NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fifth Third Bancorp 97 26.
CERTAIN REGULATORY REQUIREMENTS AND CAPITAL RATIOS The principal source of income and funds for the Bancorp (parent company) are dividends from its subsidiaries.
During 2008, the amount of dividends the bank subsidiaries could pay to the Bancorp without prior approval of regulatory agencies was limited to their 2008 eligible net profits, as defined, and the adjusted retained 2007 and 2006 net income of those subsidiaries.
The Bancorp’s subsidiary banks must maintain cash reserve balances when total reservable deposit liabilities are greater than the regulatory exemption.
These reserve requirements may be satisfied with vault cash and noninterest-bearing cash balances on reserve with a Federal Reserve Bank.
In 2008 and 2007, the subsidiary banks were required to maintain average cash reserve balances of $403 million and $330 million, respectively.
The FRB adopted 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 Bank Holding Company Act of 1956, as amended.
These guidelines include quantitative measures that assign risk weightings to assets and off-balance sheet items, as well as define and set minimum regulatory capital requirements.
All bank holding companies are required to maintain core capital (Tier I) of at least 4% of riskweighted assets and off-balance sheet items (Tier I capital ratio), total capital of at least 8% of risk-weighted assets and off-balance sheet items (Total risk-based capital ratio) and Tier I capital of at least 3% of adjusted quarterly average assets (Tier I leverage ratio).
Failure to meet the minimum capital requirements can initiate certain actions by regulators that could have a direct material effect on the Consolidated Financial Statements of the Bancorp.
Tier I capital consists principally of shareholders’ equity including Tier I qualifying trust preferred securities or notes payable pertaining to unconsolidated special purpose entities that issue trust preferred securities.
It excludes unrealized gains and losses on available-for-sale securities and unrecognized pension actuarial gains and losses and prior service cost, less goodwill and certain other intangibles.
Tier II capital consists principally of perpetual and trust preferred stock that is not eligible to be included as Tier I capital, term subordinated debt, intermediate-term preferred stock and, subject to limitations, general allowances for loan and lease losses.
Assets are adjusted under the risk-based guidelines to take into account different risk characteristics.
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.
Both the FRB and the OCC have issued regulations regarding the capital adequacy of subsidiary banks.
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 issued substantially similar regulations to implement the system of prompt corrective action established by Section 38 of the Federal Deposit Insurance Act.
Under the regulations, a bank generally shall be deemed to be well-capitalized if it has a Total risk-based capital ratio of 10% or more, a Tier I capital ratio of 6% or more, a Tier I leverage ratio of 5% or more and is not subject to any written capital order or directive.
If an institution becomes undercapitalized, it would become subject to significant additional oversight, regulations and requirements as mandated by the Federal Deposit Insurance Act.
The Bancorp and each of its subsidiary banks had Tier I, Total risk-based capital and Tier I leverage ratios above the well-capitalized levels at December 31, 2008 and 2007.
As of December 31, 2008, the most recent notification from the FRB categorized the Bancorp and each of its subsidiary banks as well-capitalized under the regulatory framework for prompt corrective action.
To continue to qualify for financial holding company status pursuant to the GrammLeach-Bliley Act of 1999, the Bancorp’s subsidiary banks must, among other things, maintain “well-capitalized” capital ratios.
U. S.  bank regulatory authorities and international bank supervisory organizations, principally the Basel Committee on Banking Supervision, are currently considering changes to the riskbased capital adequacy framework for banks, including emphasis on credit, market and operational risk components, which ultimately could affect the appropriate capital guidelines for bank holding companies such as the Bancorp.
Capital and risk-based capital and leverage ratios for the Bancorp and its significant subsidiary banks at December 31:
## Table 0 ##
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Credit Ratings The cost and availability of financing to the Bancorp are impacted by its credit ratings.
A downgrade to the Bancorp’s credit ratings could affect its ability to access the credit markets and increase its borrowing costs, thereby adversely impacting the Bancorp’s financial condition and liquidity.
Key factors in maintaining high credit ratings include a stable and diverse earnings stream, strong credit quality, strong capital ratios and diverse funding sources, in addition to disciplined liquidity monitoring procedures.
The Bancorp’s credit ratings are summarized in Table 58.
The ratings reflect the ratings agencies view on the Bancorp’s capacity to meet financial commitments.
* * As an investor, you should be aware that a security rating is not a recommendation to buy, sell or hold securities, that it may be subject to revision or withdrawal at any time by the assigning rating organization and that each rating should be evaluated independently of any other rating.
Additional information on the credit rating ranking within the overall classification system is located on the website of each credit rating agency.
