Reports Net Income of $50 million
CINCINNATI, April 23 /PRNewswire-FirstCall/ --
-- Extended nearly $18 billion of new and renewed credit in the first
quarter
-- Average earning assets increased 1 percent sequentially; growth
reflected investments in securities backed by loans and mortgage loans
held-for-sale, partially offset by effect of lower commercial line
utilization
-- Average core deposits increased 4 percent from the fourth quarter of
2008 on strong growth in checking deposits, up 5 percent, particularly
in demand deposits
-- Noninterest income increased 9 percent sequentially, up 8 percent
excluding BOLI charges and securities losses, on robust mortgage
activity
-- Noninterest expense declined 52 percent from the fourth quarter, down
9 percent excluding the fourth quarter 2008 goodwill impairment
charge, reflecting strong expense control
-- Allowance to loan ratio increased to 3.71 percent, allowance to
nonperforming loans ratio of 128 percent
-- Tier 1 capital ratio of 10.9 percent
-- Tangible equity ratio of 7.9 percent
-- Tangible common equity ratio of 4.2 percent and tangible common equity
to risk-weighted assets of 4.6 percent; both ratios exclude unrealized
securities gains of $151 million
-- Signed agreement to sell a 51 percent interest in Fifth Third's
processing business
-- Expected pre-tax book gain of $1.7 billion; pro forma improvement
to capital ratios of approximately 90 bps (pro forma 3/31/09 Tier
1 ratio of 11.8 percent; tangible equity ratio of 8.8 percent;
tangible common equity ratio of 5.2 percent)
Earnings Highlights
For the Three Months Ended
March December September June March
2009 2008 2008 2008 2008
Earnings ($ in millions)
Net income (loss) $50 ($2,142) ($56) ($202) $286
Net income (loss) available
to common shareholders ($26) ($2,184) ($81) ($202) $286
Common Share Data
Earnings per share, basic (0.04) (3.78) (0.14) (0.37) 0.54
Earnings per share, diluted (0.04) (3.78) (0.14) (0.37) 0.54
Cash dividends per common
share 0.01 0.01 0.15 0.15 0.44
Financial Ratios
Return on average assets 0.17% (7.16%) (.19%) (.72%) 1.03%
Return on average common
equity (1.4) (94.6) (3.3) (8.5) 12.3
Tier I capital 10.93 10.59 8.57 8.51 7.72
Net interest margin (a) 3.06 3.46 4.24 3.04 3.41
Efficiency (a) 65.1 131.3 54.2 58.6 42.3
Common shares outstanding
(in thousands) 576,936 577,387 577,487 577,530 532,106
Average common shares
outstanding (in thousands):
Basic 571,810 571,809 571,705 540,030 528,498
Diluted 571,810 571,809 571,705 540,030 530,372
% Change
Seq Yr/Yr
Earnings ($ in millions)
Net income (loss) NM (83%)
Net income (loss) available to
common shareholders (99%) NM
Common Share Data
Earnings per share, basic (99%) NM
Earnings per share, diluted (99%) NM
Cash dividends per common share - (98%)
Financial Ratios
Return on average assets NM (83%)
Return on average common equity (99%) NM
Tier I capital 3% 41%
Net interest margin (a) (12%) (10%)
Efficiency (a) (50%) 54%
Common shares outstanding (in
thousands) - 8%
Average common shares outstanding
(in thousands):
Basic - 8%
Diluted - 8%
(a) Presented on a fully taxable equivalent basis
NM: not meaningful
Fifth Third Bancorp (Nasdaq: FITB) today reported first quarter 2009 net
income of $50 million, compared with a net loss of $2.1 billion in the fourth
quarter of 2008 and net income of $286 million in the first quarter of 2008.
Preferred dividends of $76 million increased from $42 million in the fourth
quarter, primarily related to the issuance of $3.4 billion in preferred stock
to the U.S. Treasury on December 31, 2008. Including preferred dividends, the
net loss attributable to common shares was $26 million, or $0.04 per diluted
share, compared with a net loss of $2.2 billion, or $3.78 per diluted share,
in the fourth quarter of 2008 and net income of $286 million, or $0.54 per
diluted share, in the first quarter of 2008.
First quarter net income benefited by $101 million after-tax, or $0.18 per
share, due to the net impact of several significant items during the quarter
outlined below. Two of these items reduced income tax expense, by $161
million, while these items and two others reduced pre-tax, pre-provision
earnings in the first quarter by $92 million. During the quarter we decided to
surrender one of our bank-owned life insurance (BOLI) policies. As a result, a
$106 million tax benefit, or $0.19 per share, was recognized relating to
losses in the policy recorded in prior periods that are now expected to be tax
deductible. First quarter results also included non-cash charges of $54
million pre-tax, or $0.06 per share after-tax, related to this policy,
reflecting reserves recorded in connection with the intent to surrender the
policy as well as losses related to market value declines. Additionally,
during the first quarter of 2009, we reached an agreement with the IRS to
settle all of Fifth Third's disputed leveraged leases for all open years. As a
result of this settlement agreement, we recognized a $55 million reduction in
income tax expense in the first quarter, or $0.10 per share, related to the
reduction in tax reserves related to these exposures. This settlement also
resulted in a reduction of net interest income of $6 million pre-tax, or $0.01
per share after-tax. Reported results for the first quarter also included $24
million pre-tax, or $0.03 per share after-tax, in securities losses and $8
million pre-tax or $0.01 per share after-tax in severance expense. Additional
information on the tax benefits discussed above may be found later in this
release.
Fourth quarter 2008 results included a $965 million pre-tax, or $1.64 per
share after-tax, charge to record the impairment of goodwill and $74 million
pre-tax, or $0.11 per share after-tax, of charges related to
other-than-temporary impairment on securities and the BOLI policy. First
quarter 2008 results included a gain and an expense reversal totaling $425
million pre-tax, or $0.52 per share after-tax, related to Visa, Inc.'s initial
public offering, charges of $152 million pre-tax, or $0.22 per share after-tax
on the BOLI policy, and severance and merger charges of $16 million, or $0.02
per share after-tax.
