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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
28 Fifth Third Bancorp
TABLE 23: SUMMARY OF CREDIT LOSS EXPERIENCE
For the Years Ended December 31 ($ in millions) 2004 2003 2002 2001 2000
Losses charged off:
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . . $ (95) (152) (81) (106) (37)
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . (14) (9) (18) (12) (22)
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (3) (6) (2) (1)
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . (15) (24) (10) (7) (3)
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (156) (136) (115) (117) (73)
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34) (56) (43) (65) (40)
Total losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (321) (380) (273) (309) (176)
Recoveries of losses previously charged off:
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . . 14 16 20 21 16
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . 52 5 10 10
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —13——
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . ———— 1
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 40 46 39 31
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991212 9
Total recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 68 86 82 67
Net losses charged off:
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . . (81) (136) (61) (85) (21)
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . (9) (7) (13) (2) (12)
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (2) (3) (2) (1)
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . (15) (24) (10) (7) (2)
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115) (96) (69) (78) (42)
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) (47) (31) (53) (31)
Total net losses charged off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (252) (312) (187) (227) (109)
Net charge-offs as a percent of average loans and leases (excluding held for sale):
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . . .54% 1.00 .52 .79 .20
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . . .12 .10 .23 .04 .21
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 .09 .12 .06 .03
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . . .27 .57 .23 .14 .04
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 .58 .49 .65 .41
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 .84 .65 1.13 .58
Total net charge-offs as a percent of average loans and leases (excluding
held for sale) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45% .63 .43 .54 .26
TABLE 22: ATTRIBUTION OF RESERVE FOR LOAN AND LEASE LOSSES TO LOAN PORTFOLIOS
As of December 31 ($ in millions) 2004 2003 2002(a) 2001(a) 2000(a)
Reserve attributed to:
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . $ 210 234 159 118 107
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . 73 77 117 102 103
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 34 41 32 28
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . 44 29 43 31 18
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 146 141 132 134
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 64 132 101 113
Unallocated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 113 50 108 106
Total reserve for loan and lease losses . . . . . . . . . . . . . . . . . . . . . . . . . . $ 713 697 683 624 609
Credit portfolios (excluding held for sale):
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . $16,058 14,209 12,743 10,807 10,669
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . 7,636 6,894 5,885 6,085 6,227
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,726 3,636 3,327 3,356 3,223
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . 6,988 4,425 3,495 4,505 5,635
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,923 17,432 15,116 12,565 11,551
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,477 5,712 5,362 4,230 5,225
Total loans and leases (excluding held for sale) . . . . . . . . . . . . . . . . . . . $59,808 52,308 45,928 41,548 42,530
Reserve as a percent of loan and lease portfolios (excluding held for sale):
Commercial, fi nancial and agricultural loans . . . . . . . . . . . . . . . . . . 1.31% 1.65 1.24 1.09 1.00
Real estate - commercial mortgage loans . . . . . . . . . . . . . . . . . . . . . .96 1.12 1.98 1.69 1.65
Real estate - construction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 .94 1.24 .97 .87
Real estate - residential mortgage loans . . . . . . . . . . . . . . . . . . . . . . .63 .66 1.24 .69 .31
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 .84 .93 1.05 1.16
Lease fi nancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 1.12 2.46 2.38 2.17
Unallocated (as a percent of total loans and leases) . . . . . . . . . . . . . . .23 .22 .11 .26 .25
Total loans and leases (excluding held for sale) . . . . . . . . . . . . . . . . . . . 1.19% 1.33 1.49 1.50 1.43
(a) The reserve for loan and lease losses in 2002, 2001 and 2000 includes funded and unfunded commitments. As of December 31, 2004, the reserve for unfunded commitments
has been reclassifi ed from the reserve for loan and lease losses to other liabilities. The 2003 year-end reserve for unfunded commitments has been reclassifi ed to conform to the
current period presentation.