%
Please see cautionary statement for risk factors related to forward-looking
statements. * Presented on a fully-taxable equivalent basis.
** Noninterest income forecast includes impact of Durbin amendment starting in
October 2011. Debit interchange estimated to be $30 million in Q4 2011 vs. $55 million in Q4 2010
^ Ratio as a percent of loans excluding held-for-sale; allowance
expectation assumes current expectation for credit and economic trends and is subject to review at quarter-end.
^^ Annualized net charge-offs as a percentage of average loans and leases
# Current period regulatory capital data ratios are estimated
2Q11 Actual
Outlook as of July 21, 2011
Modest growth vs. 2Q11
Modest growth vs. 2Q11
Down ~$50mm
Lower vs. 2Q11
Lower vs. 2Q11
Building
$869 million
3.62%
$656 million
$901 million
$619 million
1.2%
9.2%
11.0%
11.9%
16.0%
$304 million (1.56%^^)
$2.6 billion (3.35%)
$2.1 billion (2.66%)
2H11 Outlook
Up vs. 3Q11
~3.70% in 4Q11
Similar to 3Q11
Modest growth
Modest growth
<1.25%^^ in 4Q11
Building |
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©
Fifth Third Bank | All Rights Reserved
2011
2012
2013
2014
2015
2016
2017 on
Fifth Third Bancorp
Fifth Third Capital Trust
$4,313
$750
Retail Brokered CD maturities: $121mm in 2011; $42mm in 2012
Readily available borrowing capacity at FHLB: $6.1B; Contingent
borrowing capacity at the Fed: $20.8B
FHLB borrowings $2.8B; 2Q avg core deposits $78B; equity $12B
Holding Company cash at 6/30/11: $1.3B
Expected cash obligations over the next 12 months
$0 debt maturities
~$221mm common dividends (at $0.06 dividend)
~$35mm Series G preferred dividends
~$450mm interest and other expenses
Cash currently sufficient to satisfy all fixed obligations for nearly 2
years (debt maturities, common and preferred dividends, interest
and other expenses) without accessing capital markets; relying on
dividends from subsidiaries; proceeds from asset sales
Holding company unsecured debt maturities ($mm)
Bank
unsecured
debt
maturities
($mm
excl.
Brokered
CDs)
Heavily core funded
$1,250
Strong liquidity profile |
![]() 22
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Fifth Third Bank | All Rights Reserved
Mortgage repurchase overview
Demand requests and repurchase losses remain
volatile; near-term repurchase losses are expected to
remain somewhat elevated
Virtually all sold loans and new claims relate to
agencies
98% of outstanding balance of loans sold
87% of currently outstanding claims
Majority of outstanding balances of the serviced for
others portfolio relates to origination activity in 2009
and later
Private claims and exposure relate to whole loan sales
(no outstanding first mortgage securitizations)
Preponderance of private sales prior to 2006
Repurchase Reserves* ($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Beginning balance
$84
$85
$103
$101
$87
Net reserve additions
19
47
21
10
15
Repurchase losses
(18)
(29)
(23)
(23)
(22)
Ending balance
$85
$103
$101
$87
$80
Outstanding Counterparty Claims ($ in millions)
Outstanding Balance of Sold Loans ($ in millions)
2005 and prior
GSE
GNMA
Private
Total
$8,388
$318
$613
$9,319
2006
1,915
67
289
2,271
2007
3,119
99
252
3,470
2008
3,248
774
3
4,024
2009 and later
28,677
8,264
1
36,942
Total
$45,348
$9,522
$1,155
$56,025
*
Includes
reps
and
warranty
reserve
($60mm)
and
reserve
for
loans
sold
with
recourse
($20mm) |
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Fifth Third Bank | All Rights Reserved
Non-performing assets and net charge-offs:
Product view*
Total NPAs
Total NCOs
*NPAs exclude loans held-for-sale.
3Q10 NCOs exclude $510mm loans sold of moved to held-for-sale in 3Q10
|
![]() 24
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Fifth Third Bank | All Rights Reserved
Total NPAs
Total NCOs
Non-performing assets and net charge-offs:
Geographic view*
*NPAs exclude loans held-for-sale.
3Q10 NCOs exclude $510mm loans sold of moved to held-for-sale in 3Q10
|
![]() 25
©
Fifth Third Bank | All Rights Reserved
Commercial & industrial*
Loans by geography
Credit trends
Loans by industry
Comments
Commercial & Industrial loans represented 36% of total loans
and 25% of net charge-offs
21% of 2Q11 losses on loans to companies in real estate
related industries
Loans to real estate related industries of $2.8B (10%);
2Q11 NCO ratio of 2.22%
FL
represented
6%
of
2Q11
losses,
7%
of
loans;
MI
represented
20% of losses, 12% of loans
* NPAs exclude loans held-for-sale.
3Q10 includes losses on loans transferred to held-for-sale
Non-core:
$108
Core:
$129
Core NCO Rate:
1.94%
3Q10 NCO Breakout
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$26,008
$26,302
$27,191
$27,344
$28,099
90+ days delinquent
$49
$28
$16
$8
$7
as % of loans
0.19%
0.11%
0.06%
0.03%
0.02%
Avg Loans
$26,176
$26,344
$26,338
$27,331
$27,909
NPAs
$792
$594
$612
$620
$638
as % of loans
3.05%
2.26%
2.25%
2.27%
2.27%
Net charge-offs
$104
$237
$85
$83
$76
as % of loans
1.58%
3.57%
1.27%
1.22%
1.10%
C&I |
![]() 26
©
Fifth Third Bank | All Rights Reserved
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$11,481
$10,985
$10,845
$10,510
$10,233
90+ days delinquent
$53
$29
$11
$8
$12
as % of loans
0.46%
0.26%
0.10%
0.08%
0.11%
Avg Loans
$11,659
$11,375
$10,985
$10,685
$10,394
NPAs
$956
$679
$679
$696
$710
as % of loans
8.33%
6.19%
6.26%
6.63%
6.94%
Net charge-offs
$78
$268
$79
$54
$47
as % of loans
2.68%
9.34%
2.86%
2.04%
1.83%
Commercial mortgage
Commercial mortgage*
Loans by geography
Credit trends
Loans by industry
Comments
* NPAs exclude loans held-for-sale.
