<PAGE> 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 June 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 271,346,733 shares of the Registrant's Common Stock, without par
value, outstanding as of July 31, 1999.
<PAGE> 2
FIFTH THIRD BANCORP
INDEX
<TABLE>
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1999 and 1998 and December 31, 1998 3
Consolidated Statements of Income -
Three and Six Months Ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1999 and 1998 5
Consolidated Statements of Changes in Shareholders' Equity -
Six Months Ended June 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
</TABLE>
2
<PAGE> 3
FIFTH THIRD BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
========================================================================================================================
JUNE 30, DECEMBER 31, JUNE 30,
($000'S) 1999 1998 1998
========================================================================================================================
ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash and Due from Banks $ 703,303 $ 819,862 $ 882,432
Securities Available for Sale (a) 9,497,834 8,334,625 7,890,292
Securities Held to Maturity (b) 63,505 86,013 100,510
Other Short-Term Investments 110,472 118,535 39,028
Loans Held for Sale 215,513 492,017 329,870
Loans and Leases
Commercial Loans 5,117,889 4,822,992 4,562,990
Construction Loans 670,350 572,082 554,584
Commercial Mortgage Loans 1,332,052 1,178,752 1,239,497
Commercial Lease Financing 1,844,941 1,739,316 1,612,704
Residential Mortgage Loans 4,215,184 4,269,880 5,212,635
Consumer Loans 3,706,365 3,354,681 3,164,660
Consumer Lease Financing 3,108,614 2,530,535 2,275,574
Unearned Income (770,666) (689,215) (647,530)
Reserve for Credit Losses (284,443) (266,860) (270,129)
- ------------------------------------------------------------------------------------------------------------------------
Total Loans and Leases 18,940,286 17,512,163 17,704,985
Bank Premises and Equipment 335,396 330,838 316,588
Accrued Income Receivable 265,623 282,551 221,150
Other Assets 1,496,489 945,178 807,827
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 31,628,421 $ 28,921,782 $ 28,292,682
========================================================================================================================
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------
Deposits
Demand $ 3,209,577 $ 3,194,782 $ 2,992,603
Interest Checking 3,120,466 3,160,227 2,885,282
Savings and Money Market 4,517,651 4,418,523 4,349,236
Time Deposits 9,281,146 8,006,823 8,565,222
- ------------------------------------------------------------------------------------------------------------------------
Total Deposits 20,128,840 18,780,355 18,792,343
Federal Funds Borrowed 3,239,496 2,038,541 1,872,756
Short-Term Bank Notes 125,000 - 350,000
Other Short-Term Borrowings 2,013,637 1,655,386 1,712,296
Accrued Taxes, Interest and Expenses 784,111 710,772 651,217
Other Liabilities 180,753 270,055 199,439
Long-Term Debt 1,823,295 2,288,151 1,637,185
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 28,295,132 25,743,260 25,215,236
========================================================================================================================
SHAREHOLDERS' EQUITY (c)
- ------------------------------------------------------------------------------------------------------------------------
Common Stock 602,140 592,559 594,729
Capital Surplus 538,774 495,067 484,359
Retained Earnings 2,249,743 2,066,407 1,907,147
Unrealized Gains (Losses) on
Securities Available for Sale (46,758) 82,448 91,211
Non-Officer Employee Stock Grant (5,981) - -
Treasury Stock (4,629) (57,959) -
- ------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 3,333,289 3,178,522 3,077,446
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 31,628,421 $ 28,921,782 $ 28,292,682
========================================================================================================================
</TABLE>
(a) Amortized cost: June 30, 1999 - $9,570,240, December 31, 1998 - $8,208,032
and June 30, 1998 - $7,749,882.
(b) Market value: June 30, 1999 - $68,973, December 31, 1998 - $86,013 and June
30, 1998 - $100,514.
