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FIFTH THIRD BANCORP Annual Report, Year Ended Dec 31, 1993

Filing Date
Filed February 17, 1994
Period End
December 31, 1993
In the record · 2016–202610-K1210-Q348-K328

FITB filed 12 annual reports (10-K), 34 quarterly reports (10-Q) and 328 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Sep ’19Sep ’19
  3. Material agreement8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 17, 1994. Cited figures are marked; the original filing is the authoritative source.

Fifth Third Bancorp (FITB) closed 1993 with record results: net income rose 19.7% to $196.4 milliona ($3.28 per share, up 19.3%), extending a twentieth consecutive year of earnings growth.

Return on average assets improved to 1.80% and return on average equity to 18.2%, while total assets grew 17.2% to $11.97 billionb, driven largely by retail loan and lease growth, four bank acquisitions (including the $342 million TriState Bancorp, accounted for as a pooling of interests), and $568 million in deposit purchases over 1992-1993. Growth came at a cost to margin: net interest margin compressed 22 basis points to 4.51%, reflecting falling long-term rates and a shrinking benefit from non-interest-bearing funding, though net interest income still rose 11% to $456.8 million on a taxable-equivalent basis. Credit quality improved meaningfully.

Net charge-offs fell 41% to $26.3 millionc (0.32% of average loans versus 0.68% in 1992), nonperforming assets dropped to 0.27% of loans and other real estate owned from 0.71%, and the reserve for credit losses covered nonperforming assets 5.6 times. Capital is strong, with a Tier 1 risk-based ratio of 11.4% and total risk-based capital of 13.8%, both well above the 6% and 10% well-capitalized thresholds.

The main investor watch items are the shift toward consumer leasing and mortgages, which grew sharply (consumer leases up 82.5%), a securities portfolio that carries a short average life of about 3.5 years, and a loan book that now includes substantial interest-rate-sensitive exposure, with a one-year cumulative negative repricing gap of $407 milliond (3.4% of assets). Management also flagged a pending January 1994 merger agreement with Cumberland Federal Bancorporation ($1.1 billion in assets), expected to close in mid-1994.

02—Key points

Key Highlights

  1. Net income rose 19.7% to $196.4 million in 1993; EPS of $3.28 was up 19.3%, marking the twentieth consecutive year of earnings growth.
  2. Return on average assets reached 1.80% and return on average equity 18.2%, both improved from 1992 levels of 1.74% and 17.3%.
  3. Total assets grew 17.2% to $11.97 billion, and loans and leases grew 17.9% to $8.81 billion, led by consumer leases (+82.5%) and installment loans (+23.6%).
  4. Credit quality improved: net charge-offs fell 41.2% to $26.3 million, nonperforming assets fell to 0.27% of loans and OREO from 0.71%, and the reserve for credit losses stood at 1.53% of loans.
  5. Net interest margin compressed 22 basis points to 4.51%, though net interest income increased 11.0% to $456.8 million (taxable-equivalent basis).
  6. Capital remained strong, with Tier 1 risk-based capital of 11.4% and total risk-based capital of 13.8%, well above well-capitalized thresholds; stockholders' equity rose 19.1% to $1.20 billion.
  7. Acquisitions expanded the franchise: TriState Bancorp (~$342 million in assets) closed December 1993, and a merger with Cumberland Federal Bancorporation ($1.1 billion in assets) was agreed in January 1994 and is expected to close mid-1994.

03—Questions

Frequently Asked Questions

  1. How profitable was Fifth Third Bancorp in 1993 and how did that compare with prior years?

    Net income was $196.4 million, up 19.7% from $164.1 million in 1992 and $138.2 million in 1991. Earnings per share were $3.28, compared with $2.75 in 1992 and $2.33 in 1991. Return on average assets rose to 1.80% and return on average equity to 18.2%.

  2. Did credit quality improve or deteriorate in 1993?

    It improved. Net charge-offs fell to $26.3 million from $44.7 million, and the provision for credit losses dropped to $44.5 million from $65.3 million. Nonperforming assets declined to $24.1 million from $53.5 million, and the reserve for credit losses rose to $135.1 million, or 1.53% of loans and leases.

  3. What is the main risk to watch in the balance sheet?

    Interest-rate sensitivity and margin pressure. The net interest margin fell to 4.51% from 4.73% as long-term rates dropped faster than short-term rates and the benefit from free funding declined. The one-year cumulative repricing gap was negative $407 million (3.4% of total assets), meaning liabilities reprice faster than assets, which could hurt earnings if rates rise. Management, however, said it expected very limited exposure to rising rates in 1994.

  4. How strong is the company's capital position?

    Strong. Stockholders' equity was $1.20 billion, or 10% of assets, with a leverage ratio of 9.9%. Tier 1 and total risk-based capital ratios were 11.4% and 13.8%, respectively, well above the regulatory minimums of 4% and 8% and the well-capitalized levels of 6% and 10%.

  5. What growth drove the balance sheet expansion, and was it organic?

    Growth was a mix of organic expansion and acquisitions. Loans and leases increased $1.3 billion, mainly in consumer leases, installment loans and mortgages. The company also bought $290.9 million in deposits in 1993, including $131 million from World Savings and $106 million from First National Bank of Dayton, and acquired TriState Bancorp, which contributed about $189 million in loans. Management also reported 40 new banking locations in 1993.

04—Continue

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