SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1993 Commission File Number 0-8076
FIFTH THIRD BANCORP
(Exact name of Registrant as specified in its charter)
Ohio 31-0854434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
38 Fountain Square Plaza
Cincinnati, Ohio 45263
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 579-5300
Securities registered pursuant to Section 12(g) of the Act:
Common Stock Without Par Value
4-1/4% Convertible Subordinated Notes due 1998
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes: /X/ No: / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The Aggregate Market Value of the Voting Stock held by non-affiliates of the
Registrant was $2,120,474,478 as of February 1, 1994. (NOTE 1)
The number of shares outstanding of the Registrant's Common Stock, without par
value, as of February 1, 1994 was 61,479,066 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1993 Annual Report to Stockholders: Parts II and IV
Proxy Statement for 1994 Annual Meeting of Stockholders: Parts III and IV
NOTE 1: In calculating the market value of securities held by non-affiliates
of Registrant as disclosed on the cover page of this Form 10-K, Registrant has
treated as securities held by affiliates as of December 31, 1993, voting stock
owned of record by its directors and principal executive officers, stockholders
owning greater than 10% of the voting stock, and voting stock held by
Registrant's trust departments in a fiduciary capacity.
Total Pages: 67
FIFTH THIRD BANCORP
1993 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
PAGE
Item 1. Business 3
Item 2. Properties 18
Item 3. Legal Proceedings 19
Item 4. Submission of Matters to a Vote of Security Holders 19
PART II
Item 5. Market For Registrant's Common Equity and Related
Stockholder Matters 20
Item 6. Selected Financial Data 20
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 21
Item 8. Financial Statements and Supplementary Data 21
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 21
PART III
Item 10. Directors and Executive Officers of the Registrant 21
Item 11. Executive Compensation 21
Item 12. Security Ownership of Certain Beneficial Owners and Management 21
Item 13. Certain Relationships and Related Transactions 21
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 21
Page 2
PART I
ITEM 1. BUSINESS
FIFTH THIRD BANCORP
ORGANIZATION
Registrant was organized in 1974 under the laws of the State of Ohio. It began
operations in 1975 upon reorganization of its principal subsidiary The Fifth
Third Bank. The executive offices of the Registrant are located in Cincinnati,
Ohio. The Registrant is a multi-bank holding company as defined in the Bank
Holding Company Act of 1956, as amended, and is registered as such with the
Board of Governors of the Federal Reserve System. Registrant is also a unitary
savings and loan holding company and is registered with the Office of Thrift
Supervision. Registrant has thirteen wholly-owned subsidiaries: The Fifth
Third Bank; The Fifth Third Bank of Columbus; The Fifth Third Bank of
Northwestern Ohio, National Association; The Fifth Third Bank of Southern Ohio;
The Fifth Third Bank of Western Ohio, National Association; Fifth Third
Community Development Company; Fifth Third Trust Co. & Savings Bank, FSB;
Fountain Square Management Co.; Fifth Third Bank of Central Kentucky, Inc.;
Fifth Third Bank of Northern Kentucky, Inc.; The Fifth Third Bank of Central
Indiana; The Fifth Third Bank of Southeastern Indiana; and Fountain Square
Insurance Company. Unless the context otherwise indicates the term "Company"
as used herein means the Registrant and the term "Bank" means its wholly-owned
subsidiary, The Fifth Third Bank.
As of December 31, 1993, the Company's consolidated total assets were
$11,966,000,000 and capital accounts totalled $1,197,646,000.
The Bank has four wholly-owned subsidiaries: Midwest Payment Systems, Inc.;
Fifth Third Securities, Inc.; The Fifth Third Company; and The Fifth Third
Leasing Company.
PRIOR ACQUISITIONS
The Company is the result of mergers and acquisitions over the years involving
25 financial institutions throughout Ohio, Indiana, Kentucky, and Florida. The
Company during 1993 made the following acquisitions:
On January 22, 1993, the Company purchased $54 million in deposits from Home
Savings of America. The three offices were located in Oxford, Fremont, and
Chillicothe Ohio and were acquired by The Bank, The Fifth Third Bank of
Northwestern Ohio, National Association and the Fifth Third Bank of Southern
Ohio, respectively.
On February 26, 1993, the Company purchased $106 million in deposits of six
Cincinnati banking offices of First National Bank of Dayton which were acquired
by the Bank.
On October 18, 1993, the Company purchased $131 million in deposits from World
Savings and Loan Association. The two branches located in Norwalk and Sandusky,
Ohio were acquired by The Fifth Third Bank of Northwestern Ohio, National
Association and the three branches located in Piqua and Sidney, Ohio were
acquired by The Fifth Third Bank of Western Ohio, National Association.
Page 3
On December 23, 1993, the Company acquired The TriState Bancorp with
consolidated assets of approximately $342 million. TriState's subsidiary, First
Financial Savings Association, F.A., which had six branches in Cincinnati, was
merged with the Bank.
OTHER OPERATIONS
The Company has other operations conducted through non-bank entities as follows:
Fountain Square Insurance Company, a wholly-owned subsidiary of the Company, was
formed for the purpose of engaging in credit life, accident and health insurance
underwriting and reinsurance activities.
Fifth Third Community Development Company, a wholly-owned subsidiary of the
Company, was formed for the purpose of engaging in development and
rehabilitation of real estate, investment in business ventures, and related
activities specifically designed to address the needs in housing, employment,
and public facilities of low and moderate income persons and communities.
Fountain Square Management Co., a wholly-owned subsidiary of the Company, was
formed for the purpose of engaging in real estate management of the Fifth Third
Center and other Company owned properties.
