Fifth Third Bancorp (Nasdaq: FITB) today reported third quarter 2013 net
income of $421 million, compared with net income of $591 million in the
second quarter of 2013 and net income of $363 million in the third
quarter of 2012. Third quarter 2013 net income available to common
shareholders was also $421 million, or $0.47 per diluted share, as there
were no preferred dividends paid in the third quarter. After preferred
dividends, second quarter 2013 net income to common shareholders was
$582 million, or $0.65 per diluted share, and third quarter 2012 net
income to common shareholders was $354 million, or $0.38 per diluted
share.
Third quarter 2013 noninterest income included an $85 million gain on
the sale of Vantiv shares and a $6 million positive valuation adjustment
on the Vantiv warrant. Third quarter noninterest expense included $30
million in charges to increase litigation reserves, $5 million in
severance expense, and $5 million in large bank assessments for 2012 and
2013 initiated by regulators under the Dodd-Frank Act. Results also
included the benefit of a $15 million reduction in the mortgage
representation and warranty reserve and a $4 million seasonal pension
settlement charge.
Second quarter 2013 noninterest income included a $242 million gain on
the sale of Vantiv shares, a $76 million positive valuation adjustment
on the Vantiv warrant, and a pre-tax benefit of $10 million resulting
from a settlement related to a previously surrendered bank-owned life
insurance (BOLI) policy. Second quarter noninterest expense included $51
million in charges to increase litigation reserves and $1 million in
severance expense. Results also included $9 million of charges to
increase the mortgage representation and warranty reserve.
Third quarter 2012 noninterest income included a $16 million negative
valuation adjustment on the Vantiv warrant and $13 million in gains
recognized on the sale of certain Fifth Third funds. Third quarter 2012
noninterest expense included $26 million of debt extinguishment costs
associated with the redemption of Fifth Third Capital Trust V and Fifth
Third Capital Trust VI trust preferred securities (TruPS), $5 million in
charges to increase litigation reserves, $2 million of expenses
associated with the sale of certain Fifth Third funds, and $2 million of
severance expense. Results also included $24 million of charges to
increase the mortgage representation and warranty reserve.
|
Earnings Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
September
|
June
|
March
|
December
|
September
|
|
|
|
|
|
|
2013
|
2013
|
2013
|
2012
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Earnings ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bancorp
|
$
|
421
|
|
$
|
591
|
|
$
|
422
|
|
$
|
399
|
|
$
|
363
|
|
|
(29
|
%)
|
|
16
|
%
|
|
Net income available to common shareholders
|
$
|
421
|
|
$
|
582
|
|
$
|
413
|
|
$
|
390
|
|
$
|
354
|
|
|
(28
|
%)
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
0.47
|
|
|
0.67
|
|
|
0.47
|
|
|
0.44
|
|
|
0.39
|
|
|
(30
|
%)
|
|
21
|
%
|
|
Earnings per share, diluted
|
|
0.47
|
|
|
0.65
|
|
|
0.46
|
|
|
0.43
|
|
|
0.38
|
|
|
(28
|
%)
|
|
24
|
%
|
|
Cash dividends per common share
|
|
0.12
|
|
|
0.12
|
|
|
0.11
|
|
|
0.10
|
|
|
0.10
|
|
|
-
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
1.35
|
%
|
|
1.94
|
%
|
|
1.41
|
%
|
|
1.33
|
%
|
|
1.23
|
%
|
|
(30
|
%)
|
|
10
|
%
|
|
Return on average common equity
|
|
12.1
|
|
|
17.3
|
|
|
12.5
|
|
|
11.5
|
|
|
10.4
|
|
|
(30
|
%)
|
|
15
|
%
|
|
Return on average tangible common equity
|
|
14.7
|
|
|
21.1
|
|
|
15.4
|
|
|
14.1
|
|
|
12.8
|
|
|
(31
|
%)
|
|
14
|
%
|
|
Tier I risk-based capital
|
|
11.15
|
|
|
11.07
|
|
|
10.83
|
|
|
10.65
|
|
|
10.85
|
|
|
1
|
%
|
|
3
|
%
|
|
Tier I common equity
|
|
9.89
|
|
|
9.43
|
|
|
9.70
|
|
|
9.51
|
|
|
9.67
|
|
|
5
|
%
|
|
2
|
%
|
|
Net interest margin(a) |
|
3.31
|
|
|
3.33
|
|
|
3.42
|
|
|
3.49
|
|
|
3.56
|
|
|
(1
|
%)
|
|
(7
|
%)
|
|
Efficiency(a) |
|
59.2
|
|
|
53.2
|
|
|
59.8
|
|
|
65.2
|
|
|
63.7
|
|
|
11
|
%
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (in thousands)
|
|
887,030
|
|
|
851,474
|
|
|
874,645
|
|
|
882,152
|
|
|
897,467
|
|
|
4
|
%
|
|
(1
|
%)
|
|
Average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
880,183
|
|
|
858,583
|
|
|
870,923
|
|
|
884,676
|
|
|
904,475
|
|
|
3
|
%
|
|
(3
|
%)
|
|
Diluted
|
|
888,111
|
|
|
900,625
|
|
|
913,163
|
|
|
925,585
|
|
|
944,821
|
|
|
(1
|
%)
|
|
(6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Presented on a fully taxable equivalent basis
|
|
|
|
|
|
|
|
|
|
|
The percentages in all of the tables in this earning release are
calculated on actual dollar amounts and not the rounded dollar
amounts.
|
“Fifth Third reported solid third quarter results, reflecting our
continued focus on revenue generation as well as expense discipline,”
said Kevin T. Kabat, Vice Chairman and CEO of Fifth Third Bancorp.
“Return on average assets was 1.4 percent and return on average tangible
common equity* was 14.7 percent for the quarter including Vantiv-related
gains, and were 1.2 percent and 12.6 percent, respectively, excluding
them.
“Highlights from the quarter include an increase in net interest income
of 2 percent and continued balance sheet strength. Period end loans in
the portfolio reached the highest level in the company’s history,
despite significant borrower caution. Core deposits grew 2 percent over
last quarter, reflecting higher deposits in nearly all of our key
markets as recent annual FDIC market share data also shows. Lower fee
income reflected lower Vantiv-related gains and the impact of
significantly higher mortgage rates and resultant effects on that
business, as well as the comparison to a very strong second quarter. On
a year-over-year basis, fee income performance was driven by deposit
service charges, investment advisory revenue, and card and processing
revenue.
“Credit trends continued to improve as net charge-offs declined below 50
basis points of average loans and leases for the first time in 6 years,
and we saw continued improvement in nearly every key credit metric.
“We recently completed our outstanding repurchase agreement for $539
million of common shares. We have approximately $600 million of
repurchase capacity remaining under our current CCAR plan extending
through March 31, 2014, excluding any potential gains from Vantiv share
sales in the future. Our capital position under the Basel III rules
would remain strong with an estimated pro forma Tier 1 common equity
ratio* of 9.5 percent under the new final capital rules compared with
9.9 percent under current capital rules.”
* Non-GAAP measure; see Reg. G reconciliation on page 35 in Exhibit
99.1 of 8-k filing dated 10/17/13.
