Exhibit 99.1
News Release | ||||||
CONTACT: | Bradley S. Adams (Analysts) | FOR IMMEDIATE RELEASE | ||||
(513) 534-0983 | January 17, 2006 | |||||
Debra DeCourcy (Media) | ||||||
(513) 534-4153 |
FIFTH THIRD BANCORP REPORTS FOURTH QUARTER 2005
EARNINGS OF $0.60 PER DILUTED SHARE
Fifth Third Bancorp’s 2005 fourth quarter earnings per diluted share were $.60 compared to $.31 per diluted share for the same period in 2004. Fourth quarter net income totaled $332 million compared to $176 million in the same quarter last year. Return on average assets (ROA) and return on average equity (ROE) were 1.27 percent and 13.9 percent, respectively, compared to 0.72 percent and 7.6 percent in 2004’s fourth quarter. Earnings per diluted share for the full year 2005 were $2.77, an increase of three percent over last year’s earnings of $2.68. ROA for the full year 2005 was 1.50 percent and ROE was 16.6 percent, compared to 1.61 percent and 17.2 percent, respectively, in 2004. Fourth quarter and full year 2004 earnings were negatively impacted by $326 million in total pre-tax ($208 million after-tax) termination charges and securities losses, or $.37 per diluted share, related to balance sheet initiatives undertaken to reduce leverage and improve our interest rate profile for expected market conditions. Earnings and balance sheet comparisons to the prior year are also impacted by the first quarter 2005 acquisition of First National Bankshares of Florida, Inc. (First National).
“Revenue and net income trends were significantly below our expectations entering the year,” stated George A. Schaefer, Jr., President and CEO of Fifth Third Bancorp. “Although loan growth remained strong in 2005, disappointing deposit growth in the first half of the year combined with significant flattening of the yield curve throughout the year provided a challenging environment for Fifth Third. The resulting declines in returns from the securities portfolio have more than offset growth generated from core banking activities this year with spread based revenues, the largest component of our income statement, remaining essentially unchanged from the prior year. Efforts to reduce the level of securities and wholesale funding on the balance sheet began in late 2004 and continued throughout 2005. While restraining balance sheet growth negatively impacts short-term earnings and comparisons to prior periods, we believe that these actions will improve the risk profile of the balance sheet and deliver more consistent returns on invested capital over the long-term. In the short term, we continue to focus on all expense categories given the difficulty of the interest rate environment. While maintaining an appropriate level of investment in our high opportunity markets remains vital to our long-term success, we believe that 2006 will provide opportunities to optimize returns on recent investments and improve expense efficiency in light of current revenue trends.”
“Despite the difficulties encountered this year and their impacts on the performance of our stock, I feel that we have accomplished many things to improve our competitive position and drive revenue and earnings growth in the years to come. We are extremely proud of the efforts of our employees in producing very strong lending
results, renewed strength in deposit growth and the strong overall results from Fifth Third Processing Solutions and our commercial line of business. In addition to these core strengths, Fifth Third added numerous new banking center locations in 2005 in extremely attractive deposit markets, meaningfully expanded our sales force and accomplished numerous infrastructure improvements that we believe have improved the earnings potential, efficiency and strength of your company.”
Balance Sheet Trends
Retail transaction account growth and commercial customer additions resulted in strong deposit trends in the second half of 2005. Compared to the fourth quarter last year, average transaction account balances increased by $3.8 billion, or eight percent, highlighted by strong growth in average savings and money market deposits. Compared to the third quarter of 2005, average transaction account balances increased by $1.4 billion, or 11 percent on an annualized sequential basis. On a full year average basis, total transaction deposits increased by $4.8 billion, or 11 percent, over last year. Including consumer time deposits, total core deposits increased by 12 percent over the same quarter last year and 13 percent on an annualized sequential basis. 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 five percent on a full year basis and average core deposits increased eight percent on the same basis (comparisons are being provided to supplement an understanding of the fundamental deposit trends).
Loan and lease balances exhibited continued strength with average loans and leases increasing by $1.9 billion from last quarter, or 11 percent on an annualized sequential basis, and by 19 percent on a full year average basis. On a period end basis, total loans and leases increased by 18 percent over the same quarter last year and by seven percent on an annualized sequential basis. Period end commercial loan and lease balances increased by 22 percent over the same quarter last year and by $1.3 billion, or 14 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 three 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 by 14 percent and period end consumer loan and lease balances, excluding residential mortgage, increased by 12 percent over last year (comparisons are being provided to supplement an understanding of fundamental lending trends).
Net Interest Income
Net interest income on a fully taxable equivalent basis decreased two percent on a full year basis due to 25 basis points (bp) of contraction in the net interest margin. Margin compression during 2005 largely resulted from decreases in the net interest rate spread associated with increases in rates paid across deposit and other funding categories, continued mix shifts within the deposit base to higher cost time deposits and the prolonged and significant flattening of the yield curve throughout the year. Fifth Third is focused on growing core deposit balances and remains optimistic that recent trend improvement will continue in 2006 in order to improve the funding mix, more effectively fund future loan growth and improve net interest margin trends.
Compared to the fourth quarter of 2004, net interest income on a fully taxable equivalent basis decreased two percent, despite five percent growth in average earning assets, due to a 24 bp decline in the net interest margin. Earning asset growth relative to the fourth quarter of 2004 has been muted due to a reduction of $6.3 billion in the average available-for-sale securities portfolio. In addition to the resulting impact from a decreasing
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net interest rate spread and the flattening yield curve, margin, net interest income and earning asset trends and comparisons to prior year periods are impacted by common stock repurchase activity, the impact of sales and cash flows in the reduction of the available-for-sale securities portfolio and 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.
Compared to the third quarter of 2005, net interest income on a fully taxable equivalent basis decreased by $10 million, or five percent annualized, due to modest growth in average earning assets and 5 bp of contraction in the net interest margin. Fourth quarter earning asset growth was muted by efforts to reduce the risks associated with increasing short-term interest rates including the maintenance of strong capital levels through reductions in the available-for-sale securities portfolio. Due to the timing of sale activities at the end of the third quarter, the available-for-sale securities portfolio decreased approximately $1.7 billion on an average basis and $460 million on a period end basis from third quarter levels.
Noninterest Income
Improved performance in certain business line revenue segments resulted in good noninterest income performance in the fourth quarter of 2005. Overall noninterest income, excluding operating lease revenues and securities gains and losses, increased by 18 percent over the same quarter last year and 16 percent on an annualized sequential basis.
Fifth Third Processing Solutions, our electronic payment processing division, delivered a 16 percent increase in revenues over the same quarter last year and an 18 percent increase on a full year basis. Full year revenue comparisons are impacted by the second quarter 2004 sale of certain small merchant processing contracts. Exclusive of the impact of this transaction, electronic payment processing revenue increased 23 percent on a full year basis (comparisons are being provided to supplement an understanding of fundamental revenue trends). Fourth quarter trends are representative of continuing momentum in attracting new customer relationships and moderated by slower growth in the level of retail sales transaction volumes in the fourth quarter of 2005. Fifth Third remains confident in the near and intermediate term growth outlook in this business and continues to see significant opportunities to attract new financial institution customers and retailers.
Sales of retail deposit accounts and corporate treasury management products led to an increase in deposit service revenues of six percent over the same quarter last year and one percent on a full year basis. Retail deposit revenues strengthened in the latter half of 2005 and increased by seven percent over the same quarter last year and three percent on a full year basis. Commercial deposit revenues increased by three percent over the same quarter last year and were essentially unchanged on a full year basis with good growth in the number of relationships mitigated by the impacts of higher interest rates on compensating balances in commercial deposit accounts. Compared to the third quarter of 2005, deposit service revenues declined modestly primarily due to a decrease in consumer overdraft related revenues.
Investment Advisory revenues increased by five percent over the same quarter last year and were essentially unchanged on a full year basis. Modest revenue in 2005 resulted primarily from declines in 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 $196 billion in assets under care.
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Mortgage net service revenue totaled $42 million in the fourth quarter and $174 million on a full year basis compared to $24 million in 2004’s fourth quarter and $178 million in all of 2004. Mortgage originations remained strong and totaled $2.5 billion in the fourth quarter versus $2.9 billion last quarter and $2.0 billion in the fourth quarter of last year. Fourth quarter mortgage banking net service revenue was comprised of $65 million in total mortgage banking fees and loan sales, less $13 million in amortization and valuation adjustments on mortgage servicing rights and less $10 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 $433 million at December 31, 2005 on a servicing portfolio of $25.7 billion, compared to $408 million last quarter on a servicing portfolio of $24.5 billion.
Other noninterest income totaled $165 million in the fourth quarter and $620 million on a full year basis, compared to $125 million in the same quarter last year and $671 million for all of 2004. Comparison of full year results are impacted by a 2004 total pre-tax gain of approximately $157 million on the second and third quarter sales of certain third-party sourced merchant processing contracts. Exclusive of the impact of this transaction, other noninterest income increased by 20 percent on a full year basis primarily due to strong growth in commercial banking revenues, customer interest rate derivative sales, bank owned life insurance and cardholder fees; comparisons being provided to supplement an understanding of fundamental revenue trends. Compared to the third quarter of 2005, other noninterest income increased by $20 million due to very strong growth in commercial banking revenues and customer interest rate derivative sales.
