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, 1996
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) (Zip Code)
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
The number of shares outstanding of the Registrant's Common Stock,
without par value, as of September 30, 1996 was 105,871,574 shares.
<PAGE>
FIFTH THIRD BANCORP
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1996 and 1995 and December 31, 1995 3
Consolidated Statements of Income -
Three and Nine Months Ended September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 5
Consolidated Statements of Changes in Stockholders'
Equity - Nine Months Ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 11
<PAGE>
Fifth Third Bancorp and SubsidiariesSeptember 30, Dec. 31,September 30
Consolidated Balance Sheets 1996 1995 1995
($000's) (unaudited) (unaudited)
ASSETS
Cash and Due from Banks $ 683,190 628,535 561,545
Securities Available for Sale (a) 6,098,576 4,151,178 2,069,427
Securities Held to Maturity (b) 166,145 187,091 2,561,074
Other Short-Term Investments 44,090 6,822 7,540
Loans and Leases
Commercial Loans 4,159,484 3,584,124 3,565,736
Construction Loans 350,153 312,098 300,251
Commercial Mortgage Loans 787,340 794,267 783,633
Commercial Lease Financing 923,461 830,644 706,533
Residential Mortgage Loans 2,148,405 1,974,911 2,291,925
Consumer Loans 2,560,138 3,062,697 2,882,738
Consumer Lease Financing 1,869,250 1,457,929 1,346,874
Unearned Income (404,945) (326,027) (285,336
Reserve for Credit Losses (185,689) (177,388) (173,461
-------- -------- --------
Total Loans and Leases 12,207,597 11,513,255 11,418,893
Bank Premises and Equipment 227,562 195,990 188,028
Accrued Income Receivable 167,282 133,998 142,204
Other Assets 492,546 236,014 204,158
-------- -------- --------
Total Assets $ 20,086,988 17,052,883 17,152,869
LIABILITIES
Deposits
Demand $ 2,147,417 1,827,837 1,681,755
Interest Checking 1,790,561 1,558,506 1,449,289
Savings 1,864,773 795,799 707,583
Money Market 1,499,387 1,920,871 1,895,524
Other Time 5,679,443 4,621,401 4,654,969
Certificates - $100,000 and Over 898,702 704,968 861,813
Foreign Office 696,405 1,056,398 470,919
-------- -------- --------
Total Deposits 14,576,688 12,485,780 11,721,852
Federal Funds Borrowed 710,376 553,041 991,916
Short-Term Bank Notes 874,993 450,000 875,000
Other Short-Term Borrowings 1,136,369 1,002,454 1,058,000
Accrued Taxes, Interest and Expenses 389,640 315,026 328,514
Other Liabilities 90,480 96,611 101,595
Long-Term Debt 277,565 281,996 286,908
Convertible Subordinated Notes -- 143,400 143,706
-------- -------- --------
Total Liabilities 18,056,111 15,328,308 15,507,491
STOCKHOLDERS' EQUITY
Common Stock (c) 235,035 222,939 222,808
Capital Surplus 523,625 338,555 262,143
Retained Earnings 1,304,898 1,148,279 1,171,094
Unrealized Losses (32,681) 14,802 (10,667
-------- -------- --------
Total Stockholders' Equity 2,030,877 1,724,575 1,645,378
Total Liabilities and
Stockholders' Equity $ 20,086,988 17,052,883 17,152,869
See Notes to Consolidated Financial Statements
<PAGE>
Fifth Third Bancorp and Subsidiaries
Consolidated Balance Sheets
(continued)
(a) Amortized cost: Sept. 30, 1996 - $6,148,857,000, Dec. 31, 1995 -
$4,129,405,000 and Sept. 30, 1995 - $2,086,838,000.
(b) Market value: Sept. 30, 1996 - $166,145,000, Dec. 31, 1995 -
$187,091,000 and Sept. 30, 1995 - $2,575,318,000.
(c) Stated value $2.22 per share; authorized 300,000,000; outstanding
Sept. 30, 1996 - 105,871,574, Dec. 31, 1995 - 100,422,996 and
Sept. 30, 1995 - 100,363,760. The number of shares outstanding
at Dec. 31, 1995 and Sept. 30, 1995 have been adjusted for the
three-for-two stock split effected in the form of a stock
dividend paid January 12, 1996.
See Notes to Consolidated Financial Statements.
