Fifth Third Bank 2012 Annual Report Download - page 6
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2010 2011 2012
$503
$1,094
$1,541
$1,800
$1,200
$600
$0
2010 2011 2012
3.02%
1.49%
0.85%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
2010 2011 2012
7.5%
9.4% 9.5%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
4 * Non-GAAP measure. For further information, see the Non-GAAP Financial Measures section of MD&A.
age of revenue) of 61.7 percent also remains higher
than our longer-term expectation for a more normal
operating environment. We will continue to carefully
manage expenses in the context of the business and
revenue environment.
Credit metrics continued to improve across the
board. Full year net charge-os of $704 million
declined 40 percent to 85 bps of average portfolio
loans and leases, the lowest level in ve years. Non-
performing assets, including those held-for-sale, of
$1.3 billion declined $639 million, or 33 percent. At
year-end, total delinquencies excluding nonaccrual
of $525 million were at their lowest level since the
second quarter of 2004. is improvement in credit
trends led to a reduction in our loan loss reserves of
$401 million during 2012, while at the same time
producing strong coverage ratios, at 2.16 percent of
portfolio loans and 180 percent of nonperforming
portfolio loans.
Net interest income remained stable despite the
challenging interest rate environment, up 1 percent
compared with 2011, and beneted from our focus
on growing interest earning assets while we manage
interest rate risk. Net interest margin was 3.55
percent and, although we expect additional margin
compression given the interest rate environment, we
expect it to remain manageable due to our relatively
neutral interest rate risk prole.
Total loan growth at year-end of 6 percent was
driven by higher origination volume particularly
in commercial and industrial (C&I), residential
mortgage and automobile loans. Average commercial
loans increased 6 percent from 2011, with average
C&I loan growth of $4 billion, up 15 percent. In 2012,
we expanded our Commercial capabilities by estab-
lishing a specialized energy industry lending group
and remained focused on the healthcare industry,
with our continued investment in new products to
help hospitals and medical practices streamline their
collection cycles and accelerate their cash ows.
Average consumer loans increased 5 percent from
2011, largely due to average residential mortgage
loan growth of 18 percent. Our mortgage business
beneted from increased renancing due to low
rates and originations related to the government’s
HARP 2.0 program, which represented nearly 20
percent of total mortgage originations. We continue
to see opportunities in the mortgage business with
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS
NET CHARGE-OFF RATIO
TIER 1 COMMON EQUITY*