- 1Q13 net income available to common shareholders of $413 million, or $0.46 per diluted common share, vs. $390 million or $0.43 per share in 4Q12, up 7% and $421 million or $0.45 per share in 1Q12, up 2%
- 1Q13 results included a benefit of $34 million pre-tax (~$22 million after-tax, or ~$0.02 per share) on the valuation of the warrant Fifth Third holds in Vantiv
- Significant items in 4Q12 included a positive net pre-tax impact related to Vantiv shares and warrants of $138 million (~$90 million after tax, or ~$0.10 per share) and pre-tax expense for FHLB debt extinguishment of $134 million (~$87 million after-tax, or ~$0.09 per share); significant 1Q12 items included a positive net pre-tax impact related to Vantiv shares and warrants of $127 million (~$83 million after-tax, or ~$0.09 per share)
- Excluding these items, earnings per diluted common share of $0.44^ increased $0.08, or 22%, from 1Q12
- 1Q13 return on assets (ROA) of 1.41%; return on average common equity of 12.5%; return on average tangible common equity** of 15.4%
- Pre-provision net revenue (PPNR)** of $653 million in 1Q13
- Net interest income (FTE) of $893 million, down 1% sequentially due primarily to lower day count; net interest margin 3.42%; average portfolio loans up 2% sequentially driven by 6% sequential growth in C&I loans
- Noninterest income of $743 million included $34 million gain on Vantiv warrant and $17 million in investment securities gains; compared with $880 million in prior quarter which included net gains of $138 million related to Vantiv shares and warrant
- Noninterest expense of $978 million, down 16% from 4Q12 which included FHLB debt termination charge
- 1Q13 effective tax rate of 30.4% compared with 26.8% in 4Q12 and 28.6% in 1Q12; 1Q13 income taxes included seasonal increase of $12 million related to expiration of stock options; 4Q12 income taxes included $10 million benefit from the termination of certain leases
- Credit trends remain favorable
- 1Q13 net charge-offs of $133 million (0.63% of loans and leases) vs. 4Q12 NCOs of $147 million and 1Q12 NCOs of $220 million; lowest NCO level since 2Q07; 1Q13 provision expense of $62 million compared with 4Q12 provision of $76 million and 1Q12 provision of $91 million
- Loan loss allowance decreased $71 million sequentially reflecting continued improvement in credit trends; allowance to loan ratio of 2.08%, 147% of nonperforming assets, 187% of nonperforming loans and leases, and 3.3 times 1Q13 annualized net charge-offs
- Total nonperforming assets (NPAs) of $1.2 billion including loans held-for-sale (HFS) declined $86 million, or 7%, sequentially; portfolio NPA ratio of 1.41% down 8 bps from 4Q12, NPL ratio of 1.11% down 8 bps from 4Q12
- Total delinquencies (includes loans 30-89 days past due and over 90 days past due) at lowest levels since 1Q01
- Strong capital ratios*
- Tier 1 common ratio 9.70%**, up 19 bps sequentially (Basel III pro forma estimate of ~8.9%)
- Tier 1 capital ratio 10.83%, Total capital ratio 14.35%, Leverage ratio 10.03%
- Tangible common equity ratio** of 9.03% excluding unrealized gains/losses; 9.28% including them
- Repurchased ~8 million common shares in 1Q13; average share count reduced by 14 million shares including impact from 4Q12 and 1Q13 share repurchases; new 100 million share repurchase authorization in March
- Book value per share of $15.42; tangible book value per share** of $12.62 up 2% from 4Q12 and 8% from 1Q12
* 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 the three draft Federal Register notices proposing enhancements to regulatory capital requirements published in June 2012. The actual impact to the Bancorp’s Tier I common equity ratio may change significantly due to revisions to the agencies’ final rules. See pp.15-16 in Exhibit 99.1 of 8-k filing dated 4/18/13 for more information.
** Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit 99.1 of 8-k filing dated 4/18/13.
^ Non-GAAP measure. This measure has been included herein to facilitate a greater understanding of the Bancorp’s financial condition.
Fifth Third Bancorp (Nasdaq: FITB) today reported first quarter 2013 net
income of $422 million, compared with net income of $399 million in the
fourth quarter of 2012 and net income of $430 million in the first
quarter of 2012. After preferred dividends, first quarter 2013 net
income available to common shareholders was $413 million, or $0.46 per
diluted share, compared with fourth quarter net income of $390 million,
or $0.43 per diluted share, and net income of $421 million, or $0.45 per
diluted share, in the first quarter of 2012.
First quarter 2013 noninterest income results included a $34 million
positive valuation adjustment on the Vantiv warrant; a $7 million gain
on the sale of certain Fifth Third Asset Management (FTAM) advisory
contracts; and a $7 million charge related to the valuation of the Visa
total return swap. Net gains on investment securities were $17 million.
First quarter 2013 noninterest expense results included a $9 million
benefit from the sale of affordable housing investments and $9 million
in charges to increase litigation reserves. First quarter income tax
expense was higher by $12 million due to the seasonal expiration of
employee stock options.
Fourth quarter 2012 noninterest income included a $157 million gain on
the sale of Vantiv shares; a $19 million negative valuation adjustment
on the Vantiv warrant; and a $15 million charge related to the valuation
of the Visa total return swap. Net gains on investment securities were
$2 million. Fourth quarter noninterest expense included $134 million of
debt extinguishment costs associated with the termination of Federal
Home Loan Bank (FHLB) debt and $13 million in charges to increase
litigation reserves. Results also included an additional $29 million of
charges to increase the mortgage representation and warranty reserve due
to new Freddie Mac guidance for potential 2004-2006 repurchase claims.
Fourth quarter 2012 taxes were reduced by approximately $10 million due
to the termination of certain leases.
First quarter 2012 results included $115 million in pre-tax gains on the
initial public offering of Vantiv, Inc., $46 million in positive
valuation adjustments on the Vantiv warrant and put option, as well as
$34 million of charges recorded in equity method earnings in other
noninterest income related to Vantiv’s bank debt refinancing and debt
termination charges. First quarter 2012 results also included $23
million in income from an agreement reached on certain outstanding
disputes for non-income tax related assessments in noninterest expense;
a $19 million charge to noninterest income related to the Visa total
return swap, additions to litigation reserves of $13 million, debt
termination charges of $9 million, and severance expense of $6 million.
Net gains on investment securities were $9 million.
|
Earnings Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Earnings ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bancorp
|
|
|
$
|
422
|
|
|
$
|
399
|
|
|
$
|
363
|
|
|
$
|
385
|
|
|
$
|
430
|
|
|
6
|
%
|
|
(2
|
%)
|
|
Net income available to common shareholders
|
|
|
$
|
413
|
|
|
$
|
390
|
|
|
$
|
354
|
|
|
$
|
376
|
|
|
$
|
421
|
|
|
6
|
%
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
|
|
0.47
|
|
|
|
0.44
|
|
|
|
0.39
|
|
|
|
0.41
|
|
|
|
0.46
|
|
|
7
|
%
|
|
2
|
%
|
|
Earnings per share, diluted
|
|
|
|
0.46
|
|
|
|
0.43
|
|
|
|
0.38
|
|
|
|
0.40
|
|
|
|
0.45
|
|
|
7
|
%
|
|
2
|
%
|
|
Cash dividends per common share
|
|
|
|
0.11
|
|
|
|
0.10
|
|
|
|
0.10
|
|
|
|
0.08
|
|
|
|
0.08
|
|
|
10
|
%
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
|
|
1.41
|
%
|
|
|
1.33
|
%
|
|
|
1.23
|
%
|
|
|
1.32
|
%
|
|
|
1.49
|
%
|
|
6
|
%
|
|
(5
|
%)
|
|
Return on average common equity
|
|
|
|
12.5
|
|
|
|
11.5
|
|
|
|
10.4
|
|
|
|
11.4
|
|
|
|
13.1
|
|
|
9
|
%
|
|
(4
|
%)
|
|
Return on average tangible common equity
|
|
|
|
15.4
|
|
|
|
14.1
|
|
|
|
12.8
|
|
|
|
14.1
|
|
|
|
16.2
|
|
|
9
|
%
|
|
(5
|
%)
|
|
Tier I capital
|
|
|
|
10.83
|
|
|
|
10.65
|
|
|
|
10.85
|
|
|
|
12.31
|
|
|
|
12.20
|
|
|
2
|
%
|
|
(11
|
%)
|
|
Tier I common equity
|
|
|
|
9.70
|
|
|
|
9.51
|
|
|
|
9.67
|
|
|
|
9.77
|
|
|
|
9.64
|
|
|
2
|
%
|
|
1
|
%
|
|
Net interest margin(a)
|
|
|
|
3.42
|
|
|
|
3.49
|
|
|
|
3.56
|
|
|
|
3.56
|
|
|
|
3.61
|
|
|
(2
|
%)
|
|
(5
|
%)
|
|
Efficiency(a)
|
|
|
|
59.8
|
|
|
|
65.2
|
|
|
|
63.7
|
|
|
|
59.4
|
|
|
|
58.3
|
|
|
(8
|
%)
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (in thousands)
|
|
|
|
874,645
|
|
|
|
882,152
|
|
|
|
897,467
|
|
|
|
918,913
|
|
|
|
920,056
|
|
|
(1
|
%)
|
|
(5
|
%)
|
|
Average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
870,923
|
|
|
|
884,676
|
|
|
|
904,475
|
|
|
|
913,541
|
|
|
|
915,226
|
|
|
(2
|
%)
|
|
(5
|
%)
|
|
Diluted
|
|
|
|
913,163
|
|
|
|
925,585
|
|
|
|
944,821
|
|
|
|
954,622
|
|
|
|
957,416
|
|
|
(1
|
%)
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 not the rounded dollar amounts.
