<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1998 Commission File Number 0-8076
FIFTH THIRD BANCORP
(Exact name of Registrant as specified in its charter)
Ohio 31-0854434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
38 Fountain Square Plaza
Cincinnati, Ohio 45263
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:(513)579-5300
Securities registered pursuant to Section 12(g) of the Act:
Common Stock Without Par Value
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.//
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
The Aggregate Market Value of the Voting Stock held by non-affiliates of the
Registrant was $12,846,228,056 as of February 1, 1999. (1)
There were 267,147,048 shares of the Registrant's Common Stock, without par
value, outstanding as of February 1, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
1998 Annual Report to Shareholders: Parts I, II, and IV
Proxy Statement for 1999 Annual Meeting of Shareholders: Parts III and IV
(1) In calculating the market value of securities held by non-affiliates of
Registrant as disclosed in the cover page of this Form 10-K, Registrant has
treated as securities held by affiliates as of December 31, 1998, voting stock
owned of record by its directors and principal executive officers, shareholders
owning greater than 10% of the voting stock and voting stock held by
Registrant's trust departments in a fiduciary capacity.
<PAGE> 2
PART I
ITEM 1. BUSINESS
- -----------------
ORGANIZATION
Fifth Third Bancorp (the "Company") is an Ohio corporation organized in 1975 as
a bank holding company registered under the Bank Holding Company Act of 1956, as
amended (the "Act"), and subject to regulation by the Federal Reserve Board. The
Company, with its principal office located in Cincinnati, is a multi-bank
holding company as defined in the Act and is registered as such with the Board
of Governors of the Federal Reserve System and has 17 wholly-owned subsidiaries:
Fifth Third Bank; Fifth Third Bank, Central Ohio; Fifth Third Bank, Northwestern
Ohio, N.A.; Fifth Third Bank, Ohio Valley; Fifth Third Bank, Western Ohio; Fifth
Third Bank, Florida; Fifth Third Bank, Northern Kentucky, Inc.; Fifth Third
Bank, Kentucky, Inc.; Fifth Third Bank, Indiana; Fifth Third Bank, Southwest,
F.S.B.; Fifth Third Community Development Company; Fifth Third Investment
Company; Fountain Square Insurance Company; Calvin Hotel Co.; Fifth Third/The
Ohio Company; State Savings Mortgage Company and Heartland Capital Management,
Inc.
At December 31, 1998, the Company, its affiliated banks and other subsidiaries
had consolidated total assets of $28.9 billion, consolidated total deposits of
$18.8 billion and consolidated total shareholders' equity of $3.2 billion.
The Company, through its subsidiaries, engages primarily in commercial, retail
and trust banking, investment services and leasing activities and also provides
credit life, accident and health insurance, discount brokerage services and
property management for its properties. Those subsidiaries consist of The Fifth
Third Company, Fifth Third Securities, Inc., The Fifth Third Leasing Company,
Midwest Payment Systems, Inc. ("MPS"), Fifth Third International Company and
Fifth Third/W. Lyman Case & Company. Fifth Third's affiliates provide a full
range of financial products and services to the retail, commercial, financial,
governmental, educational and medical sectors, including a wide variety of
checking, savings and money market accounts, and credit products such as credit
cards, installment loans, mortgage loans and leasing. Each of the banking
affiliates has deposit insurance provided by the Federal Deposit Insurance
Corporation ("FDIC") through the Bank Insurance Fund ("BIF") and the Savings
Association Insurance Fund ("SAIF").
The Company, through its banking subsidiaries, operates for itself and other
financial institutions a proprietary automated teller machine ("ATM") network,
Jeanie(R). The Jeanie system participates in a shared ATM network called "Money
Station(R)," which includes several Ohio bank holding companies and over 5,000
ATM's. The "Money Station" network participates in another shared ATM network
called "PLUS System(R)," which is a nationwide network with over 170,000
participating ATM's. Fifth Third Bank, through its wholly-owned subsidiary, MPS,
also provides electronic switch services for several regional banks and bank
holding companies in Ohio, Kentucky and Illinois.
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<PAGE> 3
Fifth Third International Company has a 99.9 percent owned subsidiary: Fifth
Third Trade Services Limited. Fifth Third Investment Company owns the remaining
.01 percent.
The Fifth Third Leasing Company has a 100 percent owned subsidiary: Fifth Third
Auto Leasing Trust.