3Q10 includes losses on loans transferred to held-for-sale
Commercial mortgage loans represented 13% of total loans
and 15% of net charge-offs
Owner
occupied
2Q11
NCO
ratio
of 1.1%, non-owner
occupied
2Q11 NCO ratio of 2.6%
Loans from FL/MI represented 38% of portfolio loans, 60% of
portfolio losses in 2Q11
Non-core:
$202
Core:
$66
Core NCO Rate:
2.30%
3Q10 NCO Breakout |
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Fifth Third Bank | All Rights Reserved
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$2,965
$2,349
$2,048
$1,980
$1,778
90+ days delinquent
$37
$5
$3
$23
$48
as % of loans
1.24%
0.21%
0.13%
1.16%
2.71%
Avg Loans
$3,160
$2,885
$2,171
$2,030
$1,918
NPAs
$482
$291
$259
$248
$240
as % of loans
16.26%
12.40%
12.65%
12.53%
13.52%
Net charge-offs
$43
$121
$10
$26
$20
as % of loans
5.46%
16.58%
1.88%
5.24%
4.09%
Commercial construction
Commercial construction*
Loans by geography
Credit trends
Loans by industry
Comments
* NPAs exclude loans held-for-sale.
3Q10 includes losses on loans transferred to held-for-sale
Commercial construction loans represented 2% of total loans
and 7% of net charge-offs
Loans from FL/MI represented 31% of portfolio loans, 81% of
portfolio losses in 2Q11
Non-core:
$77
Core:
$44
Core NCO Rate:
5.99%
3Q10 NCO Breakout |
![]() 28
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Fifth Third Bank | All Rights Reserved
Homebuilders/developers*
(included in previous slides)
Loans by geography
Credit trends
Loans by industry
Comments
Originations of builder/developer loans suspended in 2007
Remaining
portfolio
balance
of
$597mm,
down
82%
from
peak
of $3.3B in 2Q08; represents approximately 1% of total loans
and 1.4% of commercial loans
$14mm
of
NCOs
(51%
commercial
mortgage,
37%
commercial
construction, 12% C&I)
$243mm of NPAs (66% commercial mortgage, 28%
commercial construction, 7% C&I)
* NPAs exclude loans held-for-sale.
3Q10 includes losses on loans transferred to held-for-sale
Non-core:
$95
Core:
$32
Core NCO Rate:
12.25%
3Q10 NCO Breakout
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$1,207
$824
$699
$651
$597
90+ days delinquent
$12
$3
$1
$1
$1
as % of loans
1.03%
0.37%
0.12%
0.16%
0.19%
NPAs
$431
$280
$259
$249
$243
as % of loans
35.68%
33.97%
37.12%
38.30%
40.67%
Net charge-offs
$48
$127
$19
$22
$14
as % of loans
15.01%
48.74%
10.08%
13.04%
8.91%
Homebuilders/developers |
![]() 29
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Fifth Third Bank | All Rights Reserved
Residential mortgage
1
liens: 100%; weighted average LTV: 74.6%
Weighted average origination FICO: 745
Origination FICO distribution: <660 8%; 660-689 6%; 690-719
10%; 720-749 14%; 750+ 47%; Other^ 15%
(note: loans <660 includes CRA loans and FHA/VA loans)
Origination LTV distribution: <=70 34%; 70.1-80 40%; 80.1-90 8%;
90.1-95 5%; >95 14%
Vintage distribution: 2011 15%; 2010 25%; 2009 5%; 2008 8%;
2007 9%; 2006 9%; 2005 14%; 2004 and prior 15%
% through broker: 15%; performance similar to direct
Loans by geography
Credit trends
Portfolio details
Comments
^ Includes acquired loans where FICO at origination is not available
3Q10 includes losses on loans sold
Residential
mortgage
loans
represented
13%
of
total
loans
and
12% of net charge-offs
FL portfolio 18% of residential mortgage loans driving 55% of
portfolio losses
Non-core:
$123
Core:
$81
Core NCO Rate:
4.10%
3Q10 NCO Breakout
st
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$7,707
$7,975
$8,956
$9,530
$9,849
90+ days delinquent
$107
$111
$100
$98
$87
as % of loans
1.38%
1.39%
1.12%
1.03%
0.88%
Avg Loans
$7,805
$7,837
$8,382
$9,282
$9,654
NPAs
$549
$328
$368
$338
$338
as % of loans
7.12%
4.11%
4.11%
3.55%
3.43%
Net charge-offs
$85
$204
$62
$65
$36
as % of loans
4.35%
10.37%
2.93%
2.82%
1.50%
Residential mortgage |
![]() 30
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Fifth Third Bank | All Rights Reserved
Home equity
1
st
liens: 31%; 2nd liens: 69%
Weighted average origination FICO:
749
Origination FICO distribution^: <660 4%; 660-689 7%; 690-719 13%;
720-749 17%; 750+ 50%; Other 9%
Average CLTV: 74%; Origination CLTV distribution: <=70 39%; 70.1-80 22%;
80.1-90 18%; 90.1-95 7%; >95 14%
Vintage distribution: 2011 1%; 2010 3%; 2009 4%; 2008 11%; 2007 11%; 2006
15%; 2005 14%; 2004 and prior 40%
% through broker channels: 14% WA FICO: 735 brokered, 752 direct; WA
CLTV: 88% brokered; 72% direct
Portfolio details
Comments
Brokered loans by geography
Direct loans by geography
Credit trends
Home equity loans represented 14% of total loans and 18% of net