Fifth Third Company, a wholly-owned subsidiary of the Bank, owns a 32-story
office tower and 5-story office building and parking garage known as the Fifth
Third Center and the William S. Rowe Building, respectively. The Company
occupies 70% of the buildings and leases the remainder to commercial and retail
tenants.
Fifth Third Securities, Inc., a wholly-owned subsidiary of the Bank, is a
registered broker-dealer, through which the Company operates its securities
brokerage business.
Fifth Third Leasing Company, a wholly-owned subsidiary of the Bank, is engaged
in the business of leasing personal property.
Midwest Payment Systems, Inc., a wholly-owned subsidiary of the Bank, engages
in providing merchant processing, electronic funds transfers and other data
processing services.
THE FIFTH THIRD BANK
ORGANIZATION
The present Bank is the result of mergers and acquisitions over the years
involving thirty-one Cincinnati financial institutions, the oldest of which was
The Bank of Ohio Valley, organized June 17, 1858. Other major banks involved
in the mergers were The Fifth National Bank, The Third National Bank and The
Union Trust Company. Sixty-three of the Bank's banking centers are located in
Hamilton County, Ohio; with its other banking centers in the following counties:
Butler County - 12; Clermont County - 5; Cuyahoga Co 3; Lake County - 5;
Montgomery County - 12; and Warren County - 7.
Page 4
As of December 31, 1993, the Bank's total assets were $6,875,027,000 including
total loans and leases of $4,847,723,000. On that date, total deposits were
$4,605,082,000 and capital accounts totalled $518,088,000.
The Bank in 1993 opened 10 new banking centers, purchased or acquired through
merger 12 banking centers, transferred 2 banking centers to an affiliate and
closed 3 banking centers. The Bank has 34 Bank Marts(R), non-traditional
centers located in select grocery stores, which combine location accessibility
with extended hours on Saturday and Sunday afternoons. The Bank provides full
service banking to individuals, industry and governmental agencies through each
of its 118 banking centers.
The Company, through its Affiliates and the Bank, provides a full line of
banking services including Retail, Commercial, Trust & Investment, and Data
Processing.
RETAIL BANKING
Retail Banking is responsible for operating the 102 banking centers in
southwestern Ohio. The Affiliate Division is responsible for the operations of
the Company's other nine banks throughout Ohio, Kentucky, Indiana and Florida.
The banking centers offer full service banking to individuals, industry and
governmental agencies providing customers with easy accessibility to banking
services. The Bank operates banking centers which are open seven days a week
(which are referred to under the federally registered trademark as "Bank Marts")
in select Kroger, FINAST and Marsh Supermarkets and retirement centers,
providing the ultimate in convenience for the busy consumer of the '90s.
Convenience and personal service, delivered along with a comprehensive package
of banking products continue to reinforce the Company's marketing position.
The Bank makes a strong impact on the southwestern Ohio retail banking market
through a great variety of services, including personal checking accounts and
savings programs, certificates of deposit, money market accounts, individual
retirement accounts and Keogh plans.
Consumer Banking includes the Bankcard, Installment Loan, Leasing and
Residential Mortgage Loan Departments, services individual as well as corporate
customers, offering a broad range of credit programs for all retail customers
including credit card banking under the VISA and MasterCard designation, as well
as private label cards, installment loans, student loans, and secured and
unsecured personal loans. The Residential Mortgage Loan Department provides
FHA, VA and conventional as well as adjustable rate mortgage loans to
individuals, and is active in originating mortgages for sale in the secondary
market.
The Affiliate banks are headquartered in major geographic areas and make a
strong impact on the banking market in the region. These banks provide full
service banking including consumer lending, commercial lending, and trust and
investment services making a major contribution to the Company's strong growth.
Twenty-three of the Company's new banking centers were opened or purchased by
the Affiliate banks bringing the total to 171 banking centers. The Affiliate
banks had a strong year with 1993 net income increasing 24.4 percent over 1992.
The Affiliates Division is also responsible for identifying acquisition
candidates and for coordinating the merging of the acquired institutions and
branches into the Company. The Company's Annual Report has a full discussion
of announced acquisitions expected to occur in 1994.
Page 5
COMMERCIAL BANKING
Commercial Banking experienced solid growth in commercial loan and lease
outstandings during 1994 with significant improvement in credit quality. The
Company's strong capital base and consistent earnings performance allow
flexibility to work with its borrowers. A sound lending philosophy, aggressive
calling, cross-selling techniques and a strong focus on customer service allowed
Commercial Banking to experience strong growth.
Commercial Banking provides a variety of services to meet the needs of the
Bank's corporate customers. Available are all types of commercial loans,
including lines of credit, revolving credits, term loans, real estate mortgage
loans and other specialized loans including asset-based financing as well as
various types of commercial leases. The Company further serves the requirements
of large and small industrial and commercial enterprises by providing cash
management services including freight payment, payroll programs, merchant
banking services, cashiering, lockbox and other automated services.
Relationship banking continues to be the focus, with emphasis on product
packages and cross-selling to produce outstanding results.
The Bank through its Financial Institutions Department, serves as correspondent
for numerous banks principally located in the four state area of Ohio, Kentucky,
Indiana and West Virginia. The Bank offers a wide variety of services to its
correspondent banks, including check clearance, loan participation, automated
data processing services as well as investment, trust, pension and profit
sharing services.
The Bank through the International Department, assists local businesses and
customers in carrying out their import-export activities and provides letters
of credit, foreign exchange, banker's acceptance financing and other related
international banking services.
TRUST & INVESTMENT SERVICES
The Trust & Investment Group is customer driven offering a full range of trust
and investment services for individuals, corporations and not-for-profit
organizations.
