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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------- -------
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. [ ]
The Aggregate Market Value of the Voting Stock held by non-affiliates of the
Registrant was $30,711,680,250 as of February 28, 2002. /(1)/
There were 582,012,862 shares of the Registrant's Common Stock, without par
value, outstanding as of February 28, 2002.
DOCUMENTS INCORPORATED BY REFERENCE
2001 Annual Report to Shareholders: Parts I, II and IV
Proxy Statement for 2002 Annual Meeting of Shareholders: Parts III and IV
/(1) In calculating the market value of securities held by non-affiliates of
Registrant as disclosed on the cover page of this Form 10-K, Registrant has
treated as securities held by affiliates as of December 31, 2001, 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./
FIFTH THIRD BANCORP
2001 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Page
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Item 1. Business 3-25
Item 2. Properties 26
Item 3. Legal Proceedings 26
Item 4. Submission of Matters to a Vote of Security Holders 26
PART II
Item 5. Market For Registrant's Common Equity and Related
Shareholder Matters 27
Item 6. Selected Financial Data 27
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 27
Item 8. Financial Statements and Supplementary Data 27
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 27
PART III
Item 10. Directors and Executive Officers of the Registrant 28-31
Item 11. Executive Compensation 31
Item 12. Security Ownership of Certain Beneficial Owners and Management 31
Item 13. Certain Relationships and Related Transactions 31
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 32-38
2
PART I
ITEM 1. BUSINESS
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ORGANIZATION
Fifth Third Bancorp (the "Registrant") is an Ohio corporation organized in 1975
and is a registered financial holding company and a bank holding company under
the Bank Holding Company Act of 1956, as amended (the "BHCA"), and subject to
regulation by the Federal Reserve Board ("FRB"). The Registrant, with its
principal office located in Cincinnati, is a multi-bank holding company as
defined in the BHCA and is registered as such with the Board of Governors of the
Federal Reserve System. At December 31, 2001, the Registrant's wholly-owned
second tier holding company, Fifth Third Financial Corporation, had 11
wholly-owned direct subsidiaries: Fifth Third Bank; Fifth Third Bank, Florida;
Fifth Third Bank, Northern Kentucky, Inc.; Fifth Third Bank, Kentucky, Inc.;
Fifth Third Bank, Indiana; Fifth Third Bank, (Michigan); Fifth Third Community
Development Corporation; Fifth Third Insurance Services, Inc.; Fifth Third
Investment Company; USB, Inc. and Heartland Capital Management, Inc.
At December 31, 2001, the Registrant, its affiliated banks and other
subsidiaries had consolidated total assets of approximately $71.0 billion,
consolidated total deposits of approximately $45.9 billion and consolidated
total shareholders' equity of approximately $7.6 billion.
The Registrant, through its subsidiaries, engages primarily in commercial,
retail and trust banking, electronic payment processing services and investment
advisory services. Significant subsidiaries of the Registrant's affiliate banks
consist of: The Fifth Third Company; Fifth Third Leasing Company; Midwest
Payment Systems, Inc. ("MPS"); Fifth Third International Company; Fifth Third
Real Estate Capital Markets Company; Fifth Third Mortgage Company; Fifth Third
Mortgage Insurance Reinsurance Company; Fifth Third Insurance Agency, Inc.;
Fifth Third Real Estate Investment Trust, Inc.; Fifth Third Asset Management,
Inc.; Fifth Third Securities, Inc.; USB Payment Processing, Inc. and GNB Realty,
LLC. The Registrant's subsidiaries 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 Registrant, through its MPS subsidiary, operates for itself and other
financial institutions a proprietary automated teller machine ("ATM") and Point
of Sale ("POS") network, Jeanie(R). Fifth Third Bank participates in several
regional shared ATM networks including "NYCE(R)," "Pulse(R)," and "Star(R)".
These networks include approximately 408,000, 433,000 and 1,063,000 ATMs and POS
devices, respectively. Fifth Third Bank also participates in "Cirrus(R)," and
"Plus System(R)," which are international ATM networks including approximately
635,000 and
3
PART I
ITEM 1. BUSINESS (continued)
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ORGANIZATION
700,000 participating ATMs, respectively. MPS also provides electronic fund
transfers, ATM processing, electronic personal banking, merchant transaction
processing, electronic bill payment and electronic benefit transfer services for
thousands of regional banks, bank holding companies, service retailers and other
financial institutions throughout the United States.
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. These subsidiaries provide foreign exchange trading, automated
letters of credit and import/export services to commercial customers.
The Fifth Third Leasing Company has a 100 percent-owned subsidiary: The Fifth
Third Auto Leasing Trust, which provides indirect auto loans and leases to
consumers.
Additional information regarding the Registrant's businesses is included in the
Management Editorial (pages 4 through 14) in the Registrant's 2001 Annual Report
to Shareholders and is incorporated herein by reference and attached to this
filing as Exhibit 13.
ACQUISITIONS
The Registrant has completed several mergers and acquisitions over the years
involving financial institutions throughout Ohio, Indiana, Kentucky, Michigan,
Illinois, and Florida. The Registrant is continually evaluating strategic
acquisition opportunities and frequently conducts due diligence activities in
connection with possible transactions. As a result, discussions, and in some
cases, negotiations may take place and future acquisitions involving cash, debt
or equity securities may occur. These typically involve the payment of a premium
over book value, and therefore, some dilution of book value and net income per
share may occur with any future transactions. The Registrant's strategy for
growth includes strengthening its presence in core markets, expanding into
contiguous markets and broadening its product offerings. Consistent with this
strategy the Registrant engaged in the following acquisitions during 2001:
On January 2, 2001, the Registrant completed the acquisition of Resource
Management, Inc. dba Maxus Investment Group ("Maxus"), a privately-held
diversified financial services company based in Cleveland, Ohio. In connection
with this acquisition, the Registrant issued 470,162 shares of Fifth Third
common stock and paid $18.1 million in cash for the outstanding capital stock of
Maxus. This transaction was accounted for as a purchase.
4
PART I
ITEM 1. BUSINESS (continued)
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ACQUISITIONS
On March 9, 2001, the Registrant completed the acquisition of Capital Holdings,
Inc. ("Capital Holdings"), a publicly traded bank holding company located in
Sylvania, Ohio which owns Capital Bank, N.A., with total assets of approximately
$1.1 billion and total deposits of $874 million. In connection with this
acquisition, the Registrant issued 4,505,385 shares of Fifth Third common stock
for the outstanding shares of Capital Holdings. This transaction was tax-free
and accounted for as a pooling-of-interests.
On April 2, 2001, the Registrant completed the acquisition of Old Kent Financial
Corporation ("Old Kent"), a publicly traded financial holding company based in
Grand Rapids, Michigan. As of December 31, 2000, Old Kent had total assets of
$23.8 billion and total deposits of approximately $17.4 billion. In connection
with this acquisition, the Registrant issued 103,716,638 shares of Fifth Third
common stock, 7,250 shares of Fifth Third Series D convertible perpetual
preferred stock and 2,000 shares of Fifth Third Series E perpetual preferred
stock to the shareholders of Old Kent. This transaction was tax-free and
accounted for as a pooling-of-interests.
On October 31, 2001, the Registrant completed the acquisition of USB, Inc. (USB)
and its subsidiaries. USB was a privately-held company that provides payment
processing services for agent banks and small and medium sized merchants. In
connection with this acquisition, the Registrant paid approximately $220 million
in cash. This transaction was accounted for as a purchase transaction.
Additional information, with respect to acquisitions, is included in Note 20
(pages 31 through 32) of the Notes to Consolidated Financial Statements in the
Registrant's 2001 Annual Report to Shareholders and is incorporated herein by
reference and attached to this filing as Exhibit 13.
There are hundreds of commercial banks, savings and loans and other financial
service providers in Ohio, Kentucky, Michigan, Illinois, Indiana, Florida, West
Virginia and nationally, which provide strong competition to the Registrant's
banking subsidiaries. The Registrant competes for deposits, loans and other
banking services in its principal geographic markets as well as in selected
national markets as opportunities arise. In addition to the challenge of
attracting and retaining customers for traditional banking services, the
Registrant's competitors now include securities dealers, brokers, mortgage
bankers, investment advisors and insurance companies who seek to offer one-stop
financial services to their customers which include services that traditional
banks have not been able or allowed to offer their customers in the past.