Credit Quality
Fourth quarter credit quality trends reflect an elevated level of net charge-offs associated with approximately $27 million in previously announced losses to bankrupt commercial airline carriers and an increase in consumer loan and lease losses associated with increased personal bankruptcies prior to the recently enacted reform legislation. Net charge-offs as a percentage of average loans and leases were 67 bp in the fourth quarter, compared to 38 bp last quarter and 44 bp in the fourth quarter of 2004. Nonperforming assets were 52 bp of total loans and leases and other real estate owned at December 31, 2005, compared to 51 bp last quarter and in the year ago fourth 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 $117 million in the fourth quarter, compared to $65 million in the same quarter last year and $64 million in the third quarter of 2005. The provision for loan and lease losses totaled $134 million in the fourth quarter compared to $65 million in the same quarter last year and $69 million in the third quarter of 2005. The allowance for loan and lease losses represents 1.06 percent of total loans and leases outstanding as of December 31, 2005, compared to 1.06 percent last quarter and 1.19 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 decreased by 18 percent compared to the same quarter last year and by two percent on a full year basis. Comparisons to prior periods are impacted by the previously disclosed $247 million
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charge related to the early retirement of approximately $2.8 billion of long-term debt in the fourth quarter of 2004 and a $78 million charge related to the early retirement of approximately $1 billion of long-term debt in the second quarter of 2004. Exclusive of the impact of these termination charges, total noninterest expense increased by 11 percent in both the fourth quarter and on a full year basis primarily due to increases in sales force headcount, information technology and occupancy expenditures related to the addition of 63 de-novo banking centers in 2005 that did not involve relocation. Compared to the third quarter of 2005, total noninterest expense increased by $31 million due to growth in volume related bankcard expenditures, approximately $9 million in fraud related expenses and approximately $10 million in tax related expense.
Fifth Third expects growth in noninterest expenses in 2006 to be modest with continued management focus in light of current revenue trends. Cost savings initiatives will be somewhat mitigated by continuing investment in certain high opportunity markets, including the expected addition of approximately 50 net new banking centers throughout the year, in order to provide greater convenience to our customers and drive deposit and loan growth. Fifth Third’s efficiency ratio was 55.6 percent in the fourth quarter and 53.2 percent on a full year basis compared to 76.0 percent and 53.9 percent in the same periods last year.
Conference Call
Fifth Third will host a conference call to discuss these fourth 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: 4130197#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $105.2 billion in assets, operates 19 affiliates with 1,119 full-service Banking Centers, including 119 Bank Mart® locations open seven days a week inside select grocery stores and 2,024 Jeanie® ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania and Missouri. 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
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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 December 31, 2005
Table of Contents
Financial Highlights | 8-9 | |||
Consolidated Statements of Income | 10 | |||
Consolidated Statements of Income (Taxable Equivalent) | 11 | |||
Consolidated Balance Sheets | 12-13 | |||
Consolidated Statements of Changes in Shareholders’ Equity | 14 | |||
Average Balance Sheet and Yield Analysis | 15-17 | |||
Summary of Loans and Leases | 18 | |||
Regulatory Capital | 19 | |||
Asset Quality | 20 | |||
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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 | ||||||||||||||||
December 2005 | September 2005 | December 2004 | Yr/Yr | Seq | December 2005 | December 2004 | Yr/Yr | ||||||||||||
Income Statement Data | |||||||||||||||||||
Net interest income (a) | $735 | $745 | $752 | (2% | ) | (1% | ) | $2,996 | $3,048 | (2% | ) | ||||||||
Noninterest income | 636 | 622 | 479 | 33% | 2% | 2,500 | 2,465 | 1% | |||||||||||
Total revenue (a) | 1,371 | 1,367 | 1,231 | 11% | - | 5,496 | 5,513 | - | |||||||||||
Provision for loan and lease losses | 134 | 69 | 65 | 106% | 94% | 330 | 268 | 23% | |||||||||||
Noninterest expense | 763 | 732 | 935 | (18% | ) | 4% | 2,927 | 2,972 | (2% | ) | |||||||||
Net income | 332 | 395 | 176 | 89% | (16% | ) | 1,549 | 1,525 | 2% | ||||||||||
Common Share Data | |||||||||||||||||||
Earnings per share, basic | $0.60 | $0.71 | $0.31 | 94% | (15% | ) | $2.79 | $2.72 | 3% | ||||||||||
Earnings per share, diluted | 0.60 | 0.71 | 0.31 | 94% | (15% | ) | 2.77 | 2.68 | 3% | ||||||||||
Cash dividends per common share | 0.38 | 0.38 | 0.35 | 9% | - | 1.46 | 1.31 | 11% | |||||||||||
Book value per share | 17.00 | 16.93 | 16.00 | 6% | - | 17.00 | 16.00 | 6% | |||||||||||
Dividend payout ratio | 63.3% | 53.5% | 112.9% | (44% | ) | 18% | 52.7% | 48.9% | 8% | ||||||||||
Market price per share: | |||||||||||||||||||
High | $42.50 | $43.99 | $52.34 | (19% | ) | (3% | ) | $48.12 | $60.00 | (20% | ) | ||||||||
Low | 35.04 | 36.38 | 45.32 | (23% | ) | (4% | ) | 35.04 | 45.32 | (23% | ) | ||||||||
End of period | 37.72 | 36.75 | 47.30 | (20% | ) | 3% | 37.72 | 47.30 | (20% | ) | |||||||||
Common shares outstanding (in thousands) | 555,623 | 554,400 | 557,649 | - | - | 555,623 | 557,649 | - | |||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||||||
Basic | 553,591 | 553,855 | 560,162 | (1% | ) | - | 554,411 | 561,259 | (1% | ) | |||||||||
Diluted | 556,322 | 557,681 | 566,108 | (2% | ) | - | 558,443 | 568,234 | (2% | ) | |||||||||
Market capitalization | $20,958 | $20,374 | $26,377 | (21% | ) | 3% | $20,958 | $26,377 | (21% | ) | |||||||||
Price/earnings ratio (b) | 13.57 | 14.76 | 17.65 | (23% | ) | (8% | ) | 13.57 | 17.65 | (23% | ) | ||||||||
Financial Ratios | |||||||||||||||||||
Return on average assets | 1.27% | 1.51% | 0.72% | 76% | (16% | ) | 1.50% | 1.61% | (7% | ) | |||||||||
Return on average equity | 13.9% | 16.6% | 7.6% | 83% | (16% | ) | 16.6% | 17.2% | (3% | ) | |||||||||
Noninterest income as a percent of total revenue | 46% | 46% | 39% | 18% | - | 45% | 45% | - | |||||||||||
Average equity as a percent of average assets | 9.12% | 9.11% | 9.51% | (4% | ) | - | 9.06% | 9.34% | (3% | ) | |||||||||
Net interest margin (a) | 3.11% | 3.16% | 3.35% | (7% | ) | (2% | ) | 3.23% | 3.48% | (7% | ) | ||||||||
Efficiency (a) | 55.6% | 53.5% | 76.0% | (27% | ) | 4% | 53.2% | 53.9% | (1% | ) | |||||||||
Effective tax rate | 28.9% | 29.2% | 20.9% | 38% | (1% | ) | 29.9% | 31.8% | (6% | ) | |||||||||
Credit Quality | |||||||||||||||||||
Net losses charged off | $117 | $64 | $65 | 80% | 83% | $299 | $252 | 19% | |||||||||||