ACQUISITIONS
The Company is the result of mergers and acquisitions over the years involving
financial institutions throughout Ohio, Indiana, Kentucky, Arizona and Florida.
The Company made the following acquisitions during 1998:
On April 9, 1998, the Company acquired W. Lyman Case & Company, a commercial
mortgage banking company headquartered in Columbus, Ohio, for $15 million. W.
Lyman Case & Company originated more than $680 million in financing and equity
transactions since acquisition and has a loan servicing portfolio of $2 billion
at year-end 1998. On June 12, 1998, the Company acquired The Ohio Company, a
full-service broker-dealer for retail and institutional clients headquartered in
Columbus, Ohio, for consideration consisting of 1,862,765 shares of the
Company's common stock. These transactions were accounted for as purchases.
On June 19, 1998, the Company acquired State Savings Company ("State"), a
privately-owned thrift holding company headquartered in Columbus, Ohio with $2.7
billion in assets. On June 26, 1998, the Company acquired CitFed Bancorp, Inc.
("CitFed"), a publicly-traded savings and loan holding company headquartered in
Dayton, Ohio with $3.1 billion in assets. These transactions were tax-free,
stock-for-stock exchanges accounted for as poolings-of-interests. The Company
exchanged 16,625,271 shares of the Company's common stock for all outstanding
shares of State. The Company exchanged 13,222,869 shares of the Company's common
stock for each outstanding share of CitFed.
Financial data for all prior periods has been restated to reflect the second
quarter 1998 mergers with CitFed and State. Cash dividends per common share are
those of the Company declared prior to the mergers with CitFed and State.
The restatement of the CitFed merger was accomplished by combining CitFed's
March 31, 1998 fiscal year financial information with the Company's December 31,
1997 calendar year financial information. In 1998, CitFed's fiscal year was
conformed to the Company's calendar year. As a result of conforming fiscal
periods, the Company's Consolidated Statements 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 $7.8 million. An adjustment to shareholders'
equity removes the effect of including CitFed's financial results in both
periods.
COMPETITION
There are hundreds of commercial banks, savings and loans and other financial
services providers in Ohio, Kentucky, Indiana, Arizona and Florida and
nationally, which provide strong
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<PAGE> 4
competition to the Company's banking subsidiaries. As providers of a full range
of financial services, these subsidiaries compete with national and state banks,
savings and loan associations, securities dealers, brokers, mortgage bankers,
finance and insurance companies, and other financial service companies. With
respect to data processing services, the Bank's data processing subsidiary,
Midwest Payment Systems, Inc., competes with other electronic fund transfer
(EFT) service providers such as Electronic Payment Systems, Deluxe Corporation
and Electronic Data Systems and other merchant processing providers such as
First Data Corporation, National Processing, Inc. and First USA Paymentech, Inc.
The earnings of the Company are affected by general economic conditions as well
as by the monetary policies of the Federal Reserve Board. Such policies, which
include regulating the national supply of bank reserves and bank credit, can
have a major effect upon the source and cost of funds and the rates of return
earned on loans and investments. The Federal Reserve influences the size and
distribution of bank reserves through its open market operations and changes in
cash reserve requirements against member bank deposits.
REGULATION AND SUPERVISION
The Company, as a bank holding company, is subject to the restrictions of the
Act. The Act provides that the acquisition of control of a bank is subject to
the prior approval of the Board of Governors of the Federal Reserve System. The
Company is required to obtain the prior approval of the Federal Reserve Board
before it can acquire control of more than 5 percent of the voting shares of
another bank. The Act does not permit the Federal Reserve Board to approve an
acquisition by the Company, or any of its subsidiaries, of any bank located in a
state other than Ohio, unless the acquisition is specifically authorized by the
law of the state in which such bank is located.
On September 29, 1994, the Act was amended by The Interstate Banking and Branch
Efficiency Act of 1994 which authorizes interstate bank acquisitions anywhere in
the country effective one year after the date of enactment, and interstate
branching by acquisition and consolidation effective June 1, 1997, in those
states that have not opted out by that date.
The Company's subsidiary state banks are primarily subject to the laws of the
state in which each is located, the Board of Governors of the Federal Reserve
System and/or the Federal Deposit Insurance Corporation. The subsidiary bank
which is organized under the laws of the United States is primarily subject to
regulation by the Comptroller of the Currency and the Federal Deposit Insurance
Corporation. The Company's savings and loan subsidiary is subject to regulation
by the Office of Thrift Supervision.