<PAGE>
Fifth Third Bancorp and Subsidiaries Three Months Ended
Consolidated Statements of Income (unaudited) September 30,
($000's) -----------------------
1996 1995
----------- -----------
Interest and Fees on Loans and Leases $254,019 228,046
Interest on Securities
Taxable 99,411 68,411
Exempt from Income Taxes 5,352 5,941
----------- -----------
Total Interest on Securities 104,763 74,352
Interest on Other Short-Term Investments 248 343
----------- -----------
Total Interest Income 359,030 302,741
INTEREST EXPENSE ----------- -----------
Interest on Deposits
Interest Checking 9,996 7,096
Savings 15,105 3,632
Money Market 13,351 15,971
Other Time 77,643 66,200
Certificates - $100,000 and Over 12,778 13,830
Foreign Office 9,858 7,577
----------- -----------
Total Interest on Deposits 138,731 114,306
Interest on Federal Funds Borrowed 14,569 14,618
Interest on Short-Term Bank Notes 10,643 14,536
Interest on Other Short-Term Borrowings 13,197 10,971
Interest on Long-Term Debt and Notes 4,791 5,461
----------- -----------
Total Interest Expense 181,931 159,892
----------- -----------
NET INTEREST INCOME 177,099 142,849
Provision for Credit Losses 16,431 10,698
NET INTEREST INCOME AFTER ----------- -----------
PROVISION FOR CREDIT LOSSES 160,668 132,151
OTHER OPERATING INCOME
Trust Income 18,486 15,619
Service Charges on Deposits 21,457 17,488
Data Processing Income 22,911 19,714
Other Service Charges and Fees 32,478 23,416
Securities Gains 18 4,081
----------- -----------
Total Other Operating Income 95,350 80,318
OPERATING EXPENSES
Salaries, Wages and Incentives 46,712 40,234
Employee Benefits 12,144 10,440
Equipment Expenses 4,899 4,051
Net Occupancy Expenses 9,080 7,060
Other Operating Expenses 48,216 37,803
One-Time SAIF Assessment 16,612 --
----------- -----------
Total Operating Expenses 137,663 99,588
----------- -----------
INCOME BEFORE INCOME TAXES 118,355 112,881
Applicable Income Taxes 39,300 37,692
----------- -----------
NET INCOME $79,055 75,189
=========== ===========
NET INCOME PER SHARE (a) $ .75 .75
AVERAGE SHARES OUTSTANDING (000's) (a) 105,789 99,680
CASH DIVIDENDS DECLARED PER SHARE (a) $ .29 .23 1/3
See Notes to Consolidated Financial Statements.
<PAGE>
Fifth Third Bancorp and Subsidiaries Nine Months Ended
Consolidated Statements of Income (unaudited) September 30,
($000's) -----------------------
1996 1995
----------- -----------
Interest and Fees on Loans and Leases $742,627 657,972
Interest on Securities
Taxable 266,390 183,663
Exempt from Income Taxes 16,067 17,227
----------- -----------
Total Interest on Securities 282,457 200,890
Interest on Other Short-Term Investments 627 987
----------- -----------
Total Interest Income 1,025,711 859,849
INTEREST EXPENSE ----------- -----------
Interest on Deposits
Interest Checking 26,159 20,934
Savings 38,441 10,136
Money Market 44,553 44,709
Other Time 227,839 180,769
Certificates - $100,000 and Over 35,858 29,493
Foreign Office 22,872 40,414
----------- -----------
Total Interest on Deposits 395,722 326,455
Interest on Federal Funds Borrowed 48,459 40,121
Interest on Short-Term Bank Notes 18,105 41,887
Interest on Other Short-Term Borrowings 36,222 29,655
Interest on Long-Term Debt and Notes 16,947 9,487
----------- -----------
Total Interest Expense 515,455 447,605
----------- -----------
NET INTEREST INCOME 510,256 412,244
Provision for Credit Losses 44,229 28,479
NET INTEREST INCOME AFTER ----------- -----------
PROVISION FOR CREDIT LOSSES 466,027 383,765
OTHER OPERATING INCOME
Trust Income 54,943 45,649
Service Charges on Deposits 61,538 48,748
Data Processing Income 63,273 54,502
Other Service Charges and Fees 90,625 70,160
Securities Gains 390 4,110
----------- -----------
Total Other Operating Income 270,769 223,169
OPERATING EXPENSES
Salaries, Wages and Incentives 139,945 116,644
Employee Benefits 35,759 30,847
Equipment Expenses 14,911 12,277
Net Occupancy Expenses 26,883 20,878
Other Operating Expenses 141,179 111,284
One-Time SAIF Assessment 16,612 --
----------- -----------
Total Operating Expenses 375,289 291,930
----------- -----------
INCOME BEFORE INCOME TAXES 361,507 315,004
Applicable Income Taxes 120,063 105,183
----------- -----------
NET INCOME $241,444 209,821
=========== ===========
NET INCOME PER SHARE (a) $ 2.34 2.13
AVERAGE SHARES OUTSTANDING (000's) (a) 103,361 98,373
CASH DIVIDENDS DECLARED PER SHARE (a) $ .81 .70
See Notes to Consolidated Financial Statements.