|
Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Condensed Statements of Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (taxable equivalent)
|
$
|
898
|
|
|
$
|
885
|
|
|
$
|
893
|
|
|
$
|
903
|
|
|
$
|
907
|
|
|
2
|
%
|
|
(1
|
%)
|
|
Provision for loan and lease losses
|
|
51
|
|
|
|
64
|
|
|
|
62
|
|
|
|
76
|
|
|
|
65
|
|
|
(20
|
%)
|
|
(22
|
%)
|
|
Total noninterest income
|
|
721
|
|
|
|
1,060
|
|
|
|
743
|
|
|
|
880
|
|
|
|
671
|
|
|
(32
|
%)
|
|
7
|
%
|
|
Total noninterest expense
|
|
959
|
|
|
|
1,035
|
|
|
|
978
|
|
|
|
1,163
|
|
|
|
1,006
|
|
|
(7
|
%)
|
|
(5
|
%)
|
|
Income before income taxes (taxable equivalent)
|
|
609
|
|
|
|
846
|
|
|
|
596
|
|
|
|
544
|
|
|
|
507
|
|
|
(28
|
%)
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent adjustment
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
4
|
|
|
|
4
|
|
|
2
|
%
|
|
13
|
%
|
|
Applicable income taxes
|
|
183
|
|
|
|
250
|
|
|
|
179
|
|
|
|
144
|
|
|
|
139
|
|
|
(27
|
%)
|
|
32
|
%
|
|
Net income
|
|
421
|
|
|
|
591
|
|
|
|
412
|
|
|
|
396
|
|
|
|
364
|
|
|
(29
|
%)
|
|
16
|
%
|
|
Less: Net income attributable to noncontrolling interests
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(3
|
)
|
|
|
1
|
|
|
19
|
%
|
|
(46
|
%)
|
|
Net income attributable to Bancorp
|
|
421
|
|
|
|
591
|
|
|
|
422
|
|
|
|
399
|
|
|
|
363
|
|
|
(29
|
%)
|
|
16
|
%
|
|
Dividends on preferred stock
|
|
-
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
(100
|
%)
|
|
(100
|
%)
|
|
Net income available to common shareholders
|
|
421
|
|
|
|
582
|
|
|
|
413
|
|
|
|
390
|
|
|
|
354
|
|
|
(28
|
%)
|
|
19
|
%
|
|
Earnings per share, diluted
|
$
|
0.47
|
|
|
$
|
0.65
|
|
|
$
|
0.46
|
|
|
$
|
0.43
|
|
|
$
|
0.38
|
|
|
(28
|
%)
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Interest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income (taxable equivalent)
|
$
|
997
|
|
|
$
|
989
|
|
|
$
|
1,000
|
|
|
$
|
1,020
|
|
|
$
|
1,027
|
|
|
1
|
%
|
|
(3
|
%)
|
|
Total interest expense
|
|
99
|
|
|
|
104
|
|
|
|
107
|
|
|
|
117
|
|
|
|
120
|
|
|
(5
|
%)
|
|
(18
|
%)
|
|
Net interest income (taxable equivalent)
|
$
|
898
|
|
|
$
|
885
|
|
|
$
|
893
|
|
|
$
|
903
|
|
|
$
|
907
|
|
|
2
|
%
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets (taxable equivalent)
|
|
3.68
|
%
|
|
|
3.73
|
%
|
|
|
3.84
|
%
|
|
|
3.94
|
%
|
|
|
4.03
|
%
|
|
(1
|
%)
|
|
(9
|
%)
|
|
Rate paid on interest-bearing liabilities
|
|
0.54
|
%
|
|
|
0.57
|
%
|
|
|
0.59
|
%
|
|
|
0.65
|
%
|
|
|
0.67
|
%
|
|
(6
|
%)
|
|
(20
|
%)
|
|
Net interest rate spread (taxable equivalent)
|
|
3.14
|
%
|
|
|
3.16
|
%
|
|
|
3.25
|
%
|
|
|
3.29
|
%
|
|
|
3.36
|
%
|
|
(1
|
%)
|
|
(7
|
%)
|
|
Net interest margin (taxable equivalent)
|
|
3.31
|
%
|
|
|
3.33
|
%
|
|
|
3.42
|
%
|
|
|
3.49
|
%
|
|
|
3.56
|
%
|
|
(1
|
%)
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, including held for sale
|
$
|
89,154
|
|
|
$
|
89,473
|
|
|
$
|
88,880
|
|
|
$
|
86,180
|
|
|
$
|
84,829
|
|
|
-
|
|
|
5
|
%
|
|
Total securities and other short-term investments
|
|
18,528
|
|
|
|
16,962
|
|
|
|
16,846
|
|
|
|
16,765
|
|
|
|
16,588
|
|
|
9
|
%
|
|
12
|
%
|
|
Total interest-earning assets
|
|
107,682
|
|
|
|
106,435
|
|
|
|
105,726
|
|
|
|
102,945
|
|
|
|
101,417
|
|
|
1
|
%
|
|
6
|
%
|
|
Total interest-bearing liabilities
|
|
73,190
|
|
|
|
73,363
|
|
|
|
74,038
|
|
|
|
71,420
|
|
|
|
72,026
|
|
|
-
|
|
|
2
|
%
|
|
Bancorp shareholders' equity
|
|
14,440
|
|
|
|
14,221
|
|
|
|
13,779
|
|
|
|
13,855
|
|
|
|
13,887
|
|
|
2
|
%
|
|
4
|
%
|
Net interest income of $898 million on a fully taxable equivalent basis
increased $13 million from the second quarter. The increase was driven
by higher balances and higher yields in investment securities. Net
interest income also benefited from a decline in interest expense driven
by the full quarter impact from the maturity of debt and related swaps
during the prior quarter as well as the benefit from high-priced CDs
that matured during the quarter. Additionally, an extra day in the
quarter contributed $6 million to net interest income. These benefits
were partially offset by the effects of loan repricing and lower
held-for-sale loan balances as well as the residual impact from the
maturity of interest rate floors in the prior quarter.
The net interest margin was 3.31 percent, a decrease of 2 bps from 3.33
percent in the previous quarter. The decline in net interest margin was
due to lower loan yields and the residual impact from the maturity of
interest rate floors in the second quarter, partially offset by the
effect of lower funding rates and higher securities yields. The impact
of day count reduced the net interest margin by 1 bp.
Compared with the third quarter of 2012, net interest income decreased
$9 million and the net interest margin decreased 25 bps, driven by lower
asset yields partially offset by higher average loan balances, lower
long-term debt expense due to a reduction in higher cost average
long-term debt along with a decrease in the rate paid on average
long-term debt, and run-off in higher-priced CDs.
Securities
Average securities and other short-term investments were $18.5 billion
in the third quarter of 2013 compared with $17.0 billion in the previous
quarter and $16.6 billion in the third quarter of 2012. On an end of
period basis, available-for-sale securities of $18.1 billion increased
$1.9 billion from the prior quarter, largely due to added investments
following the increase in market rates experienced during the early and
middle part of the third quarter. Other short-term investments end of
period balances of $2.6 billion increased $1.5 billion sequentially due
to higher interest bearing cash balances held at the Federal Reserve at
quarter end.
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Portfolio Loans and Leases ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
$
|
38,133
|
|
|
$
|
37,630
|
|
|
$
|
36,395
|
|
|
$
|
34,301
|
|
|
$
|
33,111
|
|
|
1
|
%
|
|
15
|
%
|
|
Commercial mortgage loans
|
|
8,273
|
|
|
|
8,618
|
|
|
|
8,965
|
|
|
|
9,193
|
|
|
|
9,567
|
|
|
(4
|
%)
|
|
(14
|
%)
|
|
Commercial construction loans
|
|
793
|
|
|
|
713
|
|
|
|
695
|
|
|
|
686
|
|
|
|
742
|
|
|
11
|
%
|
|
7
|
%
|
|
Commercial leases
|
|
3,572
|
|
|
|
3,552
|
|
|
|
3,556
|
|
|
|
3,509
|
|
|
|
3,481
|
|
|
1
|
%
|
|
3
|
%
|
|
Subtotal - commercial loans and leases
|
|
50,771
|
|
|
|
50,513
|
|
|
|
49,611
|
|
|
|
47,689
|
|
|
|
46,901
|
|
|
1
|
%
|
|
8
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
12,486
|
|
|
|
12,260
|
|
|
|
12,096
|
|
|
|
11,846
|
|
|
|
11,578
|
|
|
2
|
%
|
|
8
|
%
|
|
Home equity
|
|
9,432
|
|
|
|
9,625
|
|
|
|
9,872
|
|
|
|
10,129
|
|
|
|
10,312
|
|
|
(2
|
%)
|
|
(9
|
%)
|
|
Automobile loans
|
|
12,083
|
|
|
|
11,887
|
|
|
|
11,961
|
|
|
|
11,944
|
|
|
|
11,812
|
|
|
2
|
%
|
|
2
|
%
|
|
Credit card
|
|
2,140
|
|
|
|
2,071
|
|
|
|
2,069
|
|
|
|
2,029
|
|
|
|
1,971
|
|
|
3
|
%
|
|
9
|
%
|
|
Other consumer loans and leases
|
|
360
|
|
|
|
351
|
|
|
|
294
|
|
|
|
306
|
|
|
|
314
|
|
|
2
|
%
|
|
15
|
%
|
|
Subtotal - consumer loans and leases
|
|
36,501
|
|
|
|
36,194
|
|
|
|
36,292
|
|
|
|
36,254
|
|
|
|
35,987
|
|
|
1
|
%
|
|
1
|
%
|
|
Total average loans and leases (excluding held for sale)
|
$
|
87,272
|
|
|
$
|
86,707
|
|
|
$
|
85,903
|
|
|
$
|
83,943
|
|
|
$
|
82,888
|
|
|
1
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans held for sale
|
|
1,882
|
|
|
|
2,766
|
|
|
|
2,977
|
|
|
|
2,237
|
|
|
|
1,941
|
|
|
(32
|
%)
|
|
(3
|
%)
|
Average loan and lease balances (excluding loans held-for-sale)
increased $565 million, or 1 percent, sequentially and increased $4.4
billion, or 5 percent, from the third quarter of 2012. The increase in
average loans and leases was primarily driven by growth in the
commercial and industrial (C&I), residential mortgage, and auto loan
portfolios. The growth was partially offset by declines in commercial
mortgage and home equity loans. Period end loans and leases (excluding
loans held-for-sale) of $87.2 billion increased $199 million
sequentially and $4.2 billion, or 5 percent, from a year ago.
