1
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, 1997 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
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 $8,341,147,473 as of January 30, 1998. (Note 1)
The number of shares outstanding of the Registrant's Common Stock, without par
value, as of January 30, 1998 was 155,308,905 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1997 Annual Report to Stockholders: Parts I, II and IV
Proxy Statement for 1998 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, 1997, 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.
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FIFTH THIRD BANCORP
1997 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Page
----
Item 1. Business 3
Item 2. Properties 13
Item 3. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 13
PART II
Item 5. Market For Registrant's Common Equity and Related
Stockholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 13
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 14
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 16
Item 12. Security Ownership of Certain Beneficial Owners and Management 16
Item 13. Certain Relationships and Related Transactions 16
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 17
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PART I
ITEM 1. BUSINESS
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 and had fourteen wholly-owned
subsidiaries: The Fifth Third Bank; The Fifth Third Bank of Columbus; The Fifth
Third Bank of Northwestern Ohio, N.A.; The Fifth Third Bank of Southern Ohio;
The Fifth Third Bank of Western Ohio; Fifth Third Bank of Northeastern Ohio;
Fifth Third Bank of Florida; Fifth Third Bank of Northern Kentucky, Inc.; Fifth
Third Bank of Kentucky, Inc.; The Fifth Third Bank of Central Indiana; Fifth
Third Community Development Company; Fifth Third Investment Company; Fountain
Square Insurance Company; and Heartland Capital Management, Inc. 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, 1997, the Company's consolidated total assets were
$21,375,054,000 and stockholders' equity totalled $2,277,411,000.
The Bank has five wholly-owned subsidiaries: Midwest Payment Systems, Inc.;
Fifth Third Securities, Inc.; The Fifth Third Company; The Fifth Third Leasing
Company; and Fifth Third International Company.
Fifth Third International Company has a 99.9 percent owned subsidiary: Fifth
Third Trade Services Limited. Fifth Third Investment Company owns the remaining
.01 percent.
ACQUISITIONS
The Company is the result of mergers and acquisitions over the years involving
financial institutions throughout Ohio, Indiana, Kentucky, and Florida. The
Company made the following acquisitions during 1997:
On June 6, 1997, the Company acquired the net assets and operations of Gateway
Leasing Corporation for $2.2 million.
On July 25, 1997, the Company purchased Suburban Bancorporation, Inc., a savings
and loan holding company with total assets of $200.3 million and deposits of
$126.1 million, for consideration consisting of 580,145 shares of the Company's
common stock.
On September 26, 1997, the Company purchased the Ohio branches and deposits of
Great Lakes National Bank Ohio with $129 million in deposits and eight branches
for $11.3 million.
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On November 24, 1997, the Company purchased Heartland Capital Management, Inc.,
a money managing firm headquartered in Indianapolis, Indiana, for consideration
consisting of 234,003 shares of the Company's common stock.
In December 1997, the Company entered into a merger agreement with The Ohio
Company, a full-service broker-dealer for retail and institutional clients
headquartered in Columbus, Ohio. The merger is expected to be completed in
mid-1998, will be accounted for as a purchase and is subject to approval by
stockholders of The Ohio Company and appropriate regulatory agencies. In
connection with the acquisition of The Ohio Company, the Company will issue
shares of its common stock having a fair market value of $80 million in exchange
for all the outstanding shares of The Ohio Company.
In January 1998, the Company entered into merger agreements with State Savings
Company, a privately-owned thrift holding company headquartered in Columbus,
Ohio with $2.8 billion in assets and CitFed Bancorp, Inc., a publicly-traded
savings and loan holding company headquartered in Dayton, Ohio with $3.3 billion
in assets. These transactions are tax-free, stock-for-stock exchanges accounted
for as poolings-of-interests.
The Company will exchange 11,083,560 shares of Fifth Third Bancorp common stock
for all outstanding shares of State Savings Company. The Company will exchange
.67 shares of Fifth Third Bancorp common stock for each outstanding share of
CitFed Bancorp, Inc. Both transactions are expected to be completed in mid-1998
and are subject to approval by the stockholders of State Savings Company and
CitFed Bancorp, Inc., respectively and appropriate regulatory agencies.
In January 1998, the Registrant's Board of Directors rescinded the Company's
stock repurchase programs. No shares have been purchased under these programs
since June 1997.