<PAGE>
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
For the Six Months Ended June 30, ($000's)
1996 1995
------------------------------------------------------------------------
Operating Activities
------------------------------------------------------------------------
Net Income $241,444 $209,821
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities
Provision for Credit Losses 44,229 28,479
Depreciation, Amortization and Accretion 38,842 19,391
Provision for Deferred Income Taxes 21,730 17,358
Realized Securities Gains (2,076) (4,119)
Realized Securities Losses 1,686 9
Proceeds from Sales of Residential Mortgage
Loans Held for Sale 401,356 203,272
Net Gains on Sales of Loans (6,496) (3,025)
Net Increase in Residential Mortgage Loans
Held for Sale (485,780) (275,132)
Net Increase in Accrued Income Receivable (31,212) (24,633)
Net Decrease (Increase) in Other Assets (75,779) 15,970
Net Increase in Accrued Taxes, Interest and
Expenses 71,815 94,146
Net Decrease in Other Liabilities (34,510) (9,946)
------------------------------------------------------------------------
Net Cash Provided by Operating Activities 185,249 271,591
------------------------------------------------------------------------
Investing Activities
Proceeds from Sales of Securities Available
for Sale 266,571 113,539
Proceeds from Calls, Paydowns and Maturities of
Securities Available for Sale 666,104 152,470
Purchases of Securities Available for Sale (2,222,110) (460,025)
Proceeds from Calls, Paydowns and Maturities of
Securities Held to Maturity 243,849 415,922
Purchases of Securities Held to Maturity (223,447) (445,958)
Net Decrease (Increase) in Other
Short-Term Investments (33,780) 37,948
Purchase of Loans in Acquisitions (224,313) (177,904)
Proceeds from Securitization of Automobile Loans 824,607 --
Net Increase in Loans and Leases (1,739,504)(1,157,890)
Purchases of Bank Premises and Equipment (28,663) (19,680)
Proceeds from Disposal of Bank Premises
and Equipment 1,441 2,148
Net Cash Paid in Purchase of Subsidiaries (175,572) (30,313)
------------------------------------------------------------------------
Net Cash Used in Investing Activities (2,644,817)(1,569,743)
------------------------------------------------------------------------
<PAGE>
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
For the Six Months Ended June 30, ($000's)
(continued) 1996 1995
------------------------------------------------------------------------
Financing Activities
Purchase of Deposits 1,921,019 271,435
Net Increase in Core Deposits 222,274 187,064
Net Increase (Decrease) in CDs - $100,000 and Over,
Including Foreign (268,524) 29,007
Net Increase in Federal Funds Borrowed 157,335 313,309
Net Increase in Short-Term Bank Notes 424,993 30,005
Net Increase in Other Short-Term Borrowings 133,915 146,105
Issuance of Long-Term Debt 10,125 266,556
Repayment of Long-Term Debt (15,257) (15,115)
Payment of Cash Dividends (80,204) (65,713)
Exercise of Stock Options 8,643 2,170
Other (96) (135)
------------------------------------------------------------------------
Net Cash Provided by Financing Activities 2,514,223 1,164,688
------------------------------------------------------------------------
Increase (Decrease) in Cash and Due from Banks 54,655 (133,464)
Cash and Due from Banks at Beginning of Period 628,535 695,009
------------------------------------------------------------------------
Cash and Due from Banks at End of Period $683,190 561,545
========================================================================
See Notes to Consolidated Financial Statements
<PAGE>
Fifth Third Bancorp and Subsidiaries
Consolidated Statements of Changes
In Stockholders' Equity (unaudited)
For the Nine Months Ended September 30 ($000's)
1996 1995
----------- -----------
Balance at January 1 $ 1,724,575 1,398,774
Net Income 241,444 209,821
Cash Dividends Declared (1996 - $.81 Per
Share and 1995 - $.70 Per Share) (a) (84,797) (69,071)
Stock Options Exercised,
Including Treasury Shares Issued 8,643 2,170
Stock Issued in Conversion
of Subordinated Notes 143,255 --
Shares Acquired for Treasury (53) (70)
Fractional Shares Issued (36) --
Stock Issued in Acquisitions and Other 45,329 66,203
Change in Unrealized Gains/Losses on
Securities Available for Sale (47,483) 37,551
----------- -----------
Balance at September 30 $ 2,030,877 1,645,378
=========== ===========
(a) Per share amounts and average shares outstanding have been adjusted
for the three-for-two stock split effected in the form of a stock
dividend paid January 12, 1996.