The Company and its subsidiaries are subject to certain restrictions on
intercompany loans and investments. The Company and its subsidiaries are also
subject to certain restrictions with respect to engaging in the underwriting and
public sale and distribution of securities. In addition,
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<PAGE> 5
the Company and its subsidiaries are subject to examination at the discretion of
supervisory authorities.
The Act limits the activities which may be engaged in by the Company and its
subsidiaries to ownership of banks and those activities which the Federal
Reserve Board has deemed or may in the future find to be so closely related to
banking as to be a proper incident thereto.
The Financial Reform, Recovery and Enforcement Act of 1989 (FIRREA) provides
that a holding company's controlled insured depository institutions are liable
for any loss incurred by the Federal Deposit Insurance Corporation in connection
with the default of, or any FDIC-assisted transaction involving, an affiliated
insured bank or savings association.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the "FDIC
Improvement Act") covers a wide expanse of banking regulatory issues. The FDIC
Improvement Act deals with the recapitalization of the Bank Insurance Fund, with
deposit insurance reform, including requiring the FDIC to establish a risk-based
premium assessment system, and with a number of other regulatory and supervisory
matters.
EMPLOYEES
As of December 31, 1998, there were no employees of the Company. Subsidiaries of
the Company employed 8,761 employees -- 1,383 were officers and 1,568 were
part-time employees. There were 8,330 full-time equivalent employees as of
December 31, 1998.
STATISTICAL INFORMATION
Pages 6 to 13 contain statistical information on the Company and its
subsidiaries. Information about the Company's business segments is incorporated
herein by reference to pages 28 and 29 of Registrant's 1998 Annual Report to
Shareholders attached to this filing as Exhibit 13.
6
<PAGE> 6
SECURITIES PORTFOLIO
The securities portfolio as of December 31 for each of the last five years, and
the maturity distribution and weighted average yield of securities as of
December 31, 1998, are incorporated herein by reference to the securities tables
on page 36 of the Company's 1998 Annual Report to Shareholders attached to this
filing as Exhibit 13.
The weighted average yields for the securities portfolio are yields to maturity
weighted by the par values of the securities. The weighted average yields on
securities exempt from income taxes are computed on a taxable-equivalent basis.
The taxable-equivalent yields are net after-tax yields to maturity divided by
the complement of the full corporate tax rate (35 percent). In order to express
yields on a taxable-equivalent basis, yields on obligations of states and
political subdivisions (municipal securities) have been increased as follows:
<TABLE>
<S> <C>
Under 1 year 2.70%
1 - 5 years 2.46%
6 - 10 years 2.55%
Over 10 years 2.83%
Total municipal securities 2.52%
</TABLE>
AVERAGE BALANCE SHEETS
The average balance sheets are incorporated herein by reference to Table 1 on
pages 30 and 31 of the Company's 1998 Annual Report to Shareholders attached to
this filing as Exhibit 13.
ANALYSIS OF NET INTEREST INCOME AND NET INTEREST INCOME CHANGES
The analysis of net interest income and the analysis of net interest income
changes are incorporated herein by reference to Table 1 and Table 2 and the
related discussion on pages 30 through 32 of the Company's 1998 Annual Report to
Shareholders attached to this filing as Exhibit 13.