5
PART I
ITEM 1. BUSINESS (continued)
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COMPETITION
Moreover, under the Gramm-Leach-Bliley Act of 1999 (the "GLBA"), effective March
11, 2000, securities firms, insurance companies and other financial services
providers that elect to become financial holding companies may acquire banks and
other financial institutions. The GLBA significantly changed the competitive
environment in which the Registrant conducts business. See "Regulation and
Supervision" below. The increasingly competitive environment is a result
primarily of changes in regulation, changes in technology, product delivery
systems and the accelerating pace of consolidation among financial service
providers. These competitors with focused products targeted at highly profitable
customer segments, compete across geographic boundaries and provide customers
increasing access to meaningful alternatives to banking services in nearly all
significant products. These competitive trends are likely to continue. The
Registrant's ability to maintain its history of strong financial performance and
return on investment to shareholders will depend in part on the Registrant's
ability to expand its scope of available financial services as needed to meet
the needs and demands of its customers. With respect to electronic payment
processing services, the Bank's electronic payment processing subsidiary, MPS,
competes with other electronic fund transfer ("EFT") service providers such as
Concord EFS, Inc., eFunds Corporation and Electronic Data Systems and other
merchant processing providers such as First Data Corporation and National
Processing, Inc.
REGULATION AND SUPERVISION
In addition to the generally applicable state and federal laws governing
businesses and employers, the Registrant and its subsidiary state banks (the
"State Banks") and federal savings bank subsidiary are further regulated by
federal and state laws and regulations applicable to financial institutions and
their parent companies. Virtually all aspects of the Registrant, the State Banks
and the federal savings bank are subject to specific requirements or
restrictions and general regulatory oversight. State and federal banking laws
principal objectives are the maintenance of the safety and soundness of
financial institutions and the federal deposit insurance system and the
protection of consumers or classes of consumers, rather than the specific
protection of shareholders of a bank or the parent company of a bank, such as
the Registrant. In addition, the supervision, regulation and examination of the
Registrant and its subsidiaries by the bank regulatory agencies is not intended
for the protection of the Registrant's security holders. To the extent the
following material describes statutory or regulatory provisions, it is qualified
in its entirety by reference to the particular statute or regulation.
6
PART I
ITEM 1. BUSINESS (continued)
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REGULATION AND SUPERVISION
The Registrant
- --------------
General. The Registrant is a bank holding company registered under the
BHCA. In 2000, the Registrant elected and qualified for financial holding
company ("FHC") status under the Gramm-Leach-Bliley Act (as discussed below).
The Registrant is subject to appropriate regulation and supervision by the FRB
and the Ohio Division of Financial Institutions (the "Division"). The Registrant
is required to file annually a report of operations with, and are subject to
examination by, the FRB and the Division. The FRB has the authority to issue
orders to bank holding companies to cease and desist from unsound banking
practices and violations of conditions imposed by, or violations of agreements
with, the FRB. The FRB is also empowered to assess civil monetary penalties
against companies or individuals who violate the BHCA or orders or regulations
thereunder, to order termination of non-banking activities of non-banking
subsidiaries of bank holding companies, and to order termination of ownership
and control of a non-banking subsidiary by a bank holding company.
The BHCA - Geographic Expansion. The BHCA prohibits a bank holding company,
without prior approval of the FRB, from acquiring substantially all the assets
of a bank or acquiring direct or indirect ownership or control of more than 5%
of the voting shares of any bank, or increasing such ownership or control of any
bank, or merging or consolidating with any bank holding company. The Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 generally authorizes
bank holding companies to acquire banks located in any state, possibly subject
to certain state-imposed age and deposit concentration limits, and also
generally authorizes interstate mergers and to a lesser extent, interstate
branching.
The Gramm-Leach-Bliley Act - Broader Range of Financial Activities for
Financial Holding Companies. The GLBA became law on November 12, 1999. The
general effect of the GLBA is to establish a comprehensive framework to permit
affiliations among commercial banks, insurance companies, securities firms, and
other financial service providers by revising and expanding the BHCA framework
to permit a holding company system, such as the Registrant's, to engage in a
full range of financial activities through a new entity known as a FHC.
"Financial activities" is broadly defined to include not only banking,
insurance, and securities activities, but also merchant banking and additional
activities that the FRB, in consultation with the Secretary of the Treasury,
determines to be financial in nature, incidental to such financial activities,
or complementary activities that do not pose a substantial risk to the safety
and soundness of depository institutions or the financial system generally. In
sum, the GLBA permits bank holding companies, such as the Registrant, that
qualify and elect to be treated as a FHC, to engage in a significantly broader
range of financial activities than other registered bank holding companies that
are not so treated.
7
PART I
ITEM 1. BUSINESS (continued)
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REGULATION AND SUPERVISION
In order to elect to become a FHC and engage in the new activities, a bank
holding company must meet certain tests and file an election form with the FRB.
To qualify, all of a bank holding company's subsidiary banks must be
well-capitalized (as discussed on page 10 under "The State Banks") and
well-managed, as measured by regulatory guidelines. In addition, to engage in
the new activities each of the bank holding company's banks must have been rated
"satisfactory" or better in its most recent Federal Community Reinvestment Act
evaluation. Furthermore, a bank holding company that elects to be treated as a
FHC may face significant consequences if its banks fail to maintain the required
capital and management ratings, including entering into an agreement with the
FRB which imposes limitations on its operations and may even require
divestitures. Such possible ramifications may limit the ability of a bank
subsidiary to significantly expand or acquire less than well-capitalized and
well-managed institutions.
Capital Requirements. The FRB has adopted capital adequacy guidelines
pursuant to which it assesses the adequacy of capital in examining and
supervising a bank holding company and in analyzing applications to it under the
BHCA. These capital adequacy guidelines generally require bank holding companies
to maintain total capital equal to 8% of total risk-adjusted assets and
off-balance sheet items (the "Total Risk-Based Capital Ratio"), with at least
one-half of that amount consisting of Tier I or core capital and the remaining
amount consisting of Tier II or supplementary capital. Tier I capital for bank
holding companies generally consists of the sum of common shareholders' equity
and perpetual preferred stock (subject in the case of the latter to limitations
on the kind and amount of such stocks which may be included as Tier I capital),
less goodwill and other non-qualifying intangible assets. Tier II capital
generally consists of hybrid capital instruments; perpetual preferred stock,
that is not eligible to be included as Tier I capital; term subordinated debt
and intermediate-term preferred stock; and, subject to limitations, general
allowances for loan losses. Assets are adjusted under the risk-based guidelines
to take into account different risk characteristics.
In addition to the risk-based capital requirements, the FRB requires bank
holding companies to maintain a minimum leverage capital ratio of Tier I capital
(defined by reference to the risk-based capital guidelines) to total average
assets (the "Leverage Ratio") of 3.0%. Total average assets for this purpose
does not include goodwill and any other intangible assets and investments that
the FRB determines should be deducted from Tier I capital. The FRB has announced
that the 3.0% Leverage Ratio requirement is the minimum for the top-rated bank
holding companies without any supervisory, financial or operational weaknesses
or deficiencies or those which are not experiencing or anticipating significant
growth.
The Registrant is currently in compliance with both the Total Risk-Based Capital
Ratio and the Leverage Ratio requirements. As of December 31, 2001, the
Registrant had a Tier I Risk-Based
8
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
REGULATION AND SUPERVISION
Capital Ratio and a Total Risk-Based Capital Ratio equal to 12.36% and 14.42%,
respectively and a Leverage Ratio equal to 10.53%. U.S. bank regulatory
authorities and international bank supervisory organizations, principally the
Basel Committee on Banking Supervision, currently are considering changes to the
risk-based capital adequacy framework which ultimately could affect the
appropriate capital guidelines, including changes (such as those relating to
lending to registered broker-dealers) that are of particular relevance to banks
that engage in significant securities activities.
Limitations on Acquisitions of Common Stock. The Federal Change in Bank
Control Act prohibits a person or group of persons from acquiring "control" of a
bank holding company unless the FRB has been given at least 60 days to review
the proposal. Under a rebuttable presumption established by the FRB, the
acquisition of 10% or more of a class of voting stock of a bank holding company,
with a class of securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") would, under the
circumstances set forth in the presumption, constitute the acquisition of
control. In addition, any company, as that term is broadly defined in the
statute, would be required to obtain the approval of the FRB under BHCA before
acquiring 25% (5% in the case of an acquirer that is a bank holding company) or
more or such lesser percentage of common stock as the FRB deems to constitute
control.
Ohio Law. Ohio law, the state law principally governing the Registrant and
its largest bank subsidiary, does not require bank holding companies to register
with the Division. As a general matter, the Division does not rule upon or
regulate the activities in which bank holding companies or their nonbank
subsidiaries engage. A bank holding company, however, may not acquire control of
an Ohio bank through purchase, assignment, transfer, pledge, or other
disposition of voting securities without the prior consent of the Division. In
examining the Ohio banks of a bank holding company, the bank holding company
itself is subject to review by the Division. The Division has the authority to
issue orders to bank holding companies to cease and desist from unsound banking
practices and violations of law and of conditions imposed by, or violations of
agreements with, the Division in connection with the operation of Ohio banks.
