Fifth Third Bank 2010 Annual Report Download - page 48

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
46 Fifth Third Bancorp
Deposits
Deposit balances represent an important source of funding and
revenue growth opportunity. The Bancorp continues to focus on
core deposit growth in its retail and commercial franchises by
improving customer satisfaction, building complete relationships
and offering competitive rates. At December 31, 2010, core
deposits represented 70% of the Bancorp’s asset funding base
compared to 68% at December 31, 2009.
Core deposits increased $765 million, or one percent,
compared to 2009 due primarily to increases of $3.0 billion in
savings and $2.0 billion in demand deposits which was primarily
the result of excess customer liquidity. In addition, foreign office
deposits increased $1.3 billion due to an increase in commercial
customer deposits due to excess customer liquidity, and those
customers opting to sweep additional funds into these accounts
for the higher interest rates. These increases were partially offset
by the continued run-off of higher priced certificates included in
other time deposits, which declined $4.7 billion, or 38%,
compared to December 31, 2009, as well as a decline in interest
checking due primarily to rate management actions on single
product public funds accounts in the second half of 2010.
Included in core deposits are foreign office deposits, which
are Eurodollar sweep accounts for the Bancorp’s commercial
customers. These accounts bear interest at rates slightly higher
than money market accounts, but the Bancorp does not have to
pay FDIC insurance nor pledge collateral. The Bancorp uses these
deposits, as well as certificates of deposit $100,000 and over, as a
method to fund earning asset growth. Certificates $100,000 and
over at December 31, 2010 decreased $3.4 billion compared to
December 31, 2009 as customers opted to maintain their balances
in liquid accounts due to historically low interest rates.
On an average basis, core deposits increased $6.9 billion, or
10%, due to increases in interest checking of $3.1 billion, demand
deposits of $2.8 billion, savings deposits of $2.7 billion and
foreign office deposits of $1.2 billion, partially offset by a decrease
in other time deposits of $3.6 billion. This activity was the result
of the migration of higher priced certificates included in other
time deposits into transaction accounts, as well as the impact of
historically low rates and excess customer liquidity.
TABLE 22: DEPOSITS
A
s of December 31 ($ in millions) 2010 2009 2008 2007 2006
Demand $21,413 19,411 15,287 14,404 14,331
Interest checking 18,560 19,935 14,222 15,254 15,993
Savings 20,903 17,898 16,063 15,635 13,181
Money market 5,035 4,431 4,689 6,521 6,584
Foreign office 3,721 2,454 2,144 2,572 1,353
Transaction deposits 69,632 64,129 52,405 54,386 51,442
Other time 7,728 12,466 14,350 11,440 10,987
Core deposits 77,360 76,595 66,755 65,826 62,429
Certificates - $100,000 and over 4,287 7,700 11,851 6,738 6,628
Other 110 7 2,881 323
Total deposits $81,648 84,305 78,613 75,445 69,380
TABLE 23: AVERAGE DEPOSITS
A
s of December 31 ($ in millions) 2010 2009 2008 2007 2006
Demand $19,669 16,862 14,017 13,261 13,741
Interest checking 18,218 15,070 14,191 14,820 16,650
Savings 19,612 16,875 16,192 14,836 12,189
Money market 4,808 4,320 6,127 6,308 6,366
Foreign office 3,355 2,108 2,153 1,762 732
Transaction deposits 65,662 55,235 52,680 50,987 49,678
Other time 10,526 14,103 11,135 10,778 10,500
Core deposits 76,188 69,338 63,815 61,765 60,178
Certificates - $100,000 and over 6,083 10,367 9,531 6,466 5,795
Other 6157 2,067 1,393 2,979
Total average deposits $82,277 79,862 75,413 69,624 68,952