- 3Q14 net income available to common shareholders of $328 million, or $0.39 per diluted common share
- Includes a $53 million pre-tax (~$35 million after-tax, or $0.04 per share) negative valuation adjustment on the warrant Fifth Third holds in Vantiv
- 3Q14 return on average assets (ROA) of 1.02%; return on average common equity of 9.2%; return on average tangible common equity** of 11.1%
- Pre-provision net revenue (PPNR)** of $535 million in 3Q14
- Net interest income (FTE) of $908 million, flat sequentially and up 1% from 3Q13; net interest margin of 3.10%, down 5 basis points sequentially
- Average portfolio loans of $90.8 billion, up $250 million sequentially and $3.5 billion from 3Q13
- Noninterest income of $520 million compared with $736 million in the prior quarter; impacted by a $53 million negative valuation on the Vantiv warrant during the quarter; 2Q14 included a $125 million gain on the sale of Vantiv shares and a $63 million positive valuation on the Vantiv warrant
- Noninterest expense of $888 million compared with $954 million in the prior quarter driven by lower compensation and benefits expense and lower litigation reserve charges
- Credit trends
- 3Q14 net charge-offs of $115 million (0.50% of loans and leases) vs. 2Q14 NCOs of $101 million (0.45% of loans and leases) and 3Q13 NCOs of $109 million (0.49% of loans and leases)
- 3Q14 provision expense of $71 million vs. $76 million in 2Q14 and $51 million in 3Q13
- Allowance for loan and lease losses decreased $44 million sequentially; allowance to loan ratio of 1.56%
- Total nonperforming assets (NPAs) of $803 million, including loans held-for-sale (HFS), declined $34 million sequentially; portfolio NPA ratio of 0.88% down 4 bps from 2Q14, NPL ratio of 0.68% down 2 bps from 2Q14
- Strong capital ratios*
- Tier 1 common ratio** 9.64%, vs. 9.61% in 2Q14 (Basel III pro forma estimate of ~9.4%)
- Tier 1 risk-based capital ratio 10.83%, Total risk-based capital ratio 14.34%, Leverage ratio 9.82%
- Tangible common equity ratio** of 8.84%; 8.64% excluding securities portfolio unrealized gains/losses
- Book value per share of $16.87; tangible book value per share** of $13.95; up 1% from 2Q14 and up 7% from 3Q13
- Repurchased 10 million common shares in 3Q14; incremental impact from 2Q14 and 3Q14 transactions reduced average diluted share count by 10 million in 3Q14
* 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 Basel III Final Rule approved in July 2013. See “Capital Position” section for more information.
** Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit 99.1 of 8-k filing dated 10/16/14.
Fifth Third Bancorp (Nasdaq: FITB) today reported third quarter 2014 net
income of $340 million versus net income of $439 million in the second
quarter of 2014 and $421 million in the third quarter of 2013. After
preferred dividends, net income available to common shareholders was
$328 million, or $0.39 per diluted share, in the third quarter of 2014,
compared with $416 million, or $0.49 per diluted share, in the second
quarter of 2014, and $421 million, or $0.47 per diluted share, in the
third quarter of 2013.
Third quarter 2014 included:
Income
-
($53 million) negative valuation adjustment on the Vantiv warrant
-
($3 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
Expenses
-
($4 million) in litigation reserve charges
Second quarter 2014 included:
Income
-
$125 million gain on the sale of Vantiv shares
-
$63 million positive valuation adjustment on the Vantiv warrant
-
($17 million) negative valuation adjustments for land upon which the
Bancorp no longer expects to build branches
-
($16 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
-
($12 million) negative impact to equity method income from the
Bancorp’s interest in Vantiv related to certain charges recognized by
Vantiv as a result of their acquisition of Mercury Payment Systems
Expenses
-
($61 million) in litigation reserve charges
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 total return swap
entered into as part of the 2009 sale of Visa, Inc. Class B shares
Expenses
-
($30 million) in litigation reserve charges
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Earnings ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Bancorp
|
|
|
|
|
$
|
340
|
|
|
$
|
439
|
|
|
$
|
318
|
|
|
$
|
402
|
|
|
$
|
421
|
|
|
(22
|
%)
|
|
(19
|
%)
|
|
Net income available to common shareholders
|
|
|
|
|
$
|
328
|
|
|
$
|
416
|
|
|
$
|
309
|
|
|
$
|
383
|
|
|
$
|
421
|
|
|
(21
|
%)
|
|
(22
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic
|
|
|
|
|
|
0.39
|
|
|
|
0.49
|
|
|
|
0.36
|
|
|
|
0.44
|
|
|
|
0.47
|
|
|
(20
|
%)
|
|
(17
|
%)
|
|
Earnings per share, diluted
|
|
|
|
|
|
0.39
|
|
|
|
0.49
|
|
|
|
0.36
|
|
|
|
0.43
|
|
|
|
0.47
|
|
|
(20
|
%)
|
|
(17
|
%)
|
|
Cash dividends per common share
|
|
|
|
|
|
0.13
|
|
|
|
0.13
|
|
|
|
0.12
|
|
|
|
0.12
|
|
|
|
0.12
|
|
|
-
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
|
|
|
|
|
1.02
|
%
|
|
|
1.34
|
%
|
|
|
1.00
|
%
|
|
|
1.24
|
%
|
|
|
1.35
|
%
|
|
(24
|
%)
|
|
(25
|
%)
|
|
Return on average common equity
|
|
|
|
|
|
9.2
|
|
|
|
11.9
|
|
|
|
9.0
|
|
|
|
10.8
|
|
|
|
12.1
|
|
|
(23
|
%)
|
|
(24
|
%)
|
|
Return on average tangible common equity(b)
|
|
|
|
|
|
11.1
|
|
|
|
14.4
|
|
|
|
11.0
|
|
|
|
13.1
|
|
|
|
14.7
|
|
|
(23
|
%)
|
|
(24
|
%)
|
|
Tier I risk-based capital
|
|
|
|
|
|
10.83
|
|
|
|
10.80
|
|
|
|
10.45
|
|
|
|
10.43
|
|
|
|
11.21
|
|
|
-
|
|
|
(3
|
%)
|
|
Tier I common equity(b)
|
|
|
|
|
|
9.64
|
|
|
|
9.61
|
|
|
|
9.51
|
|
|
|
9.45
|
|
|
|
9.95
|
|
|
-
|
|
|
(3
|
%)
|
|
Net interest margin(a)
|
|
|
|
|
|
3.10
|
|
|
|
3.15
|
|
|
|
3.22
|
|
|
|
3.21
|
|
|
|
3.31
|
|
|
(2
|
%)
|
|
(6
|
%)
|
|
Efficiency(a)
|
|
|
|
|
|
62.1
|
|
|
|
58.2
|
|
|
|
64.9
|
|
|
|
61.5
|
|
|
|
59.2
|
|
|
7
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding (in thousands)
|
|
|
|
|
|
834,262
|
|
|
|
844,489
|
|
|
|
847,569
|
|
|
|
855,306
|
|
|
|
887,030
|
|
|
(1
|
%)
|
|
(6
|
%)
|
|
Average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
829,392
|
|
|
|
838,492
|
|
|
|
845,860
|
|
|
|
868,077
|
|
|
|
880,183
|
|
|
(1
|
%)
|
|
(6
|
%)
|
|
Diluted
|
|
|
|
|
|
838,324
|
|
|
|
848,245
|
|
|
|
857,924
|
|
|
|
877,511
|
|
|
|
888,111
|
|
|
(1
|
%)
|
|
(6
|
%)
|
|
(a)
|
|
Presented on a fully taxable equivalent basis.
|
|
(b)
|
|
The tangible common equity and tier 1 common equity 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.
|
|
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.
|
|
|
“We were pleased with our operating results in the third quarter that
were characterized by strong expense discipline as we endured the
effects of the continued low interest rate environment,” said Kevin
Kabat, CEO of Fifth Third Bancorp.