"While the environment remains challenging, our results were in line with
our expectations," said Kevin T. Kabat, Chairman, President and CEO of Fifth
Third Bancorp. "Fee growth continues to be strong, increasing 8 percent from
the previous quarter excluding BOLI and securities losses. Expenses were
well-managed, down 9 percent excluding the effect of the goodwill charge last
quarter. Net interest income and margin were lower in the first quarter, as
expected, and bottomed out in January reflecting the effect of lower market
rates on asset yields, which reprice more rapidly than our liabilities. We are
seeing substantial margin improvement, which we expect to continue in the
second quarter, as we more fully realize the benefit of these rate reductions
on liability costs as well as wider loan spreads."
"Earning assets increased 1 percent, with growth driven by $2.9 billion of
additional investments in securities backed by consumer mortgage and auto
loans and by strong growth in mortgage loans held-for-sale. Average core
deposit balances increased 4 percent from the previous quarter, and demand
deposits were up 6 percent sequentially and 15 percent on a year-over-year
basis, excluding acquisitions. Our Everyday Great Rates strategy has continued
to help us expand our customer base. We also continue to lend to provide
substantial amounts of new credit to qualified customers, and extended nearly
$8 billion of consumer credit and $10 billion of commercial credit to our
customers in the first quarter. Given the current economic environment, we
continue to feel good about the core operations and earnings power of the
Bank."
"From the beginning of this current credit cycle, we have been
aggressively dealing with our most problematic loan portfolios. During the
fourth quarter of 2008, we took actions to further reduce the risk in these
portfolios, primarily residential homebuilder and commercial non-owner
occupied real estate loans in Michigan and Florida, and we also significantly
increased our loan loss reserves. Net charge-offs of $490 million for the
quarter were in line with our expectations in January, and NPA growth
moderated. Our provision exceeded charge-offs by $283 million, increasing the
allowance for loan losses to 3.71 percent or 128 percent of nonperforming
loans."
"The sale of a controlling interest in our processing business, which we
announced on March 30, 2009, is expected to close in the second quarter and to
significantly strengthen the bank's capital ratios. The transaction's
structure allows us to retain a 49 percent interest in the business, and we
expect our partnership with Advent International will provide the business
with access to additional capital and resources that will accelerate growth
opportunities. This transaction will significantly enhance the level and
composition of our already strong regulatory capital position, and provide us
with additional capital resources to withstand further economic deterioration,
should that occur."
The transaction with Advent is expected to generate approximately $1.2
billion in additional tangible common equity and Tier 1 capital and to
generate net income of nearly $1 billion. Including the estimated effect of
this transaction, on a pro forma basis for the first quarter of 2009, Fifth
Third's capital ratios would have increased by approximately 90 basis points
(bps). On a pro forma basis, the tangible common equity ratio would have been
approximately 5.2 percent, the tangible equity ratio would have been
approximately 8.8 percent, the Tier 1 capital ratio would have been
approximately 11.8 percent, and the total capital ratio would have been
approximately 16.0 percent. Pro forma book value per share would have been
$15.25 and pro forma tangible book value per share would have been $10.80,
compared with the March 31, 2009 reported book value per share of $13.61 and
tangible book value per share of $8.79.
Income Statement Highlights
For the Three Months Ended % Change
March December September June March
2009 2008 2008 2008 2008 Seq Yr/Yr
Condensed Statements of
Income ($ in millions)
Net interest income
(taxable equivalent) $781 $897 $1,068 $744 $826 (13%) (5%)
Provision for loan and
lease losses 773 2,356 941 719 544 (67%) 42%
Total noninterest
income 697 642 717 722 864 9% (19%)
Total noninterest
expense 962 2,022 967 858 715 (52%) 35%
Income (loss) before
income taxes (taxable
equivalent) (257) (2,839) (123) (111) 431 (91%) NM
Taxable equivalent
adjustment 5 5 5 6 6 - (17%)
Applicable income
taxes (312) (702) (72) 85 139 (56%) NM
Net income (loss) 50 (2,142) (56) (202) 286 NM (83%)
Dividends on preferred
stock 76 42 25 - - 81% NM
Net income (loss)
available to common
shareholders (26) (2,184) (81) (202) 286 (99%) NM
Earnings per share,
diluted ($0.04) ($3.78) ($0.14) ($0.37) $0.54 (99%) NM
NM: not meaningful
Net Interest Income
For the Three Months Ended
March December September June March
2009 2008 2008 2008 2008
Interest Income
($ in millions)
Total interest income
(taxable equivalent) $1,183 $1,411 $1,553 $1,213 $1,453
Total interest expense 402 514 485 469 627
Net interest income
(taxable equivalent) $781 $897 $1,068 $744 $826
Average Yield
Yield on interest-earning
assets 4.63% 5.44% 6.16% 4.95% 5.99%
Yield on interest-bearing
liabilities 1.89% 2.28% 2.25% 2.23% 2.99%
Net interest rate spread
(taxable equivalent) 2.74% 3.16% 3.91% 2.72% 3.00%
Net interest margin
(taxable equivalent) 3.06% 3.46% 4.24% 3.04% 3.41%
Average Balances ($ in
millions)
Loans and leases, including
held for sale $85,829 $87,426 $85,772 $85,212 $84,912
Total securities and other
short-term investments 17,835 15,683 14,515 13,363 12,597
Total interest-bearing
liabilities 86,218 89,440 85,990 84,417 84,353
Shareholders' equity 12,084 10,291 10,843 9,629 9,379
% Change
Seq Yr/Yr
Interest Income ($ in millions)
Total interest income (taxable
equivalent) (16%) (19%)
Total interest expense (22%) (36%)
Net interest income (taxable
equivalent) (13%) (5%)
Average Yield
Yield on interest-earning assets (15%) (23%)
Yield on interest-bearing
liabilities (17%) (37%)
Net interest rate spread
(taxable equivalent) (13%) (9%)
Net interest margin (taxable
equivalent) (12%) (10%)
Average Balances ($ in millions)
Loans and leases, including held
for sale (2%) 1%
Total securities and other short-
term investments 14% 42%
Total interest-bearing liabilities (4%) 2%
Shareholders' equity 17% 29%
Net interest income of $781 million on a taxable equivalent basis declined
$116 million from the fourth quarter of 2008, partially driven by a $38
million reduction in loan discount accretion related to the second quarter
2008 acquisition of First Charter Corporation ("First Charter") and a $6
million charge to reflect the change in the timing of tax benefits on
leveraged leases associated with the settlement with the IRS. Excluding these
items, net interest income declined $72 million, or 9 percent, from the fourth
quarter 2008. The sequential decrease was driven by the first quarter impact
of the decline in market rates, particularly LIBOR rates, as assets have
repriced faster than liabilities. Additionally, the first quarter included a
full quarter effect of higher-cost deposits put on during the fourth quarter.