charge-offs
Approximately 14% of portfolio in broker product driving 36% total
loss
Approximately
one
third
of
Fifth
Third
2
nd
liens
are
behind
Fifth
Third
1
liens
2005/2006 vintages represent approximately 29% of portfolio; account
for 52% of losses
Aggressive home equity line management strategies in place
Note: Brokered and direct home equity net charge-off ratios are calculated
based on end of period loan balances ^ Includes acquired loans where FICO at
origination is not available st
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$1,838
$1,770
$1,698
$1,637
$1,586
90+ days delinquent
$29
$26
$25
$25
$23
as % of loans
1.57%
1.46%
1.46%
1.51%
1.46%
Net charge-offs
$24
$26
$25
$24
$20
as % of loans
5.29%
5.87%
5.74%
5.88%
4.89%
Home equity -
brokered
($ in millions)
2Q10
3Q10
4Q10
1Q11
2Q11
Balance
$10,149
$10,004
$9,815
$ 9,585
$ 9,462
90+ days delinquent
$61
$61
$59
$59
$61
as % of loans
0.60%
0.61%
0.60%
0.62%
0.64%
Net charge-offs
$37
$40
$40
$39
$34
as % of loans
1.45%
1.57%
1.61%
1.64%
1.44%
Home equity -
direct |
![]() 31
©
Fifth Third Bank | All Rights Reserved
Loans ($B)
% of
FITB
NPAs ($M)
% of
FITB
NCOs
($M)
% of
FITB
Commercial loans
1.9
7%
73
11%
5
6%
Commercial mortgage
1.2
12%
144
20%
15
32%
Commercial construction
0.3
17%
106
44%
15
79%
Commercial lease
0.0
1%
-
0%
-
0%
Commercial
3.4
8%
324
20%
35
25%
Mortgage
1.8
18%
147
43%
21
58%
Home equity
0.9
8%
9
13%
8
14%
Auto
0.5
5%
1
8%
1
12%
Credit card
0.1
5%
3
7%
2
8%
Other consumer
0.0
4%
0
1%
0
1%
Consumer
3.3
9%
161
34%
32
20%
Total
6.7
9%
485
23%
68
22%
Florida
Florida market*
Deterioration in real estate values having effect on credit trends as evidenced by
increased NPA/NCOs in real estate related products COML
MORTGAGE
C&I
RESI
MORTGAGE
OTHER
CONS
COML
CONST
COML
LEASE
HOME
EQUITY
AUTO
CREDIT
CARD
Total Loans
NPAs
NCOs
*NPAs exclude loans held-for-sale.
Weak commercial real estate market
Losses due to significant declines in
valuations
Valuations; relatively small home
equity portfolio |
![]() 32
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Fifth Third Bank | All Rights Reserved
Loans ($B)
% of
FITB
NPAs ($M)
% of
FITB
NCOs
($M)
% of
FITB
Commercial loans
3.3
12%
121
19%
15
20%
Commercial mortgage
2.6
26%
141
20%
13
28%
Commercial construction
0.3
14%
27
11%
0
2%
Commercial lease
0.2
6%
7
30%
(0)
0%
Commercial
6.4
15%
296
18%
29
20%
Mortgage
1.5
15%
37
11%
4
10%
Home equity
2.3
21%
10
14%
13
23%
Auto
1.0
9%
2
15%
1
14%
Credit card
0.3
15%
10
19%
4
15%
Other consumer
0.1
19%
0
0%
0
1%
Consumer
5.1
15%
59
12%
22
16%
Total
11.6
15%
354
17%
51
18%
Michigan
Michigan market*
Deterioration in home price values coupled with weak economy impacting credit trends
due to frequency of defaults and severity COML
MORTGAGE
C&I
RESI
MORTGAGE
OTHER
CONS
COML
CONST
COML
LEASE
HOME
EQUITY
AUTO
CREDIT
CARD
Total Loans
NPAs
NCOs
*NPAs exclude loans held-for-sale.
Negative impact from housing
valuations, economy,
unemployment
Economic weakness impact on
commercial real estate market |
Exhibit 99.3
July 2011
QUARTERLY 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 quarterly information.
If you need further information, please fax or e-mail your request to Fifth Thirds Investor Relations Department at (513) 534-3945 or
IR@53.com
Jim Eglseder VP / Investor Relations (513) 534-8424 |
Rich Rosen VP / Investor Relations (513) 534-3307 |
Quarterly Data
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
|||||||||||||||||||||||||
Ratios (percent) |
||||||||||||||||||||||||||||||||
Return on assets |
1.22 | 0.97 | 1.18 | 0.84 | 0.68 | (0.04 | ) | (0.35 | ) | (0.34 | ) | |||||||||||||||||||||
Return on average common equity |
11.0 | 3.1 | 10.4 | 6.8 | 5.2 | (3.0 | ) | (6.3 | ) | (6.1 | ) | |||||||||||||||||||||
Average equity as a percent of average assets |
11.12 | 11.77 | 12.52 | 12.38 | 12.04 | 11.92 | 12.31 | 12.24 | ||||||||||||||||||||||||
Net interest margin (a) |
3.62 | 3.71 | 3.75 | 3.70 | 3.57 | 3.63 | 3.55 | 3.43 | ||||||||||||||||||||||||
Efficiency (a) |
59.1 | 62.5 | 62.6 | 56.2 | 62.1 | 62.6 | 63.1 | 50.8 | ||||||||||||||||||||||||
Net losses charged off as a percent of average loans and leases |
1.56 | 1.92 | 1.86 | 4.95 | 2.26 | 3.01 | 3.62 | 3.75 | ||||||||||||||||||||||||
Allowance for loan and lease losses as a percent of loans and leases |
3.35 | 3.62 | 3.88 | 4.20 | 4.85 | 4.91 | 4.88 | 4.69 | ||||||||||||||||||||||||
Allowance for credit losses as a percent of loans and leases |
3.61 | 3.89 | 4.17 | 4.51 | 5.18 | 5.25 | 5.27 | 5.06 | ||||||||||||||||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including OREO (b) |