Average commercial portfolio loan and lease balances increased $258
million, or 1 percent, sequentially and increased $3.9 billion, or 8
percent, from the third quarter of 2012. The increase from prior periods
was largely driven by growth in average C&I loans of $503 million from
the prior quarter and $5.0 billion from the third quarter of 2012,
partially offset by lower average commercial real estate balances.
Within commercial real estate, average commercial mortgage balances
continued to decline although average commercial construction balances
increased for the second consecutive quarter. Commercial line usage, on
an end of period basis, was 30 percent of committed lines in the third
quarter of 2013 compared with 31 percent in the second quarter of 2013
and 32 percent in the third quarter of 2012.
Average consumer portfolio loan and lease balances increased 1 percent
sequentially and year-over-year. Growth was broad-based, although
partially offset by lower home equity balances as runoff continues to
outpace new production. Average residential mortgage loans increased
$226 million sequentially and $908 million from a year ago, reflecting
the continued retention of certain shorter term residential mortgage
loans. Average auto loans increased $196 million sequentially and $271
million from the third quarter of 2012.
Average loans held-for-sale balances of $1.9 billion decreased $884
million sequentially and $59 million compared with the third quarter of
2012. Period end loans held-for-sale of $1.3 billion decreased $818
million from the previous quarter and $472 million from the third
quarter of 2012 reflecting lower residential mortgage held-for-sale
balances due to the lower volume of mortgage originations.
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Deposits ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
|
|
$
|
30,655
|
|
|
$
|
29,682
|
|
|
$
|
28,565
|
|
|
$
|
29,223
|
|
|
$
|
27,127
|
|
|
3
|
%
|
|
13
|
%
|
|
Interest checking
|
|
|
23,116
|
|
|
|
22,796
|
|
|
|
23,763
|
|
|
|
23,556
|
|
|
|
22,967
|
|
|
1
|
%
|
|
1
|
%
|
|
Savings
|
|
|
18,026
|
|
|
|
18,864
|
|
|
|
19,576
|
|
|
|
20,216
|
|
|
|
21,283
|
|
|
(4
|
%)
|
|
(15
|
%)
|
|
Money market
|
|
|
9,693
|
|
|
|
8,918
|
|
|
|
7,932
|
|
|
|
6,026
|
|
|
|
4,776
|
|
|
9
|
%
|
|
NM
|
|
Foreign office(a) |
|
|
1,755
|
|
|
|
1,418
|
|
|
|
1,102
|
|
|
|
1,174
|
|
|
|
1,345
|
|
|
24
|
%
|
|
30
|
%
|
|
Subtotal - Transaction deposits
|
|
|
83,245
|
|
|
|
81,678
|
|
|
|
80,938
|
|
|
|
80,195
|
|
|
|
77,498
|
|
|
2
|
%
|
|
7
|
%
|
|
Other time
|
|
|
3,676
|
|
|
|
3,859
|
|
|
|
3,982
|
|
|
|
4,094
|
|
|
|
4,224
|
|
|
(5
|
%)
|
|
(13
|
%)
|
|
Subtotal - Core deposits
|
|
|
86,921
|
|
|
|
85,537
|
|
|
|
84,920
|
|
|
|
84,289
|
|
|
|
81,722
|
|
|
2
|
%
|
|
6
|
%
|
|
Certificates - $100,000 and over
|
|
|
7,315
|
|
|
|
6,519
|
|
|
|
4,017
|
|
|
|
3,084
|
|
|
|
3,016
|
|
|
12
|
%
|
|
NM
|
|
Other
|
|
|
17
|
|
|
|
10
|
|
|
|
40
|
|
|
|
32
|
|
|
|
32
|
|
|
67
|
%
|
|
(46
|
%)
|
|
Total deposits
|
|
$
|
94,253
|
|
|
$
|
92,066
|
|
|
$
|
88,977
|
|
|
$
|
87,405
|
|
|
$
|
84,770
|
|
|
2
|
%
|
|
11
|
%
|
|
(a)
|
|
Includes commercial customer Eurodollar sweep balances for
which the Bancorp pays rates comparable to other commercial
deposit accounts.
|
Average core deposits increased $1.4 billion, or 2 percent, sequentially
and increased $5.2 billion, or 6 percent, from the third quarter of
2012. Average transaction deposits, which are included in core deposits,
increased $1.6 billion, or 2 percent, from the second quarter of 2013
and $5.7 billion, or 7 percent from the third quarter of 2012 driven by
higher demand deposits, money market account, and interest checking
balances, partially offset by lower savings balances. Other time
deposits, primarily CDs, decreased 5 percent sequentially and 13 percent
compared with the third quarter of 2012.
Commercial average transaction deposits increased 6 percent sequentially
and increased 10 percent from the previous year. Sequential growth
reflected higher demand deposit, foreign office, and money market
account balances partially offset by lower interest checking and savings
balances. Year-over-year growth reflected higher demand deposit, money
market account, interest checking, and foreign office balances. Average
public funds balances were $4.9 billion compared with $5.2 billion in
the second quarter of 2013 and $5.1 billion in the third quarter of 2012.
Consumer average transaction deposits decreased 1 percent sequentially
and increased 5 percent from the third quarter of 2012. The sequential
decrease reflected lower demand deposit and savings balances, which were
partially offset by higher money market and interest checking balances.
Year-over-year growth was driven by increased money market and demand
deposit balances partially offset by lower savings and interest checking
balances. Consumer CDs included in core deposits declined 5 percent
sequentially and 13 percent year-over-year driven by maturities of
higher-rate CDs.
|
Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Wholesale Funding ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates - $100,000 and over
|
$
|
7,315
|
|
|
$
|
6,519
|
|
|
$
|
4,017
|
|
|
$
|
3,084
|
|
|
$
|
3,016
|
|
|
12
|
%
|
|
NM
|
|
Other deposits
|
|
17
|
|
|
|
10
|
|
|
|
40
|
|
|
|
32
|
|
|
|
32
|
|
|
67
|
%
|
|
(46
|
%)
|
|
Federal funds purchased
|
|
464
|
|
|
|
560
|
|
|
|
691
|
|
|
|
794
|
|
|
|
664
|
|
|
(17
|
%)
|
|
(30
|
%)
|
|
Other short-term borrowings
|
|
1,675
|
|
|
|
2,867
|
|
|
|
5,429
|
|
|
|
4,553
|
|
|
|
4,856
|
|
|
(42
|
%)
|
|
(66
|
%)
|
|
Long-term debt
|
|
7,453
|
|
|
|
7,552
|
|
|
|
7,506
|
|
|
|
7,891
|
|
|
|
8,863
|
|
|
(1
|
%)
|
|
(16
|
%)
|
|
Total wholesale funding
|
$
|
16,924
|
|
|
$
|
17,508
|
|
|
$
|
17,683
|
|
|
$
|
16,354
|
|
|
$
|
17,431
|
|
|
(3
|
%)
|
|
(3
|
%)
|
Average wholesale funding of $16.9 billion decreased $584 million, or 3
percent, sequentially and decreased $507 million, or 3 percent, compared
with the third quarter of 2012. The sequential and year-over-year
comparisons reflect lower short-term borrowings, primarily average
short-term FHLB borrowings, partially offset by the issuance of
certificates $100,000 and over. Average long-term debt balances
reflected the full quarter impact of the $750 million and $500 million
senior note maturities in the second quarter of 2013 partially offset by
$1.3 billion in long-term funding issued in conjunction with the auto
securitization in August of 2013.
