Fifth Third Bank 2013 Annual Report Download - page 104

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
102 Fifth Third Bancorp
The FRB launched the 2014 stress testing program and CCAR
on November 1, 2013. The stress testing results and capital plan
were submitted by the Bancorp to the FRB on January 6, 2014.
The FRB expects to release summary results of the 2014 stress
testing program and CCAR in March 2014. The results will include
supervisory projections of capital ratios, losses and revenues under
the supervisory adverse and supervisory severely adverse scenarios.
The FRB will also issue an objection or non-objection to each
participating institution’s capital plan submitted under CCAR.
Additionally, as a CCAR institution Fifth Third is required to
disclose its own estimates of results under the supervisory severely
adverse scenario using the same consistently applied capital actions
noted above, and to provide information related to risks included in
its stress testing; a summary description of the methodologies used;
estimates of aggregate pre-provision net revenue, losses, provisions,
and pro forma capital ratios at the end of the forward-looking
planning horizon of at least nine quarters; and an explanation of the
most significant causes of changes in regulatory capital ratios. These
disclosures are required by March 31, 2014 and are to be sent to the
FRB and publicly disclosed.
4. SECURITIES
The following table provides the amortized cost, fair value and unrealized gains and losses for the major categories of the available-for-sale and
other and held-to-maturity securities portfolios as of December 31:
2013 2012
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
($ in millions) Cost Gains Losses Value Cost Gains Losses Value
A
vailable-for-sale and other:
U.S. Treasury and government agencies $ 26 - - 26 41 - - 41
U.S. Government sponsored agencies 1,523 121 - 1,644 1,730 181 - 1,911
Obligations of states and political subdivisions 187 5 - 192 203 9 - 212
A
gency mortgage-backed securities(a) 12,294 140 (150) 12,284 8,403 345 (18) 8,730
Other bonds, notes and debentures 3,514 76 (8) 3,582 3,161 119 (3) 3,277
Other securities(b) 865 5 (1) 869 1,033 3 - 1,036
Total $ 18,409 347 (159) 18,597 14,571 657 (21) 15,207
Held-to-maturity:
Obligations of states and political subdivisions $ 207 - - 207 282 - - 282
Other debt securities 1 - - 1 2 - - 2
Total $ 208 - - 208 284 - - 284
(a)
Includes interest-only mortgage backed securities of
$262
and $408 as of
December 31, 2013
and 2012, respectively, recorded at fair value with fair value changes recorded in securities gains, net
and securities gains, net – non-qualifying hedges on mortgage servicing rights in the Consolidated Statements of Income.
(b) Other securities consist of FHLB and FRB restricted stock holdings of
$402
and
$349
, respectively, at
December 31, 2013
and, $497 and $347, respectively, at December 31, 2012, that are
carried at cost, and certain mutual fund and equity security holdings.
The following table presents realized gains and losses that were recognized in income from available-for-sale securities for the years ended
December 31:
($ in millions) 2013 2012 2011
Realized gains $77 75 75
Realized losses (102) (2) -
OTTI (74) (58) (19)
Net realized (losses) gains(a) $ (99) 15 56
(a) Excludes net gains on interest-only mortgage-backed securities of $129 for the year ended December 31, 2013.
Trading securities totaled $343 million as of December 31, 2013,
compared to $207 million at December 31, 2012. Gross realized
gains on trading securities were $1 million, $2 million and $1 million
for the years ended December 31, 2013, 2012 and 2011,
respectively. Gross realized losses on trading securities were
immaterial to the Bancorp for the years ended December 31, 2013
and 2012 and $7 million for the year ended December 31, 2011. Net
unrealized gains on trading securities were $3 million, $1 million and
$5 million at December 31, 2013, 2012 and 2011, respectively.
At December 31, 2013 and 2012 securities with a fair value of
$11.6 billion and $12.6 billion, respectively, were pledged to secure
borrowings, public deposits, trust funds, derivative contracts and for
other purposes as required or permitted by law.