Exhibit 99.1
| | | | |
| | | | | News Release |
| | |
CONTACT: | | Bradley S. Adams (Analysts) | | FOR IMMEDIATE RELEASE |
| | | (513) 534-0983 | | April 15, 2004 |
| | | Roberta R. Jennings (Media) | | |
| | | (513) 579-4153 | | |
FIFTH THIRD BANCORP REPORTS 12 PERCENT INCREASE
IN FIRST QUARTER EARNINGS PER SHARE
Fifth Third Bancorp’s 2004 first quarter earnings per diluted share were $.75, an increase of 12 percent over $.67 per diluted share for the same period in 2003. First quarter net income totaled $430,131,000, a 10 percent increase over first quarter 2003’s net income of $389,762,000. First quarter return on average assets (ROA) and return on average equity (ROE) were 1.88 percent and 19.7 percent, respectively, compared to 1.90 percent and 18.0 percent in 2003’s first quarter. Financial results in the current and all prior periods are impacted by the adoption on a retroactive basis of the fair value method of expense recognition for employee stock-based compensation.
“I would like to thank our employees for their hard work in producing another quarter of solid growth,” stated George A. Schaefer, Jr., President and CEO of Fifth Third Bancorp. “I am extremely encouraged by our results this quarter as we continue to face the challenges posed by a volatile interest rate environment. Improving trends in service income and credit quality, consistent growth in spread-based revenues and disciplined expense control offer reason for optimism over the remainder of the year as our sales force and affiliate management teams continue to focus on winning customer relationships and cross-selling additional products and services. Our low-risk profile, strong balance sheet, diversified business mix and focused sales force position Fifth Third to continue to deliver consistent value to our shareholders.”
“In March, Fifth Third’s Board of Directors increased the quarterly cash dividend by 23 percent over the same period last year and 10 percent over the cash dividend declared last quarter. This quarter’s dividend increase illustrates the importance we place on delivering shareholder value and follows our last dividend increase only nine months ago — a pattern we have consistently followed over the years. We have always worked diligently to deliver solid investment returns to our shareholders.”
“Recently, Fifth Third announced that the Federal Reserve Bank of Cleveland and the Ohio Department of Commerce, Division of Financial Institutions had terminated the Written Agreement entered into in late March 2003. We believe that the steps taken in conjunction with this agreement have made our organization stronger. The development of new and expanded risk management, audit and infrastructure processes will better prepare us as a company to meet the opportunities and challenges in today’s business environment.”
Other Operating Income
Other Operating Income increased seven percent over the same quarter last year and 18 percent on an annualized sequential basis.
Investment Advisory revenues increased 17 percent over the same quarter last year primarily as a result of improved market performance and strong sales momentum across numerous product lines including retirement plan services, institutional asset management, retail brokerage and private client services. Fifth Third continues to focus its sales efforts on integrating services across business lines and working closely with retail and commercial team members to take advantage of a diverse and expanding customer base. Fifth Third Investment Advisors, among the largest money managers in the Midwest, has $34 billion in assets under management and $179 billion in assets under care.
Fifth Third Processing Solutions, our electronic payment processing division, delivered a 14 percent increase in revenues over the first quarter of last year. Comparisons to prior periods are impacted by the significant seasonal increases in transaction volumes typically seen in the fourth quarter and a $7 million first quarter 2004 revenue impact associated with the MasterCard®/Visa® settlement. Revenue from Electronic Funds Transfer (EFT) increased four percent compared to the same quarter last year and merchant processing revenue increased 23 percent over the same quarter last year. Fifth Third Processing Solutions continues to realize strong sales momentum from the addition of new customer relationships in both its Merchant Services and EFT businesses. On April 1, 2004, Fifth Third sold certain out-of-footprint third-party sourced merchant processing contracts. The net income from these third-party sourced merchant processing contracts in relation to Fifth Third Bancorp and the electronic payment processing segment is not material to their respective overall results of operations.
Successful sales of retail and commercial deposit accounts and corporate treasury management products fueled an increase in deposit service revenues of eight percent over the same quarter last year and remained essentially unchanged from last quarter due to the seasonality in retail service revenues. The first quarter results were highlighted by a 14 percent increase in commercial deposit based revenues over the same quarter last year, and a 43 percent increase on an annualized sequential basis, on the strength of Fifth Third’s continuing focus on new customer acquisition and cross-sell initiatives within its core middle-market commercial banking franchise.
Mortgage net service revenue totaled $43.9 million in the first quarter compared to $57.2 million last quarter and $76.8 million in 2003’s first quarter. Inclusive of net realized securities gains/losses resulting from sales from a portfolio established to hedge against volatility related to the value of mortgage servicing rights, mortgage net service revenue totaled $77.9 million in the first quarter of last year. Mortgage originations totaled $2.0 billion in the first quarter versus $1.9 billion last quarter and $4.3 billion in the first quarter of last year. Fifth Third currently expects mortgage banking originations and revenues to stabilize at levels similar to those seen this quarter as compared to the record levels of refinance activity and applications seen during 2003. First quarter mortgage net service revenue was comprised of $61.4 million in total mortgage banking fees and loan sales, plus $17.6 million of gains and mark-to-market adjustments on both settled and outstanding free-standing derivative financial instruments and less $35.1 million in net valuation adjustments and amortization on mortgage servicing rights. In the first quarter of 2004, Fifth Third continued to maintain its posture with regard to hedging activity to manage the risk associated with impairment changes and write-downs incurred on its mortgage servicing rights portfolio. The mark-to-market adjustments and settlement of free-standing derivative financial instruments and corresponding valuation adjustments resulted from interest rate
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volatility and the resulting impact of changing prepayment speeds on the mortgage servicing portfolio. The mortgage servicing asset, net of the valuation reserve, is $274.4 million at March 31, 2004, compared to $289.0 million last quarter, on a servicing portfolio of $24.1 billion.
Other service charges and fee revenue totaled $140.6 million in the first quarter, an 11 percent decrease from the first quarter last year and a 25 percent increase from last quarter. Compared to the first quarter of last year, modest decreases were evident with the exception of strong growth in institutional fixed income trading and sales and insurance revenues. Compared to the fourth quarter of last year, strong growth was seen in commercial banking, consumer loan and lease, institutional fixed income trading and sales and insurance revenues.
Balance Sheet Trends
Loan and lease balances exhibited strong growth with period end loans and leases held for investment increasing by $1.6 billion from last quarter, or 12 percent on an annualized sequential basis, driven primarily by strong results in both consumer and commercial lending. On an average basis, total loans and leases increased by nine percent over the same quarter last year. Direct installment loan originations remained very strong and totaled $1.5 billion in the first quarter, compared to $1.6 billion last quarter, with balances increasing by 15 percent over the first quarter of last year and nine percent on an annualized sequential basis. Consumer loans and comparisons to prior periods are impacted by the securitization and sale of $903 million in home equity lines of credit in the third quarter of 2003 and the inclusion of $750 million in automotive loans in held for sale. Period end commercial loan and lease balances increased by 12 percent over the same quarter last year and by $819 million from last quarter.
