Exhibit 99.1
| News Release | ||||
CONTACT: | Bradley S. Adams (Analysts) | FOR IMMEDIATE RELEASE | ||
(513) 534-0983 | October 18, 2005 | |||
Debra DeCourcy (Media) | ||||
(513) 534-4153 | ||||
FIFTH THIRD BANCORP REPORTS THIRD QUARTER 2005
EARNINGS OF $ 0.71 PER DILUTED SHARE
Fifth Third Bancorp’s 2005 third quarter earnings per diluted share were $.71 compared to $.83 per diluted share for the same period in 2004. Third quarter net income totaled $395 million compared to $471 million in the same quarter last year. Return on average assets (ROA) and return on average equity (ROE) were 1.51 percent and 16.6 percent, respectively, compared to 1.95 percent and 21.1 percent in 2004’s third quarter. Third quarter earnings and balance sheet comparisons to the prior year are impacted by the previously disclosed first quarter 2005 acquisition of First National Bankshares of Florida, Inc. (First National). Third quarter 2004 earnings were positively impacted by a $27 million decrease in the reserve for credit losses and the corresponding decrease in the provision for loan and lease losses.
“Revenue and net income trends remain below our expectations,” stated George A. Schaefer, Jr., President and CEO of Fifth Third Bancorp. “Deposit growth year to date has not been sufficient to fund loan growth or to prevent further contraction in the net interest margin. This factor mitigated very strong lending results, well behaved credit trends and excellent results from Fifth Third Processing Solutions and our commercial line of business. To improve results, we have aggressively increased deposit rates, despite the negative impact on the third quarter margin, to deliver greater value to new and existing customers. We believe competitive rates combined with enhanced product offerings, like our new identity theft solution, will result in better deposit performance than we have seen through the first nine months of this year. Our goal remains improving our funding mix to more effectively fund future loan growth. We are also carefully reviewing all expense categories given the difficulty of the environment and current revenue trends.”
“The continued flattening of the yield curve provides substantial challenges by limiting investment opportunities and returns. The financial services business periodically faces challenges such as these and I believe long-term performance is determined by how you respond in times of difficulty. Despite short-term pressures, Fifth Third remains committed to our unique affiliate bank model and is focused on a long-term view with an emphasis on returns on invested capital. Today, this means we will continue to make the appropriate de-novo investments to drive profitable growth in each of our markets as the most effective method to deliver returns to our shareholders. We will also continue to maintain appropriate capital levels while working to achieve the benefits of scale that increased automation can deliver.”
“In September, Fifth Third’s Board of Directors increased the quarterly cash dividend on its common shares to $.38 per share, an increase of 19 percent over the $.32 per share declared in September 2004 and a nine percent increase over the $.35 per share declared in June 2005. This quarter’s dividend surpasses our level of current earnings growth but illustrates the importance we place on delivering value to our shareholders and the confidence
we have in returning to better growth and profitability. On behalf of our management team and 23,000 employees, we thank our shareholders for their continued confidence and look forward to delivering better results.”
Noninterest Income
Recent improved performance in certain business line revenue segments continued in the third quarter of 2005. Overall noninterest income, excluding operating lease revenues and securities gains, increased by eight percent over the same quarter last year.
Fifth Third Processing Solutions, our electronic payment processing division, delivered a 23 percent increase in revenues over the same quarter last year and a 15 percent increase on an annualized sequential basis. Third quarter results are representative of continuing strong trends in merchant processing and financial institution volumes and corresponding impacts on processing volumes. Fifth Third continues to see significant opportunities to attract new retailers and financial institution customers.
Deposit service revenues increased 16 percent on an annualized sequential basis due to strong growth in net new consumer deposit account production. Net new consumer deposit account production increased by 17 percent unannualized in the third quarter. Compared to the same quarter last year, deposit service revenues increased by two percent highlighted by five percent growth in retail deposit revenues. Commercial deposit revenues declined modestly compared to the same quarter last year with growth in the number of relationships offset by the impacts of higher interest rates on compensating balances in commercial deposit accounts.
Investment Advisory revenues were essentially unchanged compared to the same quarter last year and decreased by nine percent on an annualized sequential basis from last quarter. The decrease in revenue compared to the second quarter resulted primarily from declines in retail brokerage related revenues. Fifth Third continues to focus its efforts on improving execution in retail brokerage and growing the institutional money management business by improving penetration and cross-sell in our large middle market commercial customer base. Fifth Third Investment Advisors, among the largest money managers in the Midwest, has $33 billion in assets under management and $189 billion in assets under care.
Mortgage net service revenue totaled $45 million in the third quarter compared to $46 million last quarter and $49 million in 2004’s third quarter. Mortgage originations totaled $2.9 billion in the third quarter versus $2.6 billion last quarter and $1.7 billion in the third quarter of last year. Third quarter mortgage banking net service revenue was comprised of $61 million in total mortgage banking fees and loan sales, plus $6 million in amortization and valuation adjustments on mortgage servicing rights and less $22 million of losses and mark-to-market adjustments on both settled and outstanding free-standing derivative financial instruments. The mark-to-market adjustments and settlement of free-standing derivative financial instruments and corresponding valuation adjustments resulted from interest rate volatility and the resulting impact of changing prepayment speeds on the mortgage servicing portfolio. The mortgage servicing asset, net of the valuation reserve, was $408 million at September 30, 2005 on a servicing portfolio of $24.5 billion, compared to $368 million last quarter on a servicing portfolio of $24.5 billion.
Other noninterest income totaled $145 million in the third quarter compared to $156 million last quarter and $137 million in the year ago third quarter. Compared to the same period last year, other noninterest income increased six percent primarily due to strong growth in commercial banking revenues, customer interest rate derivative sales, bank owned life insurance and cardholder fees. The decrease in other noninterest income relative to last quarter is primarily attributable to declines in consumer lending fees and institutional bond sales and underwriting.
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Balance Sheet Trends
Average transaction deposits increased by eight percent over the same quarter last year with good retail and commercial account growth mitigated by certain high balance account attrition and balance migration to higher cost deposit products. Compared to the same quarter last year, average core deposit balances increased $5.9 billion, or 12 percent, highlighted by 11 percent growth in average demand deposits, 28 percent growth in average savings and money market deposits and 34 percent growth in consumer time deposits. These results were mitigated by a $1.1 billion decrease, or five percent, in average interest checking deposits from the same quarter last year. Deposit comparisons to prior year periods are impacted by the first quarter 2005 acquisition of First National. Exclusive of the impact of this transaction, average transaction account balances increased by three percent over the same quarter last year and average core deposits increased five percent over the same quarter last year; comparisons being provided to supplement an understanding of the fundamental deposit trends. Compared to the second quarter of this year, average transaction account balances were essentially unchanged despite 20 percent unannualized growth in the number of consumer deposit accounts opened during the third quarter. Average core deposits increased by three percent on an annualized basis, highlighted by 33 percent annualized growth in money market deposits and 21 percent annualized growth in consumer time deposits.
Loan and lease balances exhibited continued strength across Fifth Third’s footprint with period end loans and leases increasing by a very strong $2.5 billion from last quarter, or 15 percent on an annualized sequential basis. On an average basis, total loans and leases, including held for sale, increased by 19 percent over the same quarter last year and by 11 percent on an annualized sequential basis. Period end commercial loan and lease balances increased by 23 percent over the same quarter last year and by $1.0 billion, or 11 percent on an annualized sequential basis. Period end consumer loan and lease balances, excluding residential mortgage, increased by 14 percent over the same quarter last year and by $1.1 billion, or 20 percent on an annualized sequential basis. Loan and lease comparisons to prior year periods are impacted by the addition of approximately $3.9 billion in total loans in conjunction with the acquisition of First National. Exclusive of the impact of this transaction, period end commercial loan and lease balances increased 13 percent and period end consumer loan and lease balances, excluding residential mortgage, increased 12 percent over last year; comparisons being provided to supplement an understanding of fundamental lending trends.
Fifth Third repurchased approximately 2.3 million common shares in the third quarter of 2005. As of September 30, 2005, the remaining authority under the plan authorized by the Board of Directors in January of 2005 is 17.8 million shares. All counterparty purchase activity associated with the previously announced overnight accelerated share repurchase transaction, providing for the repurchase of 35.5 million common shares, was completed in the third quarter of 2005.
Net Interest Income
Net interest income on a fully taxable equivalent basis decreased three percent over the same quarter last year and seven percent on an annualized basis from last quarter. Third quarter margin compression largely resulted from aggressive increases in deposit pricing combined with lower than expected growth in balances. Fifth Third remains optimistic that core deposit trends will improve in the fourth quarter from year-to-date 2005 run rates and that recent aggressive pricing and marketing initiatives will improve the funding mix, more effectively fund future loan growth and improve net interest margin trends.
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Compared to the third quarter of 2004, net interest income on a fully taxable equivalent basis decreased three percent despite five percent growth in average earning assets due to a 26 basis point (bp) decline in the net interest margin. Margin, net interest income and earning asset trends and comparisons to prior year periods are impacted by the first quarter 2005 acquisition of First National, including a modestly negative impact to net interest income from purchase accounting loan and deposit net amortization, common stock repurchase activity and the impact of sales and cash flows in the reduction of the available-for-sale securities portfolio. Including balance sheet initiatives undertaken in the fourth quarter of 2004, available-for-sale securities have declined by $9 billion, or 29 percent, from the same quarter last year.
Compared to the second quarter of 2005, net interest income on a fully taxable equivalent basis decreased by $13 million, or seven percent annualized, due to modest growth in average earning assets and 13 bp of contraction in the net interest margin. Margin contraction resulted from decreases in the net interest rate spread associated with continued mix shifts within the deposit base to higher cost time deposits, increases in rates paid across deposit captions and the continued flattening of the yield curve. Third quarter earning asset growth was muted by efforts to reduce the risks associated with increasing interest rates given weaker than anticipated core deposit growth trends. This included the maintenance of strong capital levels through reductions in the available-for-sale securities portfolio totaling $908 million on an average basis and $2.1 billion on a period end basis from second quarter levels.