“Success in these volatile markets continues to come from managing
expenses and growing current earnings while avoiding exposures that do
not generate appropriate returns for the risks taken. On all of those
fronts, we are doing an exceptional job and creating long term
shareholder value. Despite significant elevated competition from banks
and non-banks alike, our loan production during the quarter was healthy
and within our profitability targets. Deposit growth continues to be
very strong as we view the strength of our deposit franchise as the
driving force for profitable balance sheet growth in the coming years.
“Fee income results for the quarter were highlighted by categories that
exhibit less volatility, like card and processing revenue up 9 percent,
investment advisory fees up 6 percent, and service charges on deposits
up 4 percent year-over-year. We continue to see the benefits of our
focus on building complete customer relationships largely driven from
the changes to our deposit account structure undertaken in the past
couple of years.
“During the quarter, we entered into an agreement to repurchase $225
million of common shares, which includes a portion of the gains realized
from our sale of Vantiv shares last quarter. For the quarter, we
maintained strong capital ratios as our Tier I common equity ratio* was
9.6 percent, and 9.4 percent as estimated pro forma under the Basel III
rules. We continue to balance the environment for growth with prudent
returns of capital to our shareholders in line with our capital
management objectives.”
* Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit
99.1 of 8-k filing dated 10/16/14.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Condensed Statements of Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (taxable equivalent)
|
|
|
|
|
$
|
908
|
|
|
$
|
905
|
|
|
$
|
898
|
|
$
|
905
|
|
|
$
|
898
|
|
|
-
|
|
|
1
|
%
|
|
Provision for loan and lease losses
|
|
|
|
|
|
71
|
|
|
|
76
|
|
|
|
69
|
|
|
53
|
|
|
|
51
|
|
|
(7
|
%)
|
|
40
|
%
|
|
Total noninterest income
|
|
|
|
|
|
520
|
|
|
|
736
|
|
|
|
564
|
|
|
703
|
|
|
|
721
|
|
|
(29
|
%)
|
|
(28
|
%)
|
|
Total noninterest expense
|
|
|
|
|
|
888
|
|
|
|
954
|
|
|
|
950
|
|
|
989
|
|
|
|
959
|
|
|
(7
|
%)
|
|
(7
|
%)
|
|
Income before income taxes (taxable equivalent)
|
|
|
|
|
|
469
|
|
|
|
611
|
|
|
|
443
|
|
|
566
|
|
|
|
609
|
|
|
(23
|
%)
|
|
(23
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable equivalent adjustment
|
|
|
|
|
|
5
|
|
|
|
5
|
|
|
|
5
|
|
|
5
|
|
|
|
5
|
|
|
13
|
%
|
|
7
|
%
|
|
Applicable income taxes
|
|
|
|
|
|
124
|
|
|
|
167
|
|
|
|
119
|
|
|
159
|
|
|
|
183
|
|
|
(26
|
%)
|
|
(32
|
%)
|
|
Net income
|
|
|
|
|
|
340
|
|
|
|
439
|
|
|
|
319
|
|
|
402
|
|
|
|
421
|
|
|
(22
|
%)
|
|
(19
|
%)
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
-
|
|
|
|
-
|
|
|
(4
|
%)
|
|
-
|
|
|
Net income attributable to Bancorp
|
|
|
|
|
|
340
|
|
|
|
439
|
|
|
|
318
|
|
|
402
|
|
|
|
421
|
|
|
(22
|
%)
|
|
(19
|
%)
|
|
Dividends on preferred stock
|
|
|
|
|
|
12
|
|
|
|
23
|
|
|
|
9
|
|
|
19
|
|
|
|
-
|
|
|
(47
|
%)
|
|
-
|
|
|
Net income available to common shareholders
|
|
|
|
|
|
328
|
|
|
|
416
|
|
|
|
309
|
|
|
383
|
|
|
|
421
|
|
|
(21
|
%)
|
|
(22
|
%)
|
|
Earnings per share, diluted
|
|
|
|
|
$
|
0.39
|
|
|
$
|
0.49
|
|
|
$
|
0.36
|
|
$
|
0.43
|
|
|
$
|
0.47
|
|
|
(20
|
%)
|
|
(17
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Interest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income (taxable equivalent)
|
|
|
|
|
$
|
1,023
|
|
|
$
|
1,013
|
|
|
$
|
998
|
|
|
$
|
1,007
|
|
|
$
|
997
|
|
|
1
|
%
|
|
3
|
%
|
|
Total interest expense
|
|
|
|
|
|
115
|
|
|
|
108
|
|
|
|
100
|
|
|
|
102
|
|
|
|
99
|
|
|
6
|
%
|
|
16
|
%
|
|
Net interest income (taxable equivalent)
|
|
|
|
|
$
|
908
|
|
|
$
|
905
|
|
|
$
|
898
|
|
|
$
|
905
|
|
|
$
|
898
|
|
|
-
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets (taxable equivalent)
|
|
|
|
|
|
3.49
|
%
|
|
|
3.53
|
%
|
|
|
3.58
|
%
|
|
|
3.57
|
%
|
|
|
3.68
|
%
|
|
(1
|
%)
|
|
(5
|
%)
|
|
Rate paid on interest-bearing liabilities
|
|
|
|
|
|
0.56
|
%
|
|
|
0.54
|
%
|
|
|
0.51
|
%
|
|
|
0.52
|
%
|
|
|
0.54
|
%
|
|
5
|
%
|
|
5
|
%
|
|
Net interest rate spread (taxable equivalent)
|
|
|
|
|
|
2.93
|
%
|
|
|
2.99
|
%
|
|
|
3.07
|
%
|
|
|
3.05
|
%
|
|
|
3.14
|
%
|
|
(2
|
%)
|
|
(7
|
%)
|
|
Net interest margin (taxable equivalent)
|
|
|
|
|
|
3.10
|
%
|
|
|
3.15
|
%
|
|
|
3.22
|
%
|
|
|
3.21
|
%
|
|
|
3.31
|
%
|
|
(2
|
%)
|
|
(6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, including held for sale
|
|
|
|
|
$
|
91,428
|
|
|
$
|
91,241
|
|
|
$
|
90,238
|
|
|
$
|
88,865
|
|
|
$
|
89,154
|
|
|
-
|
|
|
3
|
%
|
|
Total securities and other short-term investments
|
|
|
|
|
|
24,927
|
|
|
|
23,940
|
|
|
|
22,940
|
|
|
|
23,043
|
|
|
|
18,528
|
|
|
4
|
%
|
|
35
|
%
|
|
Total interest-earning assets
|
|
|
|
|
|
116,355
|
|
|
|
115,181
|
|
|
|
113,178
|
|
|
|
111,908
|
|
|
|
107,682
|
|
|
1
|
%
|
|
8
|
%
|
|
Total interest-bearing liabilities
|
|
|
|
|
|
81,157
|
|
|
|
80,770
|
|
|
|
79,130
|
|
|
|
77,573
|
|
|
|
73,190
|
|
|
-
|
|
|
11
|
%
|
|
Bancorp shareholders' equity
|
|
|
|
|
|
15,486
|
|
|
|
15,157
|
|
|
|
14,862
|
|
|
|
14,757
|
|
|
|
14,440
|
|
|
2
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income of $908 million on a fully taxable equivalent basis
increased $3 million from the second quarter driven by higher average
investment securities balances, an additional day in the third quarter,
and loan growth. These benefits were partially offset by the effects of
loan repricing and higher interest expense associated with debt
issuances in the second and third quarters of 2014.
