Fifth Third Bank 2013 Annual Report Download - page 59

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
57 Fifth Third Bancorp
The contractual maturities of other time deposits and certificates $100,000 and over as of December 31, 2013 are summarized in the following
table:
TABLE 26: CONTRACTUAL MATURITIES OF OTHER TIME DEPOSITS AND CERTIFICATES $100,000 AND OVER
($ in millions) 2013
Next 12 months $ 7,424
13-24 months 1,200
25-36 months 702
37-48 months 488
49-60 months 232
A
fter 60 months 55
Total $ 10,101
Borrowings
Total borrowings decreased $3.0 billion, or 21%, from December
31, 2012 due to decreases in other short-term borrowings and
federal funds purchased, partially offset by an increase in long-term
debt. Total borrowings as a percentage of interest-bearing liabilities
were 14% and 19% at December 31, 2013 and 2012, respectively.
TABLE 27: BORROWINGS
A
s of December 31 ($ in millions) 2013 2012 2011 2010 2009
Federal funds purchased $ 284 901 346 279 182
Other short-term borrowings 1,380 6,280 3,239 1,574 1,415
Long-term debt 9,633 7,085 9,682 9,558 10,507
Total borrowings $ 11,297 14,266 13,267 11,411 12,104
Federal funds purchased decreased by $617 million, or 68%, from
December 31, 2012 driven by a decrease in excess balances in
reserve accounts held at Federal Reserve Banks that the Bancorp
purchased from other member banks on an overnight basis. Other
short-term borrowings decreased $4.9 billion, or 78%, from
December 31, 2012 driven by a decrease of $4.7 billion in short-
term FHLB borrowings. The Bancorp decreased its reliance on
short-term funding in 2013 in anticipation of future regulatory
standards which require a greater dependency on long-term and
stable funding. Long-term debt increased by $2.5 billion, or 36%,
from December 31, 2012 primarily driven by the issuance of $3.1
billion of unsecured senior bank notes, $750 million of subordinated
notes and the issuance of asset-backed securities by a consolidated
VIE of $1.3 billion related to an automobile loan securitization
during 2013. These issuances were partially offset by the maturity of
$1.3 billion of senior notes, the redemption of $750 million of
outstanding TruPS and $277 million of declines due to fair value
adjustments on hedged debt. For additional information regarding
long-term debt, see Note 16 of the Notes to Consolidated Financial
Statements.
TABLE 28: AVERAGE BORROWINGS
A
s of December 31 ($ in millions) 2013 2012 2011 2010 2009
Federal funds purchased $ 503 560 345 291 517
Other short-term borrowings 3,024 4,246 2,777 1,635 6,463
Long-term debt 7,914 9,043 10,154 10,902 11,035
Total average borrowings $ 11,441 13,849 13,276 12,828 18,015
Average total borrowings decreased $2.4 billion, or 17%, compared
to December 31, 2012, due to decreases in average federal funds
purchased, average other short-term borrowings and average long-
term debt. Average federal funds purchased decreased $57 million,
or 10%, primarily due to a decrease in excess balances in reserve
accounts held at Federal Reserve Banks that the Bancorp purchased
from other member banks on an overnight basis. Average other
short-term borrowings decreased $1.2 billion, or 29%, primarily due
to the previously mentioned decrease in short-term FHLB
borrowings. The level of average federal funds purchased and
average other short-term borrowings can fluctuate significantly from
period to period depending on funding needs and which sources are
used to satisfy those needs. Additionally, The Bancorp decreased its
reliance on short-term funding in 2013 in anticipation of future
regulatory standards which require a greater dependency on long-
term and stable funding. Average long-term debt decreased $1.1
billion, or 12%, driven by the maturity of $1.3 billion of unsecured
senior bank notes in the second quarter of 2013, the redemption of
$1.4 billion of TruPS during the third quarter of 2012 and the
extinguishment of $1.0 billion of long-term FHLB advances during
the fourth quarter of 2012 partially offset by the issuance of $1.3
billion of unsecured senior bank notes in the first quarter of 2013
and the issuance of $1.8 billion of unsecured senior bank notes and
$750 million of subordinated notes in the fourth quarter of 2013.
Information on the average rates paid on borrowings is
discussed in the net interest income section of the MD&A. In
addition, refer to the Liquidity Risk Management section for a
discussion on the role of borrowings in the Bancorp’s liquidity
management.