Credit Quality
Credit quality metrics and trends remained stable at historically low levels in the third quarter. Net charge-offs as a percentage of average loans and leases were 38 bp in the third quarter, compared to 34 bp last quarter and 40 bp in the third quarter of 2004. Nonperforming assets were 51 bp of total loans and leases and other real estate owned at September 30, 2005, compared to 51 bp last quarter and 48 bp posted in the year ago third quarter. Overall, the level of nonperforming loans and net charge-offs remains a small percentage of the total loan and lease portfolio. Net charge-offs were $64 million in the third quarter, compared to $57 million in the same quarter last year and $55 million in the second quarter of 2005. The provision for loan and lease losses totaled $69 million in the third quarter compared to $26 million in the same quarter last year and $60 million in the second quarter of 2005. The allowance for loan and lease losses represents 1.06 percent of total loans and leases outstanding as of September 30, 2005, compared to 1.09 percent last quarter and 1.23 percent in the same quarter last year. Comparisons to the level of prior year allowance for loan and lease losses are impacted by the first quarter 2005 acquisition of First National. The loan and lease assets of First National were recorded on Fifth Third’s balance sheet at their respective fair values as of January 1, 2005. Estimated credit impairment was included in this determination of fair value; therefore, the previously existing allowance for loan and lease losses did not carryover to the allowance for loan and lease losses on Fifth Third’s balance sheet.
Noninterest Expense
Total noninterest expense moderated considerably from recent trends and increased by $4 million from the second quarter of 2005. Increases in marketing, information technology and bankcard volume related costs were mitigated by reductions in total personnel related expenditures. Fifth Third expects growth in noninterest expenses in future quarters to stabilize around current levels with management focus in light of current revenue trends. Cost savings initiatives will be somewhat mitigated by continued growth in the sales force, occupancy and information technology to improve efficiency, provide greater convenience to our customers and drive
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deposit and loan growth. Compared to the same quarter last year, total noninterest expense increased by $84 million, or 13 percent, due to the first quarter 2005 acquisition of First National, increased information technology expenditures and significant investments in the sales force and retail distribution network. Fifth Third’s third quarter efficiency ratio was 53.5 percent, compared to 52.2 percent last quarter and 47.0 percent in the third quarter of last year.
Conference Call
Fifth Third will host a conference call to discuss these third quarter financial results at 8:30 a.m. (Eastern 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 for approximately seven days by dialing 800-642-1687 for domestic access and 706-645-9291 for international access (passcode: 1380709#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $104.6 billion in assets, operates 19 affiliates with 1,106 full-service Banking Centers, including 125 Bank Mart® locations open seven days a week inside select grocery stores and 1,996 Jeanie® ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia and Pennsylvania. The financial strength of Fifth Third’s Ohio and Michigan 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 among 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 press release may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined with acquired entities 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 the financial condition, results of operations, plans, objectives, future performance and business of the Bancorp and/or the combined company 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 the Bancorp, one or more acquired entities and/or the combined company do business, are less 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 the Bancorp, one or more acquired entities and/or the combined company or the businesses in which the Bancorp, one or more acquired entities and/or the combined company are engaged; (8) difficulties in combining the operations of acquired entities and (9) the impact of reputational risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity. The Bancorp undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this press release.
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FIFTH THIRD BANCORP AND SUBSIDIARIES Quarterly Financial Review for September 30, 2005 Table of Contents
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FIFTH THIRD BANCORP AND SUBSIDIARIES
Financial Highlights
$ in millions, except per share data
(unaudited)
| For the Three Months Ended | % Change | Year to Date | % Change | ||||||||||||||||||||||||||
| September 2005 | June 2005 | September 2004 | Yr/Yr | Seq | September 2005 | September 2004 | Yr/Yr | ||||||||||||||||||||||
Income Statement Data | |||||||||||||||||||||||||||||
Net interest income (a) | $ | 745 | $ | 758 | $ | 766 | (3 | )% | (2 | )% | $ | 2,262 | $ | 2,296 | (1 | )% | |||||||||||||
Noninterest income | 622 | 635 | 611 | 2 | % | (2 | )% | 1,864 | 1,986 | (6 | )% | ||||||||||||||||||
Total revenue (a) | 1,367 | 1,393 | 1,377 | (1 | )% | (2 | )% | 4,126 | 4,282 | (4 | )% | ||||||||||||||||||
Provision for loan and lease losses | 69 | 60 | 26 | 165 | % | 15 | % | 197 | 203 | (3 | )% | ||||||||||||||||||
Noninterest expense | 732 | 728 | 648 | 13 | % | 1 | % | 2,164 | 2,038 | 6 | % | ||||||||||||||||||
Net income | 395 | 417 | 471 | (16 | )% | (5 | )% | 1,217 | 1,349 | (10 | )% | ||||||||||||||||||
Common Share Data | |||||||||||||||||||||||||||||
Earnings per share, basic | $ | 0.71 | $ | 0.75 | $ | 0.84 | (15 | )% | (5 | )% | $ | 2.19 | $ | 2.40 | (9 | )% | |||||||||||||
Earnings per share, diluted | 0.71 | 0.75 | 0.83 | (14 | )% | (5 | )% | 2.18 | 2.37 | (8 | )% | ||||||||||||||||||
Cash dividends per common share | 0.38 | 0.35 | 0.32 | 19 | % | 9 | % | 1.08 | 0.96 | 13 | % | ||||||||||||||||||
Book value per share | 16.93 | 16.82 | 16.11 | 5 | % | 1 | % | 16.93 | 16.11 | 5 | % | ||||||||||||||||||
Dividend payout ratio | 53.5 | % | 46.7 | % | 38.6 | % | 39 | % | 15 | % | 49.5 | % | 40.5 | % | 22 | % | |||||||||||||
Market price per share: | |||||||||||||||||||||||||||||
High | $ | 43.99 | $ | 44.67 | $ | 54.07 | (19 | )% | (2 | )% | $ | 48.12 | $ | 60.00 | (20 | )% | |||||||||||||
Low | 36.38 | 40.24 | 46.59 | (22 | )% | (10 | )% | 36.38 | 46.59 | (22 | )% | ||||||||||||||||||
End of period | 36.75 | 41.17 | 49.22 | (25 | )% | (11 | )% | 36.75 | 49.22 | (25 | )% | ||||||||||||||||||
Common shares outstanding (in thousands) | 554,400 | 555,938 | 561,113 | (1 | )% | - | 554,400 | 561,113 | (1 | )% | |||||||||||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||||||||||||||||
Basic | 553,855 | 553,872 | 560,335 | (1 | )% | - | 554,687 | 561,627 | (1 | )% | |||||||||||||||||||
Diluted | 557,681 | 558,176 | 566,543 | (2 | )% | - | 559,158 | 568,948 | (2 | )% | |||||||||||||||||||
Market capitalization | $ | 20,374 | $ | 22,888 | $ | 27,618 | (26 | )% | (11 | )% | $ | 20,374 | $ | 27,618 | (26 | )% | |||||||||||||
Price/earnings ratio (b) | 14.76 | 15.77 | 15.68 | (6 | )% | (6 | )% | 14.76 | 15.68 | (6 | )% | ||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||
Return on average assets | 1.51 | % | 1.63 | % | 1.95 | % | (23 | )% | (7 | )% | 1.59 | % | 1.91 | % | (17 | )% | |||||||||||||
Return on average equity | 16.6 | % | 18.1 | % | 21.1 | % | (21 | )% | (8 | )% | 17.6 | % | 20.6 | % | (15 | )% | |||||||||||||
Noninterest income as a percent of total revenue | 46 | % | 46 | % | 44 | % | 5 | % | - | 45 | % | 46 | % | (2 | )% | ||||||||||||||
Average equity as a percent of average assets | 9.11 | % | 8.98 | % | 9.21 | % | (1 | )% | 1 | % | 9.04 | % | 9.28 | % | (3 | )% | |||||||||||||