We expect net interest income to increase in the second quarter, as deposits
and other liabilities more fully reflect lower market rates and as higher-cost
term deposits issued during the third and fourth quarters mature.
The reported net interest margin was 3.06 percent, down 40 bps from 3.46
percent in the fourth quarter of 2008. The decrease was partially due to a 15
bps reduction in the benefit from purchase accounting adjustments for First
Charter loan discount accretion, which contributed 16 bps to the first quarter
margin versus 31 bps of benefit to the previous quarter margin. The charge
related to leveraged leases also reduced the first quarter margin by 2 bps.
Excluding these items, the net interest margin declined 23 bps from the
previous quarter, in line with expectations. The primary driver of this
decline was the differential impact of lower market rates on assets and
liabilities and the full-quarter effect of higher-priced term deposits issued
in the latter part of 2008, as previously mentioned. In the current low rate
environment, the bank's net asset exposure to short-term market rates
adversely impacts net interest income and net interest margin, which will
begin to reverse as term liabilities mature and are replaced at lower rates.
Compared with the first quarter of 2008, net interest income decreased $45
million and the net interest margin decreased 35 bps from 3.41 percent.
Excluding the impact of loan discount accretion from the First Charter
acquisition and the first quarter leveraged lease litigation charge, net
interest income declined by $82 million from the same period in 2008 and the
net interest margin declined 49 bps, largely driven by the factors described
earlier.
Average Loans
For the Three Months Ended
March December September June March
2009 2008 2008 2008 2008
Average Portfolio Loans and
Leases ($ in millions)
Commercial:
Commercial loans $28,949 $30,227 $28,284 $28,299 $25,367
Commercial mortgage 12,508 13,189 13,257 12,590 12,016
Commercial construction 4,987 5,990 6,110 5,700 5,577
Commercial leases 3,564 3,610 3,641 3,747 3,723
Subtotal - commercial loans
and leases 50,008 53,016 51,292 50,336 46,683
Consumer:
Residential mortgage
loans 9,195 9,335 9,681 9,922 10,395
Home equity 12,763 12,677 12,534 12,012 11,846
Automobile loans 8,687 8,428 8,303 8,439 9,278
Credit card 1,825 1,748 1,720 1,703 1,660
Other consumer loans and
leases 1,083 1,165 1,165 1,125 1,083
Subtotal - consumer loans
and leases 33,553 33,353 33,403 33,201 34,262
Total average loans and
leases (excluding held for
sale) $83,561 $86,369 $84,695 $83,537 $80,945
Average loans held for sale 2,268 1,057 1,077 1,676 3,967
% Change
Seq Yr/Yr
Average Portfolio Loans and Leases
($ in millions)
Commercial:
Commercial loans (4%) 14%
Commercial mortgage (5%) 4%
Commercial construction (17%) (11%)
Commercial leases (1%) (4%)
Subtotal - commercial loans and
leases (6%) 7%
Consumer:
Residential mortgage loans (2%) (12%)
Home equity 1% 8%
Automobile loans 3% (6%)
Credit card 4% 10%
Other consumer loans and leases (7%) -
Subtotal - consumer loans and
leases 1% (2%)
Total average loans and leases
(excluding held for sale) (3%) 3%
Average loans held for sale 115% (43%)
Average portfolio loan and lease balances decreased 3 percent sequentially
and were up 3 percent from the first quarter of 2008. Excluding the impact of
the $1.3 billion in commercial loans sold or transferred to held-for-sale
during the fourth quarter of 2008, average portfolio loan and lease balances
declined by 2 percent sequentially. Period end loans, including loans
held-for-sale, were relatively flat compared with the fourth quarter of 2008.
On a year-over-year basis, the effect of the $1.3 billion of commercial loans
sold or transferred to held-for-sale during the fourth quarter and the first
quarter 2008 auto loan securitization nearly offset the growth in loans from
the acquisition of First Charter in the second quarter of 2008.
Average commercial loan and lease balances decreased 6 percent
sequentially and were up 7 percent compared with the previous year.
Approximately half of the sequential decline reflected fourth quarter
commercial charge-offs and the transfer of loans to held-for-sale. During the
first quarter of 2009, commercial and industrial (C&I) average loans decreased
by approximately $1.3 billion, primarily due to lower customer line
utilization, which was down about $700 million, and a decline in customer use
of contingent liquidity facilities related to certain off-balance sheet
programs. These programs represented balances of $1.5 billion during the first
quarter of 2009 and balances of $1.8 billion in the fourth quarter of 2008.
Average commercial mortgage and commercial construction loan balances declined
by a combined $1.7 billion, primarily driven by the sale or transfer to
held-for-sale and associated charge-offs of approximately $1.3 billion of
underperforming loan balances as a result of our credit actions at the end of
the fourth quarter of 2008. Excluding the impact of acquisitions, the impact
of off-balance sheet programs, and loans that were either sold or transferred
to held-for-sale in the fourth quarter of 2008, average commercial loan and
lease balances declined by 3 percent sequentially and increased 3 percent from
the previous year, reflecting lower line utilization, portfolio charge-offs,
and lower commercial construction loan balances.
Consumer loan and lease balances increased 1 percent sequentially and
declined 2 percent from the first quarter of 2008. Excluding acquisitions,
consumer loan balances declined 5 percent from the previous year, largely due
to a decline in auto loans as a result of $2.7 billion in sales and
securitizations in the first quarter of 2008. Sequentially, modest credit card
and auto loan growth was partially offset by a decline in residential mortgage
loans. On a year-over-year basis, growth in home equity and credit card loans
was more than offset by a reduction in residential mortgage and auto loan
balances. Excluding acquisitions, consumer loans declined 2 percent from the
previous year on a period end basis.
High mortgage origination volumes during the first quarter of 2009 drove a
$1.2 billion increase in the warehouse of residential mortgages held-for-sale
on a period end basis. The majority of Fifth Third's mortgage originations are
held for sale to be sold to agencies and are not reflected in reported loans
or loan growth.
