Fifth Third Bank 2013 Annual Report Download - page 130

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
128 Fifth Third Bancorp
Bancorp recognized $4 million of OTTI on its investments in
private equity funds. See Note 27 for further information.
The Bancorp purchases life insurance policies on the lives of
certain directors, officers and employees and is the owner and
beneficiary of the policies. Certain BOLI policies have a stable value
agreement through either a large, well-rated bank or multi-national
insurance carrier that provides limited cash surrender value
protection from declines in the value of each policy’s underlying
investments. See Note 1 for further information.
The Bancorp utilizes derivative instruments as part of its overall
risk management strategy to reduce certain risks related to interest
rate, prepayment and foreign currency volatility. The Bancorp also
holds derivatives instruments for the benefit of its commercial
customers and for other business purposes. For further information
on derivative instruments, see Note 12.
A bankers’ acceptance is created when a time draft is drawn on
and accepted by a bank. By accepting the draft, the bank assumes
the credit risk of the underlying obligor, usually the buyer or the
seller of goods or their bank, and makes an unconditional promise
to pay the holder of the draft the amount of the draft at maturity,
which is generally less than one year from the date of the draft.
When the Bancorp is the accepting bank, it records the full amount
of the acceptance in both other assets and other liabilities in the
Consolidated Balance Sheets.
In 2009, the Bancorp sold an approximate 51% interest in its
processing business, Vantiv Holding, LLC. As a result of additional
share sales completed by the Bancorp in 2012 and 2013, the
Bancorp’s current ownership share in Vantiv Holding, LLC is
approximately 25%. The Bancorp’s ownership in Vantiv Holding,
LLC is accounted for under the equity method of accounting. See
Note 19 for further information.
OREO represents property acquired through foreclosure or
other proceedings and is carried at the lower of cost or fair value,
less costs to sell. See Note 1 for further information.
15. SHORT-TERM BORROWINGS
Borrowings with original maturities of one year or less are classified
as short term, and include federal funds purchased and other short-
term borrowings. Federal funds purchased are excess balances in
reserve accounts held at FRBs that the Bancorp purchased from
other member banks on an overnight basis. Other short-term
borrowings include securities sold under repurchase agreements,
derivative collateral, FHLB advances and other borrowings with
original maturities of one year or less.
A
summary of short-term borrowings and weighted-average rates follows:
2013 2012
($ in millions) Amount Rate Amount Rate
A
s of December 31:
Federal funds purchased $284 0.03% $901 0.10%
Other short-term borrowings 1,380 0.09 6,280 0.15
A
verage for the years ended December 31:
Federal funds purchased $503 0.12% $560 0.14%
Other short-term borrowings 3,024 0.18 4,246 0.18
Maximum month-end balance for the years ended December 31:
Federal funds purchased $925 $901
Other short-term borrowings 8,001 6,330