Net interest margin (a) | 3.16 | % | 3.29 | % | 3.42 | % | (8 | )% | (4 | )% | 3.27 | % | 3.52 | % | (7 | )% | |||||||||||||
Efficiency (a) | 53.5 | % | 52.2 | % | 47.0 | % | 14 | % | 2 | % | 52.4 | % | 47.6 | % | 10 | % | |||||||||||||
Effective tax rate | 29.2 | % | 30.1 | % | 32.1 | % | (9 | )% | (3 | )% | 30.1 | % | 33.0 | % | (9 | )% | |||||||||||||
Credit Quality | |||||||||||||||||||||||||||||
Net losses charged off | $ | 65 | $ | 55 | $ | 57 | 14 | % | 18 | % | $ | 183 | $ | 186 | (2 | )% | |||||||||||||
Net losses charged off as a percent of average loans and leases | 0.38 | % | 0.34 | % | 0.40 | % | (5 | )% | 12 | % | 0.37 | % | 0.45 | % | (18 | )% | |||||||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.06 | % | 1.09 | % | 1.23 | % | (14 | )% | (3 | )% | 1.06 | % | 1.23 | % | (14 | )% | |||||||||||||
Allowance for credit losses as a percent of loans and leases | 1.16 | % | 1.20 | % | 1.35 | % | (14 | )% | (3 | )% | 1.16 | % | 1.35 | % | (14 | )% | |||||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.51 | % | 0.51 | % | 0.48 | % | 6 | % | - | 0.51 | % | 0.48 | % | 6 | % | ||||||||||||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74 | % | 0.71 | % | 0.72 | % | 3 | % | 4 | % | 0.74 | % | 0.72 | % | 3 | % | |||||||||||||
Average Balances | |||||||||||||||||||||||||||||
Loans and leases, including held for sale | $ | 68,556 | $ | 66,762 | $ | 57,679 | 19 | % | 3 | % | $ | 66,812 | $ | 56,236 | 19 | % | |||||||||||||
Total securities and other short-term investments | 24,915 | 25,716 | 31,413 | (21 | )% | (3 | )% | 25,578 | 30,891 | (17 | )% | ||||||||||||||||||
Total assets | 103,699 | 102,765 | 96,212 | 8 | % | 1 | % | 102,501 | 94,169 | 9 | % | ||||||||||||||||||
Demand deposits | 13,977 | 13,905 | 12,537 | 11 | % | 1 | % | 13,791 | 12,065 | 14 | % | ||||||||||||||||||
Interest-bearing deposits | 50,403 | 49,858 | 43,637 | 16 | % | 1 | % | 50,010 | 43,581 | 15 | % | ||||||||||||||||||
Short-term borrowings | 9,620 | 9,372 | 13,274 | (28 | )% | 3 | % | 9,622 | 14,322 | (33 | )% | ||||||||||||||||||
Long-term debt | 16,914 | 17,049 | 15,055 | 12 | % | (1 | )% | 16,528 | 12,564 | 32 | % | ||||||||||||||||||
Shareholders’ equity | 9,451 | 9,224 | 8,861 | 7 | % | 2 | % | 9,262 | 8,736 | 6 | % | ||||||||||||||||||
Regulatory Capital Ratios (c) | |||||||||||||||||||||||||||||
Tier 1 capital | 8.62 | % | 8.48 | % | 10.73 | % | (20 | )% | 2 | % | 8.62 | % | 10.73 | % | (20 | )% | |||||||||||||
Total risk-based capital | 10.79 | % | 10.80 | % | 12.81 | % | (16 | )% | - | 10.79 | % | 12.81 | % | (16 | )% | ||||||||||||||
Tier 1 leverage | 7.93 | % | 7.76 | % | 9.13 | % | (13 | )% | 2 | % | 7.93 | % | 9.13 | % | (13 | )% | |||||||||||||
Operations | |||||||||||||||||||||||||||||
Banking centers | 1,106 | 1,098 | 1,005 | 10 | % | 1 | % | 1,106 | 1,005 | 10 | % | ||||||||||||||||||
ATMs | 1,996 | 1,994 | 1,872 | 7 | % | - | 1,996 | 1,872 | 7 | % | |||||||||||||||||||
Full-time equivalent employees | 21,674 | 21,594 | 19,061 | 14 | % | - | 21,674 | 19,061 | 14 | % | |||||||||||||||||||
(a) Presented on a fully taxable equivalent basis
(b) Based on the most recent twelve-month diluted earnings per share and end of period stock prices
(c) Current period regulatory capital ratios are estimates
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FIFTH THIRD BANCORP AND SUBSIDIARIES
Financial Highlights
$ in millions, except per share data
(unaudited)
| For the Three Months Ended | ||||||||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | ||||||||||||||||
Income Statement Data | ||||||||||||||||||||
Net interest income (a) | $ | 745 | $ | 758 | $ | 759 | $ | 752 | $ | 766 | ||||||||||
Noninterest income | 622 | 635 | 607 | 479 | 611 | |||||||||||||||
Total revenue (a) | 1,367 | 1,393 | 1,366 | 1,231 | 1,377 | |||||||||||||||
Provision for loan and lease losses | 69 | 60 | 67 | 65 | 26 | |||||||||||||||
Noninterest expense | 732 | 728 | 705 | 935 | 648 | |||||||||||||||
Net income | 395 | 417 | 405 | 176 | 471 | |||||||||||||||
Common Share Data | ||||||||||||||||||||
Earnings per share, basic | $ | 0.71 | $ | 0.75 | $ | 0.73 | $ | 0.31 | $ | 0.84 | ||||||||||
Earnings per share, diluted | 0.71 | 0.75 | 0.72 | 0.31 | 0.83 | |||||||||||||||
Cash dividends per common share | 0.38 | 0.35 | 0.35 | 0.35 | 0.32 | |||||||||||||||
Book value per share | 16.93 | 16.82 | 16.04 | 16.00 | 16.11 | |||||||||||||||
Dividend payout ratio | 53.5 | % | 46.7 | % | 48.6 | % | 112.9 | % | 38.6 | % | ||||||||||
Market price per share: | ||||||||||||||||||||
High | $ | 43.99 | $ | 44.67 | $ | 48.12 | $ | 52.34 | $ | 54.07 | ||||||||||
Low | 36.38 | 40.24 | 42.05 | 45.32 | 46.59 | |||||||||||||||
End of period | 36.75 | 41.17 | 42.98 | 47.30 | 49.22 | |||||||||||||||
Common shares outstanding (in thousands) | 554,400 | 555,938 | 554,055 | 557,649 | 561,113 | |||||||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||
Basic | 553,855 | 553,872 | 556,362 | 560,162 | 560,335 | |||||||||||||||
Diluted | 557,681 | 558,176 | 561,659 | 566,108 | 566,543 | |||||||||||||||
Market capitalization | $ | 20,374 | $ | 22,888 | $ | 23,813 | $ | 26,377 | $ | 27,618 | ||||||||||
Price/earnings ratio (b) | 14.76 | 15.77 | 16.22 | 17.65 | 15.68 | |||||||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.51 | % | 1.63 | % | 1.62 | % | 0.72 | % | 1.95 | % | ||||||||||
Return on average equity | 16.6 | % | 18.1 | % | 18.0 | % | 7.6 | % | 21.1 | % | ||||||||||
Noninterest income as a percent of total revenue | 46 | % | 46 | % | 44 | % | 39 | % | 44 | % | ||||||||||
Average equity as a percent of average assets | 9.11 | % | 8.98 | % | 9.02 | % | 9.51 | % | 9.21 | % | ||||||||||
Net interest margin (a) | 3.16 | % | 3.29 | % | 3.38 | % | 3.35 | % | 3.42 | % | ||||||||||
Efficiency (a) | 53.5 | % | 52.2 | % | 51.6 | % | 76.0 | % | 47.0 | % | ||||||||||
Effective tax rate | 29.2 | % | 30.1 | % | 30.9 | % | 20.9 | % | 32.1 | % | ||||||||||
Credit Quality | ||||||||||||||||||||
Net losses charged off | $ | 65 | $ | 55 | $ | 63 | $ | 65 | $ | 57 | ||||||||||
Net losses charged off as a percent of average loans and leases | 0.38 | % | 0.34 | % | 0.40 | % | 0.44 | % | 0.40 | % | ||||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.06 | % | 1.09 | % | 1.11 | % | 1.19 | % | 1.23 | % | ||||||||||
Allowance for credit losses as a percent of loans and leases | 1.16 | % | 1.20 | % | 1.21 | % | 1.31 | % | 1.35 | % | ||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.51 | % | 0.51 | % | 0.53 | % | 0.51 | % | 0.48 | % | ||||||||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74 | % | 0.71 | % | 0.73 | % | 0.74 | % | 0.72 | % | ||||||||||
Average Balances | ||||||||||||||||||||
Loans and leases, including held for sale | $ | 68,556 | $ | 66,762 | $ | 65,076 | $ | 59,440 | $ | 57,679 | ||||||||||
Total securities and other short-term investments | 24,915 | 25,716 | 26,119 | 29,725 | 31,413 | |||||||||||||||
Total assets | 103,699 | 102,765 | 101,009 | 97,062 | 96,212 | |||||||||||||||
Demand deposits | 13,977 | 13,905 | 13,484 | 13,107 | 12,537 | |||||||||||||||
Interest-bearing deposits | 50,403 | 49,858 | 49,763 | 44,879 | 43,637 | |||||||||||||||
Short-term borrowings | 9,620 | 9,372 | 9,878 | 11,208 | 13,274 | |||||||||||||||
Long-term debt | 16,914 | 17,049 | 15,604 | 15,585 | 15,055 | |||||||||||||||
Shareholders’ equity | 9,451 | 9,224 | 9,108 | 9,229 | 8,861 | |||||||||||||||
Regulatory Capital Ratios (c) | ||||||||||||||||||||
Tier 1 capital | 8.62 | % | 8.48 | % | 8.40 | % | 10.31 | % | 10.73 | % | ||||||||||
Total risk-based capital | 10.79 | % | 10.80 | % | 10.78 | % | 12.31 | % | 12.81 | % | ||||||||||
Tier 1 leverage | 7.93 | % | 7.76 | % | 7.62 | % | 8.89 | % | 9.13 | % | ||||||||||
Operations | ||||||||||||||||||||
Banking centers | 1,106 | 1,098 | 1,092 | 1,011 | 1,005 | |||||||||||||||
ATMs | 1,996 | 1,994 | 1,988 | 1,898 | 1,872 | |||||||||||||||
Full-time equivalent employees | 21,674 | 21,594 | 21,287 | 19,659 | 19,061 | |||||||||||||||
(a) Presented on a fully taxable equivalent basis
(b) Based on the most recent twelve-month diluted earnings per share and end of period stock prices