Average Deposits
For the Three Months Ended
March Dec. Sept. June March
2009 2008 2008 2008 2008
Average Deposits
($ in millions)
Demand deposits $15,532 $14,602 $14,225 $14,023 $13,208
Interest checking 14,229 13,698 13,843 14,396 14,836
Savings 16,272 15,960 16,154 16,583 16,075
Money market 4,559 4,983 6,051 6,592 6,896
Foreign office (a) 1,755 1,876 2,126 2,169 2,443
Subtotal - Transaction
deposits 52,347 51,119 52,399 53,763 53,458
Other time 14,501 13,337 10,780 9,517 10,884
Subtotal - Core deposits 66,848 64,456 63,179 63,280 64,342
Certificates - $100,000
and over 11,802 12,468 11,623 8,143 5,835
Other 247 1,090 395 2,948 3,861
Total deposits $78,897 $78,014 $75,197 $74,371 $74,038
% Change
Seq Yr/Yr
Average Deposits ($ in millions)
Demand deposits 6% 18%
Interest checking 4% (4%)
Savings 2% 1%
Money market (9%) (34%)
Foreign office (a) (6%) (28%)
Subtotal - Transaction deposits 2% (2%)
Other time 9% 33%
Subtotal - Core deposits 4% 4%
Certificates - $100,000 and
over (5%) 102%
Other (77%) (94%)
Total deposits 1% 7%
(a) Includes commercial customer Eurodollar sweep balances for
which the Bancorp pays rates comparable to other commercial deposit
accounts.
Average core deposits increased 4 percent both sequentially and versus the
first quarter of 2008. Acquisitions had a 4 percent positive effect on a
year-over-year basis. Sequential growth in average demand deposit (DDA),
interest checking, savings, and consumer CD balances was partially offset by
lower money market and foreign office commercial sweep deposits. On a
year-over-year basis, growth in DDA, savings, and consumer CD balances more
than offset lower interest checking, money market, and foreign office
commercial sweep deposits. Average transaction deposits (excluding consumer
time deposits) were up 2 percent from fourth quarter 2008 and declined 2
percent from a year ago. The year-over-year decline reflected the migration of
money market balances to CDs that offered higher rates.
Retail average core deposits increased 3 percent sequentially and
increased 7 percent from the first quarter of 2008. Sequential growth in DDA,
interest checking, savings, and consumer CD balances was partially offset by
lower money market balances, a result of migration into higher-rate consumer
CDs. Higher average account balances drove DDA growth, and strong account
production drove the increase in savings account balances. Commercial core
deposits increased 5 percent sequentially and were down 3 percent from the
previous year. Sequential growth in DDA and interest checking account balances
more than offset lower savings and money market account balances.
Noninterest Income
For the Three Months Ended % Change
March Dec. Sept. June March
2009 2008 2008 2008 2008 Seq Yr/Yr
Noninterest
Income
($ in millions)
Electronic
payment
processing
revenue $223 $230 $235 $235 $213 (3%) 5%
Service charges
on deposits 146 162 172 159 147 (10%) (1%)
Investment
advisory
revenue 76 78 90 92 93 (3%) (18%)
Corporate
banking revenue 116 121 104 111 107 (4%) 8%
Mortgage banking
net revenue 134 (29) 45 86 97 NM 38%
Other
noninterest
income 10 24 112 49 177 (57%) (94%)
Securities gains
(losses), net (24) (40) (63) (10) 27 (40%) NM
Securities gains,
net -
non-qualifying
hedges on
mortgage
servicing rights 16 96 22 - 3 (83%) 534%
Total
noninterest
income $697 $642 $717 $722 $864 9% (19%)
Noninterest income of $697 million increased $55 million sequentially and
decreased $167 million from a year ago. First quarter of 2009 results included
$54 million in charges related to one of our BOLI policies and $24 million in
securities losses. Fourth quarter of 2008 results included a non-cash BOLI
charge of $34 million and an other-than-temporary impairment (OTTI) charge of
$40 million on preferred securities. Excluding these items, noninterest income
increased by $59 million, or 8 percent from the previous quarter, driven by
strong mortgage banking revenue. First quarter of 2008 results included a $273
million gain resulting from the Visa IPO and securities gains of $27 million,
partially offset by a $152 million non-cash BOLI charge. Excluding these
items, noninterest income increased by $59 million, or 8 percent from the
previous year. Year-over-year growth in noninterest income was driven by
mortgage banking revenue, corporate banking revenue, and payments processing
revenue.
Electronic payment processing revenue of $223 million declined 3 percent
sequentially and increased 5 percent from a year ago. Merchant processing
revenue decreased 9 percent sequentially and increased 5 percent compared to
the previous year. The sequential decline was driven by seasonally strong
fourth quarter of 2008 performance and a decrease in average dollar amount per
credit card transaction due to lower consumer spending. Year-over-year growth
was assisted by continued strong debit processing revenue growth. Card issuer
interchange revenue declined 4 percent sequentially and increased 5 percent
from the previous year. The sequential decline was driven by seasonality and a
decline in the average dollar amount per debit and credit card transaction.
Year-over-year growth benefited from a higher volume of credit card
transactions. Financial institutions revenue increased 3 percent compared with
the previous quarter and grew 4 percent from the first quarter of 2008 on
higher transaction volumes as debit card use continues to replace cash and
checks at the point of transaction.
Service charges on deposits of $146 million decreased 10 percent
sequentially and 1 percent compared with the same quarter last year. Retail
service charges decreased 14 percent from the previous quarter and 6 percent
from the first quarter of 2008 due to lower transaction volumes. Commercial
service charges declined 5 percent sequentially, largely due to higher
compensating balances, and increased 5 percent compared with last year.
Year-over-year growth primarily reflected an increase in customer accounts and
lower market interest rates, as reduced earnings credit rates paid on customer
balances have resulted in higher realized net services fees to pay for
treasury management services.
Corporate banking revenue of $116 million decreased by $5 million or 4
percent from strong fourth quarter results, as the more stable macroeconomic
environment has led to slower growth in customer hedging transactions.