(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
June 30, 1999 - 271,234,131, (excludes 73,636 treasury shares) December 31,
1998 - 266,918,544 (excludes 922,028 treasury shares) and June 30, 1998 -
267,895,839. 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
<PAGE> 4
FIFTH THIRD BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
============================================================================================================================
THREE MONTHS ENDED Six Months Ended
JUNE 30, June 30,
-----------------------------------------------------------------
($000's) 1999 1998 1999 1998
============================================================================================================================
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans and Leases $ 367,854 $ 369,690 $ 720,870 $ 725,034
Interest on Securities
Taxable 150,384 138,792 288,922 284,520
Exempt from Income Taxes 3,047 2,968 5,875 5,908
- ---------------------------------------------------------------------------------------------------------------------------
Total Interest on Securities 153,431 141,760 294,797 290,428
Interest on Other Short-Term Investments 516 1,924 2,412 4,656
- ---------------------------------------------------------------------------------------------------------------------------
Total Interest Income 521,801 513,374 1,018,079 1,020,118
- ---------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on Deposits
Interest Checking 17,357 16,790 32,330 32,581
Savings and Money Market 32,399 38,897 64,544 78,353
Time Deposits 100,983 120,001 200,680 242,896
- ---------------------------------------------------------------------------------------------------------------------------
Total Interest on Deposits 150,739 175,688 297,554 353,830
Interest on Federal Funds Borrowed 38,980 31,881 70,107 59,091
Interest on Short-Term Bank Notes 7,038 10,061 13,461 22,527
Interest on Other Short-Term Borrowings 19,941 22,314 40,920 44,470
Interest on Long-Term Debt and Notes 24,630 23,847 45,370 47,763
- ---------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 241,328 263,791 467,412 527,681
- ---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 280,473 249,583 550,667 492,437
Provision for Credit Losses 27,661 44,774 51,021 67,602
- ---------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 252,812 204,809 499,646 424,835
OTHER OPERATING INCOME
Investment Advisory Income 42,323 31,149 81,707 58,964
Service Charges on Deposits 34,025 32,747 65,570 61,263
Data Processing Income 40,881 32,327 78,549 62,157
Other Service Charges and Fees 69,463 51,562 134,573 101,366
Securities Gains 660 480 1,919 4,635
- ---------------------------------------------------------------------------------------------------------------------------
Total Other Operating Income 187,352 148,265 362,318 288,385
OPERATING EXPENSES
Salaries, Wages and Incentives 80,396 70,004 155,981 136,880
Employee Benefits 18,467 9,702 36,161 27,296
Equipment Expenses 8,782 8,216 17,552 16,219
Net Occupancy Expenses 13,529 12,623 26,660 24,681
Other Operating Expenses 74,220 70,815 151,840 139,567
Merger-Related Charges - 89,701 - 89,701
- ---------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 195,394 261,061 388,194 434,344
- ---------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 244,770 92,013 473,770 278,876
Applicable Income Taxes 83,214 34,253 161,767 96,885
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME (b) $ 161,556 $ 57,760 $ 312,003 $ 181,991
============================================================================================================================
Per Share (a):
Basic Earnings $ 0.60 $ 0.22 $ 1.16 $ 0.69
Diluted Earnings $ 0.59 $ 0.22 $ 1.14 $ 0.68
Cash Dividends $ 0.20 $ 0.17 $ 0.40 $ 0.34
- ---------------------------------------------------------------------------------------------------------------------------
Average Shares (000's) (a):
Outstanding 269,367 264,988 268,264 263,836
Diluted 274,789 270,026 273,822 268,952
============================================================================================================================
(a) and (b) are described on Page 6.