COMPETITION
There are hundreds of commercial banks, savings and loans and other financial
services providers in Ohio, Kentucky, Indiana, Florida and nationally, which
provide strong competition to the Company's banking subsidiaries. As providers
of a full range of financial services, these subsidiaries compete with national
and state banks, savings and loan associations, securities dealers, brokers,
mortgage bankers, finance and insurance companies, and other financial service
companies. With respect to data processing services, the Bank's data processing
subsidiary, Midwest Payment Systems, Inc., competes with other electronic fund
transfer (EFT) service providers such as Electronic Payment Systems, Deluxe
Corporation and Electronic Data Systems and other merchant processing providers
such as First Data Corporation, National Processing, Inc. and First USA
Paymentech, Inc.
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.
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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 (the "Act"). The 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 percent 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.
On September 29, 1994, the Act was amended by The Interstate Banking and Branch
Efficiency Act of 1994 which authorizes interstate bank acquisitions anywhere in
the country effective one year after the date of enactment, and interstate
branching by acquisition and consolidation effective June 1, 1997, in those
states that have not opted out by that date.
The Company's subsidiary 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 subsidiary bank
which is organized under the laws of the United States is primarily subject to
regulation by the Comptroller of the Currency and the Federal Deposit Insurance
Corporation. Prior to January, 1997, the Company, which was also a savings and
loan holding company, and its savings and loan subsidiaries were subject to
regulation by the Office of Thrift Supervision.
The Company and its subsidiaries are subject to certain restrictions on
intercompany loans and investments. The Company and its subsidiaries are also
subject to certain restrictions with respect to engaging in the underwriting and
public sale and distribution of securities. In addition, the Company and its
subsidiaries are subject to examination at the discretion of supervisory
authorities.
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.
The Financial Reform, Recovery and Enforcement Act of 1989 (FIRREA) provides
that a holding company's controlled insured depository institutions are liable
for any loss incurred by the Federal Deposit Insurance Corporation in connection
with the default of, or any FDIC-assisted transaction involving, an affiliated
insured bank or savings association.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the "FDIC
Improvement Act") covers a wide expanse of banking regulatory issues. The FDIC
Improvement Act deals with the recapitalization of the Bank Insurance Fund, with
deposit insurance reform, including requiring the FDIC to establish a risk-based
premium assessment system, and with a number of other regulatory and supervisory
matters.
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EMPLOYEES
As of December 31, 1997, there were no employees of the Company. Subsidiaries of
the Company employed 7,180 employees -- 1,244 were officers and 1,363 were
part-time employees.
STATISTICAL INFORMATION
Pages 6 to 12 contain statistical information on the Company and its
subsidiaries. Information about the Company's business segments is incorporated
herein by reference to pages 25 and 26 of Registrant's 1997 Annual Report to
Stockholders attached to this filing as Exhibit 13.
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, 1997, are incorporated herein by reference to the securities tables
on pages 32 and 33 of the Company's 1997 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 percent). In order to express
yields on a taxable equivalent basis, yields on obligations of states and
political subdivisions (municipal securities) have been increased as follows:
Under 1 year 2.61%
1 - 5 years 2.19%
6 - 10 years 2.19%
Over 10 years 2.48%
Total municipal securities 2.24%
AVERAGE BALANCE SHEETS
The average balance sheets are incorporated herein by reference to Table 1 on
pages 28 and 29 of the Company's 1997 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 28 through 30 of the Company's 1997 Annual Report to
Stockholders attached to this filing as Exhibit 13.