The Company offers investment management to all its customers. For those who
prefer to choose their own investment options, Fifth Third Securities, Inc., the
Bank's brokerage subsidiary, offers full-service brokerage to both institutional
and retail customers. For the year ended December 31, 1993, the Trust &
Investment Services, primarily within the Bank, had over $38 billion in assets
under care, of which approximately $7 billion is under management.
The Personal Trust Department offers a diverse range of investment and financial
services, including Investment Management, Private Banking, Tax and Real Estate
Services, Trust Services, Estate Planning and a Foundation Office. These
services are tailored to suit any individual's needs.
Corporations and non-profit organizations also benefit from the Bank's wide
range of services, including Investment Management, Employee Benefits, Corporate
Trust, Stock Transfer, Securities Custody, Mutual Funds, Custody and Endowments.
Page 6
The Bank is the Investment Advisor of the Fountain Square Funds. The Fountain
Square Funds is a family of mutual funds consisting of three money market funds
and six stock and bond funds. At December 31, 1993 the Fountain Square Funds'
assets were approximately $1 billion.
DATA PROCESSING
Midwest Payment Systems, Inc. ("MPS") a subsidiary of the Bank, provides
computer services and electronic funds transfer services for the Bank as well
as for other retail and financial institutions. MPS is one of the nation's
leading providers of electronic funds transfer (EFT) services, servicing
customers nationwide and a source of substantial fee income. MPS is active in
the Point of Sale (POS) business, where it has become a national force in credit
card authorization and data capture. MPS is committed to growth as a single-
source solution for financial institutions, retail businesses and governmental
entities.
MPS offers an online automated teller machine (ATM) network, known as the
JEANIE(R) network, and serves as the transaction switch processor for several
regional ATM Networks including MONEY(SM) Station of Ohio located principally
in Ohio where the JEANIE network members participate, the Kentucky regional ATM
Network called the QUEST Network, and a shared ATM Network operating in Chicago,
Illinois called CASH(SM) Station. It also provides other electronic banking
services to financial institutions throughout the United States and online
credit card authorization and data capture for retail merchants at the point of
sale.
____________________
(R) Registered Trademark with U.S. Pat. & T.M. Office
(SM) Service Mark owned by Money Station, Inc.
(SM) Service Mark owned by Cash Station, Inc.
FINANCE
The Finance Group consists of the Treasury and Accounting Groups. The Treasury
Group's responsibilities primarily include monitoring and managing the Company's
net interest income in response to changes in economic conditions and interest
rate movements. The Treasury Group monitors changes in the Company's financial
risk exposures and coordinates strategies with various business units, and
manages and monitors the Bank's and the Company's money market funding, asset
liability management, institutional security dealer sales, investor relations
areas, and monitors the affiliate banks' investment portfolios.
COMPETITION
There are hundreds of commercial banks, savings and loans and other financial
service providers in Ohio, Kentucky, Indiana and Florida, and adjoining states,
thus providing strong competition to the Company's subsidiaries. With respect
to correspondent banking, the Bank's area of competition includes most of
Kentucky and southern Ohio and parts of Indiana and West Virginia. The
Company's subsidiaries compete for deposits with commercial banks, savings and
loan associations and other competitors such as brokerage houses and for retail
and commercial business with banks in other areas of the country, many of which
possess greater financial resources. With respect to the data processing
services, the Bank competes with other third party service providers such as
Deluxe Data Services, EDS and Electronic Payment Systems.
Page 7
The earnings of the Company are affected by general economic conditions as well
as by the monetary policies of the Federal Reserve Board. Such policies, which
include regulating the national supply of bank reserves and bank credit, can
have a major effect upon the source and cost of funds and the rates of return
earned on loans and investments. The Federal Reserve influences the size and
distribution of bank reserves through its open market operations and changes in
cash reserve requirements against member bank deposits.
REGULATION AND SUPERVISION
The Company, as a bank holding company, is subject to the restrictions of the
Bank Holding Company act of 1956, as amended. This Act provides that the
acquisition of control of a bank is subject to the prior approval of the Board
of Governors of the Federal Reserve System. The Company is required to obtain
the prior approval of the Federal Reserve Board before it can acquire control
of more than 5% of the voting shares of another bank. The Act does not permit
the Federal Reserve Board to approve an acquisition by the Company, or any of
its subsidiaries, of any bank located in a state other than Ohio, unless the
acquisition is specifically authorized by the law of the state in which such
bank is located.
The Bank, as a state member bank, is subject to regulation by the Superintendent
of Banks of the State of Ohio, the Board of Governors of the Federal Reserve
System and the Federal Deposit Insurance Corporation. The Company and any other
subsidiaries which it now owns or may hereafter acquire are considered
affiliates of the Bank as that term is defined in the Securities Act of 1933,
as amended.
The Company's other affiliate state banks are primarily subject to the laws of
the state in which each is located, the Board of Governors of the Federal
Reserve System and/or the Federal Deposit Insurance Corporation. The affiliate
banks which are organized under the laws of the United States are primarily
subject to regulation by the Comptroller of the Currency and the Federal Deposit
Insurance Corporation.
The Company and its banking affiliates are subject to certain restrictions on
loans by the Bank, on investments by the Bank in their stock and on its taking
such stock and securities as collateral for loans to any borrower. The Company
and affiliates of the Bank are also subject to certain restrictions with respect
to engaging in the underwriting and public sale and distribution of securities.
In addition, any such affiliates of the Bank will be subject to examination at
the discretion of supervisory authorities.
The Company as a saving and loan holding company and its savings and loan
subsidiary is subject to examination and regulation by the Office of Thrift
Supervision.
The Bank Holding Company Act limits the activities which may be engaged in by
the Company and its subsidiaries to ownership of banks and those activities
which the Federal Reserve Board has deemed or may in the future find to be so
closely related to banking as to be a proper incident thereto.
