Net gains on investment securities were $2 million in the fourth quarter of 2012, compared with investment securities gains of $2 million in the previous quarter and $5 million in the fourth quarter of 2011.
|For the Three Months Ended||% Change|
|Noninterest Expense ($ in millions)|
|Salaries, wages and incentives||$416||$399||$393||$399||$393||4%||6%|
|Net occupancy expense||76||76||74||77||79||-||(3%)|
|Technology and communications||52||49||48||47||48||6%||10%|
|Card and processing expense||31||30||30||30||28||5%||10%|
|Other noninterest expense||465||345||281||281||334||35%||39%|
|Total noninterest expense||$1,163||$1,006||$937||$973||$993||16%||17%|
Noninterest expense of $1.2 billion increased 16 percent from the third quarter of 2012 and increased 17 percent from the fourth quarter of 2011. Fourth quarter 2012 expenses included $134 million of debt extinguishment costs associated with the termination of $1 billion of FHLB debt; $26 million of additional expenses associated with the increase in the representation and warranty reserve; and $13 million in charges to increase litigation reserves. Third quarter 2012 expenses included $26 million of debt extinguishment costs associated with the redemption of Capital Trust V and Capital Trust VI TruPS; $22 million of additional expenses associated with the increase in the mortgage representation and warranty reserve; $5 million in charges to increase litigation reserves; a $5 million benefit from the sale of affordable housing investments; and $2 million of costs associated with the sale of certain Fifth Third funds. Fourth quarter 2011 expenses included $10 million in charges to increase litigation reserves, primarily related to bankcard association membership. Excluding these items, noninterest expense of $990 million increased $34 million, or 4 percent, compared with the third quarter of 2012 and increased $7 million, or 1 percent, compared with the fourth quarter of 2011. The increase in both periods was largely due to higher compensation-related expenses, primarily performance incentives, driven by strong mortgage originations and commercial and corporate banking results. In addition, the sequential comparison was affected by $6 million of annual pension settlement expense in the fourth quarter.