Fifth Third Bank 2010 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
Borrowings
Total borrowings declined $693 million from December 31, 2009,
as the result of a decrease in long-term debt partially offset by an
increase in federal funds purchased and other short-term
borrowings.
Long-term debt at December 31, 2010 decreased $949
million, or nine percent, compared to December 31, 2009
primarily as the result of the repayment of $1.0 billion in FHLB
advances during the fourth quarter of 2010 and the maturity of
$800 million of long-term debt in the first quarter of 2010. These
declines were partially offset by the impact of a change in U.S.
GAAP which required the Bancorp to consolidate long-term debt
on January 1, 2010 that had an outstanding balance of $692
million as of December 31, 2010.
Average borrowings declined $5.2 billion from 2009,
primarily as a result of repayment of term auction facility funds
and FHLB advances throughout 2009 which contributed $3.7
billion and $1.2 billion, respectively, to average balances in 2009.
These repayments were made possible by a decrease in loan
demand combined with growth in deposits during 2009. See the
Capital Management Section for additional information.
Information on the average rates paid on borrowings is
included within the Statements of Income Analysis. Additionally,
refer to the Liquidity Risk Management section for a discussion
on the role of borrowings in the Bancorp’s liquidity management.
On January 25, 2011, the Bancorp issued $1.0 billion of
senior notes to third party investors, bearing a fixed rate of
interest of 3.625% per annum. The notes are unsecured, senior
obligations of the Bancorp and mature on January 25, 2016. See
Note 32 of the Notes to Consolidated Financial Statement for
further information on the debt issuance.
TABLE 24: BORROWINGS
A
s of December 31 ($ in millions) 2010 2009 2008 2007 2006
Federal funds purchased $279 182 287 4,427 1,421
Other short-term borrowings 1,574 1,415 9,959 4,747 2,796
Long-term debt 9,558 10,507 13,585 12,857 12,558
Total borrowings $11,411 12,104 23,831 22,031 16,775
TABLE 25: AVERAGE BORROWINGS
A
s of December 31 ($ in millions) 2010 2009 2008 2007 2006
Federal funds purchased $291 517 2,975 3,646 4,148
Other short-term borrowings 1,635 6,463 7,785 3,244 8,670
Long-term debt 10,902 11,035 13,903 12,505 14,247
Total borrowings $12,828 18,015 24,663 19,395 27,065