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F-6
RESULTS OF OPERATIONS
The following provides a comparative discussion of the Corporation's consolidated results of operations for 2014 compared
to 2013. A comparative discussion of results for 2013 compared to 2012 is provided at the end of this section. For a discussion
of the Critical Accounting Policies that affect the Consolidated Results of Operations, see the "Critical Accounting Policies" section
of this Financial Review.
ANALYSIS OF NET INTEREST INCOME - Fully Taxable Equivalent (FTE)
(dollar amounts in millions)
Years Ended December 31 2014 2013 2012
Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate
Commercial loans $ 29,715 $ 927 3.12% $ 27,971 $ 917 3.28% $ 26,224 $ 903 3.44%
Real estate construction loans 1,909 65 3.41 1,486 57 3.85 1,390 62 4.44
Commercial mortgage loans 8,706 327 3.75 9,060 372 4.11 9,842 437 4.44
Lease financing 834 19 2.33 847 27 3.23 864 26 3.01
International loans 1,376 50 3.65 1,275 48 3.74 1,272 47 3.73
Residential mortgage loans 1,778 68 3.82 1,620 66 4.09 1,505 68 4.55
Consumer loans 2,270 73 3.20 2,153 71 3.30 2,209 76 3.42
Total loans (a) (b) 46,588 1,529 3.28 44,412 1,558 3.51 43,306 1,619 3.74
Mortgage-backed securities 8,970 209 2.33 9,246 213 2.33 9,446 231 2.52
Other investment securities 380 2 0.45 391 2 0.48 469 4 0.77
Total investment securities (c) 9,350 211 2.26 9,637 215 2.25 9,915 235 2.43
Interest-bearing deposits with banks 5,513 14 0.26 4,930 13 0.26 4,128 10 0.26
Other short-term investments 109 — 0.57 112 1 1.22 134 2 1.65
Total earning assets 61,560 1,754 2.85 59,091 1,787 3.03 57,483 1,866 3.27
Cash and due from banks 934 987 983
Allowance for loan losses (601) (622) (693)
Accrued income and other assets 4,445 4,477 4,796
Total assets $ 66,338 $ 63,933 $ 62,569
Money market and interest-bearing checking deposits $ 22,891 24 0.11 $ 21,704 28 0.13 $ 20,622 35 0.17
Savings deposits 1,744 1 0.03 1,657 1 0.03 1,593 1 0.06
Customer certificates of deposit 4,869 18 0.36 5,471 23 0.42 5,902 31 0.53
Foreign office time deposits (d) 261 2 0.82 500 3 0.52 412 3 0.63
Total interest-bearing deposits 29,765 45 0.15 29,332 55 0.19 28,529 70 0.25
Short-term borrowings 200 — 0.04 211 — 0.07 76 — 0.12
Medium- and long-term debt (e) 2,965 50 1.68 3,972 57 1.45 4,818 65 1.36
Total interest-bearing sources 32,930 95 0.29 33,515 112 0.33 33,423 135 0.41
Noninterest-bearing deposits 25,019 22,379 21,004
Accrued expenses and other liabilities 1,016 1,074 1,133
Total shareholders’ equity 7,373 6,965 7,009
Total liabilities and shareholders’ equity $ 66,338 $ 63,933 $ 62,569
Net interest income/rate spread (FTE) $ 1,659 2.56 $ 1,675 2.70 $ 1,731 2.86
FTE adjustment (f) $ 4 $ 3 $ 3
Impact of net noninterest-bearing sources of funds 0.14 0.14 0.17
Net interest margin (as a percentage of average earning
assets) (FTE) (a) (c) 2.70% 2.84% 3.03%
(a) Accretion of the purchase discount on the acquired loan portfolio of $34 million, $49 million and $71 million increased the net interest margin by 6 basis
points, 8 basis points and 12 basis points in 2014, 2013 and 2012, respectively.
(b) Nonaccrual loans are included in average balances reported and in the calculation of average rates.
(c) Includes investment securities available-for-sale and investment securities held-to-maturity. Average rate based on average historical cost. Carrying value
exceeded average historical cost by $12 million, $92 million and $255 million in 2014, 2013 and 2012, respectively.
(d) Includes substantially all deposits by foreign depositors; deposits are primarily in excess of $100,000.
(e) Medium- and long-term debt average balances included $192 million, $274 million and $343 million in 2014, 2013 and 2012, respectively, for the gain
attributed to the risk hedged with interest rate swaps. Interest expense on medium-and long-term debt was reduced by $72 million in both 2014 and 2013
and $69 million in 2012, for the net gains on these fair value hedge relationships.
(f) The FTE adjustment is computed using a federal tax rate of 35%.