See Notes to Consolidated Financial Statements
<PAGE>
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 only normal,
recurring accruals) necessary to present fairly the consolidated
financial position as of September 30, 1996 and 1995, and the
results of operations for the three and nine months ended
September 30, 1996 and 1995 and cash flows for the nine months
ended September 30, 1996 and 1995. In accordance with generally
accepted accounting principles for interim financial information,
these statements do not include all of the information and
footnotes required by generally accepted accounting principles for
complete annual financial statements. Financial information as of
December 31, 1995 has been derived from the audited consolidated
financial statements of the Registrant. The results of operations
and cash flows for the nine months ended September 30, 1996 and
1995 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, 1995, included in the Registrant's Annual
Report on Form 10-K.
2. The Registrant adopted Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," effective January 1,
1996. This statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amounts of
these assets may not be recoverable. The adoption of SFAS No. 121
did not have a material effect on the Consolidated Financial
Statements.
3. The Registrant adopted SFAS No. 123, "Accounting for Stock-Based
Compensation," effective January 1, 1996. This statement
encourages, but does not require, adoption of a fair-value-based
accounting method for employee stock-based compensation
arrangements. Management has elected to disclose in the 1996
annual Consolidated Financial Statements pro forma net income and
net income per share as if the fair-value-based method had been
applied in measuring compensation cost.
4. SFAS No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" was issued in June,
1996 and provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishments of
liabilities. SFAS No. 125 applies to transactions occurring after
December 31, 1996. Management has not yet quantified the effect of
this new standard on the Consolidated Financial Statements.
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Residential mortgage loans held for sale, which are valued at the
lower of aggregate cost or market value, were $10,216,000,
$22,954,000 and $24,659,000 at September 30, 1996, December 31,
1995 and September 30, 1995, respectively.
6. In the first nine months of 1996, the Registrant paid $515,216,000
in interest and $80,500,000 in Federal income taxes. In the first
nine months of 1995, the Registrant paid $411,120,000 in interest
and $52,000,000 in Federal income taxes. In the first nine months
of 1996 and 1995, respectively, the Registrant had noncash
investing activities consisting of the securitization of
$639,600,000 and $553,149,000 of residential mortgage loans.
7. On March 15, 1996, the Registrant acquired Kentucky Enterprise
Bancorp, Inc., with assets of $276 million in a stock-for-stock
exchange accounted for as a pooling of interests. The Consolidated
Financial Statements for prior periods have not been restated due
to immateriality.
8. On January 19, 1996, the Registrant purchased the deposits and
fixed assets of the 28 offices of 1st Nationwide Bank in the
Cleveland, Ohio area for $136 million. On February 23, 1996, the
Registrant purchased the deposits, loans and fixed assets of First
Chicago NBD Corporation's 25 office Columbus and Dayton, Ohio
operations.
9. During the second quarter of 1996, the Registrant redeemed its
4 1/4% Convertible Subordinated Notes due 1998 by issuing
3.4 million common shares. As a result, $143.3 million was added
to Stockholders' Equity.
10. Certain prior year's data has been reclassified to conform to
current presentation.
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.
RESULTS OF OPERATIONS
Third quarter 1996 results include a one-time, pre-tax charge of $16.6
million ($10.8 million, or $.10 per share after tax), mandated by recent
federal legislation to recapitalize the Savings Association Insurance
Fund (SAIF). The Registrant's net income was $79,055,000 for the third
quarter, up 5.1%, and $241,444,000 for the first nine months of 1996, up
15.1%, compared to the same periods in 1995. Net income per share for
the third quarter was $.75, unchanged from 1995's $.75 and $2.34 for the
first nine months, up 9.9% over 1995's $2.13. The SAIF charge applies
to approximately $2.7 billion of thrift deposits acquired by the
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Registrant over the years. In exchange for the charge this quarter, the
Registrant expects ongoing deposit insurance premiums will be reduced by
approximately $6.1 million annually.