The Division is also empowered to assess civil monetary penalties against bank
holding companies and banks engaging in unsafe or unsound practices.
The State Banks
- ---------------
General. The State Banks are subject to extensive state regulation and
examination by the appropriate state banking agency in the particular state
where each bank is chartered, the FRB and by the FDIC, which insures its
deposits to the maximum extent permitted by law. The federal and state laws and
regulations which are applicable to banks regulate among other things, the scope
of their business, their investments, their reserves against deposits, the
timing of the availability of deposited funds and the nature, amount of and
collateral for certain loans.
9
PART I
ITEM 1. BUSINESS (continued)
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REGULATION AND SUPERVISION
FDIC Insurance Premiums. The State Banks pay deposit insurance premiums to
the FDIC generally based on an assessment rate established by the FDIC for Bank
Insurance Fund-member institutions. The FDIC has established a risk-based
assessment system under which institutions are classified, and generally pay
premiums according to their perceived risk to the federal deposit insurance
funds. The Federal Deposit Insurance Act ("FDIA") does not require the FDIC to
charge all banks deposit insurance premiums when the ratio of deposit insurance
reserves to insured deposits is maintained above specified levels. However, as a
result of general economic conditions and recent bank failures, it is possible
that the ratio of deposit insurance reserves to insured deposits could fall
below the minimum ratio that FDIA requires, which would result in the FDIC
setting deposit insurance assessment rates sufficient to increase deposit
insurance reserves to the required ratio. A resumption of assessments of deposit
insurance premiums charged to well capitalized institutions could have an effect
on net earnings. The State Banks cannot predict whether the FDIC will be
required to increase deposit insurance assessments above their current levels.
Capital Requirements. The FRB has promulgated regulations and adopted a
statement of policy regarding the capital adequacy of state-chartered banks,
which, like the State Banks, are members of the Federal Reserve System. These
requirements are substantially similar to those adopted by the FRB regarding
bank holding companies, as described above. In addition, the federal banking
agencies have promulgated substantially similar regulations to implement the
system of prompt corrective action established by Section 38 of the FDIA. Under
the regulations, a bank generally shall be deemed to be (i) "well-capitalized"
if it has Total Risk-Based Capital Ratio of 10.0% or more, has a Tier I
Risk-Based Capital Ratio of 6.0% or more, has a Leverage Ratio of 5.0% or more
and is not subject to any written capital order or directive; or (ii)
"adequately capitalized" if it has a Total Risk-Based Capital Ratio of 8.0% or
more, a Tier I Risk-Based Capital Ratio of 4.0% or more, and a Leverage Ratio of
4.0% or more (3.0% under certain circumstances) and does not meet the definition
of "well-capitalized;" or (iii) "undercapitalized" if it has a Total Risk Based
Capital Ratio that is less than 8.0%, a Tier I Risk Based Capital Ratio that is
less than 4.0% or a Leverage Ratio that is less than 4.0% (3.0% under certain
circumstances); or (iv) "significantly undercapitalized" if it has a Total Risk
Based Capital Ratio that is less than 6.0%, a Tier I Risk Based Capital Ratio
that is less than 3.0% or a Leverage Ratio that is less than 3.0%, and (v)
"critically undercapitalized" if it has a ratio of tangible equity to total
assets that is equal to or less than 2.0%. If an institution becomes
undercapitalized, it would become subject to significant additional oversight
and regulation, as mandated by the FDIA.
As of December 31, 2001, each of the State Banks were deemed to be
well-capitalized institutions for the above purposes. As is discussed above, the
State Banks are required to remain well-capitalized institutions at all times
because the Registrant elected to be treated as an FHC.
10
PART I
ITEM 1. BUSINESS (continued)
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REGULATION AND SUPERVISION
Transactions with Affiliates. The FDIA restricts the range of permissible
transactions between a bank and an affiliated company. The State Banks are
subject to certain restrictions on loans to affiliated companies, on investments
in the stock or securities thereof, on the taking of such stock or securities as
collateral for loans to any borrower, and on the issuance of a guarantee or
letter of credit on their behalf. The State Banks are also subject to certain
restrictions on most types of transactions with affiliates, requiring that the
terms of such transactions be substantially equivalent to terms to similar
transactions with non-affiliates. The GLBA requires the FRB to promulgate rules
addressing credit exposure relating to derivatives transactions and intra-day
extensions of credit between banks and their affiliates. The FRB has adopted
interim rules addressing such transactions, and it has solicited comments on the
types of restrictions that should apply to derivatives transactions and
intra-day extensions of credit between banks and their affiliates.
Activities and Investments of Insured State-Chartered Banks. Section 24 of
the FDIA generally limits the activities as principal and equity investments of
FDIC-insured, state-chartered banks to those that are permissible for national
banks. Further, the GLBA permits national banks and state banks, to the extent
permitted under state law, to engage in certain new activities which are
permissible for subsidiaries of a FHC. Further, it expressly preserves the
ability of state banks to retain all existing subsidiaries. In order to form a
financial subsidiary, a state bank must be well-capitalized, and the bank would
be subject to certain capital deductions, risk management and affiliate
transaction rules.
Community Reinvestment Act. The Federal Community Reinvestment Act ("CRA")
requires the FRB to evaluate the performance of each of the State Banks in
helping to meet the credit needs of the community. As a part of the CRA program,
the State Banks are subject to periodic examinations by the FRB, and must
maintain comprehensive records of their CRA activities for this purpose. Each of
the State Banks has a CRA rating of satisfactory or higher.
Customer Information Security. The FRB, the FDIC and other bank regulatory
agencies have adopted final guidelines (the "Guidelines") for safeguarding
confidential customer information. The Guidelines require each financial
institution, under the supervision and ongoing oversight of its Board of
Directors, to create a comprehensive written information security program
designed to ensure the security and confidentiality of customer information,
protect against any anticipated threats or hazards to the security or integrity
of such information; and protect against unauthorized access to or use of such
information that could result in substantial harm or inconvenience to any
customer.
11
PART I
ITEM 1. BUSINESS (continued)
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REGULATION AND SUPERVISION
Privacy. The GLBA requires financial institutions to implement policies and
procedures regarding the disclosure of nonpublic personal information about
consumers to nonaffiliated third parties. In general, the statute requires
explanations to consumers on policies and procedures regarding the disclosure of
such nonpublic personal information, and, except as otherwise required by law,
prohibits disclosing such information except as provided in the State Banks
policies and procedures.
USA Patriot Act. The USA Patriot Act of 2001 (the "Patriot Act"), designed
to deny terrorists and others the ability to obtain access to the United States
financial system, has significant implications for depository institutions,
brokers, dealers and other businesses involved in the transfer of money. The
Patriot Act mandates or will require financial institutions to implement
additional policies and procedures with respect to, or additional measures
designed to address, any or all of the following matters, among others: money
laundering; suspicious activities and currency transaction reporting; and
currency crimes.
Regulatory Enforcement Authority. The enforcement powers available to
federal banking regulators include, among other things, the ability to assess
civil money penalties, to issue cease-and-desist or removal orders and to
initiate injunctive actions against banking organizations and
institution-affiliated parties, as defined. In general, these enforcement
actions may be initiated for violations of laws and regulations and unsafe or
unsound practices. Other actions or inactions may provide the basis for
enforcement action, including misleading or untimely reports filed with
regulatory authorities. Federal law requires, except under certain
circumstances, public disclosure of final enforcement actions by the federal
banking agencies.
Transfer Agency. In order to serve as a transfer agent to clients that
execute transactions in publicly traded securities, banks must register with the
SEC as a transfer agent under the Exchange Act. As a registered transfer agent,
Fifth Third Bank is subject to certain reporting and record keeping
requirements. Currently, management believes Fifth Third Bank is in compliance
with these registration, reporting and record keeping requirements.
Regulation of Investment Companies. Certain mutual fund and unit investment
trust clients are regulated as `investment companies' as that term is defined
under the Investment Company Act of 1940, as amended (the "ICA"), and are
subject to various examination and reporting requirements.
12
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
REGULATION AND SUPERVISION
The provisions of the ICA and the regulations promulgated thereunder prescribe
the type of institution which may act as a custodian of investment company
assets, as well as the manner in which a custodian administers the assets in its
custody. As a custodian for a number of investment company clients, these
regulations require, among other things, that certain minimum aggregate capital,
surplus, and undivided profit levels are maintained. Additionally, arrangements
with clearing agencies or other securities depositories must meet ICA
requirements for segregation of assets, identification of assets and client
approval. Future legislative and regulatory changes in the existing laws and
regulations governing custody of investment company assets, particularly with
respect to custodian qualifications, may have a material and adverse impact on
the Registrant. Currently, management believes the Registrant is in compliance
with all minimum capital and securities depository requirements. Further, the
Registrant is not aware of any proposed or pending regulatory developments,
which, if approved, would adversely affect its ability to act as custodian to an
investment company.