Page 8
Those activities presently authorized by the Federal Reserve Board include the
following general activities: (1) the making or servicing of loans or other
extensions of credit; (2) operating as an industrial bank, Morris Plan Bank, or
industrial loan company according to state law without the accepting of demand
deposits and without the making of commercial loans; (3) performing the
functions and activities of a trust company; (4) acting with certain limitations
as investment or financial advisor; (5) leasing personal property and equipment;
(6) the making of equity and debt investments in projects or corporations
designated primarily to promote community welfare; (7) providing bookkeeping and
data processing services for the internal operations of the bank holding company
and its subsidiaries; and providing to others data processing and transmission
services and facilities for banking, financial or related economic data; (8)
acting as insurance agent or broker under certain circumstances and with respect
to certain types of insurance, including underwriter for credit life insurance,
credit accident insurance and health insurance which is directly related to
extensions of credit by the bank holding company system; (9) providing limited
courier services for the internal operations of the holding company, for checks
exchanged among banking institutions, and for audit and accounting media of a
banking or financial nature used in processing such media; (10) providing
management consulting advice to non-affiliate banks under certain limitations;
(11) the retail sale of money orders with a face value of $1,000 or less, of
travelers checks and of U.S. Savings Bonds; (12) performing appraisals of real
estate; (13) acting as intermediary in arranging financing of commercial or
industrial income-producing real estate; (14) providing securities brokerage
services, (restricted to buying and selling securities solely as agent for
customers), related securities activities and incidental activities; (15)
underwriting and dealing in government obligations and money market instruments;
(16) foreign exchange advisory and transactional services; (17) acting as
futures commission merchant; (18) providing investment advice on financial
futures and options on futures; (19) providing consumer financial counseling;
(20) providing tax planning and preparation; (21) providing check guaranty
services; (22) operating a collection agency; and (23) operating a credit
bureau. For details and limitations on these activities, reference should be
made to Regulation Y of the Federal Reserve Board, as amended. Further, under
the 1970 amendment of this Act and the regulations of the Federal Reserve Board,
the Company and its subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit or provisions of any
property or service.
EMPLOYEES
As of December 31, 1993, there were no full time employees of the Company.
Affiliates of the Company employed 5,294 employees of whom 860 were officers and
1,162 were part-time employees.
STATISTICAL INFORMATION
Pages 10 to 17 contain statistical information on the Company and its
subsidiaries.
Page 9
SECURITIES PORTFOLIO
The securities portfolio as of December 31 for each of the last five years, and
the maturity distribution and weighted average yield of securities as of
December 31, 1993, are incorporated herein by reference to the securities tables
on page 30 of the Company's 1993 Annual Report to Stockholders attached to this
filing as Exhibit 13.
The weighted average yields for the securities portfolio are yields to maturity
weighted by the par values of the securities. The weighted average yields on
securities exempt from income taxes are computed on a taxable equivalent basis.
The taxable equivalent yields are net after-tax yields to maturity divided by
the complement of the full corporate tax rate (35%).
In order to express yields on a taxable equivalent basis, yields on obligations
of states and political subdivisions have been increased as follows:
Under 1 year 2.43%
1 - 5 years 2.73%
6 - 10 years 2.65%
Over 10 years 3.09%
Total securities 2.64%
The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Debt and Equity Securities," effective December 31,
1993. This Statement requires securities to be classified as held to maturity,
available for sale or trading. Only those securities classified as held to
maturity are reported at amortized cost, with those available for sale and
trading reported at fair value with unrealized gains and losses included in
stockholders' equity or income, respectively. Refer to pages 19 and 20 in the
Company's 1993 Annual Report to Stockholders for a summary of the investment
portfolio classifications at December 31, 1993.
The investment portfolio has increased in size during the past year due in part
to the securitization and transfer to securities of $291,586,000 in residential
mortgage loans. The investment portfolio is comprised largely of fixed and
variable rate mortgage-backed securities. These AAA rated securities are backed
by first mortgages on single-family homes predominately underwritten to the
standards of and guaranteed by the government sponsored agencies of GNMA, FNMA
and FHLMC. They differ from traditional debt securities primarily in that they
have uncertain maturity dates, and are priced based on estimated prepayment
rates on the underlying mortgages.
The estimated average life of the portfolio is three years and six months, which
is very short by industry standards and minimizes our exposure to the risk of
rising interest rates. The Company holds no securities which would be
classified as high risk under the new FFIEC guidelines on mortgage-backed
securities.
The Company had sales of securities available for sale of approximately $230
million during 1993. This activity resulted in $6.5 million in realized
securities gains, less than 2.2% of income before income taxes, and represented
12.2% of total security gains, realized and unrealized, as of December 31, 1993.
Page 10
AVERAGE BALANCE SHEETS
The average balance sheets are incorporated herein by reference to Table 1 on
pages 26 and 27 of the Company's 1993 Annual Report to Stockholders attached to
this filing as Exhibit 13.
ANALYSIS OF NET INTEREST INCOME AND NET INTEREST INCOME CHANGES
The analysis of net interest income and the analysis of net interest income
changes are incorporated herein by reference to Table 1 and Table 2 and the
related discussion on pages 26 through 28 of the Company's 1993 Annual Report
to Stockholders attached to this filing as Exhibit 13.