(c) Current period regulatory capital ratios are estimates
8
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
$ in millions
(unaudited)
| For the Three Months Ended | % Change | Year to Date | % Change | |||||||||||||||||||||
| September 2005 | June 2005 | September 2004 | Yr/Yr | Seq | September 2005 | September 2004 | Yr/Yr | |||||||||||||||||
Interest Income | ||||||||||||||||||||||||
Interest and fees on loans and leases | $ | 1,017 | $ | 936 | $ | 721 | 41 | % | 9 | % | $ | 2,821 | $ | 2,072 | 36 | % | ||||||||
Interest on securities: | ||||||||||||||||||||||||
Taxable | 255 | 268 | 310 | (18 | )% | (5 | )% | 789 | 925 | (15 | )% | |||||||||||||
Exempt from income taxes | 10 | 10 | 11 | (9 | )% | - | 30 | 34 | (12 | )% | ||||||||||||||
Total interest on securities | 265 | 278 | 321 | (17 | )% | (5 | )% | 819 | 959 | (15 | )% | |||||||||||||
Interest on other short-term investments | 1 | 1 | 1 | - | - | 3 | 2 | 50 | % | |||||||||||||||
Total interest income | 1,283 | 1,215 | 1,043 | 23 | % | 6 | % | 3,643 | 3,033 | 20 | % | |||||||||||||
Interest Expense | ||||||||||||||||||||||||
Interest on deposits: | ||||||||||||||||||||||||
Interest checking | 86 | 71 | 47 | 83 | % | 21 | % | 220 | 118 | 86 | % | |||||||||||||
Savings | 48 | 35 | 16 | 200 | % | 37 | % | 109 | 36 | 203 | % | |||||||||||||
Money market | 37 | 28 | 10 | 270 | % | 32 | % | 90 | 23 | 291 | % | |||||||||||||
Other time | 68 | 61 | 39 | 74 | % | 11 | % | 182 | 117 | 56 | % | |||||||||||||
Certificates - $100,000 and over | 34 | 29 | 15 | 127 | % | 17 | % | 89 | 35 | 154 | % | |||||||||||||
Foreign office | 34 | 29 | 12 | 183 | % | 17 | % | 89 | 39 | 128 | % | |||||||||||||
Total interest on deposits | 307 | 253 | 139 | 121 | % | 21 | % | 779 | 368 | 112 | % | |||||||||||||
Interest on federal funds purchased | 35 | 29 | 17 | 106 | % | 21 | % | 89 | 52 | 71 | % | |||||||||||||
Interest on short-term bank notes | - | 2 | 5 | (100 | )% | (100 | )% | 6 | 9 | (33 | )% | |||||||||||||
Interest on other short-term borrowings | 41 | 34 | 23 | 78 | % | 21 | % | 102 | 56 | 82 | % | |||||||||||||
Interest on long-term debt | 163 | 147 | 102 | 60 | % | 11 | % | 429 | 279 | 54 | % | |||||||||||||
Total interest expense | 546 | 465 | 286 | 91 | % | 17 | % | 1,405 | 764 | 84 | % | |||||||||||||
Net Interest Income | 737 | 750 | 757 | (3 | )% | (2 | )% | 2,238 | 2,269 | (1 | )% | |||||||||||||
Provision for loan and lease losses | 69 | 60 | 26 | 165 | % | 15 | % | 197 | 203 | (3 | )% | |||||||||||||
Net interest income after provision for loan and lease losses | 668 | 690 | 731 | (9 | )% | (3 | )% | 2,041 | 2,066 | (1 | )% | |||||||||||||
Noninterest Income | ||||||||||||||||||||||||
Electronic payment processing revenue | 187 | 180 | 152 | 23 | % | 4 | % | 535 | 449 | 19 | % | |||||||||||||
Service charges on deposits | 137 | 132 | 134 | 2 | % | 4 | % | 390 | 389 | - | ||||||||||||||
Mortgage banking net revenue | 45 | 46 | 49 | (8 | )% | (2 | )% | 132 | 154 | (14 | )% | |||||||||||||
Investment advisory revenue | 89 | 91 | 88 | 1 | % | (2 | )% | 269 | 278 | (3 | )% | |||||||||||||
Other noninterest income | 145 | 156 | 137 | 6 | % | (7 | )% | 454 | 545 | (17 | )% | |||||||||||||
Operating lease revenue | 11 | 15 | 35 | (69 | )% | (27 | )% | 46 | 129 | (64 | )% | |||||||||||||
Securities gains (losses), net | 8 | 15 | 16 | (50 | )% | (47 | )% | 38 | 42 | (10 | )% | |||||||||||||
Total noninterest income | 622 | 635 | 611 | 2 | % | (2 | )% | 1,864 | 1,986 | (6 | )% | |||||||||||||
Noninterest Expense | ||||||||||||||||||||||||
Salaries, wages and incentives | 285 | 295 | 252 | 13 | % | (3 | )% | 846 | 752 | 13 | % | |||||||||||||
Employee benefits | 70 | 67 | 64 | 9 | % | 4 | % | 218 | 205 | 6 | % | |||||||||||||
Equipment expense | 26 | 25 | 22 | 18 | % | 4 | % | 76 | 61 | 25 | % | |||||||||||||
Net occupancy expense | 54 | 54 | 45 | 20 | % | - | 162 | 137 | 18 | % | ||||||||||||||
Operating lease expense | 8 | 10 | 24 | (67 | )% | (20 | )% | 34 | 94 | (64 | )% | |||||||||||||
Other noninterest expense | 289 | 277 | 241 | 20 | % | 4 | % | 828 | 789 | 5 | % | |||||||||||||
Total noninterest expense | 732 | 728 | 648 | 13 | % | 1 | % | 2,164 | 2,038 | 6 | % | |||||||||||||
Income before income taxes | 558 | 597 | 694 | (20 | )% | (7 | )% | 1,741 | 2,014 | (14 | )% | |||||||||||||
Applicable income taxes | 163 | 180 | 223 | (27 | )% | (9 | )% | 524 | 665 | (21 | )% | |||||||||||||
Net income | $ | 395 | $ | 417 | $ | 471 | (16 | )% | (5 | )% | $ | 1,217 | $ | 1,349 | (10 | )% | ||||||||
Net income available to common shareholders (a) | $ | 395 | $ | 417 | $ | 471 | (16 | )% | (5 | )% | $ | 1,217 | $ | 1,348 | (10 | )% | ||||||||
(a) Dividends on preferred stock are $.185 million for all quarters presented and $.555 for all year to date periods presented
9
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Statements of Income (Taxable Equivalent)
$ in millions
(unaudited)
| For the Three Months Ended | ||||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | ||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans and leases | $ | 1,017 | $ | 936 | $ | 867 | $ | 775 | $ | 721 | ||||||
Interest on securities: | ||||||||||||||||
Taxable | 255 | 268 | 267 | 293 | 310 | |||||||||||
Exempt from income taxes | 10 | 10 | 10 | 11 | 11 | |||||||||||
Total interest on securities | 265 | 278 | 277 | 304 | 321 | |||||||||||
Interest on other short-term investments | 1 | 1 | 1 | 2 | 1 | |||||||||||
Total interest income | 1,283 | 1,215 | 1,145 | 1,081 | 1,043 | |||||||||||
Taxable equivalent adjustment | 8 | 8 | 8 | 9 | 9 | |||||||||||
Total interest income (taxable equivalent) | 1,291 | 1,223 | 1,153 | 1,090 | 1,052 | |||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits: | ||||||||||||||||
Interest checking | 86 | 71 | 63 | 56 | 47 | |||||||||||
Savings | 48 | 35 | 27 | 21 | 16 | |||||||||||
Money market | 37 | 28 | 25 | 16 | 10 | |||||||||||
Other time | 68 | 61 | 52 | 45 | 39 | |||||||||||
Certificates - $100,000 and over | 34 | 29 | 25 | 13 | 15 | |||||||||||
Foreign office | 34 | 29 | 27 | 20 | 12 | |||||||||||
Total interest on deposits | 307 | 253 | 219 | 171 | 139 | |||||||||||
Interest on federal funds purchased | 35 | 29 | 25 | 24 | 17 | |||||||||||
Interest on short-term bank notes | - | 2 | 5 | 6 | 5 | |||||||||||
Interest on other short-term borrowings | 41 | 34 | 27 | 22 | 23 | |||||||||||
Interest on long-term debt | 163 | 147 | 118 | 115 | 102 | |||||||||||
Total interest expense | 546 | 465 | 394 | 338 | 286 | |||||||||||
Net interest income (taxable equivalent) | 745 | 758 | 759 | 752 | 766 | |||||||||||
Provision for loan and lease losses | 69 | 60 | 67 | 65 | 26 | |||||||||||
Net interest income (taxable equivalent) after provision for loan and lease losses | 676 | 698 | 692 | 687 | 740 | |||||||||||
Noninterest Income | ||||||||||||||||
Electronic payment processing revenue | 187 | 180 | 168 | 173 | 152 | |||||||||||
Service charges on deposits | 137 | 132 | 121 | 126 | 134 | |||||||||||
Mortgage banking net revenue | 45 | 46 | 41 | 24 | 49 | |||||||||||
Investment advisory revenue | 89 | 91 | 90 | 82 | 88 | |||||||||||
Other noninterest income | 145 | 156 | 153 | 125 | 137 | |||||||||||
Operating lease revenue | 11 | 15 | 20 | 27 | 35 | |||||||||||
Securities gains (losses), net | 8 | 15 | 14 | (78 | ) | 16 | ||||||||||
Total noninterest income | 622 | 635 | 607 | 479 | 611 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries, wages and incentives | 285 | 295 | 265 | 266 | 252 | |||||||||||
Employee benefits | 70 | 67 | 82 | 56 | 64 | |||||||||||
Equipment expense | 26 | 25 | 25 | 23 | 22 | |||||||||||
Net occupancy expense | 54 | 54 | 54 | 48 | 45 | |||||||||||
Operating lease expense | 8 | 10 | 15 | 20 | 24 | |||||||||||
Other noninterest expense | 289 | 277 | 264 | 522 | 241 | |||||||||||
Total noninterest expense | 732 | 728 | 705 | 935 | 648 | |||||||||||
Income before income taxes (taxable equivalent) | 566 | 605 | 594 | 231 | 703 | |||||||||||
Taxable equivalent adjustment | 8 | 8 | 8 | 9 | 9 | |||||||||||