Investment companies are also subject to extensive record keeping and reporting
requirements. These requirements dictate the type, volume and duration of the
record keeping the Registrant undertakes, either in the role as custodian for an
investment company or as a provider of administrative services to an investment
company. Further, specific ICA guidelines must be followed when calculating the
net asset value of a client mutual fund. Consequently, changes in the statutes
or regulations governing record keeping and reporting or valuation calculations
will affect the manner in which operations are conducted.
New legislation or regulatory requirements could have a significant impact on
the information reporting requirements applicable to the Registrant and may in
the short term adversely affect the Registrant's ability to service clients at a
reasonable cost. Any failure to provide such support could cause the loss of
customers and have a material adverse effect on financial results. Additionally,
legislation or regulations may be proposed or enacted to regulate the Registrant
in a manner which may adversely affect financial results.
13
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
REGULATION AND SUPERVISION
Other Securities Laws Issues. The GLBA also amended the federal securities
laws to eliminate the blanket exceptions that banks traditionally have had from
the definition of broker-dealer and investment adviser. With respect to broker
dealer registration, the SEC has extended the date by which banks must comply
with new broker-dealer registration requirements until at least May 12, 2002.
Banks not falling within the specific exemptions provided by the new law may
have to register with the SEC as a broker-dealer and become subject to SEC
jurisdiction. The Registrant is currently evaluating alternatives to ensure that
its banks will not be required to register as a broker-dealer. With respect to
investment adviser registration, the GLBA requires a bank that acts as
investment adviser to a registered investment company to register as an
investment adviser or to conduct such advisory activities through a separately
identifiable department or division of the bank so registered. The Registrant
furnishes investment advice to registered investment companies in a manner
designed to ensure that none of its banks need to register with the SEC as an
investment adviser. Federal and state laws impose numerous obligations on
registered investment advisers, including fiduciary duties, record keeping
requirements and disclosure obligations. Currently, management believes the
Registrant is in compliance with these requirements.
State Laws. The State Banks are subject to requirements and restrictions
under applicable state law, particularly in the states in which they are
chartered, including restrictions on the types and amounts of loans that may be
granted and the interest that may be charged thereon, and limitations on the
types of investments that may be made and the type of services which may be
offered. Various state consumer laws and regulations also affect the operations
of the State Banks.
Federal Savings Bank
- --------------------
The Registrant's federal savings bank subsidiary is primarily subject to
regulation by the Office of Thrift Supervision (the "OTS"). The OTS is
responsible for the administration and enforcement of the Home Owners' Loan Act
of 1933 and applicable portions of the FDIA. The OTS is authorized to provide
for the organization, incorporation, examination and regulation of federal
savings banks. Under this authority, the OTS' functions include, but are not
limited to, regulation of the corporate structure of federal savings banks;
regulation of the distributions of earnings; regulation of lending and other
investment powers; the regulation of mergers, conversions, and dissolutions
involving federal savings banks; and the enforcement of laws, regulations or
conditions, or conditions against federal savings banks.
14
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
REGULATION AND SUPERVISION
As the other federal regulators, the OTS has promulgated regulations and adopted
a statement of policy regarding the capital adequacy of federal savings banks.
These requirements are substantially similar to those adopted by the FRB
regarding bank holding companies and state member banks as described above. As
of December 31, 2001, the Registrant's federal savings bank was deemed to be
well-capitalized.
Pursuant to the CRA, the OTS evaluates the performance of the Registrant's
federal savings bank in helping to meet the credit needs of the community. As a
part of the CRA program, the federal savings bank is subject to periodic
examinations by the OTS, and must maintain comprehensive records of their CRA
activities for this purpose. The federal savings bank has a CRA rating of
satisfactory.
Additional Information
- ----------------------
Additional information regarding regulatory matters is included in Note 17 (page
29) of the Notes to Consolidated Financial Statements in the Registrant's 2001
Annual Report to Shareholders, and is incorporated herein by reference and
attached to this filing as Exhibit 13.
EMPLOYEES
As of December 31, 2001, there were no employees of the Registrant. Subsidiaries
of the Registrant employed 19,118 employees - 3,619 were officers and 3,581 were
part-time employees. There were 18,373 full-time equivalent employees as of
December 31, 2001.
STATISTICAL INFORMATION
Pages 17 through 25 contain statistical information on the Registrant and its
subsidiaries. Information about the Registrant's business segments is included
in Note 24 (pages 34 through 35) of the Notes to Consolidated Financial
Statements in the Registrant's 2001 Annual Report to Shareholders, and is
incorporated herein by reference and attached to this filing as Exhibit 13.
AVERAGE BALANCE SHEETS
The average balance sheets for each of the last three fiscal years are
incorporated herein by reference to Table 1 of Management's Discussion and
Analysis of Financial Condition and Results of Operations (page 37) of the
Registrant's 2001 Annual Report to Shareholders attached to this filing as
Exhibit 13.
15
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
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 of
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the related discussion on pages 37 through 40 of the Registrant's
2001 Annual Report to Shareholders attached to this filing as Exhibit 13.
INVESTMENT SECURITIES PORTFOLIO
The investment securities portfolio as of December 31 for each of the last five
years and the maturity distribution and weighted average yield of investment
securities as of December 31, 2001, are incorporated herein by reference to the
Securities Portfolio and Maturities of Securities tables on page 42 of the
Registrant's 2001 Annual Report to Shareholders attached to this filing as
Exhibit 13.
The weighted average yields for the investment securities portfolio are yields
to maturity, weighted by the par values of the investment securities. The
weighted average yields on investment 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:
Under 1 year 2.96%
1 - 5 years 2.93%
6 - 10 years 2.71%
Over 10 years 2.73%
Total municipal securities 2.73%
16
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
TYPES OF LOANS AND LEASES
A summary of loans and leases by major category for the last five fiscal years
ended December 31 ($000's):
2001 2000 1999 1998 1997
------------ ---------- ---------- ---------- ----------
Commercial, financial and
agricultural loans $ 10,838,518 10,674,980 9,920,635 8,882,784 8,891,303
Real estate - construction loans 3,356,172 3,222,553 2,272,178 1,662,020 1,465,955
Real estate - mortgage loans 10,590,127 11,862,125 12,335,433 12,516,431 13,290,085
Consumer loans 12,564,893 11,551,102 9,053,473 7,209,759 6,998,674
Lease financing 5,109,273 6,165,378 6,188,694 4,566,195 3,855,106
------------ ---------- ---------- ---------- ----------
Loans and leases, gross 42,458,983 43,476,138 39,770,413 34,837,189 34,501,123
Unearned income (911,091) (945,748) (933,824) (721,790) (594,976)
Reserve for credit losses (624,080) (609,340) (572,919) (532,176) (509,231)
------------ ---------- ---------- ---------- ----------
Loans and leases, net $ 40,923,812 41,921,050 38,263,670 33,583,223 33,396,916
============ ========== ========== ========== ==========
Loans held for sale $ 2,180,063 1,654,996 1,198,407 2,861,345 1,590,307
============ ========== ========== ========== ==========
MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
A summary of the remaining maturities of the loan portfolio distributed to
reflect cash flows at December 31, 2001, based on scheduled repayment ($000's):
Commercial,
Financial and Real Estate Real Estate
Agricultural Construction Commercial Residential Consumer Lease
Loans Loans Loans Mortgage Loans Financing Total
------------- ------------ ----------- ----------- ---------- --------- -----------
Due in one year or less $ 6,780,511 1,651,248 1,328,216 1,525,821 5,473,180 1,854,097 $18,613,073
Due after one year through
five years 3,567,003 1,314,899 3,720,671 2,606,250 5,655,425 3,018,505 19,882,753
Due after five years 491,004 390,025 1,036,173 372,996 1,436,288 236,671 3,963,157
----------- --------- --------- --------- ---------- --------- -----------
Total $10,838,518 3,356,172 6,085,060 4,505,067 12,564,893 5,109,273 $42,458,983
=========== ========= ========= ========= ========== ========= ===========
A summary of the remaining maturities of the loan portfolio distributed to
reflect cash flows at December 31, 2001 based on the sensitivity of loans to
interest rate changes for loans due after one year was as follows ($000's):
Commercial,
Financial and Real Estate Real Estate
Agricultural Construction Commercial Residential Consumer Lease
Loans Loans Loans Mortgage Loans Financing Total
------------- ------------ ----------- ----------- --------- --------- -----------
Predetermined interest rate $2,488,774 582,698 3,312,591 1,018,131 3,396,516 3,153,084 $13,951,794
Floating or adjustable interest rate $1,569,233 1,122,226 1,444,253 1,961,115 3,695,197 102,092 $ 9,894,116
17
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
RISK ELEMENTS
Interest on loans is normally accrued at the rate agreed upon at the time each
loan was negotiated. It is the Registrant's policy to discontinue accrual of
interest on commercial, construction and mortgage loans when there is a clear
indication that the borrower's cash flow may not be sufficient to meet payments
as they become due. Loans, other than consumer loans, are 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. Consumer loans and
revolving lines of credit for equity lines and credit cards that have principal
and interest payments that become past due one hundred and twenty days and one
hundred and eighty days or more, respectively, are charged off to the allowance
for credit losses. The following table presents data concerning loans and leases
at risk at December 31 ($000's):
2001 2000 1999 1998 1997
-------- -------- -------- -------- --------
Nonaccrual loans and leases $215,961 174,250 133,200 150,472 172,515
Loans and leases contractually
past due 90 days or more as
to principal, interest or rental
payments 163,694 128,454 83,087 104,030 75,001
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 -- 1,603 2,210 5,159 6,589
Other real estate owned 19,142 24,685 19,073 21,417 24,389
-------- -------- -------- -------- --------
Total $398,797 328,992 237,570 281,078 278,494
======== ======== ======== ======== ========
As of December 31, 2001, there were $15,846,000 of loans and leases currently
performing in accordance with contractual terms where there were serious doubts
as to the ability of the borrower to comply with such terms.
