Fifth Third Bank 2013 Annual Report Download - page 57

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
55 Fifth Third Bancorp
portfolio was 6.7 years at December 31, 2013, compared to 3.8 years
at December 31, 2012. In addition, at December 31, 2013, the
available-for-sale securities portfolio had a weighted-average yield of
3.39%, compared to 3.30% at December 31, 2012.
Information presented in Table 22 is on a weighted-average life
basis, anticipating future prepayments. Yield information is
presented on an FTE basis and is computed using historical cost
balances. Maturity and yield calculations for the total available-for-
sale portfolio exclude equity securities that have no stated yield or
maturity. Total net unrealized gains on the available-for-sale
securities portfolio were $188 million at December 31, 2013,
compared to $636 million at December 31, 2012. The decrease from
December 31, 2012 was primarily due to an increase in interest rates
during 2013. The fair value of investment securities is impacted by
interest rates, credit spreads, market volatility and liquidity
conditions. The fair value of investment securities generally
decreases when interest rates increase or when credit spreads widen.
TABLE 22: CHARACTERISTICS OF AVAILABLE-FOR-SALE AND OTHER SECURITIES
Weighted-Average Weighted-Average
A
s of December 31, 2013 ($ in millions) Amortized Cost Fair Value Life (in years) Yield
U.S. Treasury and government agencies:
A
verage life 1 – 5 years $25 25 2.7 0.82 %
A
verage life 5 – 10 years 1 1 5.4 1.50
Total 26 26 2.7 0.83
U.S. Government sponsored agencies:
A
verage life 1 – 5 years 1,523 1,644 3.0 3.64
Total 1,523 1,644 3.0 3.64
Obligations of states and political subdivisions:(a)
A
verage life 1 – 5 years 123 125 2.7 2.40
A
verage life 5 – 10 years 55 57 6.6 4.00
A
verage life greater than 10 years 9 10 10.9 3.87
Total 187 192 4.3 2.95
A
gency mortgage-backed securities:
A
verage life of one year or less 118 121 0.6 6.03
A
verage life 1 – 5 years 1,564 1,616 4.3 4.03
A
verage life 5 – 10 years 9,547 9,480 7.2 3.47
A
verage life greater than 10 years 1,065 1,067 14.4 3.94
Total 12,294 12,284 7.4 3.61
Other bonds, notes and debentures:
A
verage life of one year or less 225 230 0.1 1.68
A
verage life 1 – 5 years 1,529 1,569 3.1 2.84
A
verage life 5 – 10 years 1,188 1,193 7.1 2.61
A
verage life greater than 10 years 572 590 15.1 1.92
Total 3,514 3,582 6.2 2.54
Other securities 865 869
Total available-for-sale and other securities $18,409 18,597 6.7 3.39 %
(a) Taxable-equivalent yield adjustments included in the above table are 0.01%, 0.89%, 2.06% and 0.37% for securities with an average life of 1-5 years, 5-10 years, greater than 10 years and in
total, respectively.
Deposits
The Bancorp’s deposit balances represent an important source of
funding and revenue growth opportunity. The Bancorp continues to
focus on core deposit growth in its retail and commercial franchises
by improving customer satisfaction, building full relationships and
offering competitive rates. Core deposits represented 71% of the
Bancorp’s asset funding base for both of the years ended December
31, 2013 and 2012.
TABLE 23: DEPOSITS
A
s of December 31 ($ in millions) 2013 2012 2011 2010 2009
Demand $ 32,634 30,023 27,600 21,413 19,411
Interest checking 25,875 24,477 20,392 18,560 19,935
Savings 17,045 19,879 21,756 20,903 17,898
Money market 11,644 6,875 4,989 5,035 4,431
Foreign office 1,976 885 3,250 3,721 2,454
Transaction deposits 89,174 82,139 77,987 69,632 64,129
Other time 3,530 4,015 4,638 7,728 12,466
Core deposits 92,704 86,154 82,625 77,360 76,595
Certificates - $100,000 and over 6,571 3,284 3,039 4,287 7,700
Other - 79 46 1 10
Total deposits $ 99,275 89,517 85,710 81,648 84,305
Core deposits increased $6.6 billion, or eight percent, compared to
December 31, 2012, driven by an increase of $7.0 billion, or nine
percent, in transaction deposits, partially offset by a decrease of
$485 million, or 12%, in other time deposits. Total transaction
deposits increased from December 31, 2012 due to increases in
money market deposits, demand deposits, interest checking deposits