-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T6etAcQq0B7ULTSz10Cz6d0nCxJDIdpTwkc5GdQp0BFsWMLZdCpomWRVDA22HZnk cQDtszMIwrXxFhMEOSA2WQ== 0000950152-99-008990.txt : 19991115 0000950152-99-008990.hdr.sgml : 19991115 ACCESSION NUMBER: 0000950152-99-008990 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIFTH THIRD BANCORP CENTRAL INDEX KEY: 0000035527 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 310854434 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08076 FILM NUMBER: 99750134 BUSINESS ADDRESS: STREET 1: 38 FOUNTAIN SQ PLZ STREET 2: FIFTH THIRD CENTER CITY: CINCINNATI STATE: OH ZIP: 45263 BUSINESS PHONE: 5135795300 10-Q 1 FIFTH THIRD BANCORP 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1999 Commission File Number 0-8076 FIFTH THIRD BANCORP (Exact name of Registrant as specified in its charter) Ohio 31-0854434 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) Fifth Third Center Cincinnati, Ohio 45263 (Address of principal executive offices) Registrant's telephone number, including area code: (513) 579-5300 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- There were 305,321,874 shares of the Registrant's Common Stock, without par value, outstanding as of October 31, 1999. 2 FIFTH THIRD BANCORP INDEX
Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1999 and 1998 and December 31, 1998 3 Consolidated Statements of Income - Three and Nine Months Ended September 30, 1999 and 1998 4 Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1999 and 1998 5 Consolidated Statements of Changes in Shareholders' Equity - Nine Months Ended September 30, 1999 and 1998 6 Notes to Consolidated Financial Statements 7 - 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 - 18 Item 3. Quantitative and Qualitative Disclosures About Market Risk 19 Part II. Other Information 20
2 3
FIFTH THIRD BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------ SEPTEMBER 30, December 31, September 30, ($000'S) 1999 1998 1998 - ------------------------------------------------------------------------------------------------------------------------ ASSETS - ------------------------------------------------------------------------------------------------------------------------ Cash and Due from Banks $ 716,591 $ 820,716 $ 749,403 Securities Available for Sale (a) 9,985,754 8,464,697 8,559,241 Securities Held to Maturity (b) 91,189 86,013 85,175 Other Short-Term Investments 354,198 126,048 143,851 Loans Held for Sale 117,982 492,017 367,355 Loans and Leases Commercial Loans 5,261,495 4,822,992 4,682,028 Construction Loans 715,862 586,116 556,906 Commercial Mortgage Loans 1,485,076 1,214,329 1,219,803 Commercial Lease Financing 1,978,367 1,739,316 1,650,675 Residential Mortgage Loans 4,596,824 4,469,469 4,603,837 Consumer Loans 3,936,522 3,358,336 3,262,111 Consumer Lease Financing 3,386,144 2,530,535 2,386,936 Unearned Income (834,081) (690,342) (669,317) Reserve for Credit Losses (303,416) (267,666) (262,341) - ------------------------------------------------------------------------------------------------------------------------ Total Loans and Leases 20,222,793 17,763,085 17,430,638 Bank Premises and Equipment 345,274 334,867 328,283 Accrued Income Receivable 259,591 284,298 272,009 Other Assets 1,144,305 946,559 803,758 - ------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 33,237,677 $ 29,318,300 $ 28,739,713 - ------------------------------------------------------------------------------------------------------------------------ LIABILITIES - ------------------------------------------------------------------------------------------------------------------------ Deposits Demand $ 3,246,117 $ 3,196,448 $ 2,879,293 Interest Checking 3,216,060 3,170,731 2,811,776 Savings and Money Market 4,551,127 4,466,576 4,394,455 Time Deposits 8,525,025 8,152,429 8,756,523 - ------------------------------------------------------------------------------------------------------------------------ Total Deposits 19,538,329 18,986,184 18,842,047 Federal Funds Borrowed 3,306,603 2,038,541 2,023,793 Short-Term Bank Notes 467,000 - 60,000 Other Short-Term Borrowings 3,674,709 1,655,386 1,730,674 Accrued Taxes, Interest and Expenses 774,721 712,535 757,587 Other Liabilities 413,233 271,521 186,679 Long-Term Debt 1,657,822 2,438,151 1,992,663 - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 29,832,417 26,102,318 25,593,443 - ------------------------------------------------------------------------------------------------------------------------ SHAREHOLDERS' EQUITY ( c ) - ------------------------------------------------------------------------------------------------------------------------ Common Stock 610,345 596,281 595,850 Capital Surplus 536,804 513,313 483,121 Retained Earnings 2,401,195 2,081,520 2,020,766 Unrealized Gains (Losses) on Securities Available for Sale (138,093) 82,827 117,803 Non-Officer Employee Stock Grant (4,991) - - Treasury Stock - (57,959) (71,270) - ------------------------------------------------------------------------------------------------------------------------ TOTAL SHAREHOLDERS' EQUITY 3,405,260 3,215,982 3,146,270 - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 33,237,677 $ 29,318,300 $ 28,739,713 - ------------------------------------------------------------------------------------------------------------------------
(a) Amortized cost: September 30, 1999 - $10,198,311, December 31, 1998 - $8,337,530 and September 30, 1998 - $8,378,25. (b) Market value: September 30, 1999 - $90,972, December 31, 1998 - $86,013 and September 30, 1998 - $85,170. (c) Preferred stock no par value; 500,000 shares authorized; none issued. Common stock stated value $2.22 per share; authorized 500,000,000; outstanding September 30, 1999 - 274,930,084, December 31, 1998 - 268,595,140 (excludes 922,028 treasury shares) and September 30, 1998 - 268,400,854 (excludes 1,116,365 treasury shares). Outstanding and treasury shares have been adjusted for the three-for-two stock split effected in the form of a stock dividend declared March 17, 1998 and distributed April 15, 1998. See Notes to Consolidated Financial Statements 3 4