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
FIFTH THIRD BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
============================================================================================================================
SIX MONTHS ENDED
JUNE 30,
--------------------------------
($000's) 1999 1998
============================================================================================================================
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 312,003 $ 181,991
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision for Credit Losses 51,021 67,602
Depreciation, Amortization and Accretion 33,457 40,408
Provision for Deferred Income Taxes 65,235 6,213
Realized Securities Gains (2,368) (6,922)
Realized Securities Losses 449 2,287
Proceeds from Sales of Residential Mortgage Loans Held for Sale 1,471,492 1,705,308
Net Gains on Sales of Loans (22,814) (14,278)
Increase in Residential Mortgage Loans Held for Sale (1,183,249) (1,757,128)
Decrease (Increase) in Accrued Income Receivable 16,928 (8,101)
Increase in Other Assets (545,777) (65,987)
Increase in Accrued Taxes, Interest and Expenses 73,339 80,890
Increase (Decrease) in Other Liabilities (36,339) 12,337
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 233,377 244,620
============================================================================================================================
INVESTING ACTIVITIES
Proceeds from Sales of Securities Available for Sale 411,336 1,209,351
Proceeds from Calls, Paydowns and Maturities of Securities Available for Sale 1,370,162 1,310,853
Purchases of Securities Available for Sale (2,869,044) (2,194,182)
Proceeds from Calls, Paydowns and Maturities of Securities Held to Maturity 28,116 28,824
Purchases of Securities Held to Maturity (5,608) (51,865)
Decrease in Other Short-Term Investments 8,063 141,397
Increase in Loans and Leases (1,738,093) (793,197)
Purchases of Bank Premises and Equipment (30,586) (31,399)
Proceeds from Disposal of Bank Premises and Equipment 9,334 4,517
Net Cash Paid in Acquisitions (44) (15,000)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (2,816,364) (390,701)
============================================================================================================================
FINANCING ACTIVITIES
Increase (Decrease) in Core Deposits (77,013) 13,164
Increase (Decrease) in CDs - $100,000 and Over, including Foreign 1,425,498 (240,717)
Increase in Federal Funds Borrowed 1,200,955 619,203
Increase (Decrease) in Short-Term Bank Notes 125,000 (205,000)
Increase (Decrease) in Other Short-Term Borrowings 358,251 (130,082)
Proceeds from Issuance of Long-Term Debt and Notes 170,000 1,102,869
Repayment of Long-Term Debt (635,029) (973,383)
Payment of Cash Dividends (106,875) (76,627)
Exercise of Stock Options 12,183 9,759
Proceeds from Sale of Common Stock - 178,125
Purchases of Treasury Stock - (45,896)
Other (6,542) (280)
- ---------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,466,428 251,135
===========================================================================================================================
INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (116,559) 105,054
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD 819,862 777,378
- ---------------------------------------------------------------------------------------------------------------------------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 703,303 $ 882,432
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
FIFTH THIRD BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
===========================================================================================================================
--------------------------------------
SIX MONTHS ENDED
JUNE 30,
--------------------------------------
($000'S) 1999 1998
===========================================================================================================================
<S> <C> <C>
BALANCE AT DECEMBER 31 $ 3,178,522 $ 2,762,836
Net Income 312,003 181,991
Nonowner Changes in Equity, Net of Tax:
Change in Unrealized Gains on Securities Available for Sale (129,206) (7,043)
- --------------------------------------------------------------------------------------------------------------------------
Net Income and Nonowner Changes in Equity 182,797 174,948
Cash Dividends Declared (1999 - $.40 per share
and 1998 - $.34 per share) (a) (107,736) (87,983)
Shares Acquired for Treasury - (45,896)
Non-Officer Employee Stock Grant (c) (5,981) -
Earnings Adjustment of Pooled Entity (b) - (7,803)
Stock Options Exercised
Including Treasury Shares Issued 12,183 9,759
Stock Issued in Public Offering (44) 178,125
Stock Issued in Acquisitions and Other 73,548 93,460
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT JUNE 30 $ 3,333,289 $ 3,077,446
===========================================================================================================================
</TABLE>
(a) Cash dividends per common share for the 1998 period are those of Fifth
Third Bancorp declared prior to the second quarter 1998 mergers with CitFed
Bancorp, Inc. and State Savings Company.
(b) The restatement of the CitFed Bancorp, Inc. 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
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 $7,803. An adjustment to shareholders' equity removes the effect of
including CitFed's financial results in both periods.
(c) See Note 7 to the Consolidated Financial Statements.
See Notes to Consolidated Financial Statements
6
<PAGE> 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 June 30, 1999 and 1998, the results of operations for
the three and six months ended June 30, 1999 and 1998, and the
statements of cash flows for the six months ended June 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 six months ended June 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. Pending Business Combinations:
On August 6, 1999, the Registrant completed the acquisition of
Emerald Financial Corp., a unitary saving and loan holding company
based in Strongsville, Ohio. At March 31, 1999, Emerald Financial had
total assets of $677.1 million and total deposits of $562.4 million.
In connection with this acquisition, the Registrant exchanged
approximately 3,430,000 shares of Fifth Third common stock with the
shareholders of Emerald Financial Corp.
On July 12, 1999, the Registrant agreed to acquire Peoples Bank
Corporation and its subsidiary, Peoples Bank & Trust Company. As of
June 30, 1999, Peoples Bank Corporation had total assets of $650
million and total deposits of $566 million. The merger agreement
provides that 1.09 shares of the Fifth Third's common stock will be
exchanged for each share of Peoples Bank Corporation common stock on a
tax-free basis. The transaction is expected to close in the fourth
quarter of 1999, pending regulatory and shareholder approval. 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 Bank Corporation.