Sequential results were driven by lower interest rate derivatives and foreign
exchange revenue and institutional sales revenue, partially offset by an
increase in lease termination fees and growth in business lending fees. On a
year-over-year basis, corporate banking revenue increased by $9 million, or 8
percent. Strong growth in business lending fees, institutional sales revenue,
and lease termination fees more than offset lower interest rate derivatives
and foreign exchange revenue.
Investment advisory revenue of $76 million was down 3 percent sequentially
and 18 percent from the first quarter of 2008 due to the impact on managed
assets of the overall decline in market values. Institutional trust revenue
decreased 3 percent from the previous quarter largely driven by lower asset
values. Mutual fund fees were down 18 percent from the previous quarter,
reflecting lower asset valuations and a shift to money market and other lower
fee products. Brokerage fees were down 5 percent from the fourth quarter of
2008, reflecting the continued shift in assets from equity products to lower
yielding money market funds due to market volatility as well as a decline in
transaction-based revenues.
Mortgage banking net revenue was $134 million in the first quarter of
2009, an increase of $163 million from fourth quarter 2008 results and a $37
million increase from the first quarter of 2008. First quarter originations
were $4.9 billion, up from $2.1 billion the previous quarter, and resulted in
gains on mortgages held-for-sale of $131 million compared with gains of $45
million during the previous quarter, and $93 million during the same period in
2008. Revenue for the first quarter included $3 million of gains on the sale
of portfolio loans compared with $3 million in the previous quarter and $11
million in the first quarter of 2008. Net servicing revenue, before mortgage
servicing rights (MSR) valuation adjustments, totaled $2 million in the first
quarter, compared with $22 million last quarter and $8 million a year ago. MSR
valuation adjustments, including mark-to-market related adjustments on
free-standing derivatives used to economically hedge the MSR portfolio,
represented a net gain of $1 million in the first quarter of 2009, compared
with a net loss of $96 million last quarter and a net loss of $3 million a
year ago. Including gains in MSR balance sheet hedges reported in securities
gains and losses, total mortgage banking revenue increased by $83 million from
the previous quarter. The mortgage servicing asset, net of the valuation
reserve, was $478 million at quarter end on a servicing portfolio of $41.5
billion.
Net securities gains on non-qualifying hedges on MSRs were $16 million in
the first quarter of 2009 compared to net gains of $96 million in the previous
quarter and $3 million in the first quarter of 2008.
Net losses on investment securities were $24 million in the first quarter
of 2009, of which $18 million was attributable to the reclassification of
available-for-sale securities related to deferred compensation plan
obligations to trading securities. Subsequent changes in value on these
trading securities will be directly offset by compensation expense. Net losses
on investment securities during the fourth quarter of 2008 were $40 million.
Other noninterest income totaled $10 million in the first quarter of 2009
compared with $24 million the previous quarter and $177 million in the first
quarter of 2008. First quarter of 2009 results included $54 million of charges
related to one of its BOLI policies, while fourth quarter 2008 results
included a $34 million non-cash BOLI charge and first quarter 2008 results
included a $273 million gain from the Visa IPO partially offset by a $152
million non-cash BOLI charge. Excluding these items, other noninterest income
increased by $6 million from the previous quarter and $8 million from the same
period the previous year due to gains on the sale of non-performing assets.
Noninterest Expense
For the Three Months Ended % Change
March Dec. Sept. June March
2009 2008 2008 2008 2008 Seq Yr/Yr
Noninterest Expense
($ in millions)
Salaries, wages and
incentives $327 $337 $321 $331 $347 (3%) (6%)
Employee benefits 83 61 72 60 85 36% (1%)
Payment processing expense 67 70 70 67 66 (5%) 1%
Net occupancy expense 79 77 77 73 72 2% 9%
Technology and
communications 45 48 47 49 47 (7%) (5%)
Equipment expense 31 35 34 31 31 (10%) 3%
Other noninterest expense 330 1,394 346 247 67 (76%) 393%
Total noninterest expense $962 $2,022 $967 $858 $715 (52%) 35%
Noninterest expense of $962 million decreased $1.1 billion sequentially
and increased $247 million from a year ago. First quarter of 2009 results
included $8 million in severance expense while fourth quarter 2008 results
included a $965 million non-cash goodwill impairment charge and an $8 million
charge due to changes on loss estimates related to our indemnification
obligation with Visa. Excluding these items, expenses declined by $95 million
or 9 percent, driven by a lower provision for unfunded commitments and the
effect of fourth quarter charges associated with derivative counterparty
losses, which accounted for $61 million of the sequential expense decline. The
remaining decline reflected strong core expense control across a variety of
categories. First quarter 2008 results included the reversal of $152 million
in Visa litigation reserves, $9 million of severance expense, and $7 million
in acquisition related expenses. Excluding these items in the first quarter of
2008, expenses increased by $103 million, or 12 percent from the same quarter
the previous year driven by higher credit-related costs, particularly loan and
lease collection costs and provision for unfunded commitments, as well as the
effect of higher deposit insurance assessments and the effect of the second
quarter 2008 acquisition of First Charter.
Credit Quality
For the Three Months Ended
March December September June March
2009 2008 2008 2008 2008
Total net losses charged off
($ in millions)
Commercial loans ($103) ($422) ($85) ($107) ($36)
Commercial mortgage loans (77) (465) (94) (21) (33)
Commercial construction loans (76) (539) (88) (49) (72)
Commercial leases - - - - -
Residential mortgage loans (75) (68) (77) (63) (34)
Home equity (72) (54) (55) (54) (41)
Automobile loans (46) (43) (32) (26) (35)
Credit card (36) (30) (24) (21) (20)
Other consumer loans and leases (5) (6) (8) (3) (5)
Total net losses charged off (490) (1,627) (463) (344) (276)
Total losses (521) (1,652) (481) (365) (293)
Total recoveries 31 25 18 21 17
Total net losses charged off ($490) ($1,627) ($463) ($344) ($276)
Ratios (annualized)
Net losses charged off as a percent
of average loans and leases
(excluding held for sale) 2.37% 7.50% 2.17% 1.66% 1.37%
Commercial 2.08% 10.70% 2.07% 1.41% 1.21%
Consumer 2.82% 2.40% 2.33% 2.04% 1.58%
Net charge-offs were $490 million in the first quarter of 2009, or 237 bps
of average loans on an annualized basis. Fourth quarter net losses were $1.6
billion and included net losses of $800 million on commercial loans that were
either sold or transferred to held-for-sale. Excluding these losses, net
charge-offs were $827 million in the fourth quarter and declined in the first
quarter by $337 million, reflecting the beneficial effect of credit actions
taken in the previous quarter. Loss experience overall continues to be
weighted toward commercial and residential real estate loans in Michigan and
Florida. In aggregate, Florida and Michigan represented approximately 51
percent of total losses during the quarter and 28 percent of total loans and
leases.