For the years 2001, 2000 and 1999, interest income of $6,937,000, $2,302,000 and
$3,439,000, respectively, was recorded on nonaccrual and renegotiated loans and
leases. Additional interest income of $23,937,000, $9,709,000 and $12,147,000,
respectively, would have been recorded if the nonaccrual and renegotiated loans
and leases had been current in accordance with their original terms.
18
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
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 for the last five fiscal years ended December 31
($000's):
2001 2000 1999 1998 1997
------------ ---------- ---------- ---------- ----------
Loans and leases outstanding at
December 31 $ 41,547,892 42,530,390 38,836,589 34,115,399 33,906,147
============ ========== ========== ========== ==========
Loans held for sale $ 2,180,063 1,654,996 1,198,407 2,861,345 1,590,307
============ ========== ========== ========== ==========
Average loans and leases
outstanding $ 44,888,227 42,690,459 38,652,106 36,013,782 33,850,423
============ ========== ========== ========== ==========
Reserve for credit losses,
January 1 $ 609,340 572,919 532,176 509,231 483,572
------------ ---------- ---------- ---------- ----------
Losses charged off:
Commercial, financial and
agricultural loans (117,725) (59,037) (71,018) (70,760) (32,754)
Real estate - construction loans (2,221) (1,131) (1,088) (1,085) (1,165)
Real estate - mortgage loans (7,224) (2,602) (4,742) (10,205) (13,299)
Consumer loans (116,294) (73,460) (92,177) (90,720) (121,270)
Lease financing (65,203) (39,596) (40,237) (31,879) (28,057)
------------ ---------- ---------- ---------- ----------
Total losses (308,667) (175,826) (209,262) (204,649) (196,545)
------------ ---------- ---------- ---------- ----------
Recoveries of losses previously
charged off:
Commercial, financial and
agricultural loans 30,874 25,724 19,574 9,842 12,517
Real estate - construction loans 390 326 31 133 366
Real estate - mortgage loans 197 226 688 3,163 2,906
Consumer loans 38,165 31,707 33,766 34,597 25,172
Lease financing 11,905 9,158 13,623 7,169 7,880
------------ ---------- ---------- ---------- ----------
Total recoveries 81,531 67,141 67,682 54,904 48,841
------------ ---------- ---------- ---------- ----------
Net losses charged off:
Commercial, financial and
agricultural loans (86,851) (33,313) (51,444) (60,918) (20,237)
Real estate - construction loans (1,831) (805) (1,057) (952) (799)
Real estate - mortgage loans (7,027) (2,376) (4,054) (7,042) (10,393)
Consumer loans (78,129) (41,753) (58,411) (56,123) (96,098)
Lease financing (53,298) (30,438) (26,614) (24,710) (20,177)
------------ ---------- ---------- ---------- ----------
Total net losses charged off (227,136) (108,685) (141,580) (149,745) (147,704)
------------ ---------- ---------- ---------- ----------
Reserve of acquired
institutions and other 5,799 7,446 12,878 (3,729) (3,256)
Provision charged to operations 200,640 125,660 143,232 156,217 176,619
Merger-related provision 35,437 12,000 26,213 20,202 --
Reserve for credit losses,
------------ ---------- ---------- ---------- ----------
December 31 $ 624,080 609,340 572,919 532,176 509,231
============ ========== ========== ========== ==========
Reserve as a percent of loans
and leases outstanding 1.50% 1.43% 1.48% 1.56% 1.50%
19
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
SUMMARY OF CREDIT LOSS EXPERIENCE
Allocation of reserve for credit losses,
December 31: 2001 2000 1999 1998 1997
-------- ------- ------- ------- -------
Commercial, financial and
agricultural loans $239,771 223,140 243,735 186,407 202,911
Real estate - construction loans 13,231 14,441 20,198 16,403 10,957
Real estate - mortgage loans 31,079 17,610 24,533 11,068 12,469
Consumer loans 131,618 134,177 126,812 161,728 148,825
Lease financing 100,727 113,337 82,113 83,123 65,215
Unallocated Reserve 107,654 106,635 75,528 73,447 68,854
-------- ------- ------- ------- -------
Total reserve for credit losses $624,080 609,340 572,919 532,176 509,231
======== ======= ======= ======= =======
The reserve for credit losses is an estimate and is available to absorb probable
losses from any portion of the loan and lease portfolio.
As of December 31, 2001, the reserve for credit losses was $624 million, or 1.50
percent of total loans and leases. This compares to $609 million, or 1.43
percent of total loans and leases, as of December 31, 2000. The increase in this
ratio was due to an uncertain economic environment in 2001 as exhibited by the
increase of nonaccrual loans and leases from $174.3 million at December 31, 2000
to $216.0 million at December 31, 2001. Total underperforming assets also
increased from $329.0 million, or .77% of total loans and leases outstanding and
other real estate owned ("OREO") at December 31, 2000 to $398.8 million, or .96%
of total loans and leases outstanding and OREO, at December 31, 2001.
The allocation of the reserve for credit losses for commercial loans increased
from $223.1 million, or 36.6% of the reserve for credit losses, at December 31,
2000 to $239.8 million, or 38.4% of the reserve for credit losses at December
31, 2001. The reserve for credit losses for consumer and lease financing loans
declined from $247.5, or 40.6% of the reserve for credit losses at December 31,
2000 to $232.3 million, or 37.2% of the reserve for credit losses, at December
31, 2001.
20
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
SUMMARY OF CREDIT LOSS EXPERIENCE
The distribution of loans and leases by type and the ratio of net charge-offs to
average loans and leases outstanding was as follows:
2001 2000 1999 1998 1997
----- ----- ----- ----- -----
Percentage of loans and leases to total
loans and leases at December 31:
Commercial, financial and
agricultural loans 25.5% 24.6 24.9 25.5 25.8
Real estate - construction loans 7.9 7.4 5.7 4.8 4.2
Real estate - mortgage loans 24.9 27.3 31.0 35.9 38.5
Consumer loans 29.6 26.5 22.8 20.7 20.3
Lease financing 12.1 14.2 15.6 13.1 11.2
----- ----- ----- ----- -----
Total 100.0% 100.0 100.0 100.0 100.0
===== ===== ===== ===== =====
Ratio of net charge-offs during year
to average loans and leases outstanding
during year:
Commercial, financial and
agricultural loans 0.68% 0.28 0.45 0.61 0.24
Real estate - construction loans 0.05 0.03 0.05 0.05 0.06
Real estate - mortgage loans 0.06 0.02 0.03 0.05 0.08
Consumer loans 0.54 0.36 0.58 0.66 1.42
Lease financing 0.97 0.53 0.47 0.61 0.66
----- ----- ----- ----- -----
Weighted Average Ratio 0.45% 0.23 0.32 0.38 0.45
21
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
CRITICAL ACCOUNTING POLICIES
Reserve for Credit Losses. The Registrant maintains a reserve to absorb
probable loan and lease losses inherent in the portfolio. The reserve for credit
losses is maintained at a level management considers to be adequate to absorb
probable loan and lease losses inherent in the portfolio, based on evaluations
of the collectibility and historical loss experience of loans and leases. 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 factors which, in management's judgement, deserve
consideration under existing economic conditions in estimating probable credit
losses. 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 probable 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. Included in the review of
individual loans are those that are impaired as provided in Statement of
Financial Accounting Standards 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 a 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-off experience sustained on loans
according to their internal risk grade. These grades encompass ten categories
that define a borrower's estimated 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.
