Fifth Third Bank 2013 Annual Report Download - page 162

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
160 Fifth Third Bancorp
Assets and Liabilities Measured at Fair Value on a
Nonrecurring Basis
Certain assets and liabilities are measured at fair value on a
nonrecurring basis. These assets and liabilities are not measured at
fair value on an ongoing basis; however, they are subject to fair
value adjustments in certain circumstances, such as when there is
evidence of impairment.
The following tables represent those assets that were subject to fair value adjustments during the years ended December 31, 2013 and 2012 and
still held as of the end of the period, and the related losses from fair value adjustments on assets sold during the period as well as assets still held as
of the end of the period:
Fair Value Measurements Using Total Losses
A
s of December 31, 2013 ($ in millions) Level 1 Level 2 Level 3 Total 2013
Commercial loans held for sale(a) $ - - 3 3 (7)
Commercial and industrial loans - - 443 443 (281)
Commercial mortgage loans - - 61 61 (41)
Commercial construction loans - - 16 16 (10)
MSRs - - 967 967 192
OREO - - 87 87 (45)
Private equity investment funds - - 181 181 (4)
Total $ - - 1,758 1,758 (196)
Fair Value Measurements Using Total Losses
A
s of December 31, 2012 ($ in millions) Level 1 Level 2 Level 3 Total 2012
Commercial loans held for sale(a) $ - - 9 9 (13)
Commercial and industrial loans - - 83 83 (122)
Commercial mortgage loans - - 46 46 (50)
Commercial construction loans - - 4 4 (22)
MSRs - - 697 697 (103)
OREO - - 165 165 (74)
Total $ - - 1,004 1,004 (384)
(a) Includes commercial nonaccrual loans held for sale.
The following tables present information as of December 31, 2013 and 2012 about significant unobservable inputs related to the Bancorp’s
material categories of Level 3 financial assets and liabilities measured on a nonrecurring basis:
A
s of December 31, 2013 ($ in millions)
Financial Instrument Fair Value Valuation Technique
Significant Unobservable
Inputs
Ranges of
Inputs
Weighted-Average
Commercial loans held for sale $ 3
A
ppraised value
A
ppraised value NM NM
Cost to sell NM 10.0%
Commercial and industrial loans 443
A
ppraised value Collateral value NM NM
Commercial mortgage loans 61
A
ppraised value Collateral value NM NM
Commercial construction loans 16
A
ppraised value Collateral value NM NM
MSRs 967 Discounted cash flow Prepayment speed 0 - 100%
(Fixed) 10.3%
(Adjustable) 25.6%
Discount rates 9.4 - 18.0%
(Fixed) 10.4%
(Adjustable) 11.6%
OREO 87
A
ppraised value
A
ppraised value NM NM
Private equity investment funds 44(a)
Liquidity discount applied
to fund's net asset value Liquidity discount 0 - 18% 3.0%
(a) Includes funds the Bancorp will be prohibited from retaining after the July 21, 2015 end of the conformance period for the final rules, adopted under the Bank Holding Company Act, that
implemented the provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the Volcker Rule.