2.66 | 2.73 | 2.79 | 2.72 | 3.87 | 4.02 | 4.22 | 4.09 | ||||||||||||||||||||||||
Allowance for loan and lease losses as a percent of nonperforming assets (b) |
125.19 | 131.94 | 138.18 | 153.41 | 124.40 | 121.50 | 115.55 | 114.30 | ||||||||||||||||||||||||
Allowance for credit losses as a percent of nonperforming |
134.65 | 141.86 | 148.62 | 164.54 | 132.97 | 129.80 | 124.63 | 123.11 | ||||||||||||||||||||||||
Common Share Data |
||||||||||||||||||||||||||||||||
Earnings per share |
$ | 0.36 | $ | 0.10 | $ | 0.34 | $ | 0.22 | $ | 0.16 | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.20 | ) | |||||||||||||
Earnings per diluted share |
$ | 0.35 | $ | 0.10 | $ | 0.33 | $ | 0.22 | $ | 0.16 | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.20 | ) | |||||||||||||
Cash dividends per common share |
0.06 | 0.06 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||||||||||||||||
Book value per share |
13.23 | 12.80 | 13.06 | 12.86 | 12.65 | 12.31 | 12.44 | 12.69 | ||||||||||||||||||||||||
Common shares outstanding, excluding treasury |
919,818,137 | 918,728,008 | 796,272,522 | 796,283,198 | 796,319,712 | 794,816,131 | 795,068,164 | 795,316,187 | ||||||||||||||||||||||||
Market price per share: |
||||||||||||||||||||||||||||||||
High |
$ | 14.15 | $ | 15.75 | $ | 15.11 | $ | 13.81 | $ | 15.95 | $ | 14.05 | $ | 10.92 | $ | 11.20 | ||||||||||||||||
Low |
11.88 | 13.25 | 11.71 | 10.64 | 12.00 | 9.81 | 8.76 | 6.33 | ||||||||||||||||||||||||
End of period |
12.75 | 13.89 | 14.68 | 12.03 | 12.29 | 13.56 | 9.75 | 10.13 | ||||||||||||||||||||||||
Supplemental Data |
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Common dividends declared ($ in millions) |
$ | 55 | $ | 55 | $ | 8 | $ | 8 | $ | 8 | $ | 8 | $ | 8 | $ | 8 | ||||||||||||||||
Full-time equivalent employees |
20,953 | 20,837 | 20,838 | 20,667 | 20,479 | 20,038 | 20,998 | 20,559 | ||||||||||||||||||||||||
Banking centers |
1,316 | 1,310 | 1,312 | 1,309 | 1,309 | 1,309 | 1,309 | 1,306 | ||||||||||||||||||||||||
ATMs |
2,456 | 2,453 | 2,445 | 2,390 | 2,362 | 2,364 | 2,358 | 2,372 |
(a) | Presented on a fully taxable equivalent basis (FTE). |
(b) | Excludes nonperforming assets held for sale. |
Page 2
Quarterly Data
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
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Income Statement ($ in millions) |
||||||||||||||||||||||||||||||||
Interest income (FTE) |
$ | 1,050 | $ | 1,065 | $ | 1,109 | $ | 1,130 | $ | 1,121 | $ | 1,147 | $ | 1,147 | $ | 1,174 | ||||||||||||||||
Interest expense |
181 | 181 | 190 | 214 | 234 | 246 | 265 | 300 | ||||||||||||||||||||||||
Net interest income (FTE) |
869 | 884 | 919 | 916 | 887 | 901 | 882 | 874 | ||||||||||||||||||||||||
Provision for loan and lease losses |
113 | 168 | 166 | 457 | 325 | 590 | 776 | 952 | ||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||
Service charges on deposits |
126 | 124 | 140 | 143 | 149 | 142 | 159 | 164 | ||||||||||||||||||||||||
Investment advisory revenue |
95 | 98 | 93 | 90 | 87 | 91 | 86 | 82 | ||||||||||||||||||||||||
Corporate banking revenue |
95 | 86 | 103 | 86 | 93 | 81 | 89 | 77 | ||||||||||||||||||||||||
Mortgage banking net revenue |
162 | 102 | 149 | 232 | 114 | 152 | 132 | 140 | ||||||||||||||||||||||||
Card and processing revenue |
89 | 80 | 81 | 77 | 84 | 73 | 76 | 74 | ||||||||||||||||||||||||
Gain on sale of processing business |
| | | | | | | (6 | ) | |||||||||||||||||||||||
Other noninterest income |
83 | 81 | 55 | 195 | 85 | 74 | 107 | 312 | ||||||||||||||||||||||||
Securities gains, net |
6 | 8 | 21 | 4 | 8 | 14 | 2 | 8 | ||||||||||||||||||||||||
Securities gains, net - non-qualifying hedges on mortgage servicing rights |
| 5 | 14 | | | | | | ||||||||||||||||||||||||
Total noninterest income |
656 | 584 | 656 | 827 | 620 | 627 | 651 | 851 | ||||||||||||||||||||||||
Noninterest expense: |
||||||||||||||||||||||||||||||||
Salaries, wages and incentives |
365 | 351 | 385 | 360 | 356 | 329 | 331 | 335 | ||||||||||||||||||||||||
Employee benefits |
79 | 97 | 73 | 82 | 73 | 86 | 69 | 83 | ||||||||||||||||||||||||
Net occupancy expense |
75 | 77 | 76 | 72 | 73 | 76 | 75 | 75 | ||||||||||||||||||||||||
Technology and communications |
48 | 45 | 52 | 48 | 45 | 45 | 47 | 43 | ||||||||||||||||||||||||
Equipment expense |
28 | 29 | 32 | 30 | 31 | 30 | 31 | 30 | ||||||||||||||||||||||||
Card and processing expense |
29 | 29 | 26 | 26 | 31 | 25 | 27 | 25 | ||||||||||||||||||||||||