The net interest margin was 3.10 percent, a decrease of 5 bps from the
previous quarter primarily due to the effects of loan repricing and debt
issuances. Additionally, day count negatively impacted the net interest
margin by 1 bp.
Compared with the third quarter of 2013, net interest income increased
$10 million and the net interest margin decreased 21 bps. The increase
in net interest income was driven by higher balances and yields on
investment securities as well as higher loan balances partially offset
by the effect of loan repricing and higher interest expense resulting
from increased long-term debt balances. The decline in the net interest
margin was primarily driven by the impact of loan repricing.
Securities
Average securities and other short-term investments were $24.9 billion
in the third quarter of 2014 compared with $23.9 billion in the previous
quarter and $18.5 billion in the third quarter of 2013. Average
securities of $22.6 billion increased $886 million from the prior
quarter reflecting purchases of securities, primarily in the second
quarter. Other short-term investments average balances of $2.3 billion
increased $101 million sequentially while end of period balances
increased $1.3 billion reflecting higher cash balances held at the
Federal Reserve.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Average Portfolio Loans and Leases ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
|
|
$
|
41,477
|
|
|
$
|
41,374
|
|
|
$
|
40,377
|
|
|
$
|
38,835
|
|
|
$
|
38,133
|
|
|
-
|
|
|
9
|
%
|
|
Commercial mortgage loans
|
|
|
|
|
|
7,633
|
|
|
|
7,885
|
|
|
|
7,981
|
|
|
|
8,047
|
|
|
|
8,273
|
|
|
(3
|
%)
|
|
(8
|
%)
|
|
Commercial construction loans
|
|
|
|
|
|
1,563
|
|
|
|
1,362
|
|
|
|
1,116
|
|
|
|
952
|
|
|
|
793
|
|
|
15
|
%
|
|
97
|
%
|
|
Commercial leases
|
|
|
|
|
|
3,571
|
|
|
|
3,555
|
|
|
|
3,607
|
|
|
|
3,578
|
|
|
|
3,572
|
|
|
-
|
|
|
-
|
|
|
Subtotal - commercial loans and leases
|
|
|
|
|
|
54,244
|
|
|
|
54,176
|
|
|
|
53,081
|
|
|
|
51,412
|
|
|
|
50,771
|
|
|
-
|
|
|
7
|
%
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans
|
|
|
|
|
|
12,785
|
|
|
|
12,611
|
|
|
|
12,659
|
|
|
|
12,609
|
|
|
|
12,486
|
|
|
1
|
%
|
|
2
|
%
|
|
Home equity
|
|
|
|
|
|
9,009
|
|
|
|
9,101
|
|
|
|
9,194
|
|
|
|
9,296
|
|
|
|
9,432
|
|
|
(1
|
%)
|
|
(4
|
%)
|
|
Automobile loans
|
|
|
|
|
|
12,105
|
|
|
|
12,070
|
|
|
|
12,023
|
|
|
|
12,019
|
|
|
|
12,083
|
|
|
-
|
|
|
-
|
|
|
Credit card
|
|
|
|
|
|
2,295
|
|
|
|
2,232
|
|
|
|
2,230
|
|
|
|
2,202
|
|
|
|
2,140
|
|
|
3
|
%
|
|
7
|
%
|
|
Other consumer loans and leases
|
|
|
|
|
|
361
|
|
|
|
359
|
|
|
|
343
|
|
|
|
357
|
|
|
|
360
|
|
|
1
|
%
|
|
-
|
|
|
Subtotal - consumer loans and leases
|
|
|
|
|
|
36,555
|
|
|
|
36,373
|
|
|
|
36,449
|
|
|
|
36,483
|
|
|
|
36,501
|
|
|
1
|
%
|
|
-
|
|
|
Total average loans and leases (excluding held for sale)
|
|
|
|
|
$
|
90,799
|
|
|
$
|
90,549
|
|
|
$
|
89,530
|
|
|
$
|
87,895
|
|
|
$
|
87,272
|
|
|
-
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans held for sale
|
|
|
|
|
|
629
|
|
|
|
692
|
|
|
|
708
|
|
|
|
970
|
|
|
|
1,882
|
|
|
(9
|
%)
|
|
(67
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loan and lease balances (excluding loans held-for-sale)
increased $250 million sequentially and increased $3.5 billion, or 4
percent, from the third quarter of 2013. The sequential increase in
average loans and leases was primarily driven by growth in commercial
construction, residential mortgage, and commercial and industrial (C&I)
loans. Sequential growth was partially offset by declines in commercial
mortgage and home equity loans. Period end loans and leases (excluding
loans held-for-sale) of $90.6 billion increased $140 million
sequentially and $3.4 billion, or 4 percent, from a year ago.
Average commercial portfolio loan and lease balances were flat
sequentially and increased $3.5 billion, or 7 percent, from the third
quarter of 2013. Average C&I loans increased $103 million from the prior
quarter and $3.3 billion from the third quarter of 2013. Within
commercial real estate, average commercial mortgage balances continued
to decline and average commercial construction balances increased for
the seventh consecutive quarter. Commercial line usage, on an end of
period basis, was 32 percent of committed lines in the third quarter of
2014 compared with 32 percent in the second quarter of 2014 and 30
percent in the third quarter of 2013.
Average consumer portfolio loan and lease balances increased $182
million, or 1 percent, sequentially and were flat year-over-year.
Average residential mortgage loans increased 1 percent sequentially and
increased 2 percent from a year ago. On a sequential basis, average
credit card loans increased 3 percent while average home equity loans
declined 1 percent. Compared with the third quarter of 2013, average
credit card loans increased 7 percent while average home equity loans
declined 4 percent.
