Fifth Third Bank 2001 Annual Report Download - page 30

Notes to Consolidated Financial Statements
FIFTH THIRD BANCORP AND SUBSIDIARIES
28
There are claims pending against the Bancorp and its subsidiaries
which have arisen in the normal course of business. Based on a
review of such litigation with legal counsel, management believes
any resulting liability would not have a material effect upon the
Bancorp’s consolidated financial position or results of operations.
15. Other Service Charges And Fees and Other
Operating Expenses
The major components of other service charges and fees and other
operating expenses for the years ended December 31:
($ in millions) 2001 2000 1999
Other Service Charges and Fees:
Cardholder fees . . . . . . . . . . . . . $ 49.7 41.8 41.5
Consumer loan and lease fees . . . 58.9 48.9 57.4
Commercial banking . . . . . . . . . 125.1 86.0 67.2
Bank owned life insurance
income. . . . . . . . . . . . . . . . . . 52.2 43.2 15.7
Insurance income. . . . . . . . . . . . 49.1 47.8 45.0
Gain on sale of branches. . . . . . . 42.7 ——
Other . . . . . . . . . . . . . . . . . . . . 164.5 121.3 111.6
Total other service charges
and fees. . . . . . . . . . . . . . . . . . . $542.2 389.0 338.4
Other Operating Expenses:
Marketing and
communications . . . . . . . . . . . $135.7 128.8 125.5
Bankcard. . . . . . . . . . . . . . . . . . 103.2 72.1 67.7
Intangibles amortization. . . . . . . 71.2 60.3 55.9
Franchise taxes. . . . . . . . . . . . . . 17.9 27.7 26.6
Loan and lease . . . . . . . . . . . . . . 62.4 38.9 32.3
Printing and supplies . . . . . . . . . 40.4 40.9 44.2
Travel . . . . . . . . . . . . . . . . . . . . 33.5 33.7 31.9
Data processing and operations. . . 70.1 86.4 98.9
Corporate insurance. . . . . . . . . . 27.0 16.9 8.1
Other . . . . . . . . . . . . . . . . . . . . 194.2 160.8 158.5
Total other operating expenses. . . . $755.6 666.5 649.6
16. Retirement and Benefit Plans
A combined summary of the defined benefit retirement plans at and
for the years ended December 31:
($ in millions) 2001 2000
Change in benefit obligation:
Projected benefit obligation at beginning of year $242.5 245.6
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . 11.8 10.4
Interest cost. . . . . . . . . . . . . . . . . . . . . . . . . 18.3 17.0
Curtailment . . . . . . . . . . . . . . . . . . . . . . . . ( 8.7) ( 16.2)
Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . ( 6.0) —
Termination benefit. . . . . . . . . . . . . . . . . . . — 1.8
Acquisition/divestiture . . . . . . . . . . . . . . . . . — 2.7
Amendments. . . . . . . . . . . . . . . . . . . . . . . . — .9
Actuarial loss. . . . . . . . . . . . . . . . . . . . . . . . 42.0 12.3
Benefits paid. . . . . . . . . . . . . . . . . . . . . . . . ( 37.1) ( 32.0)
Projected benefit obligation at end of year . . . . $262.8 242.5
Change in plan assets:
Fair value of plan assets at beginning of year . $312.1 318.2
Actual return on assets. . . . . . . . . . . . . . . . . ( 12.8) 15.4
Contributions . . . . . . . . . . . . . . . . . . . . . . . 9.3 4.7
Acquired plan . . . . . . . . . . . . . . . . . . . . . . . — 5.8
Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . (7.2) —
Benefits paid. . . . . . . . . . . . . . . . . . . . . . . . ( 37.1) ( 32.0)
Fair value of plan assets at end of year . . . . . . . $264.3 312.1
($ in millions) 2001 2000
Funded status. . . . . . . . . . . . . . . . . . . . . . . . . $ 1.5 69.6
Unrecognized transition amount . . . . . . . . . . . ( 6.5) ( 8.9)
Unrecognized prior service cost . . . . . . . . . . . . 8.1 11.3
Unrecognized actuarial loss (gain) . . . . . . . . . . 40.0 ( 36.0)
Net amount recognized. . . . . . . . . . . . . . . . . . $ 43.1 36.0
Amounts recognized in the Consolidated
Balance Sheets consist of:
Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . $ 89.6 77.8
Accrued benefit liability . . . . . . . . . . . . . . . . . ( 46.7) ( 42.0)
Accumulated nonowner changes in equity . . . . .2 .2
Net amount recognized. . . . . . . . . . . . . . . . . . $ 43.1 36.0
($ in millions) 2001 2000 1999
Components of net periodic pension
cost (benefit):
Service cost. . . . . . . . . . . . . . . . . . $11.8 10.4 14.9
Interest cost . . . . . . . . . . . . . . . . . 18.3 17.0 17.0
Curtailment . . . . . . . . . . . . . . . . . 1.8 (12.7) —
Expected return on assets . . . . . . . (29.1) (28.5) (25.4)
Amortization and deferral of transition
amount. . . . . . . . . . . . . . . . . . . ( 2.3) ( 2.4) ( 2.4)
Amortization of actuarial gain . . . . ( 1.4) ( 5.4) ( 2.1)
Amortization of unrecognized prior
service cost . . . . . . . . . . . . . . . . 1.3 1.3 1.3
Settlement . . . . . . . . . . . . . . . . . . 1.9 ( 1.4) —
Termination benefit . . . . . . . . . . . — 1.8 —
Net periodic pension cost (benefit) . . . $ 2.3 (19.9) 3.3
In connection with the merger of CNB, the CNB defined
benefit pension plan was curtailed and the resulting curtailment gain
was recorded against the merger charge in 2000. Recognition of the
gain had no impact on operating earnings.
Plan assets consist primarily of common trust and mutual funds
managed by Fifth Third Bank, an affiliate of the Bancorp, listed
stocks and U.S. bonds.
2001 2000 1999
Weighted-average assumptions:
For disclosure:
Discount rate . . . . . . . . . . . . . . 7.25% 7.80% 7.66%
Rate of compensation increase . . 4.86 4.77 4.81
For measuring net periodic pension
cost (benefit):
Discount rate . . . . . . . . . . . . . . 7.80 7.66 6.80
Rate of compensation increase . . 4.77 4.81 4.67
Expected return on plan assets . . 9.52 9.36 9.59
For the Bancorp’s nonqualified supplemental defined benefit
plans, with an accumulated benefit obligation exceeding assets, the
total projected benefit obligation, accumulated benefit obligation
and fair value of plan assets were $33.3 million, $25.4 million and
$0, respectively, as of December 31, 2001 and $33.4 million, $25.9
million and $0, respectively, as of December 31, 2000. The
Bancorp’s profit sharing plan contribution was $33.5 million for
2001, $37.9 million for 2000 and $34.1 million for 1999.