Income before income taxes | 558 | 597 | 586 | 222 | 694 | |||||||||||
Applicable income taxes | 163 | 180 | 181 | 46 | 223 | |||||||||||
Net income | $ | 395 | $ | 417 | $ | 405 | $ | 176 | $ | 471 | ||||||
Net income available to common shareholders (a) | $ | 395 | $ | 417 | $ | 404 | $ | 176 | $ | 471 | ||||||
(a) Dividends on preferred stock are $.185 million for all quarters presented
10
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
| As of | % Change | |||||||||||||||||
| September 2005 | June 2005 | September 2004 | Yr/Yr | Annual Seq | ||||||||||||||
Assets | ||||||||||||||||||
Cash and due from banks | $ | 3,372 | $ | 2,781 | $ | 2,313 | 46 | % | 84 | % | ||||||||
Available-for-sale securities (a) | 22,537 | 24,647 | 31,557 | (29 | )% | (34 | )% | |||||||||||
Held-to-maturity securities (b) | 332 | 307 | 254 | 31 | % | 32 | % | |||||||||||
Trading securities | 105 | 84 | 81 | 30 | % | 99 | % | |||||||||||
Other short-term investments | 113 | 113 | 384 | (71 | )% | - | ||||||||||||
Loans held for sale | 1,237 | 783 | 452 | 174 | % | 230 | % | |||||||||||
Portfolio loans and leases: | ||||||||||||||||||
Commercial loans | 18,591 | 18,013 | 15,259 | 22 | % | 13 | % | |||||||||||
Construction loans | 6,529 | 6,201 | 4,448 | 47 | % | 21 | % | |||||||||||
Commercial mortgage loans | 9,138 | 9,091 | 7,644 | 20 | % | 2 | % | |||||||||||
Commercial lease financing | 4,731 | 4,639 | 4,558 | 4 | % | 8 | % | |||||||||||
Residential mortgage loans | 7,353 | 7,042 | 6,481 | 13 | % | 18 | % | |||||||||||
Consumer loans | 21,786 | 20,610 | 18,638 | 17 | % | 23 | % | |||||||||||
Consumer lease financing | 1,910 | 1,994 | 2,460 | (22 | )% | (17 | )% | |||||||||||
Unearned income | (1,284 | ) | (1,294 | ) | (1,452 | ) | (12 | )% | (3 | )% | ||||||||
Portfolio loans and leases | 68,754 | 66,296 | 58,036 | 18 | % | 15 | % | |||||||||||
Allowance for loan and lease losses | (727 | ) | (722 | ) | (713 | ) | 2 | % | 3 | % | ||||||||
Portfolio loans and leases, net | 68,027 | 65,574 | 57,323 | 19 | % | 15 | % | |||||||||||
Bank premises and equipment | 1,643 | 1,581 | 1,233 | 33 | % | 16 | % | |||||||||||
Operating lease equipment | 159 | 161 | 394 | (60 | )% | (5 | )% | |||||||||||
Accrued interest receivable | 482 | 451 | 416 | 16 | % | 27 | % | |||||||||||
Goodwill | 2,176 | 2,178 | 980 | 122 | % | - | ||||||||||||
Intangible assets | 220 | 231 | 157 | 40 | % | (19 | )% | |||||||||||
Servicing rights | 417 | 378 | 349 | 19 | % | 41 | % | |||||||||||
Other assets | 3,788 | 3,891 | 2,472 | 53 | % | (11 | )% | |||||||||||
Total assets | $ | 104,608 | $ | 103,160 | $ | 98,365 | 6 | % | 6 | % | ||||||||
Liabilities | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Demand | $ | 14,294 | $ | 14,393 | $ | 12,886 | 11 | % | (3 | )% | ||||||||
Interest checking | 18,169 | 18,811 | 19,362 | (6 | )% | (14 | )% | |||||||||||
Savings | 10,437 | 9,653 | 8,307 | 26 | % | 32 | % | |||||||||||
Money market | 5,855 | 4,732 | 4,264 | 37 | % | 94 | % | |||||||||||
Other time | 8,867 | 8,513 | 6,569 | 35 | % | 16 | % | |||||||||||
Certificates - $100,000 and over | 4,195 | 3,986 | 2,092 | 101 | % | 21 | % | |||||||||||
Foreign office | 3,678 | 3,089 | 3,380 | 9 | % | 76 | % | |||||||||||
Total deposits | 65,495 | 63,177 | 56,860 | 15 | % | 15 | % | |||||||||||
Federal funds purchased | 3,548 | 4,523 | 5,368 | (34 | )% | (86 | )% | |||||||||||
Short-term bank notes | - | - | 1,275 | (100 | )% | NM | ||||||||||||
Other short-term borrowings | 6,075 | 4,972 | 7,330 | (17 | )% | 88 | % | |||||||||||
Accrued taxes, interest and expenses | 2,136 | 2,456 | 2,199 | (3 | )% | (52 | )% | |||||||||||
Other liabilities | 1,447 | 1,185 | 1,165 | 24 | % | 88 | % | |||||||||||
Long-term debt | 16,522 | 17,494 | 15,128 | 9 | % | (22 | )% | |||||||||||
Total liabilities | 95,223 | 93,807 | 89,325 | 7 | % | 6 | % | |||||||||||
Total shareholders’ equity (c) | 9,385 | 9,353 | 9,040 | 4 | % | 1 | % | |||||||||||
Total liabilities and shareholders’ equity | $ | 104,608 | $ | 103,160 | $ | 98,365 | 6 | % | 6 | % | ||||||||
(a) Amortized cost | $ | 22,993 | $ | 24,814 | $ | 31,751 | (28 | )% | (29 | )% | ||||||||
(b) Market values | 332 | 307 | 254 | 31 | % | 32 | % | |||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | ||||||||||||||||||
Authorized | 1,300,000 | 1,300,000 | 1,300,000 | - | - | |||||||||||||
Outstanding, excluding treasury | 554,400 | 555,938 | 561,113 | (1 | )% | (1 | )% | |||||||||||
Treasury | 29,027 | 27,489 | 22,339 | 30 | % | 22 | % | |||||||||||
11
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
| As of | ||||||||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | $ | 3,372 | $ | 2,781 | $ | 2,420 | $ | 2,561 | $ | 2,313 | ||||||||||
Available-for-sale securities (a) | 22,537 | 24,647 | 25,101 | 24,687 | 31,557 | |||||||||||||||
Held-to-maturity securities (b) | 332 | 307 | 303 | 255 | 254 | |||||||||||||||
Trading securities | 105 | 84 | 128 | 77 | 81 | |||||||||||||||
Other short-term investments | 113 | 113 | 1,213 | 532 | 384 | |||||||||||||||
Loans held for sale | 1,237 | 783 | 809 | 559 | 452 | |||||||||||||||
Portfolio loans and leases: | ||||||||||||||||||||
Commercial loans | 18,591 | 18,013 | 17,500 | 16,058 | 15,259 | |||||||||||||||
Construction loans | 6,529 | 6,201 | 5,922 | 4,726 | 4,448 | |||||||||||||||
Commercial mortgage loans | 9,138 | 9,091 | 9,048 | 7,636 | 7,644 | |||||||||||||||
Commercial lease financing | 4,731 | 4,639 | 4,533 | 4,634 | 4,558 | |||||||||||||||
Residential mortgage loans | 7,353 | 7,042 | 7,416 | 6,988 | 6,481 | |||||||||||||||
Consumer loans | 21,786 | 20,610 | 19,698 | 18,923 | 18,638 | |||||||||||||||
Consumer lease financing | 1,910 | 1,994 | 2,099 | 2,273 | 2,460 | |||||||||||||||
Unearned income | (1,284 | ) | (1,294 | ) | (1,314 | ) | (1,430 | ) | (1,452 | ) | ||||||||||
Portfolio loans and leases | 68,754 | 66,296 | 64,902 | 59,808 | 58,036 | |||||||||||||||
Allowance for loan and lease losses | (727 | ) | (722 | ) | (717 | ) | (713 | ) | (713 | ) | ||||||||||
Portfolio loans and leases, net | 68,027 | 65,574 | 64,185 | 59,095 | 57,323 | |||||||||||||||
Bank premises and equipment | 1,643 | 1,581 | 1,529 | 1,315 | 1,233 | |||||||||||||||
Operating lease equipment | 159 | 161 | 224 | 304 | 394 | |||||||||||||||
Accrued interest receivable | 482 | 451 | 438 | 397 | 416 | |||||||||||||||
Goodwill | 2,176 | 2,178 | 2,167 | 979 | 980 | |||||||||||||||
Intangible assets | 220 | 231 | 243 | 150 | 157 | |||||||||||||||
Servicing rights | 417 | 378 | 378 | 352 | �� | 349 | ||||||||||||||
Other assets | 3,788 | 3,891 | 3,575 | 3,193 | 2,472 | |||||||||||||||
Total assets | $ | 104,608 | $ | 103,160 | $ | 102,713 | $ | 94,456 | $ | 98,365 | ||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Demand | $ | 14,294 | $ | 14,393 | $ | 13,960 | $ | 13,486 | $ | 12,886 | ||||||||||
Interest checking | 18,169 | 18,811 | 19,722 | 19,481 | 19,362 | |||||||||||||||
Savings | 10,437 | 9,653 | 9,711 | 8,310 | 8,307 | |||||||||||||||
Money market | 5,855 | 4,732 | 4,777 | 4,321 | 4,264 | |||||||||||||||
Other time | 8,867 | 8,513 | 8,017 | 6,837 | 6,569 | |||||||||||||||
Certificates - $100,000 and over | 4,195 | 3,986 | 3,867 | 2,121 | 2,092 | |||||||||||||||
Foreign office | 3,678 | 3,089 | 5,257 | 3,670 | 3,380 | |||||||||||||||
Total deposits | 65,495 | 63,177 | 65,311 | 58,226 | 56,860 | |||||||||||||||
Federal funds purchased | 3,548 | 4,523 | 2,669 | 4,714 | 5,368 | |||||||||||||||
Short-term bank notes | - | - | 775 | 775 | 1,275 | |||||||||||||||
Other short-term borrowings | 6,075 | 4,972 | 4,925 | 4,537 | 7,330 | |||||||||||||||
Accrued taxes, interest and expenses | 2,136 | 2,456 | 2,273 | 2,216 | 2,199 | |||||||||||||||
Other liabilities | 1,447 | 1,185 | 1,551 | 1,081 | 1,165 | |||||||||||||||
Long-term debt | 16,522 | 17,494 | 16,321 | 13,983 | 15,128 | |||||||||||||||
Total liabilities | 95,223 | 93,807 | 93,825 | 85,532 | 89,325 | |||||||||||||||
Total shareholders’ equity (c) | 9,385 | 9,353 | 8,888 | 8,924 | 9,040 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 104,608 | $ | 103,160 | $ | 102,713 | $ | 94,456 | $ | 98,365 | ||||||||||
