Fifth Third Bank 2013 Annual Report Download - page 106

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
104 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) 2013 2012
Loans and leases held for sale:
Commercial and industrial loans $31 39
Commercial mortgage loans 3 13
Commercial construction loans 2 9
Commercial leases 1 -
Residential mortgage loans 890 2,856
Other consumer loans and leases 17 22
Total loans and leases held for sale $944 2,939
Portfolio loans and leases:
Commercial and industrial loans $39,316 36,038
Commercial mortgage loans 8,066 9,103
Commercial construction loans 1,039 698
Commercial leases 3,625 3,549
Total commercial loans and leases 52,046 49,388
Residential mortgage loans 12,680 12,017
Home equity 9,246 10,018
A
utomobile loans 11,984 11,972
Credit card 2,294 2,097
Other consumer loans and leases 364 290
Total consumer loans and leases 36,568 36,394
Total portfolio loans and leases $88,614 85,782
Total portfolio loans and leases are recorded net of unearned
income, which totaled $700 million as of December 31, 2013 and
$758 million as of December 31, 2012. 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 $111 million and
$73 million as of December 31, 2013 and 2012, respectively.
The Bancorp’s FHLB and FRB advances are generally secured by
loans. The Bancorp had loans of $10.9 billion and $12.7 billion at
December 31, 2013 and 2012, respectively, pledged at the FHLB,
and loans of $33.5 billion and $30.9 billion at December 31, 2013
and 2012, respectively, pledged at the FRB.
The following table presents a summary of the total loans and leases owned by the Bancorp as of and for the years ended December 31:
90 Days Past Due Net
Balance and Still Accruing Charge-Offs
($ in millions) 2013 2012 2013 2012 2013 2012
Commercial and industrial loans $ 39,347 36,077 $ - 1 $ 168 165
Commercial mortgage loans 8,069 9,116 - 22 47 99
Commercial construction loans 1,041 707 - 1 4 25
Commercial leases 3,626 3,549 - - 1 8
Residential mortgage loans 13,570 14,873 66 75 60 122
Home equity 9,246 10,018 - 58 97 157
A
utomobile loans 11,984 11,972 8 8 22 31
Credit card 2,294 2,097 29 30 78 74
Other consumer loans and leases 381 312 - - 24 23
Total loans and leases $ 89,558 88,721 $103 195 $ 501 704
Less: Loans held for sale $ 944 2,939
Total portfolio loans and leases $ 88,614 85,782
The Bancorp engages in commercial lease products primarily related
to the financing of commercial equipment. The Bancorp had $3.0
billion of direct financing leases and $1.3 billion of leveraged leases
at both of the years ended December 31, 2013 and 2012.
Pre-tax income from leveraged leases for 2013 was $25 million
compared to pre-tax income in 2012 of $37 million. The tax effect
of this income was an expense of $9 million in 2013 and a benefit of
$6 million in 2012.