|
|
|
“First quarter earnings results demonstrated continued strong momentum
for Fifth Third,” said Kevin Kabat, CEO of Fifth Third Bancorp. “Net
income to common shareholders of $413 million was among the best results
in company history. Return on average assets was 1.41 percent and return
on average tangible common equity* was 15.4 percent.
“Loan growth remained strong and net interest income results were higher
than expected. Average loans increased 2 percent sequentially, driven by
4 percent growth in average commercial loans with continued strength in
C&I lending, up 6 percent from the fourth quarter. Residential mortgage
lending also remained strong. Fee income results were solid despite the
negative effects of seasonality in the first quarter.
“Credit trends continued to be favorable, with net charge-offs declining
10 percent, to 0.63 percent of average loans and leases, the lowest
level since the second quarter of 2007. Nonperforming assets declined 7
percent. Loan loss reserve levels and coverage ratios remain strong at
2.08 percent of loans and 187 percent of nonperforming portfolio loans.
“We completed our repurchase activity related to our 2012 capital plan
in early April. Total repurchases in 2012 and the first quarter of 2013
were 50 million shares, including those related to after-tax gains on
the sale of Vantiv shares. Period end shares have declined 5 percent
since year-end 2011. Despite these actions, our strong common equity
capital ratios have increased 35 basis points over this period.
Additionally, in March, we announced a 10 percent increase in the
quarterly common stock dividend, to $0.11. Given our capacity for
internal capital generation, we would expect to continue to return
capital to shareholders in a responsible manner, absent unforeseen
developments.”
* Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit
99.1 of 8-k filing dated 4/18/13.
|
Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Condensed Statements of Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (taxable equivalent)
|
|
|
|
|
$
|
893
|
|
|
|
$
|
903
|
|
|
|
$
|
907
|
|
|
$
|
899
|
|
|
$
|
903
|
|
|
(1
|
%)
|
|
|
(1
|
%)
|
|
Provision for loan and lease losses
|
|
|
|
|
|
62
|
|
|
|
|
76
|
|
|
|
|
65
|
|
|
|
71
|
|
|
|
91
|
|
|
(18
|
%)
|
|
|
(31
|
%)
|
|
Total noninterest income
|
|
|
|
|
|
743
|
|
|
|
|
880
|
|
|
|
|
671
|
|
|
|
678
|
|
|
|
769
|
|
|
(16
|
%)
|
|
|
(3
|
%)
|
|
Total noninterest expense
|
|
|
|
|
|
978
|
|
|
|
|
1,163
|
|
|
|
|
1,006
|
|
|
|
937
|
|
|
|
973
|
|
|
(16
|
%)
|
|
|
-
|
|
|
Income before income taxes (taxable equivalent)
|
|
|
|
|
|
596
|
|
|
|
|
544
|
|
|
|
|
507
|
|
|
|
569
|
|
|
|
608
|
|
|
10
|
%
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent adjustment
|
|
|
|
|
|
5
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
4
|
|
|
|
5
|
|
|
4
|
%
|
|
|
1
|
%
|
|
Applicable income taxes
|
|
|
|
|
|
179
|
|
|
|
|
144
|
|
|
|
|
139
|
|
|
|
180
|
|
|
|
173
|
|
|
24
|
%
|
|
|
4
|
%
|
|
Net income
|
|
|
|
|
|
412
|
|
|
|
|
396
|
|
|
|
|
364
|
|
|
|
385
|
|
|
|
430
|
|
|
4
|
%
|
|
|
(4
|
%)
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
|
|
|
(10
|
)
|
|
|
|
(3
|
)
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
NM
|
|
|
NM
|
|
Net income attributable to Bancorp
|
|
|
|
|
|
422
|
|
|
|
|
399
|
|
|
|
|
363
|
|
|
|
385
|
|
|
|
430
|
|
|
6
|
%
|
|
|
(2
|
%)
|
|
Dividends on preferred stock
|
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
-
|
|
|
|
-
|
|
|
Net income available to common shareholders
|
|
|
|
|
|
413
|
|
|
|
|
390
|
|
|
|
|
354
|
|
|
|
376
|
|
|
|
421
|
|
|
6
|
%
|
|
|
(2
|
%)
|
|
Earnings per share, diluted
|
|
|
|
|
$
|
0.46
|
|
|
|
$
|
0.43
|
|
|
|
$
|
0.38
|
|
|
$
|
0.40
|
|
|
$
|
0.45
|
|
|
7
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Interest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income (taxable equivalent)
|
|
|
|
|
$
|
1,000
|
|
|
|
$
|
1,020
|
|
|
|
$
|
1,027
|
|
|
|
$
|
1,031
|
|
|
|
$
|
1,045
|
|
|
|
(2
|
%)
|
|
|
(4
|
%)
|
|
Total interest expense
|
|
|
|
|
|
107
|
|
|
|
|
117
|
|
|
|
|
120
|
|
|
|
|
132
|
|
|
|
|
142
|
|
|
|
(8
|
%)
|
|
|
(25
|
%)
|
|
Net interest income (taxable equivalent)
|
|
|
|
|
$
|
893
|
|
|
|
$
|
903
|
|
|
|
$
|
907
|
|
|
|
$
|
899
|
|
|
|
$
|
903
|
|
|
|
(1
|
%)
|
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets (taxable equivalent)
|
|
|
|
|
|
3.84
|
%
|
|
|
|
3.94
|
%
|
|
|
|
4.03
|
%
|
|
|
|
4.08
|
%
|
|
|
|
4.18
|
%
|
|
|
(3
|
%)
|
|
|
(8
|
%)
|
|
Yield on interest-bearing liabilities
|
|
|
|
|
|
0.59
|
%
|
|
|
|
0.65
|
%
|
|
|
|
0.67
|
%
|
|
|
|
0.73
|
%
|
|
|
|
0.79
|
%
|
|
|
(10
|
%)
|
|
|
(26
|
%)
|
|
Net interest rate spread (taxable equivalent)
|
|
|
|
|
|
3.25
|
%
|
|
|
|
3.29
|
%
|
|
|
|
3.36
|
%
|
|
|
|
3.35
|
%
|
|
|
|
3.39
|
%
|
|
|
(1
|
%)
|
|
|
(4
|
%)
|
|
Net interest margin (taxable equivalent)
|
|
|
|
|
|
3.42
|
%
|
|
|
|
3.49
|
%
|
|
|
|
3.56
|
%
|
|
|
|
3.56
|
%
|
|
|
|
3.61
|
%
|
|
|
(2
|
%)
|
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, including held for sale
|
|
|
|
|
$
|
88,880
|
|
|
|
$
|
86,180
|
|
|
|
$
|
84,829
|
|
|
|
$
|
84,508
|
|
|
|
$
|
83,757
|
|
|
|
3
|
%
|
|
|
6
|
%
|
|
Total securities and other short-term investments
|
|
|
|
|
|
16,846
|
|
|
|
|
16,765
|
|
|
|
|
16,588
|
|
|
|
|
17,168
|
|
|
|
|
16,735
|
|
|
|
-
|
|
|
|
1
|
%
|
|
Total interest-earning assets
|
|
|
|
|
|
105,726
|
|
|
|
|
102,945
|
|
|
|
|
101,417
|
|
|
|
|
101,676
|
|
|
|
|
100,492
|
|
|
|
3
|
%
|
|
|
5
|
%
|
|
Total interest-bearing liabilities
|
|
|
|
|
|
74,038
|
|
|
|
|
71,420
|
|
|
|
|
72,026
|
|
|
|
|
73,162
|
|
|
|
|
72,219
|
|
|
|
4
|
%
|
|
|
3
|
%
|
|
Bancorp shareholders' equity
|
|
|
|
|
|
13,779
|
|
|
|
|
13,855
|
|
|
|
|
13,887
|
|
|
|
|
13,628
|
|
|
|
|
13,366
|
|
|
|
(1
|
%)
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income of $893 million on a fully taxable equivalent basis
decreased $10 million from the fourth quarter and reflected a $12
million decrease due to lower day count in the first quarter. Excluding
the impact of day count, the benefit of loan growth partially offset the
effect of loan repricing and lower reinvestment rates on the securities
portfolio. Net interest income also benefited from a decline in interest
expense driven by a reduction in long-term debt expense reflecting the
full quarter impact of the FHLB debt termination in the fourth quarter
of approximately $9 million.