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
$
|
140
|
|
$
|
136
|
|
$
|
131
|
|
$
|
134
|
|
|
$
|
128
|
|
3
|
%
|
|
10
|
%
|
|
Corporate banking revenue
|
|
102
|
|
|
106
|
|
|
99
|
|
|
114
|
|
|
|
101
|
|
(4
|
%)
|
|
1
|
%
|
|
Mortgage banking net revenue
|
|
121
|
|
|
233
|
|
|
220
|
|
|
258
|
|
|
|
200
|
|
(48
|
%)
|
|
(40
|
%)
|
|
Investment advisory revenue
|
|
97
|
|
|
98
|
|
|
100
|
|
|
93
|
|
|
|
92
|
|
(2
|
%)
|
|
6
|
%
|
|
Card and processing revenue
|
|
69
|
|
|
67
|
|
|
65
|
|
|
66
|
|
|
|
65
|
|
2
|
%
|
|
6
|
%
|
|
Other noninterest income
|
|
185
|
|
|
414
|
|
|
109
|
|
|
215
|
|
|
|
78
|
|
(55
|
%)
|
|
NM
|
|
Securities gains, net
|
|
2
|
|
|
-
|
|
|
17
|
|
|
2
|
|
|
|
2
|
|
NM
|
|
56
|
%
|
|
Securities gains (losses), net - non-qualifying hedges on mortgage
servicing rights
|
|
5
|
|
|
6
|
|
|
2
|
|
|
(2
|
)
|
|
|
5
|
|
(12
|
%)
|
|
5
|
%
|
|
Total noninterest income
|
$
|
721
|
|
$
|
1,060
|
|
$
|
743
|
|
$
|
880
|
|
|
$
|
671
|
|
(32
|
%)
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM: Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income of $721 million decreased $339 million sequentially
and increased $50 million compared with prior year results. These
comparisons reflect the Vantiv-related impacts described below as well
as lower mortgage banking net revenue.
Third quarter 2013 results included an $85 million gain on the sale of
Vantiv shares as well as the $6 million positive Vantiv warrant
valuation adjustment. This compares with a $242 million gain on the sale
of Vantiv shares and a $76 million positive warrant valuation adjustment
in the second quarter of 2013, and a $16 million negative warrant
valuation adjustment in the third quarter of 2012. Quarterly results
included charges related to the valuation of the total return swap
entered into as part of the 2009 sale of Visa, Inc. Class B shares.
Negative valuation adjustments on this swap were $2 million, $5 million,
and $1 million in the in the third quarter of 2013, the second quarter
of 2013, and the third quarter of 2012, respectively. Second quarter
2013 results included a pre-tax benefit of $10 million resulting from a
settlement related to a previously surrendered BOLI policy. Third
quarter 2012 results included $13 million in gains recognized on the
sale of certain Fifth Third funds. Excluding these items and net
securities gains in all periods, noninterest income of $630 million
decreased $107 million, or 15 percent, from the previous quarter and
decreased $43 million, or 6 percent, from the third quarter of 2012. The
sequential decline was primarily due to lower mortgage banking net
revenue. The year-over-year decline was primarily the result of lower
mortgage banking net revenue partially offset by higher service charges
on deposits and investment advisory revenue.
Service charges on deposits of $140 million increased 3 percent from the
second quarter and increased 10 percent compared with the same quarter
last year. Retail service charges increased 2 percent sequentially and
17 percent from the third quarter of 2012. The sequential increase was
driven by higher overdraft occurrences while the year-over-year increase
was primarily due to the transition to our new and simplified deposit
product offerings. Commercial service charges increased 4 percent
sequentially and increased 6 percent from a year ago primarily as a
result of higher treasury management fees.
Corporate banking revenue of $102 million decreased 4 percent from the
second quarter of 2013 and increased 1 percent from the same period last
year. The sequential decline was primarily driven by lower foreign
exchange fees and interest rate derivatives, partially offset by higher
syndications fees and business lending fees. The year-over-year growth
was primarily driven by higher syndication fees, business lending fees,
and interest rate derivatives, partially offset by lower institutional
sales revenue, foreign exchange fees, and letter of credit fees.
Mortgage banking net revenue was $121 million in the third quarter of
2013, a 48 percent decrease from the second quarter of 2013 and a 40
percent decrease from the third quarter of 2012. Third quarter 2013
originations were $4.8 billion, compared with a record $7.5 billion in
the previous quarter and $5.8 billion in the third quarter of 2012.
Third quarter 2013 originations resulted in gains of $74 million on
mortgages sold, compared with gains of $150 million during the previous
quarter and $226 million during the third quarter of 2012. The declines
from the prior quarter and prior year reflected lower production and
lower gain on sale margins. Mortgage servicing fees this quarter were
$63 million, compared with $62 million in the previous quarter and in
the third quarter of 2012. Mortgage banking net revenue is also affected
by net servicing asset valuation adjustments, which include mortgage
servicing rights (MSR) amortization and MSR valuation adjustments
(including mark-to-market adjustments on free-standing derivatives used
to economically hedge the MSR portfolio). These net servicing asset
valuation adjustments were negative $16 million in the third quarter of
2013 (reflecting MSR amortization of $39 million and MSR valuation
adjustments of positive $23 million); positive $21 million in the second
quarter of 2013 (MSR amortization of $51 million and MSR valuation
adjustments of positive $72 million); and negative $88 million in the
third quarter of 2012 (MSR amortization of $48 million and MSR valuation
adjustments of negative $40 million). The mortgage servicing asset, net
of the valuation reserve, was $915 million at quarter end on a servicing
portfolio of $69 billion.
Net gains on securities held as non-qualifying hedges for the MSR
portfolio were $5 million in the third quarter of 2013, compared with
net gains of $6 million in the second quarter of 2013 and net gains of
$5 million in the third quarter of 2012.
Investment advisory revenue of $97 million decreased 2 percent from the
second quarter and increased 6 percent year-over-year. The sequential
decline reflected lower brokerage fees and private client services
revenue from a strong second quarter of 2013. The year-over-year
increase was due to higher brokerage fees and private client services
revenue, which was partially offset by the absence of mutual fund fees
due to the sale of certain Fifth Third funds in the third quarter of
2012.
Card and processing revenue of $69 million in the third quarter of 2013
increased 2 percent sequentially and 6 percent from the third quarter of
2012, reflecting the impact of higher transaction volumes.
Other noninterest income totaled $185 million in the third quarter of
2013, compared with $414 million in the previous quarter and $78 million
in the third quarter of 2012. The third quarter of 2013 included an $85
million gain on the sale of Vantiv shares. Other noninterest income also
included effects of the valuation of the Vantiv warrant and changes in
income related to the valuation of the Visa total return swap. For the
quarters ending September 30, 2013, June 30, 2013, and September 30,
2012, the impact of warrant valuation adjustments were positive $6
million, positive $76 million, and negative $16 million, respectively,
and changes in income related to the Visa total return swap were losses
of $2 million, $5 million, and $1 million, respectively. The second
quarter of 2013 also included a $242 million gain from the sale of
Vantiv shares and a $10 million benefit resulting from a settlement
related to a previously surrendered BOLI policy. The third quarter of
2012 also included $13 million in gains recognized on the sale of
certain Fifth Third funds. Excluding the items detailed above, other
noninterest income of $96 million increased approximately $5 million, or
5 percent, from the second quarter of 2013 and increased approximately
$14 million, or 17 percent, from the third quarter of 2012.
Net credit-related costs recognized in other noninterest income were $5
million in the third quarter of 2013 versus $6 million last quarter and
$14 million in the third quarter of 2012. Third quarter 2013 results
primarily reflected $5 million of losses on other real estate owned
(OREO). Second quarter 2013 results included $1 million of fair value
charges on commercial loans held-for-sale, as well as $5 million of
losses on OREO. Third quarter 2012 results included $2 million of net
gains on sales of commercial loans held-for-sale, $3 million of fair
value charges on commercial loans held-for-sale, and $11 million of
losses on OREO.