(a) Amortized cost | $ | 22,993 | $ | 24,814 | $ | 25,558 | $ | 24,801 | $ | 31,751 | ||||||||||
(b) Market values | 332 | 307 | 303 | 255 | 254 | |||||||||||||||
(c) Common shares, stated value $2.22 per share | ||||||||||||||||||||
Authorized | 1,300,000 | 1,300,000 | 1,300,000 | 1,300,000 | 1,300,000 | |||||||||||||||
Outstanding, excluding treasury | 554,400 | 555,938 | 554,055 | 557,649 | 561,113 | |||||||||||||||
Treasury | 29,027 | 27,489 | 29,372 | 25,803 | 22,339 | |||||||||||||||
12
FIFTH THIRD BANCORP AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
$ in millions
(unaudited)
| For the Three Months Ended | Year to Date | |||||||||||||||
| September 2005 | September 2004 | September 2005 | September 2004 | |||||||||||||
Total shareholders’ equity, beginning | $ | 9,353 | $ | 8,393 | $ | 8,924 | $ | 8,667 | ||||||||
Net income | 395 | 471 | 1,217 | 1,349 | ||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Change in unrealized gains and (losses): | ||||||||||||||||
Available-for-sale securities | (189 | ) | 313 | (224 | ) | (77 | ) | |||||||||
Qualifying cash flow hedges | 7 | 25 | 16 | (19 | ) | |||||||||||
Change in additional pension liability | - | (2 | ) | 60 | (2 | ) | ||||||||||
Comprehensive income | 213 | 807 | 1,069 | 1,251 | ||||||||||||
Cash dividends declared: | ||||||||||||||||
Common stock | (210 | ) | (180 | ) | (599 | ) | (539 | ) | ||||||||
Preferred stock (a) | - | - | (1 | ) | (1 | ) | ||||||||||
Stock-based awards exercised, including treasury shares issued | 15 | 14 | 55 | 78 | ||||||||||||
Stock-based compensation expense | 16 | 21 | 53 | 63 | ||||||||||||
Loans repaid (issued) related to exercise of stock-based awards, net | 3 | - | 8 | (2 | ) | |||||||||||
Change in corporate tax benefit related to stock-based compensation | - | 7 | 15 | 10 | ||||||||||||
Shares acquired for treasury | (3 | ) | (20 | ) | (1,648 | ) | (804 | ) | ||||||||
Shares issued in business combination | - | - | 1,509 | 317 | ||||||||||||
Other | (2 | ) | (2 | ) | - | - | ||||||||||
Total shareholders’ equity, ending | $ | 9,385 | $ | 9,040 | $ | 9,385 | $ | 9,040 | ||||||||
(a) Dividends on preferred stock are $.185 million for all quarters presented and $.555 for all year to date periods
presented
13
FIFTH THIRD BANCORP AND SUBSIDIARIES
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
| For the Three Months Ended | % Change | |||||||||||||||||
| September 2005 | June 2005 | September 2004 | Yr/Yr | Annual Seq | ||||||||||||||
Assets | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans and leases | $ | 68,556 | $ | 66,762 | $ | 57,679 | 19 | % | 11 | % | ||||||||
Taxable securities | 24,013 | 24,771 | 30,241 | (21 | )% | (12 | )% | |||||||||||
Tax exempt securities | 787 | 815 | 890 | (12 | )% | (14 | )% | |||||||||||
Other short-term investments | 115 | 130 | 282 | (59 | )% | (46 | )% | |||||||||||
Total interest-earning assets | 93,471 | 92,478 | 89,092 | 5 | % | 4 | % | |||||||||||
Cash and due from banks | 2,742 | 2,822 | 2,265 | 21 | % | (11 | )% | |||||||||||
Other assets | 8,207 | 8,182 | 5,603 | 46 | % | 1 | % | |||||||||||
Allowance for loan and lease losses | (721 | ) | (717 | ) | (748 | ) | (4 | )% | 2 | % | ||||||||
Total assets | $ | 103,699 | $ | 102,765 | $ | 96,212 | 8 | % | 4 | % | ||||||||
Liabilities | ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest checking | $ | 18,498 | $ | 19,267 | $ | 19,570 | (5 | )% | (16 | )% | ||||||||
Savings | 9,939 | 9,697 | 8,212 | 21 | % | 10 | % | |||||||||||
Money market | 5,154 | 4,755 | 3,542 | 46 | % | 33 | % | |||||||||||
Other time | 8,730 | 8,286 | 6,539 | 34 | % | 21 | % | |||||||||||
Certificates - $100,000 and over | 4,156 | 3,946 | 2,459 | 69 | % | 21 | % | |||||||||||
Foreign office | 3,925 | 3,907 | 3,315 | 18 | % | 2 | % | |||||||||||
Federal funds purchased | 4,001 | 3,952 | 4,847 | (17 | )% | 5 | % | |||||||||||
Short-term bank notes | - | 230 | 1,275 | (100 | )% | (100 | )% | |||||||||||
Other short-term borrowings | 5,619 | 5,190 | 7,152 | (21 | )% | 33 | % | |||||||||||
Long-term debt | 16,914 | 17,049 | 15,055 | 12 | % | (3 | )% | |||||||||||
Total interest-bearing liabilities | 76,936 | 76,279 | 71,966 | 7 | % | 3 | % | |||||||||||
Demand deposits | 13,977 | 13,905 | 12,537 | 11 | % | 2 | % | |||||||||||
Other liabilities | 3,335 | 3,357 | 2,848 | 17 | % | (3 | )% | |||||||||||
Total liabilities | 94,248 | 93,541 | 87,351 | 8 | % | 3 | % | |||||||||||
Shareholders’ equity | 9,451 | 9,224 | 8,861 | 7 | % | 10 | % | |||||||||||
Total liabilities and shareholders’ equity | $ | 103,699 | $ | 102,765 | $ | 96,212 | 8 | % | 4 | % | ||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||
Basic | 553,855 | 553,872 | 560,335 | (1 | )% | - | ||||||||||||
Diluted | 557,681 | 558,176 | 566,543 | (2 | )% | - | ||||||||||||
Yield Analysis | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Loans and leases | 5.90 | % | 5.64 | % | 4.99 | % | ||||||||||||
Taxable securities | 4.22 | % | 4.33 | % | 4.08 | % | ||||||||||||
Tax exempt securities | 7.42 | % | 7.29 | % | 7.56 | % | ||||||||||||
Other short-term investments | 3.49 | % | 3.28 | % | 1.51 | % | ||||||||||||
Total interest-earning assets | 5.48 | % | 5.30 | % | 4.70 | % | ||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest checking | 1.84 | % | 1.49 | % | 0.94 | % | ||||||||||||
Savings | 1.90 | % | 1.44 | % | 0.76 | % | ||||||||||||
Money market | 2.82 | % | 2.37 | % | 1.11 | % | ||||||||||||
Other time | 3.14 | % | 2.93 | % | 2.40 | % | ||||||||||||
Certificates-$100,000 and over | 3.28 | % | 2.92 | % | 2.40 | % | ||||||||||||
Foreign office | 3.41 | % | 2.98 | % | 1.45 | % | ||||||||||||
Federal funds purchased | 3.50 | % | 2.97 | % | 1.42 | % | ||||||||||||
Short-term bank notes | - | 2.84 | % | 1.46 | % | |||||||||||||
Other short-term borrowings | 2.92 | % | 2.63 | % | 1.27 | % | ||||||||||||
Long-term debt | 3.80 | % | 3.46 | % | 2.71 | % | ||||||||||||
Total interest-bearing liabilities | 2.82 | % | 2.44 | % | 1.58 | % | ||||||||||||
Ratios: | ||||||||||||||||||
Net interest margin (taxable equivalent) | 3.16 | % | 3.29 | % | 3.42 | % | ||||||||||||
Net interest rate spread (taxable equivalent) | 2.66 | % | 2.86 | % | 3.12 | % | ||||||||||||
Interest-bearing liabilities to interest-earning assets | 82.31 | % | 82.48 | % | 80.77 | % | ||||||||||||
14
FIFTH THIRD BANCORP AND SUBSIDIARIES
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
| Year to Date | % Change | ||||||||||
| September 2005 | September 2004 | Yr/Yr | |||||||||
Assets | |||||||||||
Interest-earning assets: | |||||||||||
Loans and leases | $ | 66,812 | $ | 56,236 | 19 | % | |||||
Taxable securities | 24,569 | 29,696 | (17 | )% | |||||||
Tax exempt securities | 819 | 935 | (12 | )% | |||||||
Other short-term investments | 190 | 260 | (27 | )% | |||||||
Total interest-earning assets | 92,390 | 87,127 | 6 | % | |||||||
Cash and due from banks | 2,728 | 2,140 | 27 | % | |||||||
Other assets | 8,101 | 5,625 | 44 | % | |||||||
Allowance for loan and lease losses | (718 | ) | (723 | ) | (1 | )% | |||||
Total assets | $ | 102,501 | $ | 94,169 | 9 | % | |||||
Liabilities | |||||||||||
Interest-bearing liabilities: | |||||||||||
Interest checking | $ | 19,240 | $ | 19,464 | (1 | )% | |||||
Savings | 9,660 | 7,771 | 24 | % | |||||||
Money market | 4,900 | 3,220 | 52 | % | |||||||
Other time | 8,271 | 6,049 | 37 | % | |||||||
Certificates - $100,000 and over | 3,883 | 2,502 | 55 | % | |||||||
Foreign office | 4,056 | 4,575 | (11 | )% | |||||||
Federal funds purchased | 4,040 | 6,238 | (35 | )% | |||||||
Short-term bank notes | 332 | 941 | (65 | )% | |||||||
Other short-term borrowings | 5,250 | 7,143 | (27 | )% | |||||||
Long-term debt | 16,528 | 12,564 | 32 | % | |||||||
Total interest-bearing liabilities | 76,160 | 70,467 | 8 | % | |||||||
Demand deposits | 13,791 | 12,065 | 14 | % | |||||||
Other liabilities | 3,288 | 2,901 | 13 | % | |||||||
Total liabilities | 93,239 | 85,433 | 9 | % | |||||||
Shareholders’ equity | 9,262 | 8,736 | 6 | % | |||||||
Total liabilities and shareholders’ equity | $ | 102,501 | $ | 94,169 | 9 | % | |||||
