Fifth Third Bank 2010 Annual Report Download - page 125

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fifth Third Bancorp 123
Cash and due from banks, other securities, other short-term investments,
deposits, federal funds purchased and other short-term borrowings
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 bids when available, or on discounted cash flow
models incorporating appraisals of the underlying collateral, as
well as assumptions about investor return requirements and
amounts and timing of expected cash flows. 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.
Portfolio loans and leases, net
Fair values were estimated by discounting future cash flows using
the current market rates of loans to borrowers with similar credit
characteristics and similar 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.