Net gains on investment securities were $2 million in the third quarter
of 2013, compared with no material investment securities gains of in the
previous quarter and $2 million in the third quarter of 2012.
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
September
|
|
June
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Expense ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and incentives
|
$
|
389
|
|
|
$
|
404
|
|
|
$
|
399
|
|
|
$
|
416
|
|
|
$
|
399
|
|
|
(4
|
%)
|
|
(2
|
%)
|
|
Employee benefits
|
|
83
|
|
|
|
83
|
|
|
|
114
|
|
|
|
96
|
|
|
|
79
|
|
|
-
|
|
|
4
|
%
|
|
Net occupancy expense
|
|
75
|
|
|
|
76
|
|
|
|
79
|
|
|
|
76
|
|
|
|
76
|
|
|
(2
|
%)
|
|
(1
|
%)
|
|
Technology and communications
|
|
52
|
|
|
|
50
|
|
|
|
49
|
|
|
|
52
|
|
|
|
49
|
|
|
5
|
%
|
|
6
|
%
|
|
Equipment expense
|
|
29
|
|
|
|
28
|
|
|
|
28
|
|
|
|
27
|
|
|
|
28
|
|
|
6
|
%
|
|
5
|
%
|
|
Card and processing expense
|
|
33
|
|
|
|
33
|
|
|
|
31
|
|
|
|
31
|
|
|
|
30
|
|
|
(2
|
%)
|
|
9
|
%
|
|
Other noninterest expense
|
|
298
|
|
|
|
361
|
|
|
|
278
|
|
|
|
465
|
|
|
|
345
|
|
|
(18
|
%)
|
|
(14
|
%)
|
|
Total noninterest expense
|
$
|
959
|
|
|
$
|
1,035
|
|
|
$
|
978
|
|
|
$
|
1,163
|
|
|
$
|
1,006
|
|
|
(7
|
%)
|
|
(5
|
%)
|
Noninterest expense of $959 million decreased 7 percent from the second
quarter of 2013 and decreased 5 percent versus the third quarter of 2012.
Third quarter 2013 expenses included $30 million in charges to increase
litigation reserves, $5 million in severance expense, and $5 million in
large bank assessment fees. Second quarter 2013 expenses included $51
million in charges to increase litigation reserves and $1 million in
severance expense. Third quarter 2012 expenses included $26 million of
debt extinguishment costs associated with the redemption of Fifth Third
Capital Trust V and Fifth Third Capital Trust VI TruPS, $5 million in
charges to increase litigation reserves, $2 million of expenses
associated with the sale of certain Fifth Third funds, and $2 million of
severance expense. Excluding these items, noninterest expense of $919
million decreased $64 million compared with the second quarter of 2013
and decreased $52 million compared with the third quarter of 2012. The
decrease from both periods was largely due to lower compensation-related
expense, primarily in the mortgage business; lower credit-related costs,
including a $15 million reduction in the mortgage representation and
warranty reserve due to improving underlying repurchase metrics; and
lower loan and lease expense. These declines were partially offset by a
$4 million seasonal pension settlement charge.
Credit costs related to problem assets recorded as noninterest expense
totaled $16 million in the third quarter of 2013, compared with $35
million in the second quarter of 2013 and $59 million in the third
quarter of 2012. Third quarter credit-related expenses included
provision for mortgage repurchases that was a benefit of $4 million,
compared with expense of $20 million in the second quarter and $36
million a year ago. (Realized mortgage repurchase losses were $13
million in the third quarter of 2013, compared with $14 million last
quarter and $15 million in the third quarter of 2012.) Provision for
unfunded commitments was $1 million in the current quarter, compared
with a benefit of $2 million last quarter and a year ago. Derivative
valuation adjustments related to customer credit risk were immaterial
for this quarter and last quarter compared with positive $2 million for
the year ago quarter. OREO expense was $5 million this quarter, compared
with $3 million last quarter and $6 million a year ago. Other problem
asset-related expenses were $14 million in the third quarter, compared
with $14 million the previous quarter and $21 million in the same period
last year.
|
Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Total net losses charged off ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
($44
|
)
|
|
|
($33
|
)
|
|
|
($25
|
)
|
|
|
($36
|
)
|
|
|
($29
|
)
|
|
Commercial mortgage loans
|
(2
|
)
|
|
|
(10
|
)
|
|
|
(26
|
)
|
|
|
(17
|
)
|
|
|
(28
|
)
|
|
Commercial construction loans
|
2
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
Commercial leases
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
Residential mortgage loans
|
(12
|
)
|
|
|
(15
|
)
|
|
|
(20
|
)
|
|
|
(23
|
)
|
|
|
(26
|
)
|
|
Home equity
|
(19
|
)
|
|
|
(23
|
)
|
|
|
(30
|
)
|
|
|
(34
|
)
|
|
|
(37
|
)
|
|
Automobile loans
|
(6
|
)
|
|
|
(5
|
)
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
Credit card
|
(19
|
)
|
|
|
(19
|
)
|
|
|
(20
|
)
|
|
|
(19
|
)
|
|
|
(18
|
)
|
|
Other consumer loans and leases
|
(9
|
)
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
Total net losses charged off
|
(109
|
)
|
|
|
(112
|
)
|
|
|
(133
|
)
|
|
|
(147
|
)
|
|
|
(156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses
|
(141
|
)
|
|
|
(145
|
)
|
|
|
(168
|
)
|
|
|
(177
|
)
|
|
|
(188
|
)
|
|
Total recoveries
|
32
|
|
|
|
33
|
|
|
|
35
|
|
|
|
30
|
|
|
|
32
|
|
|
Total net losses charged off
|
($109
|
)
|
|
|
($112
|
)
|
|
|
($133
|
)
|
|
|
($147
|
)
|
|
|
($156
|
)
|
|
Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses charged off as a percent of average loans and leases
(excluding held for sale)
|
0.49
|
%
|
|
|
0.51
|
%
|
|
|
0.63
|
%
|
|
|
0.70
|
%
|
|
|
0.75
|
%
|
|
Commercial
|
0.35
|
%
|
|
|
0.36
|
%
|
|
|
0.44
|
%
|
|
|
0.46
|
%
|
|
|
0.53
|
%
|
|
Consumer
|
0.70
|
%
|
|
|
0.73
|
%
|
|
|
0.89
|
%
|
|
|
1.01
|
%
|
|
|
1.04
|
%
|
Net charge-offs were $109 million in the third quarter of 2013, or 49
bps of average loans on an annualized basis. Net charge-offs declined 2
percent compared with second quarter 2013 net charge-offs of $112
million, and declined 31 percent versus third quarter 2012 net
charge-offs of $156 million.
Commercial net charge-offs were $44 million, or 35 bps, down $1 million
sequentially. C&I net charge-offs of $44 million increased $11 million
from the previous quarter, and were offset by a $10 million decline in
commercial real estate net charge-offs and a $2 million decline in
commercial lease net charge-offs compared with the previous quarter.
Consumer net charge-offs were $65 million, or 70 bps, down $2 million
sequentially. Net charge-offs on residential mortgage loans in the
portfolio were $12 million, down $3 million from the previous quarter.
Home equity net charge-offs were $19 million, down $4 million from the
second quarter of 2013. Net charge-offs on brokered home equity loans
represented 31 percent of third quarter home equity losses; such loans
are 13 percent of the total $9.4 billion home equity portfolio.