Page 11
Types of Loans and Leases
- -------------------------
A summary of loans and leases by major category as of December 31 follows ($000's):
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Commercial, financial and
agricultural loans $2,679,611 2,485,310 2,206,176 2,266,553 2,236,707
Real estate - construction loans 322,910 308,781 281,021 244,435 274,169
Real estate - mortgage loans 2,792,464 2,431,072 1,506,224 1,253,954 1,088,204
Consumer loans 2,000,459 1,631,496 1,440,219 1,414,088 1,257,839
Lease financing 1,170,231 737,186 478,125 429,231 425,794
---------- ---------- ---------- ---------- ----------
Loans and leases, gross 8,965,675 7,593,845 5,911,765 5,608,261 5,282,713
Unearned income (154,636) (118,986) (105,153) (111,271) (118,873)
Reserve for credit losses (135,097) (114,751) (90,324) (85,025) (79,956)
---------- ---------- ---------- ---------- ----------
Loans and leases, net $8,675,942 7,360,108 5,716,288 5,411,965 5,083,884
========== ========== ========== ========== ==========
Maturities and Sensitivity of Loans to Changes in Interest Rates
- -------------------------------------------------------------------
The remaining maturities of the loan portfolio distributed to reflect expected cash flows
(excluding residential mortgage and consumer loans) at December 31, 1993, and the sensitivity
of loans to interest rate changes for loans due after one year is as follows ($000's):
Commercial,
Financial
and Real Estate Real Estate
Agricultural Construction Commercial
Loans Loans Loans Total
------------ ------------ ------------ ------------
Due in one year or less $1,560,221 102,873 75,695 1,738,789
Due after one year through five years 887,389 151,343 316,142 1,354,874
Due after five years 232,001 68,694 242,658 543,353
---------- ---------- -------- ----------
Total $2,679,611 322,910 634,495 3,637,016
========== ========== ======== ==========
Loans due after one year
Predetermined interest rate $600,918 218,539 428,442 1,247,899
========== ========== ======== ==========
Floating or adjustable interest rate $518,472 1,498 130,358 650,328
========== ========== ======== ==========
Page 12
Risk Elements
- -------------
Interest on loans is normally accrued at the rate agreed upon at the time each loan was
negotiated. It is the Company's policy to discontinue accrual of interest on commercial,
construction and mortgage loans when there is a clear indication that the borrower's cash
flow may not be sufficient to meet payments as they become due. Loans, other than consumer
loans, are placed on nonaccrual status when principal or interest is past due ninety days
or more, unless the loan is well secured and in the process of collection. The following
table presents data concerning loans and leases at risk at December 31, 1993 and previous
years ($000's):
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Nonaccrual loans and leases $15,709 29,273 65,253 70,115 31,811
Loans and leases contractually
past due ninety days or more as
to interest, principal or rental
payments 9,696 21,382 26,898 23,908 17,025
Loans and leases renegotiated to
provide a reduction or deferral of
interest, principal or rental payments
because of the financial position
deterioration of the borrower 377 402 793 6,248 2,832
Loans and leases now current
where there are serious doubts
as to the ability of the
borrower to comply with present
repayment terms 35,992 35,097 32,819 36,690 29,003
<FN>
For calendar year 1993, interest income of $368,000 was recorded on nonaccrual and
renegotiated loans and leases. Additional interest income of $1,169,000 would have been
recorded if the nonaccrual and renegotiated loans and leases had been current in accordance
with their original terms.
Page 13
Summary of Credit Loss Experience
- ------------------------------------
A summary of the activity in the reserve for credit losses arising from provisions charged to
operations, losses charged off and recoveries of losses previously charged off is as follows
($000's):
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Loans and leases outstanding at
December 31 $8,811,039 7,474,859 5,806,612 5,496,990 5,163,840
=========== =========== =========== =========== ===========
Average loans and leases outstanding $8,186,873 6,616,396 5,659,608 5,250,014 4,805,763
=========== =========== =========== =========== ===========
Reserve for credit losses, January 1 $114,751 90,324 85,025 79,956 67,412
--------- --------- --------- --------- ---------
Losses charged off:
Commercial, financial and
agricultural loans (12,113) (24,156) (22,380) (13,021) (9,523)
Real estate - construction loans -- -- -- (1,724) --
Real estate - mortgage loans (6,451) (5,700) (8,153) (4,303) (2,346)
Consumer loans (15,571) (21,474) (25,024) (20,833) (17,908)
Lease financing (1,850) (1,910) (2,556) (2,339) (3,063)
--------- --------- --------- --------- ---------
Total losses (35,985) (53,240) (58,113) (42,220) (32,840)
--------- --------- --------- --------- ---------
Recoveries of losses previously
charged off:
Commercial, financial and
agricultural loans 2,103 1,109 1,580 1,995 1,894
Real estate - construction loans -- -- -- -- --
Real estate - mortgage loans 449 372 280 139 305
Consumer loans 6,532 6,574 4,972 4,054 4,495
Lease financing 638 499 538 1,222 1,049
--------- --------- --------- --------- ---------
Total recoveries 9,722 8,554 7,370 7,410 7,743
--------- --------- --------- --------- ---------
Net losses charged off:
Commercial, financial and
agricultural loans (10,010) (23,047) (20,800) (11,026) (7,629)
Real estate - construction loans -- -- -- (1,724) --
Real estate - mortgage loans (6,002) (5,328) (7,873) (4,164) (2,041)
Consumer loans (9,039) (14,900) (20,052) (16,779) (13,413)
Lease financing (1,212) (1,411) (2,018) (1,117) (2,014)
--------- --------- --------- --------- ---------
Total net losses charged off (26,263) (44,686) (50,743) (34,810) (25,097)
--------- --------- --------- --------- ---------
Reserve of acquired banks 2,122 3,798 298 -- 1,173
--------- --------- --------- --------- ---------
Provision charged to operations 44,487 65,315 55,744 39,879 36,468
