2013 Earnings Per Diluted Share of $2.02, Up 22 Percent from 2012
Record full year net income and net income to common shareholders
- 4Q13 net income available to common shareholders of $383 million, or $0.43 per diluted common share
- 4Q13 return on average assets (ROA) of 1.24%; return on average common equity of 10.8%; return on average tangible common equity** of 13.1%
- Pre-provision net revenue (PPNR)** of $614 million in 4Q13, including $91 million pre-tax gains on the valuation of the Vantiv warrant and $69 million increased litigation reserves
- Net interest income (FTE) of $905 million, up 1% sequentially; net interest margin of 3.21%
- Period end portfolio loans of $88.6 billion, up $1.4 billion; average portfolio loans up 1% sequentially
- Noninterest income of $703 million compared with $721 million in prior quarter (gains on Vantiv investments similar in each quarter)
- Noninterest expense of $989 million, up 3% from 3Q13, driven by higher litigation reserve expense partially offset by a benefit to the mortgage repurchase provision
- Overall credit trends remain favorable
- 4Q13 net charge-offs of $148 million (0.67% of loans and leases) vs. 3Q13 NCOs of $109 million (0.49% of loans and leases) and 4Q12 NCOs of $147 million (0.70% of loans and leases); 4Q13 results included $43 million of charge-offs on a loan restructured during the quarter and $6 million of home equity charge-offs due to a change in policy, which together contributed 22 bps to the 4Q13 charge off ratio
- 4Q13 provision expense of $53 million vs. $51 million in 3Q13 and $76 million in 4Q12
- Allowance for loan and lease losses decreased $95 million sequentially reflecting continued improvement in credit trends and charges to the allowance; allowance to loan ratio of 1.79%
- Total nonperforming assets (NPAs) of $986 million, including loans held-for-sale (HFS), declined $39 million, or 4%, sequentially; portfolio NPA ratio of 1.10% down 6 bps from 3Q13, NPL ratio of 0.84% down 4 bps from 3Q13; results reflect $46 million of additions due to a change in policy on home equity nonaccruals
- Strong capital ratios*; sequentially reduced due to 4Q13 repurchases
- Tier 1 common ratio 9.38%**, vs. 9.88% in 3Q13 (Basel III pro forma estimate of ~9.0%**)
- Tier 1 risk-based capital ratio 10.35%, Total risk-based capital ratio 14.07%, Leverage ratio 9.64%
- Tangible common equity ratio** of 8.63% excluding unrealized gains/losses; 8.69% including them
- Book value per share of $15.85; tangible book value per share** of $13.00; down 1% from 3Q13 and up 5% from 4Q12
- Repurchased 32 million common shares in 4Q13; reduced average diluted share count by 12 million
* Capital ratios estimated; presented under current U.S. capital regulations. The pro forma Basel III Tier I common equity ratio is management’s estimate based upon its current interpretation of recent prospective regulatory capital requirements approved in July 2013. See “Capital Position” section for more information.
** Non-GAAP measure; see Reg. G reconciliation on page 34 in Exhibit 99.1 of 8-k filing dated 1/23/14.
Fifth Third Bancorp (Nasdaq: FITB) today reported record full year 2013
net income of $1.8 billion, up 16 percent from net income of $1.6
billion in 2012. After preferred dividends, 2013 net income available to
common shareholders was a record $1.8 billion, or $2.02 per diluted
share, up 17 percent compared with 2012 net income available to common
shareholders of $1.5 billion, or $1.66 per diluted share.
Fourth quarter 2013 net income was $402 million, a decrease of 4 percent
from net income of $421 million in the third quarter of 2013 and an
increase of 1 percent from net income of $399 million in the fourth
quarter of 2012. After preferred dividends, net income available to
common shareholders was $383 million, or $0.43 per diluted share, in the
fourth quarter 2013, compared with $421 million, or $0.47 per diluted
share, in the third quarter 2013, and $390 million, or $0.43 per diluted
share, in the fourth quarter of 2012.
Fourth quarter 2013 included:
Income
-
$91 million positive valuation adjustment on the Vantiv warrant
-
($18 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
-
$9 million annual payment received from Vantiv pursuant to tax
receivable agreement
Expenses
-
($69 million) in net charges to increase litigation reserves
-
($8 million) of debt extinguishment costs associated with the
redemption of Fifth Third Capital Trust IV trust preferred securities
(TruPS)
-
($8 million) contribution to Fifth Third Foundation
-
($8 million) in severance expense
Results also included a benefit to the mortgage repurchase provision of
$28 million primarily related to Fifth Third’s settlement with Freddie
Mac and corresponding expectations for future repurchase requests and
file claims. (As previously announced, Fifth Third entered into a
settlement for $25 million with Freddie Mac to resolve certain
repurchase claims associated with mortgage loans originated and sold
prior to January 1, 2009, which was charged against the representation
and warranty reserve.)
Third quarter 2013 included:
Income
-
$85 million gain on the sale of Vantiv shares
-
$6 million positive valuation adjustment on the Vantiv warrant
-
($2 million) charge related to the valuation of the Visa total return
swap
Expenses
-
($30 million) in charges to increase litigation reserves
-
($5 million) in severance expense
-
($5 million) in large bank assessments for 2012 and 2013 initiated by
regulators under the Dodd-Frank Act
-
($4 million) seasonal pension settlement charge
Results also included a benefit to the mortgage repurchase provision of
$4 million.
Fourth quarter 2012 included:
Income
-
$157 million gain on the sale of Vantiv shares
-
($19 million) negative valuation adjustment on the Vantiv warrant
-
($15 million) charge related to the valuation of the Visa total return
swap
Expenses
-
($134 million) of debt extinguishment costs associated with the
termination of Federal Home Loan Bank (FHLB) debt
-
($13 million) in charges to increase litigation reserves
-
($3 million) in severance expense
Other
-
Fourth quarter 2012 taxes were reduced by approximately $10 million
due to the termination of certain leases
Results also included the impact of $47 million in mortgage repurchase
provision.
|
|
|
Earnings Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
% Change
|
|
|
December
|
September
|
June
|
March
|
December
|
|
|
|
|
|
2013
|
2013
|
2013
|
2013
|
2012
|
Seq
|
|
Yr/Yr
|
|
Earnings ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bancorp
|
$
|
402
|
|
$
|
421
|
|
$
|
591
|
|
$
|
422
|
|
$
|
399
|
|
(4
|
%)
|
|
1
|
%
|
|
Net income available to common shareholders
|
$
|
383
|
|
$
|
421
|
|
$
|
582
|
|
$
|
413
|
|
$
|
390
|
|
(9
|
%)
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
0.44
|
|
|
0.47
|
|
|
0.67
|
|
|
0.47
|
|
|
0.44
|
|
(6
|
%)
|
|
-
|
|
|
Earnings per share, diluted
|
|
0.43
|
|
|
0.47
|
|
|
0.65
|
|
|
0.46
|
|
|
0.43
|
|
(9
|
%)
|
|
-
|
|
|
Cash dividends per common share
|
|
0.12
|
|
|
0.12
|
|
|
0.12
|
|
|
0.11
|
|
|
0.10
|
|
-
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
1.24
|
%
|
|
1.35
|
%
|
|
1.94
|
%
|
|
1.41
|
%
|
|
1.33
|
%
|
(8
|
%)
|
|
(7
|
%)
|
|
Return on average common equity
|
|
10.8
|
|
|
12.1
|
|
|
17.3
|
|
|
12.5
|
|
|
11.5
|
|
(10
|
%)
|
|
(6
|
%)
|
|
Return on average tangible common equity
|
|
13.1
|
|
|
14.7
|
|
|
21.1
|
|
|
15.4
|
|
|
14.1
|
|
(11
|
%)
|
|
(7
|
%)
|
|
Tier I risk-based capital
|
|
10.35
|
|
|
11.14
|
|
|
11.07
|
|
|
10.83
|
|
|
10.65
|
|
(7
|
%)
|
|
(3
|
%)
|
|
Tier I common equity
|
|
9.38
|
|
|
9.88
|
|
|
9.43
|
|
|
9.70
|
|
|
9.51
|
|
(5
|
%)
|
|
(1
|
%)
|
|
Net interest margin(a)
|
|
3.21
|
|
|
3.31
|
|
|
3.33
|
|
|
3.42
|
|
|
3.49
|
|
(3
|
%)
|
|
(8
|
%)
|
|
Efficiency(a)
|
|
61.5
|
|
|
59.2
|
|
|
53.2
|
|
|
59.8
|
|
|
65.2
|
|
4
|
%
|
|
(6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (in thousands)
|
|
855,306
|
|
|
887,030
|
|
|
851,474
|
|
|
874,645
|
|
|
882,152
|
|
(4
|
%)
|
|
(3
|
%)
|
|
Average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
868,077
|
|
|
880,183
|
|
|
858,583
|
|
|
870,923
|
|
|
884,676
|
|
(1
|
%)
|
|
(2
|
%)
|
|
Diluted
|
|
877,511
|
|
|
888,111
|
|
|
900,625
|
|
|
913,163
|
|
|
925,585
|
|
(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 and not the rounded dollar
amounts.
|
|
NM: Not meaningful.
|
|
|
“Fifth Third reported full year net income available to common
shareholders of $1.8 billion in 2013, which marks the best result in our
Company’s history and represents 17 percent growth from strong 2012
earnings,” said Kevin T. Kabat, Vice Chairman and CEO of Fifth Third
Bancorp. “Return on average assets of 1.48 percent increased 11 percent
over last year, and return on average tangible common equity of 16.0
percent was up 12 percent over last year.