FIFTH THIRD BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - --------------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED Nine Months Ended SEPTEMBER 30, September 30, ----------------------------------------------------------------- ($000'S) 1999 1998 1999 1998 - --------------------------------------------------------------------------------------------------------------------------- INTEREST INCOME Interest and Fees on Loans and Leases $ 392,692 $ 371,737 $ 1,122,008 $ 1,105,621 Interest on Securities Taxable 154,052 131,713 447,233 418,588 Exempt from Income Taxes 2,760 3,097 8,635 9,005 - --------------------------------------------------------------------------------------------------------------------------- Total Interest on Securities 156,812 134,810 455,868 427,593 Interest on Other Short-Term Investments 2,987 2,574 5,774 7,828 - --------------------------------------------------------------------------------------------------------------------------- Total Interest Income 552,491 509,121 1,583,650 1,541,042 - --------------------------------------------------------------------------------------------------------------------------- INTEREST EXPENSE Interest on Deposits Interest Checking 18,238 18,074 50,655 50,720 Savings and Money Market 34,915 37,271 100,479 116,380 Time Deposits 113,793 120,350 319,057 366,735 - --------------------------------------------------------------------------------------------------------------------------- Total Interest on Deposits 166,946 175,695 470,191 533,835 Interest on Federal Funds Borrowed 51,386 30,800 121,493 89,891 Interest on Short-Term Bank Notes 3,001 3,219 16,651 25,746 Interest on Other Short-Term Borrowings 22,385 21,130 63,305 66,295 Interest on Long-Term Debt and Notes 23,616 25,531 72,075 76,073 - --------------------------------------------------------------------------------------------------------------------------- Total Interest Expense 267,334 256,375 743,715 791,840 - --------------------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME 285,157 252,746 839,935 749,202 Provision for Credit Losses 23,233 15,279 77,944 82,971 - --------------------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 261,924 237,467 761,991 666,231 OTHER OPERATING INCOME Investment Advisory Income 43,114 38,489 124,821 97,453 Service Charges on Deposits 36,220 32,936 101,790 94,199 Data Processing Income 45,098 35,412 123,647 97,569 Other Service Charges and Fees 70,746 58,303 205,366 159,750 Securities Gains 1,965 2,236 3,662 7,207 - --------------------------------------------------------------------------------------------------------------------------- Total Other Operating Income 197,143 167,376 559,286 456,178 OPERATING EXPENSES Salaries, Wages and Incentives 81,376 76,065 242,321 214,520 Employee Benefits 13,390 15,053 49,551 42,349 Equipment Expenses 8,797 8,191 26,722 24,004 Net Occupancy Expenses 14,664 13,304 41,568 38,110 Other Operating Expenses 77,907 70,159 236,087 210,916 Merger-Related Charges - - - 89,701 - --------------------------------------------------------------------------------------------------------------------------- Total Operating Expenses 196,134 182,772 596,249 619,600 - --------------------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 262,933 222,071 725,028 502,809 Applicable Income Taxes 89,429 77,282 248,047 174,835 - --------------------------------------------------------------------------------------------------------------------------- NET INCOME (b) $ 173,504 $ 144,789 $ 476,981 $ 327,974 - --------------------------------------------------------------------------------------------------------------------------- Per Share (a): Basic Earnings $ 0.64 $ 0.54 $ 1.76 $ 1.23 Diluted Earnings $ 0.62 $ 0.53 $ 1.72 $ 1.21 Cash Dividends $ 0.24 $ 0.17 $ 0.64 $ 0.51 - --------------------------------------------------------------------------------------------------------------------------- Average Shares (000's) (a): Outstanding 273,445 268,327 270,796 266,227 Diluted 278,381 273,711 276,597 271,446 - ---------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements 4 5
FIFTH THIRD BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - --------------------------------------------------------------------------------------------------------------------------- NINE MONTHS ENDED SEPTEMBER 30, ------------------------------- ($000's) 1999 1998 - --------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Net Income $ 476,981 $ 327,974 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Credit Losses 77,944 82,971 Depreciation, Amortization and Accretion 61,296 60,287 Provision for Deferred Income Taxes 122,171 37,947 Realized Securities Gains (5,079) (9,321) Realized Securities Losses 1,417 2,114 Proceeds from Sales of Residential Mortgage Loans Held for Sale 1,743,538 2,382,295 Net Gains on Sales of Loans (26,685) (24,022) Increase in Residential Mortgage Loans Held for Sale (1,369,503) (2,444,211) Decrease (Increase) in Accrued Income Receivable 24,707 (57,847) Increase in Other Assets (219,845) (81,031) Increase (Decrease) in Accrued Taxes, Interest and Expenses (60,391) 112,412 Increase (Decrease) in Other Liabilities 141,620 (27,615) - --------------------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 968,171 361,953 - --------------------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Proceeds from Sales of Securities Available for Sale 903,968 1,627,182 Proceeds from Calls, Paydowns and Maturities of Securities Available for Sale 1,964,079 1,745,668 Purchases of Securities Available for Sale (3,714,455) (2,644,878) Proceeds from Calls, Paydowns and Maturities of Securities Held to Maturity 30,526 39,356 Purchases of Securities Held to Maturity (32,513) (52,058) Decrease (Increase) in Other Short-Term Investments (223,355) 46,904 Increase in Loans and Leases (3,330,068) (1,200,693) Purchases of Bank Premises and Equipment (51,246) (50,207) Proceeds from Disposal of Bank Premises and Equipment 13,459 7,621 Net Cash Acquired (Paid) in Acquisitions 493 (15,000) - --------------------------------------------------------------------------------------------------------------------------- NET CASH USED IN INVESTING ACTIVITIES (4,439,112) (496,105) - --------------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Increase (Decrease) in Core Deposits 203,664 (426,634) Increase in CDs - $100,000 and Over, including Foreign 343,615 53,417 Increase in Federal Funds Borrowed 1,268,062 770,240 Increase (Decrease) in Short-Term Bank Notes 467,000 (495,000) Increase (Decrease) in Other Short-Term Borrowings 2,019,109 (136,704) Proceeds from Issuance of Long-Term Debt and Notes 320,000 1,562,869 Repayment of Long-Term Debt (1,100,416) (1,148,889) Payment of Cash Dividends (174,130) (124,143) Exercise of Stock Options 20,800 19,573 Proceeds from Sale of Common Stock - 178,125 Purchases of Treasury Stock - (143,890) Other (888) (3,598) - --------------------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 3,366,816 105,366 - --------------------------------------------------------------------------------------------------------------------------- DECREASE IN CASH AND DUE FROM BANKS (104,125) (28,786) CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD 820,716 778,189 - --------------------------------------------------------------------------------------------------------------------------- CASH AND DUE FROM BANKS AT END OF PERIOD $ 716,591 $ 749,403 - ---------------------------------------------------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements 5 6
FIFTH THIRD BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - --------------------------------------------------------------------------------------------------------------------------- NINE MONTHS ENDED SEPTEMBER 30, --------------------------------------- ($000'S) 1999 1998 - --------------------------------------------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31 $ 3,215,982 $ 2,794,260 Net Income 476,981 327,974 Nonowner Changes in Equity, Net of Tax: Change in Unrealized Gains on Securities Available for Sale (220,920) 19,498 - --------------------------------------------------------------------------------------------------------------------------- Net Income and Nonowner Changes in Equity 256,061 347,472 Cash Dividends Declared (1999 - $.64 per share and 1998 - $.34 per share) (a) (173,719) (133,326) Shares Acquired for Treasury - (143,890) Non-Officer Employee Stock Grant ( c ) (4,991) - Earnings Adjustment of Pooled Entities (b) 548 (7,803) Stock Options Exercised Including Treasury Shares Issued 20,800 19,573 Fractional Shares Issued (44) - Stock Issued in Public Offering - 178,125 Stock Issued in Acquisitions and Other 90,623 91,859 - --------------------------------------------------------------------------------------------------------------------------- BALANCE AT SEPTEMBER 30 $ 3,405,260 $ 3,146,270 - ---------------------------------------------------------------------------------------------------------------------------
(a) Cash dividends per common share for the 1999 period are those of Fifth Third Bancorp declared prior to the second quarter 1999 merger with Enterprise Federal Bancorp, Inc. ("Enterprise"). Cash dividends per common share for the 1998 period are those of Fifth Third Bancorp declared prior to the 1998 second quarter mergers with CitFed Bancorp, Inc. ("CitFed") and State Savings Company. (b) The restatement of the Enterprise merger was accomplished by combining Enterprise's September 30, 1998 fiscal year-end financial information with that of the Bancorp's December 31, 1998 calendar information. In 1999, Enterprises' fiscal year was conformed to the Bancorp's calendar year. As a result of conforming fiscal periods, the Bancorp's consolidated statements of income for the fourth quarter of 1998 excludes Enterprise's net income for the three months ended December 31, 1998 of $548. An adjustment to shareholders' equity includes the effect of excluding Enterprise's financial results for the three months ended December 31, 1998. The restatement of the CitFed merger was accomplished by combining CitFed's March 31, 1998 fiscal year financial information with the Bancorp's December 31, 1997 calendar year financial information. In 1998, CitFed's fiscal year was conformed to the Bancorp's calendar year. As a result of conforming fiscal periods, the Bancorp's consolidated statement of income for the fourth quarter of 1997 and the first quarter of 1998 include CitFed's net income for the three months ended March 31, 1998 of $7,803. An adjustment to shareholders' equity removes the effect of including CitFed's financial results in both periods. (c) See Note 8 to the Consolidated Financial Statements. See Notes to Consolidated Financial Statements 6 7 FINANCIAL INFORMATION ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the unaudited Consolidated Financial Statements include all adjustments (which consist of normal recurring accruals) necessary, to present fairly the consolidated financial position as of September 30, 1999 and 1998, the results of operations for the three and nine months ended September 30, 1999 and 1998, and the statements of cash flows for the nine months ended September 30, 1999 and 1998. In accordance with generally accepted accounting principles for interim financial information, these statements do not include certain information and footnote disclosures required by generally accepted accounting principles for complete annual financial statements. Financial information as of December 31, 1998 has been derived from the audited Consolidated Financial Statements of Fifth Third Bancorp (the "Registrant"). The results of operations and statements of cash flows for the three and nine months ended September 30, 1999 and 1998 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the Consolidated Financial Statements and footnotes thereto for the year ended December 31, 1998, included in the Registrant's Annual Report on Form 10-K. 2. Financial data for all prior periods have been restated to reflect the second quarter 1999 acquisition with Enterprise Federal Bancorp, Inc. ("Enterprise"), a publicly-traded savings and loan holding company headquartered in West Chester, Ohio with $539 million in assets. The acquisition was a tax-free, stock-for-stock exchange accounted for as a pooling-of-interests. The Registrant exchanged 1,676,596 shares of Fifth Third common stock with the shareholders of Enterprise. The contribution of Enterprise to consolidated net interest income, other operating income, and net income for the periods prior to the merger was as follows:
