Fifth Third Bank 2011 Annual Report Download - page 93

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fifth Third Bancorp 91
5. LOANS AND LEASES
The Bancorp diversifies its loan and lease portfolio by offering a
variety of loan and lease products with various payment terms and
rate structures. Lending activities are concentrated within those
states in which the Bancorp has banking centers and are primarily
located in the Midwestern and Southeastern regions of the United
States. The Bancorp’s commercial loan portfolio consists of lending
to various industry types. Management periodically reviews the
performance of its loan and lease products to evaluate whether they
are performing within acceptable interest rate and credit risk levels
and changes are made to underwriting policies and procedures as
needed. The Bancorp maintains an allowance to absorb loan and
lease losses inherent in the portfolio. For further information on
credit quality and the ALLL, see Note 6.
The following table provides a summary of the total loans and leases classified by primary purpose as of December 31:
($ in millions) 2011 2010
Loans and leases held for sale:
Commercial and industrial loans $45 83
Commercial mortgage loans 76 147
Commercial construction loans 17 63
Residential mortgage loans 2,802 1,901
Other consumer loans and leases 14 22
Total loans and leases held for sale $2,954 2,216
Portfolio loans and leases:
Commercial and industrial loans $30,783 27,191
Commercial mortgage loans 10,138 10,845
Commercial construction loans 1,020 2,048
Commercial leases 3,531 3,378
Total commercial loans and leases 45,472 43,462
Residential mortgage loans 10,672 8,956
Home equity 10,719 11,513
A
utomobile loans 11,827 10,983
Credit card 1,978 1,896
Other consumer loans and leases 350 681
Total consumer loans and leases 35,546 34,029
Total portfolio loans and leases $81,018 77,491
Total portfolio loans and leases are recorded net of unearned
income, which totaled $942 million as of December 31, 2011 and
$1.0 billion as of December 31, 2010. Additionally, portfolio loans
and leases are recorded net of unamortized premiums and
discounts, deferred loan fees and costs, and fair value adjustments
(associated with acquired loans or loans designated as fair value
upon origination) which totaled a net premium of $45 million as of
December 31, 2011 and a net discount of $19 million as of
December 31, 2010.
The following table presents a summary of the total loans and leases owned by the Bancorp as of and for the years ended December 31:
Balance of Loans 90 Net
Balance Days or More Past Due Charge-Offs
($ in millions) 2011 2010 2011 2010 2011 2010
Commercial and industrial loans $ 30,828 27,275 $4 16 $ 276 586
Commercial mortgage loans 10,214 10,992 3 11 195 524
Commercial construction loans 1,037 2,111 1 3 85 252
Commercial leases 3,531 3,378 - - (2) 2
Residential mortgage loans 13,474 10,857 79 100 173 439
Home equity loans 10,719 11,513 74 89 220 264
A
utomobile loans 11,827 10,983 9 13 53 88
Credit Card 1,978 1,896 30 42 98 155
Other consumer loans and leases 364 702 - - 74 18
Total loans and leases $ 83,972 79,707 $200 274 $ 1,172 2,328
Less: Loans held for sale $ 2,954 2,216
Total portfolio loans and leases $ 81,018 77,491
The Bancorp engages in commercial and consumer lease products
primarily related to the financing of commercial equipment and
automobiles. The Bancorp had $2.9 billion of direct financing leases
and $1.7 billion of leveraged leases at December 31, 2011 compared
to $3.0 billion and $1.7 billion, respectively, at December 31, 2010.
Pre-tax income from leveraged leases for 2011 was $33 million
compared to pre-tax income in 2010 of $49 million. The tax effect
of this income was an expense of $10 million in 2011 and 2010.