Originations of these loans were discontinued in 2007. Net charge-offs
in the auto portfolio of $6 million increased $1 million compared with
the prior quarter. Net charge-offs on consumer credit card loans were
$19 million, consistent with the second quarter. Net charge-offs on
other consumer loans were $9 million, up $4 million compared with the
previous quarter.
|
|
|
|
|
For the Three Months Ended
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Allowance for Credit Losses ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning
|
$
|
1,735
|
|
|
|
$
|
1,783
|
|
|
|
$
|
1,854
|
|
|
|
$
|
1,925
|
|
|
|
$
|
2,016
|
|
|
Total net losses charged off
|
|
(109
|
)
|
|
|
|
(112
|
)
|
|
|
|
(133
|
)
|
|
|
|
(147
|
)
|
|
|
|
(156
|
)
|
|
Provision for loan and lease losses
|
|
51
|
|
|
|
|
64
|
|
|
|
|
62
|
|
|
|
|
76
|
|
|
|
|
65
|
|
|
Allowance for loan and lease losses, ending
|
|
1,677
|
|
|
|
|
1,735
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
|
|
1,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
|
|
178
|
|
|
Provision for unfunded commitments
|
|
1
|
|
|
|
|
(2
|
)
|
|
|
|
(11
|
)
|
|
|
|
3
|
|
|
|
|
(2
|
)
|
|
Reserve for unfunded commitments, ending
|
|
167
|
|
|
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
1,677
|
|
|
|
|
1,735
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
|
|
1,925
|
|
|
Reserve for unfunded commitments
|
|
167
|
|
|
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
Total allowance for credit losses
|
$
|
1,844
|
|
|
|
$
|
1,901
|
|
|
|
$
|
1,951
|
|
|
|
$
|
2,033
|
|
|
|
$
|
2,101
|
|
|
Allowance for loan and lease losses ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of loans and leases
|
|
1.92
|
%
|
|
|
|
1.99
|
%
|
|
|
|
2.08
|
%
|
|
|
|
2.16
|
%
|
|
|
|
2.32
|
%
|
|
As a percent of nonperforming loans and leases(a) |
|
218
|
%
|
|
|
|
191
|
%
|
|
|
|
187
|
%
|
|
|
|
180
|
%
|
|
|
|
167
|
%
|
|
As a percent of nonperforming assets(a) |
|
165
|
%
|
|
|
|
151
|
%
|
|
|
|
147
|
%
|
|
|
|
144
|
%
|
|
|
|
133
|
%
|
|
|
|
(a) Excludes nonaccrual loans and leases in loans held for sale
|
Provision for loan and lease losses totaled $51 million in the third
quarter of 2013, down $13 million from the second quarter of 2013 and
down $14 million from the third quarter of 2012. The allowance for loan
and lease losses declined $58 million sequentially reflecting continued
improvement in credit trends. The allowance represented 1.92 percent of
total loans and leases outstanding as of quarter end, compared with 1.99
percent last quarter, and represented 218 percent of nonperforming loans
and leases, and 165 percent of nonperforming assets.
|
|
|
|
|
As of
|
|
|
September
|
June
|
March
|
|
December
|
|
September
|
|
|
2013
|
2013
|
2013
|
|
2012
|
|
2012
|
|
Nonperforming Assets and Delinquent Loans ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual portfolio loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
$
|
146
|
|
|
$
|
218
|
|
|
$
|
229
|
|
|
$
|
234
|
|
|
|
$
|
309
|
|
|
Commercial mortgage loans
|
|
106
|
|
|
|
169
|
|
|
|
184
|
|
|
|
215
|
|
|
|
|
263
|
|
|
Commercial construction loans
|
|
27
|
|
|
|
39
|
|
|
|
66
|
|
|
|
70
|
|
|
|
|
76
|
|
|
Commercial leases
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
5
|
|
|
Residential mortgage loans
|
|
83
|
|
|
|
96
|
|
|
|
110
|
|
|
|
114
|
|
|
|
|
126
|
|
|
Home equity
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
30
|
|
|
|
|
29
|
|
|
Automobile loans
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Other consumer loans and leases
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
-
|
|
|
Total nonaccrual loans and leases
|
$
|
391
|
|
|
$
|
551
|
|
|
$
|
618
|
|
|
$
|
665
|
|
|
|
$
|
808
|
|
|
Restructured loans and leases - commercial (nonaccrual)
|
|
241
|
|
(c) |
|
196
|
|
(c) |
|
159
|
|
(c) |
|
177
|
|
|
|
|
153
|
|
|
Restructured loans and leases - consumer (nonaccrual)
|
|
138
|
|
|
|
162
|
|
|
|
174
|
|
|
|
187
|
|
|
|
|
192
|
|
|
Total nonperforming loans and leases
|
$
|
770
|
|
|
$
|
909
|
|
|
$
|
951
|
|
|
$
|
1,029
|
|
|
|
$
|
1,153
|
|
|
Repossessed personal property
|
|
7
|
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
|
|
|
10
|
|
|
Other real estate owned(a) |
|
237
|
|
|
|
235
|
|
|
|
252
|
|
|
|
249
|
|
|
|
|
283
|
|
|
Total nonperforming assets(b) |
$
|
1,014
|
|
|
$
|
1,150
|
|
|
$
|
1,210
|
|
|
$
|
1,286
|
|
|
|
$
|
1,446
|
|
|
Nonaccrual loans held for sale
|
|
11
|
|
|
|
15
|
|
|
|
16
|
|
|
|
25
|
|
|
|
|
38
|
|
|
Restructured loans - commercial (nonaccrual) held for sale
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
5
|
|
|
Total nonperforming assets including loans held for sale
|
$
|
1,025
|
|
|
$
|
1,165
|
|
|
$
|
1,229
|
|
|
$
|
1,315
|
|
|
|
$
|
1,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured Consumer loans and leases (accrual)
|
$
|
1,694
|
|
|
$
|
1,671
|
|
|
$
|
1,683
|
|
|
$
|
1,655
|
|
|
|
$
|
1,641
|
|
|
Restructured Commercial loans and leases (accrual)
|
$
|
499
|
|
(c) |
$
|
475
|
|
(c) |
$
|
441
|
|
(c) |
$
|
431
|
|
|
|
$
|
442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 90 days past due
|
$
|
156
|
|
|
$
|
152
|
|
|
$
|
164
|
|
|
$
|
195
|
|
|
|
$
|
201
|
|
|
Nonperforming loans and leases as a percent of portfolio loans,
leases and other assets, including other real estate owned(b)
|
|
0.88
|
%
|
|
|
1.04
|
%
|
|
|
1.11
|
%
|
|
|
1.19
|
%
|
|
|
|
1.38
|
%
|
|
Nonperforming assets as a percent of portfolio loans, leases and
other assets, including other real estate owned(b)
|
|
1.16
|
%
|
|
|
1.32
|
%
|
|
|
1.41
|
%
|
|
|
1.49
|
%
|
|
|
|
1.73
|
%
|
|
(a)
|
|
Excludes government insured advances.
|
|
(b)
|
|
Does not include nonaccrual loans held for sale.
|
|
(c)
|
|
Excludes $21.5 million of restructured nonaccrual loans and
$7.6 million of restructured accruing loans associated with a
consolidated variable interest entity in which the Bancorp has no
continuing credit risk.
|
Total nonperforming assets, including loans held-for-sale, were $1.0
billion, a decline of $140 million, or 12 percent, from the previous
quarter. Nonperforming assets held-for-investment (NPAs) were $1.0
billion, or 1.16 percent, of total loans, leases and OREO, and decreased
$136 million, or 12 percent, from the previous quarter. Nonperforming
loans held-for-investment (NPLs) at quarter end were $770 million or
0.88 percent of total loans, leases and OREO, and decreased $139
million, or 15 percent, from the previous quarter.
Commercial portfolio NPAs were $680 million, or 1.34 percent of
commercial loans, leases and OREO, and decreased $114 million, or 14
percent, from the second quarter. Commercial portfolio NPLs were $521
million, or 1.02 percent of commercial loans and leases, and decreased
$102 million from last quarter. C&I portfolio NPAs of $321 million
decreased $40 million from the prior quarter. Commercial mortgage
portfolio NPAs were $296 million, down $59 million from the previous
quarter. Commercial construction portfolio NPAs were $62 million, a
decrease of $7 million from the previous quarter. Commercial lease
portfolio NPAs were $1 million, a decrease of $7 million from the
previous quarter. Commercial real estate loans in Michigan and Florida
represented 52 percent of commercial real estate NPAs and 36 percent of
our total commercial real estate portfolio. Within the overall
commercial loan portfolio, residential real estate builder and developer
portfolio NPAs of $53 million declined $10 million from the second
quarter, of which $33 million were commercial mortgage assets, $14
million were commercial construction assets and $6 million were C&I
assets. Commercial portfolio NPAs included $241 million of nonaccrual
troubled debt restructurings (TDRs), compared with $196 million last
quarter.
Consumer portfolio NPAs of $334 million, or 0.91 percent of consumer
loans, leases and OREO, decreased $22 million from the second quarter.
