Fifth Third Bank 2014 Annual Report Download - page 137

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
135 Fifth Third Bancorp
unsubstantiated. As a result of these factors, the Bancorp is not
always able to provide an estimate of the range of reasonably
possible outcomes for each claim. A reserve for a potential litigation
loss is established when information related to the loss contingency
indicates both that a loss is probable and that the amount of loss
can be reasonably estimated. Any such reserve is adjusted from time
to time thereafter as appropriate to reflect changes in circumstances.
The Bancorp also determines, when possible (due to the
uncertainties described above), estimates of reasonably possible
losses or ranges of reasonably possible losses, in excess of amounts
reserved. Under U.S. GAAP, an event is “reasonably possible” if
“the chance of the future event or events occurring is more than
remote but less than likely” and an event is “remote” if “the chance
of the future event or events occurring is slight.” Thus, references
to the upper end of the range of reasonably possible loss for cases
in which the Bancorp is able to estimate a range of reasonably
possible loss mean the upper end of the range of loss for cases for
which the Bancorp believes the risk of loss is more than slight. For
matters where the Bancorp is able to estimate such possible losses
or ranges of possible losses, the Bancorp currently estimates that it
is reasonably possible that it could incur losses related to legal and
regulatory proceedings including the matters discussed above in an
aggregate amount up to approximately $105 million in excess of
amounts reserved, with it also being reasonably possible that no
losses will be incurred in these matters. The estimates included in
this amount are based on the Bancorp’s analysis of currently
available information, and as new information is obtained the
Bancorp may change its estimates.
For these matters and others where an unfavorable outcome is
reasonably possible but not probable, there may be a range of
possible losses in excess of the established reserve that cannot be
estimated. Based on information currently available, advice of
counsel, available insurance coverage and established reserves, the
Bancorp believes that the eventual outcome of the actions against
the Bancorp and/or its subsidiaries, including the matters described
above, will not, individually or in the aggregate, have a material
adverse effect on the Bancorp’s consolidated financial position.
However, in the event of unexpected future developments, it is
possible that the ultimate resolution of those matters, if unfavorable,
may be material to the Bancorp’s results of operations for any
particular period, depending, in part, upon the size of the loss or
liability imposed and the operating results for the applicable period.