--------- --------- --------- --------- ---------
Reserve for credit losses, December 31 $135,097 114,751 90,324 85,025 79,956
========= ========= ========= ========= =========
Page 14
Summary of Credit Loss Experience, continued
- --------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Reserve for credit losses,
December 31:
Commercial, financial and
agricultural loans $68,825 65,285 48,383 53,377 54,811
Real estate - construction loans 6,442 6,096 -- 5,198 2,000
Real estate - mortgage loans 18,136 12,194 15,358 4,257 3,698
Consumer loans 32,271 25,715 22,232 17,534 15,987
Lease financing 9,423 5,461 4,351 4,659 3,460
--------- --------- --------- --------- ---------
Total reserve for
credit losses $135,097 114,751 90,324 85,025 79,956
========= ========= ========= ========= =========
The distribution of loans and leases by type, the ratio of net charge-offs to average loans
and leases outstanding and the ratio of the reserve for credit losses to loans and leases
outstanding is as follows:
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Percentage of loans and leases to total
loans and leases at December 31
Commercial, financial and
agricultural loans 29.9 % 32.7 37.3 40.4 42.3
Real estate - construction loans 3.6 4.1 4.8 4.4 5.2
Real estate - mortgage loans 31.1 32.0 25.5 22.3 20.6
Consumer loans 22.3 21.5 24.4 25.2 23.8
Lease financing 13.1 9.7 8.0 7.7 8.1
------ ------ ------ ------ ------
Total 100.0 % 100.0 100.0 100.0 100.0
------ ------ ------ ------ ------
Ratio of net charge-offs during year to
average loans and leases outstanding during
year
Commercial, financial and
agricultural loans 0.38 % 0.98 0.92 0.51 0.37
Real estate - construction loans -- -- -- 0.70 --
Real estate - mortgage loans 0.23 0.27 0.57 0.36 0.21
Consumer loans 0.50 0.98 1.45 1.28 1.13
Lease financing 0.15 0.29 0.54 0.32 0.62
Weighted Average Ratio 0.32 0.68 0.90 0.66 0.52
Ratio of reserve for credit losses to loans
and leases outstanding at December 31 1.53 % 1.54 1.56 1.55 1.55
Page 15
Reserve for Credit Losses
- -------------------------
The reserve for credit losses is established through charges to operations by
a provision for credit losses. Loans and leases which are determined to be
uncollectible are charged against the reserve and any subsequent recoveries are
credited to the reserve. The amount charged to operations is based on several
factors. These include the following:
1. Analytical reviews of the credit loss experience in relationship to
outstanding loans and leases to determine an adequate reserve for credit
losses required for loans and leases at risk.
2. A continuing review of problem or at risk loans and leases and the overall
portfolio quality.
3. Regular examinations and appraisals of the loan and lease portfolio
conducted by the Bank's examination staff and the banking supervisory
authorities.
4. Management's judgement with respect to the current and expected economic
conditions and their impact on the existing loan and lease portfolio.
The amount provided for credit losses exceeded actual net charge-offs by
$18,224,000 in 1993, $20,629,000 in 1992 and $5,001,000 in 1991.
Management reviews the reserve on a quarterly basis to determine whether
additional provisions should be made after considering the factors noted above.
Based on these procedures, management is of the opinion that the reserve at
December 31, 1993 of $135,097,000 is adequate.
Maturity Distribution of Domestic Certificates of Deposit of $100,000 and Over
- ------------------------------------------------------------------------------
at December 31, 1993 ($000's)
-----------------------------
Under 3 months $174,719
3 to 6 months 70,717
7 to 12 months 45,625
Over 12 months 14,469
--------
Total certificates - $100,000 and over $305,530
========
Note: Foreign office deposits are denominated in amounts greater than $100,000.
Page 16
Purchase of Deposits
- --------------------
On January 22, 1993, the Company purchased $54 million of deposits as well as
the facilities of three Home Savings of America offices in Oxford, Chillicothe
and Fremont, Ohio. On February 26, 1993, the Company purchased $106 million in
deposits and the facilities of six First National Bank of Dayton locations in
Cincinnati. On October 18, 1993, the Company purchased $131 million in deposits
and the facilities of five World Savings and Loan Association branches in
western and northwestern Ohio.
Funds Borrowed
- --------------
Funds borrowed is comprised of various short-term sources of funds. A summary
of the average outstanding, maximum month-end balance and weighted average
interest rate for the years ended December 31 follows ($000's):
1993 1992 1991
---- ---- ----
Average outstanding $1,275,568 1,173,253 766,860
Maximum month-end balance $1,602,217 1,436,203 1,042,566
Weighted average interest rate 3.00% 3.47 5.59
Return on Equity and Assets
- ---------------------------
The following table presents certain operating ratios:
1993 1992 1991
------ ------ ------
Return on assets (A) 1.80% 1.74 1.68
Return on equity (B) 18.2% 17.3 16.6
Dividend payout ratio (C) 31.8% 33.0 33.7
Equity to assets ratio (D) 9.92% 10.07 10.11
- -----------------------------------------
(A) net income divided by average assets
(B) net income divided by average equity
(C) dividends declared per share divided by fully diluted net income per share
(D) average equity divided by average assets
Page 17
ITEM 2. PROPERTIES
The Company's executive offices and the main office of the Bank are located on
Fountain Square Plaza in downtown Cincinnati, Ohio. On August 17, 1983, these
facilities, located in a 32-story office tower and a 5-story office building and
parking garage known as the Fifth Third Center and the William S. Rowe Building,
respectively, were purchased by a subsidiary of the Bank, as a 65% partner in
a partnership with two other partners. The Bank's subsidiary has acquired the
interest of the other two partners and now owns 100% of the Fifth Third Center
and the William S. Rowe Building.
The Bank operates 118 banking centers, of which 53 are owned and 65 are leased.
