Fifth Third Bank 2013 Annual Report Download - page 173

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
171 Fifth Third Bancorp

General
Commercial Branch Consumer Investment Corporate
2011 ($ in millions) Banking Banking Lending Advisors and Other Eliminations Total
Net interest income $ 1,357 1,423 343 113 321 - 3,557
Provision for loan and lease losses 490 393 261 27 (748) - 423
Net interest income after provision for loan
and lease losses 867 1,030 82 86 1,069 - 3,134
Noninterest income:
Mortgage banking net revenue - 11 585 1 - - 597
Service charges on deposits 207 309 - 4 - - 520
Corporate banking revenue 332 14 - 3 1 - 350
Investment advisory revenue 12 117 - 364 (1) (117)(a) 375
Card and processing revenue 38 305 - 4 (39) - 308
Other noninterest income 52 81 36 (3) 84 - 250
Securities gains, net - - - - 46 - 46
Securities gains, net - non-qualifying hedges on
mortgage servicing rights - - 9 - - - 9
Total noninterest income 641 837 630 373 91 (117) 2,455
Noninterest expense:
Salaries, wages and incentives 203 454 149 138 534 - 1,478
Employee benefits 37 127 34 26 106 - 330
Net occupancy expense 20 184 8 11 82 - 305
Technology and communications 11 5 1 1 170 - 188
Card and processing expense 5 114 - - 1 - 120
Equipment expense 2 51 1 1 58 - 113
Other noninterest expense 795 640 433 244 (771) (117) 1,224
Total noninterest expense 1,073 1,575 626 421 180 (117) 3,758
Income before income taxes 435 292 86 38 980 - 1,831
A
pplicable income tax expense (benefit) (6) 102 30 14 393 - 533
Net income 441 190 56 24 587 - 1,298
Less: Net income attributable to noncontrolling interests - - - - 1 - 1
Net income attributable to Bancorp 441 190 56 24 586 - 1,297
Dividends on preferred stock - - - - 203 - 203
Net income available to common shareholders $ 441 190 56 24 383 - 1,094
Total goodwill $ 613 1,656 - 148 - - 2,417
Total assets $ 45,864 46,703 24,325 7,670 (7,595) - 116,967
(a) Revenue sharing agreements between Investment Advisors and Branch Banking are eliminated in the Consolidated Statements of Income.
31. SUBSEQUENT EVENTS
On February 20, 2014, the Bancorp transferred approximately $1.3
billion in fixed-rate consumer automobile loans to a bankruptcy
remote trust which was deemed to be a VIE. The primary purposes
for which the VIE was created were to issue asset-backed securities
with varying levels of credit subordination and payment priority, as
well as residual interests, and to provide the Bancorp with access to
liquidity for its originated loans. The Bancorp retained residual
interests in the VIE and, therefore, has an obligation to absorb
losses and a right to receive benefits from the VIE that could
potentially be significant to the VIE. In addition, the Bancorp
retained servicing rights for the underlying loans and, therefore,
holds the power to direct the activities of the VIE that most
significantly impact the economic performance of the VIE. As a
result, the Bancorp concluded that it is the primary beneficiary of
the VIE and, therefore, will consolidate this VIE in the Bancorp’s
first quarter of 2014 Form 10-Q. The assets of the VIE are
restricted to the settlement of the notes and other obligations of the
VIE. Third-party holders of the notes do not have recourse to the
general assets of the Bancorp.
On January 28, 2014, the Bancorp entered into an accelerated
share repurchase transaction with a counterparty pursuant to which
the Bancorp purchased 3,950,705 shares, or approximately $99
million, of its outstanding common stock on January 31, 2014. The
Bancorp repurchased the shares of its common stock as part of its
Board approved 100 million share repurchase program previously
announced on March 19, 2013. The Bancorp expects the settlement
of the transaction to occur on or before March 26, 2014.