Three Months Three Months Nine Months Ended Ended Ended March 31, September 30, September 30, ($000's) 1999 1998 1998 - --------------------------------------------------------------------------------------------------------- Net Interest Income - --------------------------------------------------------------------------------------------------------- Fifth Third Bancorp $ 270,194 250,395 742,832 Enterprise Federal Bancorp, Inc. 2,542 2,351 6,370 - --------------------------------------------------------------------------------------------------------- Combined $ 272,736 252,746 749,202 - --------------------------------------------------------------------------------------------------------- Other Operating Income - --------------------------------------------------------------------------------------------------------- Fifth Third Bancorp $ 174,966 167,337 455,722 Enterprise Federal Bancorp, Inc. 57 39 456 - --------------------------------------------------------------------------------------------------------- Combined $ 175,023 167,376 456,178 - --------------------------------------------------------------------------------------------------------- Net Income - --------------------------------------------------------------------------------------------------------- Fifth Third Bancorp $ 150,447 144,073 326,064 Enterprise Federal Bancorp, Inc. (729) 716 1,910 - --------------------------------------------------------------------------------------------------------- Combined $ 149,718 144,789 327,974 - ---------------------------------------------------------------------------------------------------------
-7- 8 ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED): 3. PENDING BUSINESS COMBINATION: On July 12, 1999, the Registrant agreed to acquire Peoples Bank Corporation of Indianapolis ("Peoples") and its subsidiary, Peoples Bank & Trust Company. As of September 30, 1999, Peoples had total assets of $675 million and total deposits of $587 million. The merger agreement provides that 1.09 shares of Fifth Third's common stock will be exchanged for each share of Peoples' common stock on a tax-free basis. The transaction is expected to close in November 1999. In connection with this acquisition, the Registrant expects to exchange approximately 3,850,000 shares of Fifth Third common stock with the shareholders of Peoples. 4. COMPLETED BUSINESS COMBINATIONS: On October 29, 1999, the Registrant completed the acquisition of CNB Bancshares, Inc. ("CNB") a bank holding company based in Evansville, Indiana which owns Civitas Bank. As of September 30, 1999, CNB had total assets of $7.9 billion and deposits of $4.9 billion. In connection with this acquisition, the Registrant exchanged approximately 30.4 million shares of Fifth Third common stock with the shareholders of CNB. A summary of unaudited proforma financial information giving effect to the CNB acquisition is shown below. The unaudited financial information is not indicative of the results that would have been realized had the entities been combined during these periods, nor is it indicative of the actual results the combined companies will report in the future.
----------------------------------------------------------------------------------------- For the Years Ended ($000' except for per share amounts) 1998 1997 1996 ----------------------------------------------------------------------------------------- Net Interest Income $ 1,233,612 $ 1,144,795 $ 1,058,265 Other Operating Income $ 742,928 $ 583,749 $ 487,593 Net Income $ 537,699 $ 520,732 $ 436,026 ----------------------------------------------------------------------------------------- Net Income, Per Share Diluted $ 1.77 $ 1.73 $ 1.43 -----------------------------------------------------------------------------------------
The Registrant expects to incur $101 million and $18 million in pre-tax merger-related costs during the fourth quarter of 1999 in connection with the integration of the CNB and Peoples acquisitions, respectively. The Registrant could incur additional pre-tax merger related costs up to $23 million during the first quarter of 2000 in connection with the CNB acquisition. On August 6, 1999, the Registrant completed the acquisition of Emerald Financial Corp., ("Emerald") a unitary saving and loan holding company based in Strongsville, Ohio. At March 31, 1999, Emerald had total assets of $677 million and total deposits of $562 million. In connection with this acquisition, the Registrant exchanged 3,379,539 shares of Fifth Third common stock with the shareholders of Emerald. On July 9, 1999, the Registrant acquired Vanguard Financial Co., a privately-held commercial mortgage banking company headquarted in Cincinnati, Ohio. The transaction was accounted for as a purchase. -8- 9 ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED): On June 11, 1999, the Registrant completed the acquisition of South Florida Bank Holding Corporation ("South Florida"), a bank holding company based in Ft. Myers, Florida, which owns South Florida Bank. At March 31, 1999, South Florida had total assets of $93 million and deposits of $79 million. In connection with this acquisition, the Registrant exchanged 442,560 shares of Fifth Third common stock with the shareholders of South Florida. On April 16, 1999, the Registrant completed the acquisition of Ashland Bankshares, Inc., ("Ashland") which owns the Bank of Ashland. Ashland is based in Ashland, Kentucky, with $168 million of assets and deposits of $152 million at March 31, 1999. In connection with the acquisition, the Registrant exchanged 1,224,860 shares of Fifth Third common stock with the shareholders of Ashland. The Consolidated Financial Statements for the nine months ended September 30, 1999 have not been restated to include the South Florida, Emerald, and Ashland acquisitions, accounted for as pooling-of-interests, due to immateriality. 