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.
An unallocated reserve is maintained to recognize the imprecision in estimating
and measuring loss when evaluating reserves for individual loans or pools of
loans.
22
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
CRITICAL ACCOUNTING POLICIES
Reserves on individual loans and historical loss rate are reviewed quarterly and
adjusted as necessary base don changing borrower and/or collateral conditions
and actual collection and charge-off experience.
The Registrant's primary market area for lending is Ohio, Kentucky, Indiana,
Florida, Michigan, Illinois and West Virginia. 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
Registrant's customers.
The Registrant has not substantively changed any aspect of its overall approach
in the determination of the allowance for loan losses. There have been no
material changes in assumptions or estimation techniques as compared to prior
years that impacted the determination of the current year allowance.
Based on the procedures discussed above, management is of the opinion the
reserve of $624,080,000 was adequate, but not excessive, to absorb estimated
credit losses associated with the loan and lease portfolio at December 31, 2001.
See further information regarding the reserve for credit losses in Note 1 (pages
19 and 20) and Note 3 (page 23) of the Notes to Consolidated Financial
Statements in the Registrant's 2001 Annual Report to Shareholders, incorporated
herein by reference and attached to this filing as Exhibit 13.
Valuation of Derivatives. The Bancorp maintains an overall interest rate
risk management strategy that incorporates the use of derivative instruments to
minimize significant unplanned fluctuations in earnings and cash flows caused by
interest rate volatility. Derivative instruments that the Bancorp may use as
part of its interest rate risk management strategy include interest rate and
principal only swaps, interest rate floors, forward contracts and both futures
contracts and options on futures contracts. The primary risk of material changes
to the value of the derivative instruments is the fluctuation in interest rates,
however, as the Bancorp principally utilizes these derivative instruments as
part of a designated hedging program, the change in the derivative value is
generally offset by a corresponding change in the value of the hedged item or a
forecasted transaction. See further information regarding derivatives in Note 1
(page 20 through 22) of the Notes to Consolidated Financial Statements in the
Registrant's 2001 Annual Report to Shareholders, incorporated herein by
reference and attached to this filing as Exhibit 13.
Valuation of Mortgage Servicing Rights. When the Bancorp sells loans
through either securitizations or individual loans sales in accordance with its
investment policies, it may retain one or more subordinated tranches, servicing
rights and in some cases a cash reserve account, all of which are retained
interests in the securitized or sold loans. Gain or loss on sale of the loans
depends in part on the previous carrying amount of the financial assets involved
in the sale, allocated between the assets sold and the retained interests based
on their relative fair value at the date of the sale. To obtain fair values,
23
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
CRITICAL ACCOUNTING POLICIES
quoted markets prices are used if available. If quotes are not available for
retained interests, the Bancorp calculates fair value based on the present value
of future expected cash flows using management's best estimates of the key
assumptions - credit losses, prepayment speeds, forward yield curves and
discount rates commensurate with the risks involved.
Servicing rights resulting from loans sales are amortized in proportion to, and
over the period of estimated net servicing revenues. Servicing rights are
assessed for impairment periodically, based on fair value, with any impairment
recognized through a valuation allowance. For purposes of measuring impairment,
the rights are stratified based on interest rate and original maturity. Fees
received for servicing mortgage loans owned by investors are based on a
percentage of the outstanding monthly principal balance of such loans and are
included in income as loan payments are received. Costs of servicing loans are
charged to expense as incurred.
Key economic assumptions used in measuring any potential impairment of the
servicing rights include the prepayment speed of the underlying mortgage loans,
the weighted-average life of the loan and the discount rate. The primary risk of
material changes to the value of the mortgage servicing rights resides in the
potential volatility in the economic assumptions used, particularly the
prepayment speed. The Bancorp monitors this risk and adjusts its valuation
allowance as necessary to adequately reserve for any probable impairment in the
portfolio. By adjusting the allowance, as necessary each quarter, the Bancorp
mitigates its risk to material adverse changes in the value of the portfolio.
See further discussion in Note 1 (page 20) and Note 19 (page 30) of the Notes to
Consolidated Financial Statements in the Registrant's 2001 Annual Report to
Shareholders, incorporated herein by reference and attached to this filing as
Exhibit 13.
MATURITY DISTRIBUTION OF DOMESTIC CERTIFICATES OF DEPOSIT
OF $100,000 AND OVER AT DECEMBER 31, 2001 ($000'S)
Three months or less $1,049,325
Over three months through six months 503,500
Over six months through twelve months 445,395
Over twelve months 198,943
----------
Total certificates - $100,000 and over $2,197,163
Note: Foreign office deposits totaling $1,221,127 are denominated in amounts
greater than $100,000.
24
PART I
ITEM 1. BUSINESS (continued)
- ----------------------------
RETURN ON EQUITY AND ASSETS
The following table presents certain operating ratios (as originally reported):
2001/1/ 2000/2/ 1999/3/
---- ---- ----
Return on assets (a) 1.55% 1.71 1.57
Return on equity (b) 15.1% 19.1 17.3
Dividend payout ratio (c) 44.7% 38.2 40.9
Equity to assets ratio (d) 10.28% 8.98 9.07
(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
(d) average equity divided by average assets
/(1) Certain 2001 ratios and statistics include merger-related charges and a
nonrecurring accounting principle change of $394.5 million pretax ($300.3
million after tax, or $.51 per diluted share). For comparability, excluding
the impact of these charges, return on average assets, return on average
equity and the dividend payout ratio for 2001 would have been 1.97%, 19.2%
and 35.0%, respectively./
/(2) Certain 2000 ratios and statistics include merger-related charges of $99.0
million pretax ($66.6 million after tax, or $.12 per diluted share). For
comparability, excluding the impact of these charges, return on average
assets, return on average equity and the dividend payout ratio for 2000
would have been 1.81%, 20.2% and 33.3%, respectively./
/(3) Certain 1999 ratios and statistics include merger-related charges of $134.4
million pretax ($101.4 million after tax, or $.18 per diluted share). For
comparability, excluding the impact of these charges, return on average
assets, return on average equity and the dividend payout ratio for 1999
would have been 1.74%, 19.2% and 32.2%, respectively./
25
PART I
ITEM 2. PROPERTIES
- ------------------
The Registrant's executive offices and the main office of the Fifth Third Bank
are located on Fountain Square Plaza in downtown Cincinnati, Ohio, in a 32-story
office tower, a five-story office building with an attached parking garage and a
separate ten-story office building known as the Fifth Third Center, the William
S. Rowe Building and the 530 Building, respectively. The Registrant's main
operations center is located in Cincinnati, Ohio, in a three-story building with
an attached parking garage known as the Madisonville Operations Center. One of
the subsidiaries of the Registrant owns 100 percent of these buildings.
At December 31, 2001, the Registrant, through its subsidiary banks, two in
Kentucky and one located in each of Ohio, Indiana, Michigan, Illinois and
Florida, operated 933 banking centers, of which 613 were owned and 320 were
leased. The properties owned are free from mortgages and encumbrances.
Management's Editorial (pages 4 through 14) and Note 5 (page 24) of Notes to
Consolidated Financial Statements of the Registrant's 2001 Annual Report to
Shareholders is incorporated herein by reference and attached to this filing as
Exhibit 13.
ITEM 3. LEGAL PROCEEDINGS
- -------------------------
The Registrant and its subsidiaries are not parties to any material legal
proceedings other than those arising in the normal course of business. Based on
a review of such litigation with legal counsel, management believes any
resulting liability would not have a material effect upon the Registrant's
consolidated financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
None.
26
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
- -----------------------------------------------------------------------------
The information required by this item is incorporated herein by reference to
Financial Highlights (page 1) of the Registrant's 2001 Annual Report to
Shareholders attached to this filing as Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------
The information required by this item is incorporated herein by reference to
Note 1 (pages 19 through 22) and Note 20 (pages 31 through 32) of Notes to
Consolidated Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations (page 46) of the Registrant's 2001
Annual Report to Shareholders attached to this filing as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS
-------------
The information required by this item is incorporated herein by reference to
Management's Discussion and Analysis of Financial Condition and Results of
Operations (pages 37 through 46) of the Registrant's 2001 Annual Report to
Shareholders attached to this filing as Exhibit 13.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
The information required by this item is incorporated herein by reference to
pages 44 through 45 of the Registrant's 2001 Annual Report to Shareholders
attached to this filing as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------
The information required by this item is incorporated herein by reference to
pages 15 through 36 of the Registrant's 2001 Annual Report to Shareholders
attached to this filing as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- -----------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None.