Net losses charged off as a percent of average loans and leases | 0.67% | 0.38% | 0.44% | 52% | 76% | 0.45% | 0.45% | - | |||||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.06% | 1.06% | 1.19% | (11% | ) | - | 1.06% | 1.19% | (11% | ) | |||||||||
Allowance for credit losses as a percent of loans and leases | 1.16% | 1.16% | 1.31% | (11% | ) | - | 1.16% | 1.31% | (11% | ) | |||||||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.52% | 0.51% | 0.51% | 2% | 2% | 0.52% | 0.51% | 2% | |||||||||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74% | 0.74% | 0.74% | - | - | 0.74% | 0.74% | - | |||||||||||
Average Balances | |||||||||||||||||||
Loans and leases, including held for sale | $70,489 | $68,556 | $59,440 | 19% | 3% | $67,737 | $57,042 | 19% | |||||||||||
Total securities and other short-term investments | 23,274 | 24,915 | 29,725 | (22% | ) | (7% | ) | 24,999 | 30,597 | (18% | ) | ||||||||
Total assets | 103,988 | 103,699 | 97,062 | 7% | - | 102,876 | 94,896 | 8% | |||||||||||
Transaction deposits | 48,937 | 47,568 | 45,126 | 8% | 3% | 47,929 | 43,175 | 11% | |||||||||||
Core deposits | 58,080 | 56,298 | 51,807 | 12% | 3% | 56,420 | 49,383 | 14% | |||||||||||
Interest-bearing deposits | 52,038 | 50,402 | 44,879 | 16% | 3% | 50,520 | 43,908 | 15% | |||||||||||
Short-term borrowings | 9,179 | 9,620 | 11,208 | (18% | ) | (5% | ) | 9,511 | 13,539 | (30% | ) | ||||||||
Long-term debt | 15,956 | 16,914 | 15,585 | 2% | (6% | ) | 16,384 | 13,323 | 23% | ||||||||||
Shareholders’ equity | 9,480 | 9,451 | 9,229 | 3% | - | 9,317 | 8,860 | 5% | |||||||||||
Regulatory Capital Ratios (c) | |||||||||||||||||||
Tier 1 capital | 8.43% | 8.45% | 10.31% | (18% | ) | - | 8.43% | 10.31% | (18% | ) | |||||||||
Total risk-based capital | 10.51% | 10.57% | 12.31% | (15% | ) | (1% | ) | 10.51% | 12.31% | (15% | ) | ||||||||
Tier 1 leverage | 8.08% | 7.93% | 8.89% | (9% | ) | 2% | 8.08% | 8.89% | (9% | ) | |||||||||
Operations | |||||||||||||||||||
Banking centers | 1,119 | 1,106 | 1,011 | 11% | 1% | 1,119 | 1,011 | 11% | |||||||||||
ATMs | 2,024 | 1,996 | 1,898 | 7% | 1% | 2,024 | 1,898 | 7% | |||||||||||
Full-time equivalent employees | 21,681 | 21,674 | 19,659 | 10% | - | 21,681 | 19,659 | 10% |
(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 | ||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | ||||||
Income Statement Data | ||||||||||
Net interest income (a) | $735 | $745 | $758 | $759 | $752 | |||||
Noninterest income | 636 | 622 | 635 | 607 | 479 | |||||
Total revenue (a) | 1,371 | 1,367 | 1,393 | 1,366 | 1,231 | |||||
Provision for loan and lease losses | 134 | 69 | 60 | 67 | 65 | |||||
Noninterest expense | 763 | 732 | 728 | 705 | 935 | |||||
Net income | 332 | 395 | 417 | 405 | 176 | |||||
Common Share Data | ||||||||||
Earnings per share, basic | $0.60 | $0.71 | $0.75 | $0.73 | $0.31 | |||||
Earnings per share, diluted | 0.60 | 0.71 | 0.75 | 0.72 | 0.31 | |||||
Cash dividends per common share | 0.38 | 0.38 | 0.35 | 0.35 | 0.35 | |||||
Book value per share | 17.00 | 16.93 | 16.82 | 16.04 | 16.00 | |||||
Dividend payout ratio | 63.3% | 53.5% | 46.7% | 48.6% | 112.9% | |||||
Market price per share: | ||||||||||
High | $42.50 | $43.99 | $44.67 | $48.12 | $52.34 | |||||
Low | 35.04 | 36.38 | 40.24 | 42.05 | 45.32 | |||||
End of period | 37.72 | 36.75 | 41.17 | 42.98 | 47.30 | |||||
Common shares outstanding (in thousands) | 555,623 | 554,400 | 555,938 | 554,055 | 557,649 | |||||
Average common shares outstanding (in thousands): | ||||||||||
Basic | 553,591 | 553,855 | 553,872 | 556,362 | 560,162 | |||||
Diluted | 556,322 | 557,681 | 558,176 | 561,659 | 566,108 | |||||
Market capitalization | $20,958 | $20,374 | $22,888 | $23,813 | $26,377 | |||||
Price/earnings ratio (b) | 13.57 | 14.76 | 15.77 | 16.22 | 17.65 | |||||
Financial Ratios | ||||||||||
Return on average assets | 1.27% | 1.51% | 1.63% | 1.62% | 0.72% | |||||
Return on average equity | 13.9% | 16.6% | 18.1% | 18.0% | 7.6% | |||||
Noninterest income as a percent of total revenue | 46% | 46% | 46% | 44% | 39% | |||||
Average equity as a percent of average assets | 9.12% | 9.11% | 8.98% | 9.02% | 9.51% | |||||
Net interest margin (a) | 3.11% | 3.16% | 3.29% | 3.38% | 3.35% | |||||
Efficiency (a) | 55.6% | 53.5% | 52.2% | 51.6% | 76.0% | |||||
Effective tax rate | 28.9% | 29.2% | 30.1% | 30.9% | 20.9% | |||||
Credit Quality | ||||||||||
Net losses charged off | $117 | $64 | $55 | $63 | $65 | |||||
Net losses charged off as a percent of average loans and leases | 0.67% | 0.38% | 0.34% | 0.40% | 0.44% | |||||
Allowance for loan and lease losses as a percent of loans and leases | 1.06% | 1.06% | 1.09% | 1.11% | 1.19% | |||||
Allowance for credit losses as a percent of loans and leases | 1.16% | 1.16% | 1.20% | 1.21% | 1.31% | |||||
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.52% | 0.51% | 0.51% | 0.53% | 0.51% | |||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74% | 0.74% | 0.71% | 0.73% | 0.74% | |||||
Average Balances | ||||||||||
Loans and leases, including held for sale | $70,489 | $68,556 | $66,762 | $65,076 | $59,440 | |||||
Total securities and other short-term investments | 23,274 | 24,915 | 25,716 | 26,119 | 29,725 | |||||
Total assets | 103,988 | 103,699 | 102,765 | 101,009 | 97,062 | |||||
Transaction deposits | 48,937 | 47,568 | 47,624 | 47,581 | 45,126 | |||||
Core deposits | 58,080 | 56,298 | 55,910 | 55,368 | 51,807 | |||||
Interest-bearing deposits | 52,038 | 50,402 | 49,858 | 49,763 | 44,879 | |||||
Short-term borrowings | 9,179 | 9,620 | 9,372 | 9,878 | 11,208 | |||||
Long-term debt | 15,956 | 16,914 | 17,049 | 15,604 | 15,585 | |||||
Shareholders’ equity | 9,480 | 9,451 | 9,224 | 9,108 | 9,229 | |||||
Regulatory Capital Ratios (c) | ||||||||||
Tier 1 capital | 8.43% | 8.45% | 8.48% | 8.40% | 10.31% | |||||
Total risk-based capital | 10.51% | 10.57% | 10.80% | 10.78% | 12.31% | |||||
Tier 1 leverage | 8.08% | 7.93% | 7.76% | 7.62% | 8.89% | |||||
Operations | ||||||||||
Banking centers | 1,119 | 1,106 | 1,098 | 1,092 | 1,011 | |||||
ATMs | 2,024 | 1,996 | 1,994 | 1,988 | 1,898 | |||||
Full-time equivalent employees | 21,681 | 21,674 | 21,594 | 21,287 | 19,659 |
(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
9
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Income
$ in millions
(unaudited)
For the Three Months Ended | % Change | Year to Date | % Change | ||||||||||||||||||
December 2005 | September 2005 | December 2004 | Yr/Yr | Seq | December 2005 | December 2004 | Yr/Yr | ||||||||||||||
Interest Income | |||||||||||||||||||||
Interest and fees on loans and leases | $1,098 | $1,017 | $775 | 42% | 8% | $3,918 | $2,847 | 38% | |||||||||||||
Interest on securities: | |||||||||||||||||||||
Taxable | 243 | 255 | 293 | (17% | ) | (5% | ) | 1,032 | 1,217 | (15% | ) | ||||||||||
Exempt from income taxes | 9 | 10 | 11 | (18% | ) | (10% | ) | 39 | 45 | (13% | ) | ||||||||||
Total interest on securities | 252 | 265 | 304 | (17% | ) | (5% | ) | 1,071 | 1,262 | (15% | ) | ||||||||||
Interest on other short-term investments | 2 | 1 | 2 | - | 100% | 6 | 5 | 20% | |||||||||||||