“Fourth quarter earnings of $402 million rounded out a very good year.
Earning asset growth, including 2 percent sequential loan growth,
contributed to a $7 million increase in net interest income. Total
deposits were up 5 percent sequentially, highlighted by 8 percent demand
deposit growth. Most fee income comparisons were up, led by mortgage
banking which increased 4 percent sequentially, and service charges on
deposits, investment advisory revenue, and card and processing revenue
which all increased in the low single digits.
“Full year net charge-offs were down more than $200 million, or 29
percent from last year, and were at the lowest levels since 2007.
Nonperforming assets were down 24 percent from last year and were at the
lowest levels since 2006.
“We continued to prudently and actively manage our capital position,
reducing our share count by 3 percent, inclusive of the additional 35.5
million shares attributable to the conversion of our Series G preferred
stock to common stock during the year. We also increased our annual
dividends to $0.47 per share, up 31 percent from 2012. Despite these
substantial returns, shareholders’ equity increased 4 percent from a
year ago. Fifth Third performed very well in 2013, and we feel the
Company is well positioned to succeed as we enter 2014.”
* Non-GAAP measure; see Reg. G reconciliation on page 34 in Exhibit
99.1 of 8-k filing dated 1/23/14.
|
Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Condensed Statements of Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (taxable equivalent)
|
$
|
905
|
|
|
$
|
898
|
|
|
$
|
885
|
|
|
$
|
893
|
|
|
$
|
903
|
|
|
1
|
%
|
|
-
|
|
|
Provision for loan and lease losses
|
|
53
|
|
|
|
51
|
|
|
|
64
|
|
|
|
62
|
|
|
|
76
|
|
|
5
|
%
|
|
(30
|
%)
|
|
Total noninterest income
|
|
703
|
|
|
|
721
|
|
|
|
1,060
|
|
|
|
743
|
|
|
|
880
|
|
|
(2
|
%)
|
|
(20
|
%)
|
|
Total noninterest expense
|
|
989
|
|
|
|
959
|
|
|
|
1,035
|
|
|
|
978
|
|
|
|
1,163
|
|
|
3
|
%
|
|
(15
|
%)
|
|
Income before income taxes (taxable equivalent)
|
|
566
|
|
|
|
609
|
|
|
|
846
|
|
|
|
596
|
|
|
|
544
|
|
|
(7
|
%)
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent adjustment
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
|
4
|
|
|
4
|
%
|
|
17
|
%
|
|
Applicable income taxes
|
|
159
|
|
|
|
183
|
|
|
|
250
|
|
|
|
179
|
|
|
|
144
|
|
|
(13
|
%)
|
|
11
|
%
|
|
Net income
|
|
402
|
|
|
|
421
|
|
|
|
591
|
|
|
|
412
|
|
|
|
396
|
|
|
(5
|
%)
|
|
2
|
%
|
|
Less: Net income attributable to noncontrolling interests
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(3
|
)
|
|
NM
|
|
|
(89
|
%)
|
|
Net income attributable to Bancorp
|
|
402
|
|
|
|
421
|
|
|
|
591
|
|
|
|
422
|
|
|
|
399
|
|
|
(4
|
%)
|
|
1
|
%
|
|
Dividends on preferred stock
|
|
19
|
|
|
|
-
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
-
|
|
|
NM
|
|
|
Net income available to common shareholders
|
|
383
|
|
|
|
421
|
|
|
|
582
|
|
|
|
413
|
|
|
|
390
|
|
|
(9
|
%)
|
|
(2
|
%)
|
|
Earnings per share, diluted
|
$
|
0.43
|
|
|
$
|
0.47
|
|
|
$
|
0.65
|
|
|
$
|
0.46
|
|
|
$
|
0.43
|
|
|
(9
|
%)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Interest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income (taxable equivalent)
|
$
|
1,007
|
|
|
$
|
997
|
|
|
$
|
989
|
|
|
$
|
1,000
|
|
|
$
|
1,020
|
|
|
1
|
%
|
|
(1
|
%)
|
|
Total interest expense
|
|
102
|
|
|
|
99
|
|
|
|
104
|
|
|
|
107
|
|
|
|
117
|
|
|
3
|
%
|
|
(13
|
%)
|
|
Net interest income (taxable equivalent)
|
$
|
905
|
|
|
$
|
898
|
|
|
$
|
885
|
|
|
$
|
893
|
|
|
$
|
903
|
|
|
1
|
%
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets (taxable equivalent)
|
|
3.57
|
%
|
|
|
3.68
|
%
|
|
|
3.73
|
%
|
|
|
3.84
|
%
|
|
|
3.94
|
%
|
|
(3
|
%)
|
|
(9
|
%)
|
|
Rate paid on interest-bearing liabilities
|
|
0.52
|
%
|
|
|
0.54
|
%
|
|
|
0.57
|
%
|
|
|
0.59
|
%
|
|
|
0.65
|
%
|
|
(3
|
%)
|
|
(20
|
%)
|
|
Net interest rate spread (taxable equivalent)
|
|
3.05
|
%
|
|
|
3.14
|
%
|
|
|
3.16
|
%
|
|
|
3.25
|
%
|
|
|
3.29
|
%
|
|
(3
|
%)
|
|
(7
|
%)
|
|
Net interest margin (taxable equivalent)
|
|
3.21
|
%
|
|
|
3.31
|
%
|
|
|
3.33
|
%
|
|
|
3.42
|
%
|
|
|
3.49
|
%
|
|
(3
|
%)
|
|
(8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, including held for sale
|
$
|
88,865
|
|
|
$
|
89,154
|
|
|
$
|
89,473
|
|
|
$
|
88,880
|
|
|
$
|
86,180
|
|
|
-
|
|
|
3
|
%
|
|
Total securities and other short-term investments
|
|
23,043
|
|
|
|
18,528
|
|
|
|
16,962
|
|
|
|
16,846
|
|
|
|
16,765
|
|
|
24
|
%
|
|
37
|
%
|
|
Total interest-earning assets
|
|
111,908
|
|
|
|
107,682
|
|
|
|
106,435
|
|
|
|
105,726
|
|
|
|
102,945
|
|
|
4
|
%
|
|
9
|
%
|
|
Total interest-bearing liabilities
|
|
77,573
|
|
|
|
73,190
|
|
|
|
73,363
|
|
|
|
74,038
|
|
|
|
71,420
|
|
|
6
|
%
|
|
9
|
%
|
|
Bancorp shareholders' equity
|
|
14,757
|
|
|
|
14,440
|
|
|
|
14,221
|
|
|
|
13,779
|
|
|
|
13,855
|
|
|
2
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income of $905 million on a fully taxable equivalent basis
increased $7 million from the third quarter. The increase was driven by
higher balances and yields in investment securities, higher portfolio
loan balances, and the benefit from high-priced CDs that matured during
the quarter. These benefits were partially offset by the effects of loan
repricing, lower held-for-sale loan balances, and higher interest
expense as a result of debt issuances during the quarter.
The net interest margin was 3.21 percent, a decrease of 10 bps from 3.31
percent in the previous quarter. The decline in net interest margin was
largely due to higher cash balances driven by strong deposit growth as
well as the impact of the debt issuances during the quarter. Otherwise,
the benefit from the maturity of high-priced CDs and higher securities
yields offset the impact of lower loan yields.
Compared with the fourth quarter of 2012, net interest income increased
$2 million and the net interest margin decreased 28 bps, driven by lower
asset yields partially offset by higher average loan balances, lower
long-term debt expense due to a reduction in higher cost average
long-term debt, and run-off in higher-priced CDs.
Securities
Average securities and other short-term investments were $23.0 billion
in the fourth quarter of 2013 compared with $18.5 billion in the
previous quarter and $16.8 billion in the fourth quarter of 2012.
Average securities of $18.4 billion increased $1.8 billion from the
prior quarter, largely due to net securities added during the third
quarter of 2013 and approximately $550 million net additions in the
fourth quarter of 2013. Other short-term investments average balances of
$4.6 billion increased $2.7 billion sequentially with higher
interest-bearing cash balances held at the Federal Reserve at quarter
end related to deposit growth and the debt issuances during the quarter.