Consumer portfolio NPLs were $249 million, or 0.68 percent of consumer
loans and leases and decreased $37 million from last quarter. Of
consumer NPAs, $292 million were in residential real estate portfolios.
Residential mortgage NPAs were $229 million, $25 million lower than last
quarter, with Florida representing 41 percent of residential mortgage
NPAs and 13 percent of total residential mortgage loans. Home equity
NPAs of $63 million were up $6 million compared with last quarter.
Credit card NPAs of $34 million decreased $3 million compared to the
previous quarter. Consumer nonaccrual TDRs were $138 million in the
third quarter of 2013, compared with $162 million in the second quarter
2013.
Third quarter OREO balances included in portfolio NPA balances described
above were $237 million, up $2 million from the second quarter, and
included $160 million in commercial OREO and $77 million in consumer
OREO. Repossessed personal property of $7 million consisted largely of
autos.
Loans still accruing over 90 days past due were $156 million, up $4
million, or 2 percent, from the second quarter of 2013. Commercial
balances over 90 days past due were $3 million. Consumer balances 90
days past due of $153 million were up $1 million from the previous
quarter. Loans 30-89 days past due of $258 million were flat from the
previous quarter. Commercial balances 30-89 days past due of $13 million
were up $6 million sequentially and consumer balances 30-89 days past
due of $245 million decreased $6 million from the second quarter. The
above delinquencies figures exclude nonaccruals described previously.
Commercial nonaccrual loans held-for-sale were $11 million, compared
with $15 million at the end of the second quarter.
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
2012
|
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity to average assets
|
11.71
|
%
|
|
|
11.64
|
%
|
|
|
11.38
|
%
|
|
|
11.65
|
%
|
|
|
11.82
|
%
|
|
Tangible equity(a) |
9.75
|
%
|
|
|
9.65
|
%
|
|
|
9.36
|
%
|
|
|
9.17
|
%
|
|
|
9.45
|
%
|
|
Tangible common equity (excluding unrealized gains/losses)(a) |
9.27
|
%
|
|
|
8.83
|
%
|
|
|
9.03
|
%
|
|
|
8.83
|
%
|
|
|
9.10
|
%
|
|
Tangible common equity (including unrealized gains/losses)(a) |
9.42
|
%
|
|
|
8.94
|
%
|
|
|
9.28
|
%
|
|
|
9.10
|
%
|
|
|
9.45
|
%
|
|
Tangible common equity as a percent of risk-weighted assets
(excluding unrealized gains/losses)(a)(b) |
9.95
|
%
|
|
|
9.49
|
%
|
|
|
9.77
|
%
|
|
|
9.57
|
%
|
|
|
9.74
|
%
|
|
Regulatory capital ratios:(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier I risk-based capital
|
11.15
|
%
|
|
|
11.07
|
%
|
|
|
10.83
|
%
|
|
|
10.65
|
%
|
|
|
10.85
|
%
|
|
Total risk-based capital
|
14.36
|
%
|
|
|
14.34
|
%
|
|
|
14.35
|
%
|
|
|
14.42
|
%
|
|
|
14.76
|
%
|
|
Tier I leverage
|
10.58
|
%
|
|
|
10.40
|
%
|
|
|
10.03
|
%
|
|
|
10.05
|
%
|
|
|
10.09
|
%
|
|
Tier I common equity(a) |
9.89
|
%
|
|
|
9.43
|
%
|
|
|
9.70
|
%
|
|
|
9.51
|
%
|
|
|
9.67
|
%
|
|
Book value per share
|
15.84
|
|
|
|
15.56
|
|
|
|
15.42
|
|
|
|
15.10
|
|
|
|
14.84
|
|
|
Tangible book value per share(a) |
13.09
|
|
|
|
12.69
|
|
|
|
12.62
|
|
|
|
12.33
|
|
|
|
12.12
|
|
|
(a)
|
|
The tangible equity, tangible common equity, tier I common
equity and tangible book value per share ratios, while not
required by accounting principles generally accepted in the United
States of America (U.S. GAAP), are considered to be critical
metrics with which to analyze banks. The ratios have been included
herein to facilitate a greater understanding of the Bancorp's
capital structure and financial condition. See the Regulation G
Non-GAAP Reconciliation table for a reconciliation of these ratios
to U.S. GAAP.
|
|
|
|
|
|
(b)
|
|
Under the banking agencies risk-based capital guidelines,
assets and credit equivalent amounts of derivatives and
off-balance sheet exposures are assigned to broad risk categories.
The aggregate dollar amount in each risk category is multiplied by
the associated risk weight of the category. The resulting weighted
values are added together resulting in the Bancorp's total risk
weighted assets.
|
|
|
|
|
|
(c)
|
|
Current period regulatory capital data ratios are estimated.
|
Capital ratios remained strong, reflecting growth in retained earnings
during the quarter. Compared with the prior quarter, the Tier 1 common
equity ratio* of 9.89 percent increased 46 bps. The tangible common
equity to tangible assets ratio* was 9.27 percent (excluding unrealized
gains/losses) and 9.42 percent (including unrealized gains/losses).
These ratios included 37 bps of benefit from the conversion of Series G
preferred stock at the beginning of the quarter. The Tier 1 risk-based
capital ratio increased 8 bps to 11.15 percent. The Total risk-based
capital ratio increased 2 bps to 14.36 percent and the Leverage ratio
increased 18 bps to 10.58 percent.
Book value per share at September 30, 2013 was $15.84 and tangible book
value per share* was $13.09, compared with June 30, 2013 book value per
share of $15.56 and tangible book value per share of $12.69.
As previously announced, Fifth Third entered into a share repurchase
agreement with a counterparty on May 21, 2013, whereby Fifth Third would
purchase approximately $539 million of its outstanding common stock.
This transaction reduced Fifth Third’s average common share count in the
third quarter by 15 million shares. The settlement of the forward
contract occurred on October 1, 2013, and an additional 4,270,250 shares
were repurchased upon completion of the agreement which will be
reflected in the fourth quarter share count.
U.S. banking regulators approved final capital rules for U.S. banks,
including changes to the definition of capital components (i.e. the
numerator of capital ratios) and changes to risk-weighting rules for
assets (i.e. the denominator of capital ratios). These final rules
implement portions of rules proposed by international banking regulators
known as Basel III and Basel II. Fifth Third is not a Basel “Advanced
Approaches” institution. Therefore, Fifth Third would be subject to the
general capital rules governing the capital or numerator portion of
these final rules and the “Standardized Approach” for risk-weighting
assets. Additionally, Fifth Third would have a one-time irrevocable
option to neutralize certain accumulated other comprehensive income
(AOCI) components in capital, comparable to treatment under prevailing
capital rules. Fifth Third will also be subject to the Market Risk Rule
for trading assets and liabilities, which has been re-proposed for
alignment with the other final capital rules. We continue to evaluate
the final rule and its impact, which would apply beginning reporting
periods after January 1, 2015.
Our current estimate of the pro-forma fully phased in Tier I common
equity ratio at September 30, 2013 under the final capital rule,
assuming the Company elected to maintain the current treatment of AOCI
components in capital, would be approximately 9.5 percent**. This would
compare with 9.9 percent* as calculated under the currently prevailing
Basel I capital framework. The primary drivers of the change from the
prevailing capital framework to the Basel III framework would be an
increase in Tier I common equity of approximately 8 bps, which would be
more than offset by modestly higher risk-weighted assets. (The largest
impact to the numerator is that the new rules would not require the
current 10 percent deduction of mortgage servicing rights assets; the
largest changes to the denominator would be the treatment of
securitizations and lending commitments of less than a year.) Should
Fifth Third make the election to include AOCI components in capital, the
September 30, 2013 pro forma Basel III Tier 1 common ratio would be
increased by approximately 18 bps. Fifth Third’s pro forma Tier 1 common
equity ratio exceeds the minimum buffered Tier 1 common equity ratio of
7 percent, comprising a minimum of 4.5 percent plus a capital
conservation buffer of 2.5 percent. The pro forma Tier 1 common equity
ratio does not include the effect of any mitigating actions the Bancorp
may undertake to offset any impact of the final capital rules.
The new regulations approved by U.S. banking regulators also cease Tier
1 capital treatment for outstanding trust preferred securities (“TruPS”)
for banking organizations greater than $15 billion by January 1, 2016.