Commercial customer additions and net new retail checking account growth, mitigated by attrition in higher balance interest bearing accounts, resulted in modest deposit trends for Fifth Third in the first quarter of 2004. Compared to the same quarter last year, average interest checking balances and average demand deposit balances increased by seven percent and 20 percent, respectively, with average transaction account balances as a whole increasing six percent. Sequentially, the level of transaction account balances declined modestly from a seasonally strong fourth quarter due to continued moderation in balances in interest bearing accounts given the low level of interest rates. Fifth Third is confident in its ability to competitively price and generate growth in customers and deposit balances in an increasing interest rate environment. Given the success of de-novo banking center openings in generating approximately $400 million in new deposit balances since the beginning of 2003, Fifth Third expects to continue to expand its retail banking network in certain metropolitan markets within its footprint with 75 new banking center openings planned during the remainder of 2004.
Compared to the first quarter of 2003, net interest income on a fully-taxable equivalent basis increased six percent despite a 14 basis point (bp) decrease in the net interest margin due to nine percent growth in average earning assets. The previously disclosed implementation of SFAS No. 150 during the third quarter of 2003 and the resulting reclassification of approximately $10 million of quarterly minority interest expense into interest expense, impacted net interest income and margin performance comparisons to the first quarter of 2003. Sequentially, net interest income on a fully-taxable equivalent basis increased eight percent on an annualized basis due to 6 bp of expansion in the net interest margin from the recent slowing of prepayment speeds and growth in the level of average earning assets. Fifth Third expects that margin and net interest income trends in coming periods will continue to benefit from the steepness in the
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short end of the yield curve and moderation in the level of prepayment activity with absolute results dependent upon the magnitude of deposit growth in relation to balance sheet growth and the speed of interest rate changes in an improving economy.
Fifth Third repurchased approximately 5.6 million shares of its common stock for a total of approximately $325 million in the first quarter of 2004. With increasing capital levels and continued stability in earning asset yields anticipated in the remainder of 2004, Fifth Third continues to view share repurchases as an effective means of delivering value to shareholders. As of March 31, 2004, the remaining authority under the plan authorized by the Board of Directors in March 2003 is approximately 8.5 million shares.
Credit Quality
Credit quality metrics and trends improved substantially in the first quarter. First quarter net charge-offs as a percentage of average loans and leases were 54 bp, compared to 72 bp last quarter and 56 bp in the first quarter of last year. Nonperforming assets were 57 bp of total loans and leases and other assets, including other real estate owned at March 31, 2004, improved from 61 bp posted last quarter. Overall, the level of nonperforming loans and net charge-offs remain a small percentage of the total loan and lease portfolio. Net charge-offs for the quarter were $70.8 million, compared to $95.0 million last quarter and $64.7 million in the first quarter of 2003. Commercial loan and lease net charge-offs declined by $23.3 million from the fourth quarter of last year and totaled $30.6 million in the first quarter. The first quarter provision for loan and lease losses totaled $83.2 million, compared to $93.7 million last quarter and $84.8 million in the same quarter last year, resulting in a $12.4 million increase in the credit loss reserve which is at 1.45 percent of total loans and leases outstanding, compared to 1.47 percent at December 31, 2003. Fifth Third continues to expect near-term trend improvement in the level of commercial loan losses and nonperforming assets as the overall economy in our Midwestern footprint continues to build upon recent positive momentum.
Operating Expenses
First quarter operating expenses increased six percent over the same period last year and decreased four percent on an annualized basis from last quarter. Comparisons to the same period last year are impacted by the implementation of FASB Interpretation No. 46 in the third quarter of 2003, resulting in the recognition of $38 million of depreciation expense on operating lease assets captured as a component of operating expenses. Excluding this impact, operating expenses were essentially flat compared to the same quarter last year; comparisons being provided to supplement an understanding of the fundamental trends in operating expenses.
Fifth Third’s first quarter efficiency ratio was 47.1 percent, improved from 49.0 percent last quarter and 47.2 percent in the first quarter of last year. The significant sequential quarter improvement in the efficiency ratio resulted from annualized revenue growth of 12 percent in relation to a four percent annualized decrease in operating expenses. Fifth Third is continuing to focus on efficiency initiatives as part of our core emphasis on operating leverage. These initiatives include increasing levels of automation of processes, the rationalization and reduction of non-core businesses as they relate to our retail and middle market commercial customer base, returns on invested capital and related opportunities for continued growth in 2004 and years to come.
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Stock-Based Compensation Expense
In the first quarter of 2004, Fifth Third elected to adopt on a retroactive basis the fair value method of expense recognition for employee stock-based compensation. This retroactive adoption has resulted in the restatement of financial results for the recognition of compensation expense in all fiscal years beginning after December 31, 1994 for the estimated fair value of all employee stock-based compensation grants. The impact on salaries, wages and other incentives expense in the 2004 first quarter was approximately $23 million ($19 million after-tax) as compared to approximately $36 million ($29 million after-tax) in the 2003 first quarter. Additionally, as a result of this change in accounting, Fifth Third recognized a deferred tax asset and corresponding increase to shareholders’ equity of $104 million.
Conference Call
Fifth Third will host a conference call to discuss these first quarter financial results at 9:30 a.m. (Eastern Daylight Time) today. Investors, analysts and other interested parties may dial into the conference call at 877-309-0967 for domestic access and 706-679-3977 for international access (password: Fifth Third). A replay of the conference call will be available until 11:59 p.m. April 22, 2004 by dialing 800-642-1687 for domestic access and 706-645-9291 for international access (passcode: 6677821#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $94 billion in assets, operates 17 affiliates with 960 full-service Banking Centers, including 129 Bank Mart® locations open seven days a week inside select grocery stores and 1,827 Jeanie® ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee and West Virginia. The financial strength of Fifth Third’s affiliate banks continues to be recognized by rating agencies with deposit ratings of AA- and Aa1 from Standard & Poor’s and Moody’s, respectively. Additionally, Fifth Third Bancorp continues to maintain the highest short-term ratings available at A-1+ and Prime-1 and is recognized by Moody’s with one of the highest senior debt ratings for any U.S. bank holding company of Aa2. Fifth Third operates four main businesses: Retail, Commercial, Investment Advisors and Fifth Third Processing Solutions. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded through the Nasdaq National Market System under the symbol “FITB.”