Total interest income | 1,352 | 1,283 | 1,081 | 25% | 5% | 4,995 | 4,114 | 21% | |||||||||||||
Interest Expense | |||||||||||||||||||||
Interest on deposits: | |||||||||||||||||||||
Interest checking | 94 | 86 | 56 | 68% | 9% | 314 | 174 | 80% | |||||||||||||
Savings | 67 | 48 | 21 | 219% | 40% | 176 | 58 | 203% | |||||||||||||
Money market | 50 | 37 | 16 | 213% | 35% | 140 | 39 | 259% | |||||||||||||
Other time | 81 | 68 | 45 | 80% | 19% | 263 | 162 | 62% | |||||||||||||
Certificates - $100,000 and over | 40 | 34 | 13 | 208% | 18% | 129 | 48 | 169% | |||||||||||||
Foreign office | 37 | 34 | 20 | 85% | 9% | 126 | 58 | 117% | |||||||||||||
Total interest on deposits | 369 | 307 | 171 | 116% | 20% | 1,148 | 539 | 113% | |||||||||||||
Interest on federal funds purchased | 49 | 35 | 24 | 104% | 40% | 138 | 77 | 79% | |||||||||||||
Interest on short-term bank notes | - | - | 6 | (100% | ) | NM | 6 | 15 | (60% | ) | |||||||||||
Interest on other short-term borrowings | 36 | 41 | 22 | 64% | (12% | ) | 138 | 78 | 77% | ||||||||||||
Interest on long-term debt | 170 | 163 | 115 | 48% | 4% | 600 | 393 | 53% | |||||||||||||
Total interest expense | 624 | 546 | 338 | 85% | 14% | 2,030 | 1,102 | 84% | |||||||||||||
Net Interest Income | 728 | 737 | 743 | (2% | ) | (1% | ) | 2,965 | 3,012 | (2% | ) | ||||||||||
Provision for loan and lease losses | 134 | 69 | 65 | 106% | 94% | 330 | 268 | 23% | |||||||||||||
Net interest income after provision for loan and lease losses | 594 | 668 | 678 | (12% | ) | (11% | ) | 2,635 | 2,744 | (4% | ) | ||||||||||
Noninterest Income | |||||||||||||||||||||
Electronic payment processing revenue | 200 | 187 | 173 | 16% | 7% | 735 | 622 | 18% | |||||||||||||
Service charges on deposits | 133 | 137 | 126 | 6% | (3% | ) | 522 | 515 | 1% | ||||||||||||
Mortgage banking net revenue | 42 | 45 | 24 | 75% | (7% | ) | 174 | 178 | (2% | ) | |||||||||||
Investment advisory revenue | 86 | 89 | 82 | 5% | (3% | ) | 355 | 360 | (1% | ) | |||||||||||
Other noninterest income | 165 | 145 | 125 | 32% | 14% | 620 | 671 | (8% | ) | ||||||||||||
Operating lease revenue | 9 | 11 | 27 | (67% | ) | (18% | ) | 55 | 156 | (65% | ) | ||||||||||
Securities gains (losses), net | 1 | 8 | (78 | ) | NM | (88% | ) | 39 | (37 | ) | NM | ||||||||||
Total noninterest income | 636 | 622 | 479 | 33% | 2% | 2,500 | 2,465 | 1% | |||||||||||||
Noninterest Expense | |||||||||||||||||||||
Salaries, wages and incentives | 287 | 285 | 266 | 8% | 1% | 1,133 | 1,018 | 11% | |||||||||||||
Employee benefits | 65 | 70 | 56 | 16% | (7% | ) | 283 | 261 | 8% | ||||||||||||
Equipment expense | 29 | 26 | 23 | 26% | 12% | 105 | 84 | 25% | |||||||||||||
Net occupancy expense | 59 | 54 | 48 | 23% | 9% | 221 | 185 | 19% | |||||||||||||
Operating lease expense | 6 | 8 | 20 | (70% | ) | (25% | ) | 40 | 114 | (65% | ) | ||||||||||
Other noninterest expense | 317 | 289 | 522 | (39% | ) | 10% | 1,145 | 1,310 | (13% | ) | |||||||||||
Total noninterest expense | 763 | 732 | 935 | (18% | ) | 4% | 2,927 | 2,972 | (2% | ) | |||||||||||
Income before income taxes | 467 | 558 | 222 | 110% | (16% | ) | 2,208 | 2,237 | (1% | ) | |||||||||||
Applicable income taxes | 135 | 163 | 46 | 193% | (17% | ) | 659 | 712 | (7% | ) | |||||||||||
Net income | $332 | $395 | $176 | 89% | (16% | ) | $1,549 | $1,525 | 2% | ||||||||||||
Net income available to common shareholders (a) | $332 | $395 | $176 | 89% | (16% | ) | $1,548 | $1,524 | 2% |
(a) Dividends on preferred stock are $.185 million for all quarters presented and $.740 for all year to date periods presented
10
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Income (Taxable Equivalent)
$ in millions
(unaudited)
For the Three Months Ended | |||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | |||||||
Interest Income | |||||||||||
Interest and fees on loans and leases | $1,098 | $1,017 | $936 | $867 | $775 | ||||||
Interest on securities: | |||||||||||
Taxable | 243 | 255 | 268 | 267 | 293 | ||||||
Exempt from income taxes | 9 | 10 | 10 | 10 | 11 | ||||||
Total interest on securities | 252 | 265 | 278 | 277 | 304 | ||||||
Interest on other short-term investments | 2 | 1 | 1 | 1 | 2 | ||||||
Total interest income | 1,352 | 1,283 | 1,215 | 1,145 | 1,081 | ||||||
Taxable equivalent adjustment | 7 | 8 | 8 | 8 | 9 | ||||||
Total interest income (taxable equivalent) | 1,359 | 1,291 | 1,223 | 1,153 | 1,090 | ||||||
Interest Expense | |||||||||||
Interest on deposits: | |||||||||||
Interest checking | 94 | 86 | 71 | 63 | 56 | ||||||
Savings | 67 | 48 | 35 | 27 | 21 | ||||||
Money market | 50 | 37 | 28 | 25 | 16 | ||||||
Other time | 81 | 68 | 61 | 52 | 45 | ||||||
Certificates - $100,000 and over | 40 | 34 | 29 | 25 | 13 | ||||||
Foreign office | 37 | 34 | 29 | 27 | 20 | ||||||
Total interest on deposits | 369 | 307 | 253 | 219 | 171 | ||||||
Interest on federal funds purchased | 49 | 35 | 29 | 25 | 24 | ||||||
Interest on short-term bank notes | - | - | 2 | 5 | 6 | ||||||
Interest on other short-term borrowings | 36 | 41 | 34 | 27 | 22 | ||||||
Interest on long-term debt | 170 | 163 | 147 | 118 | 115 | ||||||
Total interest expense | 624 | 546 | 465 | 394 | 338 | ||||||
Net interest income (taxable equivalent) | 735 | 745 | 758 | 759 | 752 | ||||||
Provision for loan and lease losses | 134 | 69 | 60 | 67 | 65 | ||||||
Net interest income (taxable equivalent) after provision for loan and lease losses | 601 | 676 | 698 | 692 | 687 | ||||||
Noninterest Income | |||||||||||
Electronic payment processing revenue | 200 | 187 | 180 | 168 | 173 | ||||||
Service charges on deposits | 133 | 137 | 132 | 121 | 126 | ||||||
Mortgage banking net revenue | 42 | 45 | 46 | 41 | 24 | ||||||
Investment advisory revenue | 86 | 89 | 91 | 90 | 82 | ||||||
Other noninterest income | 165 | 145 | 156 | 153 | 125 | ||||||
Operating lease revenue | 9 | 11 | 15 | 20 | 27 | ||||||
Securities gains (losses), net | 1 | 8 | 15 | 14 | (78 | ) | |||||
Total noninterest income | 636 | 622 | 635 | 607 | 479 | ||||||
Noninterest Expense | |||||||||||
Salaries, wages and incentives | 287 | 285 | 295 | 265 | 266 | ||||||
Employee benefits | 65 | 70 | 67 | 82 | 56 | ||||||
Equipment expense | 29 | 26 | 25 | 25 | 23 | ||||||
Net occupancy expense | 59 | 54 | 54 | 54 | 48 | ||||||
Operating lease expense | 6 | 8 | 10 | 15 | 20 | ||||||
Other noninterest expense | 317 | 289 | 277 | 264 | 522 | ||||||
Total noninterest expense | 763 | 732 | 728 | 705 | 935 | ||||||
Income before income taxes (taxable equivalent) | 474 | 566 | 605 | 594 | 231 | ||||||
Taxable equivalent adjustment | 7 | 8 | 8 | 8 | 9 | ||||||
Income before income taxes | 467 | 558 | 597 | 586 | 222 | ||||||
Applicable income taxes | 135 | 163 | 180 | 181 | 46 | ||||||
Net income | $332 | $395 | $417 | $405 | $176 | ||||||
Net income available to common shareholders (a) | $332 | $395 | $417 | $404 | $176 |
(a) Dividends on preferred stock are $.185 million for all quarters presented
11
Fifth Third Bancorp and Subsidiaries
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
As of | % Change | ||||||||||||||
December 2005 | September 2005 | December 2004 | Yr/Yr | Annual Seq | |||||||||||
Assets | |||||||||||||||