On July 9, 1999, the Registrant acquired Vanguard Financial Co., a
privately-held commercial mortgage banking company headquarted in
Cincinnati, Ohio, which originated more than $400 million in financing
and equity transactions in 1998, and has a loan servicing portfolio in
excess of $700 million. The transaction was accounted for as a
purchase. Pro forma effects of this acquisition were not material to
the Registrant.
7
<PAGE> 8
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED):
On June 16, 1999, the Registrant agreed to acquire CNB Bancshares,
Inc., a bank holding company based in Evansville, Indiana which owns
Civitas Bank. As of June 30, 1999, CNB Bancshares, Inc. had total
assets of $7.7 billion and deposits of $4.9 billion. The acquisition is
expected to be completed in the fourth quarter of 1999, pending
regulatory and shareholder approval. The merger agreement provides that
.8825 shares of Fifth Third's common stock will be exchanged for each
share of CNB Bancshares, Inc. common stock on a tax-free basis. In
connection with this acquisition, the Registrant expects to exchange
approximately 35,800,000 shares of Fifth Third common stock with the
shareholders of CNB Bancshares, Inc.
3. Completed Business Combinations:
On June 11, 1999, the Registrant completed the acquisition of South
Florida Bank Holding Corporation, a bank holding company based in Ft.
Myers, Florida, which owns South Florida Bank. As of March 31, 1999,
South Florida had total assets of $92.5 million and deposits of $78.8
million. In connection with this acquisition, the Registrant exchanged
442,560 shares of Fifth Third common stock with the shareholders of
South Florida.
On May 14, 1999, the Registrant completed the acquisition of Enterprise
Federal Bancorp, Inc., a savings and loan holding company based in
West Chester, Ohio. As of March 31, 1999, Enterprise Federal Bancorp,
Inc. had total assets of $539 million and total deposits of $323
million. In connection with this acquisition, the Registrant exchanged
1,676,596 shares of Fifth Third common stock with the shareholders of
Enterprise Federal Bancorp, Inc.
On April 16, 1999, the Registrant completed the acquisition of Ashland
Bankshares, Inc., which owns the Bank of Ashland. Ashland Bankshares,
Inc. is based in Ashland, Kentucky, with $168 million in 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 Bankshares, Inc.
The Consolidated Financial Statements have not been restated to include
the South Florida Bank, Enterprise Federal Bancorp, and Ashland
Bankshares acquisitions, accounted for as pooling-of-interests, due to
immateriality.
8
<PAGE> 9
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED):
On June 12, 1998, the Registrant acquired The Ohio Company, a
full-service broker-dealer for retail and institutional clients
headquartered in Columbus, Ohio. The acquisition was accounted for as a
purchase. In connection with the acquisition, the Registrant exchanged
1,862,765 shares of Fifth Third common stock for all of the outstanding
shares of The Ohio Company.
4. For the six months of 1999, the Registrant paid $476,974,000 in
interest and $77,750,000 in Federal income taxes. For the first six
months of 1998, the Registrant paid $533,868,000 in interest and
$83,950,000 in Federal income taxes. During the first half of 1999 and
1998, the Registrant had noncash investing activities consisting of the
securitization of $258,949,000 and $82,604,000 of residential mortgage
loans, respectively.
5. 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.
6. 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,
commercial banking, investment advisory services, and data processing.