Commercial net charge-offs were $256 million, or 208 bps, in the first
quarter of 2009, compared with $1.4 billion in the fourth quarter, which
included net losses of $800 million on commercial loans sold or transferred to
held-for-sale. Excluding these losses, commercial net charge-offs declined by
$370 million on a sequential basis. Within the commercial portfolio, C&I
losses were $103 million, compared with $383 million in fourth quarter
portfolio losses and an additional $39 million in losses realized on the sales
or transfers. Loans to auto dealers accounted for $26 million and loans to
companies in real estate-related industries accounted for $28 million of C&I
net losses. Commercial mortgage net losses totaled $77 million, versus
portfolio losses of $93 million last quarter and additional $372 million in
losses realized on the sales or transfers. Michigan and Florida accounted for
65 percent of commercial mortgage losses. Commercial construction net losses
were $76 million, compared with $150 million in portfolio losses in the fourth
quarter and an additional $389 million of losses realized on the sales or
transfers. Michigan and Florida accounted for 42 percent of commercial
construction losses. Across all commercial portfolios, net losses on
residential builder and developer portfolio loans totaled $64 million,
compared with $128 million in fourth quarter portfolio losses and an
additional $440 million realized on the sales or transfers. These homebuilder
losses were composed of $4 million on C&I loans, $16 million on commercial
mortgage loans, and $44 million on commercial construction loans. Originations
of homebuilder/developer loans were suspended in 2007 and remaining portfolio
balances total $2.3 billion. Commercial net charge-offs excluding losses on
the suspended homebuilder/developer portfolio were $192 million, or 165 bps in
the first quarter.
Consumer net charge-offs of $234 million, or 282 bps, were up $33 million
from the fourth quarter of 2008. Home equity net charge-offs of $72 million
increased $18 million sequentially and continued to be driven by losses on
brokered home equity loans. Net losses on brokered home equity loans were $30
million or 42 percent of first quarter home equity losses, while brokered home
equity loans represented $2.2 billion, or 18 percent, of the total home equity
portfolio. Originations of brokered home equity loans were discontinued in
2007. Michigan and Florida represented 47 percent of first quarter home equity
losses and 29 percent of total home equity loans. Net charge-offs within the
residential mortgage portfolio were $75 million, an increase of $7 million
from the previous quarter, with losses in Michigan and Florida representing 79
percent of losses in the first quarter and approximately 44 percent of the
total mortgage portfolio. Net charge-offs in the auto portfolio increased by
$3 million from the fourth quarter of 2008 to $46 million and losses on
consumer credit card loans were $36 million, up $6 million from the last
quarter, as higher unemployment and weakening economic conditions continue to
impact these portfolios.
For the Three Months Ended
March December September June March
2009 2008 2008 2008 2008
Allowance for Credit Losses
($ in millions)
Allowance for loan and lease
losses, beginning $2,787 $2,058 $1,580 $1,205 $937
Total net losses charged off (490) (1,627) (463) (344) (276)
Provision for loan and lease
losses 773 2,356 941 719 544
Allowance for loan and lease
losses, ending 3,070 2,787 2,058 1,580 1,205
Reserve for unfunded
commitments, beginning 195 132 115 103 95
Provision for unfunded
commitments 36 63 17 10 8
Acquisitions - - - 2 -
Reserve for unfunded
commitments, ending 231 195 132 115 103
Components of allowance for
credit losses:
Allowance for loan and lease
losses 3,070 2,787 2,058 1,580 1,205
Reserve for unfunded
commitments 231 195 132 115 103
Total allowance for credit
losses $3,301 $2,982 $2,190 $1,695 $1,308
Allowance for loan and lease
losses ratio
As a percent of loans and
leases 3.71% 3.31% 2.41% 1.85% 1.49%
As a percent of nonperforming
loans and leases (a) (b) 128% 157% 92% 92% 95%
As a percent of nonperforming
assets (a) (b) 116% 139% 84% 81% 82%
(a) Excludes non accrual loans and leases in loans held for sale
(b) During 1Q09 the Bancorp modified its nonaccrual policy to exclude
TDR loans less than 90 days past due because they were performing in
accordance with restructured terms. For comparability purposes,
prior periods were adjusted to reflect this reclassification.
Provision for loan and lease losses totaled $773 million in the first
quarter of 2009, exceeding net charge-offs by $283 million. The increase in
the allowance for loan and lease losses reflected growth in nonperforming
assets and overall delinquencies and increased loss estimates once loans
become delinquent related to the deterioration in real estate collateral
values.
The allowance for loan and lease losses represented 3.71 percent of total
loans and leases outstanding as of quarter end, compared with 3.31 percent
last quarter, and represented 128 percent of nonperforming loans.
As of
Nonperforming Assets and
Delinquency March December September June March
($ in millions) 2009 2008 2008 2008 2008
Nonaccrual loans and
leases:
Commercial loans $667 $541 $550 $407 $300
Commercial mortgage 692 482 724 524 312
Commercial construction 551 362 636 537 408
Commercial leases 27 21 23 18 11
Residential mortgage 265 259 216 142 138
Home equity 25 26 27 35 42
Automobile 2 5 3 7 13
Other consumer loans and
leases - - - - -
Total nonaccrual loans
and leases $2,229 $1,696 $2,179 $1,670 $1,224
Restructured loans and
leases (non accrual) (a) 167 80 50 56 43
Total nonperforming loans
and leases $2,396 $1,776 $2,229 $1,726 $1,267
Repossessed personal
property 25 24 24 22 22
Other real estate owned (b) 227 206 198 190 182
Total nonperforming
assets (c) $2,648 $2,006 $2,451 $1,938 $1,471
Nonaccrual loans held for
sale 403 473 - - -
Total nonperforming
assets including loans
held for sale $3,051 $2,479 $2,451 $1,938 $1,471
Restructured loans and
leases (accrual) (a) $615 494 377 262 121
Total loans and leases 90
days past due $733 $662 $671 $608 $539
Total loans and leases 30-
89 days past due
Nonperforming loans and
leases as a percent of
portfolio loans, leases
and other assets,
including other real
estate owned (c) 2.89% 2.11% 2.60% 2.01% 1.56%
Nonperforming assets as a
percent of portfolio
loans, leases and other
assets, including other
real estate owned (c) 3.19% 2.38% 2.86% 2.26% 1.81%
(a) During 1Q09 the Bancorp modified its nonaccrual policy to exclude TDR
loans less than 90 days past due because they were performing in
accordance with restructured terms. For comparability purposes, prior
periods were adjusted to reflect this reclassification.