These leases have various expiration dates to the year 2013. Properties owned
by the Bank are free from mortgages and encumbrances.
The Company has nine other affiliate banks, four located in Ohio, two in
Kentucky, two in Indiana, and one in Florida. The affiliate banks operate 171
banking centers, of which 99 are owned and 72 are leased.
OHIO BANKS
The Fifth Third Bank of Columbus opened 7 new banking centers, 3 of which were
Bank Marts. The Fifth Third Bank of Columbus, with its main office in the Fifth
Third Center, Columbus, Ohio, now has 35 locations.
The Fifth Third Bank of Northwestern Ohio, National Association, opened 1 new
banking center and purchased 3 banking centers. The Fifth Third Bank of
Northwestern Ohio, National Association, with its main office located in Toledo,
Ohio, now has 49 locations.
The Fifth Third Bank of Western Ohio, National Association, purchased 3 banking
centers (2 of which were later closed), and closed 1 banking center. The Fifth
Third Bank of Western Ohio, National Association, with its main office located
in Piqua, Ohio, now has 28 locations.
The Fifth Third Bank of Southern Ohio purchased 1 banking center, and had 2
banking centers transferred from the Bank. The Fifth Third Bank of Southern
Ohio, with its main office located in Hillsboro, Ohio, now has 13 locations.
KENTUCKY BANKS
Fifth Third Bank of Northern Kentucky, Inc., opened 3 new banking centers. The
Fifth Third Bank of Northern Kentucky, with its main office located in
Covington, Kentucky, now has 18 locations.
Fifth Third Bank of Central Kentucky, Inc., opened 2 new banking centers. The
Fifth Third Bank of Central Kentucky, Inc., with its main office in Lexington,
Kentucky, now has 6 locations.
INDIANA BANKS
The Fifth Third Bank of Central Indiana opened 4 new banking centers, 2 of which
were Bank Marts. The Fifth Bank of Central Indiana, with its main office in
Indianapolis, Indiana, now has 15 locations.
Page 18
The Fifth Third Bank of Southeastern Indiana did not open or close any banking
centers in 1993. The Fifth Third Bank of Southeastern Indiana, with its main
office located in Greensburg, Indiana, has 6 locations.
FLORIDA SAVINGS BANK
Fifth Third Trust Co. & Savings Bank, FSB, relocated its banking center to a new
full-service location in 1993. The Fifth Third Trust Co. & Savings Bank, FSB,
has its main office and banking center located in Naples, Florida.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are not parties to any material legal
proceedings other than routine litigation incidental to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS
The names, ages and positions of the Executive Officers of the Company as of
January 31, 1994 are listed below along with their business experience during
the past 5 years. Officers are appointed annually by the Board of Directors at
the meeting of Directors immediately following the Annual Meeting of
Stockholders.
CURRENT POSITION and
Name and Age Business Experience During Past 5 Years
George A. Schaefer, Jr., 48 PRESIDENT AND CEO. President and Chief
Executive Officer of the Company and the
Bank since January, 1991. Previously, Mr.
Schaefer was President and COO of the
Company and Bank since April, 1989.
Formerly, Mr. Schaefer had been Executive
Vice President of the Company and the Bank.
George W. Landry, 53 EXECUTIVE VICE PRESIDENT. Executive Vice
President of the Company and Bank since
November, 1989. Previously, Mr. Landry was
Group Vice President of the Bank.
Stephen J. Schrantz, 45 EXECUTIVE VICE PRESIDENT. Executive Vice
President of the Company and Bank since
November, 1989. Previously, Mr. Schrantz
was Senior Vice President of the Bank.
Michael D. Baker, 43 SENIOR VICE PRESIDENT. Senior Vice
President of the Company since March, 1993,
and of the Bank since July, 1987.
P. Michael Brumm, 46 SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER. CFO of the Company and Bank since
June, 1990, and Senior Vice President of
the Bank.
Page 19
Robert P. Niehaus, 47 SENIOR VICE PRESIDENT. Senior Vice
President of the Company since March 1993,
and Senior Vice President of the Bank.
Previously, Mr. Niehaus was Vice President
of the Company.
Michael K. Keating, 38 SENIOR VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY. Senior Vice President and
General Counsel of the Company since March,
1993 and Senior Vice President and Counsel
of the Bank since November, 1989, and
Secretary of the Company and the Bank since
January, 1994. Previously, Mr. Keating was
Vice President, Counsel and Assistant
Secretary of the Bank and Counsel of the
Company. Mr. Keating is a son of Mr.
William J. Keating, Director.
Neal E. Arnold, 33 TREASURER. Treasurer of the Company and
the Bank since October, 1990 and Senior
Vice President of the Bank since April,
1993. Previously, Mr. Arnold was Vice
President of the Bank since October, 1990.
Previously, Mr. Arnold was CFO and Senior
Vice President with First National Bank of
Grand Forks, North Dakota.
Gerald L. Wissel, 37 AUDITOR. Auditor of the Company and the
Bank since March 1990 and Senior Vice
President of the Bank since November 1991.
Previously, Mr. Wissel was Vice President
of the Bank since March 1990. Mr. Wissel
was formerly with Deloitte and Touche,
independent public accountants.
Roger W. Dean, 31 CONTROLLER. Controller of the Company and
Vice President of the Bank since June,
1993. Previously, Mr. Dean was with
Deloitte & Touche, independent public
accountants.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated herein by reference to
Page 1 of Registrant's 1993 Annual Report to Stockholders attached to this
filing as Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
page 35 of Registrant's 1993 Annual Report to Stockholders attached to this
filing as Exhibit 13.
