Fifth Third Bank 2012 Annual Report Download - page 23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
21 Fifth Third Bancorp
The following table reconciles non-GAAP financial measures to U.S. GAAP as of and for the years ended December 31:
TABLE 3: NON-GAAP FINANCIAL MEASURES
($ in millions) 2012 2011
Income before income taxes (U.S. GAAP) 2,210 1,831
A
dd: Provision expense (U.S. GAAP) 303 423
Pre-provision net revenue 2,513 2,254
Net income available to common shareholders (U.S. GAAP) $ 1,541 1,094
A
dd: Intangible amortization, net of tax 9 15
Tangible net income available to common shareholders 1,550 1,109
Total Bancorp shareholders’ equity (U.S. GAAP) $ 13,716 13,201
Less: Preferred stock (398) (398)
Goodwill (2,416) (2,417)
Intangible assets (27) (40)
Tangible common equity, including unrealized gains / losses 10,875 10,346
Less: Accumulated other comprehensive income (375) (470)
Tangible common equity, excluding unrealized gains / losses (1) 10,500 9,876
A
dd: Preferred stock 398 398
Tangible equity (2) 10,898 10,274
Total assets (U.S. GAAP) $ 121,894 116,967
Less: Goodwill (2,416) (2,417)
Intangible assets (27) (40)
Accumulated other comprehensive income, before tax (577) (723)
Tangible assets, excluding unrealized gains / losses (3) $ 118,874 113,787
Total Bancorp shareholders’ equity (U.S. GAAP) $ 13,716 13,201
Less: Goodwill and certain other intangibles (2,499) (2,514)
Accumulated other comprehensive income (375) (470)
A
dd: Qualifying TruPS 810 2,248
Other 33 38
Tier I risk-based capital 11,685 12,503
Less: Preferred stock (398) (398)
Qualifying TruPS (810) (2,248)
Qualified noncontrolling interests in consolidated subsidiaries (48) (50)
Tier I common equity (4) $ 10,429 9,807
Risk-weighted assets (5)(a) $ 109,699 104,945
Ratios:
Tangible equity (2) / (3) 9.17 %9.03
Tangible common equity (1) / (3) 8.83 %8.68
Tier I common equity (4) / (5) 9.51 %9.35
Basel III - Estimated Tier I common equity ratio
Tier I common equity (Basel I) $ 10,429
A
dd: Ad
j
ustment related to AOCI for available-for-sale securities 429
Estimated Tier I common equity under Basel III rules(b) 10,858
Estimated risk-weighted assets under Basel III rules(c) 123,725
Estimated Tier I common equity ratio under Basel III rules 8.78 %
(a) Under the banking agencies’ risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar
amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together, along with the measure for market risk, resulting in the
Bancorp’s total risk-weighted assets.
(b) Tier I common equity under Basel III includes the unrealized gains and losses for available-for-sale securities. Other adjustments include mortgage servicing rights and deferred tax assets subject to
threshold limitations and deferred tax liabilities related to intangible assets.
(c) Key differences under Basel III in the calculation of risk-weighted assets compared to Basel I include: (1) risk weighting for commitments under 1 year; (2) higher risk weighting for exposures to
residential mortgage, home equity, past due loans, foreign banks and certain commercial real estate; (3) higher risk weighting for mortgage servicing rights and deferred tax assets that are under certain
thresholds as a percent of Tier I capital; (4) incremental capital requirements for stress VaR; and (5) derivatives are differentiated between exchange clearing and over-the-counter and the 50% risk-
weight cap is removed. The estimated Basel III risk-weighted assets are based upon the Bancorp’s interpretations of the three draft Federal Register notices proposing enhancements to the regulatory
capital requirements that were published in June of 2012. These amounts are preliminary and subject to change depending on the adoption of final Basel III capital rules by the Regulatory Agencies.