Excluding the impact of the one-time charge, return on average equity
was 17.5% and return on average assets was 1.79% for the third quarter
of 1996.
The Registrant's net interest income on a fully taxable equivalent basis
for the third quarter of 1996 was $186.6 million, a 23% increase over
the $151.2 million for the same period of 1995. This increase resulted
from a 20% increase in average interest-earning assets and an increase
of 12 basis points in the net interest margin.
Commercial loans and leases were up 15.8%, led by commercial leases, up
31.2%. Installment loan and consumer lease originations totalled $735
million this quarter and $2.3 billion for the nine months ended,
compared to $595 million and $1.6 billion, respectively, for the same
periods last year. Residential mortgage loan volume remained strong,
with approximately $368 million originated in the third quarter and $1.2
billion for the nine months ended, compared to $330 million and $643
million, respectively, for the same periods in 1995. The Registrant
sold or securitized nearly $150 million of mortgage loans during the
quarter and over $1 billion during the first nine months of 1996. The
Registrant also securitized and sold an additional $413 million of auto
loans during the third quarter, which brings the total auto loans
securitized during the nine months ended to over $820 million.
Excluding the effect of sales and securitizations during the past twelve
months, consumer loan outstandings have increased 39.4%.
The provision for credit losses was $16.4 million in the third quarter
of 1996 and $10.7 million in the third quarter of 1995. Net chargeoffs
for the third quarter were .46% of average loans and leases, compared
with .28% reported for the third quarter of 1995. Nonperforming assets
as a percentage of total loans, leases and other real estate owned were
.38% at September 30, 1996 and .24% at September 30, 1995. Although net
chargeoffs have risen in 1996, the total net chargeoff ratio remains
below the Registrant's historical 10-year average of .48% and the
reserve for credit losses is in excess of three and one-half times
nonperforming assets.
Total other operating income, excluding securities gains, increased to
$95.3 million for the third quarter of 1996, a 25% increase over the
third quarter of 1995. Trust income and data processing income
increased 18.4% and 16.2%, respectively, over the same period in 1995,
while other service charges and fees increased 38.7% for the quarter,
due largely to growth in cardholder fees, consumer loan fees and
mortgage banking income.
The overhead ratio (operating expenses-excluding the SAIF assessment-
divided by the sum of taxable equivalent net interest income and other
operating income) for the quarter improved to 42.9%, compared to 44.1%
last quarter and 43% for the third quarter of 1995. Excluding the
SAIF assessment, total operating expenses this quarter increased less
than one percent over last quarter as management continues to scrutinize
expenses and integrate acquisitions. Excluding the one-time charge,
total operating expenses increased 21.6% over the same period of 1995.
Salaries, wages, incentives and employee benefits increased 16.1%. The
number of full-time equivalent employees (FTEs) increased 10.2% (or 605)
over the same period in 1995 to 6,525 at September 30, 1996.
Approximately one-half of the increase in FTEs is directly due to
acquisitions. Equipment and net occupancy expenses increased 25.8% over
1995 due to the net addition of 33 locations, primarily from
acquisitions, and upgrades of equipment to support growth and processing
technology. Other operating expenses before the assessment increased
27.5% over 1995, due in large part to increases in expenses resulting
from strong volume in all of our businesses, data processing and the
amortization of intangibles.
MATERIAL CHANGES IN FINANCIAL CONDITION
The material changes that have occurred in the Registrant's financial
condition during 1996 are as follows ($000's):
Sept. 30, Dec. 31,
1996 1995 $ +/- % +/-
--------- ----------- ------- ----
Securities Available for Sale $ 6,098,576 4,151,178 1,947,398 46.9
Loans and Leases 12,393,286 11,690,643 702,643 6.0
Other Assets 492,546 236,014 256,532 108.7
Core Deposits 12,981,581 10,724,414 2,257,167 21.0
CDs > $100,000, incl. Foreign 1,595,107 1,761,366 (166,259) (9.4)
Federal Funds Borrowed 710,376 553,041 157,335 28.4
Short-Term Bank Notes 874,993 450,000 424,993 94.4
Convertible Subordinated Notes -- 143,400 (143,400)(100.0)
The growth in securities available for sale was due primarily to the
liquidity provided by core deposit acquisitions, which added a total of
$2 billion in deposits. Loan and lease origination volume was strong,
offset by securitizations and sales of $1.9 billion in residential
mortgage and auto loans. Loan and lease volume was funded primarily
through short-term borrowings including federal funds borrowed and
short-term bank notes, which were also used to replace maturing foreign
office deposits. Acquisitions also contributed over $199 million in
intangibles (other assets). The decrease in Convertible Subordinated
Notes is due to the conversion as previously discussed.