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Portfolio Loans and Leases ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
$
|
38,835
|
|
|
$
|
38,133
|
|
|
$
|
37,630
|
|
|
$
|
36,395
|
|
|
$
|
34,301
|
|
|
2
|
%
|
|
13
|
%
|
|
Commercial mortgage loans
|
|
|
8,047
|
|
|
|
8,273
|
|
|
|
8,618
|
|
|
|
8,965
|
|
|
|
9,193
|
|
|
(3
|
%)
|
|
(12
|
%)
|
|
Commercial construction loans
|
|
|
952
|
|
|
|
793
|
|
|
|
713
|
|
|
|
695
|
|
|
|
686
|
|
|
20
|
%
|
|
39
|
%
|
|
Commercial leases
|
|
|
3,578
|
|
|
|
3,572
|
|
|
|
3,552
|
|
|
|
3,556
|
|
|
|
3,509
|
|
|
-
|
|
|
2
|
%
|
|
Subtotal - commercial loans and leases
|
|
|
51,412
|
|
|
|
50,771
|
|
|
|
50,513
|
|
|
|
49,611
|
|
|
|
47,689
|
|
|
1
|
%
|
|
8
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
|
12,609
|
|
|
|
12,486
|
|
|
|
12,260
|
|
|
|
12,096
|
|
|
|
11,846
|
|
|
1
|
%
|
|
6
|
%
|
|
Home equity
|
|
|
9,296
|
|
|
|
9,432
|
|
|
|
9,625
|
|
|
|
9,872
|
|
|
|
10,129
|
|
|
(1
|
%)
|
|
(8
|
%)
|
|
Automobile loans
|
|
|
12,019
|
|
|
|
12,083
|
|
|
|
11,887
|
|
|
|
11,961
|
|
|
|
11,944
|
|
|
(1
|
%)
|
|
1
|
%
|
|
Credit card
|
|
|
2,202
|
|
|
|
2,140
|
|
|
|
2,071
|
|
|
|
2,069
|
|
|
|
2,029
|
|
|
3
|
%
|
|
9
|
%
|
|
Other consumer loans and leases
|
|
|
357
|
|
|
|
360
|
|
|
|
351
|
|
|
|
294
|
|
|
|
306
|
|
|
(1
|
%)
|
|
17
|
%
|
|
Subtotal - consumer loans and leases
|
|
|
36,483
|
|
|
|
36,501
|
|
|
|
36,194
|
|
|
|
36,292
|
|
|
|
36,254
|
|
|
-
|
|
|
1
|
%
|
|
Total average loans and leases (excluding held for sale)
|
|
$
|
87,895
|
|
|
$
|
87,272
|
|
|
$
|
86,707
|
|
|
$
|
85,903
|
|
|
$
|
83,943
|
|
|
1
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans held for sale
|
|
|
970
|
|
|
|
1,882
|
|
|
|
2,766
|
|
|
|
2,977
|
|
|
|
2,237
|
|
|
(48
|
%)
|
|
(57
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loan and lease balances (excluding loans held-for-sale)
increased $623 million, or 1 percent, sequentially and increased $4.0
billion, or 5 percent, from the fourth quarter of 2012. The increase in
average loans and leases was primarily driven by growth in the
commercial and industrial (C&I), commercial construction, and
residential mortgage loan portfolios. The growth was partially offset by
declines in commercial mortgage, home equity, and auto loans. Period end
loans and leases (excluding loans held-for-sale) of $88.6 billion
increased $1.4 billion, or 2 percent, sequentially and $2.8 billion, or
3 percent, from a year ago.
Average commercial portfolio loan and lease balances increased $641
million, or 1 percent, sequentially and increased $3.7 billion, or 8
percent, from the fourth quarter of 2012. The increase from prior
periods was largely driven by growth in average C&I loans of $702
million from the prior quarter and $4.5 billion from the fourth quarter
of 2012, partially offset by lower average commercial real estate
balances. Within commercial real estate, average commercial mortgage
balances continued to decline although average commercial construction
balances increased for the fourth consecutive quarter. Commercial line
usage, on an end of period basis, was 29 percent of committed lines in
the fourth quarter of 2013 compared with 30 percent in the third quarter
of 2013 and 31 percent in the fourth quarter of 2012.
Average consumer portfolio loan and lease balances were flat
sequentially and increased 1 percent year-over-year. Average residential
mortgage loans increased $123 million sequentially and $763 million from
a year ago, reflecting the continued retention of certain residential
mortgage loans. Otherwise, on a sequential basis, average home equity
and auto loans each declined 1 percent due to seasonally lower
production volumes while average bankcard loans increased 3 percent
reflecting growth in actively used cards and seasonally higher balances.
Compared with the fourth quarter of 2012, growth in all other consumer
loan categories was partially offset by lower home equity balances as
paydowns continue to outpace new production.
Average loans held-for-sale balances of $970 million decreased $912
million sequentially and $1.3 billion compared with the fourth quarter
of 2012. Period end loans held-for-sale of $944 million decreased $386
million from the previous quarter and $2.0 billion from the fourth
quarter of 2012. Both comparisons reflected lower residential mortgage
held-for-sale balances due to the lower volume of mortgage originations.
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Deposits ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
|
|
$
|
30,765
|
|
|
$
|
30,655
|
|
|
$
|
29,682
|
|
|
$
|
28,565
|
|
|
$
|
29,223
|
|
|
-
|
|
|
5
|
%
|
|
Interest checking
|
|
|
24,650
|
|
|
|
23,116
|
|
|
|
22,796
|
|
|
|
23,763
|
|
|
|
23,556
|
|
|
7
|
%
|
|
5
|
%
|
|
Savings
|
|
|
17,323
|
|
|
|
18,026
|
|
|
|
18,864
|
|
|
|
19,576
|
|
|
|
20,216
|
|
|
(4
|
%)
|
|
(14
|
%)
|
|
Money market
|
|
|
11,285
|
|
|
|
9,693
|
|
|
|
8,918
|
|
|
|
7,932
|
|
|
|
6,026
|
|
|
16
|
%
|
|
87
|
%
|
|
Foreign office(a)
|
|
|
1,717
|
|
|
|
1,755
|
|
|
|
1,418
|
|
|
|
1,102
|
|
|
|
1,174
|
|
|
(2
|
%)
|
|
46
|
%
|
|
Subtotal - Transaction deposits
|
|
|
85,740
|
|
|
|
83,245
|
|
|
|
81,678
|
|
|
|
80,938
|
|
|
|
80,195
|
|
|
3
|
%
|
|
7
|
%
|
|
Other time
|
|
|
3,529
|
|
|
|
3,676
|
|
|
|
3,859
|
|
|
|
3,982
|
|
|
|
4,094
|
|
|
(4
|
%)
|
|
(14
|
%)
|
|
Subtotal - Core deposits
|
|
|
89,269
|
|
|
|
86,921
|
|
|
|
85,537
|
|
|
|
84,920
|
|
|
|
84,289
|
|
|
3
|
%
|
|
6
|
%
|
|
Certificates - $100,000 and over
|
|
|
7,456
|
|
|
|
7,315
|
|
|
|
6,519
|
|
|
|
4,017
|
|
|
|
3,084
|
|
|
2
|
%
|
|
142
|
%
|
|
Other
|
|
|
-
|
|
|
|
17
|
|
|
|
10
|
|
|
|
40
|
|
|
|
32
|
|
|
(99
|
%)
|
|
(99
|
%)
|
|
Total deposits
|
|
$
|
96,725
|
|
|
$
|
94,253
|
|
|
$
|
92,066
|
|
|
$
|
88,977
|
|
|
$
|
87,405
|
|
|
3
|
%
|
|
11
|
%
|
|
(a)
|
|
Includes commercial customer Eurodollar sweep balances for
which the Bancorp pays rates comparable to other commercial
deposit accounts.
|
|
|
|
|
Average core deposits increased $2.3 billion, or 3 percent, sequentially
and increased $5.0 billion, or 6 percent, from the fourth quarter of
2012. Average transaction deposits, which are included in core deposits,
increased $2.5 billion, or 3 percent, from the third quarter of 2013 and
$5.5 billion, or 7 percent from the fourth quarter of 2012 driven by
higher money market account, interest checking, and demand deposit
balances, partially offset by lower savings balances. Other time
deposits, primarily CDs, decreased 4 percent sequentially and 14 percent
compared with the fourth quarter of 2012.
Commercial average transaction deposits increased 6 percent sequentially
and 10 percent from the previous year. Sequential and year-over-year
growth reflected higher money market account, interest checking, and
demand deposit balances due to new accounts and customers holding higher
balances.