Average common shares outstanding (in thousands): | |||||||||||
Basic | 554,687 | 561,627 | (1 | )% | |||||||
Diluted | 559,158 | 568,948 | (2 | )% | |||||||
Yield Analysis | |||||||||||
Interest-earning assets: | |||||||||||
Loans and leases | 5.66 | % | 4.94 | % | |||||||
Taxable securities | 4.30 | % | 4.16 | % | |||||||
Tax exempt securities | 7.35 | % | 7.47 | % | |||||||
Other short-term investments | 2.35 | % | 1.15 | % | |||||||
Total interest-earning assets | 5.31 | % | 4.69 | % | |||||||
Interest-bearing liabilities: | |||||||||||
Interest checking | 1.53 | % | 0.81 | % | |||||||
Savings | 1.51 | % | 0.62 | % | |||||||
Money market | 2.46 | % | 0.94 | % | |||||||
Other time | 2.94 | % | 2.59 | % | |||||||
Certificates - $100,000 and over | 3.05 | % | 1.88 | % | |||||||
Foreign office | 2.94 | % | 1.12 | % | |||||||
Federal funds purchased | 2.96 | % | 1.12 | % | |||||||
Short-term bank notes | 2.60 | % | 1.24 | % | |||||||
Other short-term borrowings | 2.60 | % | 1.02 | % | |||||||
Long-term debt | 3.47 | % | 2.98 | % | |||||||
Total interest-bearing liabilities | 2.47 | % | 1.45 | % | |||||||
Ratios: | |||||||||||
Net interest margin (taxable equivalent) | 3.27 | % | 3.52 | % | |||||||
Net interest rate spread (taxable equivalent) | 2.84 | % | 3.24 | % | |||||||
Interest-bearing liabilities to interest-earning assets | 82.43 | % | 80.88 | % | |||||||
15
FIFTH THIRD BANCORP AND SUBSIDIARIES
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
| For the Three Months Ended | ||||||||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | ||||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans and leases | $ | 68,556 | $ | 66,762 | $ | 65,076 | $ | 59,440 | $ | 57,679 | ||||||||||
Taxable securities | 24,013 | 24,771 | 24,935 | 28,379 | 30,241 | |||||||||||||||
Tax exempt securities | 787 | 815 | 856 | 866 | 890 | |||||||||||||||
Other short-term investments | 115 | 130 | 328 | 480 | 282 | |||||||||||||||
Total interest-earning assets | 93,471 | 92,478 | 91,195 | 89,165 | 89,092 | |||||||||||||||
Cash and due from banks | 2,742 | 2,822 | 2,619 | 2,445 | 2,265 | |||||||||||||||
Other assets | 8,207 | 8,182 | 7,909 | 6,171 | 5,603 | |||||||||||||||
Allowance for loan and lease losses | (721 | ) | (717 | ) | (714 | ) | (719 | ) | (748 | ) | ||||||||||
Total assets | $ | 103,699 | $ | 102,765 | $ | 101,009 | $ | 97,062 | $ | 96,212 | ||||||||||
Liabilities | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest checking | $ | 18,498 | $ | 19,267 | $ | 19,972 | $ | 19,345 | $ | 19,570 | ||||||||||
Savings | 9,939 | 9,697 | 9,339 | 8,447 | 8,212 | |||||||||||||||
Money market | 5,154 | 4,755 | 4,786 | 4,227 | 3,542 | |||||||||||||||
Other time | 8,730 | 8,286 | 7,787 | 6,681 | 6,539 | |||||||||||||||
Certificates - $100,000 and over | 4,156 | 3,946 | 3,539 | 2,106 | 2,459 | |||||||||||||||
Foreign office | 3,925 | 3,907 | 4,340 | 4,073 | 3,315 | |||||||||||||||
Federal funds purchased | 4,001 | 3,952 | 4,170 | 4,880 | 4,847 | |||||||||||||||
Short-term bank notes | - | 230 | 775 | 1,188 | 1,275 | |||||||||||||||
Other short-term borrowings | 5,619 | 5,190 | 4,933 | 5,140 | 7,152 | |||||||||||||||
Long-term debt | 16,914 | 17,049 | 15,604 | 15,585 | 15,055 | |||||||||||||||
Total interest-bearing liabilities | 76,936 | 76,279 | 75,245 | 71,672 | 71,966 | |||||||||||||||
Demand deposits | 13,977 | 13,905 | 13,484 | 13,107 | 12,537 | |||||||||||||||
Other liabilities | 3,335 | 3,357 | 3,172 | 3,054 | 2,848 | |||||||||||||||
Total liabilities | 94,248 | 93,541 | 91,901 | 87,833 | 87,351 | |||||||||||||||
Shareholders’ equity | 9,451 | 9,224 | 9,108 | 9,229 | 8,861 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 103,699 | $ | 102,765 | $ | 101,009 | $ | 97,062 | $ | 96,212 | ||||||||||
Average common shares outstanding (in thousands): | ||||||||||||||||||||
Basic | 553,855 | 553,872 | 556,362 | 560,162 | 560,335 | |||||||||||||||
Diluted | 557,681 | 558,176 | 561,659 | 566,108 | 566,543 | |||||||||||||||
Yield Analysis | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans and leases | 5.90 | % | 5.64 | % | 5.42 | % | 5.20 | % | 4.99 | % | ||||||||||
Taxable securities | 4.22 | % | 4.33 | % | 4.34 | % | 4.11 | % | 4.08 | % | ||||||||||
Tax exempt securities | 7.42 | % | 7.29 | % | 7.36 | % | 7.37 | % | 7.56 | % | ||||||||||
Other short-term investments | 3.49 | % | 3.28 | % | 1.56 | % | 2.00 | % | 1.51 | % | ||||||||||
Total interest-earning assets | 5.48 | % | 5.30 | % | 5.13 | % | 4.86 | % | 4.70 | % | ||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest checking | 1.84 | % | 1.49 | % | 1.27 | % | 1.14 | % | 0.94 | % | ||||||||||
Savings | 1.90 | % | 1.44 | % | 1.15 | % | 1.01 | % | 0.76 | % | ||||||||||
Money market | 2.82 | % | 2.37 | % | 2.14 | % | 1.53 | % | 1.11 | % | ||||||||||
Other time | 3.14 | % | 2.93 | % | 2.72 | % | 2.71 | % | 2.40 | % | ||||||||||
Certificates - $100,000 and over | 3.28 | % | 2.92 | % | 2.92 | % | 2.41 | % | 2.40 | % | ||||||||||
Foreign office | 3.41 | % | 2.98 | % | 2.48 | % | 1.94 | % | 1.45 | % | ||||||||||
Federal funds purchased | 3.50 | % | 2.97 | % | 2.41 | % | 1.98 | % | 1.42 | % | ||||||||||
Short-term bank notes | - | 2.84 | % | 2.53 | % | 1.97 | % | 1.46 | % | |||||||||||
Other short-term borrowings | 2.92 | % | 2.63 | % | 2.18 | % | 1.64 | % | 1.27 | % | ||||||||||
Long-term debt | 3.80 | % | 3.46 | % | 3.10 | % | 2.93 | % | 2.71 | % | ||||||||||
Total interest-bearing liabilities | 2.82 | % | 2.44 | % | 2.12 | % | 1.87 | % | 1.58 | % | ||||||||||
Ratios: | ||||||||||||||||||||
Net interest margin (taxable equivalent) | 3.16 | % | 3.29 | % | 3.38 | % | 3.35 | % | 3.42 | % | ||||||||||
Net interest rate spread (taxable equivalent) | 2.66 | % | 2.86 | % | 3.01 | % | 2.99 | % | 3.12 | % | ||||||||||
Interest-bearing liabilities to interest-earning assets | 82.31 | % | 82.48 | % | 82.51 | % | 80.38 | % | 80.77 | % | ||||||||||
16
FIFTH THIRD BANCORP AND SUBSIDIARIES
Summary of Loans and Leases
$ in millions
(unaudited)
| For the Three Months Ended | |||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | |||||||||||
Average Loans and Leases | |||||||||||||||
Commercial: | |||||||||||||||
Commercial loans | $ | 18,203 | $ | 17,768 | $ | 18,073 | $ | 15,565 | $ | 15,068 | |||||
Commercial mortgage | 9,095 | 9,042 | 8,385 | 7,617 | 7,582 | ||||||||||
Commercial construction | 5,700 | 5,467 | 4,870 | 4,247 | 3,963 | ||||||||||
Commercial leases | 3,537 | 3,436 | 3,393 | 3,333 | 3,300 | ||||||||||
Subtotal - commercial | 36,535 | 35,713 | 34,721 | 30,762 | 29,913 | ||||||||||
Consumer: | |||||||||||||||
Consumer mortgage | 8,271 | 8,453 | 8,417 | 7,346 | 6,631 | ||||||||||
Consumer construction | 624 | 576 | 468 | 378 | 352 | ||||||||||
Credit card | 778 | 755 | 830 | 827 | 797 | ||||||||||
Home equity | 11,702 | 11,325 | 10,929 | 10,414 | 10,060 | ||||||||||
Other consumer loans | 8,868 | 8,089 | 7,732 | 7,581 | 7,647 | ||||||||||
Consumer leases | 1,778 | 1,851 | 1,979 | 2,132 | 2,279 | ||||||||||
Subtotal - consumer | 32,021 | 31,049 | 30,355 | 28,678 | 27,766 | ||||||||||
Total average loans and leases | $ | 68,556 | $ | 66,762 | $ | 65,076 | $ | 59,440 | $ | 57,679 | |||||
End of Period Loans and Leases Serviced | |||||||||||||||
Commercial: | |||||||||||||||
Commercial loans | $ | 18,591 | $ | 18,013 | $ | 17,500 | $ | 16,058 | $ | 15,259 | |||||
Commercial mortgage | 9,138 | 9,091 | 9,048 | 7,636 | 7,644 | ||||||||||
Commercial construction | 5,880 | 5,590 | 5,365 | 4,348 | 4,077 | ||||||||||
Commercial leases | 3,619 | 3,527 | 3,416 | 3,426 | 3,357 | ||||||||||
Subtotal - commercial | 37,228 | 36,221 | 35,329 | 31,468 | 30,337 | ||||||||||
Consumer: | |||||||||||||||
Consumer mortgage | 7,353 | 7,042 | 7,416 | 6,988 | 6,481 | ||||||||||
Consumer construction | 649 | 611 | 557 | 378 | 371 | ||||||||||
Credit card | 805 | 749 | 790 | 843 | 809 | ||||||||||
Home equity | 11,766 | 11,521 | 11,085 | 10,508 | 10,243 | ||||||||||
Other consumer loans | 9,215 | 8,340 | 7,824 | 7,572 | 7,586 | ||||||||||
Consumer leases | 1,738 | 1,812 | 1,901 | 2,051 | 2,209 | ||||||||||