5. For the nine months of 1999, the Registrant paid $751,276,000 in interest and $82,750,000 in Federal income taxes. For the first nine months of 1998, the Registrant paid $797,217,000 in interest and $110,000,000 in Federal income taxes. During the first nine months of 1999 and 1998, the Registrant had noncash investing activities consisting of the securitization of $819,101,000 and $942,600,000 of residential mortgage loans, respectively. 6. In June 1998, the Financial Accounting Standards Board issued Statement of Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", effective for all fiscal periods beginning after June 15, 1999. In June 1999, the FASB issued Statement No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133", to amend Statement No. 133 to be effective for all fiscal years beginning after June 15, 2000. Statement No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities. It requires recognition of all derivatives as either assets or liabilities in the statement of financial condition and measurement of those instruments at fair value. The adoption of Statement No. 133 is not expected to have a material effect on the Registrant's consolidated statement of financial condition. 7. In 1998, The Registrant adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", which requires financial disclosure and descriptive information about reportable operating segments, based on how chief decision makers manage the business. The Registrant's principal segments include retail banking, -9- 10 ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED): commercial banking, investment advisory services, and data processing. Retail banking provides a full range of deposit products and consumer loans and leases. Commercial banking offers services to business, government, and professional customers. Investment advisory services provide a full range of investment alternatives for individuals, companies, and not-for-profit organizations. Data processing, through Midwest Payment Systems (MPS), provides electronic funds transfer (EFT) services, merchant transaction processing, operates the Registrant's Jeanie ATM network and provides other data processing services to affiliated and unaffiliated customers. General corporate and other includes the investment portfolio, certain non-deposit funding, unassigned equity, the net effect of funds transfer pricing and other items not allocated to operating segments. Total revenues exclude securities gains and losses. Results of operations and selected financial information by operating segment for the three and nine months ended September 30, 1999 and 1998 are as follows:
THREE MONTHS ENDED INVESTMENT GENERAL SEPTEMBER 30, COMMERCIAL RETAIL ADVISORY DATA ACQUIRED CORPORATE ($000'S) BANKING BANKING SERVICES PROCESSING (a) ENTITIES AND OTHER ELIMINATIONS (a) TOTAL - ------------------------------------------------------------------------------------------------------------------------------ 1999 Total Revenues $ 121,599 $ 252,875 $ 53,269 $ 48,732 $ - $ 7,941 $ (4,081) $ 480,335 - ------------------------------------------------------------------------------------------------------------------------------ Net Income $ 52,439 $ 87,680 $ 17,107 $ 15,590 $ - $ 688 $ - $ 173,504 - ------------------------------------------------------------------------------------------------------------------------------ 1998 Total Revenues $ 96,795 $ 214,612 $ 46,239 $ 39,174 $ 2,390 $ 22,849 $ (4,173) $ 417,886 - ------------------------------------------------------------------------------------------------------------------------------ Net Income $ 29,445 $ 88,438 $ 11,791 $ 12,249 $ 747 $ 2,119 $ - $ 144,789 - ------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED INVESTMENT GENERAL SEPTEMBER 30, COMMERCIAL RETAIL ADVISORY DATA ACQUIRED CORPORATE ($000'S) BANKING BANKING SERVICES PROCESSING (a) ENTITIES AND OTHER ELIMINATIONS (a) TOTAL - ----------------------------------------------------------------------------------------------------------------------------- 1999 Total Revenues $ 359,852 $ 731,268 $ 157,213 $ 133,242 $ 4,158 $ 20,812 $(10,986) $1,395,559 - ------------------------------------------------------------------------------------------------------------------------------ Net Income $ 151,086 $ 244,919 $ 49,596 $ 41,799 $ (8,526) $ (1,893) $ - $ 476,981 - ------------------------------------------------------------------------------------------------------------------------------ 1998 Total Revenues $ 274,648 $ 548,916 $ 118,585 $ 107,105 $ 99,561 $ 59,734 $(10,376) $1,198,173 - ------------------------------------------------------------------------------------------------------------------------------ Net Income $ 93,345 $ 202,712 $ 36,638 $ 31,426 $(50,990) $ 14,843 $ - $ 327,974 - ------------------------------------------------------------------------------------------------------------------------------
(a)- Data Processing services revenues provided to the banking segments by MPS are eliminated in the Consolidated Statements of Income. There were no material changes in the identifiable assets that were disclosed in the Registrant's December 31, 1998 Annual Report on Form 10-K. -10- 11 ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED): 8. On May 3, 1999, the Registrant issued 86,375 shares of common stock under the 1998 Long-Term Incentive Plan. These shares were awarded to non-officer employees with three or more years of service. The market value of these shares on the date of grant was approximately $6.5 million. This award is being recognized as compensation expense over the two-year vesting period. The unamortized cost is reported as a reduction of shareholders' equity. 9. In 1998, the Registrant adopted SFAS No. 130, "Reporting Comprehensive Income". The statement establishes standards for the reporting and display of net income and nonowner changes in equity. The Registrant elected to present the required disclosures in the Consolidated Statement of Changes in Shareholders' Equity on page 6. The caption "Net income and Nonowner Changes in Equity", represents total comprehensive income as defined in the statement. Disclosure of the reclassification adjustments, related tax effects allocated to nonowner changes in equity and accumulated nonowner changes in equity for the nine months ended September 30, 1999 and 1998 are provided below ($000s).