Average loans held-for-sale balances of $629 million decreased $63
million sequentially and $1.3 billion compared with the third quarter of
2013. Period end loans held-for-sale of $641 million decreased $41
million from the previous quarter and $689 million from the third
quarter of 2013 reflecting lower residential mortgage held-for-sale
balances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Average Deposits ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
|
|
|
|
|
$
|
31,790
|
|
|
$
|
31,275
|
|
|
$
|
30,626
|
|
|
$
|
30,765
|
|
|
$
|
30,655
|
|
|
2
|
%
|
|
4
|
%
|
|
Interest checking
|
|
|
|
|
|
24,926
|
|
|
|
25,222
|
|
|
|
25,911
|
|
|
|
24,650
|
|
|
|
23,116
|
|
|
(1
|
%)
|
|
8
|
%
|
|
Savings
|
|
|
|
|
|
15,759
|
|
|
|
16,509
|
|
|
|
16,903
|
|
|
|
17,323
|
|
|
|
18,026
|
|
|
(5
|
%)
|
|
(13
|
%)
|
|
Money market
|
|
|
|
|
|
15,222
|
|
|
|
13,942
|
|
|
|
12,439
|
|
|
|
11,285
|
|
|
|
9,693
|
|
|
9
|
%
|
|
57
|
%
|
|
Foreign office(a)
|
|
|
|
|
|
1,663
|
|
|
|
2,200
|
|
|
|
2,017
|
|
|
|
1,717
|
|
|
|
1,755
|
|
|
(24
|
%)
|
|
(5
|
%)
|
|
Subtotal - Transaction deposits
|
|
|
|
|
|
89,360
|
|
|
|
89,148
|
|
|
|
87,896
|
|
|
|
85,740
|
|
|
|
83,245
|
|
|
-
|
|
|
7
|
%
|
|
Other time
|
|
|
|
|
|
3,800
|
|
|
|
3,693
|
|
|
|
3,616
|
|
|
|
3,529
|
|
|
|
3,676
|
|
|
3
|
%
|
|
3
|
%
|
|
Subtotal - Core deposits
|
|
|
|
|
|
93,160
|
|
|
|
92,841
|
|
|
|
91,512
|
|
|
|
89,269
|
|
|
|
86,921
|
|
|
-
|
|
|
7
|
%
|
|
Certificates - $100,000 and over
|
|
|
|
|
|
3,339
|
|
|
|
3,840
|
|
|
|
5,576
|
|
|
|
7,456
|
|
|
|
7,315
|
|
|
(13
|
%)
|
|
(54
|
%)
|
|
Other
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
NM
|
|
(99
|
%)
|
|
Total deposits
|
|
|
|
|
$
|
96,499
|
|
|
$
|
96,681
|
|
|
$
|
97,088
|
|
|
$
|
96,725
|
|
|
$
|
94,253
|
|
|
-
|
|
|
2
|
%
|
|
(a)
|
|
Includes commercial customer Eurodollar sweep balances for which
the Bancorp pays rates comparable to other commercial deposit
accounts.
|
|
|
|
|
Average core deposits increased $319 million sequentially and increased
$6.2 billion, or 7 percent, from the third quarter of 2013. Average
transaction deposits increased $212 million from the second quarter of
2014 primarily driven by higher money market account and demand deposit
balances, partially offset by lower savings, foreign office, and
interest checking balances. Year-over-year transaction deposits
increased $6.1 billion, or 7 percent, driven by higher money market
account, interest checking, and demand deposit balances, partially
offset by lower savings balances. Other time deposits increased 3
percent sequentially and 3 percent compared with the third quarter of
2013.
Average commercial transaction deposits increased 1 percent sequentially
and 10 percent from the previous year. Sequential performance reflected
higher demand deposit and money market account balances, partially
offset by lower foreign office and interest checking balances and
year-over-year growth reflected higher demand deposit and interest
checking balances as customers are holding higher balances.
Average consumer transaction deposits were flat sequentially and
increased 5 percent from the third quarter of 2013. The sequential
performance reflected lower savings, demand deposit, and interest
checking balances partially offset by higher money market account
balances reflecting our efforts to attract money market account
balances. Year-over-year growth was driven by increased money market
account and interest checking balances partially offset by lower savings
and demand deposit balances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Funding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Average Wholesale Funding ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates - $100,000 and over
|
|
|
|
|
$
|
3,339
|
|
|
$
|
3,840
|
|
|
$
|
5,576
|
|
|
$
|
7,456
|
|
|
$
|
7,315
|
|
|
(13
|
%)
|
|
(54
|
%)
|
|
Other deposits
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17
|
|
|
NM
|
|
(99
|
%)
|
|
Federal funds purchased
|
|
|
|
|
|
520
|
|
|
|
606
|
|
|
|
547
|
|
|
|
301
|
|
|
|
464
|
|
|
(14
|
%)
|
|
12
|
%
|
|
Other short-term borrowings
|
|
|
|
|
|
1,973
|
|
|
|
2,234
|
|
|
|
1,808
|
|
|
|
2,177
|
|
|
|
1,675
|
|
|
(12
|
%)
|
|
18
|
%
|
|
Long-term debt
|
|
|
|
|
|
13,955
|
|
|
|
12,524
|
|
|
|
10,313
|
|
|
|
9,135
|
|
|
|
7,453
|
|
|
11
|
%
|
|
87
|
%
|
|
Total wholesale funding
|
|
|
|
|
$
|
19,787
|
|
|
$
|
19,204
|
|
|
$
|
18,244
|
|
|
$
|
19,069
|
|
|
$
|
16,924
|
|
|
3
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average wholesale funding of $19.8 billion increased $583 million, or 3
percent, sequentially and $2.9 billion, or 17 percent, compared with the
third quarter of 2013. The sequential increase was driven by an increase
in long-term debt, partially offset by a decrease in certificates
$100,000 and over. Average other short-term borrowings decreased $261
million from the prior quarter primarily due to a decrease in FHLB
borrowings. The year-over-year increase reflected an increase in
long-term debt, partially offset by a decrease in certificates $100,000
and over. Average long-term debt balances reflected the issuance of $850
million of bank senior debt in the third quarter of 2014, as well as the
full quarter impact of $1.5 billion of bank senior debt issued in the
second quarter of 2014 and the full quarter impact of a $1.5 billion
on-balance sheet auto securitization executed in the second quarter of
2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Income ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
|
|
|
$
|
145
|
|
|
$
|
139
|
|
|
$
|
133
|
|
|
$
|
142
|
|
|
$
|
140
|
|
|
4
|
%
|
|
4
|
%
|
|
Corporate banking revenue
|
|
|
|
|
|
100
|
|
|
|
107
|
|
|
|
104
|
|
|
|
94
|
|
|
|
102
|
|
|
(7
|
%)
|
|
(2
|
%)
|
|
Mortgage banking net revenue
|
|
|
|
|
|
61
|
|
|
|
78
|
|
|
|
109
|
|
|
|
126
|
|
|
|
121
|
|
|
(21
|
%)
|
|
(49
|
%)
|
|
Investment advisory revenue
|
|
|
|
|
|
103
|
|
|
|
102
|
|
|
|
102
|
|
|
|
98
|
|
|
|
97
|
|
|
1
|
%
|
|
6
|
%
|
|
Card and processing revenue
|
|
|
|
|
|
75
|
|
|
|
76
|
|
|
|
68
|
|
|
|
71
|
|
|
|
69
|
|
|
(1
|
%)
|
|
9
|
%
|
|
Other noninterest income
|
|
|
|
|
|
33
|
|
|
|
226
|
|
|
|
41
|
|
|
|
170
|
|
|
|
185
|
|
|
(86
|
%)
|
|
(82
|
%)
|
|
Securities gains, net
|
|
|
|
|
|
3
|
|
|
|
8
|
|
|
|
7
|
|
|
|
2
|
|
|
|
2
|
|
|
(57
|
%)
|
|
40
|
%
|
|
Securities gains, net - non-qualifying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
hedges on mortgage servicing rights
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
-
|
|
|
(100
|
%)
|
|
Total noninterest income
|
|
|
|
|
$
|
520
|
|
|
$
|
736
|
|
|
$
|
564
|
|
|
$
|
703
|
|
|
$
|
721
|
|
|
(29
|
%)
|
|
(28
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income of $520 million decreased $216 million sequentially
and decreased $201 million compared with prior year results. These
comparisons reflect the impacts described below.