The net interest margin was 3.42 percent, a decrease of 7 bps from 3.49
percent in the previous quarter. The decline in net interest margin was
primarily driven by lower loan and securities yields and was partially
offset by the benefit of 3 bps from the full quarter impact of the FHLB
debt termination in the fourth quarter and 2 bps from the effect of
lower day count in the first quarter.
Compared with the first quarter of 2012, net interest income decreased
$10 million and the net interest margin decreased 19 bps, driven by
lower asset yields partially offset by higher average loan balances,
lower long-term debt expense, run-off in higher-priced CDs and mix shift
to lower cost deposit products.
Securities
Average securities and other short-term investments were $16.8 billion
in the first quarter of 2013 compared with $16.8 billion in the previous
quarter and $16.7 billion in the first quarter of 2012.
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Average Portfolio Loans and Leases ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
|
|
$
|
36,395
|
|
|
$
|
34,301
|
|
|
$
|
33,111
|
|
|
$
|
32,734
|
|
|
$
|
31,371
|
|
|
6
|
%
|
|
|
16
|
%
|
|
Commercial mortgage
|
|
|
|
|
|
8,965
|
|
|
|
9,193
|
|
|
|
9,567
|
|
|
|
9,810
|
|
|
|
10,007
|
|
|
(2
|
%)
|
|
|
(10
|
%)
|
|
Commercial construction
|
|
|
|
|
|
695
|
|
|
|
686
|
|
|
|
742
|
|
|
|
873
|
|
|
|
992
|
|
|
1
|
%
|
|
|
(30
|
%)
|
|
Commercial leases
|
|
|
|
|
|
3,556
|
|
|
|
3,509
|
|
|
|
3,481
|
|
|
|
3,469
|
|
|
|
3,543
|
|
|
1
|
%
|
|
|
-
|
|
|
Subtotal - commercial loans and leases
|
|
|
|
|
|
49,611
|
|
|
|
47,689
|
|
|
|
46,901
|
|
|
|
46,886
|
|
|
|
45,913
|
|
|
4
|
%
|
|
|
8
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
|
|
|
|
12,096
|
|
|
|
11,846
|
|
|
|
11,578
|
|
|
|
11,274
|
|
|
|
10,828
|
|
|
2
|
%
|
|
|
12
|
%
|
|
Home equity
|
|
|
|
|
|
9,872
|
|
|
|
10,129
|
|
|
|
10,312
|
|
|
|
10,430
|
|
|
|
10,606
|
|
|
(3
|
%)
|
|
|
(7
|
%)
|
|
Automobile loans
|
|
|
|
|
|
11,961
|
|
|
|
11,944
|
|
|
|
11,812
|
|
|
|
11,755
|
|
|
|
11,882
|
|
|
-
|
|
|
|
1
|
%
|
|
Credit card
|
|
|
|
|
|
2,069
|
|
|
|
2,029
|
|
|
|
1,971
|
|
|
|
1,915
|
|
|
|
1,926
|
|
|
2
|
%
|
|
|
7
|
%
|
|
Other consumer loans and leases
|
|
|
|
|
|
294
|
|
|
|
306
|
|
|
|
314
|
|
|
|
326
|
|
|
|
345
|
|
|
(4
|
%)
|
|
|
(15
|
%)
|
|
Subtotal - consumer loans and leases
|
|
|
|
|
|
36,292
|
|
|
|
36,254
|
|
|
|
35,987
|
|
|
|
35,700
|
|
|
|
35,587
|
|
|
-
|
|
|
|
2
|
%
|
|
Total average loans and leases (excluding held for sale)
|
|
|
|
|
$
|
85,903
|
|
|
$
|
83,943
|
|
|
$
|
82,888
|
|
|
$
|
82,586
|
|
|
$
|
81,500
|
|
|
2
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans held for sale
|
|
|
|
|
|
2,977
|
|
|
|
2,237
|
|
|
|
1,941
|
|
|
|
1,922
|
|
|
|
2,257
|
|
|
33
|
%
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loan and lease balances (excluding loans held-for-sale)
increased $2.0 billion, or 2 percent, sequentially and increased $4.4
billion, or 5 percent, from the first quarter of 2012. Period end loan
and lease balances (excluding loans held-for-sale) decreased $106
million sequentially and increased $3.6 billion, or 4 percent, from a
year ago. These comparisons reflect the securitization of $500 million
of auto loans in March 2013. This reduced average portfolio loans for
the quarter by $169 million.
Average commercial portfolio loan and lease balances were up $1.9
billion, or 4 percent, sequentially and increased $3.7 billion, or 8
percent, from the first quarter of 2012. Average C&I loans increased 6
percent sequentially and 16 percent compared with the first quarter of
2012. Average commercial mortgage and commercial construction loan
balances combined declined 2 percent sequentially and 12 percent from
the same period in the previous year. Commercial line usage, on an end
of period basis, was 31 percent of committed lines in the first quarter
of 2013 compared with 31 percent in the fourth quarter of 2012 and 32
percent in the first quarter of 2012.
Average consumer portfolio loan and lease balances were flat
sequentially and increased $705 million, or 2 percent, from the first
quarter of 2012. During the quarter, $500 million in auto loans were
reclassified to held-for-sale in anticipation of their securitization
and sale, which took place at the end of March. This reduced average
portfolio loans for the quarter by $169 million. Including that effect,
average auto loans were flat sequentially and increased 1 percent from
the first quarter of 2012 due to increased originations. Average
residential mortgage loans increased 2 percent sequentially and 12
percent from a year ago, reflecting the continued retention of certain
shorter term residential mortgage loans. Home equity loan balances
declined 3 percent sequentially and 7 percent year-over-year due to
lower demand and production.
Average loans held-for-sale balance growth was primarily driven by
higher residential mortgage held-for-sale balances as well as auto loans
that were moved to held-for-sale prior to being securitized and sold at
the end of March. Average loans held-for-sale balances of $3.0 billion
increased $740 million sequentially, reflecting a $588 million increase
in residential mortgage loans and a $135 million increase in auto loans,
and increased $720 million compared with the first quarter of 2012.
Period end loans held-for-sale of $2.7 billion decreased $248 million
from the previous quarter and increased $1.1 billion from the first
quarter of 2012 reflecting fluctuations in residential mortgage
held-for-sale balances.