Cash and due from banks | $3,078 | $3,372 | $2,561 | 20% | (35% | ) | |||||||||
Available-for-sale securities (a) | 21,924 | 22,537 | 24,687 | (11% | ) | (11% | ) | ||||||||
Held-to-maturity securities (b) | 389 | 332 | 255 | 53% | 68% | ||||||||||
Trading securities | 117 | 105 | 77 | 52% | 45% | ||||||||||
Other short-term investments | 158 | 113 | 532 | (70% | ) | 158% | |||||||||
Loans held for sale | 1,304 | 1,237 | 559 | 133% | 21% | ||||||||||
Portfolio loans and leases: | |||||||||||||||
Commercial loans | 19,174 | 18,591 | 16,058 | 19% | 12% | ||||||||||
Construction loans | 7,037 | 6,529 | 4,726 | 49% | 31% | ||||||||||
Commercial mortgage loans | 9,188 | 9,138 | 7,636 | 20% | 2% | ||||||||||
Commercial lease financing | 4,852 | 4,731 | 4,634 | 5% | 10% | ||||||||||
Residential mortgage loans | 7,152 | 7,353 | 6,988 | 2% | (11% | ) | |||||||||
Consumer loans | 22,084 | 21,786 | 18,923 | 17% | 5% | ||||||||||
Consumer lease financing | 1,751 | 1,910 | 2,273 | (23% | ) | (33% | ) | ||||||||
Unearned income | (1,313 | ) | (1,284 | ) | (1,430 | ) | (8% | ) | 9% | ||||||
Portfolio loans and leases | 69,925 | 68,754 | 59,808 | 17% | 7% | ||||||||||
Allowance for loan and lease losses | (744 | ) | (727 | ) | (713 | ) | 4% | 9% | |||||||
Portfolio loans and leases, net | 69,181 | 68,027 | 59,095 | 17% | 7% | ||||||||||
Bank premises and equipment | 1,726 | 1,643 | 1,315 | 31% | 20% | ||||||||||
Operating lease equipment | 143 | 159 | 304 | (53% | ) | (40% | ) | ||||||||
Accrued interest receivable | 511 | 482 | 397 | 29% | 24% | ||||||||||
Goodwill | 2,169 | 2,176 | 979 | 122% | (1% | ) | |||||||||
Intangible assets | 208 | 220 | 150 | 39% | (22% | ) | |||||||||
Servicing rights | 441 | 417 | 352 | 25% | 23% | ||||||||||
Other assets | 3,876 | 3,788 | 3,193 | 21% | 9% | ||||||||||
Total assets | $105,225 | $104,608 | $94,456 | 11% | 2% | ||||||||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Demand | $14,609 | $14,294 | $13,486 | 8% | 9% | ||||||||||
Interest checking | 18,282 | 18,169 | 19,481 | (6% | ) | 2% | |||||||||
Savings | 11,276 | 10,437 | 8,310 | 36% | 32% | ||||||||||
Money market | 6,129 | 5,855 | 4,321 | 42% | 19% | ||||||||||
Other time | 9,313 | 8,867 | 6,837 | 36% | 20% | ||||||||||
Certificates - $100,000 and over | 4,343 | 4,195 | 2,121 | 105% | 14% | ||||||||||
Foreign office | 3,482 | 3,678 | 3,670 | (5% | ) | (21% | ) | ||||||||
Total deposits | 67,434 | 65,495 | 58,226 | 16% | 12% | ||||||||||
Federal funds purchased | 5,323 | 3,548 | 4,714 | 13% | 198% | ||||||||||
Short-term bank notes | - | - | 775 | (100% | ) | NM | |||||||||
Other short-term borrowings | 4,246 | 6,075 | 4,537 | (6% | ) | (119% | ) | ||||||||
Accrued taxes, interest and expenses | 2,142 | 2,136 | 2,216 | (3% | ) | 1% | |||||||||
Other liabilities | 1,407 | 1,447 | 1,081 | 30% | (11% | ) | |||||||||
Long-term debt | 15,227 | 16,522 | 13,983 | 9% | (31% | ) | |||||||||
Total liabilities | 95,779 | 95,223 | 85,532 | 12% | 2% | ||||||||||
Total shareholders’ equity (c) | 9,446 | 9,385 | 8,924 | 6% | 3% | ||||||||||
Total liabilities and shareholders’ equity | $105,225 | $104,608 | $94,456 | 11% | 2% | ||||||||||
(a) Amortized cost | $22,533 | $22,993 | $24,801 | (9% | ) | (8% | ) | ||||||||
(b) Market values | 389 | 332 | 255 | 53% | 68% | ||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | |||||||||||||||
Authorized | 1,300,000 | 1,300,000 | 1,300,000 | - | - | ||||||||||
Outstanding, excluding treasury | 555,623 | 554,400 | 557,649 | - | 1% | ||||||||||
Treasury | 27,804 | 29,027 | 25,803 | 8% | (17% | ) |
12
Fifth Third Bancorp and Subsidiaries
Consolidated Balance Sheets
$ in millions, except per share data
(unaudited)
As of | |||||||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | |||||||||||
Assets | |||||||||||||||
Cash and due from banks | $3,078 | $3,372 | $2,781 | $2,420 | $2,561 | ||||||||||
Available-for-sale securities (a) | 21,924 | 22,537 | 24,647 | 25,101 | 24,687 | ||||||||||
Held-to-maturity securities (b) | 389 | 332 | 307 | 303 | 255 | ||||||||||
Trading securities | 117 | 105 | 84 | 128 | 77 | ||||||||||
Other short-term investments | 158 | 113 | 113 | 1,213 | 532 | ||||||||||
Loans held for sale | 1,304 | 1,237 | 783 | 809 | 559 | ||||||||||
Portfolio loans and leases: | |||||||||||||||
Commercial loans | 19,174 | 18,591 | 18,013 | 17,500 | 16,058 | ||||||||||
Construction loans | 7,037 | 6,529 | 6,201 | 5,922 | 4,726 | ||||||||||
Commercial mortgage loans | 9,188 | 9,138 | 9,091 | 9,048 | 7,636 | ||||||||||
Commercial lease financing | 4,852 | 4,731 | 4,639 | 4,533 | 4,634 | ||||||||||
Residential mortgage loans | 7,152 | 7,353 | 7,042 | 7,416 | 6,988 | ||||||||||
Consumer loans | 22,084 | 21,786 | 20,610 | 19,698 | 18,923 | ||||||||||
Consumer lease financing | 1,751 | 1,910 | 1,994 | 2,099 | 2,273 | ||||||||||
Unearned income | (1,313 | ) | (1,284 | ) | (1,294 | ) | (1,314 | ) | (1,430 | ) | |||||
Portfolio loans and leases | 69,925 | 68,754 | 66,296 | 64,902 | 59,808 | ||||||||||
Allowance for loan and lease losses | (744 | ) | (727 | ) | (722 | ) | (717 | ) | (713 | ) | |||||
Portfolio loans and leases, net | 69,181 | 68,027 | 65,574 | 64,185 | 59,095 | ||||||||||
Bank premises and equipment | 1,726 | 1,643 | 1,581 | 1,529 | 1,315 | ||||||||||
Operating lease equipment | 143 | 159 | 161 | 224 | 304 | ||||||||||
Accrued interest receivable | 511 | 482 | 451 | 438 | 397 | ||||||||||
Goodwill | 2,169 | 2,176 | 2,178 | 2,167 | 979 | ||||||||||
Intangible assets | 208 | 220 | 231 | 243 | 150 | ||||||||||
Servicing rights | 441 | 417 | 378 | 378 | 352 | ||||||||||
Other assets | 3,876 | 3,788 | 3,891 | 3,575 | 3,193 | ||||||||||
Total assets | $105,225 | $104,608 | $103,160 | $102,713 | $94,456 | ||||||||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Demand | $14,609 | $14,294 | $14,393 | $13,960 | $13,486 | ||||||||||
Interest checking | 18,282 | 18,169 | 18,811 | 19,722 | 19,481 | ||||||||||
Savings | 11,276 | 10,437 | 9,653 | 9,711 | 8,310 | ||||||||||
Money market | 6,129 | 5,855 | 4,732 | 4,777 | 4,321 | ||||||||||
Other time | 9,313 | 8,867 | 8,513 | 8,017 | 6,837 | ||||||||||
Certificates - $100,000 and over | 4,343 | 4,195 | 3,986 | 3,867 | 2,121 | ||||||||||
Foreign office | 3,482 | 3,678 | 3,089 | 5,257 | 3,670 | ||||||||||
Total deposits | 67,434 | 65,495 | 63,177 | 65,311 | 58,226 | ||||||||||
Federal funds purchased | 5,323 | 3,548 | 4,523 | 2,669 | 4,714 | ||||||||||
Short-term bank notes | - | - | - | 775 | 775 | ||||||||||
Other short-term borrowings | 4,246 | 6,075 | 4,972 | 4,925 | 4,537 | ||||||||||
Accrued taxes, interest and expenses | 2,142 | 2,136 | 2,456 | 2,273 | 2,216 | ||||||||||
Other liabilities | 1,407 | 1,447 | 1,185 | 1,551 | 1,081 | ||||||||||
Long-term debt | 15,227 | 16,522 | 17,494 | 16,321 | 13,983 | ||||||||||
Total liabilities | 95,779 | 95,223 | 93,807 | 93,825 | 85,532 | ||||||||||
Total shareholders’ equity (c) | 9,446 | 9,385 | 9,353 | 8,888 | 8,924 | ||||||||||
Total liabilities and shareholders’ equity | $105,225 | $104,608 | $103,160 | $102,713 | $94,456 | ||||||||||
(a) Amortized cost | $22,533 | $22,993 | $24,814 | $25,558 | $24,801 | ||||||||||
(b) Market values | 389 | 332 | 307 | 303 | 255 | ||||||||||