7
<PAGE> 7
TYPES OF LOANS AND LEASES
A summary of loans and leases by major category as of December 31 ($000's):
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ---
<S> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural loans $ 4,822,992 4,363,289 4,093,432 3,663,973 3,104,599
Real estate - construction loans 572,082 560,381 593,276 530,940 438,073
Real estate - mortgage loans 5,448,632 6,311,872 5,884,557 5,425,989 5,443,570
Consumer loans 3,354,681 3,068,597 2,837,742 3,235,003 2,546,688
Lease financing 4,269,851 3,582,731 3,095,894 2,297,125 1,703,492
------------------------------------ ---------------- ---------------- ---------------
Loans and leases, gross 18,468,238 17,886,870 16,504,901 15,153,030 13,236,422
Unearned income (689,215) (573,927) (470,378) (339,833) (243,648)
Reserve for credit losses (266,860) (250,950) (233,803) (224,134) (202,009)
------------------------------------ ---------------- ---------------- ---------------
Loans and leases, net $ 17,512,163 17,061,993 15,800,720 14,589,063 12,790,765
==================================== ================ ================ ===============
Loans held for sale $ 492,017 263,772 74,916 139,484 41,723
==================================== ================ ================ ===============
</TABLE>
MATURITIES AND SENSITIVITY OF LOANS TO CHANGES IN INTEREST RATES
The remaining maturities of the loan portfolio distributed to reflect cash flows
(excluding residential mortgage and consumer loans) at December 31, 1998, based
on scheduled repayments and the sensitivity of loans to interest rate changes
for loans due after one year ($000's):
<TABLE>
<CAPTION>
Commercial,
Financial and Real Estate Real Estate
Agricultural Construction Commercial
Loans Loans Loans Total
------------------------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Due in one year or less $ 2,219,859 332,350 476,777 $ 3,028,986
Due after one year through
five years 1,795,744 155,026 582,166 2,532,936
Due after five years 807,389 84,706 119,809 1,011,904
------------------------------------ ---------------- ----------------
Total $ 4,822,992 572,082 1,178,752 $ 6,573,826
==================================== ================ ================
Loans due after one year:
Predetermined interest rate $ 2,075,132 154,495 531,405 $ 2,761,032
==================================== ================ ================
Floating or adjustable
interest rate $ 528,001 85,237 170,570 $ 783,808
==================================== ================ ================
</TABLE>
8
<PAGE> 8
RISK ELEMENTS
Interest on loans is normally accrued at the rate agreed upon at the time each
loan was negotiated. It is the Company's policy to discontinue accrual of
interest on commercial, construction and mortgage loans when there is a clear
indication the borrower's cash flow may not be sufficient to meet payments as
they become due. Such loans, other than consumer loans, are also placed on
nonaccrual status when principal or interest is past due ninety days or more,
unless the loan is well secured and in the process of collection. The following
table presents data concerning loans and leases at risk at December 31 ($000's):
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Nonaccrual loans and leases $ 42,760 71,667 66,745 76,281 39,253
Loans and leases contractually
past due ninety days or more as
to interest, principal or rental
payments but still accruing
interest 79,233 46,281 38,053 20,455 13,237
Loans and leases renegotiated to
provide a reduction or deferral of
interest, principal or rental payments
because of the financial position
deterioration of the borrower - 128 1,121 506 443
</TABLE>
As of December 31, 1998, there were $46,742,000 of loans and leases currently
performing in accordance with contractual terms where there are serious doubts
as to the ability of the borrower to comply with such terms.
For the years 1998, 1997 and 1996, interest income of $789,000, $714,000 and
$807,000, respectively was recorded on nonaccrual and renegotiated loans and
leases. Additional interest income of $2,837,000, $5,482,000 and $6,329,000
would have been recorded if the nonaccrual and renegotiated loans and leases had
been current in accordance with their original terms.
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<PAGE> 9
SUMMARY OF CREDIT LOSS EXPERIENCE
A summary of the activity in the reserve for credit losses arising from
provisions charged to operations, losses charged off and recoveries of losses
previously charged off ($000's):
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Loans and leases outstanding at
December 31: $ 17,779,023 17,312,943 16,034,523 14,813,197 12,992,774
================= ================ ================ ================ ================
Loans held for sale $ 492,017 263,772 74,916 139,484 41,723
================= ================ ================ ================ ================
Average loans and leases
outstanding $ 17,664,000 16,583,000 15,612,000 13,929,000 12,195,000
================= ================ ================ ================ ================