This release may contain forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. This press release may contain certain forward-looking statements with respect to our financial condition, results of operations, plans, objectives, future performance and business including statements preceded by, followed by or that include the words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. 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) competitive pressures among depository institutions increase significantly; (2) changes in the interest rate environment reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (4) general economic conditions, either national or in the states in which we do business, are less
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favorable than expected; (5) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (6) changes and trends in the securities markets; (7) legislative or regulatory changes or actions, or significant litigation, adversely affect us or the businesses in which we are engaged; and (8) the impact of reputational risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity. We undertake no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. Further information on other factors which could affect the financial results of Fifth Third are included in Fifth Third’s filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from Fifth Third.
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6
FIFTH THIRD BANCORP AND SUBSIDIARIES
Quarterly Financial Review for March 31, 2004
Table of Contents
| | |
| | | Page |
|
Earnings Review: | | |
Financial Highlights | | 8 |
Consolidated Statements of Income | | 9 |
Consolidated Statements of Changes in Shareholders’ Equity | | 10 |
Condensed Consolidated Quarterly Statements of Income (Taxable Equivalent) | | 11 |
Other Operating Income and Operating Expenses | | 12 |
| |
Financial Condition: | | |
Consolidated Balance Sheets | | 13 |
Loans and Leases Serviced | | 14 |
Consolidated Average Balance Sheets, Yields (Taxable Equivalent) and Rates | | 15 |
Regulatory Capital | | 16 |
Asset Quality | | 17 |
7
FIFTH THIRD BANCORP AND SUBSIDIARIES
Financial Highlights
(unaudited)
| | | | | | | | | |
| |
| | |
| | | For the Three Months Ended
| | | |
| | | March 31,
2004 | | | March 31,
2003 | | Percent
Change | |
| |
Earnings ($ in thousands, except per share) | | | | | | | | | |
Net Interest Income (Taxable Equivalent) | | $ | 758,867 | | | 716,145 | | 6.0 | |
Net Income Available to Common Shareholders | | | 430,131 | | | 389,762 | | 10.4 | |
| | | |
Earnings Per Share: | | | | | | | | | |
Basic | | | 0.76 | | | 0.68 | | 11.8 | |
Diluted | | | 0.75 | | | 0.67 | | 11.9 | |
| | | |
Key Ratios (percent) | | | | | | | | | |
Return on Average Assets (ROA) | | | 1.88 | % | | 1.90 | | (1.1 | ) |
Return on Average Equity (ROE) | | | 19.7 | | | 18.0 | | 9.4 | |
Net Interest Margin (Taxable Equivalent) | | | 3.60 | | | 3.74 | | (3.7 | ) |
Efficiency | | | 47.1 | | | 47.2 | | (0.2 | ) |
Average Shareholders’ Equity to Average Assets | | | 9.56 | | | 10.57 | | (9.6 | ) |
Risk-Based Capital (a): | | | | | | | | | |
Tier 1 Capital | | | 10.67 | | | 12.04 | | (11.4 | ) |
Total Capital | | | 13.02 | | | 13.84 | | (5.9 | ) |
Tier 1 Leverage | | | 9.12 | | | 9.79 | | (6.8 | ) |
| | | |
Common Stock Data | | | | | | | | | |
Cash Dividends Declared Per Share | | $ | 0.32 | | | 0.26 | | 23.1 | |
Book Value Per Share | | | 15.77 | | | 15.31 | | 3.0 | |
Market Price Per Share: | | | | | | | | | |
High | | | 60.00 | | | 62.15 | | (3.5 | ) |
Low | | | 53.27 | | | 47.05 | | 13.2 | |
End of Period | | | 55.37 | | | 50.23 | | 10.2 | |
Price/Earnings Ratio (b) | | | 18.77 | | | 19.03 | | (1.4 | ) |
| | |
| |
| (a) | March 31, 2004 risk-based capital ratios are estimated. |
| (b) | Based on the most recent twelve-month earnings per diluted share and end of period stock prices. |
Values Per Share
| | | | | | | | | | | | | | | | | | |
|
| | | Book Value Per Share
| | Market Price Range
Per Share
|
| | | March 31 | | June 30 | | September 30 | | December 31 | | Low | | High |
|
1999 | | $ | 9.78 | | $ | 9.64 | | $ | 9.63 | | $ | 9.91 | | $ | 38.58 | | $ | 50.29 |
2000 | | | 10.07 | | | 10.42 | | | 10.82 | | | 11.83 | | | 29.33 | | | 60.88 |
2001 | | | 12.33 | | | 12.40 | | | 12.97 | | | 13.31 | | | 45.69 | | | 64.77 |
2002 | | | 13.59 | | | 14.31 | | | 14.69 | | | 14.98 | | | 55.26 | | | 69.70 |
2003 | | | 15.31 | | | 15.25 | | | 15.24 | | | 15.29 | | | 47.05 | | | 62.15 |
2004 | | | 15.77 | | | | | | | | | | | | 53.27 | | | 60.00 |
| |
| |
| | | | | | |
| Earnings Per Share, Basic | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended
| | | | |
| | | March 31 | | June 30 | | September 30 | | December 31 | | | | Year-to-Date |
|
1999 | | $ | 0.42 | | $ | 0.41 | | $ | 0.42 | | $ | 0.30 | | | | | $ | 1.55 |
2000 | | | 0.43 | | | 0.39 | | | 0.51 | | | 0.53 | | | | | | 1.86 |
2001 | | | 0.49 | | | 0.18 | | | 0.44 | | | 0.63 | | | | | | 1.74 |
2002 | | | 0.63 | | | 0.65 | | | 0.67 | | | 0.69 | | | | | | 2.64 |
2003 | | | 0.68 | | | 0.72 | | | 0.73 | | | 0.78 | | | | | | 2.91 |
2004 | | | 0.76 | | | | | | | | | | | | | | | 0.76 |
| |
|
| | | | | | |
| Earnings Per Share, Diluted | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended
| | | | |
| | | March 31 | | June 30 | | September 30 | | December 31 | | | | Year-to-Date |
|