1999 1998 - --------------------------------------------------------------------------------------------------------------------------- Reclassification Adjustments, Before Tax - --------------------------------------------------------------------------------------------------------------------------- Change in Unrealized (Losses) Gains Arising During Period $(343,538) $ 22,790 Reclassification Adjustment for Gains Included in Net Income 3,662 7,207 - --------------------------------------------------------------------------------------------------------------------------- Net Unrealized (Losses) Gains on Securities Available for Sale $(339,876) $ 29,997 - --------------------------------------------------------------------------------------------------------------------------- Related Tax Effects - --------------------------------------------------------------------------------------------------------------------------- Change in Unrealized (Losses) Gains Arising During Period $ 120,237 $ (7,977) Reclassification Adjustment for Gains Included in Net Income (1,281) (2,522) - --------------------------------------------------------------------------------------------------------------------------- Net Unrealized (Losses) Gains on Securities Available for Sale $ 118,956 $(10,499) - --------------------------------------------------------------------------------------------------------------------------- Reclassification Adjustments, Net of Tax - --------------------------------------------------------------------------------------------------------------------------- Change in Unrealized (Losses) Gains Arising During Period $(223,301) $ 14,813 Reclassification Adjustment for Gains Included in Net Income 2,381 4,685 - --------------------------------------------------------------------------------------------------------------------------- Net Unrealized (Losses) Gains on Securities Available for Sale $(220,920) $ 19,498 - --------------------------------------------------------------------------------------------------------------------------- Accumulated Nonowner Changes in Equity - --------------------------------------------------------------------------------------------------------------------------- Beginning Balance-Unrealized Holding Gains on Securities Available for Sale $ 82,827 $ 98,305 Current Period Change (220,920) 19,498 - --------------------------------------------------------------------------------------------------------------------------- Ending Balance-Unrealized Holding Gains (Losses) on Securities Available for Sale $(138,093) $117,803 - ---------------------------------------------------------------------------------------------------------------------------
-11- 12 ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED): 10. On May 12, 1998, the Registrant issued 3,600,000 shares of common stock through a public offering. The Registrant used the net proceeds from the sale of common stock for general corporate purposes. The issuance of the shares also facilitated the Registrant's ability to account for the acquisition of State Savings Company as a pooling-of-interests. 11. Reconciliation of Earnings Per Share to Diluted Earning Per Share:
THREE MONTHS ENDED SEPTEMBER 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------- NET AVERAGE PER-SHARE NET AVERAGE PER-SHARE ($000's) INCOME SHARES AMOUNT INCOME SHARES AMOUNT - ------------------------------------------------------------------------------------------------------------------------- EPS Income available to Common shareholders $ 173,504 273,445 $ 0.64 $ 144,789 268,327 $ 0.54 EFFECT OF DILUTIVE SECURITIES Stock Options 5,384 4,936 - ------------------------------------------------------------------------------------------------------------------------- DILUTED EPS Income available to Common shareholders Plus assumed conversions $ 173,504 278,381 $ 0.62 $144,789 273,711 $ 0.53 - -------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1999 1998 - ------------------------------------------------------------------------------------------------------------------------- NET AVERAGE PER-SHARE NET AVERAGE PER-SHARE ($000's) INCOME SHARES AMOUNT INCOME SHARES AMOUNT - ------------------------------------------------------------------------------------------------------------------------- EPS Income available to Common shareholders $ 476,981 270,796 $ 1.76 $327,974 266,227 $ 1.23 EFFECT OF DILUTIVE SECURITIES Stock Options 5,219 5,801 - ------------------------------------------------------------------------------------------------------------------------- DILUTED EPS Income available to Common shareholders Plus assumed conversions $ 476,981 276,597 $ 1.72 $327,974 271,446 $ 1.21 - -------------------------------------------------------------------------------------------------------------------------
-12- 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Registrant's financial condition and results of operations during the periods included in the Consolidated Financial Statements which are a part of this filing. This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the economic environment, competition, products and pricing in geographic and business areas in which the Registrant operates, prevailing interest rates, changes in government regulations and policies affecting financial services companies, credit quality and credit risk management, changes in the banking industry including the effects of consolidation resulting from possible mergers of financial institutions, acquisitions and integration of acquired businesses. The Registrant undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report. Results of Operations - --------------------- The Registrant's operating earnings were $477 million, up 18.2 percent, for the first nine months of 1999 from the $403.6 million last year. For the third quarter of 1999, net income was $173.5 million, up 19.8 percent for the period, compared to $144.8 million for the same period last year. Third quarter diluted earnings per share were $.62, up 17 percent over last year's $.53 and diluted operating earnings per share were $1.72 for the first nine months of 1999, up 15.4 percent over 1998's $1.49. Operating earnings, in 1998, exclude nonrecurring pretax charges of $106.4 million resulting from the second quarter mergers with CitFed Bancorp, Inc. and State Savings Company. The effect of these charges was to reduce net income by $75.6 million, or $.28 per diluted share. Including the nonrecurring charges, net income for the nine months ended September 30, 1998, was $327.9 million, or $1.21 per diluted share. Total assets were $33 billion at quarter end, compared to 1998's quarter end assets of $28.7 billion. Return on average equity was 19.7 percent and return on average assets was 2.13 percent for the third quarter of 1999 compared to 19.2 percent and 2.02 percent, respectively, for the same quarter of last year. -13- 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Net interest income on a fully taxable equivalent basis for the third quarter of 1999 was $300.2 million, a 13.5 percent increase over $264.6 million for the same period last year. For the nine month period of 1999, net interest income on a fully taxable equivalent basis increased to $883.5 million, or 12.6 percent, from the $784.8 million reported in the same period last year. The increase in net interest income during the third quarter over prior year resulted principally from a 13.3 percent growth in average interest-earning assets. During the nine month period, net interest margin improved 22 basis points to 4.09 percent from 3.87 percent in 1998. The provision for credit losses was $23.2 