Reserve for credit losses,
January 1 $ 250,950 233,803 224,134 202,009 185,416
----------------- ---------------- ---------------- ---------------- ----------------
Losses charged off:
Commercial, financial and
agricultural loans (35,335) (8,952) (11,349) (6,950) (9,321)
Real estate - construction loans (953) (5) (147) (69) -
Real estate - mortgage loans (7,562) (8,348) (7,602) (7,776) (4,894)
Consumer loans (51,267) (61,177) (54,216) (26,967) (17,105)
Lease financing (28,570) (23,034) (13,284) (5,084) (2,252)
----------------- ---------------- ---------------- ---------------- ----------------
Total losses (123,687) (101,516) (86,598) (46,846) (33,572)
----------------- ---------------- ---------------- ---------------- ----------------
Recoveries of losses previously
charged off:
Commercial, financial and
agricultural loans 1,313 2,461 2,915 1,607 1,864
Real estate - construction loans 75 293 - 61 -
Real estate - mortgage loans 2,096 2,017 2,866 2,845 4,229
Consumer loans 17,824 15,777 13,400 8,652 9,041
Lease financing 5,612 6,315 2,866 1,393 773
----------------- ---------------- ---------------- ---------------- ----------------
Total recoveries 26,920 26,863 22,047 14,558 15,907
----------------- ---------------- ---------------- ---------------- ----------------
Net losses charged off:
Commercial, financial and
agricultural loans (34,022) (6,491) (8,434) (5,343) (7,457)
Real estate - construction loans (878) 288 (147) (8) -
Real estate - mortgage loans (5,466) (6,331) (4,736) (4,931) (665)
Consumer loans (33,443) (45,400) (40,816) (18,315) (8,064)
Lease financing (22,958) (16,719) (10,418) (3,691) (1,479)
----------------- ---------------- ---------------- ---------------- ----------------
Total net losses charged off (96,767) (74,653) (64,551) (32,288) (17,665)
----------------- ---------------- ---------------- ---------------- ----------------
Letter of credit - - - - (7,800)
Reserve of acquired
institutions and other 3,506 1,705 5,838 8,479 875
Provision charged to operations 109,171 90,095 68,382 45,934 41,183
----------------- ---------------- ---------------- ---------------- ----------------
Reserve for credit losses,
December 31 $ 266,860 250,950 233,803 224,134 202,009
================= ================ ================ ================ ================
Reserve as a percent of
loans and leases outstanding 1.50% 1.45 1.46 1.51 1.55
================= ================ ================ ================ ================
</TABLE>
10
<PAGE> 10
SUMMARY OF CREDIT LOSS EXPERIENCE, CONTINUED
<TABLE>
<CAPTION>
Fifth Third Bancorp
Allocation of Reserve for Credit Losses
1998 1997 1996 1995 1994
----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural loans $ 67,004 94,484 102,444 124,886 121,861
Real estate - construction loans 4,024 5,990 1,952 1,492 1,442
Real estate - mortgage loans 1,408 1,696 1,941 2,017 1,970
Consumer loans 120,506 94,017 84,786 66,092 54,767
Lease financing 73,918 54,763 42,680 29,647 21,969
-------------- --------------- -------------- --------------- ------------
Total reserve for credit losses $ 266,860 250,950 233,803 224,134 202,009
============== =============== ============== =============== ============
</TABLE>
The analysis above is for analytical purposes. The reserve for credit losses is
general in nature and is available to absorb losses from any portion of the loan
and lease portfolio.
The distribution of loans and leases by type and the ratio of net charge-offs to
average loans and leases outstanding:
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Percentage of loans and leases to total
loans and leases at December 31:
Commercial, financial and
agricultural loans 26.2% 24.6 25.2 24.4 23.7
Real estate - construction loans 3.1 3.2 3.7 3.5 3.3
Real estate - mortgage loans 32.2 37.4 37.0 37.1 42.0
Consumer loans 18.7 17.5 17.6 21.6 19.6
Lease financing 19.8 17.3 16.5 13.4 11.4
-------------- --------------- -------------- ---------------- ------------
Total 100.0% 100.0 100.0 100.0 100.0
============== =============== ============== ================ ============
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of net charge-offs during year
to average loans and leases outstanding
during year:
Commercial, financial and
agricultural loans 0.74% 0.15 0.22 0.16 0.24
Real estate - construction loans 0.16 (0.05) 0.03 0.00 0.00
Real estate - mortgage loans 0.09 0.10 0.08 0.09 0.01
Consumer loans 1.04 1.54 1.34 0.63 0.32
Lease financing 0.69 0.58 0.45 0.21 0.10
Weighted Average Ratio 0.55 0.45 0.41 0.23 0.14
</TABLE>
11
<PAGE> 11
RESERVE FOR CREDIT LOSSES
The reserve is maintained at a level management considers to be adequate 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 based on management's review of the historical credit loss experience
and such other factors which, in management's judgment, deserve consideration
under existing economic conditions in estimating potential credit losses. Based
on the procedures discussed below, management is of the opinion the reserve of
$266,860,000 at December 31, 1998 was adequate.