1999 | | $ | 0.41 | | $ | 0.40 | | $ | 0.41 | | $ | 0.30 | | | | | $ | 1.53 |
2000 | | | 0.43 | | | 0.38 | | | 0.50 | | | 0.52 | | | | | | 1.83 |
2001 | | | 0.48 | | | 0.18 | | | 0.43 | | | 0.61 | | | | | | 1.70 |
2002 | | | 0.62 | | | 0.64 | | | 0.66 | | | 0.67 | | | | | | 2.59 |
2003 | | | 0.67 | | | 0.71 | | | 0.72 | | | 0.77 | | | | | | 2.87 |
2004 | | | 0.75 | | | | | | | | | | | | | | | 0.75 |
| | | | | | | | | | | | | | | | | | | |
|
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FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited) ($ in thousands, except per share)
| | | | | | |
|
| | | For the Three Months Ended
| |
| | | March 31, 2004 | | March 31, 2003 | |
| |
Interest Income | | | | | | |
Interest and Fees on Loans and Leases | | $ | 669,331 | | 676,058 | |
Interest on Securities: | | | | | | |
Taxable | | | 308,472 | | 310,823 | |
Exempt from Income Taxes | | | 11,808 | | 12,645 | |
|
|
Total Interest on Securities | | | 320,280 | | 323,468 | |
Interest on Other Short-Term Investments | | | 514 | | 772 | |
|
|
Total Interest Income | | | 990,125 | | 1,000,298 | |
Interest Expense | | | | | | |
Interest on Deposits: | | | | | | |
Interest Checking | | | 36,536 | | 55,267 | |
Savings | | | 8,935 | | 21,034 | |
Money Market | | | 6,636 | | 9,209 | |
Other Time | | | 44,081 | | 62,109 | |
Certificates - $100,000 and Over | | | 5,373 | | 12,318 | |
Foreign Office | | | 14,966 | | 9,567 | |
|
|
Total Interest on Deposits | | | 116,527 | | 169,504 | |
Interest on Federal Funds Purchased | | | 17,954 | | 19,620 | |
Interest on Short-Term Bank Notes | | | 1,260 | | — | |
Interest on Other Short-Term Borrowings | | | 15,591 | | 12,509 | |
Interest on Long-Term Debt | | | 89,050 | | 92,422 | |
|
|
Total Interest Expense | | | 240,382 | | 294,055 | |
|
|
Net Interest Income | | | 749,743 | | 706,243 | |
Provision for Credit Losses | | | 83,240 | | 84,817 | |
|
|
Net Interest Income After Provision for Credit Losses | | | 666,503 | | 621,426 | |
Other Operating Income | | | | | | |
Electronic Payment Processing Revenue | | | 148,234 | | 130,138 | |
Service Charges on Deposits | | | 123,247 | | 114,322 | |
Mortgage Banking Net Revenue | | | 43,938 | | 76,849 | |
Investment Advisory Revenue | | | 93,165 | | 79,737 | |
Other Service Charges and Fees | | | 140,579 | | 158,363 | |
Operating Lease Revenue | | | 51,652 | | — | |
Securities Gains, Net | | | 25,590 | | 24,909 | |
Securities Gains, Net - Non-Qualifying Hedges on Mortgage Servicing | | | — | | 1,015 | |
|
|
Total Other Operating Income | | | 626,405 | | 585,333 | |
Operating Expenses | | | | | | |
Salaries, Wages and Incentives | | | 245,438 | | 268,710 | |
Employee Benefits | | | 75,562 | | 60,650 | |
Equipment Expenses | | | 19,888 | | 19,712 | |
Net Occupancy Expenses | | | 45,648 | | 38,397 | |
Operating Lease Expenses | | | 38,282 | | — | |
Other Operating Expenses | | | 227,250 | | 226,459 | |
|
|
Total Operating Expenses | | | 652,068 | | 613,928 | |
|
|
Income from Continuing Operations Before Income Taxes and Minority Interest | | | 640,840 | | 592,831 | |
Applicable Income Taxes | | | 210,524 | | 193,468 | |
|
|
Income from Continuing Operations Before Minority Interest | | | 430,316 | | 399,363 | |
Minority Interest, Net of Tax | | | — | | (10,229 | ) |
|
|
Income from Continuing Operations | | | 430,316 | | 389,134 | |
Income from Discontinued Operations, Net of Tax | | | — | | 813 | |
|
|
Net Income | | | 430,316 | | 389,947 | |
Dividend on Preferred Stock | | | 185 | | 185 | |
|
|
Net Income Available to Common Shareholders | | $ | 430,131 | | 389,762 | |
|
|
Basic Earnings Per Share: | | | | | | |
Income from Continuing Operations | | $ | 0.76 | | 0.68 | |
Income from Discontinued Operations | | | — | | — | |
|
|
Net Income | | $ | 0.76 | | 0.68 | |
|
|
Diluted Earnings Per Share: | | | | | | |
Income from Continuing Operations | | $ | 0.75 | | 0.67 | |
Income from Discontinued Operations | | | — | | — | |
|
|
Net Income | | $ | 0.75 | | 0.67 | |
|
|
9
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
(unaudited) ($ in thousands, except per share)
| | | | | | | |
|
| |
| | | For the Three Months Ended
| |
| | | March 31, 2004 | | | March 31, 2003 | |
| |
Total Shareholders’ Equity, Beginning | | $ | 8,667,003 | | | 8,604,392 | |
Net Income | | | 430,316 | | | 389,947 | |
Nonowner Changes in Equity, Net of Tax: | | | | | | | |
Change in Unrealized Gains and (Losses) on Securities Available-for-Sale and Qualifying Cash Flow Hedges | | | 219,472 | | | (72,274 | ) |
| |
Net Income and Nonowner Changes in Equity | | | 649,788 | | | 317,673 | |
Cash Dividends Declared: | | | | | | | |
Common Stock (2004 - $.32 per share and 2003 - $.26 per share) | | | (179,901 | ) | | (149,509 | ) |
Preferred Stock | | | (185 | ) | | (185 | ) |
Stock Options Exercised Including Treasury Shares Issued | | | 29,241 | | | 23,673 | |
Stock-Based Compensation Expense | | | 22,568 | | | 35,908 | |
Loans Issued Related to Exercise of Stock Options, Net | | | (319 | ) | | — | |
Excess Corporate Tax Benefit Related to Stock-Based Compensation | | | 396 | | | (1,222 | ) |
Shares Purchased | | | (325,410 | ) | | (32,460 | ) |
Other | | | 576 | | | 12 | |
| |
Total Shareholders’ Equity, Ending | | $ | 8,863,757 | | | 8,798,282 | |
|
|
10
FIFTH THIRD BANCORP AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income (Taxable Equivalent)