Retail banking
9
<PAGE> 10
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED):
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 six months ended June 30, 1999 and
1998 are as follows:
<TABLE>
<CAPTION>
Three Months Ended INVESTMENT GENERAL
June 30, COMMERCIAL RETAIL ADVISORY DATA ACQUIRED CORPORATE
($000'S) BANKING BANKING SERVICES PROCESSING(a) ENTITIES AND OTHER ELIMINATIONS (a) TOTAL
============================================================================================================================
1999
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $124,748 $238,755 $ 53,833 $ 44,389 $ -- $ 9,141 $ (3,701) $467,165
- ----------------------------------------------------------------------------------------------------------------------------
Net Income $ 51,363 $ 76,218 $ 16,872 $ 14,456 $ -- $ 2,647 $ -- $161,556
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $ 92,707 $171,914 $ 38,219 $ 35,393 $ 34,320 $ 28,131 $ (3,316) $397,368
- ----------------------------------------------------------------------------------------------------------------------------
Net Income $ 28,675 $ 61,786 $ 13,016 $ 10,207 $(68,180) $ 12,256 $ -- $ 7,760
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended INVESTMENT GENERAL
June 30, COMMERCIAL RETAIL ADVISORY DATA ACQUIRED CORPORATE
($000'S) BANKING BANKING SERVICES PROCESSING(a) ENTITIES AND OTHER ELIMINATIONS (a) TOTAL
============================================================================================================================
1999
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $238,253 $478,393 $103,944 $ 84,510 $ -- $ 12,871 $ (6,905) $911,066
- ----------------------------------------------------------------------------------------------------------------------------
Net Income $ 98,647 $157,239 $ 32,489 $ 26,209 $ -- $ (2,581) $ -- $312,003
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Revenues $177,853 $334,304 $ 72,346 $ 67,931 $ 93,071 $ 36,885 $ (6,203) $776,187
- ----------------------------------------------------------------------------------------------------------------------------
Net Income $ 63,900 $114,274 $ 24,847 $ 19,176 $(52,930) $ 12,724 $ -- $181,991
============================================================================================================================
</TABLE>
(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
<PAGE> 11
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED):
- ---------------------------------------------------------------
7. 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.
8. 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
six months ended June 30, 1999 and 1998 are provided below ($000s).
<TABLE>
<CAPTION>
1999 1998
===========================================================================================================================
Reclassification Adjustments, Before Tax
===========================================================================================================================
<S> <C> <C>
Change in Unrealized Gains Arising During Period $(200,697) $(15,470)
Reclassification Adjustment for Gains Included in Net Income
1,919 4,635
===========================================================================================================================
Net Unrealized Losses on Securities Available for Sale $(198,778) $(10,835)
===========================================================================================================================
Related Tax Effects
===========================================================================================================================
Change in Unrealized Gains Arising During Period $ 70,244 $ 5,414
Reclassification Adjustment for Gains Included in Net Income (672) (1,622)
- ---------------------------------------------------------------------------------------------------------------------------
Net Unrealized Losses on Securities Available for Sale $ 69,572 $ 3,792
===========================================================================================================================
Reclassification Adjustments, Net of Tax
===========================================================================================================================
Change in Unrealized Gains Arising During Period $(130,453) $(10,056)
Reclassification Adjustment for Gains Included in Net Income 1,247 3,013
- ---------------------------------------------------------------------------------------------------------------------------
Net Unrealized Losses on Securities Available for Sale $(129,206) $ (7,043)
===========================================================================================================================
Accumulated Nonowner Changes in Equity
===========================================================================================================================
Beginning Balance-Unrealized Holding Gains on Securities Available for Sale $ 82,448 $ 98,254
Current Period Change (129,206) (7,043)
- ---------------------------------------------------------------------------------------------------------------------------
Ending Balance-Unrealized Holding Gains (Losses) on Securities Available for Sale $(46,758) $ 91,211
===========================================================================================================================
</TABLE>
11
<PAGE> 12
ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED):
- ---------------------------------------------------------------
9. 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.
10. Reconciliation of Earning Per Share to Diluted Earning Per Share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, 1999 1998
==========================================================================================================================
NET AVERAGE PER-SHARE NET AVERAGE PER-SHARE
($000's) INCOME SHARES AMOUNT INCOME SHARES AMOUNT
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
EPS
Income available to
Common shareholders $ 161,556 269,367 $ 0.60 $ 57,760 264,988 $ 0.22
EFFECT OF DILUTIVE SECURITIES
Stock Options 5,422 5,038
- -------------------------------------------------------------------------------------------------------------------------
DILUTED EPS
Income available to
Common shareholders
Plus assumed conversions $ 161,556 274,789 $ 0.59 $ 57,760 270,026 $ 0.22
==========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999 1998
==========================================================================================================================
NET AVERAGE PER-SHARE NET AVERAGE PER-SHARE
($000's) INCOME SHARES AMOUNT INCOME SHARES AMOUNT
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
EPS
Income available to
Common shareholders $ 312,003 268,264 $ 1.16 $181,991 263,836 $ .69
EFFECT OF DILUTIVE SECURITIES
Stock Options 5,558 5,116
- -------------------------------------------------------------------------------------------------------------------------
DILUTED EPS
Income available to
Common shareholders
Plus assumed conversions $ 312,003 273,822 $ 1.14 $181,991 268,952 $ 0.68
==========================================================================================================================
</TABLE>
12
<PAGE> 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 income was $312.0 million for the first six months of
1999 and $161.6 million for the second quarter, up 21 percent for both periods,
compared to $257.6 million and $133.3 million for the same periods last year.