(b) Excludes government insured advances.
(c) Does not include non accrual loans held-for-sale.
Nonperforming assets (NPAs) at quarter end were $2.6 billion or 3.19
percent of total loans and leases and other real estate owned (OREO), up from
$2.0 billion, or 2.38 percent, last quarter. Including $403 million of
nonaccrual loans classified as held-for-sale, total nonperforming assets were
$3.1 billion compared with $2.5 billion in the fourth quarter. During the
quarter, consistent with recent regulatory guidance, we reclassified certain
troubled debt restructurings (TDRs) from nonaccrual to accrual status. TDRs
more than 90 days past due as measured by their modified terms continue to
remain on nonaccrual status. The income statement impact of this
reclassification was insignificant. Growth in NPAs continues to be primarily
associated with commercial and residential real estate loans in Michigan and
Florida. In aggregate, Florida and Michigan represented approximately 43
percent of NPAs in the loan portfolio and 47 percent of portfolio NPA growth
from the previous quarter.
Commercial NPAs at quarter-end were $2.0 billion, or 4.07 percent, and
increased $546 million, or 37 percent, from the fourth quarter of 2008.
Residential real estate builder and developer portfolio NPAs were $554 million
in the first quarter, up $188 million from the previous quarter. Of the
residential real estate builder and developer NPAs, $26 million were C&I NPAs,
$303 million were commercial construction NPAs, and $225 million were
commercial mortgage NPAs. C&I portfolio NPAs of $675 million increased $127
million from the previous quarter. Commercial construction portfolio NPAs were
$597 million, an increase of $197 million from the fourth quarter of 2008.
Commercial mortgage NPAs were $718 million, a sequential increase of $216
million. Commercial real estate loans in Michigan and Florida represented 38
percent of our total commercial real estate portfolio in the first quarter
2008, which was consistent with previous quarter levels, and 43 percent of
commercial real estate NPAs, compared with 37 percent the previous quarter.
At quarter-end, the Bank held $403 million of commercial nonaccrual loans
in held-for-sale, compared with $473 million at the end of the fourth quarter.
These held-for-sale nonaccrual loans had an original balance of $1.6 billion,
and were charged down or marked to their fair market value as of the fourth
quarter to an average carrying value of 35 cents on the dollar. During the
quarter, the Bank sold loans with a carrying value of $48 million and received
customer payments of $8 million to settle loans previously written down to $7
million, which led to a net gain of $13 million on $55 million of balances.
The Bank took possession of the collateral underlying $5 million of the
held-for-sale real estate loans and received $10 million of principal payments
on the remaining held-for-sale balances. The remaining portfolio is composed
of $208 million of commercial mortgage loans, $185 million of commercial
construction loans, and $10 million of C&I loans. Loans in Florida and
Michigan constituted 79 percent of the $403 million held-for-sale portfolio;
of the portfolio, loans to residential real estate builders and developers
constituted 44 percent. These loans continue to be carried at the lower of
cost or market, currently 30 cents of the original balance.
Consumer NPAs of $630 million, or 1.89 percent, increased $97 million, or
18 percent, from the fourth quarter of 2008, of which $558 million were in
residential real estate portfolios. Residential mortgage NPAs increased $78
million to $475 million and home equity NPAs increased $4 million to $83
million. Nonaccrual troubled debt restructurings were $167 million, compared
with $80 million last quarter. Residential real estate loans in Michigan and
Florida represented 67 percent of total residential real estate NPAs and 35
percent of total residential real estate loans. Excluding TDRs, consumer NPAs
increased by $10 million from the previous quarter.
First quarter OREO of $227 million compared with OREO of $206 million in
the fourth quarter of 2008, and included $129 million of residential mortgage
assets, $18 million in home equity assets, and $72 million in commercial real
estate assets. Repossessed personal property largely consisted of autos. Loans
still accruing over 90 days past due were $733 million, up $71 million from
the fourth quarter of 2008. Commercial 90 days past due balances increased 7
percent from the previous quarter. Consumer 90 days past due balances
increased 14 percent from the previous quarter.
Capital Position
For the Three Months Ended
March December September June March
2009(a) 2008 2008 2008 2008
Capital Position
Average shareholders' equity
to average assets 10.18% 8.65% 9.45% 8.59% 8.43%
Tangible equity 7.89% 7.86% 6.19% 6.37% 6.19%
Tangible common equity
(excluding unrealized
gains/losses) 4.23% 4.23% 5.23% 5.40% 6.19%
Tangible common equity
(including unrealized
gains/losses) 4.35% 4.31% 5.19% 5.28% 6.19%
Tangible common equity as a
percent of risk-weighted assets
(excluding unrealized
gains/losses) 4.64% 4.51% 5.36% 5.38% 5.91%
Tangible common equity as a
percent of risk-weighted assets
(including unrealized
gains/losses) 4.77% 4.59% 5.31% 5.25% 5.92%
Regulatory capital ratios:
Tier I capital 10.93% 10.59% 8.57% 8.51% 7.72%
Total risk-based capital 15.13% 14.78% 12.30% 12.15% 11.34%
Tier I leverage 10.29% 10.27% 8.77% 9.08% 8.28%
Book value per share 13.61 13.57 16.65 16.75 17.56
Tangible book value per share 8.79 8.74 10.10 10.16 12.66
(a) Current period regulatory capital data ratios are estimated.