(unaudited) ($ in thousands)
| | | | | | | | | | | | | | |
|
| |
| | | For the Three Months Ended
| |
| | | March 31,
2004 | | December 31,
2003 | | September 30,
2003 | | | June 30,
2003 | | | March 31,
2003 | |
| |
Interest Income | | $ | 990,125 | | 987,874 | | 982,978 | | | 1,019,918 | | | 1,000,298 | |
Taxable Equivalent Adjustment | | | 9,124 | | 9,629 | | 9,661 | | | 9,683 | | | 9,902 | |
| |
Interest Income (Taxable Equivalent) | | | 999,249 | | 997,503 | | 992,639 | | | 1,029,601 | | | 1,010,200 | |
Interest Expense | | | 240,382 | | 252,921 | | 258,075 | | | 280,590 | | | 294,055 | |
| |
Net Interest Income (Taxable Equivalent) | | | 758,867 | | 744,582 | | 734,564 | | | 749,011 | | | 716,145 | |
Provision for Credit Losses | | | 83,240 | | 93,654 | | 112,082 | | | 108,877 | | | 84,817 | |
| |
Net Interest Income After Provision for Credit Losses (Taxable Equivalent) | | | 675,627 | | 650,928 | | 622,482 | | | 640,134 | | | 631,328 | |
Other Operating Income | | | 626,405 | | 599,342 | | 680,341 | | | 617,812 | | | 585,333 | |
Operating Expenses | | | 652,068 | | 658,034 | | 657,019 | | | 621,244 | | | 613,928 | |
| |
Income from Continuing Operations Before Income Taxes, Minority Interest and Cumulative Effect (Taxable Equivalent) | | | 649,964 | | 592,236 | | 645,804 | | | 636,702 | | | 602,733 | |
Applicable Income Taxes | | | 210,524 | | 182,087 | | 208,670 | | | 202,466 | | | 193,468 | |
Taxable Equivalent Adjustment | | | 9,124 | | 9,629 | | 9,661 | | | 9,683 | | | 9,902 | |
| |
Income from Continuing Operations Before Minority Interest and Cumulative Effect | | | 430,316 | | 400,520 | | 427,473 | | | 424,553 | | | 399,363 | |
Minority Interest, Net of Tax | | | — | | — | | — | | | (10,229 | ) | | (10,229 | ) |
| |
Income from Continuing Operations Before Cumulative Effect | | | 430,316 | | 400,520 | | 427,473 | | | 414,324 | | | 389,134 | |
Income from Discontinued Operations, Net of Tax | | | — | | 41,001 | | 947 | | | 1,136 | | | 813 | |
| |
Income Before Cumulative Effect | | | 430,316 | | 441,521 | | 428,420 | | | 415,460 | | | 389,947 | |
Cumulative Effect of Change in Accounting Principle, Net of Tax | | | — | | — | | (10,762 | ) | | — | | | — | |
| |
Net Income | | | 430,316 | | 441,521 | | 417,658 | | | 415,460 | | | 389,947 | |
Dividend on Preferred Stock | | | 185 | | 185 | | 185 | | | 185 | | | 185 | |
| |
Net Income Available to Common Shareholders | | $ | 430,131 | | 441,336 | | 417,473 | | | 415,275 | | | 389,762 | |
|
|
11
FIFTH THIRD BANCORP AND SUBSIDIARIES
Other Operating Income and Operating Expenses
(unaudited) ($ in thousands)
| | | | | | | | | | | |
|
| |
| | | For the Three Months Ended
|
| | | March 31,
2004 | | December 31,
2003 | | September 30,
2003 | | June 30,
2003 | | March 31,
2003 |
|
Other Operating Income | | | | | | | | | | | |
Electronic Payment Processing Revenue | | $ | 148,234 | | 160,178 | | 143,210 | | 141,501 | | 130,138 |
Service Charges on Deposits | | | 123,247 | | 124,838 | | 125,130 | | 120,826 | | 114,322 |
Mortgage Banking Net Revenue | | | 43,938 | | 57,229 | | 74,830 | | 92,826 | | 76,849 |
Investment Advisory Revenue | | | 93,165 | | 84,860 | | 84,726 | | 82,843 | | 79,737 |
Other Service Charges and Fees | | | 140,579 | | 112,522 | | 171,328 | | 139,163 | | 158,363 |
Operating Lease Revenue | | | 51,652 | | 57,900 | | 65,809 | | — | | — |
Securities Gains, Net | | | 25,590 | | 1,815 | | 15,308 | | 38,860 | | 24,909 |
Securities Gains, Net - Non-Qualifying Hedges
on Mortgage Servicing | | | — | | — | | — | | 1,793 | | 1,015 |
|
Total Other Operating Income | | $ | 626,405 | | 599,342 | | 680,341 | | 617,812 | | 585,333 |
|
Operating Expenses | | | | | | | | | | | |
Salaries, Wages and Incentives | | $ | 245,438 | | 244,167 | | 248,731 | | 269,365 | | 268,710 |
Employee Benefits | | | 75,562 | | 53,291 | | 61,087 | | 64,737 | | 60,650 |
Equipment Expenses | | | 19,888 | | 20,911 | | 21,046 | | 20,341 | | 19,712 |
Net Occupancy Expenses | | | 45,648 | | 46,552 | | 36,279 | | 37,837 | | 38,397 |
Operating Lease Expenses | | | 38,282 | | 43,967 | | 49,558 | | — | | — |
Other Operating Expenses (a) | | | 227,250 | | 249,146 | | 240,318 | | 228,964 | | 226,459 |
|
Total Operating Expenses | | $ | 652,068 | | 658,034 | | 657,019 | | 621,244 | | 613,928 |
|
Full-Time Equivalent Employees | | | 18,583 | | 18,899 | | 19,770 | | 19,830 | | 19,573 |
Banking Centers | | | 960 | | 952 | | 942 | | 943 | | 941 |
|
| (a) | Includes intangible amortization expense of $8.8 million, $9.5 million, $9.5 million, $11.6 million and $9.3 million for the three months ended March 31, 2004, December 31, 2003, September 30, 2003, June 30, 2003 and March 31, 2003, respectively. |
12
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited) ($ in thousands, except share data)
| | | | | | | |
|
| |
| | | As of
| |
| | | March 31, 2004 | | | March 31, 2003 | |
| |
Assets | | | | | | | |
Cash and Due from Banks | | $ | 2,012,466 | | | 1,771,527 | |
Securities Available-for-Sale (a) | | | 30,576,640 | | | 27,190,554 | |
Securities Held-to-Maturity (b) | | | 179,002 | | | 86,146 | |
Trading Securities | | | 96,425 | | | 32,955 | |
Other Short-Term Investments | | | 191,039 | | | 782,066 | |
Loans Held for Sale | | | 1,660,669 | | | 3,011,377 | |
Loans and Leases: | | | | | | | |
Commercial Loans | | | 14,468,576 | | | 13,380,294 | |