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TYPES OF LOANS AND LEASES
A summary of loans and leases by major category as of December 31 follows
($000's):
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Commercial, financial and
agricultural loans $ 4,268,238 4,013,785 3,584,124 3,045,315 2,685,558
Real estate - construction loans 360,242 375,938 312,098 286,088 342,177
Real estate - mortgage loans 3,106,707 2,946,225 2,769,178 3,076,463 3,434,496
Consumer loans 2,769,786 2,600,169 3,062,697 2,407,261 2,090,154
Lease financing 3,480,869 3,026,834 2,288,573 1,703,492 1,170,231
----------- ---------- ---------- ---------- ---------
Loans and leases, gross 13,985,842 12,962,951 12,016,670 10,518,619 9,722,616
Unearned income (547,125) (448,159) (326,027) (232,162) (155,718)
Reserve for credit losses (200,931) (187,278) (177,388) (155,918) (144,537)
----------- ---------- ---------- ---------- ---------
Loans and leases, net $13,237,786 12,327,514 11,513,255 10,130,539 9,422,361
=========== ========== ========== ========== =========
MATURITIES AND SENSITIVITY OF LOANS TO CHANGES IN INTEREST RATES
The remaining maturities of the loan portfolio distributed to reflect cash flows
(excluding residential mortgage and consumer loans) at December 31, 1997, based
on scheduled repayments and the sensitivity of loans to interest rate changes
for loans due after one year was as follows ($000's):
Commercial,
Financial and Real Estate Real Estate
Agricultural Construction Commercial
Loans Loans Loans Total
----- ----- ----- -----
Due in one year or less $2,443,943 135,422 203,434 $2,782,799
Due after one year through
five years 1,660,589 157,070 474,890 2,292,549
Due after five years 163,706 67,750 132,114 363,570
---------- ------- ------- ----------
Total $4,268,238 360,242 810,438 $5,438,918
========== ======= ======= ==========
Loans due after one year:
Predetermined interest rate $1,372,075 130,369 438,432 $1,940,876
========== ======= ======= ==========
Floating or adjustable
interest rate $ 452,220 94,451 168,572 $ 715,243
========== ====== ======= ==========
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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, 1997 and
previous years ($000's):
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Nonaccrual loans and leases $37,401 29,046 37,049 20,725 18,961
Loans and leases contractually
past due ninety days or more as
to interest, principal or rental
payments 46,281 38,053 20,455 13,237 10,444
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 128 1,121 506 443 2,378
Loans and leases currently performing
in accordance with contractual terms
where there are serious doubts as to
the ability of the borrower to comply
with such terms 29,145 43,097 39,621 35,254 35,992
For calendar year 1997, interest income of $489,000 was recorded on nonaccrual
and renegotiated loans and leases. Additional interest income of $3,482,000
would have been recorded if the nonaccrual and renegotiated loans and leases had
been current in accordance with their original terms.
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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 was as follows ($000's):
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Loans and leases outstanding at
December 31 $13,438,717 12,514,792 11,690,643 10,286,457 9,566,898
=========== ========== ========== ========== =========
Average loans and leases
outstanding $12,783,555 12,304,544 10,960,757 9,902,901 8,869,432
=========== ========== ========== ========== =========
Reserve for credit losses,
January 1 $ 187,278 177,388 155,918 144,537 121,452
----------- ---------- ---------- --------- ---------
Losses charged off:
Commercial, financial and
agricultural loans (8,823) (10,500) (6,596) (8,793) (12,113)
Real estate - construction loans -- -- -- -- --
Real estate - mortgage loans (2,195) (3,774) (3,697) (3,485) (7,174)
Consumer loans (59,384) (53,027) (26,330) (16,416) (16,035)
Lease financing (21,399) (13,143) (5,084) (2,252) (1,850)
----------- ---------- ---------- --------- ---------
Total losses (91,801) (80,444) (41,707) (30,946) (37,172)
----------- ---------- ---------- --------- ---------
Recoveries of losses previously
charged off:
Commercial, financial and
agricultural loans 2,159 2,865 1,443 1,795 2,103
Real estate - construction loans -- -- -- -- --
Real estate - mortgage loans 631 1,608 611 3,006 564
Consumer loans 15,196 13,174 8,399 7,898 6,793
Lease financing 5,421 2,835 1,393 773 638
----------- ---------- ---------- --------- ---------
Total recoveries 23,407 20,482 11,846 13,472 10,098
----------- ---------- ---------- --------- ---------
Net losses charged off:
Commercial, financial and
agricultural loans (6,664) (7,635) (5,153) (6,998) (10,010)
Real estate - construction loans -- -- -- -- --
Real estate - mortgage loans (1,564) (2,166) (3,086) (479) (6,610)
Consumer loans (44,188) (39,853) (17,931) (8,518) (9,242)
Lease financing (15,978) (10,308) (3,691) (1,479) (1,212)
----------- ---------- ---------- --------- ---------
Total net losses charged off (68,394) (59,962) (29,861) (17,474) (27,074)
----------- ---------- ---------- --------- ---------
Letters of credit -- -- -- (7,800) --
Reserve of acquired
institutions and other 1,705 5,838 8,369 875 2,122
Provision charged to operations 80,342 64,014 42,962 35,780 48,037
----------- ---------- ---------- --------- ---------
Reserve for credit losses,
December 31 $ 200,931 187,278 177,388 155,918 144,537
=========== ========== ========== ========== =========
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SUMMARY OF CREDIT LOSS EXPERIENCE, CONTINUED
December 31: 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Reserve for credit losses,
Commercial, financial and
agricultural loans $104,643 98,491 92,988 72,906 71,825
Real estate - construction loans 4,762 4,853 5,033 5,405 6,442
Real estate - mortgage loans 48,727 39,879 30,392 26,298 23,397
Consumer loans 22,710 25,045 32,126 36,272 33,450
Lease financing 20,089 19,010 16,849 15,037 9,423
-------- ------- ------- ------- -------
Total reserve for credit losses $200,931 187,278 177,388 155,918 144,537
======== ======= ======= ======= =======
The analysis above is for analytical purposes. The reserve for credit losses is
general in nature and is available to absorb losses from any portion of the loan
and lease portfolio.