Other noninterest expense |
277 | 290 | 343 | 361 | 326 | 365 | 387 | 285 | ||||||||||||||||||||||||
Total noninterest expense |
901 | 918 | 987 | 979 | 935 | 956 | 967 | 876 | ||||||||||||||||||||||||
Income (loss) before income taxes (FTE) |
511 | 382 | 422 | 307 | 247 | (18 | ) | (210 | ) | (103 | ) | |||||||||||||||||||||
Taxable equivalent adjustment |
5 | 5 | 5 | 4 | 5 | 4 | 4 | 5 | ||||||||||||||||||||||||
Income (loss) before income taxes |
506 | 377 | 417 | 303 | 242 | (22 | ) | (214 | ) | (108 | ) | |||||||||||||||||||||
Applicable income tax (benefit) |
169 | 112 | 83 | 65 | 50 | (12 | ) | (116 | ) | (11 | ) | |||||||||||||||||||||
Net income (loss) |
$ | 337 | $ | 265 | $ | 334 | $ | 238 | $ | 192 | $ | (10 | ) | $ | (98 | ) | $ | (97 | ) | |||||||||||||
Less: Net income attributable to noncontrolling interests |
| | 1 | | | | | | ||||||||||||||||||||||||
Net income (loss) attributable to Bancorp |
$ | 337 | $ | 265 | $ | 333 | $ | 238 | $ | 192 | $ | (10 | ) | $ | (98 | ) | $ | (97 | ) | |||||||||||||
Dividends on preferred stock |
9 | 177 | 63 | 63 | 62 | 62 | 62 | 62 | ||||||||||||||||||||||||
Net income (loss) available to common shareholders |
$ | 328 | $ | 88 | $ | 270 | $ | 175 | $ | 130 | $ | (72 | ) | $ | (160 | ) | $ | (159 | ) | |||||||||||||
Regulatory Capital Data ($ in millions) (a) |
||||||||||||||||||||||||||||||||
Tier I capital |
$ | 11,972 | $ | 12,129 | $ | 13,965 | $ | 13,698 | $ | 13,462 | $ | 13,297 | $ | 13,428 | $ | 13,574 | ||||||||||||||||
Tier II capital |
4,112 | 4,046 | 4,213 | 4,379 | 4,279 | 4,120 | 4,207 | 4,352 | ||||||||||||||||||||||||
Total risk-based capital |
$ | 16,084 | $ | 16,175 | $ | 18,178 | $ | 18,077 | $ | 17,741 | $ | 17,417 | $ | 17,648 | $ | 17,926 | ||||||||||||||||
Risk-weighted assets |
$ | 100,319 | $ | 99,392 | $ | 100,561 | $ | 98,904 | $ | 98,604 | $ | 99,281 | $ | 100,933 | $ | 102,875 | ||||||||||||||||
Tier I capital ratio |
11.93 | % | 12.20 | % | 13.89 | % | 13.85 | % | 13.65 | % | 13.39 | % | 13.30 | % | 13.19 | % | ||||||||||||||||
Total risk-based capital ratio |
16.03 | % | 16.27 | % | 18.08 | % | 18.28 | % | 17.99 | % | 17.54 | % | 17.48 | % | 17.43 | % | ||||||||||||||||
Tier I leverage ratio |
11.03 | % | 11.21 | % | 12.79 | % | 12.54 | % | 12.24 | % | 12.00 | % | 12.34 | % | 12.34 | % | ||||||||||||||||
Tier I common equity ratio |
9.20 | % | 8.99 | % | 7.48 | % | 7.34 | % | 7.17 | % | 6.96 | % | 6.99 | % | 7.01 | % |
(a) | Current period regulatory capital data and ratios are estimated. |
Page 3
Quarterly Data
As of | ||||||||||||||||||||||||||||||||
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
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Balance Sheet ($ in millions, except share data) |
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Assets |
||||||||||||||||||||||||||||||||
Cash and due from banks |
$ | 2,380 | $ | 2,121 | $ | 2,159 | $ | 2,215 | $ | 2,216 | $ | 2,133 | $ | 2,318 | $ | 2,130 | ||||||||||||||||
Available-for-sale and other securities |
15,502 | 15,135 | 15,414 | 15,975 | 16,021 | 16,935 | 18,213 | 15,682 | ||||||||||||||||||||||||
Held-to-maturity securities |
344 | 346 | 353 | 354 | 354 | 355 | 355 | 356 | ||||||||||||||||||||||||
Trading securities |
217 | 216 | 294 | 320 | 270 | 305 | 355 | 1,079 | ||||||||||||||||||||||||
Other short-term investments |
1,370 | 2,481 | 1,515 | 3,271 | 4,322 | 3,904 | 3,369 | 1,126 | ||||||||||||||||||||||||
Total cash and securities |
19,813 | 20,299 | 19,735 | 22,135 | 23,183 | 23,632 | 24,610 | 20,373 | ||||||||||||||||||||||||
Loans held for sale |
1,185 | 1,291 | 2,216 | 2,733 | 2,150 | 1,607 | 2,067 | 2,063 | ||||||||||||||||||||||||
Portfolio loans and leases |
77,967 | 77,465 | 77,491 | 76,009 | 76,232 | 77,423 | 76,779 | 78,419 | ||||||||||||||||||||||||
Total loans and leases |
79,152 | 78,756 | 79,707 | 78,742 | 78,382 | 79,030 | 78,846 | 80,482 | ||||||||||||||||||||||||
Allowance for loan and lease losses |
(2,614 | ) | (2,805 | ) | (3,004 | ) | (3,194 | ) | (3,693 | ) | (3,802 | ) | (3,749 | ) | (3,681 | ) | ||||||||||||||||
Bank premises and equipment |
2,395 | 2,389 | 2,389 | 2,377 | 2,374 | 2,384 | 2,400 | 2,426 | ||||||||||||||||||||||||
Operating lease equipment |
492 | 513 | 479 | 470 | 489 | 492 | 499 | 486 | ||||||||||||||||||||||||
Goodwill |
2,417 | 2,417 | 2,417 | 2,417 | 2,417 | 2,417 | 2,417 | 2,417 | ||||||||||||||||||||||||
Intangible assets |
49 | 55 | 62 | 72 | 83 | 94 | 106 | 119 | ||||||||||||||||||||||||
Servicing rights |
847 | 894 | 822 | 599 | 646 | 725 | 700 | 626 | ||||||||||||||||||||||||