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Deposits ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
|
|
$
|
28,565
|
|
$
|
29,223
|
|
$
|
27,127
|
|
$
|
26,351
|
|
$
|
26,063
|
|
(2
|
%)
|
|
10
|
%
|
|
Interest checking
|
|
|
|
23,763
|
|
|
23,556
|
|
|
22,967
|
|
|
23,548
|
|
|
22,308
|
|
1
|
%
|
|
7
|
%
|
|
Savings
|
|
|
|
19,576
|
|
|
20,216
|
|
|
21,283
|
|
|
22,143
|
|
|
21,944
|
|
(3
|
%)
|
|
(11
|
%)
|
|
Money market
|
|
|
|
7,932
|
|
|
6,026
|
|
|
4,776
|
|
|
4,258
|
|
|
4,543
|
|
32
|
%
|
|
75
|
%
|
|
Foreign office(a)
|
|
|
|
1,102
|
|
|
1,174
|
|
|
1,345
|
|
|
1,321
|
|
|
2,277
|
|
(6
|
%)
|
|
(52
|
%)
|
|
Subtotal - Transaction deposits
|
|
|
|
80,938
|
|
|
80,195
|
|
|
77,498
|
|
|
77,621
|
|
|
77,135
|
|
1
|
%
|
|
5
|
%
|
|
Other time
|
|
|
|
3,982
|
|
|
4,094
|
|
|
4,224
|
|
|
4,359
|
|
|
4,551
|
|
(3
|
%)
|
|
(13
|
%)
|
|
Subtotal - Core deposits
|
|
|
|
84,920
|
|
|
84,289
|
|
|
81,722
|
|
|
81,980
|
|
|
81,686
|
|
1
|
%
|
|
4
|
%
|
|
Certificates - $100,000 and over
|
|
|
|
4,017
|
|
|
3,084
|
|
|
3,016
|
|
|
3,130
|
|
|
3,178
|
|
30
|
%
|
|
26
|
%
|
|
Other
|
|
|
|
40
|
|
|
32
|
|
|
32
|
|
|
23
|
|
|
19
|
|
25
|
%
|
|
NM
|
|
Total deposits
|
|
|
$
|
88,977
|
|
$
|
87,405
|
|
$
|
84,770
|
|
$
|
85,133
|
|
$
|
84,883
|
|
2
|
%
|
|
5
|
%
|
|
(a) Includes commercial customer Eurodollar sweep balances for
which the Bancorp pays rates comparable to other commercial
deposit accounts.
|
|
|
Average core deposits increased $631 million, or 1 percent, sequentially
and increased $3.2 billion, or 4 percent, from the first quarter of
2012. Average transaction deposits, which are included in core deposits,
increased $743 million, or 1 percent, from the fourth quarter of 2012
primarily driven by higher money market and interest checking balances,
partially offset by lower demand deposits, and savings balances.
Year-over-year transaction deposits increased $3.8 billion, or 5
percent, driven by higher money market, demand deposits, and interest
checking balances, partially offset by lower savings and foreign office
balances. Other time deposits, primarily CDs, decreased 3 percent
sequentially and 13 percent compared with the first quarter of 2012.
Commercial average transaction deposits decreased 2 percent sequentially
and increased 3 percent from the previous year. Sequential performance
reflected lower demand deposit balances due to seasonality and migration
to interest checking balances. Year-over-year growth was primarily
driven by higher inflows to interest checking, demand deposit and money
market account balances, partially offset by lower foreign office
balances. Average public funds balances were $5.5 billion compared with
$5.0 billion in the fourth quarter of 2012 and $6.2 billion in the first
quarter of 2012.
Consumer average transaction deposits increased 4 percent sequentially
and increased 7 percent from the first quarter of 2012. The sequential
increase reflected seasonally higher money market and demand deposits,
which were partially offset by lower interest checking and savings
balances. Year-over-year growth was driven by increased money market,
demand deposit, and interest checking balances partially offset by lower
savings balances. Consumer CDs included in core deposits declined 3
percent sequentially, driven by customer reluctance to purchase CDs
given the current low rate environment, and declined 13 percent
year-over-year driven by maturities of higher-rate CDs.
|
Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Average Wholesale Funding ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates - $100,000 and over
|
|
|
|
|
$
|
4,017
|
|
|
$
|
3,084
|
|
|
$
|
3,016
|
|
|
$
|
3,130
|
|
|
$
|
3,178
|
|
|
30
|
%
|
|
|
26
|
%
|
|
Other deposits
|
|
|
|
|
|
40
|
|
|
|
32
|
|
|
|
32
|
|
|
|
23
|
|
|
|
19
|
|
|
25
|
%
|
|
|
NM
|
|
Federal funds purchased
|
|
|
|
|
|
691
|
|
|
|
794
|
|
|
|
664
|
|
|
|
408
|
|
|
|
370
|
|
|
(13
|
%)
|
|
|
87
|
%
|
|
Other short-term borrowings
|
|
|
|
|
|
5,429
|
|
|
|
4,553
|
|
|
|
4,856
|
|
|
|
4,303
|
|
|
|
3,261
|
|
|
19
|
%
|
|
|
66
|
%
|
|
Long-term debt
|
|
|
|
|
|
7,506
|
|
|
|
7,891
|
|
|
|
8,863
|
|
|
|
9,669
|
|
|
|
9,768
|
|
|
(5
|
%)
|
|
|
(23
|
%)
|
|
Total wholesale funding
|
|
|
|
|
$
|
17,683
|
|
|
$
|
16,354
|
|
|
$
|
17,431
|
|
|
$
|
17,533
|
|
|
$
|
16,596
|
|
|
8
|
%
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average wholesale funding of $17.7 billion increased $1.3 billion, or 8
percent, sequentially and increased $1.1 billion, or 7 percent, from the
first quarter of 2012. The sequential and year-over-year comparisons
reflect the issuance of certificates $100,000 and over and higher
short-term borrowings, primarily short-term FHLB borrowings, partially
offset by a decrease in long-term debt balances. The reduction in
average long-term debt balances reflects the full quarter impact of the
$1.0 billion termination of FHLB debt in the fourth quarter partially
offset by the partial quarter impact of the issuance of $1.3 billion in
bank notes at the end of February 2013.
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Noninterest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
|
|
|
$
|
131
|
|
|
$
|
134
|
|
|
|
$
|
128
|
|
|
$
|
130
|
|
|
$
|
129
|
|
|
(3
|
%)
|
|
|
1
|
%
|
|
Corporate banking revenue
|
|
|
|
|
|
99
|
|
|
|
114
|
|
|
|
|
101
|
|
|
|
102
|
|
|
|
97
|
|
|
(13
|
%)
|
|
|
2
|
%
|
|
Mortgage banking net revenue
|
|
|
|
|
|
220
|
|
|
|
258
|
|
|
|
|
200
|
|
|
|
183
|
|
|
|
204
|
|
|
(15
|
%)
|
|
|
7
|
%
|
|
Investment advisory revenue
|
|
|
|
|
|
100
|
|
|
|
93
|
|
|
|
|
92
|
|
|
|
93
|
|
|
|
96
|
|
|
8
|
%
|
|
|
4
|
%
|
|
Card and processing revenue
|
|
|
|
|
|
65
|
|
|
|
66
|
|
|
|
|
65
|
|
|
|
64
|
|
|
|
59
|
|
|
(1
|
%)
|
|
|
11
|
%
|
|
Other noninterest income
|
|
|
|
|
|
109
|
|
|
|
215
|
|
|
|
|
78
|
|
|
|
103
|
|
|
|
175
|
|
|
(48
|
%)
|
|
|
(37
|
%)
|
|
Securities gains, net
|
|
|
|
|
|
17
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
3
|
|
|
|
9
|
|
|
NM
|
|
|
92
|
%
|
|
Securities gains (losses), net - non-qualifying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
hedges on mortgage servicing rights
|
|
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
NM
|
|
|
NM
|
|
Total noninterest income
|
|
|
|
|
$
|
743
|
|
|
$
|
880
|
|
|
|
$
|
671
|
|
|
$
|
678
|
|
|
$
|
769
|
|
|
(16
|
%)
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM: Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income of $743 million decreased $137 million sequentially,
or 16 percent, and decreased $26 million, or 3 percent, compared with
prior year results. The sequential decrease was primarily driven by the
$157 million gain from the sale of Vantiv shares in the fourth quarter,
partially offset by Vantiv warrant valuation adjustments (gains of $34
million in the first quarter of 2013 versus losses of $19 million in the
fourth quarter 2012). Otherwise, the sequential comparison
reflected lower mortgage banking and corporate banking revenue. The
year-over-year comparison primarily reflected the impact to first
quarter 2012 results of $115 million in gains from Vantiv’s IPO, $34
million in charges recorded in equity method earnings related to
Vantiv’s debt refinancing and related termination charges, and a $46
million positive valuation adjustment on the Vantiv warrant and put
option.
First quarter 2013 results also included $7 million in gains on the sale
of certain FTAM advisory contracts. Current quarter’s results also
included a $7 million charge 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 $15 million in
the fourth quarter of 2012 and $19 million in the first quarter of 2012.
Excluding these items, the aforementioned Vantiv-related impacts, and
investment securities gains in all periods, noninterest income of $692
million decreased $63 million, or 8 percent, from the previous quarter
and increased $40 million, or 6 percent, from the first quarter of 2012.
Service charges on deposits of $131 million decreased 3 percent from the
fourth quarter and increased 1 percent compared with the same quarter
last year. Retail service charges decreased 6 percent sequentially due
to seasonally lower consumer overdraft occurrences in the first quarter.