(c) Common shares, stated value $2.22 per share (in thousands): | |||||||||||||||
Authorized | 1,300,000 | 1,300,000 | 1,300,000 | 1,300,000 | 1,300,000 | ||||||||||
Outstanding, excluding treasury | 555,623 | 554,400 | 555,938 | 554,055 | 557,649 | ||||||||||
Treasury | 27,804 | 29,027 | 27,489 | 29,372 | 25,803 |
13
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
$ in millions
(unaudited)
For the Three Months Ended | Year to Date | |||||||||||
December 2005 | December 2004 | December 2005 | December 2004 | |||||||||
Total shareholders’ equity, beginning | $9,385 | $9,040 | $8,924 | $8,667 | ||||||||
Net income | 332 | 176 | 1,549 | 1,525 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||
Change in unrealized gains and (losses): | ||||||||||||
Available-for-sale securities | (99 | ) | 53 | (323 | ) | (23 | ) | |||||
Qualifying cash flow hedges | 4 | (6 | ) | 20 | (25 | ) | ||||||
Change in additional pension liability | (1 | ) | 2 | 59 | (1 | ) | ||||||
Comprehensive income | 236 | 225 | 1,305 | 1,476 | ||||||||
Cash dividends declared: | ||||||||||||
Common stock | (211 | ) | (195 | ) | (810 | ) | (735 | ) | ||||
Preferred stock (a) | - | - | (1 | ) | (1 | ) | ||||||
Stock-based awards exercised, including treasury shares issued | 30 | 11 | 85 | 89 | ||||||||
Stock-based compensation expense | 12 | 23 | 65 | 87 | ||||||||
Loans repaid (issued) related to exercise of stock-based awards, net | 3 | 2 | 11 | - | ||||||||
Change in corporate tax benefit related to stock-based compensation | (9 | ) | 2 | 6 | 11 | |||||||
Shares acquired for treasury | (1 | ) | (183 | ) | (1,649 | ) | (987 | ) | ||||
Shares issued in business combination | - | - | 1,509 | 317 | ||||||||
Other | 1 | (1 | ) | 1 | - | |||||||
Total shareholders’ equity, ending | $9,446 | $8,924 | $9,446 | $8,924 |
(a) Dividends on preferred stock are $.185 million for all quarters presented and $.740 for all year to date periods presented
14
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
For the Three Months Ended | % Change | ||||||||||||||
December 2005 | September 2005 | December 2004 | Yr/Yr | Annual Seq | |||||||||||
Assets | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans and leases | $70,489 | $68,556 | $59,440 | 19% | 11% | ||||||||||
Taxable securities | 22,376 | 24,013 | 28,379 | (21% | ) | (27% | ) | ||||||||
Tax exempt securities | 698 | 787 | 866 | (19% | ) | (45% | ) | ||||||||
Other short-term investments | 200 | 115 | 480 | (58% | ) | 293% | |||||||||
Total interest-earning assets | 93,763 | 93,471 | 89,165 | 5% | 1% | ||||||||||
Cash and due from banks | 2,847 | 2,742 | 2,445 | 16% | 15% | ||||||||||
Other assets | 8,105 | 8,207 | 6,171 | 31% | (5% | ) | |||||||||
Allowance for loan and lease losses | (727 | ) | (721 | ) | (719 | ) | 1% | 3% | |||||||
Total assets | $103,988 | $103,699 | $97,062 | 7% | 1% | ||||||||||
Liabilities | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||
Interest checking | $17,828 | $18,498 | $19,345 | (8% | ) | (14% | ) | ||||||||
Savings | 11,036 | 9,939 | 8,447 | 31% | 44% | ||||||||||
Money market | 5,974 | 5,154 | 4,227 | 41% | 63% | ||||||||||
Other time | 9,143 | 8,730 | 6,681 | 37% | 19% | ||||||||||
Certificates - $100,000 and over | 4,354 | 4,156 | 2,106 | 107% | 19% | ||||||||||
Foreign office | 3,703 | 3,925 | 4,073 | (9% | ) | (22% | ) | ||||||||
Federal funds purchased | 4,771 | 4,001 | 4,880 | (2% | ) | 76% | |||||||||
Short-term bank notes | - | - | 1,188 | (100% | ) | NM | |||||||||
Other short-term borrowings | 4,408 | 5,619 | 5,140 | (14% | ) | (86% | ) | ||||||||
Long-term debt | 15,956 | 16,914 | 15,585 | 2% | (22% | ) | |||||||||
Total interest-bearing liabilities | 77,173 | 76,936 | 71,672 | 8% | 1% | ||||||||||
Demand deposits | 14,099 | 13,977 | 13,107 | 8% | 3% | ||||||||||
Other liabilities | 3,236 | 3,335 | 3,054 | 6% | (12% | ) | |||||||||
Total liabilities | 94,508 | 94,248 | 87,833 | 8% | 1% | ||||||||||
Shareholders’ equity | 9,480 | 9,451 | 9,229 | 3% | 1% | ||||||||||
Total liabilities and shareholders’ equity | $103,988 | $103,699 | $97,062 | 7% | 1% | ||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||
Basic | 553,591 | 553,855 | 560,162 | (1% | ) | - | |||||||||
Diluted | 556,322 | 557,681 | 566,108 | (2% | ) | (1% | ) | ||||||||
Yield Analysis | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans and leases | 6.20% | 5.90% | 5.20% | ||||||||||||
Taxable securities | 4.31% | 4.22% | 4.11% | ||||||||||||
Tax exempt securities | 7.51% | 7.42% | 7.37% | ||||||||||||
Other short-term investments | 4.41% | 3.49% | 2.00% | ||||||||||||
Total interest-earning assets | 5.75% | 5.48% | 4.86% | ||||||||||||
Interest-bearing liabilities: | |||||||||||||||
Interest checking | 2.10% | 1.84% | 1.14% | ||||||||||||
Savings | 2.41% | 1.90% | 1.01% | ||||||||||||
Money market | 3.32% | 2.82% | 1.53% | ||||||||||||
Other time | 3.50% | 3.14% | 2.71% | ||||||||||||
Certificates - $100,000 and over | 3.66% | 3.28% | 2.41% | ||||||||||||
Foreign office | 3.92% | 3.41% | 1.94% | ||||||||||||
Federal funds purchased | 4.04% | 3.50% | 1.98% | ||||||||||||
Short-term bank notes | - | - | 1.97% | ||||||||||||
Other short-term borrowings | 3.27% | 2.92% | 1.64% | ||||||||||||
Long-term debt | 4.25% | 3.80% | 2.93% | ||||||||||||
Total interest-bearing liabilities | 3.21% | 2.82% | 1.87% | ||||||||||||
Ratios: | |||||||||||||||
Net interest margin (taxable equivalent) | 3.11% | 3.16% | 3.35% | ||||||||||||
Net interest rate spread (taxable equivalent) | 2.54% | 2.66% | 2.99% | ||||||||||||
Interest-bearing liabilities to interest-earning assets | 82.31% | 82.31% | 80.38% |
15
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
Year to Date | % Change | ||||||||
December 2005 | December 2004 | Yr/Yr | |||||||
Assets | |||||||||
Interest-earning assets: | |||||||||
Loans and leases | $67,737 | $57,042 | 19% | ||||||
Taxable securities | 24,017 | 29,365 | (18% | ) | |||||
Tax exempt securities | 789 | 917 | (14% | ) | |||||
Other short-term investments | 193 | 315 | (39% | ) | |||||
Total interest-earning assets | 92,736 | 87,639 | 6% | ||||||
Cash and due from banks | 2,758 | 2,216 | 24% | ||||||
Other assets | 8,102 | 5,763 | 41% | ||||||
Allowance for loan and lease losses | (720 | ) | (722 | ) | - | ||||
Total assets | $102,876 | $94,896 | 8% | ||||||
Liabilities | |||||||||
Interest-bearing liabilities: | |||||||||
Interest checking | $18,884 | $19,434 | (3% | ) | |||||
Savings | 10,007 | 7,941 | 26% | ||||||
Money market | 5,170 | 3,473 | 49% | ||||||
Other time | 8,491 | 6,208 | 37% | ||||||
Certificates - $100,000 and over | 4,001 | 2,403 | 67% | ||||||
Foreign office | 3,967 | 4,449 | (11% | ) | |||||
Federal funds purchased | 4,225 | 5,896 | (28% | ) | |||||
Short-term bank notes | 248 | 1,003 | (75% | ) | |||||
Other short-term borrowings | 5,038 | 6,640 | (24% | ) | |||||
Long-term debt | 16,384 | 13,323 | 23% | ||||||
Total interest-bearing liabilities | 76,415 | 70,770 | 8% | ||||||
Demand deposits | 13,868 | 12,327 | 13% | ||||||
Other liabilities | 3,276 | 2,939 | 11% | ||||||
Total liabilities | 93,559 | 86,036 | 9% | ||||||