For the quarters ending September 30, 2014, June 30, 2014, and September
30, 2013, the impacts of Vantiv warrant valuation adjustments were
negative $53 million, positive $63 million, and positive $6 million,
respectively. 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. Valuation adjustments on this swap were a
negative $3 million, negative $16 million, and negative $2 million in
the third quarter of 2014, the second quarter of 2014, and the third
quarter of 2013, respectively. Second quarter 2014 results included a
$125 million gain on sale of Vantiv shares, a $17 million negative
valuation adjustment for land upon which the Bancorp no longer expects
to build branches, and a $12 million negative impact to equity method
income from the Bancorp’s interest in Vantiv related to certain charges
recognized by Vantiv as a result of their acquisition of Mercury Payment
Systems. Third quarter 2013 results also included an $85 million gain on
the sale of Vantiv shares. Excluding these items and net securities
gains in all periods, noninterest income of $573 million decreased $12
million, or 2 percent, from the previous quarter and decreased $57
million, or 9 percent, from the third quarter of 2013. The sequential
and year-over-year decline was primarily due to lower mortgage banking
net revenue.
Service charges on deposits of $145 million increased 4 percent from the
second quarter and 4 percent compared with the same quarter last year.
Sequential growth was due to a 9 percent increase in retail service
charges due to seasonality and higher overdraft occurrences as well as a
2 percent increase in commercial service charges. The year-over-year
increase was driven by an increase in commercial service charges of 5
percent related to new products and new clients and a 1 percent increase
in retail service charges due to higher overdraft occurrences.
Corporate banking revenue of $100 million decreased 7 percent from the
second quarter of 2014 and 2 percent from the third quarter last year.
The sequential decrease was due to lower syndication fees and business
lending fees, partially offset by an increase in foreign exchange fees.
The year-over-year decrease was driven by lower business lending fees,
syndication fees, and interest rate derivatives fees, partially offset
by an increase in foreign exchange fees, institutional sales revenue,
and letter of credit fees.
Mortgage banking net revenue was $61 million in the third quarter of
2014, a 21 percent decrease from the second quarter of 2014 and a 49
percent decrease from the third quarter of 2013. Third quarter 2014
originations were $2.1 billion, compared with $2.0 billion in the
previous quarter and $4.8 billion in the third quarter of 2013. Third
quarter 2014 originations resulted in gains of $34 million on mortgages
sold, compared with gains of $42 million during the previous quarter and
$74 million during the third quarter of 2013. The sequential decrease
was driven by lower gain on sale margins as well as increased retention
of certain mortgage production, which are generally shorter term or
adjustable rate. The decrease from the prior year reflected lower
production, including Fifth Third’s exit from the broker channel,
partially offset by higher gain on sale margins. Mortgage servicing fees
were $61 million this quarter, $62 million in the second quarter of
2014, and $63 million in the third quarter of 2013. Mortgage banking net
revenue is also affected by net servicing asset valuation adjustments,
which include mortgage servicing rights (MSR) amortization and MSR
valuation adjustments (including mark-to-market adjustments on
free-standing derivatives used to economically hedge the MSR portfolio).
These net servicing asset valuation adjustments were negative $34
million in the third quarter of 2014 (reflecting MSR amortization of $33
million and MSR valuation adjustments of negative $1 million); negative
$26 million in the second quarter of 2014 (MSR amortization of $32
million and MSR valuation adjustments of positive $6 million); and
negative $16 million in the third quarter of 2013 (MSR amortization of
$39 million and MSR valuation adjustments of positive $23 million). The
mortgage servicing asset, net of the valuation reserve, was $933 million
at quarter-end on a servicing portfolio of $67 billion.
Investment advisory revenue of $103 million increased 1 percent from the
second quarter and 6 percent year-over-year. Sequential and
year-over-year comparisons reflected an increase in personal asset
management fees primarily related to market-related growth as well as
increases in securities and brokerage fees.
Card and processing revenue of $75 million in the third quarter of 2014
decreased 1 percent sequentially and increased 9 percent from the third
quarter of 2013. The year-over-year increase reflects an increase in the
number of actively used cards, an increase in customer spend volume, and
higher processing fees related to additional ATM locations.
Other noninterest income totaled $33 million in the third quarter of
2014, compared with $226 million in the previous quarter and $185
million in the third quarter of 2013. As previously described, the
results included the impact of gains on sales of Vantiv shares, Vantiv
warrant valuation adjustments, charges related to the valuation of the
Visa total return swap, a valuation adjustment for certain land parcels,
and a negative impact to equity method income from the Bancorp’s
interest in Vantiv related to certain charges recognized by Vantiv as a
result of their acquisition of Mercury Payment Systems. Excluding these
items, other noninterest income of $89 million increased approximately
$6 million, or 7 percent, from the second quarter of 2014 primarily
related to an improvement in net credit related costs and decreased
approximately $7 million, or 7 percent, from the third quarter of 2013.