The distribution of loans and leases by type and the ratio of net charge-offs to
average loans and leases outstanding was as follows:
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Percentage of loans and leases to total
loans and leases at December 31
Commercial, financial and
agricultural loans 31.5% 31.9 30.5 29.5 28.0
Real estate - construction loans 2.7 3.0 2.7 2.8 3.6
Real estate - mortgage loans 23.1 23.6 23.7 29.9 35.8
Consumer loans 20.6 20.8 26.2 23.4 21.9
Lease financing 22.1 20.7 16.9 14.4 10.7
----- ----- ----- ----- -----
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 0.16% 0.20 0.15 0.24 0.38
Real estate - construction loans -- -- -- -- --
Real estate - mortgage loans 0.05 0.07 0.10 0.01 0.21
Consumer loans 1.71 1.40 0.68 0.38 0.49
Lease financing 0.59 0.45 0.22 0.12 0.15
Weighted Average Ratio 0.54 0.49 0.27 0.18 0.31
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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 Company'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
$11,948,000 in 1997, $4,052,000 in 1996 and $13,101,000 in 1995.
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, 1997 of $200,931,000 was adequate.
MATURITY DISTRIBUTION OF DOMESTIC CERTIFICATES OF DEPOSIT OF
$100,000 AND OVER AT DECEMBER 31, 1997 ($000'S)
Three months or less $ 762,288
Over three months through six months 151,555
Over six months through twelve months 69,862
Over twelve months 26,733
----------
Total certificates - $100,000 and over $1,010,438
===========
Note: Foreign office deposits totalling $540,951 are denominated in amounts
greater than $100,000.
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RETURN ON EQUITY AND ASSETS
The following table presents certain operating ratios:
1997 1996* 1995
---- ----- ----
Return on assets (a) 1.96% 1.72 1.78
Return on equity (b) 19.6% 17.2 18.1
Dividend payout ratio (c) 33.6% 34.8 33.9
Equity to assets ratio (d) 10.03% 9.99 9.82
- ---------------
(a) net income divided by average assets
(b) net income divided by average equity
(c) dividends declared per share divided by diluted earnings per share
(d) average equity divided by average assets
* 1996 ratios include the special SAIF assessment of $16.6 million pretax
($10.8 million after tax or $.06 per share). For comparability, excluding
the impact of this assessment, return on average assets, return on average
equity, and the dividend payout ratio for 1996 would have been 1.78%
17.8% and 33.7%, respectively.
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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, 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. One of the Bank's
subsidiaries owns 100 percent of these buildings.
At December 31, 1997, the Company, through its subsidiary banks, six located in
Ohio, two in Kentucky, one in Indiana and one in Florida, operated 410 banking
centers, of which 209 were owned and 201 were leased. The properties owned are
free from mortgages and encumbrances.
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.
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 1997 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 37 of Registrant's 1997 Annual Report to Stockholders attached to this
filing as Exhibit 13.
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 28 through 36 of Registrant's 1997 Annual Report to Stockholders attached
to this filing as Exhibit 13.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is incorporated herein by reference to
pages 35 and 36 of Registrant's 1997 Annual Report to Stockholders attached to
this filing as Exhibit 13.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference to
pages 13 through 27 and page 37 of Registrant's 1997 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 1998 Proxy Statement. The names, ages and positions of the
Executive Officers of the Company as of January 30, 1998 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., 52 PRESIDENT AND CEO. President and Chief Executive Officer of
the Company and the Bank.
Michael D. Baker, 47 EXECUTIVE VICE PRESIDENT. Executive Vice President of the
Company and the Bank since August, 1995. Previously, Mr.
Baker was Senior Vice President of the Company since March,
1993, and of the Bank.
