Fifth Third Bank 2011 Annual Report Download - page 51

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 49
TABLE 21: CHARACTERISTICS OF AVAILABLE-FOR-SALE AND OTHER SECURITIES
Weighted-Average Weighted-Average
A
s of December 31, 2011 ($ in millions) Amortized Cost Fair Value Life (in years) Yield
U.S. Treasury and Government agencies:
A
verage life of one year or less $ 170 170 0.3 0.71 %
A
verage life 5 – 10 years 1 1 7.1 1.48
Total 171 171 0.4 0.71
U.S. Government sponsored agencies:
A
verage life of one year or less 50 51 0.7 1.54
A
verage life 1 – 5 years 1,107 1,208 4.2 3.35
A
verage life 5 – 10 years 625 703 5.5 3.90
Total 1,782 1,962 4.6 3.49
Obligations of states and political subdivisions:(a)
A
verage life of one year or less 6 8 0.2 8.26
A
verage life 1 – 5 years 53 53 3.2 0.13
A
verage life 5 – 10 years 30 33 8.5 6.04
A
verage life greater than 10 years 7 7 10.7 4.39
Total 96 101 5.2 2.82
A
gency mortgage-backed securities:
A
verage life of one year or less 645 665 0.7 4.59
A
verage life 1 – 5 years 8,759 9,254 3.3 3.91
A
verage life 5 – 10 years 339 365 7.1 3.97
Total 9,743 10,284 3.3 3.96
Other bonds, notes and debentures:
A
verage life of one year or less 164 167 0.5 2.46
A
verage life 1 – 5 years 1,241 1,251 3.4 2.22
A
verage life 5 – 10 years 297 304 6.1 2.61
A
verage life greater than 10 years 90 90 28.9 6.50
Total 1,792 1,812 4.8 2.52
Other securities 1,030 1,032
Total available-for-sale and other securities $14,614 15,362 3.6 3.66 %
(a) Taxable-equivalent yield adjustments included in the above table are 2.86%, 0.04%, 2.09%, 1.52% and 0.97% for securities with an average life of one year or less, 1-5 years, 5-10 years, greater
than 10 years and in total, respectively.
Trading securities decreased $117 million, or 40%, compared to
December 31, 2010. The decrease from December 31, 2010 was
driven primarily by the sale of VRDNs during the first quarter of
2011, which were held by the Bancorp in its trading securities
portfolio. These securities were purchased from the market through
FTS who was also the remarketing agent. Rates on these securities
declined in 2010 and into 2011 and, as a result, the Bancorp
continued to sell the VRDNs, replacing them with higher-yielding
agency mortgage-backed securities classified as available-for-sale.
For more information on VRDNs, see Note 17 of the Notes to
Consolidated Financial Statements.
Deposits
The Bancorp’s deposit balances represent an important source of
funding and revenue growth opportunity. The Bancorp continues to
focus on core deposit growth in its retail and commercial franchises
by improving customer satisfaction, building full relationships and
offering competitive rates. Core deposits represented 71% and 70%
of the Bancorp’s asset funding base at December 31, 2011 and
2010, respectively.
TABLE 22: DEPOSITS
A
s of December 31 ($ in millions) 2011 2010 2009 2008 2007
Demand $ 27,600 21,413 19,411 15,287 14,404
Interest checking 20,392 18,560 19,935 14,222 15,254
Savings 21,756 20,903 17,898 16,063 15,635
Money market 4,989 5,035 4,431 4,689 6,521
Foreign office 3,250 3,721 2,454 2,144 2,572
Transaction deposits 77,987 69,632 64,129 52,405 54,386
Other time 4,638 7,728 12,466 14,350 11,440
Core deposits 82,625 77,360 76,595 66,755 65,826
Certificates - $100,000 and over 3,039 4,287 7,700 11,851 6,738
Other 46 1 10 7 2,881
Total deposits $ 85,710 81,648 84,305 78,613 75,445
Core deposits increased $5.3 billion, or seven percent, compared to
December 31, 2010, driven by an increase of $8.4 billion, or 12%, in
transaction deposits, partially offset by a decrease of $3.1 billion, or
40%, in other time deposits. Transaction deposits increased due to
an increase in demand deposits, interest checking deposits, and
savings deposits, partially offset by a decrease in foreign office
deposits. Demand deposits increased $6.2 billion, or 29%, due to an
increase in new accounts, growth from maturing certificates of
deposits, and commercial customers opting to hold money in
demand deposit accounts rather than investing excess cash given