Other real estate owned |
488 | 514 | 506 | 504 | 454 | 399 | 300 | 274 | ||||||||||||||||||||||||
Other assets |
7,766 | 7,453 | 7,894 | 8,200 | 7,690 | 7,280 | 7,251 | 7,218 | ||||||||||||||||||||||||
Total assets |
$ | 110,805 | $ | 110,485 | $ | 111,007 | $ | 112,322 | $ | 112,025 | $ | 112,651 | $ | 113,380 | $ | 110,740 | ||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||||||
Demand |
$ | 22,589 | $ | 22,066 | $ | 21,413 | $ | 20,109 | $ | 19,256 | $ | 19,482 | $ | 19,411 | $ | 17,666 | ||||||||||||||||
Interest checking |
18,072 | 18,597 | 18,560 | 17,225 | 17,759 | 19,126 | 19,935 | 15,168 | ||||||||||||||||||||||||
Savings |
21,764 | 21,697 | 20,903 | 20,260 | 19,646 | 19,099 | 17,898 | 17,098 | ||||||||||||||||||||||||
Money market |
4,859 | 5,184 | 5,035 | 5,064 | 4,666 | 4,782 | 4,431 | 4,378 | ||||||||||||||||||||||||
Foreign office |
3,271 | 3,569 | 3,721 | 3,807 | 3,430 | 2,844 | 2,454 | 2,356 | ||||||||||||||||||||||||
Other time |
6,399 | 7,043 | 7,728 | 9,379 | 10,966 | 11,643 | 12,466 | 13,725 | ||||||||||||||||||||||||
Certificates - $100,000 and over |
3,642 | 4,160 | 4,287 | 5,515 | 6,389 | 6,596 | 7,700 | 8,962 | ||||||||||||||||||||||||
Other foreign office |
2 | 1 | 1 | 3 | 3 | 2 | 10 | 5 | ||||||||||||||||||||||||
Total deposits |
80,598 | 82,317 | 81,648 | 81,362 | 82,115 | 83,574 | 84,305 | 79,358 | ||||||||||||||||||||||||
Federal funds purchased |
403 | 332 | 279 | 368 | 240 | 271 | 182 | 433 | ||||||||||||||||||||||||
Other short-term borrowings |
2,702 | 1,297 | 1,574 | 1,775 | 1,556 | 1,359 | 1,415 | 3,674 | ||||||||||||||||||||||||
Other liabilities |
4,349 | 3,792 | 3,868 | 3,951 | 3,424 | 3,092 | 3,474 | 3,425 | ||||||||||||||||||||||||
Long-term debt |
10,152 | 10,555 | 9,558 | 10,953 | 10,989 | 10,947 | 10,507 | 10,162 | ||||||||||||||||||||||||
Total liabilities |
98,204 | 98,293 | 96,927 | 98,409 | 98,324 | 99,243 | 99,883 | 97,052 | ||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||
Common and preferred equity |
12,242 | 12,025 | 13,867 | 13,584 | 13,395 | 13,321 | 13,457 | 13,603 | ||||||||||||||||||||||||
Net unrealized gains (losses): |
||||||||||||||||||||||||||||||||
Available-for-sale securities |
397 | 277 | 321 | 434 | 432 | 268 | 216 | 274 | ||||||||||||||||||||||||
Qualifying cash flow hedges |
68 | 58 | 67 | 73 | 84 | 98 | 105 | 108 | ||||||||||||||||||||||||
Accumulated other comprehensive income related to employee benefit plans |
(69 | ) | (72 | ) | (74 | ) | (75 | ) | (76 | ) | (78 | ) | (80 | ) | (97 | ) | ||||||||||||||||
Treasury stock, at cost |
(66 | ) | (125 | ) | (130 | ) | (132 | ) | (134 | ) | (201 | ) | (201 | ) | (200 | ) | ||||||||||||||||
Total Bancorp shareholders equity |
12,572 | 12,163 | 14,051 | 13,884 | 13,701 | 13,408 | 13,497 | 13,688 | ||||||||||||||||||||||||
Noncontrolling interest |
29 | 29 | 29 | 29 | | | | | ||||||||||||||||||||||||
Total equity |
12,601 | 12,192 | 14,080 | 13,913 | 13,701 | 13,408 | 13,497 | 13,688 | ||||||||||||||||||||||||
Total liabilities & equity |
$ | 110,805 | $ | 110,485 | $ | 111,007 | $ | 112,322 | $ | 112,025 | $ | 112,651 | $ | 113,380 | $ | 110,740 | ||||||||||||||||
Share Data |
||||||||||||||||||||||||||||||||
Preferred shares outstanding |
16,450 | 16,450 | 152,771 | 152,771 | 152,771 | 152,771 | 152,771 | 152,771 | ||||||||||||||||||||||||
Common shares outstanding, excluding treasury |
919,818,137 | 918,728,008 | 796,272,522 | 796,283,198 | 796,319,712 | 794,816,131 | 795,068,164 | 795,316,187 | ||||||||||||||||||||||||
Treasury shares held |
4,074,443 | 5,164,573 | 5,231,665 | 5,220,989 | 5,184,475 | 6,688,056 | 6,436,023 | 6,188,001 |
Page 4
Quarterly Data
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
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Average Balance Sheet ($ in millions, except share data) |
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Assets |
||||||||||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||||||||||
Loans and leases |
$ | 79,153 | $ | 79,379 | $ | 79,148 | $ | 78,854 | $ | 78,807 | $ | 80,136 | $ | 79,920 | $ | 82,889 | ||||||||||||||||
Taxable securities |
15,115 | 15,156 | 15,367 | 15,580 | 16,263 | 17,030 | 16,999 | 15,652 | ||||||||||||||||||||||||
Tax exempt securities |
96 | 197 | 268 | 273 | 343 | 385 | 727 | 1,443 | ||||||||||||||||||||||||
Other short-term investments |
1,981 | 1,937 | 2,431 | 3,456 | 4,285 | 3,144 | 1,143 | 969 | ||||||||||||||||||||||||
Total interest-earning assets |
