Fifth Third Bank 2008 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2008 Fifth Third Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
96 Fifth Third Bancorp
Financial Instruments Pertaining to SFAS No. 107, "Disclosures about Fair Value of Financial Instruments"
The following table summarizes carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments
recorded at fair value on a recurring basis at December 31:
2008 2007
($ in millions)
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Financial assets:
Cash and due from banks $2,739 2,739 2,660 2,660
Other securities (a) 797 797 722 722
Held-to-maturity securities 360 360 355 355
Other short-term investments 3,578 3,578 620 620
Loans held for sale (b) 571 571 4,329 4,371
Portfolio loans and leases, net (b) 81,349 74,234 79,316 79,600
Financial liabilities:
Deposits 78,613 79,145 75,445 75,512
Federal funds purchased 287 287 4,427 4,427
Other short-term borrowings 9,959 9,969 4,747 4,747
Long-term debt 13,585 11,022 12,857 13,298
(a) Includes FHLB and FRB restricted stock.
(b) Excludes residential mortgage loans measured at fair value on a recurring basis in accordance with SFAS No. 159 at December 31, 2008.
Short-term financial assets, other securities and liabilities
For financial instruments with a short-term or no stated maturity,
prevailing market rates and limited credit risk, carrying amounts
approximate fair value. Those financial instruments include cash
and due from banks, FHLB and FRB restricted stock, other
short-term investments, certain deposits (demand, interest
checking, savings, money market and foreign office deposits), and
federal funds purchased. Fair values for other time deposits,
certificates of deposit $100,000 and over, and other short-term
borrowings were estimated using a discounted cash flow
calculation that applied prevailing LIBOR/swap interest rates for
the same maturities.
Held-to-maturity securities
The Bancorp's held-to-maturity securities are primarily composed
of instruments that provide income tax credits as the economic
return on the investment. The fair value of these instruments is
estimated based on current U.S. Treasury tax credit rates.
Loans held for sale
Fair values for commercial loans held for sale were valued based
on executable broker quotes when available, or on the fair value
of the underlying collateral. Based upon the timing of the
transfer of the commercial loans to held for sale, current carrying
values approximate fair value as of December 31, 2008. Fair
values for other consumer loans held for sale are based on
contractual values upon which the loans may be sold to a third
party, and approximate their carrying value as of December 31,
2008 and 2007.
Portfolio loans and leases, net
Fair values were estimated by discounting future cash flows using
the current market rates as similar loans would be made to
borrowers for the same remaining maturities.
Long-term debt
Fair value of long-term debt was based on quoted market prices,
when available, or a discounted cash flow calculation using
LIBOR/swap interest rates and, in some cases, a spread for new
issues for borrowings of similar terms.