P. Michael Brumm, 50 EXECUTIVE VICE PRESIDENT. Executive Vice President of the
Company and the Bank since August, 1995. Until June, 1997,
Mr. Brumm was Chief Financial Officer of the Company and the
Bank. Previously, Mr. Brumm was Senior Vice President and
CFO of the Company and the Bank.
James J. Hudepohl, 45 EXECUTIVE VICE PRESIDENT. Executive Vice President of the
Company and the Bank since January, 1997. Previously, Mr.
Hudepohl was Senior Vice President of the Bank.
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Current Position and
Name and Age Business Experience During Past 5 Years
- ------------ ---------------------------------------
Michael K. Keating, 42 EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY. Executive Vice
President of the Company and the Bank since August, 1995 and Secretary of the
Company and the Bank since January, 1994. Previously, Mr. Keating was Senior
Vice President and General Counsel of the Company since March, 1993, and Senior
Vice President and Counsel of the Bank.
Robert P. Niehaus, 51 EXECUTIVE VICE PRESIDENT. Executive Vice President of the Company and the Bank
since August, 1995. Previously, Mr. Niehaus was Senior Vice President of the
Company since March, 1993, and Senior Vice President of the Bank.
Stephen J. Schrantz, 48 EXECUTIVE VICE PRESIDENT. Executive Vice President of the
Company and the Bank.
Gerald L. Wissel, 41 EXECUTIVE VICE PRESIDENT. Executive Vice President of the Bank since January,
1997. Auditor of the Company and the Bank. Previously, Mr. Wissel was Senior
Vice President of the Bank.
Robert J. King, Jr., 42 EXECUTIVE VICE PRESIDENT. Executive Vice President of the Company since June,
1997. Vice Chairman of The Fifth Third Bank of Northwestern Ohio, N.A. and
President and CEO of Fifth Third Bank of Northeastern Ohio since August, 1997.
Previously, Mr. King was President and CEO of The Fifth Third Bank of
Northwestern Ohio, N.A. Mr. King was Senior Vice President of the Company since
March, 1995.
James R. Gaunt, 52 EXECUTIVE VICE PRESIDENT. Executive Vice President of the Company since June,
1997. Senior Vice President of the Company since March, 1994, and President and
CEO of Fifth Third Bank of Kentucky, Inc. since August, 1994. Previously, Mr.
Gaunt was Senior Vice President of the Company and the Bank.
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Current Position and
Name and Age Business Experience During Past 5 Years
- ------------ ---------------------------------------
Neal E. Arnold, 37 CHIEF FINANCIAL OFFICER AND TREASURER. Chief Financial Officer of the Company
and the Bank since June, 1997. Mr. Arnold has been the Treasurer of the Company
and the Bank and Senior Vice President of the Bank since April, 1993.
Roger W. Dean, 35 CONTROLLER. Controller of the Company and Senior Vice President of the Bank
since March, 1997. Previously, Mr. Dean was Vice President of the Bank. Prior
to June 1993, Mr. Dean was with Deloitte & Touche LLP, independent public
accountants.
Paul L. Reynolds, 36 ASSISTANT SECRETARY. Senior Vice President of the Company and the Bank since
March, 1997. Assistant Secretary of the Company since March, 1995, General
Counsel and Assistant Secretary of the Bank since January, 1995. Previously,
Mr. Reynolds was Vice President, Counsel and Assistant Secretary of the Bank
since 1990.
Regina G. Livers, 40 COMMUNITY AFFAIRS OFFICER. Community Affairs Officer of the Company since March
1997. Previously, Ms. Livers was Vice President and Community Affairs Officer
of the Bank.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by reference under
the caption "EXECUTIVE COMPENSATION" of the Registrant's 1998 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 1998 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 1998 Proxy Statement.