96,345 | 96,669 | 97,214 | 98,163 | 99,698 | 100,695 | 98,789 | 100,953 | ||||||||||||||||||||||||
Cash and due from banks |
2,356 | 2,268 | 2,284 | 2,283 | 2,163 | 2,247 | 2,276 | 2,257 | ||||||||||||||||||||||||
Other assets |
15,298 | 14,897 | 15,449 | 15,088 | 14,550 | 14,262 | 14,084 | 13,724 | ||||||||||||||||||||||||
Allowance for loan and lease losses |
(2,799 | ) | (2,990 | ) | (3,089 | ) | (3,680 | ) | (3,798 | ) | (3,771 | ) | (3,644 | ) | (3,481 | ) | ||||||||||||||||
Total assets |
$ | 111,200 | $ | 110,844 | $ | 111,858 | $ | 111,854 | $ | 112,613 | $ | 113,433 | $ | 111,505 | $ | 113,453 | ||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||
Interest checking |
$ | 18,701 | $ | 18,539 | $ | 17,578 | $ | 17,142 | $ | 18,652 | $ | 19,533 | $ | 16,324 | $ | 14,869 | ||||||||||||||||
Savings |
21,817 | 21,324 | 20,602 | 19,905 | 19,446 | 18,469 | 17,540 | 16,967 | ||||||||||||||||||||||||
Money market |
5,009 | 5,136 | 4,985 | 4,940 | 4,679 | 4,622 | 4,279 | 4,280 | ||||||||||||||||||||||||
Foreign office |
3,805 | 3,580 | 3,733 | 3,592 | 3,325 | 2,757 | 2,516 | 2,432 | ||||||||||||||||||||||||
Other time |
6,738 | 7,363 | 8,490 | 10,261 | 11,336 | 12,059 | 13,049 | 14,264 | ||||||||||||||||||||||||
Certificates - $100,000 and over |
3,955 | 4,226 | 4,858 | 6,096 | 6,354 | 7,049 | 8,200 | 10,055 | ||||||||||||||||||||||||
Other foreign office |
2 | 1 | 9 | 4 | 5 | 8 | 51 | 95 | ||||||||||||||||||||||||
Federal funds purchased |
344 | 310 | 376 | 302 | 264 | 220 | 423 | 404 | ||||||||||||||||||||||||
Other short-term borrowings |
1,605 | 1,638 | 1,728 | 1,880 | 1,478 | 1,449 | 3,029 | 5,285 | ||||||||||||||||||||||||
Long-term debt |
10,527 | 10,255 | 10,298 | 10,954 | 10,876 | 11,489 | 10,404 | 10,108 | ||||||||||||||||||||||||
Total interest-bearing liabilities |
72,503 | 72,372 | 72,657 | 75,076 | 76,415 | 77,655 | 75,815 | 78,759 | ||||||||||||||||||||||||
Demand deposits |
22,174 | 21,582 | 21,066 | 19,362 | 19,406 | 18,822 | 18,137 | 17,059 | ||||||||||||||||||||||||
Other liabilities |
4,129 | 3,809 | 4,099 | 3,544 | 3,229 | 3,438 | 3,829 | 3,750 | ||||||||||||||||||||||||
Total liabilities |
98,806 | 97,763 | 97,822 | 97,982 | 99,050 | 99,915 | 97,781 | 99,568 | ||||||||||||||||||||||||
Equity |
12,394 | 13,081 | 14,036 | 13,872 | 13,563 | 13,518 | 13,724 | 13,885 | ||||||||||||||||||||||||
Total liabilities & equity |
$ | 111,200 | $ | 110,844 | $ | 111,858 | $ | 111,854 | $ | 112,613 | $ | 113,433 | $ | 111,505 | $ | 113,453 | ||||||||||||||||
Average loans and leases (excluding held for sale) |
$ | 77,937 | $ | 77,636 | $ | 76,236 | $ | 76,617 | $ | 76,973 | $ | 78,381 | $ | 77,601 | $ | 80,060 | ||||||||||||||||
Average common shares outstanding: |
||||||||||||||||||||||||||||||||
Basic |
914,600,600 | 880,829,800 | 791,072,308 | 791,016,740 | 790,838,716 | 790,472,577 | 790,441,911 | 790,334,226 | ||||||||||||||||||||||||
Diluted |
955,477,616 | 894,841,321 | 836,224,575 | 797,492,107 | 802,254,845 | 790,472,577 | 790,441,911 | 790,334,226 |
Page 5
Quarterly Data
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2011 |
March 31, 2011 |
December 31, 2010 |
September 30, 2010 |
June 30, 2010 |
March 31, 2010 |
December 31, 2009 |
September 30, 2009 |
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End of Period Loans and Leases ($ in millions) (net of unearned discount) |
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Commercial: |
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Commercial and industrial loans |
$ | 28,155 | $ | 27,431 | $ | 27,274 | $ | 26,502 | $ | 26,011 | $ | 26,134 | $ | 25,687 | $ | 26,215 | ||||||||||||||||
Commercial mortgage |
10,331 | 10,617 | 10,992 | 11,333 | 11,569 | 11,865 | 11,936 | 12,252 | ||||||||||||||||||||||||
Commercial construction |
1,805 | 2,020 | 2,111 | 2,500 | 3,042 | 3,396 | 3,871 | 4,268 | ||||||||||||||||||||||||
Commercial leases |
3,326 | 3,367 | 3,378 | 3,304 | 3,271 | 3,388 | 3,535 | 3,584 | ||||||||||||||||||||||||
Subtotal - commercial |
43,617 | 43,435 | 43,755 | 43,639 | 43,893 | 44,783 | 45,029 | 46,319 | ||||||||||||||||||||||||
Consumer: |
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Residential mortgage |
10,838 | 10,557 | 10,858 | 9,989 | 9,672 | 9,239 | 9,845 | 9,955 | ||||||||||||||||||||||||
Home equity |
11,048 | 11,222 | 11,513 | 11,774 | 11,987 | 12,186 | 12,174 | 12,377 | ||||||||||||||||||||||||
Automobile loans |
11,315 | 11,129 | 10,983 | 10,738 | 10,285 | 10,180 | 8,995 | 8,972 | ||||||||||||||||||||||||
Credit card |