Consumer average transaction deposits increased 1 percent sequentially
and 4 percent from the fourth quarter of 2012. The sequential increase
reflected higher interest checking and money market account balances,
which were partially offset by lower savings and demand deposit
balances. Year-over-year growth was driven by increased money market
account and demand deposit balances partially offset by lower savings
balances. Consumer CDs included in core deposits declined 4 percent
sequentially and 14 percent year-over-year driven by maturities of
higher-rate CDs.
|
Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Average Wholesale Funding ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates - $100,000 and over
|
$
|
7,456
|
|
|
$
|
7,315
|
|
|
$
|
6,519
|
|
|
$
|
4,017
|
|
|
$
|
3,084
|
|
|
2
|
%
|
|
NM
|
|
|
Other deposits
|
|
-
|
|
|
|
17
|
|
|
|
10
|
|
|
|
40
|
|
|
|
32
|
|
|
(99
|
%)
|
|
(99
|
%)
|
|
Federal funds purchased
|
|
301
|
|
|
|
464
|
|
|
|
560
|
|
|
|
691
|
|
|
|
794
|
|
|
(35
|
%)
|
|
(62
|
%)
|
|
Other short-term borrowings
|
|
2,177
|
|
|
|
1,675
|
|
|
|
2,867
|
|
|
|
5,429
|
|
|
|
4,553
|
|
|
30
|
%
|
|
(52
|
%)
|
|
Long-term debt
|
|
9,135
|
|
|
|
7,453
|
|
|
|
7,552
|
|
|
|
7,506
|
|
|
|
7,891
|
|
|
23
|
%
|
|
16
|
%
|
|
Total wholesale funding
|
$
|
19,069
|
|
|
$
|
16,924
|
|
|
$
|
17,508
|
|
|
$
|
17,683
|
|
|
$
|
16,354
|
|
|
13
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average wholesale funding of $19.1 billion increased $2.1 billion, or 13
percent, sequentially and increased $2.7 billion, or 17 percent,
compared with the fourth quarter of 2012. The sequential increase was
driven by an increase in long-term debt and short-term borrowings,
however, short-term borrowings on an end of period basis decreased by
$2.1 billion from the prior quarter due to a decline in FHLB borrowings.
The year-over-year increase reflected the issuance of certificates
$100,000 and over and an increase in long-term debt, partially offset by
a decrease in short-term borrowings. Average long-term debt balances
reflected the issuance of $750 million in Bancorp subordinated debt and
$1.75 billion in Bank senior debt in the fourth quarter of 2013, as well
as the full quarter impact of the $1.3 billion in long-term funding
issued in conjunction with the auto securitization in August of 2013. On
December 30, 2013, Fifth Third also redeemed $750 million of Fifth Third
Capital Trust IV TruPS, which did not impact the average balances due to
the timing of the redemption.
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
$
|
142
|
|
$
|
140
|
|
$
|
136
|
|
$
|
131
|
|
$
|
134
|
|
|
1
|
%
|
|
6
|
%
|
|
Corporate banking revenue
|
|
|
94
|
|
|
102
|
|
|
106
|
|
|
99
|
|
|
114
|
|
|
(8
|
%)
|
|
(18
|
%)
|
|
Mortgage banking net revenue
|
|
|
126
|
|
|
121
|
|
|
233
|
|
|
220
|
|
|
258
|
|
|
4
|
%
|
|
(51
|
%)
|
|
Investment advisory revenue
|
|
|
98
|
|
|
97
|
|
|
98
|
|
|
100
|
|
|
93
|
|
|
2
|
%
|
|
6
|
%
|
|
Card and processing revenue
|
|
|
71
|
|
|
69
|
|
|
67
|
|
|
65
|
|
|
66
|
|
|
3
|
%
|
|
8
|
%
|
|
Other noninterest income
|
|
|
170
|
|
|
185
|
|
|
414
|
|
|
109
|
|
|
215
|
|
|
(7
|
%)
|
|
(21
|
%)
|
|
Securities gains, net
|
|
|
2
|
|
|
2
|
|
|
-
|
|
|
17
|
|
|
2
|
|
|
(36
|
%)
|
|
(23
|
%)
|
|
Securities gains (losses), net - non-qualifying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
hedges on mortgage servicing rights
|
|
|
-
|
|
|
5
|
|
|
6
|
|
|
2
|
|
|
(2
|
)
|
|
(100
|
%)
|
|
100
|
%
|
|
Total noninterest income
|
|
$
|
703
|
|
$
|
721
|
|
$
|
1,060
|
|
$
|
743
|
|
$
|
880
|
|
|
(2
|
%)
|
|
(20
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income of $703 million decreased $18 million sequentially
and $177 million compared with prior year results. These comparisons
reflect the impacts described below.
Fourth quarter 2013 results included a $91 million positive valuation
adjustment on the Vantiv warrant as well as $9 million in payments
received pursuant to Fifth Third’s tax receivable agreement with Vantiv
which is expected to be an annual payment from this point forward. This
compares with an $85 million gain on the sale of Vantiv shares and a $6
million positive warrant valuation adjustment in the third quarter of
2013, and a $157 million gain on the sale of Vantiv shares and a $19
million negative warrant valuation adjustment in the fourth quarter of
2012. Quarterly results also included charges related to the valuation
of the total return swap entered into as part of the 2009 sale of Visa,
Inc. Class B shares. Negative valuation adjustments on this swap were
$18 million, $2 million, and $15 million in the in the fourth quarter of
2013, the third quarter of 2013, and the fourth quarter of 2012,
respectively. Excluding these items and net securities gains in all
periods, noninterest income of $619 million decreased $11 million, or 2
percent, from the previous quarter and decreased $136 million, or 18
percent, from the fourth quarter of 2012. The sequential decline was
primarily due to lower corporate banking revenue and other noninterest
income. The year-over-year decline was primarily the result of lower
mortgage banking net revenue and corporate banking revenue.
Service charges on deposits of $142 million increased 1 percent from the
third quarter and increased 6 percent compared with the same quarter
last year. Retail service charges were flat sequentially and increased 6
percent from the fourth quarter of 2012. The year-over-year increase was
primarily related to the transition to our new and simplified deposit
product offerings. Commercial service charges increased 2 percent
sequentially and 6 percent from a year ago primarily as a result of new
customer accounts and higher treasury management fees.
Corporate banking revenue of $94 million decreased 8 percent from the
third quarter of 2013 and decreased 18 percent from the same period last
year. The sequential decline was primarily driven by lower lease
remarketing and syndication fees, partially offset by higher
institutional sales revenue, foreign exchange fees and business lending
fees. The year-over-year decline was primarily driven by lower lease
remarketing, syndication fees, interest rate derivatives and letter of
credit fees, which benefited the year-ago quarter from higher activity
in anticipation of changes to tax rules. The decline in lease
remarketing fees was driven by a $9 million write-down of equipment
value on an operating lease during the quarter.
Mortgage banking net revenue was $126 million in the fourth quarter of
2013, a 4 percent increase from the third quarter of 2013 and a 51
percent decrease from the fourth quarter of 2012. Fourth quarter 2013
originations were $2.6 billion, compared with $4.8 billion in the
previous quarter and $7.0 billion in the fourth quarter of 2012. Fourth
quarter 2013 originations resulted in gains of $60 million on mortgages
sold, compared with gains of $74 million during the previous quarter and
$239 million during the fourth quarter of 2012. The decrease from the
prior quarter reflected lower production partially offset by increased
gain on sale margins, while the decrease from the prior year reflected
lower production and lower gain on sale margins. Mortgage servicing fees
this quarter were $64 million, compared with $63 million in the previous
quarter and $64 million in the fourth quarter of 2012. Mortgage banking
net revenue is also affected by net servicing asset valuation
adjustments, which include mortgage servicing rights (MSR) amortization
and MSR valuation adjustments (including mark-to-market adjustments on
free-standing derivatives used to economically hedge the MSR portfolio).
These net servicing asset valuation adjustments were positive $3 million
in the fourth quarter of 2013 (reflecting MSR amortization of $23
million and MSR valuation adjustments of positive $26 million); negative
$16 million in the third quarter of 2013 (MSR amortization of $39
million and MSR valuation adjustments of positive $23 million); and
negative $45 million in the fourth quarter of 2012 (MSR amortization of
$52 million and MSR valuation adjustments of positive $7 million). The
mortgage servicing asset, net of the valuation reserve, was $967 million
at quarter end on a servicing portfolio of $69 billion.
Net gains on securities held as non-qualifying hedges for the MSR
portfolio were zero in the fourth quarter of 2013, compared with net
gains of $5 million in the third quarter of 2013 and net losses of $2
million in the fourth quarter of 2012.
Investment advisory revenue of $98 million increased 2 percent from the
third quarter and 6 percent year-over-year. The sequential and
year-over-year increase was attributable to higher brokerage fees and
private client services revenue reflecting strong production and market
performance. These increases were partially offset by a decrease in
institutional trust fees.