27
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -----------------------------------------------------------
Executive Officers of the Registrant
The names, ages and positions of the Executive Officers of the Registrant as of
February 1, 2002 are listed below along with their business experience during
the past 5 years. Officers are appointed annually by the Board of Directors at
the meeting of Directors immediately following the Annual Meeting of
Shareholders.
Current Position and
Name and Age Business Experience During Past 5 Years
- ------------ ---------------------------------------
George A. Schaefer, Jr., 56 PRESIDENT AND CEO. President and Chief Executive
Officer of the Registrant and Fifth Third Bank.
Neal E. Arnold, 42 EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER. Executive Vice President of the
Registrant and Fifth Third Bank since December
1998. Chief Financial Officer of the Registrant
and Fifth Third Bank since June 1997. Mr. Arnold
has been the Treasurer of the Registrant and Fifth
Third Bank. Previously, Mr. Arnold was Treasurer
and Senior Vice President of Fifth Third Bank.
Michael D. Baker, 51 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
August 1995. Previously, Mr. Baker was Senior Vice
President of the Registrant since March 1993, and
of Fifth Third Bank.
Barry L. Boerstler, 54 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
September 1999. Mr. Boerstler was Senior Vice
President of the Registrant since December 1997,
and of Fifth Third Bank. Previously, Mr. Boerstler
was a Vice President of Fifth Third Bank.
28
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
- -----------------------------------------------------------------------
Current Position and
Name and Age Business Experience During Past 5 Years
- ------------ ---------------------------------------
James J. Hudepohl, 49 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
January 1997. Previously, Mr. Hudepohl was Senior
Vice President of Fifth Third Bank.
James R. Gaunt, 56 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant since June 1997. Senior Vice
President of the Registrant since March 1994, and
President and CEO of Fifth Third Bank, Kentucky,
Inc. since August 1994. Previously, Mr. Gaunt was
Senior Vice President of the Registrant and Fifth
Third Bank.
Paul L. Reynolds, 40 EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY. Executive Vice President of the
Registrant since September 1999. General Counsel
and Secretary of the Registrant since January
2002. Previously, Senior Vice President of the
Registrant and Fifth Third Bank since March 1997.
Assistant Secretary of the Registrant since March
1995, General Counsel and Assistant Secretary of
Fifth Third Bank since January 1995.
Robert P. Niehaus, 55 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
August 1995. Previously, Mr. Niehaus was Senior
Vice President of the Registrant since March 1993,
and Senior Vice President of Fifth Third Bank.
Stephen J. Schrantz, 52 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
October 1989. Previously, Mr. Schrantz was Senior
Vice President of Fifth Third Bank.
29
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
- -----------------------------------------------------------------------
Current Position and
Name and Age Business Experience During Past 5 Years
- ------------ ---------------------------------------
Robert J. King, Jr., 46 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant since June 1997. President and
CEO of Fifth Third Bank (Northeastern Ohio).
Previously, Mr. King was President and CEO of
Fifth Third Bank, Northwestern Ohio, N.A. and
Senior Vice President of the Registrant since
March 1995.
Gerald L. Wissel, 45 EXECUTIVE VICE PRESIDENT. Executive Vice President
of the Registrant and Fifth Third Bank since
January 1997. Previously, Mr. Wissel was Auditor
of the Registrant and Fifth Third Bank and Senior
Vice President of Fifth Third Bank.
Diane L. Dewbrey, 37 SENIOR VICE PRESIDENT. Senior Vice President of
the Registrant and Fifth Third Bank since January
2002. Previously, Ms. Dewbrey was Senior Vice
President of Fifth Third Bank.
Daniel T. Poston, 43 SENIOR VICE PRESIDENT, AUDITOR. Senior Vice
President of the Registrant and Fifth Third Bank
since January 2002. Auditor of the Registrant and
Fifth Third Bank. Mr. Poston joined the Registrant
in October 2001. Previously, Mr. Poston was a
partner with Arthur Andersen.
R. Mark Graf, 37 TREASURER. Treasurer of the Registrant since
January 2002 and of Fifth Third Bank since July
2001. Mr. Graf joined the Registrant in July 2001.
Previously, Mr. Graf served in various management
capacities at AmSouth Bancorporation.
David J. DeBrunner, 35 CONTROLLER. Vice President of the Registrant and
Fifth Third Bank since January 2002. Previously,
Mr. DeBrunner was Vice President of Fifth Third
Bank.
30
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
- -----------------------------------------------------------------------
The information required by this item concerning Directors is incorporated
herein by reference under the caption "ELECTION OF DIRECTORS" (pages 2 through
6) of the Registrant's Proxy Statement for the 2002 Annual Meeting of
Shareholders.
The information required by this item concerning Section 16 (a) Beneficial
Ownership Reporting Compliance is incorporated herein by reference under the
caption "SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" (page 9) of
the Registrant's Proxy Statement for the 2002 Annual Meeting of Shareholders.
ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------
The information required by this item is incorporated herein by reference under
the caption "EXECUTIVE COMPENSATION" (pages 7 through 13) of the Registrant's
Proxy Statement for the 2002 Annual Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -----------------------------------------------------------------------
The information required by this item is incorporated herein by reference under
the captions "CERTAIN BENEFICIAL OWNERS, ELECTION OF DIRECTORS AND EXECUTIVE
COMPENSATION" (pages 1 through 13) of the Registrant's Proxy Statement for the
2002 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------
The information required by this item is incorporated herein by reference under
the caption "CERTAIN TRANSACTIONS" (page 14) of the Registrant's Proxy Statement
for the 2002 Annual Meeting of Shareholders.
31
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
a) Documents Filed as Part of the Report
Page
----
1. Index to Financial Statements
Consolidated Statements of Income for the
Years Ended December 31, 2001, 2000 and 1999 *
Consolidated Balance Sheets as of December 31, 2001
and 2000 *
Consolidated Statements of Changes in
Shareholders' Equity for the Years Ended
December 31, 2001, 2000 and 1999 *
Consolidated Statements of Cash Flows for the
Years Ended December 31, 2001, 2000 and 1999 *
Notes to Consolidated Financial Statements *
Report of Independent Auditors - Deloitte & Touche LLP *
Report of Independent Public Accountants - Arthur Andersen LLP
To the Board of Directors of Old Kent Financial Corporation:
We have audited the consolidated balance sheet of Old Kent Financial
Corporation (a Michigan corporation) and subsidiaries as of December
31, 2000, and the related consolidated statements of income, cash
flows and shareholders' equity for each of the two years in the period
ended December 31, 2000. These financial statements are the
responsibility of the Corporation's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as
32
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
-----------
a) Documents Filed as Part of the Report
1. Index to Financial Statements (continued)
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Old Kent
Financial corporation and subsidiaries as of December 31, 2000, and
the results of their operations and their cash flows for each of the
two years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States.
/s/ Arthur Andersen LLP
Chicago, Illinois
January 17, 2001
* Incorporated by reference to pages 15 through 36 of the Registrant's
2001 Annual Report to Shareholders attached to this filing as Exhibit
13.
2. Financial Statement Schedules
The schedules for the Registrant and its subsidiaries are omitted
because of the absence of conditions under which they are required, or
because the information is set forth in the consolidated financial
statements or the notes thereto.
3. Exhibits
Exhibit No.
-----------
3.1 Code of Regulations of Fifth Third Bancorp, as amended (a)
3.2 Second Amended Articles of Incorporation of Fifth Third Bancorp,
as amended (b)
4(a) Junior Subordinated Indenture, dated as of March 20, 1997 between
Fifth Third Bancorp and Wilmington Trust Company, as Debenture
Trustee (c)
33
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
-----------
3. Exhibits
Exhibit No.
-----------
4(b) Certificate Representing the 8.136% Junior Subordinated
Deferrable Interest Debentures, Series A, of Fifth Third Bancorp
(c)
4(c) Amended and Restated Trust Agreement, dated as of March 20, 1997
of Fifth Third Capital Trust II, among Fifth Third Bancorp, as
Depositor, Wilmington Trust Company, as Property Trustee, and the
Administrative Trustees name therein (c)
4(d) Certificate Representing the 8.136% Capital Securities, Series A,
of Fifth Third Capital Trust I (c)
4(e) Guarantee Agreement, dated as of March 20, 1997 between Fifth
Third Bancorp, as Guarantor, and Wilmington Trust Company, as
Guarantee Trustee (c)
4(f) Agreement as to Expense and Liabilities, dated as of March 20,
1997 between Fifth Third Bancorp, as the holder of the Common
Securities of Fifth Third Capital Trust I and Fifth Third Capital
Trust II (c)
4(g) Old Kent Capital Trust I Floating Rate Subordinated Capital
Income Securities (d)
4(h) Form of Fifth Third Bancorp, as successor to Old Kent Financial
Corporation, Floating Rate Junior Subordinated Debentures Due
2027 (d)
4(i) Indenture, dated as of January 31, 1997 between Fifth Third
Bancorp, as successor to Old Kent Financial Corporation, and
Bankers Trust Company (e)
4(j) Guarantee Agreement, dated as of January 31, 1997, between Fifth
Third Bancorp, as successor to Old Kent Financial Corporation,
and Bankers Trust Company (f)
34
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
-----------
3. Exhibits
Exhibit No.