million in the 1999 third quarter, compared to $15.3 million in the same period last year. For the 1999 nine month period, the provision for credit losses was $77.9 million compared to $83 million in the same period last year. In 1998, the provision for credit losses included a $16.7 million provision to conform acquired companies to the Registrant's reserving and charge-off practices. Net charge-offs for the third quarter of 1999 were .33 percent of average loans and leases, compared with .53 percent for the third quarter of 1998. Underperforming assets of $123.4 million at September 30, 1999 were .60 percent of total loans and leases and other real estate owned, down from the $136.3 million reported in the same period last year or .77 percent of total loans and leases and other real estate owned. Nonperforming assets as a percentage of total loans, leases and other real estate owned was .21 percent at September 30, 1999, down from .22 percent last quarter and .34 percent for the same period last year. The Registrant maintains a reserve to absorb probable loan and lease losses inherent in the portfolio. Credit losses are charged and recoveries are credited to the reserve. Provisions for credit losses are credited to the reserve in an amount that management considers necessary to maintain an appropriate level of reserves given the estimated losses in the portfolio. The reserve is based on ongoing quarterly assessments of the probable estimated losses inherent in the loan and lease portfolio. In determining the appropriate level of reserves, the Registrant estimates losses using a range derived from "base" and "conservative" estimates. The Registrant's methodology for assessing the appropriate reserve level consists of several key elements. Larger commercial loans that exhibit potential or observed credit weaknesses are subject to individual review. Where appropriate, reserves are allocated to individual loans based on management's estimate of the borrower's ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to the Registrant. -14- 15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Included in the review of individual loans are those that are impaired as provided in SFAS No. 114, "Accounting by Creditors for Impairment of a Loan". Any reserves for impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or fair value of the underlying collateral. The Registrant evaluates the collectibility of both principal and interest when assessing the need for loss accrual. Historical loss rates are applied to other commercial loans not subject to specific reserve allocations. The loss rates are derived from a migration analysis, which computes the net charge-offs experience sustained on loans according to their internal risk grade. These grades encompass nine categories that define a borrower's ability to repay their loan obligations. Homogenous loans, such as consumer installment, residential mortgage loans, and automobile leases are not individually risk graded. Reserves are established for each pool of loans based on the expected net-charge-offs for one year. Loss rates are based on the average net charge-off history by loan category. An unallocated reserve is maintained to recognize the imprecision in estimating and measuring loss when evaluating reserves for individual loans or pools of loans. Historical loss rates for commercial and consumer loans may be adjusted for significant factors that, in management's judgement, reflect the impact of any current conditions on loss recognition. Factors which management considers in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs, nonaccrual and problem loans), changes in the internal lending policies and credit standards, collection practices, and examination results from bank regulatory agencies and the Registrant's internal credit examiners. Reserves on individual loans and historical loss rates are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience. Total other operating income, excluding securities gains, increased 18.2 percent to $195.2 million in the third quarter of 1999 compared to $165.1 million in the third quarter of 1998. For the first nine months of 1999 other operating income, excluding securities gains, was $555.6 million, for a 23.8 percent increase over the $448.9 million reported in same period last year. Data processing income increased 27.4 percent to $45.1 million for the third quarter of 1999 over prior year. Increases in electronic funds transfer (EFT) and higher transaction volume from expanded debit and ATM card usage coupled with expansion of business-to-business e:commerce contributed to the increase in data processing income. -15- 16 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Investment advisory income in 1999, increased 12 percent primarily due to double-digit sales in personal trust, employee benefits, corporate trust and brokerage revenue coupled with several new annuity products offerings. Improvements in commercial banking income and loans and lease fees contributed to the 21.3 percent increase in other service charges and fees during the third quarter. The overhead ratio (operating expenses divided by the sum of taxable equivalent net interest income and other operating income) was 39.6 percent for the 1999 third quarter, down from 42.3 percent in the same period last year. For the first nine months of 1999 the overhead ratio was 41.4 percent, compared to 42.9 percent last year, excluding merger-related charges. Operating expenses in 1998 include a one-time, merger-related pretax charge of $89.7 million resulting directly from the acquisitions of CitFed Bancorp, Inc. and State Savings Company. The charges consist of employee-related obligations, including change-of-control benefits and severance, costs to eliminate duplicate facilities and equipment, contract terminations, conversion expenses and professional fees. The improvement in the 1999 overhead ratio was primarily due to increased revenues during the third quarter and nine month period. Total operating expenses, increased to $196.1 million in the 1999 third quarter, or 7.3 percent over the same period last year. Salaries, wages, and incentives in 1999, increased 7 percent in the third quarter primarily due to additional compensation incurred to support improved sale volumes coupled with an increase in full-time-equivalent employees as a result of recent acquisitions. Net occupancy expense increased to $14.7 million during the third quarter primarily due to repairs and maintenance on existing and recently acquired facilities. Total other operating expenses increased 7.3 percent, to $77.9 million, for the quarter. Financial Condition - ------------------- The Registrant's balance sheet remains strong with high-quality assets and solid capital levels. Net interest income growth continues to be fueled by improved interest earning-asset and deposit mix, interest earning-asset growth, and net interest margin improvement. Average demand deposits and interest checking accounts grew 14.7 percent and 11.6 percent, in the third quarter and nine month period, respectively, from the same periods last year highlighting the success in emphasizing customer deposit accounts. Direct installment loan originations were $703.6 million this quarter, up 32.4 percent from last quarter's $531.6 million and up 67.4 percent from the $420 million in the third quarter last year. Residential mortgage originations increased to $1.1 billion, or 9.6 percent over last quarter's $1 billion compared to $1.2 billion in the same quarter a year ago. Consumer lease originations improved 3.8 percent to $494.5 million over last quarter and benefited from double-digit