Fifth Third’s Tier 1 and Total capital levels at September 30, 2013
included $810 million of TruPS, or 71 bps of risk weighted assets. Based
on regulatory developments, Fifth Third will continue to evaluate the
role of these types of securities in its capital structure. Fifth Third
included the potential redemption of $750 million in TruPS in its 2013
CCAR plan. To the extent these types of securities remain outstanding
during and after the phase-in period, they would continue to be included
in Total capital, as approved in the capital rules described above. We
expect to manage our capital structure over time – including the
components represented by common equity and non-common equity – to adapt
to and reflect the effect of changes in U.S. bank capital regulations,
transition periods for inclusion of capital components in capital,
regulatory expectations, and our goals for capital levels and capital
composition, as appropriate.
Fifth Third is subject to the Federal Reserve’s (FRB) Capital Plans Rule
which was issued November 9, 2012. Under this rule, we are required to
submit our annual capital plan to the Federal Reserve, for its objection
or non-objection. The plan includes those capital actions Fifth Third
intends to pursue or contemplate during the period covered by the FRB’s
response, which is the second quarter of 2013 through the first quarter
of 2014. These actions were more fully described in our March 14, 2013
announcement that the FRB did not object to Fifth Third’s 2013 CCAR
capital plan. Any such actions would be based on environmental and
market conditions, earnings results, our capital position, and other
factors, as well as approval by the Fifth Third Board of Directors, at
the time. This announcement can be found under “Press
Releases” at http://ir.53.com.
Pursuant to Fifth Third’s 2013 CCAR capital plan, on June 11, 2013,
Fifth Third provided notice that its Board of Directors had authorized
the conversion of all $398 million in outstanding Depositary Shares
representing Series G 8.5 percent convertible preferred stock into
approximately 35.5 million common shares issued to the holders. (Note
that these securities had been accounted for under the “if-converted”
method for inclusion in common shares for diluted earnings per share
reporting purposes.) Effective as of the close of the market on July 1,
2013, Fifth Third converted all remaining outstanding shares of Series G
Preferred Stock, represented by 4,110,500 Depositary Shares, into shares
of Fifth Third’s Common Stock. Each Depositary Share was convertible
into 8.6393 shares of Common Stock, and the aggregate number of shares
of Common Stock issued in this conversion was 35,511,740, although as
noted earlier those shares were already included in our diluted share
count.
* Non-GAAP measure; see Reg. G reconciliation on page 35 in Exhibit
99.1 of 8-k filing dated 10/17/13.
** Capital ratios estimated; presented under current U.S. capital
regulations. The pro forma Basel III Tier I common equity ratio is
management’s estimate based upon its current interpretation of recent
prospective regulatory capital requirements approved in July 2013.
Tax Rate
The effective tax rate was 30.3 percent this quarter compared with 29.7
percent in the second quarter and 27.7 percent in the third quarter of
2012.
Other
Fifth Third Bank owns 48.8 million units representing a 25 percent
interest in Vantiv Holding, LLC, convertible into shares of Vantiv,
Inc., a publicly traded firm (NYSE: VNTV). Based upon Vantiv’s closing
price of $27.94 on September 30, 2013, our interest in Vantiv was valued
at approximately $1.4 billion. Next month in our 10-Q, we will update
our disclosure of the carrying value of our interest in Vantiv stock,
which was $448 million as of June 30, 2013. The difference between the
market value and the book value of Fifth Third’s interest in Vantiv’s
shares is not recognized in Fifth Third’s equity or capital.
Additionally, Fifth Third has a warrant to purchase additional shares in
Vantiv which is carried as a derivative asset at a fair value of $293
million as of September 30, 2013.
Conference Call
Fifth Third will host a conference call to discuss these financial
results at 9:00 a.m. (Eastern Time) today. This conference call will be
webcast live by Thomson Financial and may be accessed through the Fifth
Third Investor Relations website at www.53.com
(click on “About Fifth Third” then “Investor Relations”). The webcast
also is being distributed over Thomson Financial’s Investor Distribution
Network to both institutional and individual investors. Individual
investors can listen to the call through Thomson Financial’s individual
investor center at www.earnings.com
or by visiting any of the investor sites in Thomson Financial’s
Individual Investor Network. Institutional investors can access the call
via Thomson Financial’s password-protected event management site,
StreetEvents (www.streetevents.com).
Those unable to listen to the live webcast may access a webcast replay
through the Fifth Third Investor Relations website at the same web
address. Additionally, a telephone replay of the conference call will be
available beginning approximately two hours after the conference call
until Thursday, October 31 by dialing 800-585-8367 for domestic access
and 404-537-3406 for international access (passcode 35616507#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of September 30, 2013, the Company
had $126 billion in assets and operated 18 affiliates with 1,326
full-service Banking Centers, including 104 Bank Mart® locations open
seven days a week inside select grocery stores and 2,374 ATMs in Ohio,
Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth
Third operates four main businesses: Commercial Banking, Branch Banking,
Consumer Lending, and Investment Advisors. Fifth Third also has a 25%
interest in Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of September 30, 2013, had $318 billion
in assets under care, of which it managed $27 billion for individuals,
corporations and not-for-profit organizations. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third’s common stock is traded on the NASDAQ® Global Select Market
under the symbol “FITB.”
Forward-Looking Statements
This news release contains statements that we believe are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Rule 175 promulgated thereunder,
and Section 21E of the Securities Exchange Act of 1934, as amended, and
Rule 3b-6 promulgated thereunder. These statements relate to our
financial condition, results of operations, plans, objectives, future
performance or business. They usually can be identified by the use of
forward-looking language such as “will likely result,” “may,” “are
expected to,” “is anticipated,” “estimate,” “forecast,” “projected,”
“intends to,” or may include other similar words or phrases such as
“believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or
similar expressions, or future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” or similar verbs. You should
not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to the risk factors
set forth in our most recent Annual Report on Form 10-K. When
considering these forward-looking statements, you should keep in mind
these risks and uncertainties, as well as any cautionary statements we
may make. Moreover, you should treat these statements as speaking only
as of the date they are made and based only on information then actually
known to us.
There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) general economic conditions and
weakening in the economy, specifically the real estate market, either
nationally or in the states in which Fifth Third, one or more acquired
entities and/or the combined company do business, are less favorable
than expected; (2) deteriorating credit quality; (3) political
developments, wars or other hostilities may disrupt or increase
volatility in securities markets or other economic conditions;
(4) changes in the interest rate environment reduce interest margins;
(5) prepayment speeds, loan origination and sale volumes, charge-offs
and loan loss provisions; (6) Fifth Third’s ability to maintain required
capital levels and adequate sources of funding and liquidity;
(7) maintaining capital requirements may limit Fifth Third’s operations
and potential growth; (8) changes and trends in capital markets;
(9) problems encountered by larger or similar financial institutions may
adversely affect the banking industry and/or Fifth Third;
(10) competitive pressures among depository institutions increase
significantly; (11) effects of critical accounting policies and
judgments; (12) changes in accounting policies or procedures as may be
required by the Financial Accounting Standards Board (FASB) or other
regulatory agencies; (13) legislative or regulatory changes or actions,
or significant litigation, adversely affect Fifth Third, one or more
acquired entities and/or the combined company or the businesses in which
Fifth Third, one or more acquired entities and/or the combined company
are engaged, including the Dodd-Frank Wall Street Reform and Consumer
Protection Act; (14) ability to maintain favorable ratings from rating
agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to
attract and retain key personnel; (17) ability to receive dividends from
its subsidiaries; (18) potentially dilutive effect of future
acquisitions on current shareholders’ ownership of Fifth Third;
(19) effects of accounting or financial results of one or more acquired
entities; (20) difficulties from the separation of or the results of
operations of Vantiv, LLC; (21) loss of income from any sale or
potential sale of businesses that could have an adverse effect on Fifth
Third’s earnings and future growth; (22) ability to secure confidential
information and deliver products and services through the use of
computer systems and telecommunications networks; and (23) the impact of
reputational risk created by these developments on such matters as
business generation and retention, funding and liquidity.
You should refer to our periodic and current reports filed with the
Securities and Exchange Commission, or “SEC,” for further information on
other factors, which could cause actual results to be significantly
different from those expressed or implied by these forward-looking
statements.
Copyright Business Wire 2013