In determining the adequacy of the reserve for credit losses, management of each
affiliate bank, on a quarterly basis, specifically evaluates the necessity of a
reserve for individual loans classified by management. The specifically
allocated reserve for a classified loan is determined 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
Company. Once a review is completed, the need for a specific reserve is
determined by senior management and allocated to the loan. Other loans not
specifically reviewed by management are evaluated using a rolling five-year
average historical charge-off experience ratio calculated by type of loan. The
historical charge-off ratio factors into account the homogeneous nature of the
loans, the geographical lending areas involved, regulatory examination findings,
specific grading systems applied and any other known factors which may impact
the ratios used. Specific reserves on individual loans and historical ratios are
reviewed quarterly and adjusted as necessary based on subsequent collections,
loan upgrades or downgrades, nonperforming trends or actual principal
charge-offs. The Company's primary market area for lending is Ohio, Kentucky and
Indiana. When evaluating the adequacy of reserves, consideration is given to
this regional geographic concentration and the closely-associated effect
changing economic conditions has on the Company's customers.
MATURITY DISTRIBUTION OF DOMESTIC CERTIFICATES OF DEPOSIT OF
$100,000 AND OVER AT DECEMBER 31, 1998 ($000'S)
<TABLE>
<S> <C>
Three months or less $ 782,236
Over three months through six months 192,588
Over six months through twelve months 183,535
Over twelve months 125,221
-------------
Total certificates - $100,000 and over $ 1,283,580
=============
</TABLE>
Foreign office deposits totaling $353,824 are denominated in amounts greater
than $100,000.
12
<PAGE> 12
RETURN ON EQUITY AND ASSETS
The following table presents certain operating ratios:
<TABLE>
<CAPTION>
1998(1) 1997 1996(2)
------- ---- -------
<S> <C> <C> <C>
Return on assets (a) 1.67% 1.74 1.55
Return on equity (b) 16.2% 18.4 16.3
Dividend payout ratio (c) 40.3% 33.6 34.8
Equity to assets ratio (d) 10.33% 9.48 9.46
</TABLE>
- ---------------------------------------------------------------
(a) net income divided by average assets
(b) net income divided by average equity
(c) dividends declared per share divided by diluted earnings per share, as
originally reported
(d) average equity divided by average assets
(1) Certain 1998 ratios and statistics include merger-related items of $106.4
million pretax ($75.6 million after tax or $.28 per share). For
comparability, excluding the merger-related items, return on average assets,
return on average equity and the dividend payout ratio for 1998 would have
been 1.93%, 18.7% and 34.8%, respectively.
(2) Certain 1996 ratios include the special SAIF assessment of $37.9 million
pretax ($24.6 million after tax or $.09 per share). For comparability,
excluding the impact of this assessment, return on average assets, return on
average equity and the dividend payout ratio for 1996 would have been 1.64%,
17.4% and 33.8%, respectively.
13
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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/George A. Schaefer, Jr. February 12, 1999
- --------------------------
George A. Schaefer, Jr.
President and CEO
(Principal Executive Officer)
Pursuant to requirements of the Securities Exchange Act of 1934, this report has
been signed on February 12, 1999 by the following persons on behalf of the
Registrant and in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Neal E. Arnold /s/Roger W. Dean
- ----------------- ---------------- -----------------
Neal E. Arnold Roger W. Dean Robert B. Morgan
Executive Vice President and CEO Controller Director
(Principal Financial Officer) (Principal Accounting Officer)
- ----------------- ---------------- -----------------
Darryl F. Allen John R. Herschede David E. Reese
Director Director Director
- ----------------- ---------------- -----------------
John F. Barrett Allen M. Hill James E. Rogers
Director Director Director
- ----------------- ---------------- -----------------
Gerald V. Dirvin William G. Kagler Brian H. Rowe
Director Director Director
- ----------------- ---------------- -----------------
Thomas D. Donnell James D. Kiggen Donald B. Schackelford
Director Director Director
/s/George A. Schaefer, Jr.
- ----------------- ---------------- -----------------
Richard T. Farmer Jerry L. Kirby George A. Schaefer, Jr.
Director Director Director
- ----------------- ---------------- -----------------
Joseph H. Head, Jr. Mitchal D. Livingston, Ph.D. John J. Schiff, Jr.
Director Director Director
</TABLE>
22