growth over the same period last year. -16- 17 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Liquidity and Capital Resources - ------------------------------- The maintenance of an adequate level of liquidity is necessary to ensure sufficient funds are available to meet customer loan demand and deposit withdrawals. The banking subsidiaries' liquidity sources consist of short-term marketable securities, maturing loans and federal funds loaned and selected securitizable loan assets. Liquidity has also been obtained through liabilities such as customer-related core deposits, funds borrowed, certificates of deposit and public funds deposits. At September 30, 1999, shareholders' equity was $3.405 billion, compared to $3.146 billion at September 30, 1998, an increase of $259 million, or 8.2 percent. Shareholders' equity as a percentage of total assets as of September 30, 1999 was 10.3 percent. The Federal Reserve Board has adopted risk-based capital guidelines which assign risk weightings to assets and off-balance sheet items and also define and set minimum capital requirements (risk-based capital ratios). The guidelines also define "well-capitalized" ratios of Tier 1, total capital, and leverage as 6 percent, 10 percent, and 5 percent, respectively. The Registrant exceeded these "well-capitalized" ratios at September 30, 1999 and 1998. At September 30, 1999, the Registrant had a Tier 1 risk-based capital ratio of 13.04 percent, a total risk-based capital ratio of 15.16 percent and a leverage ratio of 11.16 percent. At September 30, 1998, the Registrant had a Tier 1 risk-based capital ratio of 12.08 percent, a total risk-based capital ratio of 14.26 percent and a leverage ratio of 10.22 percent. Year 2000 - --------- As with other companies, the Registrant's computer programs were originally designed to recognize calendar years by their last two digits. Calculations performed using these truncated fields may not work properly with dates from the Year 2000 ("Y2K") and beyond. The Registrant began planning its Y2K conversion early in 1996 and formed a project committee that meets biweekly to review the status of the conversion. The Registrant's project includes both internal and external reviews. The Registrant's internal efforts address information technology systems and computer chip embedded functions such as vaults, elevators, security systems, building heating and cooling and other operating facilities. External efforts address critical business partners including customers, vendors, service suppliers, and utilities. The Registrants' efforts are being conducted in accordance with the Federal Financial Institutions Examinations Council (FFIEC) guidelines. The project management process as required by the FFIEC involves phases and facilitates the categorization of systems according to lost revenues or liability that would be incurred if the system failed. Senior management oversees the project and regularly reports to the Board of Directors. The Registrant identified critical systems as those where failure would result in at least $50,000 in losses per day or $1.5 million of total exposure. All five phases of the FFIEC have been completed with respect to critical systems and substantially -17- 18 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) completed for the remaining internal systems. During 1999, the Registrant will conduct additional internal integration testing and interface testing with critical business partners. Although this testing is not required, the Registrant is taking steps to ensure its efforts are successful in addressing Y2K problems. Because internal staff is largely completing the Y2K compliance effort, the Registrant does not expect to incur any significant costs with outside contractors relative to the completion of this task. The Registrant anticipates a total compliance cost of under $10 million; however, no material incremental costs are projected to be incurred. All, but an immaterial amount, of these costs are internal costs related to the lost opportunity of allocating time of the internal staff elsewhere. The estimated cost includes all software, hardware, and labor costs. The Registrant presently believes that with the planned modifications to existing systems and conversion to new systems, the Y2K compliance issues will be resolved on a timely basis, and that any related costs will not have a material impact on the operations, cash flows, or financial condition of future periods. The risks associated with the Registrant's Y2K compliance relate primarily to its relationship with critical business partners, which include customers, vendors, service suppliers, and utilities and their ability to effectively address their own Y2K issues. Major risks associated with the Y2K issue as it applies to external parties include a shut down of voice and data communication systems due to failure by systems, satellites or telephone companies; excessive cash withdrawal activities; ATM failures; cash courier delays or non-availability; problems with international accounts or offices, including inaccurate or delayed information or inaccessibility to data; and government facilities or utility companies not opening or operating. Each division within the Registrant has initiated projects to assess the Y2K preparedness of individual customers and material relationships and the impact on the Registrant in accordance with FFIEC guidelines. Contingency plans for critical business partners are being developed as their Y2K plans and procedures are analyzed. The Federal Reserve, which is the Registrant's primary bank regulator, includes a review of the risk assessments and contingency plans in its quarterly examinations of the Registrant's Y2K preparedness. -18- 19 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest rate risk management focuses on maintaining consistent growth in net interest income within Board-approved policy limits. The Registrant uses an earnings simulation model to analyze net interest income sensitivity to movements in interest rates. Given an immediate, sustained 200 basis point upward shock to the yield curve used in the simulation model, it is estimated net interest income for the Registrant would decrease by 5.50 percent over one year and increase by 2.21 percent over two years. A 200 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 3.14 percent over one year and decrease net interest income by an estimated 8.52 percent over two years. All of these estimated changes in net interest income are within the policy guidelines established by the Registrant's board of directors. -19- 20 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) List of Exhibits (27)-Financial Data Schedules for the Nine Months Ended September 30, 1999 (b) There were no Reports on Form 8-K filed during the third quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Fifth Third Bancorp ------------------- Registrant Date: November 12, 1999 /s/ Neal E. Arnold ------------------- Neal E. Arnold Senior Vice President and Chief Financial Officer -20- EX-27 2 EXHIBIT 27
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIFTH THIRD BANCORP'S QUARTERLY REPORT ON FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000035527 FIFTH THIRD BANCORP 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 716,591 278,316 75,882 0 9,985,754 91,189 90,972 20,526,209 303,416 33,237,677 19,538,239 7,444,312 1,157,954 1,657,822 0 0 610,345 2,795,915 33,237,677 1,122,008 455,868 5,774 1,583,650 470,191 743,715 839,935 77,944 3,662 596,249 725,028 476,981 0 0 476,981 1.76 1.72 4.10 36,625 79,628 0 0 266,860 81,001 24,535 303,416 303,416 0 0
-----END PRIVACY-ENHANCED MESSAGE-----