Card and processing revenue of $71 million in the fourth quarter of 2013
increased 3 percent sequentially and 8 percent from the fourth quarter
of 2012, reflecting the impact of higher transaction volumes and an
increase in the number of actively used cards.
Other noninterest income totaled $170 million in the fourth quarter of
2013, compared with $185 million in the previous quarter and $215
million in the fourth quarter of 2012. Other noninterest income included
effects of the valuation of the Vantiv warrant and changes in income
related to the valuation of the Visa total return swap. For the quarters
ending December 31, 2013, September 30, 2013, and December 31, 2012, the
impact of warrant valuation adjustments were positive $91 million,
positive $6 million, and negative $19 million, respectively, and changes
in income related to the Visa total return swap were losses of $18
million, $2 million, and $15 million, respectively. The fourth quarter
of 2013 also included $9 million in payments received pursuant to Fifth
Third’s tax receivable agreement with Vantiv which is expected to be an
annual payment from this point forward. Gains on the sale of Vantiv
shares were $85 million in the third quarter of 2013 and $157 million in
the fourth quarter of 2012. Excluding the items detailed above, other
noninterest income of $88 million decreased approximately $8 million, or
8 percent, from the third quarter of 2013 and decreased approximately $4
million, or 4 percent, from the fourth quarter of 2012.
Net credit-related costs recognized in other noninterest income were $5
million in the fourth quarter of 2013 versus $5 million last quarter and
$13 million in the fourth quarter of 2012. Fourth quarter 2013 results
primarily reflected $6 million of losses on other real estate owned
(OREO) and $2 million of fair value charges on commercial loans
held-for-sale. Third quarter 2013 results primarily reflected $5 million
of losses on 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.
Net gains on investment securities were $2 million in the fourth quarter
of 2013, compared with $2 million in the previous quarter and $2 million
in the fourth quarter of 2012.
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
% Change
|
|
|
|
December
|
|
September
|
|
|
June
|
|
|
March
|
|
|
December
|
|
|
|
|
|
|
|
|
2013
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Expense ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and incentives
|
|
$
|
388
|
|
|
$
|
389
|
|
|
$
|
404
|
|
|
$
|
399
|
|
|
$
|
416
|
|
|
-
|
|
|
(7
|
%)
|
|
Employee benefits
|
|
|
78
|
|
|
|
83
|
|
|
|
83
|
|
|
|
114
|
|
|
|
96
|
|
|
(6
|
%)
|
|
(19
|
%)
|
|
Net occupancy expense
|
|
|
77
|
|
|
|
75
|
|
|
|
76
|
|
|
|
79
|
|
|
|
76
|
|
|
2
|
%
|
|
1
|
%
|
|
Technology and communications
|
|
|
53
|
|
|
|
52
|
|
|
|
50
|
|
|
|
49
|
|
|
|
52
|
|
|
2
|
%
|
|
2
|
%
|
|
Equipment expense
|
|
|
29
|
|
|
|
29
|
|
|
|
28
|
|
|
|
28
|
|
|
|
27
|
|
|
-
|
|
|
8
|
%
|
|
Card and processing expense
|
|
|
37
|
|
|
|
33
|
|
|
|
33
|
|
|
|
31
|
|
|
|
31
|
|
|
13
|
%
|
|
18
|
%
|
|
Other noninterest expense
|
|
|
327
|
|
|
|
298
|
|
|
|
361
|
|
|
|
278
|
|
|
|
465
|
|
|
10
|
%
|
|
(30
|
%)
|
|
Total noninterest expense
|
|
$
|
989
|
|
|
$
|
959
|
|
|
$
|
1,035
|
|
|
$
|
978
|
|
|
$
|
1,163
|
|
|
3
|
%
|
|
(15
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense of $989 million increased 3 percent from the third
quarter of 2013 and decreased 15 percent versus the fourth quarter of
2012.
Fourth quarter 2013 expenses included $69 million in charges to increase
litigation reserves, $8 million of debt extinguishment costs associated
with the redemption of Fifth Third Capital Trust IV, an $8 million
contribution to Fifth Third Foundation, and $8 million in severance
expense. Third quarter 2013 expenses included $30 million in charges to
increase litigation reserves, $5 million in severance expense, and $5
million in large bank assessment fees. Fourth quarter 2012 expenses
included $134 million of debt extinguishment costs associated with the
termination of $1 billion of FHLB debt, $13 million in charges to
increase litigation reserves and $3 million in severance expense.
Excluding these items, the sequential and year-over-year decline
reflected lower credit-related costs, including the benefit of a
reduction in the mortgage representation and warranty reserve in the
fourth quarter, lower compensation-related expense and benefits expense,
primarily in the mortgage business, and lower marketing-related expenses.
Credit costs related to problem assets recorded as noninterest expense
were a benefit of $12 million in the fourth quarter of 2013, compared
with expense of $16 million in the third quarter of 2013 and expense of
$68 million in the fourth quarter of 2012. Fourth quarter credit-related
expenses included provision for mortgage repurchases that was a benefit
of $26 million reflecting the reduction in the mortgage representation
and warranty reserve primarily related to Fifth Third’s settlement with
Freddie Mac and corresponding expectations for future repurchase
requests and file claims. This is compared with a benefit of $4 million
in the third quarter and expense of $44 million a year ago. (Realized
mortgage repurchase losses were $33 million in the fourth quarter of
2013 reflecting the previously mentioned settlement payment with Freddie
Mac, compared with $13 million last quarter and $15 million in the
fourth quarter of 2012). Provision for unfunded commitments was a
benefit of $5 million in the current quarter, compared with an expense
of $1 million last quarter and an expense of $3 million a year ago.
Derivative valuation adjustments related to customer credit risk were
positive $2 million for the current quarter, immaterial last quarter,
and positive $2 million for the year ago quarter. 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 $17
million in the fourth quarter, compared with $14 million the previous
quarter and $19 million in the same period last year.
|
Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Total net losses charged off ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
($66
|
)
|
|
|
($44
|
)
|
|
|
($33
|
)
|
|
|
($25
|
)
|
|
|
($36
|
)
|
|
|
Commercial mortgage loans
|
(8
|
)
|
|
|
(2
|
)
|
|
|
(10
|
)
|
|
|
(26
|
)
|
|
|
(17
|
)
|
|
|
Commercial construction loans
|
(4
|
)
|
|
|
2
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
Commercial leases
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
1
|
|
|
|
Residential mortgage loans
|
(13
|
)
|
|
|
(12
|
)
|
|
|
(15
|
)
|
|
|
(20
|
)
|
|
|
(23
|
)
|
|
|
Home equity
|
(26
|
)
|
|
|
(19
|
)
|
|
|
(23
|
)
|
|
|
(30
|
)
|
|
|
(34
|
)
|
|
|
Automobile loans
|
(6
|
)
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
Credit card
|
(21
|
)
|
|
|
(19
|
)
|
|
|
(19
|
)
|
|
|
(20
|
)
|
|
|
(19
|
)
|
|
|
Other consumer loans and leases
|
(4
|
)
|
|
|
(9
|
)
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
Total net losses charged off
|
(148
|
)
|
|
|
(109
|
)
|
|
|
(112
|
)
|
|
|
(133
|
)
|
|
|
(147
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses
|
(183
|
)
|
|
|
(141
|
)
|
|
|
(145
|
)
|
|
|
(168
|
)
|
|
|
(177
|
)
|
|
Total recoveries
|
35
|
|
|
|
32
|
|
|
|
33
|
|
|
|
35
|
|
|
|
30
|
|
|
Total net losses charged off
|
($148
|
)
|
|
|
($109
|
)
|
|
|
($112
|
)
|
|
|
($133
|
)
|
|
|
($147
|
)
|
|
Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses charged off as a percent of average loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding held for sale)
|
0.67
|
%
|
|
|
0.49
|
%
|
|
|
0.51
|
%
|
|
|
0.63
|
%
|
|
|
0.70
|
%
|
|
|
Commercial
|
0.60
|
%
|
|
|
0.35
|
%
|
|
|
0.36
|
%
|
|
|
0.44
|
%
|
|
|
0.46
|
%
|
|
|
Consumer
|
0.76
|
%
|
|
|
0.70
|
%
|
|
|
0.73
|
%
|
|
|
0.89
|
%
|
|
|
1.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs were $148 million in the fourth quarter of 2013, or 67
bps of average loans on an annualized basis, compared with net
charge-offs of $109 million in the third quarter 2013 and $147 million
in the fourth quarter 2012. During the fourth quarter of 2013, we
restructured a single large credit resulting in a charge-off of $43
million, or 19 bps. This charge-off was absorbed by existing reserves
for this credit. Additionally, we changed the timing of when home equity
loans are placed on nonaccrual and we changed our policy regarding
treatment of second lien mortgages behind nonperforming first lien
mortgages. This resulted in additional home equity net charge-offs of $6
million, or 3 bps.