Net gains on investment securities were $3 million in the third quarter
of 2014, compared with $8 million in the previous quarter and $2 million
in the third quarter of 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
% Change
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Seq
|
|
Yr/Yr
|
|
Noninterest Expense ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and incentives
|
|
|
|
|
$
|
357
|
|
$
|
368
|
|
$
|
359
|
|
$
|
388
|
|
$
|
389
|
|
(3
|
%)
|
|
(8
|
%)
|
|
Employee benefits
|
|
|
|
|
|
75
|
|
|
79
|
|
|
101
|
|
|
78
|
|
|
83
|
|
(5
|
%)
|
|
(9
|
%)
|
|
Net occupancy expense
|
|
|
|
|
|
78
|
|
|
79
|
|
|
80
|
|
|
77
|
|
|
75
|
|
(1
|
%)
|
|
4
|
%
|
|
Technology and communications
|
|
|
|
|
|
53
|
|
|
52
|
|
|
53
|
|
|
53
|
|
|
52
|
|
3
|
%
|
|
2
|
%
|
|
Equipment expense
|
|
|
|
|
|
30
|
|
|
30
|
|
|
30
|
|
|
29
|
|
|
29
|
|
1
|
%
|
|
4
|
%
|
|
Card and processing expense
|
|
|
|
|
|
37
|
|
|
37
|
|
|
31
|
|
|
37
|
|
|
33
|
|
-
|
|
|
12
|
%
|
|
Other noninterest expense
|
|
|
|
|
|
258
|
|
|
309
|
|
|
296
|
|
|
327
|
|
|
298
|
|
(17
|
%)
|
|
(13
|
%)
|
|
Total noninterest expense
|
|
|
|
|
$
|
888
|
|
$
|
954
|
|
$
|
950
|
|
$
|
989
|
|
$
|
959
|
|
(7
|
%)
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense of $888 million declined 7 percent compared with
both the second quarter of 2014 and the third quarter of 2013.
Third quarter 2014 expenses included $4 million in charges to litigation
reserves compared with $61 million in the second quarter of 2014 and $30
million in the third quarter of 2013. Third quarter of 2013 also
included $5 million in large bank assessments for 2012 and 2013
initiated by regulators under the Dodd-Frank Act. Excluding these items,
noninterest expense of $884 million was down $9 million, or 1 percent,
sequentially and decreased $40 million, or 4 percent, year-over-year.
The sequential and year-over-year decline reflected lower
compensation-related expense and benefits expense, primarily due to
changes in our mortgage and retail staffing.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Total net losses charged off ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
|
|
($50
|
)
|
|
($31
|
)
|
|
($97
|
)
|
|
($66
|
)
|
|
($44
|
)
|
|
Commercial mortgage loans
|
|
|
|
|
(5
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(2
|
)
|
|
Commercial construction loans
|
|
|
|
|
-
|
|
|
(8
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
2
|
|
|
Commercial leases
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Residential mortgage loans
|
|
|
|
|
(9
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
(12
|
)
|
|
Home equity
|
|
|
|
|
(14
|
)
|
|
(18
|
)
|
|
(16
|
)
|
|
(26
|
)
|
|
(19
|
)
|
|
Automobile loans
|
|
|
|
|
(7
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
Credit card
|
|
|
|
|
(23
|
)
|
|
(21
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|
(19
|
)
|
|
Other consumer loans and leases
|
|
|
|
|
(7
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|
Total net losses charged off
|
|
|
|
|
(115
|
)
|
|
(101
|
)
|
|
(168
|
)
|
|
(148
|
)
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses
|
|
|
|
|
(146
|
)
|
|
(127
|
)
|
|
(190
|
)
|
|
(183
|
)
|
|
(141
|
)
|
|
Total recoveries
|
|
|
|
|
31
|
|
|
26
|
|
|
22
|
|
|
35
|
|
|
32
|
|
|
Total net losses charged off
|
|
|
|
|
($115
|
)
|
|
($101
|
)
|
|
($168
|
)
|
|
($148
|
)
|
|
($109
|
)
|
|
Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses charged off as a percent of average loans and leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding held for sale)
|
|
|
|
|
0.50
|
%
|
|
0.45
|
%
|
|
0.76
|
%
|
|
0.67
|
%
|
|
0.49
|
%
|
|
Commercial
|
|
|
|
|
0.40
|
%
|
|
0.35
|
%
|
|
0.79
|
%
|
|
0.60
|
%
|
|
0.35
|
%
|
|
Consumer
|
|
|
|
|
0.66
|
%
|
|
0.60
|
%
|
|
0.72
|
%
|
|
0.76
|
%
|
|
0.70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs were $115 million, or 50 bps, of average loans on an
annualized basis, in the third quarter of 2014 compared with net
charge-offs of $101 million, or 45 bps, in the second quarter of 2014
and $109 million, or 49 bps, in the third quarter of 2013.
Commercial net charge-offs were $55 million, or 40 bps, up $7 million
sequentially. C&I net charge-offs of $50 million increased $19 million
from the previous quarter and commercial real estate net charge-offs
decreased $12 million from $17 million in the previous quarter.
Consumer net charge-offs were $60 million, or 66 bps, up $7 million
sequentially. Net charge-offs on residential mortgage loans in the
portfolio were $9 million, up $1 million from the previous quarter. Home
equity net charge-offs were $14 million, down $4 million from the second
quarter of 2014, and net charge-offs in the auto portfolio of $7 million
were up $2 million compared with the prior quarter. Net charge-offs on
consumer credit card loans were $23 million, up $2 million from the
second quarter. Net charge-offs on other consumer loans were $7 million,
up $6 million compared with the previous quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Allowance for Credit Losses ($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning
|
|
|
|
|
$
|
1,458
|
|
|
$
|
1,483
|
|
|
$
|
1,582
|
|
|
$
|
1,677
|
|
|
$
|
1,735
|
|
|
Total net losses charged off
|
|
|
|
|
|
(115
|
)
|
|
|
(101
|
)
|
|
|
(168
|
)
|
|
|
(148
|
)
|
|
|
(109
|
)
|
|
Provision for loan and lease losses
|
|
|
|
|
|
71
|
|
|
|
76
|
|
|
|
69
|
|
|
|
53
|
|
|
|
51
|
|
|
Allowance for loan and lease losses, ending
|
|
|
|
|
|
1,414
|
|
|
|
1,458
|
|
|
|
1,483
|
|
|
|
1,582
|
|
|
|
1,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning
|
|
|
|
|
|
142
|
|
|
|
153
|
|
|
|
162
|
|
|
|
167
|
|
|
|
166
|
|
|
Provision (benefit) for unfunded commitments
|
|
|
|
|
|
(8
|
)
|
|
|
(11
|
)
|
|
|
(9
|
)
|
|
|
(5
|
)
|
|
|
1
|
|
|
Reserve for unfunded commitments, ending
|
|
|
|
|
|
134
|
|
|
|
142
|
|
|
|
153
|
|
|
|
162
|
|
|
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
|
|
|
|
1,414
|
|
|
|
1,458
|
|
|
|
1,483
|
|
|
|
1,582
|
|
|
|
1,677
|
|
|
Reserve for unfunded commitments
|
|
|
|
|
|
134
|
|
|
|
142
|
|
|
|
153
|
|
|
|
162
|
|
|
|
167
|
|
|
Total allowance for credit losses
|
|
|
|
|
$
|
1,548
|
|
|
$
|
1,600
|
|
|
$
|
1,636
|
|
|
$
|
1,744
|
|
|
$
|
1,844
|
|
|
Allowance for loan and lease losses ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of loans and leases
|
|
|
|
|
|
1.56
|
%
|
|
|
1.61
|
%
|
|
|
1.65
|
%
|
|
|
1.79
|
%
|
|
|
1.92
|
%
|
|
As a percent of nonperforming loans and leases(a)
|
|
|
|
|
|
228
|
%
|
|
|
228
|
%
|
|
|
202
|
%
|
|
|
211
|
%
|
|
|
218
|
%
|
|
As a percent of nonperforming assets(a)
|
|
|
|
|
|
178
|
%
|
|
|
175
|
%
|
|
|
157
|
%
|
|
|
161
|
%
|
|
|
165
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Excludes nonaccrual loans and leases in loans held for sale.