The tangible common equity ratio at the end of the first quarter and
fourth quarter of 2008 was 4.23 percent. The tangible equity ratio increased 3
bps to 7.89 percent, the Tier 1 capital ratio increased 34 bps to 10.93
percent, and the total capital ratio increased 35 bps to 15.13 percent. The
increase in the Tier 1 and total capital ratios related to a reduction in
risk-weighted assets primarily due to lower off-balance sheet exposures. The
capital ratios reported above do not include the anticipated benefit of the
processing joint venture with Advent International, the benefit of which is
described elsewhere in this release.
Fifth Third's tangible equity to tangible assets ratio target is 6 to 7
percent; the Tier 1 capital ratio target is 8 to 9 percent; and the total
capital ratio target is 11.5 to 12.5 percent.
Other Matters
As noted previously, Fifth Third recorded tax benefits of $106 million in
the first quarter of 2009 related to losses recorded in prior periods in one
of its BOLI policies that are now expected to be tax deductible. First quarter
results also included non-cash pre-tax charges of $54 million related to this
policy. These charges reflected $43 million in reserves recorded in connection
with the intent to surrender the policy as well as $11 million in losses
related to market value declines. We believed it was appropriate to fully
reserve the value of the stable value wrap associated with the policy because
we have not yet decided the manner in which we will surrender the policy,
which may impact the value of the wrap, and because of ongoing developments in
existing litigation with the insurance carrier. Additionally, we recognized a
$55 million reduction in income tax expense in the first quarter due to our
settlement with the IRS related to leverage leases. The reported effective tax
rate for the first quarter including these items was 119 percent. Excluding
the $161 million of unusual items outlined above, the effective tax rate was
58 percent for the quarter. This unusually high tax rate resulted primarily
from the interaction between the $262 million pre-tax loss, permanent
differences related to tax exempt income and BOLI income, and the tax credits
we expect to recognize during the year.
On March 30, 2009, Fifth Third Bancorp and Advent International announced
an agreement under which Advent International will acquire a 51 percent
interest in Fifth Third's processing business through the formation of a joint
venture that values the new company at approximately $2.35 billion before
valuation adjustments by either party. Pursuant to the agreement, Fifth Third
Bank (OH), an indirect wholly owned subsidiary of Fifth Third Bancorp, will
contribute the assets and operations of Fifth Third's merchant acquiring and
financial institutions processing business to a new limited liability company
("LLC"). The LLC's capitalization prior to the purchase of this interest will
include senior secured notes payable to subsidiaries of Fifth Third in the
amount of $1.25 billion. Advent will pay Fifth Third $561 million in cash for
a 51 percent ownership interest in the equity of the LLC and for certain put
rights. Additionally, Fifth Third will receive warrants in the new company
exercisable in certain circumstances. Fifth Third estimates the valuation
adjustments related to these warrants, the put, and minority interest
discounts may reduce its implied valuation of the business by approximately
$50 million. The agreement is subject to certain potential purchase price
adjustments. On a pro forma basis for 2008, the transaction would have been
dilutive to Fifth Third's earnings by an estimated $100 million, or
approximately $0.17 per share, of which approximately $57 million or $0.10 per
share is expected to represent non-cash intangibles amortization. The
transaction is expected to contribute significantly to Fifth Third's retained
earnings, capital levels and capital ratios, generating an expected pre-tax
book gain of an estimated $1.7 billion and increasing Fifth Third's tangible
common equity and Tier 1 capital by an estimated $1.2 billion.
Conference Call
Fifth Third will host a conference call to discuss these financial results
at 8:30 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 or
podcast 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, May 7th by dialing 800-642-1687 for domestic access and 706-645-9291
for international access (passcode 92753311#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of March 31, 2009, the Company has $119
billion in assets, operates 16 affiliates with 1,311 full-service Banking
Centers, including 95 Bank Mart(R) locations open seven days a week inside
select grocery stores and 2,354 ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia
and North Carolina. Fifth Third operates five main businesses: Commercial
Banking, Branch Banking, Consumer Lending, Investment Advisors and Fifth Third
Processing Solutions. Fifth Third is among the largest money managers in the
Midwest and, as of March 31, 2009, has $166 billion in assets under care, of
which it managed $23 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(R) National
Global Select Market under the symbol "FITB."
Forward-Looking Statements
This report may contain forward-looking statements about Fifth Third
Bancorp and/or the LLC within the meaning of Sections 27A of the Securities
Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the
Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated
thereunder, that involve inherent risks and uncertainties. This report may
contain certain forward-looking statements with respect to the financial
condition, results of operations, plans, objectives, future performance and
business of Fifth Third Bancorp and/or the combined LLC including statements
preceded by, followed by or that include the words or phrases such as
"believes," "expects," "anticipates," "plans," "trend," "objective,"
"continue," "remain" or similar expressions or future or conditional verbs
such as "will," "would," "should," "could," "might," "can," "may" or similar
expressions. There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) general economic conditions and weakening
in the economy, specifically the real estate market, either national or in the
states in which Fifth Third, and/or the LLC 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, and/or the LLC or the businesses in which these entities are
engaged; (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 in separating the operations
of the LLC; (21) lower than expected gains related to the sale of businesses;
(22) loss of income from the sale of businesses that could have an adverse
effect on Fifth Third's earnings and future growth; (23) failure to consummate
the joint venture transaction; (24) ability to secure confidential information
through the use of computer systems and telecommunications networks; and (25)
the impact of reputational risk created by these developments on such matters
as business generation and retention, funding and liquidity. Additional
information concerning factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements
is available in the Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2008, filed with the United States Securities and Exchange
Commission (SEC). Copies of this filing are available at no cost on the SEC's
Web site at www.sec.gov or on the Fifth Third's Web site at www.53.com. Fifth
Third undertakes no obligation to release revisions to these forward-looking
statements or reflect events or circumstances after the date of this report.
SOURCE Fifth Third Bancorp
-0- 04/23/2009
/CONTACT: Jim Eglseder (Investors), +1-513-534-8424, or Rich Rosen
(Investors), +1-513-534-3307, or Stephanie Honan (Media), +1-513-534-6957, all
of Fifth Third Bancorp/
/Web Site: http://www.53.com /
(FITB)
CO: Fifth Third Bancorp; Advent International
ST: Ohio
IN: FIN
SU: ERN CCA
PR
-- CL03871 --
9771 04/23/2009 06:30 EDT http://www.prnewswire.com