1,856 | 1,821 | 1,896 | 1,832 | 1,841 | 1,863 | 1,990 | 1,973 | ||||||||||||||||||||||||
Other consumer loans and leases |
478 | 592 | 702 | 770 | 704 | 779 | 813 | 886 | ||||||||||||||||||||||||
Subtotal - consumer |
35,535 | 35,321 | 35,952 | 35,103 | 34,489 | 34,247 | 33,817 | 34,163 | ||||||||||||||||||||||||
Total loans and leases |
$ | 79,152 | $ | 78,756 | $ | 79,707 | $ | 78,742 | $ | 78,382 | $ | 79,030 | $ | 78,846 | $ | 80,482 | ||||||||||||||||
Average Loans and Leases ($ in millions) (net of unearned discount) |
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Commercial: |
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Commercial and industrial loans |
$ | 27,970 | $ | 27,404 | $ | 26,509 | $ | 26,348 | $ | 26,179 | $ | 26,299 | $ | 25,838 | $ | 27,416 | ||||||||||||||||
Commercial mortgage |
10,491 | 10,816 | 11,276 | 11,462 | 11,772 | 11,836 | 12,126 | 12,449 | ||||||||||||||||||||||||
Commercial construction |
1,950 | 2,085 | 2,289 | 2,955 | 3,258 | 3,781 | 4,134 | 4,475 | ||||||||||||||||||||||||
Commercial leases |
3,349 | 3,364 | 3,314 | 3,257 | 3,336 | 3,468 | 3,574 | 3,522 | ||||||||||||||||||||||||
Subtotal - commercial |
43,760 | 43,669 | 43,388 | 44,022 | 44,545 | 45,384 | 45,672 | 47,862 | ||||||||||||||||||||||||
Consumer: |
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Residential mortgage |
10,655 | 10,736 | 10,693 | 9,897 | 9,390 | 9,478 | 10,141 | 10,820 | ||||||||||||||||||||||||
Home equity |
11,144 | 11,376 | 11,655 | 11,897 | 12,102 | 12,338 | 12,291 | 12,452 | ||||||||||||||||||||||||
Automobile loans |
11,188 | 11,070 | 10,825 | 10,517 | 10,170 | 10,185 | 8,973 | 8,871 | ||||||||||||||||||||||||
Credit card |
1,834 | 1,852 | 1,844 | 1,838 | 1,859 | 1,940 | 1,982 | 1,955 | ||||||||||||||||||||||||
Other consumer loans and leases |
572 | 676 | 743 | 683 | 741 | 811 | 861 | 929 | ||||||||||||||||||||||||
Subtotal - consumer |
35,393 | 35,710 | 35,760 | 34,832 | 34,262 | 34,752 | 34,248 | 35,027 | ||||||||||||||||||||||||
Total average loans and leases |
$ | 79,153 | $ | 79,379 | $ | 79,148 | $ | 78,854 | $ | 78,807 | $ | 80,136 | $ | 79,920 | $ | 82,889 | ||||||||||||||||
Asset Quality ($ in millions) |
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Nonaccrual portfolio loans and leases |
$ | 1,240 | $ | 1,287 | $ | 1,333 | $ | 1,378 | $ | 2,236 | $ | 2,423 | $ | 2,642 | $ | 2,704 | ||||||||||||||||
Nonaccrual loans held for sale |
147 | 184 | 247 | 680 | 163 | 239 | 220 | 286 | ||||||||||||||||||||||||
Restructured loans - commercial (non accrual) held for sale |
29 | 32 | 47 | 19 | 4 | 4 | 4 | 2 | ||||||||||||||||||||||||
Restructured loans and leases (non accrual) portfolio |
399 | 358 | 347 | 206 | 294 | 310 | 305 | 243 | ||||||||||||||||||||||||
Other assets, including other real estate owned |
449 | 481 | 494 | 498 | 439 | 396 | 297 | 273 | ||||||||||||||||||||||||
Total nonperforming assets |
$ | 2,264 | $ | 2,342 | $ | 2,468 | $ | 2,781 | $ | 3,136 | $ | 3,372 | $ | 3,468 | $ | 3,508 | ||||||||||||||||
Ninety days past due loans and leases |
$ | 279 | $ | 266 | $ | 274 | $ | 317 | $ | 397 | $ | 436 | $ | 567 | $ | 992 | ||||||||||||||||
Nonperforming Loans ($ in millions)(non-accrual plus renegotiated) |
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Commercial and industrial loans and leases |
$ | 684 | $ | 652 | $ | 753 | $ | 769 | $ | 800 | $ | 828 | $ | 840 | $ | 826 | ||||||||||||||||
Commercial mortgage |
558 | 559 | 581 | 820 | 878 | 980 | 1,035 | 1,072 | ||||||||||||||||||||||||
Commercial construction loans |
187 | 208 | 258 | 371 | 469 | 606 | 741 | 820 | ||||||||||||||||||||||||
Consumer mortgage and construction |
272 | 261 | 268 | 208 | 435 | 408 | 412 | 379 | ||||||||||||||||||||||||
Other consumer loans and leases |
114 | 181 | 114 | 115 | 115 | 153 | 144 | 138 | ||||||||||||||||||||||||
Total nonperforming loans and leases (including held for sale) |
$ | 1,815 | $ | 1,861 | $ | 1,974 | $ | 2,283 | $ | 2,697 | $ | 2,975 | $ | 3,172 | $ | 3,235 | ||||||||||||||||
Credit Charge-Offs ($ in millions) |
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Gross charge-offs |
$ | (343 | ) | $ | (397 | ) | $ | (399 | ) | $ | (992 | ) | $ | (472 | ) | $ | (622 | ) | $ | (743 | ) | $ | (796 | ) | ||||||||
Recoveries |
39 | 30 | 43 | 36 | 38 | 40 | 35 | 40 | ||||||||||||||||||||||||
Net losses charged off |
$ | (304 | ) | $ | (367 | ) | $ | (356 | ) | $ | (956 | ) | $ | (434 | ) | $ | (582 | ) | $ | (708 | ) | $ | (756 | ) | ||||||||
Page 6
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