Commercial net charge-offs were $78 million, or 60 bps, up $34 million
sequentially. C&I net charge-offs of $66 million increased $22 million
from the previous quarter primarily reflecting the single restructured
credit mentioned above. Excluding the $43 million charge-off on that
credit, commercial and C&I net charge-offs declined from the prior
quarter. Commercial real estate net charge-offs increased $12 million
from an immaterial amount in the previous quarter.
Consumer net charge-offs were $70 million, or 76 bps, up $5 million
sequentially. Net charge-offs on residential mortgage loans in the
portfolio were $13 million, up $1 million from the previous quarter.
Home equity net charge-offs were $26 million, up $7 million from the
third quarter of 2013 primarily due to the change in nonaccrual
accounting policy. Net charge-offs on brokered home equity loans
represented 32 percent of fourth quarter home equity losses; such loans
are 13 percent of the total $9.2 billion home equity portfolio.
Originations of these loans were discontinued in 2007. Net charge-offs
in the auto portfolio of $6 million were flat compared with the prior
quarter. Net charge-offs on consumer credit card loans were $21 million,
up $2 million from the third quarter. Net charge-offs on other consumer
loans were $4 million, down $5 million compared with the previous
quarter.
|
|
|
For the Three Months Ended
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Allowance for Credit Losses ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning
|
|
$
|
1,677
|
|
|
|
$
|
1,735
|
|
|
|
$
|
1,783
|
|
|
|
$
|
1,854
|
|
|
|
$
|
1,925
|
|
|
Total net losses charged off
|
|
|
(148
|
)
|
|
|
|
(109
|
)
|
|
|
|
(112
|
)
|
|
|
|
(133
|
)
|
|
|
|
(147
|
)
|
|
Provision for loan and lease losses
|
|
|
53
|
|
|
|
|
51
|
|
|
|
|
64
|
|
|
|
|
62
|
|
|
|
|
76
|
|
|
Allowance for loan and lease losses, ending
|
|
|
1,582
|
|
|
|
|
1,677
|
|
|
|
|
1,735
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning
|
|
|
167
|
|
|
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
176
|
|
|
Provision (benefit) for unfunded commitments
|
|
|
(5
|
)
|
|
|
|
1
|
|
|
|
|
(2
|
)
|
|
|
|
(11
|
)
|
|
|
|
3
|
|
|
Reserve for unfunded commitments, ending
|
|
|
162
|
|
|
|
|
167
|
|
|
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
|
1,582
|
|
|
|
|
1,677
|
|
|
|
|
1,735
|
|
|
|
|
1,783
|
|
|
|
|
1,854
|
|
|
Reserve for unfunded commitments
|
|
|
162
|
|
|
|
|
167
|
|
|
|
|
166
|
|
|
|
|
168
|
|
|
|
|
179
|
|
|
Total allowance for credit losses
|
|
$
|
1,744
|
|
|
|
$
|
1,844
|
|
|
|
$
|
1,901
|
|
|
|
$
|
1,951
|
|
|
|
$
|
2,033
|
|
|
Allowance for loan and lease losses ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of loans and leases
|
|
|
1.79
|
%
|
|
|
|
1.92
|
%
|
|
|
|
1.99
|
%
|
|
|
|
2.08
|
%
|
|
|
|
2.16
|
%
|
|
As a percent of nonperforming loans and leases(a)
|
|
|
211
|
%
|
|
|
|
218
|
%
|
|
|
|
191
|
%
|
|
|
|
187
|
%
|
|
|
|
180
|
%
|
|
As a percent of nonperforming assets(a)
|
|
|
161
|
%
|
|
|
|
165
|
%
|
|
|
|
151
|
%
|
|
|
|
147
|
%
|
|
|
|
144
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes nonaccrual loans and leases in loans held for sale.
|
|
|
Provision for loan and lease losses totaled $53 million in the fourth
quarter of 2013, up $2 million from the third quarter of 2013 and down
$23 million from the fourth quarter of 2012. The allowance for loan and
lease losses declined $95 million sequentially reflecting continued
improvement in credit trends and charges to the allowance. The allowance
represented 1.79 percent of total loans and leases outstanding as of
quarter end, compared with 1.92 percent last quarter, and represented
211 percent of nonperforming loans and leases, and 161 percent of
nonperforming assets.
|
|
|
|
|
As of
|
|
|
|
|
|
December
|
|
September
|
June
|
|
March
|
December
|
|
Nonperforming Assets and Delinquent Loans ($ in millions)
|
|
2013
|
|
2013
|
2013
|
|
2013
|
2012
|
|
Nonaccrual portfolio loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
$
|
127
|
|
|
$
|
146
|
|
|
$
|
218
|
|
|
$
|
229
|
|
|
$
|
234
|
|
|
|
Commercial mortgage loans
|
|
|
90
|
|
|
|
106
|
|
|
|
169
|
|
|
|
184
|
|
|
|
215
|
|
|
|
Commercial construction loans
|
|
|
10
|
|
|
|
27
|
|
|
|
39
|
|
|
|
66
|
|
|
|
70
|
|
|
|
Commercial leases
|
|
|
3
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
Residential mortgage loans
|
|
|
83
|
|
|
|
83
|
|
|
|
96
|
|
|
|
110
|
|
|
|
114
|
|
|
|
Home equity
|
|
|
74
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
30
|
|
|
|
Automobile loans
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Other consumer loans and leases
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
Total nonaccrual loans and leases
|
|
$
|
387
|
|
|
$
|
391
|
|
|
$
|
551
|
|
|
$
|
618
|
|
|
$
|
665
|
|
|
Restructured loans and leases - commercial (nonaccrual)(c)
|
|
|
228
|
|
|
|
241
|
|
|
|
196
|
|
|
|
159
|
|
|
|
177
|
|
|
Restructured loans and leases - consumer (nonaccrual)
|
|
|
136
|
|
|
|
138
|
|
|
|
162
|
|
|
|
174
|
|
|
|
187
|
|
|
|
|
Total nonperforming loans and leases
|
|
$
|
751
|
|
|
$
|
770
|
|
|
$
|
909
|
|
|
$
|
951
|
|
|
$
|
1,029
|
|
|
Repossessed personal property
|
|
|
7
|
|
|
|
7
|
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
|
Other real estate owned(a)
|
|
|
222
|
|
|
|
237
|
|
|
|
235
|
|
|
|
252
|
|
|
|
249
|
|
|
|
|
Total nonperforming assets(b)
|
|
$
|
980
|
|
|
$
|
1,014
|
|
|
$
|
1,150
|
|
|
$
|
1,210
|
|
|
$
|
1,286
|
|
|
Nonaccrual loans held for sale
|
|
|
6
|
|
|
|
11
|
|
|
|
15
|
|
|
|
16
|
|
|
|
25
|
|
|
Restructured loans - commercial (nonaccrual) held for sale
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
4
|
|
|
Total nonperforming assets including loans held for sale
|
|
$
|
986
|
|
|
$
|
1,025
|
|
|
$
|
1,165
|
|
|
$
|
1,229
|
|
|
$
|
1,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured Consumer loans and leases (accrual)
|
|
$
|
1,685
|
|
|
$
|
1,694
|
|
|
$
|
1,671
|
|
|
$
|
1,683
|
|
|
$
|
1,655
|
|
|
Restructured Commercial loans and leases (accrual)(c)
|
|
$
|
869
|
|
|
$
|
499
|
|
|
$
|
475
|
|
|
$
|
441
|
|
|
$
|
431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 90 days past due
|
|
$
|
103
|
|
|
$
|
156
|
|
|
$
|
152
|
|
|
$
|
164
|
|
|
$
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans and leases as a percent of portfolio loans,
leases and other assets, including other real estate owned(b)
|
|
|
0.84
|
%
|
|
|
0.88
|
%
|
|
|
1.04
|
%
|
|
|
1.11
|
%
|
|
|
1.19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets as a percent of portfolio loans, leases and
other assets, including other real estate owned(b)
|
|
|
1.10
|
%
|
|
|
1.16
|
%
|
|
|
1.32
|
%
|
|
|
1.41
|
%
|
|
|
1.49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 as of December 31, 2013, September 30,
2013, June 30, 2013 and March 31, 2013.
|
|
|
|
|
Total nonperforming assets, including loans held-for-sale, were $986
million, a decline of $39 million, or 4 percent, from the previous
quarter. Nonperforming assets held-for-investment (NPAs) were $980
million, or 1.10 percent, of total loans, leases and OREO, and decreased
$34 million, or 3 percent, from the previous quarter. Nonperforming
loans held-for-investment (NPLs) at quarter end were $751 million or
0.84 percent of total loans, leases and OREO, and decreased $19 million,
or 2 percent, from the previous quarter. During the quarter, the change
in nonaccrual policy increased nonaccrual home equity loans by $46
million, or 5 bps.