|
|
|
Provision for loan and lease losses totaled $71 million in the third
quarter of 2014, down $5 million from the second quarter of 2014 and up
$20 million from the third quarter of 2013. The allowance for loan and
lease losses declined $44 million sequentially reflecting the
portfolio’s overall risk profile and charges to the allowance. The
allowance represented 1.56 percent of total loans and leases outstanding
as of quarter end, compared with 1.61 percent last quarter, and
represented 228 percent of nonperforming loans and leases, and 178
percent of nonperforming assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
Nonperforming Assets and Delinquent Loans ($ in millions)
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Nonaccrual portfolio loans and leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans
|
|
|
|
|
$
|
102
|
|
|
$
|
103
|
|
|
$
|
153
|
|
|
$
|
127
|
|
|
$
|
146
|
|
|
Commercial mortgage loans
|
|
|
|
|
|
77
|
|
|
|
86
|
|
|
|
96
|
|
|
|
90
|
|
|
|
106
|
|
|
Commercial construction loans
|
|
|
|
|
|
2
|
|
|
|
3
|
|
|
|
3
|
|
|
|
10
|
|
|
|
27
|
|
|
Commercial leases
|
|
|
|
|
|
3
|
|
|
|
2
|
|
|
|
3
|
|
|
|
3
|
|
|
|
1
|
|
|
Residential mortgage loans
|
|
|
|
|
|
52
|
|
|
|
56
|
|
|
|
68
|
|
|
|
83
|
|
|
|
83
|
|
|
Home equity
|
|
|
|
|
|
69
|
|
|
|
73
|
|
|
|
75
|
|
|
|
74
|
|
|
|
28
|
|
|
Automobile loans
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Other consumer loans and leases
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total nonaccrual loans and leases (excludes restructured loans)
|
|
|
|
|
$
|
305
|
|
|
$
|
323
|
|
|
$
|
398
|
|
|
$
|
387
|
|
|
$
|
391
|
|
|
Restructured loans - commercial (nonaccrual)(c)
|
|
|
|
|
|
201
|
|
|
|
202
|
|
|
|
209
|
|
|
|
228
|
|
|
|
241
|
|
|
Restructured loans - consumer (nonaccrual)
|
|
|
|
|
|
114
|
|
|
|
115
|
|
|
|
126
|
|
|
|
136
|
|
|
|
138
|
|
|
Total nonaccrual portfolio loans and leases
|
|
|
|
|
$
|
620
|
|
|
$
|
640
|
|
|
$
|
733
|
|
|
$
|
751
|
|
|
$
|
770
|
|
|
Repossessed personal property
|
|
|
|
|
|
19
|
|
|
|
18
|
|
|
|
6
|
|
|
|
7
|
|
|
|
7
|
|
|
Other real estate owned(a)
|
|
|
|
|
|
157
|
|
|
|
174
|
|
|
|
207
|
|
|
|
222
|
|
|
|
237
|
|
|
Total nonperforming assets(b)
|
|
|
|
|
$
|
796
|
|
|
$
|
832
|
|
|
$
|
946
|
|
|
$
|
980
|
|
|
$
|
1,014
|
|
|
Nonaccrual loans held for sale
|
|
|
|
|
|
4
|
|
|
|
5
|
|
|
|
3
|
|
|
|
6
|
|
|
|
11
|
|
|
Restructured loans - commercial (nonaccrual) held for sale
|
|
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total nonperforming assets including loans held for sale
|
|
|
|
|
$
|
803
|
|
|
$
|
837
|
|
|
$
|
949
|
|
|
$
|
986
|
|
|
$
|
1,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured Consumer loans and leases (accrual)
|
|
|
|
|
$
|
1,610
|
|
|
$
|
1,623
|
|
|
$
|
1,682
|
|
|
$
|
1,685
|
|
|
$
|
1,694
|
|
|
Restructured Commercial loans and leases (accrual)(c)
|
|
|
|
|
$
|
885
|
|
|
$
|
914
|
|
|
$
|
847
|
|
|
$
|
869
|
|
|
$
|
499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 90 days past due
|
|
|
|
|
$
|
87
|
|
|
$
|
94
|
|
|
$
|
94
|
|
|
$
|
103
|
|
|
$
|
156
|
|
|
Nonperforming loans and leases as a percent of portfolio loans,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
leases and other assets, including other real estate owned(b)
|
|
|
|
|
|
0.68
|
%
|
|
|
0.70
|
%
|
|
|
0.82
|
%
|
|
|
0.84
|
%
|
|
|
0.88
|
%
|
|
Nonperforming assets as a percent of portfolio loans, leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and other assets, including other real estate owned(b)
|
|
|
|
|
|
0.88
|
%
|
|
|
0.92
|
%
|
|
|
1.05
|
%
|
|
|
1.10
|
%
|
|
|
1.16
|
%
|
|
(a)
|
|
Excludes government insured advances.
|
|
(b)
|
|
Does not include nonaccrual loans held for sale.
|
|
(c)
|
|
Excludes $20.9 million of restructured nonaccrual loans and
$7.6 million of restructured accruing loans as of June 30, 2014,
March 31, 2014 and December 31, 2013 and excludes $21.5 million of
restructured nonaccrual loans and $7.6 million of restructured
accruing loans as of September 30, 2013 and June 30, 2013
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 $803
million, a decline of $34 million, or 4 percent, from the previous
quarter. Nonperforming loans (NPLs) at quarter-end were $620 million or
0.68 percent of total loans, leases and OREO, and decreased $20 million,
or 3 percent, from the previous quarter.
Commercial NPAs were $487 million, or 0.90 percent of commercial loans,
leases and OREO, and decreased $25 million, or 5 percent, from the
second quarter. Commercial NPLs were $385 million, or 0.71 percent of
commercial loans and leases, and decreased $11 million from last
quarter. C&I NPAs of $278 million increased $13 million from the prior
quarter. Commercial mortgage NPAs were $186 million, down $26 million
from the previous quarter. Commercial construction NPAs were $19
million, a decrease of $12 million from the previous quarter. Commercial
lease NPAs were $4 million, flat from the previous quarter. Commercial
NPAs included $201 million of nonaccrual troubled debt restructurings
(TDRs), compared with $202 million last quarter.
Consumer NPAs of $309 million, or 0.84 percent of consumer loans, leases
and OREO, decreased $11 million from the second quarter. Consumer NPLs
were $235 million, or 0.64 percent of consumer loans and leases and
decreased $9 million from last quarter. Residential mortgage NPAs were
$164 million, $8 million lower than last quarter. Home equity NPAs of
$101 million decreased $9 million sequentially and credit card NPAs of
$37 million were up $5 million compared with the previous quarter.