Compared with the first quarter of 2012, retail service charges
decreased 6 percent primarily due to changes in our overdraft policies
during 2012. Commercial service charges decreased 1 percent sequentially
but increased 6 percent from a year ago. The improved performance
year-over-year was primarily due to pricing changes implemented during
2012.
Corporate banking revenue of $99 million decreased 13 percent from the
fourth quarter of 2012 driven by lower syndication fees, business
lending fees, and derivative fees, which benefited in the fourth quarter
from higher activity in anticipation of changes to tax rules. Corporate
banking revenue increased 2 percent from the same period last year
driven by higher institutional sales and foreign exchange fees as a
result of investments in our capital markets capabilities.
Mortgage banking net revenue was $220 million in the first quarter of
2013, a 15 percent decrease from the fourth quarter of 2012 and a 7
percent increase from the first quarter of 2012. First quarter 2013
originations were a record $7.4 billion, compared with $7.0 billion in
the previous quarter and $6.4 billion in the first quarter of 2012.
First quarter 2013 originations resulted in gains of $169 million on
mortgages sold, compared with gains of $239 million during the previous
quarter and $174 million during the first quarter of 2012. The decline
from the prior quarter and prior year reflected lower gain on sale
margins. Mortgage servicing fees this quarter were $61 million, compared
with $64 million in the previous quarter and $61 million in the first
quarter of 2012. Mortgage banking net revenue is also affected by net
servicing asset value 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 $10 million in the first quarter of
2013 (reflecting MSR amortization of $53 million and MSR valuation
adjustments of positive $43 million); negative $45 million in the fourth
quarter of 2012 (MSR amortization of $52 million and MSR valuation
adjustments of positive $7 million); and negative $31 million in the
first quarter of 2012 (MSR amortization of $46 million and MSR valuation
adjustments of positive $15 million). The mortgage servicing asset, net
of the valuation reserve, was $766 million at quarter end on a servicing
portfolio of $65 billion.
Net gains on securities held as non-qualifying hedges for the MSR
portfolio were $2 million in the first quarter of 2013, compared with
net losses of $2 million in the fourth quarter of 2012 and no gains or
losses in the first quarter of 2012.
Investment advisory revenue of $100 million increased 8 percent
sequentially and increased 4 percent year-over-year. Sequential growth
reflected higher tax-related private client services revenue, which is
seasonally stronger in the first quarter, and an increase in brokerage
fees resulting from increased production as well as improvement in
equity and bond market values. The year-over-year increase was due to
higher brokerage fees and private client services revenue partially
offset by the absence of mutual fund fees largely due to the sale of
certain Fifth Third funds in the third quarter of 2012.
Card and processing revenue of $65 million in the first quarter of 2013
decreased 1 percent sequentially and increased 11 percent from the first
quarter of 2012. The sequential decrease reflected lower transactions
volumes compared with seasonally strong fourth quarter volumes. The
year-over-year increase reflected the impact of higher transaction
volumes, higher levels of consumer spending, and new products.
Other noninterest income totaled $109 million in the first quarter of
2013, compared with $215 million in the previous quarter and $175
million in the first quarter of 2012. The sequential decrease was driven
by the $157 million gain from the sale of Vantiv shares in the fourth
quarter. The year-over-year comparison reflected $115 million in
gains from Vantiv’s IPO and the $34 million charge recorded in equity
method earnings related to Vantiv’s debt refinancing and related
termination charges in the first quarter of 2012. First quarter 2013
results also included $7 million in gains on the sale of certain FTAM
advisory contracts. Other noninterest income also includes 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 March
31, 2013, December 31, 2012, and March 31, 2012, the impact of warrant
valuation adjustments were positive $34 million, negative $19 million,
and positive $46 million, respectively, and changes in income related to
the Visa total return swap were losses of $7 million, $15 million, and
$19 million, respectively. Excluding the items detailed above, other
noninterest income of $75 million decreased approximately $17 million
from the previous quarter and increased approximately $8 million from
the first quarter of 2012.
Net credit-related costs recognized in other noninterest income were $10
million in the first quarter of 2013 versus $13 million last quarter and
$14 million in the first quarter of 2012. First quarter 2013 results
included $2 million of net gains on sales of commercial loans
held-for-sale and $1 million of fair value charges on commercial loans
held-for-sale, as well as $10 million of losses on other real estate
owned (OREO). Fourth quarter 2012 results included $4 million of net
gains on sales of commercial loans held-for-sale and $3 million of fair
value charges on commercial loans held-for-sale, as well as $10 million
of losses on OREO. First quarter 2012 results included $5 million of net
gains on sales of commercial loans held-for-sale, $1 million of fair
value charges on commercial loans held-for-sale, and $17 million of
losses on OREO.
Net gains on investment securities were $17 million in the first quarter
of 2013, compared with investment securities gains of $2 million in the
previous quarter and $9 million in the first quarter of 2012.
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
Seq
|
|
|
Yr/Yr
|
|
Noninterest Expense ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and incentives
|
|
|
|
|
$
|
399
|
|
|
$
|
416
|
|
|
$
|
399
|
|
|
$
|
393
|
|
|
$
|
399
|
|
|
(4
|
%)
|
|
|
-
|
|
|
Employee benefits
|
|
|
|
|
|
114
|
|
|
|
96
|
|
|
|
79
|
|
|
|
84
|
|
|
|
112
|
|
|
18
|
%
|
|
|
2
|
%
|
|
Net occupancy expense
|
|
|
|
|
|
79
|
|
|
|
76
|
|
|
|
76
|
|
|
|
74
|
|
|
|
77
|
|
|
4
|
%
|
|
|
2
|
%
|
|
Technology and communications
|
|
|
|
|
|
49
|
|
|
|
52
|
|
|
|
49
|
|
|
|
48
|
|
|
|
47
|
|
|
(5
|
%)
|
|
|
6
|
%
|
|
Equipment expense
|
|
|
|
|
|
28
|
|
|
|
27
|
|
|
|
28
|
|
|
|
27
|
|
|
|
27
|
|
|
3
|
%
|
|
|
3
|
%
|
|
Card and processing expense
|
|
|
|
|
|
31
|
|
|
|
31
|
|
|
|
30
|
|
|
|
30
|
|
|
|
30
|
|
|
-
|
|
|
|
5
|
%
|
|
Other noninterest expense
|
|
|
|
|
|
278
|
|
|
|
465
|
|
|
|
345
|
|
|
|
281
|
|
|
|
281
|
|
|
(40
|
%)
|
|
|
(2
|
%)
|
|
Total noninterest expense
|
|
|
|
|
$
|
978
|
|
|
$
|
1,163
|
|
|
$
|
1,006
|
|
|
$
|
937
|
|
|
$
|
973
|
|
|
(16
|
%)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense of $978 million decreased 16 percent from the fourth
quarter of 2012 and was flat versus the first quarter of 2012. First
quarter 2013 expenses included a $9 million benefit from the sale of
affordable housing investments and $9 million in charges to increase
litigation reserves. Fourth quarter 2012 expenses included $134 million
of debt extinguishment costs associated with the termination of $1
billion of FHLB debt; $26 million of additional expenses associated with
the increase in the representation and warranty reserve; and $13 million
in charges to increase litigation reserves. First quarter 2012 expenses
included a $23 million benefit from an agreement reached on certain
outstanding disputes for non-income tax related assessments, $14 million
in additions to litigation reserves, $9 million in debt termination
charges, and $6 million in severance expense. Excluding these items,
noninterest expense of $978 million decreased $12 million, or 1 percent,
compared with the fourth quarter of 2012 and increased $11 million, or 1
percent, compared with the first quarter of 2012. The sequential
decrease was largely due to lower credit-related costs and
compensation-related expenses partially offset by increased employee
benefits expense due to seasonally higher FICA and unemployment costs of
approximately $27 million.
Credit costs related to problem assets recorded as noninterest expense
totaled $24 million in the first quarter of 2013, compared with $68
million in the fourth quarter of 2012 and $34 million in the first
quarter of 2012. First quarter credit-related expenses included
provisioning for mortgage repurchases of $20 million, compared with $44
million in the fourth quarter and $15 million a year ago. (Realized
mortgage repurchase losses were $20 million in the first quarter of
2013, compared with $15 million last quarter and $17 million in the
first quarter of 2012.) Fourth quarter 2012 mortgage repurchase
provision included $26 million of additional expense to increase the
representation and warranty reserve as a result of additional
information obtained from Freddie Mac regarding changes to their
selection criteria for future mortgage repurchases and file requests.