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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, 1997, 1996 and 1995 *
Consolidated Balance Sheets, December 31, 1997
and 1996 *
Consolidated Statements of Changes in
Stockholders' Equity for the Years Ended
December 31, 1997, 1996 and 1995 *
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1997, 1996 and 1995 *
Notes to Consolidated Financial Statements *
* Incorporated by reference to pages 13 through 27 of Registrant's
1997 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 (a)
Rider 17
4(a) Junior Subordinated Indenture, dated as of March
20, 1997 between Fifth Third Bancorp and Wilmington
Trust Company, as Debenture Trustee (b)
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18
4(b) Certificate Representing the 8.136% Junior
Subordinated Deferrable Interest Debentures, Series
A, of Fifth Third Bancorp (b)
4(c) Amended and Restated Trust Agreement, dated as of
March 20, 1997 of Fifth Third Capital Trust II,
among Fifth Third Bancorp, as Depositor, Wilmington
Trust Company, as Property Trustee, and the
Administrative Trustees name therein (b)
4(d) Certificate Representing the 8.136% Capital
Securities, Series A, of Fifth Third Capital Trust
I (b)
4(e) Guarantee Agreement, dated as of March 20, 1997
between Fifth Third Bancorp, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee (b)
4(f) Agreement as to Expense and Liabilities, dated as
of March 20, 1997 between Fifth Third Bancorp, as
the holder of the Common Securities of Fifth Third
Capital Trust I and Fifth Third Capital Trust II
(b)
10(a)- Fifth Third Bancorp Unfunded Deferred Compensation
Plan for Non-Employee Directors (c)
10(b)- Fifth Third Bancorp 1990 Stock Option Plan (d)
10(c)- Fifth Third Bancorp 1987 Stock Option Plan (e)
10(d)- Indenture effective November 19, 1992 between Fifth
Third Bancorp, Issuer and NBD Bank, N.A., Trustee
(f)
10(e)- Fifth Third Bancorp 1993 Discount Stock Purchase
Plan (g)
10(f)- Fifth Third Bancorp Amended and Restated Stock
Incentive Plan for selected Executive Officers,
Employees and Directors of The Cumberland Federal
Bancorporation, Inc. (h)
10(g)- Fifth Third Bancorp Master Profit Sharing Plan (i)
10(h)- Fifth Third Bancorp Amended and Restated Stock
Option and Incentive Plan for Selected Executive
Officers, Employees and Directors of Falls
Financial, Inc. (j)
10(i)- Fifth Third Bancorp Amended 1993 Discount Stock
Purchase Plan (k)
11- Computation of Consolidated Earnings Per Share for
the Years Ended December 31, 1997, 1996, 1995, 1994
and 1993
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19
13- Fifth Third Bancorp 1997 Annual Report to
Stockholders
21- Fifth Third Bancorp Subsidiaries
23- Independent Auditors' Consent
b) Reports on Form 8-K
None.
- ------------------------
(a) Incorporated by reference to Registrant's Registration Statement, Exhibits
3.1 and 3.2, on Form S-4, Registration No. 33-19965.
(b) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission on March 26, 1997, a Form 8-K Current Report.
(c) Incorporated in this Form 10-K Annual Report by reference to Form 10-K filed
for fiscal year ended December 31, 1985.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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. 33-55223.
(i) 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. 33-55553.
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20
(j) 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. 33-61149.
(k) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as Exhibit 10 to the Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996.
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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. March 10, 1998
- --------------------------
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 March 10, 1998 by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/NEAL E. ARNOLD /s/ROGER W. DEAN /s/ROBERT B. MORGAN
- ---------------------------- ------------------------------- --------------------------
Neal E. Arnold Roger W. Dean Robert B. Morgan
Senior Vice President and CFO Controller Director
(Principal Financial Officer) (Principal Accounting Officer)
/s/IVAN W. GORR /s/JAMES E. ROGERS
- ---------------------------- ------------------------------- --------------------------
Darryl F. Allen Ivan W. Gorr James E. Rogers
Director Director Director
/s/JOSEPH H. HEAD, JR.
- ---------------------------- ------------------------------- --------------------------
John F. Barrett Joseph H. Head, Jr. Brian H. Rowe
Director Director Director
/s/MILTON C. BOESEL, JR. /s/JOAN R. HERSCHEDE /s/GEORGE A. SCHAEFER, JR.
- ---------------------------- ------------------------------- --------------------------
Milton C. Boesel, Jr. Joan R. Herschede George A. Schaefer, Jr.
Director Director Director
/s/GERALD V. DIRVIN /s/JOHN J. SCHIFF, JR.
- ---------------------------- ------------------------------- --------------------------
Gerald V. Dirvin William G. Kagler John J. Schiff, Jr.
Director Director Director
/s/THOMAS B. DONNELL /s/JAMES D. KIGGEN
- ---------------------------- ------------------------------- --------------------------
Thomas B. Donnell James D. Kiggen Dennis J. Sullivan, Jr.
Director Director Director
/s/RICHARD T. FARMER /s/MITCHEL D. LIVINGSTON, PH.D. /s/DUDLEY S. TAFT
- ---------------------------- ------------------------------- --------------------------
Richard T. Farmer Mitchel D. Livingston, Ph.D. Dudley S. Taft
Director Director Director
21