Fifth Third Bank 2009 Annual Report Download - page 49

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 47
TABLE 32: AUTOMOBILE MANUFACTURING
As of December 31, 2009 ($ in millions)
For the Year Ended
December 31, 2009
By State:
Outstanding
Exposure
90 Days
Past Due
Nonaccrual
Net Charge-offs
Michigan $221 468 - 12 14
Ohio 93 276 - 2 2
Illinois 47 138 - - -
Kentucky 32 48 - - -
All other states 9 73 - - -
Total $402 1,003 - 14 16
TABLE 33: AUTOMOBILE MANUFACTURING
As of December 31, 2008 ($ in millions)
For the Year Ended
December 31, 2008
By State:
Outstanding
Exposure
90 Days
Past Due
Nonaccrual
Net Charge-offs
Michigan $288 793 - 1 1
Ohio 184 401 - 2 -
Illinois 69 148 - - -
Kentucky 47 95 - 1 -
All other states 29 144 - - 3
Total $617 1,581 - 4 4
Consumer Portfolio
The Bancorp’s consumer portfolio is materially comprised of
three categories of loans: residential mortgage loans, home equity
loans, and automobile loans. While each of these loans has unique
features, they have a common risk characteristic of loan amount
to collateral value.
Residential Mortgage Portfolio
The Bancorp manages credit risk in the mortgage portfolio
through conservative underwriting and documentation standards
and geographic and product diversification. The Bancorp may also
package and sell loans in the portfolio or may purchase mortgage
insurance for the loans sold in order to mitigate credit risk.
The Bancorp does not originate mortgage loans that permit
customers to defer principal payments or make payments that are
less than the accruing interest. The Bancorp originates both fixed
and adjustable rate residential mortgage loans. Resets of rates on
adjustable rate mortgages are not expected to have a material
impact on credit costs in the current interest rate environment, as
approximately $1.2 billion of adjustable rate residential mortgage
loans will have rate resets in 2010 and a material amount of those
loans are expected to have either no increase or a decrease in
monthly payments, due to the decrease in index rates over the
past year.
Certain residential mortgage products have contractual
features that may increase credit exposure to the Bancorp in the
event of a decline in housing prices. These types of mortgage
products offered by the Bancorp include loans with high LTV
ratios, multiple loans on the same collateral that when combined
result in an LTV greater than 80% (80/20 loans) and interest-only
loans. The Bancorp monitors residential mortgages loans with
greater than 80% LTV ratio and no mortgage insurance as it
believes these loans represent a higher level of risk. Tables 34 and
35 provide analysis of the residential mortgage loans outstanding
with a greater than 80% LTV ratio and no mortgage insurance as
of December 31, 2009 and 2008, respectively.
TABLE 34: RESIDENTIAL MORTGAGE LOANS OUTSTANDING, LTV GREATER THAN 80%, NO MORTGAGE INSURANCE
As of December 31, 2009 ($ in millions)
For the Year Ended
December 31, 2009
By State:
Outstanding
90 Days
Past Due
Nonaccrual
Net Charge-offs
Ohio $673 4 25 18
Florida 388 9 50 68
Michigan 350 3 13 21
North Carolina 169 5 9 8
Indiana 145 1 7 4
Kentucky 92 1 3 2
Illinois 62 1 6 2
All other states 141 2 8 5
Total $2,020 26 121 128