Page 20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated herein by reference to
pages 26 through 34 of Registrant's 1993 Annual Report to Stockholders attached
to this filing as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference to
pages 15 through 25 and page 35 of Registrant's 1993 Annual Report to
Stockholders attached to this filing as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item concerning Directors is incorporated
herein by reference under the caption "ELECTION OF DIRECTORS" of the
Registrant's 1994 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by reference under
the caption "EXECUTIVE COMPENSATION" of the Registrant's 1994 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by reference under
the captions "CERTAIN BENEFICIAL OWNERS, ELECTION OF DIRECTORS, AND EXECUTIVE
COMPENSATION" of the Registrant's 1994 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by reference under
the caption "CERTAIN TRANSACTIONS" of the Registrant's 1994 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a) Documents Filed as Part of the Report PAGE
1. Index to Financial Statements
Consolidated Statements of Income for the
Years Ended December 31, 1993, 1992 and 1991 *
Consolidated Balance Sheets, December 31, 1993
and 1992 *
Page 21
Consolidated Statements of Changes in
Stockholders' Equity for the Years Ended
December 31, 1993, 1992 and 1991 *
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1993, 1992 and 1991 *
Notes to Consolidated Financial Statements *
* Incorporated by reference to pages 15 through 25 of Registrant's 1993
Annual Report to Stockholders attached to this filing as Exhibit 13.
2. Financial Statement Schedules
The schedules for Registrant and its subsidiaries are omitted because
of the absence of conditions under which they are required, or because
the information is set forth in the consolidated financial statements
or the notes thereto.
3. Exhibits
EXHIBIT
NO.
3- Amended Articles of Incorporation and Code of Regulations **
10(a)- Fifth Third Bancorp Unfunded Deferred Compensation Plan for
Non-Employee Directors ***
10(b)- Fifth Third Bancorp 1990 Stock Option Plan ****
10(c)- Fifth Third Bancorp 1987 Stock Option Plan *****
10(d)- Fifth Third Bancorp 1982 Stock Option Plan ******
10(e)- Fifth Third Bancorp Stock Option Plan for Employees of The
Fifth Third Bank of Miami Valley, National Association
*******
10(f)- Fifth Third Bancorp Stock Option Plan for Employees of The
Fifth Third Bank of Eastern Indiana ********
10(g)- Indenture effective November 19, 1992 between Fifth Third
Bancorp, Issuer and NBD Bank, N.A., Trustee *********
10(h)- Fifth Third Bancorp Amended and Restated Stock Option Plan
for Employees and Directors of The TriState Bancorp
**********
10(i)- Fifth Third Bancorp 1993 Discount Stock Purchase Plan
***********
11- Computation of Consolidated Net Income Per Share for the
Years Ended December 31, 1993, 1992, 1991, 1990 and 1989
13- Fifth Third Bancorp 1993 Annual Report to Stockholders
Page 22
21- Fifth Third Bancorp Subsidiaries
23- Independent Auditors' Consent
b) Reports on Form 8-K
NONE.
____________________
** Incorporated by reference to Registrant's Registration
Statement, Exhibits 3.1 and 3.2, on Form S-4, Registration
No. 33-19965 which is effective.
*** Incorporated in this Form 10-K Annual Report by reference to
Form 10-K filed for fiscal year ended December 31, 1985.
**** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-
34075, which is effective.
***** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-
13252, which is effective.
****** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 2-98550,
which is effective.
******* Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-
20888, which is effective.
******** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission on November 18, 1992 a
Form 8-K Current Report as an exhibit to a Registration
Statement on Form S-8, Registration No. 33-30690, which is
effective.
********* Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission on November 18, 1992 a
Form 8-K Current Report dated November 16, 1992 and as
Exhibit 4.1 to a Registration Statement on Form S-3,
Registration No. 33-54134, which is effective.
********** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-
51679, which is effective.
*********** Incorporated by reference to Registrant's filing with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form S-8, Registration No. 33-
60474, which is effective.
Page 23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FIFTH THIRD BANCORP
(Registrant)
/s/George A. Schaefer, Jr. February 15, 1994
George A. Schaefer, Jr.
President and CEO
(Principal Executive Officer)
Pursuant to requirements of the Securities Exchange Act of 1934, this report has
been signed on February 15, 1994 by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/P. Michael Brumm /s/Roger W. Dean
P. Michael Brumm Roger W. Dean
Senior Vice President and CFO Controller
(Chief Financial Officer) (Principal Accounting Officer)
/s/John F. Barrett /s/Richard T. Farmer /s/Robert B. Morgan
John F. Barrett Richard T. Farmer Robert B. Morgan
Director Director Director
/s/John D. Geary /s/Michael H. Norris
J. Kenneth Blackwell John D. Geary Michael H. Norris
Director Director Director
Milton C. Boesel, Jr.Ivan W. Gorr Brian H. Rowe
Director Director Director
/s/Clement L. Buenger/s/Joseph H. Head, Jr. /s/George A. Schaefer, Jr.
Clement L. Buenger Joseph H. Head, Jr. George A. Schaefer, Jr.
Director Director Director
/s/Nolan W. Carson /s/Joan R. Herschede /s/John J. Schiff, Jr.
Nolan W. Carson Joan R. Herschede John J. Schiff, Jr.
Director Director Director
/s/Thomas L. Dahl /s/William G. Kagler
Thomas L. Dahl William G. Kagler Stephen Stranahan
Director Director Director
/s/Gerald V. Dirvin /s/William J. Keating /s/Dennis J. Sullivan, Jr.
Gerald V. Dirvin William J. Keating Dennis J. Sullivan, Jr.
Director Director Director
/s/James D. Kiggen /s/Dudley S. Taft
Thomas B. Donnell James D. Kiggen Dudley S. Taft
Director Director Director
Page 24