Commercial portfolio NPAs were $607 million, or 1.16 percent of
commercial loans, leases and OREO, and decreased $73 million, or 11
percent, from the third quarter. Commercial portfolio NPLs were $458
million, or 0.88 percent of commercial loans and leases, and decreased
$63 million from last quarter. C&I portfolio NPAs of $290 million
decreased $31 million from the prior quarter. Commercial mortgage
portfolio NPAs were $252 million, down $44 million from the previous
quarter. Commercial construction portfolio NPAs were $59 million, a
decrease of $3 million from the previous quarter. Commercial lease
portfolio NPAs were $5 million, an increase of $4 million from the
previous quarter. Commercial real estate loans in Michigan and Florida
represented 52 percent of commercial real estate NPAs and 35 percent of
our total commercial real estate portfolio. Commercial portfolio NPAs
included $228 million of nonaccrual troubled debt restructurings (TDRs),
compared with $241 million last quarter.
Consumer portfolio NPAs of $373 million, or 1.02 percent of consumer
loans, leases and OREO, increased $39 million from the third quarter.
Consumer portfolio NPLs were $293 million, or 0.80 percent of consumer
loans and leases and increased $44 million from last quarter. Of
consumer NPAs, $332 million were in residential real estate portfolios.
Residential mortgage NPAs were $223 million, $6 million lower than last
quarter, with Florida representing 38 percent of residential mortgage
NPAs and 13 percent of total residential mortgage loans. Home equity
NPAs of $109 million were up $46 million compared with last quarter due
to the change in nonaccrual policy. Credit card NPAs of $33 million
decreased $1 million compared to the previous quarter. Consumer
nonaccrual TDRs were $136 million in the fourth quarter of 2013,
compared with $138 million in the third quarter 2013.
Fourth quarter OREO balances included in portfolio NPA balances
described above were $222 million, down $15 million from the third
quarter, and included $149 million in commercial OREO and $73 million in
consumer OREO. Repossessed personal property of $7 million consisted
largely of autos.
Loans still accruing over 90 days past due were $103 million, down $53
million, or 34 percent, from the third quarter of 2013. Commercial
balances over 90 days past due were immaterial and consumer balances 90
days past due of $103 million were down $50 million from the previous
quarter. The sequential decline was primarily due to a $46 million
decrease in home equity loans over 90 days past due, which resulted from
the previously mentioned change in nonaccrual policy. Loans 30-89 days
past due of $276 million increased $18 million, or 7 percent, from the
previous quarter. Commercial balances 30-89 days past due of $17 million
were up $4 million sequentially and consumer balances 30-89 days past
due of $259 million increased $14 million from the third quarter. The
above delinquencies figures exclude nonaccruals described previously.
Commercial nonaccrual loans held-for-sale were $6 million, compared with
$11 million at the end of the third quarter.
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
December
|
|
September
|
|
June
|
|
March
|
|
December
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity to average assets
|
11.51
|
%
|
|
|
11.71
|
%
|
|
|
11.64
|
%
|
|
|
11.38
|
%
|
|
|
11.65
|
%
|
|
Tangible equity(a)
|
9.44
|
%
|
|
|
9.75
|
%
|
|
|
9.65
|
%
|
|
|
9.36
|
%
|
|
|
9.17
|
%
|
|
Tangible common equity (excluding unrealized gains/losses)(a)
|
8.63
|
%
|
|
|
9.27
|
%
|
|
|
8.83
|
%
|
|
|
9.03
|
%
|
|
|
8.83
|
%
|
|
Tangible common equity (including unrealized gains/losses)(a)
|
8.69
|
%
|
|
|
9.42
|
%
|
|
|
8.94
|
%
|
|
|
9.28
|
%
|
|
|
9.10
|
%
|
|
Tangible common equity as a percent of risk-weighted assets
(excluding unrealized gains/losses)(a)(b)
|
9.45
|
%
|
|
|
9.95
|
%
|
|
|
9.49
|
%
|
|
|
9.77
|
%
|
|
|
9.57
|
%
|
|
Regulatory capital ratios:(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier I risk-based capital
|
10.35
|
%
|
|
|
11.14
|
%
|
|
|
11.07
|
%
|
|
|
10.83
|
%
|
|
|
10.65
|
%
|
|
|
Total risk-based capital
|
14.07
|
%
|
|
|
14.35
|
%
|
|
|
14.34
|
%
|
|
|
14.35
|
%
|
|
|
14.42
|
%
|
|
|
Tier I leverage
|
9.64
|
%
|
|
|
10.58
|
%
|
|
|
10.40
|
%
|
|
|
10.03
|
%
|
|
|
10.05
|
%
|
|
|
Tier I common equity(a)
|
9.38
|
%
|
|
|
9.88
|
%
|
|
|
9.43
|
%
|
|
|
9.70
|
%
|
|
|
9.51
|
%
|
|
Book value per share
|
15.85
|
|
|
|
15.84
|
|
|
|
15.56
|
|
|
|
15.42
|
|
|
|
15.10
|
|
|
Tangible book value per share(a)
|
13.00
|
|
|
|
13.09
|
|
|
|
12.69
|
|
|
|
12.62
|
|
|
|
12.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The tangible equity, tangible common equity, tier I common
equity and tangible book value per share ratios, while not
required by accounting principles generally accepted in the United
States of America (U.S. GAAP), are considered to be critical
metrics with which to analyze banks. The ratios have been included
herein to facilitate a greater understanding of the Bancorp's
capital structure and financial condition. See the Regulation G
Non-GAAP Reconciliation table for a reconciliation of these ratios
to U.S. GAAP.
|
|
(b)
|
|
Under the banking agencies risk-based capital guidelines,
assets and credit equivalent amounts of derivatives and
off-balance sheet exposures are assigned to broad risk categories.
The aggregate dollar amount in each risk category is multiplied by
the associated risk weight of the category. The resulting weighted
values are added together resulting in the Bancorp's total risk
weighted assets.
|
|
(c)
|
|
Current period regulatory capital data ratios are estimated.
|
|
|
|
|
Capital ratios remained strong during the quarter, reflecting growth in
retained earnings, and included the impact of the redemption of TruPS
and issuance of preferred stock during the quarter as well as the
payment of preferred dividends and share repurchase activity. Compared
with the prior quarter, the Tier 1 common equity ratio* of 9.38 percent
decreased 50 bps. The tangible common equity to tangible assets ratio*
was 8.63 percent (excluding unrealized gains/losses) and 8.69 percent
(including unrealized gains/losses). The Tier 1 risk-based capital ratio
decreased 79 bps to 10.35 percent. The Total risk-based capital ratio
decreased 28 bps to 14.07 percent and the Leverage ratio decreased 94
bps to 9.64 percent.
Book value per share at December 31, 2013 was $15.85 and tangible book
value per share* was $13.00, compared with September 30, 2013 book value
per share of $15.84 and tangible book value per share of $13.09.
As previously announced, Fifth Third entered into a share repurchase
agreement with a counterparty on November 13, 2013, whereby Fifth Third
would purchase approximately $200 million of its outstanding common
stock. For the quarter, this transaction reduced Fifth Third’s share
count by 8.5 million shares on the initial transaction date, which had a
4 million impact on average share count. Fifth Third expects the
settlement of the forward contract to occur on or before February 28,
2014. Additionally, as previously announced, Fifth Third entered into
another share repurchase agreement with a counterparty on December 10,
2013, whereby Fifth Third would purchase approximately $456 million of
its outstanding common stock. For the quarter, this transaction reduced
Fifth Third’s share count by 19.1 million shares on the initial
transaction date, which had a 4 million impact on average share count.
Fifth Third expects the settlement of the forward contract to occur on
or before March 26, 2014. Also, the settlement of the forward contract
related to the May 21, 2013 share repurchase agreement occurred on
October 1, 2013, and an additional 4.3 million shares were repurchased
upon completion of the agreement which was reflected in the fourth
quarter share count.
As previously announced, pursuant to Fifth Third’s 2013 CCAR capital
plan, Fifth Third issued 6.625 percent fixed-to-floating noncumulative
perpetual preferred stock (Series I preferred stock) for net proceeds of
$443 million on December 4, 2013.
U.S. banking regulators have approved final capital rules for U.S.
banks, including changes to the definition of capital components (i.e.
the numerator of capital ratios) and changes to risk-weighting rules for
assets (i.e. the denominator of capital ratios). These final rules
implement portions of rules proposed by international banking regulators
known as Basel III and Basel II. Fifth Third is not a Basel “Advanced
Approaches” institution. Therefore, Fifth Third would be subject to the
general capital rules governing the capital or numerator portion of
these final rules and the “Standardized Approach” for risk-weighting
assets. Additionally, Fifth Third would have a one-time irrevocable
option to neutralize certain accumulated other comprehensive income
(AOCI) components in capital, comparable to treatment under prevailing
capital rules. Fifth Third will also be subject to the Market Risk Rule
for trading assets and liabilities, which has been re-proposed for
alignment with the other final capital rules. We continue to evaluate
the final rule and its impact, which would apply beginning reporting
periods after January 1, 2015.
