Fifth Third Bank 2012 Annual Report Download - page 100

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
98 Fifth Third Bancorp
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) 2012 2011
Loans and leases held for sale:
Commercial and industrial loans $39 45
Commercial mortgage loans 13 76
Commercial construction loans 9 17
Residential mortgage loans 2,856 2,802
Other consumer loans and leases 22 14
Total loans and leases held for sale $2,939 2,954
Portfolio loans and leases:
Commercial and industrial loans $36,038 30,783
Commercial mortgage loans 9,103 10,138
Commercial construction loans 698 1,020
Commercial leases 3,549 3,531
Total commercial loans and leases 49,388 45,472
Residential mortgage loans 12,017 10,672
Home equity 10,018 10,719
A
utomobile loans 11,972 11,827
Credit card 2,097 1,978
Other consumer loans and leases 290 350
Total consumer loans and leases 36,394 35,546
Total portfolio loans and leases $85,782 81,018
Total portfolio loans and leases are recorded net of unearned
income, which totaled $758 million as of December 31, 2012 and
$942 million as of December 31, 2011. 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 $73 million and
$45 million as of December 31, 2012 and 2011, respectively.
The Bancorp’s FHLB and FRB advances are generally secured by
loans. The Bancorp had loans of $12.7 billion and $11.2 billion at
December 31, 2012 and 2011, respectively, pledged at the FHLB,
and loans of $30.9 billion and $26.8 billion at December 31, 2012
and 2011, respectively, pledged at the FRB.
The following table presents a summary of the total loans and leases owned by the Bancorp as of and for the years ended December 31:
90 Days Past Due Net
Balance and Still Accruing Charge-Offs
($ in millions) 2012 2011 2012 2011 2012 2011
Commercial and industrial loans $ 36,077 30,828 $1 4 $ 165 276
Commercial mortgage loans 9,116 10,214 22 3 99 195
Commercial construction loans 707 1,037 1 1 25 85
Commercial leases 3,549 3,531 - - 8 (2)
Residential mortgage loans 14,873 13,474 75 79 122 173
Home equity loans 10,018 10,719 58 74 157 220
A
utomobile loans 11,972 11,827 8 9 31 53
Credit card 2,097 1,978 30 30 74 98
Other consumer loans and leases 312 364 - - 23 74
Total loans and leases $ 88,721 83,972 $195 200 $ 704 1,172
Less: Loans held for sale $ 2,939 2,954
Total portfolio loans and leases $ 85,782 81,018
The Bancorp engages in commercial and consumer lease products
primarily related to the financing of commercial equipment and
automobiles. The Bancorp had $3.0 billion of direct financing leases
and $1.3 billion of leveraged leases at December 31, 2012 compared
to $2.9 billion and $1.7 billion, respectively, at December 31, 2011.
Pre-tax income from leveraged leases for 2012 was $37 million
compared to pre-tax income in 2011 of $33 million. The tax effect
of this income was a benefit of $6 million in 2012 and an expense of
$10 million in 2011.