Second quarter diluted operating earnings per share was $.59, up 18 percent over
last year's $.50 and $1.14 for the first six months, up 18.8 percent over 1998's
$.96.
Operating earnings, in 1998, exclude nonrecurring pretax charges of $106.4
million resulting from 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, earnings per
diluted share, in 1998, was $.22 for the second quarter with net income totaling
$57.8 million. For the six month period ending June 30, 1998 including the
nonrecurring charges, net income was $181.9 million, or $.68 per diluted share.
Total assets were $31.6 billion at quarter end, compared to 1998's quarter-end
assets of $28.3 billion. On an operating basis, return on average equity was
19.6 percent and return on average assets was 2.12 percent for the second
quarter of 1999 compared to 18.4 percent and 1.86 percent, respectively, for the
same quarter of last year.
13
<PAGE> 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 second quarter
of 1999 was $295 million, a 12.8 percent increase over $261.5 million for the
same period of 1998. For the six month period net interest income on a fully
taxable equivalent basis increased to $579.2 million, or 12.2 percent, from the
$516.2 million reported in the same period last year. The increase during the
quarter resulted principally from a 28 basis point increase in the net interest
margin and a 5.3 percent growth in average interest earning-asset. For the six
month period, the net interest margin improved 34 basis points to 4.19 percent
from 3.85 percent. The improvement in both the three and six month periods was
primarily attributable to an improved funding mix with growth in average
transaction deposits and solid commercial and consumer loan growth.
The net provision for credit losses was $27.7 million in the 1999 second
quarter, compared to $44.7 million in the same 1998 quarter which included a
$16.7 million provision to conform acquired companies to the Registrant's
reserving and charge-off practices. Net charge-offs for the second quarter were
.44 percent of average loans and leases, compared with .49 percent for the
second quarter of 1998. Underperforming assets (UPA's) declined to .61 percent
of total loans and leases and other real estate owned, or $117.5 million during
the quarter compared to .70 percent, or $126.6 million last quarter and .76
percent, or $137.1 million in the second quarter of 1998. Nonperforming assets
(NPA's) as a percentage of total loans, leases and other real estate owned was
.23 percent at June 30, 1999, down from .25 percent last quarter and .49 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
<PAGE> 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 of 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, for the second quarter
increased 26.3 percent to $186.7 million compared to the second quarter of 1998
and increased to $360.4 million for the first six months of 1999, or 27 percent
over the same period last year. Investment advisory income increased 35.9
percent in the quarter and 38.6 percent for the six month period, primarily due
to double-digit growth in personal trust, employee benefits, corporate trust and
brokerage revenue. Improved sales, favorable equity markets and expansion of
brokerage through acquisitions and new products all contributed to the growth.
Data processing income
15
<PAGE> 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
increased 26.5 percent, to $40.9 million and to $78.5 million, or 26.4 percent
from the three and six month periods of last year, respectively. Increases in
electronic funds transfer (EFT) and merchant processing volume coupled with
higher transaction volume from expanded debit and ATM card usage contributed to
the increase in data processing income. Improvements in commercial banking
income, credit card fees, and mortgage banking revenue contributed to the 34.7
percent increase during the quarter and the 32.8 percent increase in the six
month period in other service charges and fees.
The overhead ratio (operating expenses divided by the sum of taxable equivalent
net interest income and other operating income) was 40.5 percent for the quarter
and 41.2 percent for the six month period. Excluding the 1998 merger-related
charges of $89.7 million, the overhead ratio in 1998 was 41.8 percent for the
second quarter of 1998 and 42.8 percent for six month period. 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 overhead ratio was primarily due to
increased revenues during the quarter and six month period. Total operating
expenses, increased 14 percent, to $195.4 million, during the quarter and
increased 12.6 percent, to $388 million, for the six month period. Salaries,
wages, and incentives increased 14.8 percent in the quarter and 13.9 percent
during the six month period, primarily due to additional compensation incurred
to support improved sale volumes coupled with an increase in
full-time-equivalent employees. Employee benefit expense increased to $18.5
million for the quarter and to $36.2 million for the six month period. The
employee benefit expense increase is attributable primarily to modifications
made to the Registrant's Pension and 401(K) plans. Total other operating
expenses increased 4.8 percent, to $74.2 million, for the quarter and 8.8
percent, to $151.8 million, for the six month period.