-----------
4(k) Amended and Restated Declaration of Trust dated as of January
31, 1997, between Fifth Third Bancorp, as successor to Old Kent
Financial Corporation, and Bankers Trust Company (e)
10(a) Fifth Third Bancorp Unfunded Deferred Compensation Plan for
Non-Employee Directors (g) *
10(b) Fifth Third Bancorp 1990 Stock Option Plan (h) *
10(c) Fifth Third Bancorp 1987 Stock Option Plan (i) *
10(d) Indenture effective November 19, 1992 between Fifth Third
Bancorp, Issuer and NBD Bank, N.A., Trustee (j)
10(e) Fifth Third Bancorp Master Profit Sharing Plan (k) *
10(f) Amended and Restated Fifth Third Bancorp 1993 Stock Purchase
Plan *
10(g) Fifth Third Bancorp 1998 Long-Term Incentive Stock Plan (l) *
10(h) Amendment to Fifth Third Bancorp 1998 Long-Term Incentive Stock
Plan (m) *
10(i) Fifth Third Bancorp Variable Compensation Plan (n) *
10(j) Fifth Third Bancorp Non-qualified Deferred Compensation Plan, as
Amended and Restated (m) *
10(k) CNB Bancshares, Inc. 1999 Stock Incentive Plan, 1995 Stock
Incentive Plan, 1992 Stock Incentive Plan and Associate Stock
Option Plan; King City Federal Savings Bank 1986 Stock Option
and Incentive Plan; Indiana Bancshares, Inc. 1990 Stock Option
Plan; National Bancorp Stock Option Plan; Indiana Federal
Corporation 1986 Stock Option and Incentive Plan; and UF
Bancorp, Inc. 1991 Stock Option and Incentive Plan (o) *
35
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
----------
3. Exhibits
Exhibit No.
-----------
10(l) Fifth Third Direct (p) *
10(m) Fifth Third Bancorp Stock Option Gain Deferral Plan (m) *
10(n) Old Kent Executive Stock Option Plan of 1986, as amended (q) *
10(o) Old Kent Stock Option Incentive Plan of 1992, as amended (r) *
10(p) Old Kent Executive Stock Incentive Plan of 1997, as amended (s)
*
10(q) Old Kent Stock Incentive Plan of 1999 (t) *
11 Computation of Consolidated Earnings Per Share for the Years
Ended December 31, 2001, 2000, 1999, 1998, and 1997
13 Fifth Third Bancorp 2001 Annual Report to Shareholders
21 Fifth Third Bancorp Subsidiaries, as of December 31, 2001
23.1 Independent Auditors' Consent - Deloitte & Touche LLP
23.2 Consent of Independent Public Accountants - Arthur Andersen LLP
b) Reports on Form 8-K
During the quarter ended December 31, 2001 the Registrant filed the following
reports on Form 8-K:
Dated December 4, 2001, the Registrant issued "Management Discussion of Trends"
which has a general trend overview discussion of the Registrant's expectations
for its results of operations for the fourth quarter.
Dated December 18, 2001, the Registrant issued a press release regarding an
authorization by the Board of Directors to repurchase shares of its common stock
and the announcement of the fourth quarter 2001 common stock dividend.
- ----------
* - Denotes management contract or compensatory plan or arrangement.
36
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
-----------
(a) Incorporated by reference to Registrant's Registration Statement, on Form
S-4, Registration No. 33-63966.
(b) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2001.
(c) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission on March 26, 1997, a Form 8-K Current Report.
(d) Incorporated by reference to the Exhibits to Old Kent Financial
Corporation's Form S-4 Registration Statement filed July 19, 1997.
(e) Incorporated by reference to the Exhibits to Old Kent Financial
Corporation's Form 8-K filed on March 5, 1997.
(f) Incorporated by reference to the Exhibits to Old Kent Financial
Corporation's Form 8-K filed on March 4, 1998.
(g) Incorporated by reference to Registrant's Form 10-K Annual Report by
reference to Form 10-K filed for fiscal year ended December 31, 1985.
(h) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-8,
Registration No. 33-34075.
(i) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-8,
Registration No. 33-13252.
(j) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission on November 18, 1992, a Form 8-K Current Report dated
November 16, 1992 and as Exhibit 4.1 to a Registration Statement on Form
S-3, Registration No. 33-54134.
(k) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-8,
Registration No. 33-55553.
37
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(continued)
-----------
(l) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-8,
Registration No. 333-58249.
(m) Incorporated by reference to Registrant's Proxy Statement dated February 9,
2001.
(n) Incorporated by reference to Registrant's Proxy Statement dated February 9,
1998.
(o) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-4,
Registration No.333-84955 and by reference to CNB Bancshares Form 10-K, as
amended, for the fiscal year ended December 31, 1998.
(p) Incorporated by reference to Registrant's filing with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form S-3,
Registration No. 333-41164.
(q) Incorporated by reference to the following filings by Old Kent Financial
Corporation with the Securities and Exchange Commission: Exhibit 10 to Form
10-Q for the quarter ended September 30, 1995; Exhibit 10.19 to Form 8-K
filed on March 5, 1997; Exhibit 10.3 to Form 8-K filed on March 2, 2000.
(r) Incorporated by reference to the following filings by Old Kent Financial
Corporation with the Securities and Exchange Commission: Exhibit 10(b) to
Form 10-Q for the quarter ended June 30, 1995; Exhibit 10.20 to Form 8-K
filed on March 5, 1997; Exhibit 10(d) to Form 10-Q for the quarter ended
June 30, 1997; Exhibit 10.3 to Form 8-K filed on March 2, 2000.
(s) Incorporated by reference to Old Kent Financial Corporation's Annual
Meeting Proxy Statement dated March 1, 1997.
(t) Incorporated by reference to Old Kent Financial Corporation's Annual
Meeting Proxy Statement dated March 1, 1999.
38
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. March 11, 2002
- ---------------------------
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 March 11, 2002 by the following persons on behalf of the
Registrant and in the capacities indicated.
/s/ Neal E. Arnold /s/ David J. DeBrunner
- ------------------------------- -------------------------------- -----------------------------
Neal E. Arnold David J. DeBrunner James E. Rogers
Executive Vice President and CFO Controller Director
(Principal Financial Officer) (Principal Accounting Officer)
/s/ Darryl F. Allen /s/ Allen M. Hill
- ------------------------------- -------------------------------- -----------------------------
Darryl F. Allen Allen M. Hill Hendrick G. Meijer
Director Director Director
/s/ John F. Barrett /s/ William G. Kagler /s/ George A. Schaefer, Jr.
- ------------------------------- -------------------------------- -----------------------------
John F. Barrett William G. Kagler George A. Schaefer, Jr.
Director Director Director, President and CEO
(Principal Executive Officer)
/s/ James D. Kiggen /s/ John J. Schiff, Jr.
- ------------------------------- -------------------------------- -----------------------------
James P. Hackett James D. Kiggen John J. Schiff, Jr.
Director Director Director
/s/ Thomas B. Donnell /s/ Robert L. Koch II /s/ Donald B. Shackelford
- ------------------------------- -------------------------------- -----------------------------
Thomas B. Donnell Robert L. Koch II Donald B. Shackelford
Director Director Director
/s/ Richard T. Farmer /s/ Mitchel D. Livingston, Ph.D. /s/ Dennis J. Sullivan, Jr.
- ------------------------------- -------------------------------- -----------------------------
Richard T. Farmer Mitchel D. Livingston, Ph.D. Dennis J. Sullivan, Jr.
Director Director Director
/s/ Joseph H. Head, Jr. /s/ Robert B. Morgan /s/ Dudley S. Taft
- ------------------------------- -------------------------------- -----------------------------
Joseph H. Head, Jr. Robert B. Morgan Dudley S. Taft
Director Director Director
39
/s/ Joan R. Herschede /s/ Thomas W. Traylor
- ------------------------------- ----------------------------- -----------------------------
Joan R. Herschede David E. Reese Thomas W. Traylor
Director Director Director
/s/ David J. Wagner
- -------------------------------
David J. Wagner
Director
40