Construction Loans | | | 3,819,710 | | | 3,360,884 | |
Commercial Mortgage Loans | | | 7,197,126 | | | 5,983,988 | |
Commercial Lease Financing | | | 4,558,781 | | | 3,931,722 | |
Residential Mortgage Loans | | | 4,937,181 | | | 3,670,154 | |
Consumer Loans | | | 17,793,963 | | | 15,425,100 | |
Consumer Lease Financing | | | 2,606,642 | | | 2,746,288 | |
Unearned Income | | | (1,469,705 | ) | | (1,231,734 | ) |
| |
Total Loans and Leases | | | 53,912,274 | | | 47,266,696 | |
Reserve for Credit Losses | | | (782,806 | ) | | (703,354 | ) |
| |
Total Loans and Leases, net | | | 53,129,468 | | | 46,563,342 | |
Bank Premises and Equipment | | | 1,101,569 | | | 921,076 | |
Operating Lease Equipment | | | 657,756 | | | — | |
Accrued Interest Receivable | | | 411,998 | | | 440,194 | |
Goodwill | | | 738,054 | | | 740,124 | |
Intangible Assets | | | 154,777 | | | 231,552 | |
Servicing Rights | | | 283,291 | | | 248,569 | |
Other Assets | | | 2,539,056 | | | 2,305,336 | |
| |
Total Assets | | $ | 93,732,210 | | | 84,324,818 | |
|
|
Liabilities | | | | | | | |
Deposits: | | | | | | | |
Demand | | $ | 12,374,287 | | | 10,468,664 | |
Interest Checking | | | 19,375,214 | | | 18,681,537 | |
Savings | | | 7,391,478 | | | 8,098,013 | |
Money Market | | | 2,994,638 | | | 2,852,108 | |
Other Time | | | 6,449,918 | | | 7,500,968 | |
Certificates - $100,000 and Over | | | 2,097,358 | | | 4,934,571 | |
Foreign Office | | | 4,567,372 | | | 2,022,235 | |
| |
Total Deposits | | | 55,250,265 | | | 54,558,096 | |
Federal Funds Purchased | | | 7,501,301 | | | 4,924,065 | |
Short-Term Bank Notes | | | 500,000 | | | — | |
Other Short-Term Borrowings | | | 7,251,665 | | | 4,275,336 | |
Accrued Taxes, Interest and Expenses | | | 2,410,801 | | | 2,336,578 | |
Other Liabilities | | | 963,622 | | | 927,497 | |
Long-Term Debt | | | 10,990,799 | | | 8,033,230 | |
| |
Total Liabilities | | | 84,868,453 | | | 75,054,802 | |
Minority Interest | | | — | | | 471,734 | |
Total Shareholders’ Equity (c) | | | 8,863,757 | | | 8,798,282 | |
| |
Total Liabilities and Shareholders’ Equity | | $ | 93,732,210 | | | 84,324,818 | |
|
|
| (a) | Amortized cost: March 31, 2004 - $30,342,464 and March 31, 2003 - $26,633,108 |
| (b) | Market values: March 31, 2004 - $179,002 and March 31, 2003 - $86,146 |
| (c) | Common Shares: Stated value $2.22 per share; authorized 1,300,000,000; outstanding March 31, 2004 - 562,131,643 (excluding 21,320,048 treasury shares) and March 31, 2003 - 574,743,788 (excluding 8,697,903 treasury shares). |
13
FIFTH THIRD BANCORP AND SUBSIDIARIES
Loans and Leases Serviced
(unaudited) ($ in thousands)
| | | | | | | | | | | |
|
| | | As of
|
| | | March 31,
2004 | | December 31,
2003 | | September 30,
2003 | | June 30,
2003 | | March 31,
2003 |
|
Commercial | | | | | | | | | | | |
Commercial Loans | | $ | 14,468,571 | | 14,209,122 | | 13,824,371 | | 14,014,541 | | 13,380,264 |
Mortgage | | | 7,197,126 | | 6,893,742 | | 6,590,021 | | 6,297,335 | | 5,983,988 |
Construction | | | 3,492,951 | | 3,301,082 | | 3,143,315 | | 3,052,459 | | 3,064,878 |
Leases | | | 3,327,404 | | 3,263,145 | | 3,160,839 | | 3,021,888 | | 2,998,208 |
|
Subtotal | | | 28,486,052 | | 27,667,091 | | 26,718,546 | | 26,386,223 | | 25,427,338 |
Consumer | | | | | | | | | | | |
Consumer Loans | | | 17,036,512 | | 16,670,948 | | 17,090,372 | | 15,785,717 | | 14,862,765 |
Mortgage & Construction | | | 5,263,941 | | 4,760,317 | | 4,820,026 | | 4,054,287 | | 3,966,160 |
Credit Card | | | 757,450 | | 761,545 | | 619,893 | | 588,338 | | 562,335 |
Leases | | | 2,368,319 | | 2,447,952 | | 2,557,602 | | 2,541,934 | | 2,448,098 |
|
Subtotal | | | 25,426,222 | | 24,640,762 | | 25,087,893 | | 22,970,276 | | 21,839,358 |
|
Total Loans and Leases | | | 53,912,274 | | 52,307,853 | | 51,806,439 | | 49,356,499 | | 47,266,696 |
| | | | | |
Loans Held for Sale | | | 1,660,669 | | 1,881,127 | | 1,528,137 | | 3,245,470 | | 3,011,377 |
| | | | | |
Operating Lease Equipment (a) | | | 657,756 | | 766,762 | | 899,348 | | — | | — |
| | | | | |
Loans and Leases Serviced for Others: | | | | | | | | | | | |
Residential Mortgage (b) | | | 24,115,268 | | 24,494,643 | | 24,379,988 | | 24,990,054 | | 25,848,335 |
Commercial Mortgage (c) | | | 2,146,607 | | 2,084,710 | | 2,017,717 | | 2,008,982 | | 1,990,481 |
Commercial Loans (d) | | | 1,952,943 | | 1,790,257 | | 1,925,655 | | 1,813,106 | | 1,831,119 |
Consumer Loans (e) | | | 831,846 | | 866,156 | | 909,090 | | — | | — |
Consumer Leases (a) | | | — | | — | | — | | 1,127,470 | | 1,309,487 |
|
Total Loans and Leases Serviced for Others | | | 29,046,664 | | 29,235,766 | | 29,232,450 | | 29,939,612 | | 30,979,422 |
|
Total Loans and Leases Serviced | | $ | 85,277,363 | | 84,191,508 | | 83,466,374 | | 82,541,581 | | 81,257,495 |
|
| (a) | Prior to January 1, 2002, Fifth Third sold to and subsequently leased back from an unrelated asset-backed special purpose entity (SPE) certain consumer auto lease assets, subject to credit recourse and with servicing retained. Fifth Third adopted the provisions of FASB Interpretation No. 46 and consolidated this SPE effective July 1, 2003, as Fifth Third was deemed the primary beneficiary under the provisions of this Interpretation. |
| (b) | Fifth Third sells certain residential mortgage loans, primarily conforming and fixed-rate in nature, and retains servicing responsibilities. |
