Mr. Schaefer: Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati. We operate 14 affiliate banks, primarily in Ohio, Kentucky and Indiana. We also have operations in Florida and Arizona and have some offices in Illinois and Michigan as we branch out from our affiliate banks. We offer a broad array of financial products through our four primary businesses: commercial banking; retail banking; our investment advisory group that includes our trust group and also includes our brokerage and private banking operations; and then Midwest Payment Systems, which is the bank's data processing subsidiary. We've got about $43 billion in assets now. At the end of the year, we were the 22nd largest bank in the country by asset size. In 1999 we were 18th if you ranked us by net income. If you ranked us by market capitalization or market net worth, we ranked ninth at the end of the year out of the commercial banks in the country.
TWST: Reflect for a moment on your tenure with Fifth Third. What over
the past five years has been the major focus in your mind? Give us a
report card on yourself. Do you feel at this point you've met the
challenges that you have set for yourself? Looking ahead, what do you
see on that agenda for the next two years?
Mr. Schaefer: I became President of the bank in 1989 and since I took
over, we've tried to stay very focused on our four core businesses in
the three states that we operate in. Our basic underlying business on
the net interest income side is loan making and deposit gathering, which
is a pretty simple business. We buy money at 4% and we sell it at 8%. We
like the commercial side of the business when interest rates are high,
and we like the consumer side when interest rates are low. We're never
sure which way the interest rates are going, so we balance those about
50-50, which makes up about two-thirds of our income statement. The
other third is our fee businesses, one of which is our trust and
investment advisory group. We're about $170 billion of assets. We
actively manage about $23 billion of those assets. Also, we are the
largest EFT processor in the country now through our Midwest Payment
Systems where we do a lot of ATM driving and a lot of merchant
processing which includes credit card processing as well as debit card
processing and electronic benefits transfer. Those are basically our
core businesses. We've stayed very focused on those businesses and have
just continued to add share in our three-state market. Even with those
statistics that I mentioned earlier regarding size, we still have less
than 10% of the deposit share in Ohio, Kentucky and Indiana. We've still
got plenty of room to grow in our three main states before we venture
off into the rest of the lower 48.
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