Fifth Third Bank 2006 Annual Report Download - page 37

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 35
BALANCE SHEET ANALYSIS
Loans and Leases
Total loans and leases increased six percent compared to
December 31, 2005. Table 18 presents the Bancorp’s total
commercial and consumer loan and lease portfolio by the primary
purpose of the loan. During 2006, the Bancorp reviewed its loan
classifications, which resulted in a reclassification of approximately
$450 million of commercial loans to commercial mortgage. The
impact to average loans was immaterial as the reclassification took
place at the end of 2006. Prior year balances were not restated.
Total loans and leases grew in over half of its affiliates with double-
digit growth in the Cleveland, Detroit, Lexington, Nashville,
Orlando and Tampa markets.
Total commercial loans and leases increased $2.6 billion, or
seven percent, compared to the prior year. Excluding the impact
of the 2006 reclassification, commercial loans increased $1.9 billion
or 10%, and commercial mortgage increased by approximately
$800 million, or eight percent, compared to December 31, 2005.
The mix of commercial loans was consistent with the prior year.
Total consumer loans and leases increased five percent
compared to December 31, 2005 as a result of the introduction of
new residential mortgage products and increased promotion of
credit cards. Residential mortgage loans increased $930 million, or
11%, compared to 2005. Comparisons to prior years are
dependent upon the volume and timing of originations as well as
the timing of loan sales. Residential mortgage originations totaled
$9.4 billion in 2006 compared to $9.9 billion in 2005. Credit card
balances increased 28% to $1.1 billion. A key focus for the
Bancorp in 2007 is increasing its penetration of credit cards within
in its retail footprint. Consumer lease balances decreased 33%
from December 31, 2005 largely due to continued competitive
pricing from captive financing companies.
Average commercial loans and leases increased $3.8 billion, or
10%, compared to the December 31, 2005. The Bancorp
experienced double-digit growth in more than half of its affiliates,
including 15% in the Florida markets, 18% in Tennessee and
Chicago and 26% in Cleveland.
The growth in average consumer loans and leases was a result
of strong growth in each category mitigated by a decline in
consumer auto leases. Average consumer loans and leases
increased $2.0 billion, or six percent, compared to 2005,
highlighted by 33% growth in both the Florida and Tennessee
markets.
TABLE 19: COMPONENTS OF AVERAGE TOTAL LOANS AND LEASES
A
s of December 31 ($ in millions) 2006 2005 2004 2003 2002
Commercial:
Commercial loans $20,400 18,241 14,908 13,672 11,665
Commercial mortgage 9,797 8,923 7,391 6,299 5,834
Commercial construction 6,015 5,525 3,807 3,097 3,023
Commercial leases 3,730 3,495 3,296 3,037 2,640
Total commercial loans and leases (including held for sale) 39,942 36,184 29,402 26,105 23,162
Consumer:
Residential mortgage 8,855 8,396 6,454 6,565 6,100
Residential construction 719 586 347 315 277
Credit card 942 797 787 591 478
Home equity 12,268 11,463 9,797 9,084 8,444
Other consumer loans 9,439 8,489 7,958 7,259 5,017
Consumer leases 1,328 1,822 2,297 2,495 2,061
Total consumer loans and leases (including held for sale) 33,551 31,553 27,640 26,309 22,377
Total loans and leases (including held for sale) $73,493 67,737 57,042 52,414 45,539
Total portfolio loans and leases (excluding held for sale) $72,447 66,685 55,951 49,700 43,529
TABLE 18: COMPONENTS OF TOTAL LOANS AND LEASES (INCLUDING HELD FOR SALE)
A
s of December 31 ($ in millions) 2006 2005 2004 2003 2002
Commercial:
Commercial loans $20,725 19,299 16,058 14,226 12,786
Commercial mortgage 10,405 9,188 7,636 6,894 5,885
Commercial construction 6,168 6,342 4,348 3,301 3,009
Commercial leases 3,841 3,698 3,426 3,264 3,019
Total commercial loans and leases 41,139 38,527 31,468 27,685 24,699
Consumer:
Residential mortgage 9,226 8,296 7,533 5,530 6,804
Residential construction 679 695 378 335 319
Credit card 1,110 866 843 762 537
Home equity 12,365 12,000 10,508 8,993 8,675
Other consumer loans 9,911 9,250 7,586 8,436 5,909
Consumer leases 1,073 1,595 2,051 2,448 2,343
Total consumer loans and leases 34,364 32,702 28,899 26,504 24,587
Total loans and leases $75,503 71,229 60,367 54,189 49,286