Fifth Third Bank 2010 Annual Report Download - page 82

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
80 Fifth Third Bancorp
The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2010, by contractual maturity, are
shown in the following table:
Available-for-Sale & Other Held-to-Maturity
($ in millions)
Amortized
Cost Fair Value
Amortized
Cost Fair Value
Debt securities: (a)
Under 1 year $626 633 21 21
1-5 years 9,535 9,925 190 190
5-10 years 3,546 3,645 116 116
Over 10 years 160 159 26 26
Other securities 1,052 1,052 - -
Total $14,919 15,414 353 353
(a) Actual maturities may differ from contractual maturities when there exists a right to call or prepay obligations with or without call or prepayment penalties.
The following table provides the fair value and gross unrealized losses on available-for-sale securities in an unrealized loss position, aggregated
by investment category and length of time the individual securities have been in a continuous unrealized loss position, as of December 31:
Less than 12 months 12 months or more Total
($ in millions) Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
2010
U.S. Treasury and Government agencies $ --1- 1-
U.S. Government sponsored agencies ---- --
Obligations of states and political subdivisions 11 - 4 - 15 -
A
gency mortgage-backed securities 1,555 (32) - - 1,555 (32)
Other bonds, notes and debentures 563 (10) 47 (5) 610 (15)
Other securities ---- --
Total $2,129 (42) 52 (5) 2,181 (47)
2009
U.S. Treasury and Government agencies $288 (8) 1 - 289 (8)
U.S. Government sponsored agencies 1,024 (15) 347 (18) 1,371 (33)
Obligations of states and political subdivisions 4 - 3 - 7 -
A
gency mortgage-backed securities 1,583 (7) - - 1,583 (7)
Other bonds, notes and debentures 782 (15) 108 (14) 890 (29)
Other securities 2 - - - 2 -
Total $3,683 (45) 459 (32) 4,142 (77)
Other-Than-Temporary Impairments (OTTI)
If the fair value of an available-for-sale or held-to-maturity security
is less than its amortized cost basis, the Bancorp must determine
whether an OTTI has occurred. Under U.S. GAAP, the
recognition and measurement requirements related to OTTI differ
for debt and equity securities. See Note 1 for further information
on the Bancorp’s accounting for OTTI.
During the year ended December 31, 2010, the Bancorp
recognized $3 million in OTTI on its available-for-sale debt
securities, however, no OTTI was recognized on held-to-maturity
debt securities. During the year ended December 31, 2009, OTTI
recognized on available-for-sale and held-to-maturity debt
securities was immaterial to the Bancorp’s consolidated financial
statements. In addition, for the years ended December 31, 2010,
2009 and 2008, OTTI recognized on available-for-sale equity
securities was immaterial to the Bancorp’s consolidated financial
statements. At December 31, 2010 less than one percent of
unrealized losses in the available-for-sale securities portfolio were
represented by non-rated securities, compared to two percent at
December 31, 2009.
During 2008, the Bancorp recognized a pre-tax OTTI charge
of $67 million on FHLMC and FNMA preferred stock included in
other securities as well as a pre-tax OTTI charge of $37 million on
certain bank trust-preferred debt securities classified as available-
for-sale. Upon a change in U.S. GAAP and adoption by the
Bancorp in the second quarter of 2009, the Bancorp concluded
that the OTTI charges on the trust preferred securities were due to
non-credit related factors. Therefore, the Bancorp recognized an
increase of $37 million to the investment balance and related
unrealized losses during the year ended December 31, 2009.