Shareholders' equity | 9,317 | 8,860 | 5% | ||||||
Total liabilities and shareholders' equity | $102,876 | $94,896 | 8% | ||||||
Average common shares outstanding (in thousands): | |||||||||
Basic | 554,411 | 561,259 | (1% | ) | |||||
Diluted | 558,443 | 568,234 | (2% | ) | |||||
Yield Analysis | |||||||||
Interest-earning assets: | |||||||||
Loans and leases | 5.80% | 5.01% | |||||||
Taxable securities | 4.30% | 4.15% | |||||||
Tax exempt securities | 7.39% | 7.44% | |||||||
Other short-term investments | 2.89% | 1.48% | |||||||
Total interest-earning assets | 5.42% | 4.73% | |||||||
Interest-bearing liabilities: | |||||||||
Interest checking | 1.66% | 0.89% | |||||||
Savings | 1.76% | 0.72% | |||||||
Money market | 2.71% | 1.12% | |||||||
Other time | 3.09% | 2.62% | |||||||
Certificates - $100,000 and over | 3.22% | 1.99% | |||||||
Foreign office | 3.17% | 1.31% | |||||||
Federal funds purchased | 3.26% | 1.30% | |||||||
Short-term bank notes | 2.60% | 1.46% | |||||||
Other short-term borrowings | 2.74% | 1.14% | |||||||
Long-term debt | 3.66% | 2.95% | |||||||
Total interest-bearing liabilities | 2.66% | 1.56% | |||||||
Ratios: | |||||||||
Net interest margin (taxable equivalent) | 3.23% | 3.48% | |||||||
Net interest rate spread (taxable equivalent) | 2.76% | 3.17% | |||||||
Interest-bearing liabilities to interest-earning assets | 82.40% | 80.75% |
16
Fifth Third Bancorp and Subsidiaries
Average Balance Sheet and Yield Analysis
$ in millions, except share data
(unaudited)
For the Three Months Ended | |||||||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | |||||||||||
Assets | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans and leases | $70,489 | $68,556 | $66,762 | $65,076 | $59,440 | ||||||||||
Taxable securities | 22,376 | 24,013 | 24,771 | 24,935 | 28,379 | ||||||||||
Tax exempt securities | 698 | 787 | 815 | 856 | 866 | ||||||||||
Other short-term investments | 200 | 115 | 130 | 328 | 480 | ||||||||||
Total interest-earning assets | 93,763 | 93,471 | 92,478 | 91,195 | 89,165 | ||||||||||
Cash and due from banks | 2,847 | 2,742 | 2,822 | 2,619 | 2,445 | ||||||||||
Other assets | 8,105 | 8,207 | 8,182 | 7,909 | 6,171 | ||||||||||
Allowance for loan and lease losses | (727 | ) | (721 | ) | (717 | ) | (714 | ) | (719 | ) | |||||
Total assets | $103,988 | $103,699 | $102,765 | $101,009 | $97,062 | ||||||||||
Liabilities | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||
Interest checking | $17,828 | $18,498 | $19,267 | $19,972 | $19,345 | ||||||||||
Savings | 11,036 | 9,939 | 9,697 | 9,339 | 8,447 | ||||||||||
Money market | 5,974 | 5,154 | 4,755 | 4,786 | 4,227 | ||||||||||
Other time | 9,143 | 8,730 | 8,286 | 7,787 | 6,681 | ||||||||||
Certificates - $100,000 and over | 4,354 | 4,156 | 3,946 | 3,539 | 2,106 | ||||||||||
Foreign office | 3,703 | 3,925 | 3,907 | 4,340 | 4,073 | ||||||||||
Federal funds purchased | 4,771 | 4,001 | 3,952 | 4,170 | 4,880 | ||||||||||
Short-term bank notes | - | - | 230 | 775 | 1,188 | ||||||||||
Other short-term borrowings | 4,408 | 5,619 | 5,190 | 4,933 | 5,140 | ||||||||||
Long-term debt | 15,956 | 16,914 | 17,049 | 15,604 | 15,585 | ||||||||||
Total interest-bearing liabilities | 77,173 | 76,936 | 76,279 | 75,245 | 71,672 | ||||||||||
Demand deposits | 14,099 | 13,977 | 13,905 | 13,484 | 13,107 | ||||||||||
Other liabilities | 3,236 | 3,335 | 3,357 | 3,172 | 3,054 | ||||||||||
Total liabilities | 94,508 | 94,248 | 93,541 | 91,901 | 87,833 | ||||||||||
Shareholders’ equity | 9,480 | 9,451 | 9,224 | 9,108 | 9,229 | ||||||||||
Total liabilities and shareholders’ equity | $103,988 | $103,699 | $102,765 | $101,009 | $97,062 | ||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||
Basic | 553,591 | 553,855 | 553,872 | 556,362 | 560,162 | ||||||||||
Diluted | 556,322 | 557,681 | 558,176 | 561,659 | 566,108 | ||||||||||
Yield Analysis | |||||||||||||||
Interest-earning assets: | |||||||||||||||
Loans and leases | 6.20% | 5.90% | 5.64% | 5.42% | 5.20% | ||||||||||
Taxable securities | 4.31% | 4.22% | 4.33% | 4.34% | 4.11% | ||||||||||
Tax exempt securities | 7.51% | 7.42% | 7.29% | 7.36% | 7.37% | ||||||||||
Other short-term investments | 4.41% | 3.49% | 3.28% | 1.56% | 2.00% | ||||||||||
Total interest-earning assets | 5.75% | 5.48% | 5.30% | 5.13% | 4.86% | ||||||||||
Interest-bearing liabilities: | |||||||||||||||
Interest checking | 2.10% | 1.84% | 1.49% | 1.27% | 1.14% | ||||||||||
Savings | 2.41% | 1.90% | 1.44% | 1.15% | 1.01% | ||||||||||
Money market | 3.32% | 2.82% | 2.37% | 2.14% | 1.53% | ||||||||||
Other time | 3.50% | 3.14% | 2.93% | 2.72% | 2.71% | ||||||||||
Certificates - $100,000 and over | 3.66% | 3.28% | 2.92% | 2.92% | 2.41% | ||||||||||
Foreign office | 3.92% | 3.41% | 2.98% | 2.48% | 1.94% | ||||||||||
Federal funds purchased | 4.04% | 3.50% | 2.97% | 2.41% | 1.98% | ||||||||||
Short-term bank notes | - | - | 2.84% | 2.53% | 1.97% | ||||||||||
Other short-term borrowings | 3.27% | 2.92% | 2.63% | 2.18% | 1.64% | ||||||||||
Long-term debt | 4.25% | 3.80% | 3.46% | 3.10% | 2.93% | ||||||||||
Total interest-bearing liabilities | 3.21% | 2.82% | 2.44% | 2.12% | 1.87% | ||||||||||
Ratios: | |||||||||||||||
Net interest margin (taxable equivalent) | 3.11% | 3.16% | 3.29% | 3.38% | 3.35% | ||||||||||
Net interest rate spread (taxable equivalent) | 2.54% | 2.66% | 2.86% | 3.01% | 2.99% | ||||||||||
Interest-bearing liabilities to interest-earning assets | 82.31% | 82.31% | 82.48% | 82.51% | 80.38% |
17
Fifth Third Bancorp and Subsidiaries
Summary of Loans and Leases
$ in millions
(unaudited)
For the Three Months Ended | ||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | ||||||
Average Loans and Leases (including unearned income) | ||||||||||
Commercial: | ||||||||||
Commercial loans | $18,909 | $18,203 | $17,768 | $18,073 | $15,565 | |||||
Commercial mortgage | 9,159 | 9,095 | 9,042 | 8,385 | 7,617 | |||||
Commercial construction | 6,051 | 5,700 | 5,467 | 4,870 | 4,247 | |||||
Commercial leases | 3,611 | 3,537 | 3,436 | 3,393 | 3,333 | |||||
Subtotal - commercial | 37,730 | 36,535 | 35,713 | 34,721 | 30,762 | |||||
Consumer: | ||||||||||
Residential mortgage | 8,444 | 8,271 | 8,453 | 8,417 | 7,346 | |||||
Residential construction | 673 | 624 | 576 | 468 | 378 | |||||
Credit card | 825 | 778 | 755 | 830 | 827 | |||||
Home equity | 11,884 | 11,702 | 11,325 | 10,909 | 10,403 | |||||
Other consumer loans | 9,251 | 8,868 | 8,089 | 7,752 | 7,592 | |||||
Consumer leases | 1,682 | 1,778 | 1,851 | 1,979 | 2,132 | |||||
Subtotal - consumer | 32,759 | 32,021 | 31,049 | 30,355 | 28,678 | |||||
Total average loans and leases | $70,489 | $68,556 | $66,762 | $65,076 | $59,440 | |||||
End of Period Loans and Leases Serviced | ||||||||||
Commercial: | ||||||||||
Commercial loans | $19,174 | $18,591 | $18,013 | $17,500 | $16,058 | |||||
Commercial mortgage | 9,188 | 9,138 | 9,091 | 9,048 | 7,636 | |||||
Commercial construction | 6,342 | 5,880 | 5,590 | 5,365 | 4,348 | |||||
Commercial leases | 3,695 | 3,619 | 3,527 | 3,416 | 3,426 | |||||
Subtotal - commercial | 38,399 | 37,228 | 36,221 | 35,329 | 31,468 | |||||
Consumer: | ||||||||||
Residential mortgage | 7,152 | 7,353 | 7,042 | 7,416 | 6,988 | |||||