Consumer nonaccrual TDRs were $114 million in the third quarter of 2014,
compared with $115 million in the second quarter of 2014.
Third quarter OREO balances included in NPA balances were $157 million,
down $17 million from the second quarter, and included $90 million in
commercial OREO and $67 million in consumer OREO. Repossessed personal
property of $19 million increased $1 million from the prior quarter.
Loans over 90 days past due and still accruing were $87 million, down $7
million from the second quarter of 2014. Commercial balances over 90
days past due were $1 million compared with an immaterial amount in the
prior quarter, and consumer balances 90 days past due of $86 million
were down $8 million from the previous quarter. Loans 30-89 days past
due of $279 million were up $36 million from the previous quarter.
Commercial balances 30-89 days past due of $17 million were up $6
million sequentially and consumer balances 30-89 days past due of $262
million increased $30 million from the second quarter. The above
delinquencies figures exclude nonaccruals described previously.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
|
|
|
September
|
|
June
|
|
March
|
|
December
|
|
September
|
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Capital Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity to average assets
|
|
|
|
|
11.71
|
%
|
|
11.57
|
%
|
|
11.53
|
%
|
|
11.51
|
%
|
|
11.71
|
%
|
|
Tangible equity(a)
|
|
|
|
|
9.65
|
%
|
|
9.77
|
%
|
|
9.61
|
%
|
|
9.44
|
%
|
|
9.75
|
%
|
|
Tangible common equity (excluding unrealized gains/losses)(a)
|
|
|
|
|
8.64
|
%
|
|
8.74
|
%
|
|
8.79
|
%
|
|
8.63
|
%
|
|
9.27
|
%
|
|
Tangible common equity (including unrealized gains/losses)(a)
|
|
|
|
|
8.84
|
%
|
|
9.00
|
%
|
|
8.93
|
%
|
|
8.69
|
%
|
|
9.42
|
%
|
|
Tangible common equity as a percent of risk-weighted assets
(excluding unrealized gains/losses)(a)(b)
|
|
|
|
|
9.70
|
%
|
|
9.67
|
%
|
|
9.57
|
%
|
|
9.52
|
%
|
|
10.01
|
%
|
|
Regulatory capital ratios:(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier I risk-based capital
|
|
|
|
|
10.83
|
%
|
|
10.80
|
%
|
|
10.45
|
%
|
|
10.43
|
%
|
|
11.21
|
%
|
|
Total risk-based capital
|
|
|
|
|
14.34
|
%
|
|
14.30
|
%
|
|
14.02
|
%
|
|
14.17
|
%
|
|
14.43
|
%
|
|
Tier I leverage
|
|
|
|
|
9.82
|
%
|
|
9.86
|
%
|
|
9.71
|
%
|
|
9.70
|
%
|
|
10.64
|
%
|
|
Tier I common equity(a)
|
|
|
|
|
9.64
|
%
|
|
9.61
|
%
|
|
9.51
|
%
|
|
9.45
|
%
|
|
9.95
|
%
|
|
Book value per share
|
|
|
|
|
16.87
|
|
|
16.74
|
|
|
16.27
|
|
|
15.85
|
|
|
15.84
|
|
|
Tangible book value per share(a)
|
|
|
|
|
13.95
|
|
|
13.86
|
|
|
13.40
|
|
|
13.00
|
|
|
13.09
|
|
|
(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, the payment of preferred dividends, and share
repurchase activity. Compared with the prior quarter, the Tier 1 common
equity ratio* of 9.64 percent increased 3 bps. The tangible common
equity to tangible assets ratio* was 8.64 percent (excluding unrealized
gains/losses) and 8.84 percent (including unrealized gains/losses). The
Tier 1 risk-based capital ratio increased 3 bps to 10.83 percent. The
total risk-based capital ratio increased 4 bps to 14.34 percent and the
Leverage ratio decreased 4 bps to 9.82 percent.
Our current estimate of the pro-forma fully phased in Tier I common
equity ratio at September 30, 2014 under the final capital rule,
assuming the Company elected to maintain the current treatment of AOCI
components in capital, would be approximately 9.4 percent**. This would
compare with 9.6 percent* as calculated under the currently prevailing
Basel I capital framework. Were Fifth Third to make the election to
include AOCI components in capital, the September 30, 2014 pro forma
Basel III Tier 1 common ratio would be increased by approximately 25
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.
Book value per share at September 30, 2014 was $16.87 and tangible book
value per share* was $13.95, compared with the June 30, 2014 book value
per share of $16.74 and tangible book value per share of $13.86.
As previously announced, Fifth Third entered into a share repurchase
agreement with a counterparty on July 21, 2014, whereby Fifth Third
would purchase approximately $225 million of its outstanding common
stock. This transaction reduced Fifth Third’s third quarter share count
by 9.35 million shares on July 24, 2014. Settlement of the forward
contract related to this agreement occurred on October 14, 2014 and an
additional 1.90 million shares were repurchased upon completion of the
agreement. In addition, the settlement of the forward contract related
to the April 28, 2014, $150 million share repurchase agreement occurred
on July 21, 2014. An additional 1.02 million shares were repurchased
upon completion of the agreement. In total, the incremental impact to
the average diluted share count in the third quarter of 2014 due to
these two transactions was approximately 9.86 million shares.
* Non-GAAP measure; see Reg. G reconciliation on page 33 in Exhibit
99.1 of 8-k filing dated 10/16/14.
** 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 the Basel III Final Rule
approved in July 2013.
Tax Rate
The effective tax rate was 26.7 percent this quarter compared with 27.6
percent in the second quarter of 2014 and 30.3 percent in the third
quarter of 2013.
Other
Fifth Third Bank owns 43 million units representing a 22.8 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 $30.90 on September 30, 2014, our interest in Vantiv was valued
at approximately $1.3 billion. Next month in our 10-Q, we will update
our disclosure of the carrying value of our interest in Vantiv stock,
which was $384 million as of June 30, 2014. 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 $358
million as of September 30, 2014.
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”). Institutional
investors can access the call via Thomson Financial’s password-protected
event management site, StreetEvents (www.streetevents.com).
Those unable to listen to the live webcast may access a webcast replay
through the Fifth Third Investor Relations website at the same web
address. Additionally, a telephone replay of the conference call will be
available beginning approximately two hours after the conference call
until Thursday, October 30 by dialing 800-585-8367 for domestic access
and 404-537-3406 for international access (passcode 10261976#).
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of September 30, 2014, the Company
had $134 billion in assets and operated 15 affiliates with 1,308
full-service Banking Centers, including 102 Bank Mart® locations, most
open seven days a week, inside select grocery stores and 2,639 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 22.8%
interest in Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of September 30, 2014, had $303 billion
in assets under care, of which it managed $26 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 Fifth Third’s investment in,
relationship with, and nature of the 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
Investors
Jim Eglseder, 513-534-8424
Laura Wehby, 513-534-7407
or
Media
Larry Magnesen, 513-534-8055