Provision for unfunded commitments was a benefit of $11 million in the
current quarter, compared with an expense of $3 million last quarter and
a benefit of $2 million a year ago. Derivative valuation adjustments
related to customer credit risk were positive $1 million, $2 million,
and $4 million for this quarter, last quarter and the year ago quarter,
respectively. OREO expense was $4 million this quarter, compared with $5
million last quarter and $5 million a year ago. Other problem
asset-related expenses were $12 million in the first quarter, compared
with $19 million the previous quarter and $19 million in the same period
last year.
|
Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
Total net losses charged off ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
|
|
($25
|
)
|
|
|
($36
|
)
|
|
|
($29
|
)
|
|
|
($46
|
)
|
|
|
($54
|
)
|
|
Commercial mortgage loans
|
|
|
|
|
(26
|
)
|
|
|
(17
|
)
|
|
|
(28
|
)
|
|
|
(25
|
)
|
|
|
(30
|
)
|
|
Commercial construction loans
|
|
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
(18
|
)
|
|
Commercial leases
|
|
|
|
|
-
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
Residential mortgage loans
|
|
|
|
|
(20
|
)
|
|
|
(23
|
)
|
|
|
(26
|
)
|
|
|
(36
|
)
|
|
|
(37
|
)
|
|
Home equity
|
|
|
|
|
(30
|
)
|
|
|
(34
|
)
|
|
|
(37
|
)
|
|
|
(39
|
)
|
|
|
(46
|
)
|
|
Automobile loans
|
|
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
(9
|
)
|
|
Credit card
|
|
|
|
|
(20
|
)
|
|
|
(19
|
)
|
|
|
(18
|
)
|
|
|
(18
|
)
|
|
|
(20
|
)
|
|
Other consumer loans and leases
|
|
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
(6
|
)
|
|
Total net losses charged off
|
|
|
|
|
(133
|
)
|
|
|
(147
|
)
|
|
|
(156
|
)
|
|
|
(181
|
)
|
|
|
(220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses
|
|
|
|
|
(168
|
)
|
|
|
(177
|
)
|
|
|
(188
|
)
|
|
|
(219
|
)
|
|
|
(253
|
)
|
|
Total recoveries
|
|
|
|
|
35
|
|
|
|
30
|
|
|
|
32
|
|
|
|
38
|
|
|
|
33
|
|
|
Total net losses charged off
|
|
|
|
|
($133
|
)
|
|
|
($147
|
)
|
|
|
($156
|
)
|
|
|
($181
|
)
|
|
|
($220
|
)
|
|
Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses charged off as a percent of average loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding held for sale)
|
|
|
|
|
0.63
|
%
|
|
|
0.70
|
%
|
|
|
0.75
|
%
|
|
|
0.88
|
%
|
|
|
1.08
|
%
|
|
Commercial
|
|
|
|
|
0.44
|
%
|
|
|
0.46
|
%
|
|
|
0.53
|
%
|
|
|
0.67
|
%
|
|
|
0.89
|
%
|
|
Consumer
|
|
|
|
|
0.89
|
%
|
|
|
1.01
|
%
|
|
|
1.04
|
%
|
|
|
1.15
|
%
|
|
|
1.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs were $133 million in the first quarter of 2013, or 63
bps of average loans on an annualized basis, the lowest level since the
third quarter of 2007. Net charge-offs declined 10 percent compared with
fourth quarter 2012 net charge-offs of $147 million, and declined 39
percent versus first quarter 2012 net charge-offs of $220 million.
Commercial net charge-offs were $54 million, or 44 bps, down $2 million
compared with $56 million, or 46 bps, in the fourth quarter driven by
declines in C&I net charge-offs. Commercial net charge-offs were at the
lowest level since the third quarter of 2007. C&I net charge-offs were
$25 million, down $11 million from $36 million in the previous quarter.
Commercial mortgage net charge-offs totaled $26 million, compared with
$17 million in the prior quarter. Commercial construction net
charge-offs were $3 million in the first quarter, down $1 million
compared with the previous quarter. The homebuilder / developer
portfolio now totals $309 million, down from a peak of $3.3 billion in
the second quarter of 2008. We recorded $1 million of net charge-offs on
these loans in the first quarter of 2013.
Consumer net charge-offs were $79 million, or 89 bps, down $12 million
sequentially. Net charge-offs on residential mortgage loans in the
portfolio were $20 million, down $3 million from the previous quarter.
Home equity net charge-offs were $30 million, down from $34 million in
the fourth quarter of 2012. Net charge-offs on brokered home equity
loans represented 34 percent of first quarter home equity losses; such
loans are 14 percent of the total home equity portfolio. The home equity
portfolio included $1.3 billion of brokered loans, down from a peak of
$2.6 billion in 2007; originations of these loans were discontinued in
2007. Net charge-offs in the auto portfolio of $4 million decreased $5
million compared with the prior quarter. Net charge-offs on consumer
credit card loans were $20 million, up $1 million from fourth quarter.
Net charge-offs in other consumer loans were $5 million, down $1 million
compared with the previous quarter.
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|
|
March
|
|
|
December
|
|
|
September
|
|
|
June
|
|
|
March
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
|
2012
|
|
Allowance for Credit Losses ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning
|
|
|
|
|
$
|
1,854
|
|
|
|
$
|
1,925
|
|
|
|
$
|
2,016
|
|
|
|
$
|
2,126
|
|
|
|
$
|
2,255
|
|
|
Total net losses charged off
|
|
|
|
|
|
(133
|
)
|
|
|
|
(147
|
)
|
|
|
|
(156
|
)
|
|
|
|
(181
|
)
|
|
|
|
(220
|
)
|
|
Provision for loan and lease losses
|
|
|
|
|
|
62
|
|
|
|
|
76
|
|
|
|
|
65
|
|
|
|
|
71
|
|
|
|
|
91
|
|
|
Allowance for loan and lease losses, ending
|
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
|
|
1,925
|
|
|
|
|
2,016
|
|
|
|
|
2,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning
|
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
|
|
178
|
|
|
|
|
179
|
|
|
|
|
181
|
|
|
Provision for unfunded commitments
|
|
|
|
|
|
(11
|
)
|
|
|
|
3
|
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
Reserve for unfunded commitments, ending
|
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
|
|
178
|
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
|
|
1,925
|
|
|
|
|
2,016
|
|
|
|
|
2,126
|
|
|
Reserve for unfunded commitments
|
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
|
|
178
|
|
|
|
|
179
|
|
|
Total allowance for credit losses
|
|
|
|
|
$
|
1,951
|
|
|
|
$
|
2,033
|
|
|
|
$
|
2,101
|
|
|
|
$
|
2,194
|
|
|
|
$
|
2,305
|
|
|
Allowance for loan and lease losses ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of loans and leases
|
|
|
|
|
|
2.08
|
%
|
|
|
|
2.16
|
%
|
|
|
|
2.32
|
%
|
|
|
|
2.45
|
%
|
|
|
|
2.59
|
%
|
|
As a percent of nonperforming loans and leases(a)
|
|
|
|
|
|
187
|
%
|
|
|
|
180
|
%
|
|
|
|
167
|
%
|
|
|
|
150
|
%
|
|
|
|
157
|
%
|
|
As a percent of nonperforming assets(a)
|
|
|
|
|
|
147
|
%
|
|
|
|
144
|
%
|
|
|
|
133
|
%
|
|
|
|
125
|
%
|
|
|
|
127
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes nonaccrual loans and leases in loans held for sale
|
|
|
Provision for loan and lease losses totaled $62 million in the first
quarter of 2013, down $14 million from the fourth quarter of 2012 and
down $29 million from the first quarter of 2012. The allowance for loan
and lease losses declined $71 million sequentially reflecting continued
improvement in credit trends. This allowance represented 2.08 percent of
total loans and leases outstanding as of quarter end, compared with 2.16
percent last quarter, and represented 187 percent of nonperforming loans
and leases, 147 percent of nonperforming assets, and 3.3 times first
quarter annualized net charge-offs.