Our current estimate of the pro-forma fully phased in Tier I common
equity ratio at December 31, 2013 under the final capital rule, assuming
the Company elected to maintain the current treatment of AOCI components
in capital, would be approximately 9.0 percent**. This would compare
with 9.4 percent* as calculated under the currently prevailing Basel I
capital framework. The primary drivers of the change from the prevailing
capital framework to the Basel III framework would be an increase in
Tier I common equity of approximately 6 bps, which would be more than
offset by modestly higher risk-weighted assets. (The largest impact to
the numerator is that the new rules would not require the current 10
percent deduction of mortgage servicing rights assets; the largest
changes to the denominator would be the treatment of securitizations,
mortgage servicing rights, and lending commitments of less than a year.)
Should Fifth Third make the election to include AOCI components in
capital, the December 31, 2013 pro forma Basel III Tier 1 common ratio
would be increased by approximately 7 bps. Fifth Third’s pro forma Tier
1 common equity ratio exceeds the minimum buffered Tier 1 common equity
ratio of 7 percent, comprising a minimum of 4.5 percent plus a capital
conservation buffer of 2.5 percent. The pro forma Tier 1 common equity
ratio does not include the effect of any mitigating actions the Bancorp
may undertake to offset any impact of the final capital rules.
The new regulations approved by U.S. banking regulators also cease Tier
1 capital treatment for outstanding TruPS for banking organizations
greater than $15 billion by January 1, 2016. On December 30, 2013, Fifth
Third redeemed the $750 million of Fifth Third Capital Trust IV due to a
determination of a Capital Treatment Event. Fifth Third’s Tier 1 and
Total capital levels at December 31, 2013 included $60 million of TruPS.
Fifth Third is subject to the Federal Reserve’s (FRB) Capital Plan Rule
which was issued November 1, 2013. Under this rule, we are required to
submit our annual capital plan to the Federal Reserve, for its objection
or non-objection. Fifth Third submitted its 2014 capital plan on January
6, 2014, as required. 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 2014 through the first
quarter of 2015. Our plan for the covered period included the
possibility that we would increase our common dividend consistent with
the FRB’s 30 percent payout ratio guidance and conduct common share
repurchases at levels which would be expected to maintain common equity
capital levels in the current range. Any such actions would be based on
the FRB’s non-objection, 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. The Federal Reserve has
indicated to the BHCs that it will issue its response on or before March
31, 2014.
* Non-GAAP measure; see Reg. G reconciliation on page 34 in Exhibit
99.1 of 8-k filing dated 1/23/14.
** Capital ratios
estimated; presented under current U.S. capital regulations. The pro
forma Basel III Tier I common equity ratio is management’s estimate
based upon its current interpretation of recent prospective regulatory
capital requirements approved in July 2013.
Tax Rate
The effective tax rate was 28.4 percent this quarter compared with 30.3
percent in the third quarter and 26.8 percent in the fourth quarter of
2012.
Other
Fifth Third Bank owns 48.8 million units representing a 25 percent
interest in Vantiv Holding, LLC, convertible into shares of Vantiv,
Inc., a publicly traded firm (NYSE: VNTV). Based upon Vantiv’s closing
price of $32.61 on December 31, 2013, our interest in Vantiv was valued
at approximately $1.6 billion. Next month in our 10-K, we will update
our disclosure of the carrying value of our interest in Vantiv stock,
which was $415 million as of September 30, 2013. The difference between
the market value and the book value of Fifth Third’s interest in
Vantiv’s shares is not recognized in Fifth Third’s equity or capital.
Additionally, Fifth Third has a warrant to purchase additional shares in
Vantiv which is carried as a derivative asset at a fair value of $384
million as of December 31, 2013.
Conference Call
Fifth Third will host a conference call to discuss these financial
results at 9:00 a.m. (Eastern Time) today. This conference call will be
webcast live by Thomson Financial and may be accessed through the Fifth
Third Investor Relations website at www.53.com
(click on “About Fifth Third” then “Investor Relations”). The webcast
also is being distributed over Thomson Financial’s Investor Distribution
Network to both institutional and individual investors. Individual
investors can listen to the call through Thomson Financial’s individual
investor center at www.earnings.com
or by visiting any of the investor sites in Thomson Financial’s
Individual Investor Network. Institutional investors can access the call
via Thomson Financial’s password-protected event management site,
StreetEvents (www.streetevents.com).
Those unable to listen to the live webcast may access a webcast replay
through the Fifth Third Investor Relations website at the same web
address. Additionally, a telephone replay of the conference call will be
available beginning approximately two hours after the conference call
until Thursday, February 6 by dialing 800-585-8367 for domestic access
and 404-537-3406 for international access (passcode 144287558#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of December 31, 2013, the Company
had $130 billion in assets and operated 17 affiliates with 1,320
full-service Banking Centers, including 104 Bank Mart® locations, most
open seven days a week, inside select grocery stores and 2,586 ATMs in
Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth
Third operates four main businesses: Commercial Banking, Branch Banking,
Consumer Lending, and Investment Advisors. Fifth Third also has a 25%
interest in Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of December 31, 2013, had $302 billion
in assets under care, of which it managed $27 billion for individuals,
corporations and not-for-profit organizations. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third’s common stock is traded on the NASDAQ® Global Select Market
under the symbol “FITB.”
Forward-Looking Statements
This news release contains statements that we believe are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Rule 175 promulgated thereunder,
and Section 21E of the Securities Exchange Act of 1934, as amended, and
Rule 3b-6 promulgated thereunder. These statements relate to our
financial condition, results of operations, plans, objectives, future
performance or business. They usually can be identified by the use of
forward-looking language such as “will likely result,” “may,” “are
expected to,” “is anticipated,” “estimate,” “forecast,” “projected,”
“intends to,” or may include other similar words or phrases such as
“believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or
similar expressions, or future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” or similar verbs. You should
not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to the risk factors
set forth in our most recent Annual Report on Form 10-K. When
considering these forward-looking statements, you should keep in mind
these risks and uncertainties, as well as any cautionary statements we
may make. Moreover, you should treat these statements as speaking only
as of the date they are made and based only on information then actually
known to us.
There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a difference
include, but are not limited to: (1) general economic conditions and
weakening in the economy, specifically the real estate market, either
nationally or in the states in which Fifth Third, one or more acquired
entities and/or the combined company do business, are less favorable
than expected; (2) deteriorating credit quality; (3) political
developments, wars or other hostilities may disrupt or increase
volatility in securities markets or other economic conditions;
(4) changes in the interest rate environment reduce interest margins;
(5) prepayment speeds, loan origination and sale volumes, charge-offs
and loan loss provisions; (6) Fifth Third’s ability to maintain required
capital levels and adequate sources of funding and liquidity;
(7) maintaining capital requirements may limit Fifth Third’s operations
and potential growth; (8) changes and trends in capital markets;
(9) problems encountered by larger or similar financial institutions may
adversely affect the banking industry and/or Fifth Third;
(10) competitive pressures among depository institutions increase
significantly; (11) effects of critical accounting policies and
judgments; (12) changes in accounting policies or procedures as may be
required by the Financial Accounting Standards Board (FASB) or other
regulatory agencies; (13) legislative or regulatory changes or actions,
or significant litigation, adversely affect Fifth Third, one or more
acquired entities and/or the combined company or the businesses in which
Fifth Third, one or more acquired entities and/or the combined company
are engaged, including the Dodd-Frank Wall Street Reform and Consumer
Protection Act; (14) ability to maintain favorable ratings from rating
agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to
attract and retain key personnel; (17) ability to receive dividends from
its subsidiaries; (18) potentially dilutive effect of future
acquisitions on current shareholders’ ownership of Fifth Third;
(19) effects of accounting or financial results of one or more acquired
entities; (20) difficulties from the separation of or the results of
operations of Vantiv, LLC; (21) loss of income from any sale or
potential sale of businesses that could have an adverse effect on Fifth
Third’s earnings and future growth; (22) ability to secure confidential
information and deliver products and services through the use of
computer systems and telecommunications networks; and (23) the impact of
reputational risk created by these developments on such matters as
business generation and retention, funding and liquidity.
You should refer to our periodic and current reports filed with the
Securities and Exchange Commission, or “SEC,” for further information on
other factors, which could cause actual results to be significantly
different from those expressed or implied by these forward-looking
statements.
Fifth Third Bancorp
Jim Eglseder (Investors), 513-534-8424
Laura Wehby (Investors), 513-534-7407
Larry Magnesen (Media), 513-534-8055