LIQUIDITY AND CAPITAL RESOURCES
The maintenance of an adequate level of liquidity is necessary to ensure
that sufficient funds are available to meet customers' 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, 1996, stockholders' equity was $2.031
billion, compared to $1.645 billion at September 30, 1995, an increase
of $386 million, or 23.5%. Stockholders' equity as a percentage of
total assets as of September 30, 1996 was 10.1%. 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%, 10% and 5%, respectively. The Registrant
exceeded these "well capitalized" ratios at September 30, 1996 and
1995. At September 30, 1996, the Registrant had a Tier 1 risk-based
capital ratio of 11.2%, a total risk-based capital ratio of 14% and a
leverage ratio of 9%. At September 30, 1995, the Registrant had a Tier
1 risk-based capital ratio of 11%, total risk-based capital ratio of
14.4% and a leverage ratio of 9.5%.
ITEM 6. EXHIBITS
1. Exhibit No. 11 - Computation of Consolidated Net Income Per Share
for the Three and Nine Months Ended September 30, 1996 and 1995.
Per share amounts and average shares have been adjusted for the
three-for-two stock split effected in the form of a stock dividend
paid January 12, 1996.
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
/s/ P. Michael Brumm
---------------------
Date: November 12, 1996 P. Michael Brumm,
Executive Vice President and CFO
<PAGE><TABLE>
EXHIBIT 11
FIFTH THIRD BANCORP
COMPUTATION OF CONSOLIDATED NET INCOME PER SHARE
($000's except per share data)
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Income $ 79,055 75,189 $ 241,444 209,821
============ ============ ============ ============
Net income per common share - assuming no dilution:
Weighted average number of shares outstanding 105,789 99,680 103,361 98,373
============ ============ ============ ============
Per share (net income divided by the weighted
average number of shares outstanding) $ 0.75 0.75 $ 2.34 2.13
============ ============ ============ ============
Net income per common and common equivalent share:
Net income $ 79,055 75,189 $ 241,444 209,821
Add - Interest on 4 1/4% convertible subordinated
notes due 1998, net of applicable income taxes -- 1,079 1,637 3,240
------------ ------------ ------------ ------------
Adjusted net income $ 79,055 76,268 $ 243,081 213,061
============ ============ ============ ============
Adjusted weighted average number of shares outstanding -
after giving effect to the conversion of stock options
and convertible subordinated notes 106,697 103,729 106,154 102,671
============ ============ ============ ============
Per share (adjusted net income divided by the adjusted
weighted average number of shares outstanding) $ 0.74 0.74 $ 2.29 2.08
============ ============ ============ ============
Net income per common share - assuming full dilution:
Adjusted net income $ 79,055 76,268 $ 243,081 213,061
============ ============ ============ ============
Adjusted weighted average number of shares outstanding -
after giving effect to the conversion of stock options
and convertible subordinated notes 106,885 103,771 106,323 102,682
============ ============ ============ ============
Per share (adjusted net income divided by the adjusted
weighted average number of shares outstanding) $ 0.74 0.73 $ 2.29 2.07
============ ============ ============ ============
</TABLE>
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<S> <C>
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<PERIOD-END> SEP-30-1996
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<INVESTMENTS-CARRYING> 166,145
<INVESTMENTS-MARKET> 166,145
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<DEPOSITS> 14,576,688
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0
0
<COMMON> 235,035
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<INTEREST-DEPOSIT> 395,722
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<INTEREST-INCOME-NET> 510,256
<LOAN-LOSSES> 44,229
<SECURITIES-GAINS> 390
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<INCOME-PRETAX> 361,507
<INCOME-PRE-EXTRAORDINARY> 241,444
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<EPS-PRIMARY> 2.29
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