Fifth Third Bank 2003 Annual Report Download - page 28

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Notes to Consolidated Financial Statements
FIFTH THIRD BANCORP AND SUBSIDIARIES
26
The amortized cost and approximate fair value of securities at
December 31, 2003, by contractual maturity, are shown in the
following table. Actual maturities may differ from contractual matur-
ities when there exists a right to call or prepay obligations with or
without call or prepayment penalties.
Available-for-Sale Held-to-Maturity
Amortized Fair Amortized Fair
($ in millions) Cost Value Cost Value
Debt securities:
Under 1 year . . $ 110 111 $ 13 13
1-5 years . . . . . . 3,544 3,573 3 3
6-10 years . . . . . 3,036 3,037 81 81
Over 10 years . . 21,449 21,315 38 38
Other securities. . . 937 963 — —
Total securities . . . $29,076 28,999 $135 135
The following table provides the gross unrealized losses and fair
value, aggregated by investment category and length of time the
individual securities have been in a continuous unrealized loss
position, at December 31, 2003:
Less than 12 months 12 months or more
Total
Fair Unrealized Fair Unrealized Fair Unrealized
($ in millions) Value Losses Value Losses Value Losses
U.S. Govern-
ment and
agencies
obligations
. . $ 2,967 (55) — — 2,967 (55)
Agency
mortgage-
backed
securities
. . . 12,868 (283) — — 12,868 (283)
Other bonds,
notes and
debentures
. . 657 (9) 23 (1) 680 (10)
Other
securities
. . . 36 (3) 36 (6) 72 (9)
Total
. . . . . . $16,528 (350) 59 (7) 16,587 (357)
At December 31, 2003, 95% of the unrealized losses in the
available-for-sale security portfolio were comprised of securities issued
by U.S. Government agencies, U.S. Government sponsored agencies
and investment grade municipalities. The Bancorp believes that the
price movements in these securities are dependent upon the
movement in market interest rates particularly given the negligible
inherent credit risk for these securities. At December 31, 2003, the
percentage of unrealized losses in the available-for-sale security
portfolio represented by non-rated securities was 3%.
At December 31, 2003 and 2002, securities with a fair value of
$17.9 billion and $13.8 billion, respectively, were pledged to secure
borrowings, public deposits, trust funds and for other purposes as
required or permitted by law. Of the amount pledged by the
Bancorp at December 31, 2003, $2.1 billion represents encumbered
securities for which the secured party has the right to repledge.
Unrealized gains (losses) on trading securities held at December
31, 2003 and 2002 were not material to the Consolidated Financial
Statements.
preferred securities obligations to the junior subordinated debenture
obligations that exist between the Bancorp and the issuing trust
entities. See Note 15 for discussion of certain guarantees that the
Bancorp has provided for the benefit of the wholly-owned issuing
trust entities related to their debt obligations.
2. Securities
Securities available-for-sale as of December 31:
2003
Amortized Unrealized Unrealized Fair
($ in millions) Cost Gains Losses Value
U.S. Government
and agencies
obligations. . . . . $ 4,715 15 (55) 4,675
Obligations of
states and political
subdivisions . . . . 922 55 — 977
Agency mortgage-
backed
securities . . . . . . 21,101 163 (283) 20,981
Other bonds,
notes and
debentures. . . . . 1,401 12 (10) 1,403
Other securities. . . 937 35 (9) 963
Total securities . . . $29,076 280 (357) 28,999
2002
Amortized Unrealized Unrealized Fair
($ in millions) Cost Gains Losses Value
U.S. Government
and agencies
obligations. . . . . $2,611 82 — 2,693
Obligations of
states and political
subdivisions . . . . 1,033 58 (1) 1,090
Agency mortgage-
backed
securities . . . . . . 19,328 521 (16) 19,833
Other bonds,
notes and
debentures. . . . . 1,084 21 (3) 1,102
Other securities. . . 734 26 (14) 746
Total securities . . . $24,790 708 (34) 25,464
Securities held-to-maturity as of December 31:
2003
Amortized Unrealized Unrealized Fair
($ in millions) Cost Gains Losses Value
Obligations of
states and political
subdivisions . . . . $126 — — 126
Other debt
securities . . . . . . 9— — 9
Total securities . . . $135 ——135
2002
Amortized Unrealized Unrealized Fair
($ in millions) Cost Gains Losses Value
Obligations of
states and political
subdivisions . . . . $52 — — 52
Total securities . . . $52 — — 52