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 15.5 percent and 17.4 percent, respectively, from the same period
last year highlighting the success in emphasizing customer deposit accounts.
Direct installment loan originations were $531.6 million this quarter, exceeding
$454 million last quarter and $410 million in the second quarter last year.
Residential mortgage originations surpassed $1 billion this quarter compared to
$1.5 billion in the same quarter a year ago. Commercial loans and consumer loans
and leases all benefited from double-digit growth, from the same period last
year, led by a significant increase in commercial loans.
16
<PAGE> 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 June 30, 1999, shareholders' equity was $3.333 billion, compared to $3.077
billion at June 30, 1998, an increase of $256 million, or 8.3 percent.
Shareholders' equity as a percentage of total assets as of June 30, 1999 was
10.8 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 June 30, 1999 and 1998.
At June 30, 1999, the Registrant had a Tier 1 risk-based capital ratio of 12.12
percent, a total risk-based capital ratio of 14.13 percent and a leverage ratio
of 10.72 percent. At June 30, 1998, the Registrant had a Tier 1 risk-based
capital ratio of 11.93 percent, a total risk-based capital ratio of 14.28
percent and a leverage ratio of 9.88 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
<PAGE> 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
<PAGE> 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 4.39 percent over one
year and increase by 2.10 percent over two years. A 200 basis point immediate,
sustained downward shock in the yield curve would increase net interest income
by an estimated 2.80 percent over one year and decrease net interest income by
an estimated 8.31 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
<PAGE> 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 Six Months Ended June 30, 1999
(b) Reports on Form 8-K
Reports on Form 8-K filed during second quarter:
The Registrant filed a report on Form 8-K dated June 16, 1999, related to the
execution of an agreement to acquire CNB Bancshares, Inc., pursuant to which CNB
BancShares, Inc. will be merged with and into the Registrant.
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: August 6, 1999 /s/ Neal E. Arnold
--------------------------------
Neal E. Arnold
Senior Vice President and
Chief Financial Officer
20
<TABLE> <S> <C>
<ARTICLE>9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FIFTH THIRD BANCORP'S QUARTERLY REPORT ON FORM 10-Q FOR THE
SIX MONTHS ENDED JUNE 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000035527
<NAME> FIFTH THIRD BANCORP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 703,303
<INT-BEARING-DEPOSITS> 85,697
<FED-FUNDS-SOLD> 24,775
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,497,834
<INVESTMENTS-CARRYING> 63,505
<INVESTMENTS-MARKET> 68,973
<LOANS> 19,224,729
<ALLOWANCE> 284,443
<TOTAL-ASSETS> 31,628,421
<DEPOSITS> 20,128,840
<SHORT-TERM> 5,378,133
<LIABILITIES-OTHER> 964,864
<LONG-TERM> 1,823,295
0
0
<COMMON> 602,140
<OTHER-SE> 2,731,149
<TOTAL-LIABILITIES-AND-EQUITY> 31,628,421
<INTEREST-LOAN> 720,870
<INTEREST-INVEST> 294,797
<INTEREST-OTHER> 2,412
<INTEREST-TOTAL> 1,018,079
<INTEREST-DEPOSIT> 297,554
<INTEREST-EXPENSE> 467,412
<INTEREST-INCOME-NET> 550,667
<LOAN-LOSSES> 51,021
<SECURITIES-GAINS> 1,919
<EXPENSE-OTHER> 388,194
<INCOME-PRETAX> 473,770
<INCOME-PRE-EXTRAORDINARY> 312,003
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 312,003
<EPS-BASIC> 1.16
<EPS-DILUTED> 1.14
<YIELD-ACTUAL> 4.19
<LOANS-NON> 36,114
<LOANS-PAST> 73,735
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 261,580
<CHARGE-OFFS> 55,738
<RECOVERIES> 15,685
<ALLOWANCE-CLOSE> 284,443
<ALLOWANCE-DOMESTIC> 284,443
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