Residential construction | 695 | 649 | 611 | 557 | 378 | |||||
Credit card | 866 | 805 | 749 | 790 | 843 | |||||
Home equity | 12,000 | 11,766 | 11,521 | 11,085 | 10,508 | |||||
Other consumer loans | 9,218 | 9,215 | 8,340 | 7,824 | 7,572 | |||||
Consumer leases | 1,595 | 1,738 | 1,812 | 1,901 | 2,051 | |||||
Subtotal - consumer | 31,526 | 31,526 | 30,075 | 29,573 | 28,340 | |||||
Total portfolio loans and leases | 69,925 | 68,754 | 66,296 | 64,902 | 59,808 | |||||
Loans held for sale | 1,304 | 1,237 | 783 | 809 | 559 | |||||
Operating lease equipment | 143 | 159 | 161 | 224 | 304 | |||||
Loans and Leases Serviced for Others: | ||||||||||
Residential mortgage (a) | 25,669 | 24,525 | 24,497 | 23,341 | 23,026 | |||||
Commercial mortgage (b) | 2,126 | 2,095 | 2,067 | 2,043 | 2,045 | |||||
Commercial loans (c) | 2,754 | 2,528 | 2,346 | 2,351 | 1,941 | |||||
Commercial leases (b) | 264 | 240 | 269 | 271 | 323 | |||||
Consumer loans (d) | 871 | 972 | 1,089 | 1,192 | 1,298 | |||||
Total loans and leases serviced for others | 31,684 | 30,360 | 30,268 | 29,198 | 28,633 | |||||
Total loans and leases serviced | $103,056 | $100,510 | $97,508 | $95,133 | $89,304 |
(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 |
18
Fifth Third Bancorp and Subsidiaries
Regulatory Capital (a)
$ in millions
(unaudited)
As of | |||||||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | |||||||||||
Tier 1 capital: | |||||||||||||||
Shareholders’ equity | $9,446 | $9,385 | $9,353 | $8,888 | $8,924 | ||||||||||
Goodwill and certain other intangibles | (2,377 | ) | (2,396 | ) | (2,409 | ) | (2,410 | ) | (1,129 | ) | |||||
Unrealized (gains) losses | 405 | 310 | 127 | 314 | 101 | ||||||||||
Other | 735 | 731 | 712 | 717 | 626 | ||||||||||
Total tier 1 capital | $8,209 | $8,030 | $7,783 | $7,509 | $8,522 | ||||||||||
Total risk-based capital: | |||||||||||||||
Tier 1 capital | $8,209 | $8,030 | $7,783 | $7,509 | $8,522 | ||||||||||
Qualifying allowance for credit losses | 838 | 823 | 819 | 809 | 806 | ||||||||||
Qualifying subordinated notes | 1,193 | 1,193 | 1,312 | 1,316 | 848 | ||||||||||
Total risk-based capital | $10,240 | $10,046 | $9,914 | $9,634 | $10,176 | ||||||||||
Risk-weighted assets | $97,399 | $95,083 | $91,791 | $89,401 | $82,633 | ||||||||||
Ratios: | |||||||||||||||
Average shareholders’ equity to average assets | 9.12% | 9.11% | 8.98% | 9.02% | 9.51% | ||||||||||
Regulatory capital: | |||||||||||||||
Tier 1 capital | 8.43% | 8.45% | 8.48% | 8.40% | 10.31% | ||||||||||
Total risk-based capital | 10.51% | 10.57% | 10.80% | 10.78% | 12.31% | ||||||||||
Tier 1 leverage | 8.08% | 7.93% | 7.76% | 7.62% | 8.89% |
(a) Current period regulatory capital data and ratios are estimated
19
Fifth Third Bancorp and Subsidiaries
Asset Quality
$ in millions
(unaudited)
For the Three Months Ended | |||||||||||||||
December 2005 | September 2005 | June 2005 | March 2005 | December 2004 | |||||||||||
Summary of Credit Loss Experience | |||||||||||||||
Losses charged off: | |||||||||||||||
Commercial, financial and agricultural loans | ($35 | ) | ($24 | ) | ($24 | ) | ($16 | ) | ($19 | ) | |||||
Real estate - commercial mortgage loans | (3 | ) | (5 | ) | (3 | ) | (2 | ) | (7 | ) | |||||
Real estate - construction loans | (3 | ) | (1 | ) | - | (1 | ) | (3 | ) | ||||||
Real estate - residential mortgage | (5 | ) | (3 | ) | (5 | ) | (5 | ) | (4 | ) | |||||
Consumer loans | (58 | ) | (41 | ) | (40 | ) | (42 | ) | (42 | ) | |||||
Commercial lease financing | (28 | ) | (1 | ) | - | (8 | ) | (3 | ) | ||||||
Consumer lease financing | (5 | ) | (4 | ) | (4 | ) | (6 | ) | (6 | ) | |||||
Total losses | (137 | ) | (79 | ) | (76 | ) | (80 | ) | (84 | ) | |||||
Recoveries of losses previously charged off: | |||||||||||||||
Commercial, financial and agricultural loans | 10 | 5 | 6 | 3 | 4 | ||||||||||
Real estate - commercial mortgage loans | 1 | - | 1 | 1 | 1 | ||||||||||
Real estate - construction loans | - | - | - | 1 | - | ||||||||||
Real estate - residential mortgage | - | - | - | - | - | ||||||||||
Consumer loans | 8 | 9 | 12 | 11 | 12 | ||||||||||
Commercial lease financing | - | - | 1 | - | - | ||||||||||
Consumer lease financing | 1 | 1 | 1 | 1 | 2 | ||||||||||
Total recoveries | 20 | 15 | 21 | 17 | 19 | ||||||||||
Net losses charged off: | |||||||||||||||
Commercial, financial and agricultural loans | (25 | ) | (19 | ) | (18 | ) | (13 | ) | (15 | ) | |||||
Real estate - commercial mortgage loans | (2 | ) | (5 | ) | (2 | ) | (1 | ) | (6 | ) | |||||
Real estate - construction loans | (3 | ) | (1 | ) | - | - | (3 | ) | |||||||
Real estate - residential mortgage | (5 | ) | (3 | ) | (5 | ) | (5 | ) | (4 | ) | |||||
Consumer loans | (50 | ) | (32 | ) | (28 | ) | (31 | ) | (30 | ) | |||||
Commercial lease financing | (28 | ) | (1 | ) | 1 | (8 | ) | (3 | ) | ||||||
Consumer lease financing | (4 | ) | (3 | ) | (3 | ) | (5 | ) | (4 | ) | |||||
Total net losses charged off | ($117 | ) | ($64 | ) | ($55 | ) | ($63 | ) | ($65 | ) | |||||
Allowance for loan and lease losses, beginning | $727 | $722 | $717 | $713 | $713 | ||||||||||
Total net losses charged off | (117 | ) | (64 | ) | (55 | ) | (63 | ) | (65 | ) | |||||
Provision for loan and lease losses | 134 | 69 | 60 | 67 | 65 | ||||||||||
Allowance for loan and lease losses, ending | $744 | $727 | $722 | $717 | $713 | ||||||||||
Reserve for unfunded commitments, beginning | $69 | $71 | $67 | $72 | $72 | ||||||||||
Provision for unfunded commitments | 1 | (2 | ) | 4 | (6 | ) | - | ||||||||
Acquisitions | - | - | - | 1 | - | ||||||||||
Reserve for unfunded commitments, ending | $70 | $69 | $71 | $67 | $72 | ||||||||||
Components of allowance for credit losses: | |||||||||||||||
Allowance for loan and lease losses | $744 | $727 | $722 | $717 | $713 | ||||||||||
Reserve for unfunded commitments | 70 | 69 | 71 | 67 | 72 | ||||||||||
Total allowance for credit losses | $814 | $796 | $793 | $784 | $785 | ||||||||||
Nonperforming and underperforming assets | |||||||||||||||
Nonaccrual loans and leases (a) | $294 | $285 | $273 | $268 | $228 | ||||||||||
Renegotiated loans and leases | - | 1 | 1 | 1 | 1 | ||||||||||
Other assets, including other real estate owned | 67 | 65 | 66 | 74 | 74 | ||||||||||
Total nonperforming assets | 361 | 351 | 340 | 343 | 303 | ||||||||||
Ninety days past due loans and leases (a) | 155 | 156 | 129 | 129 | 142 | ||||||||||
Total underperforming assets | $516 | $507 | $469 | $472 | $445 | ||||||||||
Ratios | |||||||||||||||
Net losses charged off as a percent of | 0.67% | 0.38% | 0.34% | 0.40% | 0.44% | ||||||||||
Allowance for loan and lease losses as a percent of | 1.06% | 1.06% | 1.09% | 1.11% | 1.19% | ||||||||||
Allowance for credit losses as a percent of | 1.16% | 1.16% | 1.20% | 1.21% | 1.31% | ||||||||||
Nonperforming assets as a percent of loans, leases and | 0.52% | 0.51% | 0.51% | 0.53% | 0.51% | ||||||||||
Underperforming assets as a percent of loans, leases and other assets, including other real estate owned | 0.74% | 0.74% | 0.71% | 0.73% | 0.74% |
(a) Nonaccrual includes $29 million and Ninety Days Past Due includes $48 million of residential mortgage loans as of December 31, 2005
20