Subtotal - consumer | 31,526 | 30,075 | 29,573 | 28,340 | 27,699 | ||||||||||
Total portfolio loans and leases | 68,754 | 66,296 | 64,902 | 59,808 | 58,036 | ||||||||||
Loans held for sale | 1,237 | 783 | 809 | 559 | 452 | ||||||||||
Operating lease equipment | 159 | 161 | 224 | 304 | 394 | ||||||||||
Loans and Leases Serviced for Others: | |||||||||||||||
Residential mortgage (a) | 24,525 | 24,497 | 23,341 | 23,026 | 23,458 | ||||||||||
Commercial mortgage (b) | 2,095 | 2,067 | 2,043 | 2,045 | 2,091 | ||||||||||
Commercial loans (c) | 2,528 | 2,346 | 2,351 | 1,941 | 2,033 | ||||||||||
Commercial leases (b) | 240 | 269 | 271 | 323 | 220 | ||||||||||
Consumer loans (d) | 972 | 1,089 | 1,192 | 1,298 | 1,407 | ||||||||||
Total loans and leases serviced for others | 30,360 | 30,268 | 29,198 | 28,633 | 29,209 | ||||||||||
Total loans and leases serviced | $ | 100,510 | $ | 97,508 | $ | 95,133 | $ | 89,304 | $ | 88,091 | |||||
| (a) | Fifth Third sells certain residential mortgage loans, primarily conforming and fixed-rate in nature and retains servicing responsibilities |
| (b) | Fifth Third sells certain commercial mortgage loans and commercial leases and retains servicing responsibilities |
| (c) | Fifth Third transfers, subject to credit recourse and with servicing retained, certain investment grade commercial loans to an unconsolidated qualified special purpose entity, which is wholly-owned by an independent third party |
| (d) | Fifth Third sells certain consumer loans and retains servicing responsibilities |
17
FIFTH THIRD BANCORP AND SUBSIDIARIES
Regulatory Capital (a)
$ in millions
(unaudited)
| As of | ||||||||||||||||||||
| September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | ||||||||||||||||
Tier 1 capital: | ||||||||||||||||||||
Shareholders’ equity | $ | 9,385 | $ | 9,353 | $ | 8,888 | $ | 8,924 | $ | 9,040 | ||||||||||
Goodwill and certain other intangibles | (2,396 | ) | (2,409 | ) | (2,410 | ) | (1,129 | ) | (1,137 | ) | ||||||||||
Unrealized (gains) losses | 310 | 127 | 314 | 101 | 146 | |||||||||||||||
Other | 724 | 712 | 717 | 626 | 617 | |||||||||||||||
Total tier 1 capital | $ | 8,023 | $ | 7,783 | $ | 7,509 | $ | 8,522 | $ | 8,666 | ||||||||||
Total risk-based capital: | ||||||||||||||||||||
Tier 1 capital | $ | 8,023 | $ | 7,783 | $ | 7,509 | $ | 8,522 | $ | 8,666 | ||||||||||
Qualifying allowance for credit losses | 823 | 819 | 809 | 806 | 806 | |||||||||||||||
Qualifying subordinated notes | 1,193 | 1,312 | 1,316 | 848 | 868 | |||||||||||||||
Total risk-based capital | $ | 10,039 | $ | 9,914 | $ | 9,634 | $ | 10,176 | $ | 10,340 | ||||||||||
Risk-weighted assets | $ | 93,074 | $ | 91,791 | $ | 89,401 | $ | 82,633 | $ | 80,749 | ||||||||||
Ratios: | ||||||||||||||||||||
Average shareholders’ equity to average assets | 9.11 | % | 8.98 | % | 9.02 | % | 9.51 | % | 9.21 | % | ||||||||||
Regulatory capital: | ||||||||||||||||||||
Tier 1 capital | 8.62 | % | 8.48 | % | 8.40 | % | 10.31 | % | 10.73 | % | ||||||||||
Total risk-based capital | 10.79 | % | 10.80 | % | 10.78 | % | 12.31 | % | 12.81 | % | ||||||||||
Tier 1 leverage | 7.93 | % | 7.76 | % | 7.62 | % | 8.89 | % | 9.13 | % | ||||||||||
(a) Current period regulatory capital data and ratios are estimated
18
FIFTH THIRD BANCORP AND SUBSIDIARIES
Asset Quality
$ in millions
(unaudited)
| For the Three Months Ended | ||||||||||||||||||||
| Summary of Credit Loss Experience | September 2005 | June 2005 | March 2005 | December 2004 | September 2004 | |||||||||||||||
Losses charged off: | ||||||||||||||||||||
Commercial, financial and agricultural loans | $ | (24 | ) | $ | (24 | ) | $ | (16 | ) | $ | (19 | ) | $ | (24 | ) | |||||
Real estate - commercial mortgage loans | (5 | ) | (3 | ) | (2 | ) | (7 | ) | (1 | ) | ||||||||||
Real estate - construction loans | (1 | ) | - | (1 | ) | (3 | ) | - | ||||||||||||
Real estate - residential mortgage | (3 | ) | (5 | ) | (5 | ) | (4 | ) | (3 | ) | ||||||||||
Consumer loans | (41 | ) | (40 | ) | (42 | ) | (42 | ) | (37 | ) | ||||||||||
Commercial lease financing | (1 | ) | - | (8 | ) | (3 | ) | (1 | ) | |||||||||||
Consumer lease financing | (4 | ) | (4 | ) | (6 | ) | (6 | ) | (6 | ) | ||||||||||
Total losses | (79 | ) | (76 | ) | (80 | ) | (84 | ) | (72 | ) | ||||||||||
Recoveries of losses previously charged off: | ||||||||||||||||||||
Commercial, financial and agricultural loans | 5 | 6 | 3 | 4 | 3 | |||||||||||||||
Real estate - commercial mortgage loans | - | 1 | 1 | 1 | 1 | |||||||||||||||
Real estate - construction loans | - | - | 1 | - | - | |||||||||||||||
Real estate - residential mortgage | - | - | - | - | - | |||||||||||||||
Consumer loans | 9 | 12 | 11 | 12 | 9 | |||||||||||||||
Commercial lease financing | - | 1 | - | - | - | |||||||||||||||
Consumer lease financing | 1 | 1 | 1 | 2 | 2 | |||||||||||||||
Total recoveries | 15 | 21 | 17 | 19 | 15 | |||||||||||||||
Net losses charged off: | ||||||||||||||||||||
Commercial, financial and agricultural loans | (19 | ) | (18 | ) | (13 | ) | (15 | ) | (21 | ) | ||||||||||
Real estate - commercial mortgage loans | (5 | ) | (2 | ) | (1 | ) | (6 | ) | - | |||||||||||
Real estate - construction loans | (1 | ) | - | - | (3 | ) | - | |||||||||||||
Real estate - residential mortgage | (3 | ) | (5 | ) | (5 | ) | (4 | ) | (3 | ) | ||||||||||
Consumer loans | (32 | ) | (28 | ) | (31 | ) | (30 | ) | (28 | ) | ||||||||||
Commercial lease financing | (1 | ) | 1 | (8 | ) | (3 | ) | (1 | ) | |||||||||||
Consumer lease financing | (3 | ) | (3 | ) | (5 | ) | (4 | ) | (4 | ) | ||||||||||
Total net losses charged off | $ | (64 | ) | $ | (55 | ) | $ | (63 | ) | $ | (65 | ) | $ | (57 | ) | |||||
Allowance for loan and lease losses, beginning | $ | 722 | $ | 717 | $ | 713 | $ | 713 | $ | 744 | ||||||||||
Total net losses charged off | (64 | ) | (55 | ) | (63 | ) | (65 | ) | (57 | ) | ||||||||||
Provision for loan and lease losses | 69 | 60 | 67 | 65 | 26 | |||||||||||||||
Allowance for loan and lease losses, ending | $ | 727 | $ | 722 | $ | 717 | $ | 713 | $ | 713 | ||||||||||
Reserve for unfunded commitments, beginning | $ | 71 | $ | 67 | $ | 72 | $ | 72 | $ | 68 | ||||||||||
Provision for unfunded commitments | (2 | ) | 4 | (6 | ) | - | 4 | |||||||||||||
Acquisitions | - | - | 1 | - | - | |||||||||||||||
Reserve for unfunded commitments, ending | $ | 69 | $ | 71 | $ | 67 | $ | 72 | $ | 72 | ||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan and lease losses | $ | 727 | $ | 722 | $ | 717 | $ | 713 | $ | 713 | ||||||||||
Reserve for unfunded commitments | 69 | 71 | 67 | 72 | 72 | |||||||||||||||
Total allowance for credit losses | $ | 796 | $ | 793 | $ | 784 | $ | 785 | $ | 785 | ||||||||||
Nonperforming and underperforming assets | ||||||||||||||||||||
Nonaccrual loans and leases (a) | $ | 285 | $ | 273 | $ | 268 | $ | 228 | $ | 207 | ||||||||||
Renegotiated loans and leases | 1 | 1 | 1 | 1 | 3 | |||||||||||||||
Other assets, including other real estate owned | 65 | 66 | 74 | 74 | 72 | |||||||||||||||
Total nonperforming assets | 351 | 340 | 343 | 303 | 282 | |||||||||||||||
Ninety days past due loans and leases (a) | 156 | 129 | 129 | 142 | 137 | |||||||||||||||
Total underperforming assets | $ | 507 | $ | 469 | $ | 472 | $ | 445 | $ | 419 | ||||||||||
Ratios | ||||||||||||||||||||
Net losses charged off as a percent of average loans and leases | 0.38 | % | 0.34 | % | 0.40 | % | 0.44 | % | 0.40 | % | ||||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.06 | % | 1.09 | % | 1.11 | % | 1.19 | % | 1.23 | % | ||||||||||
Allowance for credit losses as a percent of loans and leases | 1.16 | % | 1.20 | % | 1.21 | % | 1.31 | % | 1.35 | % | ||||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.51 | % | 0.51 | % | 0.53 | % | 0.51 | % | 0.48 | % | ||||||||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74 | % | 0.71 | % | 0.73 | % | 0.74 | % | 0.72 | % | ||||||||||
| (a) | Nonaccrual includes $29 million and Ninety Days Past Due includes $54 million of residential mortgage loans as of September 30, 2005 |
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