| (c) | Fifth Third sells certain commercial mortgage loans and retains servicing responsibilities. |
| (d) | Fifth Third transfers, subject to credit recourse and with servicing retained, certain investment grade commercial loans to an unconsolidated qualified special purpose entity (QSPE), which is wholly-owned by an independent third party. |
| (e) | Fifth Third sells certain consumer loans that are primarily variable rate in nature and retains servicing responsibilities. |
14
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields (Taxable Equivalent) and Rates
(unaudited) ($ in thousands)
| | | | | | | | | | | | | | |
|
| | | For the Three Months Ended
| |
| | | March 31, 2004 | | | March 31, 2003 | |
|
| | | Average
Balance | | | Average
Yield/Rate | | | Average
Balance | | | Average
Yield/Rate | |
| | |
| |
Assets | | | | | | | | | | | | | | |
Interest-Earning Assets: | | | | | | | | | | | | | | |
Loans and Leases | | $ | 54,688,133 | | | 4.94 | % | | $ | 50,025,863 | | | 5.51 | % |
Taxable Securities | | | 28,854,014 | | | 4.30 | | | | 26,288,030 | | | 4.80 | |
Tax Exempt Securities | | | 995,073 | | | 7.27 | | | | 1,087,189 | | | 7.12 | |
Other Short-Term Investments | | | 230,980 | | | 0.90 | | | | 307,347 | | | 1.02 | |
| |
Total Interest-Earning Assets | | | 84,768,200 | | | 4.74 | | | | 77,708,429 | | | 5.27 | |
Cash and Due from Banks | | | 2,046,104 | | | | | | | 1,557,623 | | | | |
Other Assets | | | 5,827,374 | | | | | | | 4,513,255 | | | | |
Reserve for Credit Losses | | | (772,862 | ) | | | | | | (693,984 | ) | | | |
| |
Total Assets | | $ | 91,868,816 | | | | | | $ | 83,085,323 | | | | |
|
|
Liabilities | | | | | | | | | | | | | | |
Interest-Bearing Liabilities: | | | | | | | | | | | | | | |
Interest Checking | | $ | 19,552,506 | | | 0.75 | % | | $ | 18,202,201 | | | 1.23 | % |
Savings | | | 7,294,261 | | | 0.49 | | | | 8,206,946 | | | 1.04 | |
Money Market | | | 3,149,158 | | | 0.85 | | | | 3,016,020 | | | 1.24 | |
Other Time | | | 6,590,164 | | | 2.69 | | | | 7,830,211 | | | 3.22 | |
Certificates-$100,000 and Over | | | 1,402,805 | | | 1.54 | | | | 2,998,313 | | | 1.67 | |
Foreign Office Deposits | | | 5,935,014 | | | 1.01 | | | | 2,951,443 | | | 1.31 | |
Federal Funds Purchased | | | 7,192,297 | | | 1.00 | | | | 6,240,142 | | | 1.28 | |
Short-Term Bank Notes | | | 500,000 | | | 1.01 | | | | — | | | — | |
Other Short-Term Borrowings | | | 6,836,546 | | | 0.92 | | | | 3,956,517 | | | 1.28 | |
Long-Term Debt | | | 10,293,730 | | | 3.48 | | | | 8,129,514 | | | 4.61 | |
| |
Total Interest-Bearing Liabilities | | | 68,746,481 | | | 1.41 | | | | 61,531,307 | | | 1.94 | |
Demand Deposits | | | 11,401,468 | | | | | | | 9,528,617 | | | | |
Other Liabilities | | | 2,942,311 | | | | | | | 2,774,010 | | | | |
| |
Total Liabilities | | | 83,090,260 | | | | | | | 73,833,934 | | | | |
Minority Interest | | | — | | | | | | | 466,241 | | | | |
Shareholders’ Equity | | | 8,778,556 | | | | | | | 8,785,148 | | | | |
| |
Total Liabilities and Shareholders’ Equity | | $ | 91,868,816 | | | | | | $ | 83,085,323 | | | | |
|
|
Average Common Shares: | | | | | | | | | | | | | | |
Outstanding | | | 563,583,277 | | | | | | | 574,366,138 | | | | |
Diluted | | | 571,612,473 | | | | | | | 582,768,769 | | | | |
|
|
Ratios (percent): | | | | | | | | | | | | | | |
Net Interest Margin (Taxable Equivalent) | | | | | | 3.60 | % | | | | | | 3.74 | % |
Net Interest Rate Spread (Taxable Equivalent) | | | | | | 3.33 | % | | | | | | 3.33 | % |
Interest-Bearing Liabilities to Interest-Earning Assets | | | | | | 81.10 | % | | | | | | 79.18 | % |
|
|
15
FIFTH THIRD BANCORP AND SUBSIDIARIES
Regulatory Capital
(unaudited) ($ in thousands)
| | | | | | | | | | | | | | | | |
| |
| | | March 31,
2004 (a) | | | December 31,
2003 | | | September 30,
2003 | | | June 30, 2003 | | | March 31,
2003 | |
| |
Tier 1 Capital: | | | | | | | | | | | | | | | | |
Shareholders’ Equity | | $ | 8,863,757 | | | 8,667,003 | | | 8,693,805 | | | 8,690,775 | | | 8,798,282 | |
Goodwill and Certain Other Intangibles | | | (892,831 | ) | | (932,622 | ) | | (941,613 | ) | | (950,604 | ) | | (961,680 | ) |
Unrealized (Gains)/Losses | | | (162,103 | ) | | 57,369 | | | (42,829 | ) | | (288,328 | ) | | (348,963 | ) |
Other | | | 487,177 | | | 480,101 | | | 472,519 | | | 556,967 | | | 546,319 | |
| |
Total Tier 1 Capital | | $ | 8,296,000 | | | 8,271,851 | | | 8,181,882 | | | 8,008,810 | | | 8,033,958 | |
|
|
| | | | | |
Total Capital: | | | | | | | | | | | | | | | | |
Tier 1 Capital | | $ | 8,296,000 | | | 8,271,851 | | | 8,181,882 | | | 8,008,810 | | | 8,033,958 | |
Qualifying Reserves for Credit Losses | | | 800,607 | | | 787,143 | | | 788,381 | | | 755,103 | | | 708,122 | |
Qualifying Subordinated Notes | | | 1,030,393 | | | 1,037,333 | | | 1,056,981 | | | 991,441 | | | 491,655 | |
|
|
Total Risk-Based Capital | | $ | 10,127,000 | | | 10,096,327 | | | 10,027,244 | | | 9,755,354 | | | 9,233,735 | |
|
|
| | | | | |
Risk-Weighted Assets | | $ | 77,752,000 | | | 74,724,731 | | | 72,892,618 | | | 69,849,411 | | | 66,737,471 | |
Ratios (percent): | | | | | | | | | | | | | | | | |
Average Shareholders’ Equity to Average Assets | | | 9.56 | % | | 9.61 | | | 9.57 | | | 10.34 | | | 10.57 | |
Risk-Based Capital: | | | | | | | | | | | | | | | | |
Tier 1 Capital | | | 10.67 | % | | 11.07 | | | 11.22 | | | 11.47 | | | 12.04 | |