|
|
|
|
As of
|
|
|
|
|
March
|
|
December
|
|
September
|
|
June
|
|
March
|
|
Nonperforming Assets and Delinquent Loans ($ in millions)
|
|
|
2013
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
Nonaccrual portfolio loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
$
|
229
|
|
|
$
|
234
|
|
|
$
|
309
|
|
|
$
|
377
|
|
|
$
|
358
|
|
|
Commercial mortgage loans
|
|
|
|
184
|
|
|
|
215
|
|
|
|
263
|
|
|
|
357
|
|
|
|
347
|
|
|
Commercial construction loans
|
|
|
|
66
|
|
|
|
70
|
|
|
|
76
|
|
|
|
99
|
|
|
|
118
|
|
|
Commercial leases
|
|
|
|
1
|
|
|
|
1
|
|
|
|
5
|
|
|
|
3
|
|
|
|
8
|
|
|
Residential mortgage loans
|
|
|
|
110
|
|
|
|
114
|
|
|
|
126
|
|
|
|
135
|
|
|
|
135
|
|
|
Home equity
|
|
|
|
28
|
|
|
|
30
|
|
|
|
29
|
|
|
|
30
|
|
|
|
26
|
|
|
Automobile loans
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
Other consumer loans and leases
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
Total nonaccrual loans and leases
|
|
|
$
|
618
|
|
|
$
|
665
|
|
|
$
|
808
|
|
|
$
|
1,002
|
|
|
$
|
994
|
|
|
Restructured loans and leases - commercial (nonaccrual)(c)
|
|
|
|
159
|
|
|
|
177
|
|
|
|
153
|
|
|
|
147
|
|
|
|
157
|
|
|
Restructured loans and leases - consumer (nonaccrual)
|
|
|
|
174
|
|
|
|
187
|
|
|
|
192
|
|
|
|
193
|
|
|
|
201
|
|
|
Total nonperforming loans and leases
|
|
|
$
|
951
|
|
|
$
|
1,029
|
|
|
$
|
1,153
|
|
|
$
|
1,342
|
|
|
$
|
1,352
|
|
|
Repossessed personal property
|
|
|
|
7
|
|
|
|
8
|
|
|
|
10
|
|
|
|
9
|
|
|
|
8
|
|
|
Other real estate owned(a)
|
|
|
|
252
|
|
|
|
249
|
|
|
|
283
|
|
|
|
268
|
|
|
|
313
|
|
|
Total nonperforming assets(b)
|
|
|
$
|
1,210
|
|
|
$
|
1,286
|
|
|
$
|
1,446
|
|
|
$
|
1,619
|
|
|
$
|
1,673
|
|
|
Nonaccrual loans held for sale
|
|
|
|
16
|
|
|
|
25
|
|
|
|
38
|
|
|
|
55
|
|
|
|
110
|
|
|
Restructured loans - commercial (nonaccrual) held for sale
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
5
|
|
|
|
7
|
|
|
Total nonperforming assets including loans held for sale
|
|
|
$
|
1,229
|
|
|
$
|
1,315
|
|
|
$
|
1,489
|
|
|
$
|
1,679
|
|
|
$
|
1,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured Consumer loans and leases (accrual)
|
|
|
$
|
1,683
|
|
|
$
|
1,655
|
|
|
$
|
1,641
|
|
|
$
|
1,634
|
|
|
$
|
1,624
|
|
|
Restructured Commercial loans and leases (accrual)(c)
|
|
|
$
|
441
|
|
|
$
|
431
|
|
|
$
|
442
|
|
|
$
|
455
|
|
|
$
|
481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 90 days past due
|
|
|
$
|
164
|
|
|
$
|
195
|
|
|
$
|
201
|
|
|
$
|
203
|
|
|
$
|
216
|
|
|
Nonperforming loans and leases as a percent of portfolio loans,
|
|
|
|
|
|
|
|
|
|
|
|
|
leases and other assets, including other real estate owned(b)
|
|
|
|
1.11
|
%
|
|
|
1.19
|
%
|
|
|
1.38
|
%
|
|
|
1.62
|
%
|
|
|
1.64
|
%
|
|
Nonperforming assets as a percent of portfolio loans, leases and
|
|
|
|
|
|
|
|
|
|
|
|
|
other assets, including other real estate owned(b)
|
|
|
|
1.41
|
%
|
|
|
1.49
|
%
|
|
|
1.73
|
%
|
|
|
1.96
|
%
|
|
|
2.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $1.2
billion, a decline of $86 million, or 7 percent, from the previous
quarter. Nonperforming assets held-for-investment (NPAs) were $1.2
billion, or 1.41 percent, of total loans, leases and OREO, and decreased
$76 million, or 6 percent, from the previous quarter. Nonperforming
loans held-for-investment (NPLs) at quarter end were $951 billion or
1.11 percent of total loans, leases and OREO, and decreased $78 million,
or 8 percent, from the previous quarter.
Commercial portfolio NPAs were $828 million, or 1.66 percent of
commercial loans, leases and OREO, and decreased $55 million, or 6
percent, from the fourth quarter. Commercial portfolio NPLs were $639
million, or 1.28 percent of commercial loans and leases, and decreased
$58 million from last quarter driven by declines in commercial mortgage
and C&I NPLs. Commercial mortgage portfolio NPAs were $409 million, down
$25 million from the previous quarter. C&I portfolio NPAs of $332
million decreased $20 million from the prior quarter. Commercial
construction portfolio NPAs were $78 million, a decline of $10 million
from the previous quarter. Commercial real estate loans in Michigan and
Florida represented 49 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 $79 million declined $9 million from the
fourth quarter, of which $48 million were commercial mortgage assets,
$21 million were commercial construction assets and $10 million were C&I
assets. Commercial portfolio NPAs included $159 million of nonaccrual
troubled debt restructurings (TDRs), compared with $177 million last
quarter.
Consumer portfolio NPAs of $382 million, or 1.06 percent of consumer
loans, leases and OREO, decreased $21 million from the fourth quarter.
Consumer portfolio NPLs were $312 million, or 0.87 percent of consumer
loans and leases and decreased $20 million from last quarter. Of
consumer NPAs, $333 million were in residential real estate portfolios.
Residential mortgage NPAs were $275 million, $15 million lower than last
quarter, with Florida representing 46 percent of residential mortgage
NPAs and 14 percent of total residential mortgage loans. Home equity
NPAs of $58 million were down $4 million compared with last quarter.
Credit card NPAs were up $1 million compared to the previous quarter at
$40 million. Consumer nonaccrual TDRs were $174 million in the first
quarter of 2013, compared with $187 million in the fourth quarter 2012.
First quarter OREO balances included in portfolio NPA balances described
above were $252 million, up $3 million from the fourth quarter, and
included $190 million in commercial OREO and $62 million in consumer
OREO. Repossessed personal property of $7 million consisted largely of
autos.
Loans still accruing over 90 days past due were $164 million, down $31
million, or 16 percent, from the fourth quarter of 2012. Commercial
balances 90 days past due of $1 million were down $23 million
sequentially. Consumer balances 90 days past due of $163 million were
down $8 million from the previous quarter. Loans 30-89 days past due
excluding nonaccruals of $306 million decreased $24 million, or 7
percent, from the previous quarter. Commercial balances 30-89 days past
due excluding nonaccruals of $37 million were up $20 million
sequentially driven by one large credit and consumer balances 30-89 days
past due excluding nonaccruals of $269 million decreased $44 million
from the fourth quarter, reflecting declines in all categories.
Commercial nonaccrual loans held-for-sale were $19 million, compared
with $29 million at the end of the fourth quarter. During the quarter,
$10 million of nonaccrual held-for-sale loans were sold; $3 million of
nonaccrual commercial loans from the portfolio were transferred to loans
held-for-sale, and $3 million of loans from loans held-for-sale were
transferred to OREO. Negative valuation adjustments of $1 million were
recorded on held-for-sale loans and net gains of $3 million were
recorded on loans that were sold or settled during the quarter.
