Fifth Third Bank 2012 Annual Report Download - page 53

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
51 Fifth Third Bancorp
BALANCE SHEET ANALYSIS
Loans and Leases
The Bancorp classifies its loans and leases based upon the primary
purpose of the loan. Table 18 summarizes end of period loans and
leases, including loans held for sale and Table 19 summarizes
average total loans and leases, including loans held for sale.
TABLE 18: COMPONENTS OF LOANS AND LEASES (INCLUDES HELD FOR SALE)
A
s of December 31 ($ in millions) 2012 2011 2010 2009 2008
Commercial:
Commercial and industrial loans $36,077 30,828 27,275 25,687 29,220
Commercial mortgage loans 9,116 10,214 10,992 11,936 12,731
Commercial construction loans 707 1,037 2,111 3,871 5,335
Commercial leases 3,549 3,531 3,378 3,535 3,666
Subtotal – commercial 49,449 45,610 43,756 45,029 50,952
Consumer:
Residential mortgage loans 14,873 13,474 10,857 9,846 10,292
Home equity 10,018 10,719 11,513 12,174 12,752
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utomobile loans 11,972 11,827 10,983 8,995 8,594
Credit card 2,097 1,978 1,896 1,990 1,811
Other consumer loans and leases 312 364 702 812 1,194
Subtotal – consumer 39,272 38,362 35,951 33,817 34,643
Total loans and leases $88,721 83,972 79,707 78,846 85,595
Total portfolio loans and leases (excludes loans held for sale) $85,782 81,018 77,491 76,779 84,143
Loans and leases, including loans held for sale, increased $4.7
billion, or six percent, from December 31, 2011. The increase in
loans and leases from December 31, 2011 was the result of a $3.8
billion, or eight percent, increase in commercial loans and a $910
million, or two percent, increase in consumer loans.
The increase in commercial loans and leases from December
31, 2011 was primarily due to an increase in commercial and
industrial loans partially offset by a decrease in commercial
mortgage and commercial construction loans. Commercial and
industrial loans increased $5.2 billion, or 17%, due to targeted
marketing efforts, an increase in new loan origination activity due to
a strengthening economy and strong growth in December from
uncertainty over tax increases and U.S. fiscal policy. Commercial
mortgage loans decreased $1.1 billion, or 11%, from December 31,
2011 and commercial construction loans decreased $330 million, or
32%, from December 31, 2011 due to continued runoff as the level
of new originations was less than the repayments of the current
portfolio.
The increase in consumer loans and leases from December 31,
2011 was primarily due to an increase in residential mortgage loans,
automobile loans, and credit card loans partially offset by a decrease
in home equity loans. Residential mortgage loans increased $1.4
billion, or 10%, from December 31, 2011 due to management’s
decision to retain certain shorter term residential mortgage loans
originated through the Bancorp’s retail branches throughout 2011
and 2012 and strong originations due to continued refinancing
activity associated with historically low interest rates. Automobile
loans increased $145 million, or one percent, from December 31,
2011 due to strong origination volumes through consistent and
competitive pricing, enhanced customer service with our dealership
network, and disciplined sales execution. Credit card loans increased
$119 million, or six percent, from December 31, 2011 driven by
strong new account originations and modest attrition rates. Home
equity loans decreased $701 million, or seven percent, from
December 31, 2011 as payoffs exceeded new loan production.
TABLE 19: COMPONENTS OF AVERAGE LOANS AND LEASES (INCLUDES HELD FOR SALE)
A
s of December 31 ($ in millions) 2012 2011 2010 2009 2008
Commercial:
Commercial and industrial loans $32,911 28,546 26,334 27,556 28,426
Commercial mortgage loans 9,686 10,447 11,585 12,511 12,776
Commercial construction loans 835 1,740 3,066 4,638 5,846
Commercial leases 3,502 3,341 3,343 3,543 3,680
Subtotal – commercial 46,934 44,074 44,328 48,248 50,728
Consumer:
Residential mortgage loans 13,370 11,318 9,868 10,886 10,993
Home equity 10,369 11,077 11,996 12,534 12,269
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utomobile loans 11,849 11,352 10,427 8,807 8,925
Credit card 1,960 1,864 1,870 1,907 1,708
Other consumer loans and leases 340 529 743 1,009 1,212
Subtotal – consumer 37,888 36,140 34,904 35,143 35,107
Total average loans and leases $84,822 80,214 79,232 83,391 85,835
Total average portfolio loans and leases (excludes loans held for sale) $82,733 78,533 77,045 80,681 83,895
Average commercial loans and leases increased $2.9 billion, or six
percent, compared to December 31, 2011. The increase in average
commercial loans and leases was driven by an increase in average
commercial and industrial loans and commercial leases partially
offset by a decrease in average commercial mortgage loans and
average commercial construction loans. Average commercial and