Total Capital | | | 13.02 | % | | 13.51 | | | 13.76 | | | 13.97 | | | 13.84 | |
Tier 1 Leverage | | | 9.12 | % | | 9.23 | | | 9.21 | | | 9.29 | | | 9.79 | |
|
|
| (a) | March 31, 2004 regulatory capital data and ratios are estimated. |
16
FIFTH THIRD BANCORP AND SUBSIDIARIES
Asset Quality
(unaudited) ($ in thousands)
| | | | | | | | | | | | | | | | |
|
| Summary of Credit Loss Experience | | For the Three Months Ended | |
| | |
|
| | | March 31,
2004 | | | December 31,
2003 | | | September 30,
2003 | | | June 30,
2003 | | | March 31,
2003 | |
|
|
Losses Charged Off: | | | | | | | | | | | | | | | | |
Commercial, Financial and Agricultural Loans | | $ | (31,520 | ) | | (56,936 | ) | | (39,385 | ) | | (29,259 | ) | | (27,140 | ) |
Real Estate - Commercial Mortgage Loans | | | (3,070 | ) | | (1,678 | ) | | (4,622 | ) | | (1,218 | ) | | (1,061 | ) |
Real Estate - Construction Loans | | | (558 | ) | | (898 | ) | | (2,162 | ) | | (410 | ) | | (198 | ) |
Real Estate - Residential Mortgage Loans | | | (4,399 | ) | | (8,562 | ) | | (3,266 | ) | | (3,195 | ) | | (8,806 | ) |
Consumer Loans | | | (39,560 | ) | | (36,828 | ) | | (33,560 | ) | | (31,802 | ) | | (33,266 | ) |
Lease Financing | | | (8,803 | ) | | (8,828 | ) | | (9,364 | ) | | (25,721 | ) | | (12,007 | ) |
|
|
Total Losses | | | (87,910 | ) | | (113,730 | ) | | (92,359 | ) | | (91,605 | ) | | (82,478 | ) |
Recoveries of Losses Previously Charged Off: | | | | | | | | | | | | | | | | |
Commercial, Financial and Agricultural Loans | | | 4,136 | | | 5,355 | | | 4,111 | | | 2,379 | | | 4,489 | |
Real Estate - Commercial Mortgage Loans | | | 928 | | | 597 | | | 390 | | | 418 | | | 686 | |
Real Estate - Construction Loans | | | 19 | | | 44 | | | 231 | | | 33 | | | 176 | |
Real Estate - Residential Mortgage Loans | | | 26 | | | 20 | | | 134 | | | 11 | | | 2 | |
Consumer Loans | | | 9,919 | | | 10,867 | | | 10,037 | | | 8,393 | | | 10,159 | |
Lease Financing | | | 2,054 | | | 1,878 | | | 2,327 | | | 2,896 | | | 2,310 | |
|
|
Total Recoveries | | | 17,082 | | | 18,761 | | | 17,230 | | | 14,130 | | | 17,822 | |
Net Losses Charged Off: | | | | | | | | | | | | | | | | |
Commercial, Financial and Agricultural Loans | | | (27,384 | ) | | (51,581 | ) | | (35,274 | ) | | (26,880 | ) | | (22,651 | ) |
Real Estate - Commercial Mortgage Loans | | | (2,142 | ) | | (1,081 | ) | | (4,232 | ) | | (800 | ) | | (375 | ) |
Real Estate - Construction Loans | | | (539 | ) | | (854 | ) | | (1,931 | ) | | (377 | ) | | (22 | ) |
Real Estate - Residential Mortgage Loans | | | (4,373 | ) | | (8,542 | ) | | (3,132 | ) | | (3,184 | ) | | (8,804 | ) |
Consumer Loans | | | (29,641 | ) | | (25,961 | ) | | (23,523 | ) | | (23,409 | ) | | (23,107 | ) |
Lease Financing | | | (6,749 | ) | | (6,950 | ) | | (7,037 | ) | | (22,825 | ) | | (9,697 | ) |
|
|
Total Net Losses Charged Off | | $ | (70,828 | ) | | (94,969 | ) | | (75,129 | ) | | (77,475 | ) | | (64,656 | ) |
|
|
Reserve for Credit Losses, Beginning | | $ | 770,394 | | | 771,709 | | | 734,756 | | | 703,354 | | | 683,193 | |
Total Net Losses Charged Off | | | (70,828 | ) | | (94,969 | ) | | (75,129 | ) | | (77,475 | ) | | (64,656 | ) |
Provision Charged to Operations | | | 83,240 | | | 93,654 | | | 112,082 | | | 108,877 | | | 84,817 | |
|
|
Reserve for Credit Losses, Ending | | $ | 782,806 | | | 770,394 | | | 771,709 | | | 734,756 | | | 703,354 | |
|
|
| | | | | |
Nonperforming and Underperforming Assets | | | | | | | | | | | | | | | | |
|
|
| | | As of | |
| | |
|
| | | March 31,
2004 | | | December 31,
2003 | | | September 30,
2003 | | | June 30,
2003 | | | March 31,
2003 | |
|
|
Nonaccrual Loans and Leases (a) | | $ | 233,042 | | | 241,505 | | | 271,256 | | | 273,293 | | | 277,452 | |
Renegotiated Loans and Leases | | | 883 | | | 8,286 | | | — | | | — | | | — | |
Other Assets, Including Other Real Estate Owned | | | 74,364 | | | 68,540 | | | 52,053 | | | 33,212 | | | 29,221 | |
|
|
Total Nonperforming Assets | | | 308,289 | | | 318,331 | | | 323,309 | | | 306,505 | | | 306,673 | |
Ninety Days Past Due Loans and Leases (a) | | | 132,300 | | | 145,243 | | | 145,643 | | | 137,503 | | | 134,024 | |
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|
Total Underperforming Assets | | $ | 440,589 | | | 463,574 | | | 468,952 | | | 444,008 | | | 440,697 | |
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|
Average Loans and Leases (b) | | $ | 52,927,264 | | | 52,401,684 | | | 50,615,070 | | | 48,561,158 | | | 47,154,837 | |
Loans and Leases (b) | | | 53,912,274 | | | 52,307,853 | | | 51,806,439 | | | 49,356,499 | | | 47,266,696 | |
Ratios | | | | | | | | | | | | | | | | |
Net Losses Charged Off as a Percent of Average Loans and Leases | | | 0.54 | % | | 0.72 | | | 0.59 | | | 0.64 | | | 0.56 | |
Reserve as a Percent of Loans and Leases | | | 1.45 | % | | 1.47 | | | 1.49 | | | 1.49 | | | 1.49 | |
Nonperforming Assets as a Percent of Loans, Leases and Other Assets, Including Other Real Estate Owned | | | 0.57 | % | | 0.61 | | | 0.62 | | | 0.62 | | | 0.65 | |
Underperforming Assets as a Percent of Loans, Leases and Other Assets, Including Other Real Estate Owned | | | 0.82 | % | | 0.89 | | | 0.90 | | | 0.90 | | | 0.93 | |
| (a) | Nonaccrual includes $23.4 million and Ninety Days Past Due includes $43.7 million of residential mortgage loans as of March 31, 2004. |
| (b) | Excludes loans held for sale. |
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