FITB » Topics » Management Discussion of Trends

This excerpt taken from the FITB 8-K filed Jun 19, 2008.

Management Discussion of Trends

The following are expected results for the second quarter of 2008 and are based on actual results from April and May and current forecasts for June. Actual results for June are subject to variability due to a variety of factors, including those outlined in the Forward Looking Statements discussion at the end of this report. The following discussion is predicated on certain significant factors and the level and variation of our earnings. Our estimates and actual results for the second quarter of 2008 and any other period may differ from estimates, either for reasons outlined below or for reasons not currently contemplated.

We expect second quarter of 2008 net income to be reduced by increased provision expenses for credit losses. Second quarter reported earnings per share are currently expected to be in the range of $0.01 to $0.05 per share. This range excludes the potential impact to second quarter earnings of an accounting charge that we may determine is necessary to address any downside risk related to the tax treatment of our leveraged leases, as discussed more fully below.

We anticipate that second quarter results will reflect a continuation of recent strong core operating trends, with net interest income and noninterest income growth in excess of prior expectations, and with noninterest expense growth below prior expectations. Forecasts of credit trends for the second quarter incorporate recent deterioration, with nonperforming asset growth and net charge-off growth above expectations but decelerating. The primary cause of net charge-offs in excess of earlier forecasts is higher than expected loss severities, particularly related to real estate values, concentrated in those tied to residential real estate. Reflecting these recent adverse credit trends, we expect significant growth in our loan loss reserve and the ratio of our loan loss reserve to loans and leases, with provisioning significantly in excess of net charge-offs during the quarter.

This excerpt taken from the FITB 8-K filed Jun 18, 2008.

Management Discussion of Trends

The following are expected results for the second quarter of 2008 and are based on actual results from April and May and current forecasts for June. Actual results for June are subject to variability due to a variety of factors, including those outlined in the Forward Looking Statements discussion at the end of this report. The following discussion is predicated on certain significant factors and the level and variation of our earnings. Our estimates and actual results for the second quarter of 2008 and any other period may differ from estimates, either for reasons outlined below or for reasons not currently contemplated.

We expect second quarter of 2008 net income to be reduced by increased provision expenses for credit losses. Second quarter reported earnings per share are currently expected to be in the range of $0.01 to $0.05 per share. This range excludes the potential impact to second quarter earnings of an accounting charge that we may determine is necessary to address any downside risk related to the tax treatment of our leveraged leases, as discussed more fully below.

We anticipate that second quarter results will reflect a continuation of recent strong core operating trends, with net interest income and noninterest income growth in excess of prior expectations, and with noninterest expense growth below prior expectations. Forecasts of credit trends for the second quarter incorporate recent deterioration, with nonperforming asset growth and net charge-off growth above expectations but decelerating. The primary cause of net charge-offs in excess of earlier forecasts is higher than expected loss severities, particularly related to real estate values, concentrated in those tied to residential real estate. Reflecting these recent adverse credit trends, we expect significant growth in our loan loss reserve and the ratio of our loan loss reserve to loans and leases, with provisioning significantly in excess of net charge-offs during the quarter.

This excerpt taken from the FITB 8-K filed Dec 18, 2007.

Management Discussion of Trends

Fifth Third expects fourth quarter 2007 earnings to be reduced by increased provision expenses for credit losses and a non-cash charge to lower the current cash surrender value of one of our Bank-Owned Life Insurance (“BOLI”) policies. Current expectations for the fourth quarter of 2007 are reported earnings per share of approximately $0.24 to $0.27. For the full year 2007, reported earnings per share are expected to be approximately $2.19 to $2.22. These full-year reported results include a $0.10 per share non-cash charge related to the third quarter settlement of VISA litigation disclosed in our third quarter 2007 10-Q. Fourth quarter and full year reported results are also expected to include approximately $0.01 per share of merger-related and restructuring charges associated with our acquisition of R-G Crown in November.

Provision expense for loan and lease losses for the quarter is expected to be approximately $275 million, an increase of approximately $135 million from the third quarter of 2007. Additionally, we expect to record provision expense for unfunded commitments (reported in other noninterest expense) of approximately $10 million. The BOLI charge is expected to lower other noninterest income by approximately $100-110 million. No tax benefit is associated with this loss; consequently, reported net income would decline by the same amount. These items are described more fully below.

Additionally, we may be required to record an additional non-cash charge in the fourth quarter related to potential future VISA litigation settlements; however, that amount, if required, cannot be currently estimated.

This excerpt taken from the FITB 8-K filed Nov 20, 2006.

Management Discussion of Trends

Fifth Third expects fourth quarter 2006 earnings, before the effect of the above-mentioned items, to be lower than the third quarter. The Company does not expect a significant benefit in fourth quarter from the above actions, due to the expected timing of actual sales. All subsequent discussion of results herein excludes the effects of the aforementioned balance sheet actions.

Compared with the third quarter, the Company expects solid loan growth and relatively flat deposits. Net interest income is expected to be modestly higher than in the third quarter. Noninterest income is expected to be relatively flat compared with the third quarter, largely reflecting net gains in the prior quarter on sales of securities, three branches, and an out-of-footprint credit card portfolio. Expenses are expected to be up modestly. These results are expected to be offset by a higher effective tax rate and higher credit costs. The effective tax rate is expected to be in line with the 30 percent expectation previously disclosed.

This excerpt taken from the FITB 8-K filed Sep 11, 2006.

Management Discussion of Trends

Fifth Third expects third quarter 2006 reported earnings to be modestly lower than the second quarter. Compared with the second quarter, the Company expects solid loan and noninterest income growth, a slight decline in deposits, and a continuation of expense trends. These results are expected to be offset by higher charge-off experience. Net gains related to sales of securities and a loss from an early retirement of debt included in third quarter 2006 results are, in aggregate, expected to be similar to net securities gains in the same quarter last year. The effective tax rate is expected to be slightly lower than that experienced in second quarter 2006, returning to more normalized levels in the fourth quarter 2006. Additionally, net interest income is expected to be stable compared with the second quarter.

This excerpt taken from the FITB 8-K filed Jun 13, 2006.

Management Discussion of Trends

Though challenges remain, Fifth Third expects second quarter 2006 trends to illustrate improving performance. Good loan, deposit, credit, noninterest income and expense trends are expected to be partially mitigated by results in net interest income.

This excerpt taken from the FITB 8-K filed Mar 15, 2006.

Management Discussion of Trends

Fifth Third expects first quarter 2006 trends to be mixed. Good loan growth and improved net interest margin, expense and credit trends are expected to be mitigated by more modest trends in noninterest income.

This excerpt taken from the FITB 8-K filed Dec 12, 2005.

Management Discussion of Trends

 

Fifth Third expects fourth quarter 2005 trends to be mixed. Strong core deposit, noninterest income and loan growth are expected to be more than offset by elevated credit losses, a moderate decline in the net interest margin and modest earning asset growth due to continued reductions in available-for-sale securities.

 

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