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Capital Position
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For the Three Months Ended
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March
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December
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September
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June
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March
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2013
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2012
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2012
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2012
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2012
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Capital Position
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Average shareholders' equity to average assets
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11.38
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%
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11.65
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%
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11.82
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%
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11.58
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%
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11.49
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%
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Tangible equity(a)
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9.36
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%
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9.17
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%
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9.45
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%
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9.50
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%
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9.37
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%
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Tangible common equity (excluding unrealized gains/losses)(a)
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9.03
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%
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8.83
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%
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9.10
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%
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9.15
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%
|
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9.02
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%
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Tangible common equity (including unrealized gains/losses)(a)
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9.28
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%
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9.10
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%
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9.45
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%
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9.49
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%
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9.37
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%
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Tangible common equity as a percent of risk-weighted assets
(excluding unrealized gains/losses)(a)(b)
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9.77
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%
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9.57
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%
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9.74
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%
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9.84
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%
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9.71
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%
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Regulatory capital ratios:(c)
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Tier I capital
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10.83
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%
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10.65
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%
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10.85
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%
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12.31
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%
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12.20
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%
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Total risk-based capital
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14.35
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%
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14.42
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%
|
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14.76
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%
|
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16.24
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%
|
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16.07
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%
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Tier I leverage
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10.03
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%
|
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10.05
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%
|
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10.09
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%
|
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11.39
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%
|
|
11.31
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%
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Tier I common equity(a)
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|
9.70
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%
|
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9.51
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%
|
|
9.67
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%
|
|
9.77
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%
|
|
9.64
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%
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Book value per share
|
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15.42
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15.10
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14.84
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14.56
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14.30
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Tangible book value per share(a)
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12.62
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12.33
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12.12
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|
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11.89
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11.64
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(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.
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(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.
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(c) Current period regulatory capital data ratios are estimated.
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Capital ratios remained strong, reflecting growth in retained earnings
and included the impact of share repurchase activity during the quarter.
Compared with the prior quarter, the Tier 1 common equity ratio*
increased 19 bps to 9.70 percent. The tangible common equity to tangible
assets ratio* was 9.03 percent (excluding unrealized gains/losses) and
9.28 percent (including unrealized gains/losses). The Tier 1 capital
ratio increased 18 bps to 10.83 percent. The Total capital ratio
decreased 7 bps to 14.35 percent and the Leverage ratio decreased 2 bps
to 10.03 percent. The Tier 1 common capital ratio was reduced by 11 bps
due to the repurchase of approximately $125 million in common shares
announced during the quarter.
Book value per share at March 31, 2013 was $15.42 and tangible book
value per share* was $12.62, compared with December 31, 2012 book value
per share of $15.10 and tangible book value per share of $12.33.
As previously announced, Fifth Third entered into a share repurchase
agreement with a counterparty on January 28, 2013, whereby Fifth Third
would purchase approximately $125 million of its outstanding common
stock. For the quarter, this transaction reduced Fifth Third’s share
count by 7 million shares on the initial transaction date, which had a 5
million share impact on average share count. The settlement of the
forward contract occurred on April 5, 2013 and an additional 849,037
shares were repurchased upon completion of the agreement.
U.S. banking regulators recently proposed new capital rules for U.S.
banks as well as changes to risk-weightings for assets, which implement
portions of rules proposed by international banking regulators known as
Basel III and Basel II. Fifth Third would be subject to the proposed
“standardized approach” for risk-weightings of assets and would be
subject to the Market Risk Rule for trading assets and liabilities.
These proposals were presented for public comment, which regulators are
currently studying. We continue to evaluate these proposals and their
potential impact. Our current estimate of the pro-forma fully phased in
Tier I common equity ratio at March 31, 2013 under the proposed capital
rules is approximately 8.9 percent** compared with 9.70 percent* as
calculated under the existing Basel I capital framework. The primary
drivers of the change from the existing Basel I capital framework to the
Basel III proposal are an increase in Tier I common equity of
approximately 36 bps (primarily from the inclusion of AOCI) which would
be more than offset by the impact of increases in risk-weighted assets
(primarily from 1-4 family senior and junior lien residential mortgages
and commitments with an original maturity of one year or less). The pro
forma Tier I common equity ratio exceeds the proposed minimum Tier I
common equity ratio of 7 percent comprised of a minimum of 4.5 percent
plus a capital conservation buffer of 2.5 percent. The pro forma Tier I
common equity ratio does not include the effect of any mitigating
actions the Bancorp may undertake to offset the impact of any final
capital rules. As noted, the proposed rules remain subject to public
comment, interpretation, and change.
Under the Dodd-Frank Act financial reform legislation, TruPS were to be
phased out of Tier 1 capital over three years beginning in 2013. The new
regulations proposed by U.S. banking regulators also propose to cease
Tier 1 capital treatment for outstanding TruPS, with a similar phasing
period. Fifth Third’s Tier 1 and Total capital levels at March 31, 2013
included $810 million of TruPS, or 74 bps of risk weighted assets. Based
on regulatory developments, we will continue to evaluate the role of
these types of securities in our capital structure and included the
potential redemption of $750 million in TruPS in our 2013 CCAR plan (see
below). To the extent these types of securities remain outstanding
during and after the phase-in period they would be expected to continue
to be included in Total capital, subject to final rule-making for U.S.
capital standards. 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 legislation, changes in
U.S. bank capital regulations that reflect international capital rules
developments, regulatory expectations, and our goals for capital levels
and capital composition as appropriate given any changes in rules.
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.
On March 14, 2013, Fifth Third announced that the FRB did not object to
Fifth Third’s 2013 CCAR capital plan, which included the potential
increase in the quarterly common stock dividend to $0.12, to be
considered by the Board at its scheduled quarterly meeting in June; the
potential repurchase of up to $750 million in TruPS, subject to the
determination of a regulatory capital event, and replacement with the
issuance of a similar amount of Tier 2-qualifying subordinated debt; the
potential exercise by Fifth Third of its option to convert the $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.1 (Note that these
securities are currently accounted for under the “if-converted” method
for inclusion in common shares for earnings per share reporting
purposes.) If this conversion were to occur, the capital plan
incorporated the intention to repurchase an amount of common shares
similar to the amount issued in the conversion up to $550 million in
market value, and issue $550 million in a new class of preferred
securities; the potential repurchase of common shares in an amount up to
$984 million, including up to $550 million related to the potential
issuance of shares issued in a Series G preferred stock conversion; and
the potential issuance of an additional $500 million in a new class of
preferred securities to increase the non-common portion of Tier 1
capital as defined under Basel III proposed rules.2 In
addition, the capital plan incorporated the intention that we would make
incremental repurchases of common shares in the amount of any after-tax
gains from the sale of Vantiv, Inc. (“Vantiv”) stock. These common share
repurchase plans were intended to limit the further accumulation of
excess common equity capital during the CCAR period. These plans were
more fully described in our March 14, 2013 announcement of the FRB’s
response to our 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.
* Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit
99.1 of 8-k filing dated 4/18/13.
1 The
earliest business day that any such conversion could occur is July 1,
2013, and is subject to Fifth Third giving 20 days prior notice of the
conversion date. Fifth Third has the option to mandate conversion if the
closing price of Fifth Third’s common stock is at or above the
applicable conversion price of $15.05 for 20 of the 30 consecutive
trading days immediately preceding the date Fifth Third gives notice of
conversion.
2 Any common share repurchases
would be conducted under Board authorization and may be executed through
open market purchases or one or more private negotiated transactions,
including Rule 10b5-1 programs.
Tax Rate
The effective tax rate was 30.4 percent this quarter compared with 26.8
percent in the fourth quarter. The first quarter 2013 tax rate was
seasonally high due to the expiration of employee stock options. The
fourth quarter 2012 tax rate was lower than normal due to the benefit of
approximately $10 million related to the termination of certain leases.
Other
Fifth Third Bank owns 70.2 million units representing a 33 percent
interest in Vantiv Holding, LLC. Based upon Vantiv’s closing price of
$23.74 on March 28, 2013, our interest in Vantiv was valued at
approximately $1.7 billion. Next month in our 10-Q, we will update our
disclosure of the carrying value of our interest in Vantiv stock which
was $563 million as of December 31, 2012. The difference between the
market value and our book value 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 $211 million.
Fifth Third is the general partner in a partnership, which is
consolidated for reporting purposes but for which Fifth Third has
immaterial economic risk, with risk being borne primarily by the limited
partners. During the quarter, Fifth Third recorded $2 million in
charge-offs and $8 million in additional provision expense related to
this partnership. The effect of these impacts is fully offset in net
income attributable to noncontrolling interests recorded below Fifth
Third’s net income line.
Conference Call
Fifth Third will host a conference call to discuss these financial
results at 9:30 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
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 2 by dialing 800-585-8367 for domestic access and
404-537-3406 for international access (passcode 24633234#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of March 31, 2013, the Company had
$121 billion in assets and operated 18 affiliates with 1,320
full-service Banking Centers, including 104 Bank Mart® locations open
seven days a week inside select grocery stores and 2,426 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 33%
interest in Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of March 31, 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® National 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 from Fifth Third; (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.
Fifth Third Bancorp
Investors
Jim Eglseder, 513-534-8424
Laura Wehby, 513-534-7407
or
Media
Debra DeCourcy, APR, 513-534-4153