## Table 1 ##
CAPITAL MANAGEMENT Management regularly reviews the Bancorp’s capital levels to help ensure it is appropriately positioned under various operating environments.
The Bancorp has established a Capital Committee, which is responsible for all capital related decisions.
The Capital Committee makes recommendations to management involving capital actions.
These recommendations are reviewed and approved by the ERM Committee.
Capital Ratios The U.
S banking agencies established quantitative measures that assign risk weightings to assets and off-balance sheet items and also define and set minimum regulatory capital requirements.
The U. S.  banking agencies define “well capitalized” ratios for Tier I and total risk-based capital as 6% and 10%, respectively.
The Bancorp exceeded these “well-capitalized” ratios for all periods presented.
The Basel II advanced approach framework was finalized by U. S.  banking agencies in 2007.
Core banks, defined as those with consolidated total assets in excess of $250 billion or on balance sheet foreign exposures of $10 billion were required to adopt the advanced approach effective April 1, 2008.
The Bancorp does not meet these thresholds and, therefore, is not subject to the requirements of Basel II.
The Dodd-Frank Act requires more stringent prudential standards, including capital and liquidity requirements, for larger institutions.
It addresses the quality of capital components by limiting the degree to which certain hybrid instruments can be included.
The Dodd-Frank Act will phase out the inclusion of certain TruPS as a component of Tier I risk-based capital beginning January 1, 2013.
At December 31, 2012, the Bancorp’s Tier I riskbased capital included $810 million of TruPS representing approximately 74 bps of risk-weighted assets.
In December of 2010 and revised in June of 2011, the Basel Committee on Banking Supervision issued Basel III, a global regulatory framework, to enhance international capital standards.
In June of 2012, U. S.  banking regulators proposed enhancements to the regulatory capital requirements for U. S.  banks, which implement aspects of Basel III, such as re-defining the regulatory capital elements and minimum capital ratios, introducing regulatory capital buffers above those minimums, revising the agencies’ rules for calculating risk-weighted assets and introducing a new Tier I common equity ratio.
The Bancorp continues to evaluate these proposals and their potential impact.
Its current estimate of the proforma fully phased in Tier I common equity ratio at December 31, 2012 under the proposed capital rules is approximately 8.78%* compared with 9.51% as calculated under the existing Basel I capital framework.
The primary drivers of the change from the existing Basel I capital framework to the Basel III proposal are an increase in Tier I common equity of approximately 39 bps (primarily from including AOCI) which would be more than offset by the impact of increases in risk-weighted assets (primarily from 1-4 family senior and junior lien residential mortgages and commitments with an original maturity of one year or less).
The pro-forma Tier I common equity ratio exceeds the proposed minimum Tier I common equity ratio of 7% comprised of a minimum of 4.5% plus a capital conservation buffer of 2.5%.
The pro-forma Tier I common equity ratio does not include the effect of any mitigating actions the Bancorp may undertake to offset the impact of the proposed capital enhancements.
For further discussion on the Basel I and Basel III Tier I common equity ratios, see the Non-GAAP Financial Measures section of MD&A.
* The pro forma Tier I common equity ratio is management’s estimate based upon its current interpretation of the three draft Federal Register notices proposing enhancements to regulatory capital requirements published in June of 2012.
The actual impact to the Bancorp’s Tier I common equity ratio may change significantly due to further clarification of the agencies proposals or revisions to the agencies final rules, which remain subject to public comment.
Consolidation – Effective February 28, 2010, the Company adopted the FASB amended guidance for consolidation.
This guidance clarifies that the scope of the decrease in ownership provisions applies to the following: (i) a subsidiary or group of assets that is a business or nonprofit activity; (ii) a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).
This guidance also expands the disclosures about the deconsolidation of a subsidiary or derecognition of a group of assets within the scope of the guidance.
The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.3.
Acquisitions: Acquisition of BWE – On December 17, 2007, the Company acquired all of the issued and outstanding capital stock of Beam Wine Estates, Inc.  (“BWE”), an indirect wholly-owned subsidiary of Fortune Brands, Inc. , together with BWE’s subsidiaries: Atlas Peak Vineyards, Inc. , Buena Vista Winery, Inc. , Clos du Bois, Inc. , Gary Farrell Wines, Inc.  and Peak Wines International, Inc.  (the “BWE Acquisition”).
As a result of the BWE Acquisition, the Company acquired the U. S.  wine portfolio of Fortune Brands, Inc. , including certain wineries, vineyards or interests therein in the State of California, as well as various super-premium and fine California wine brands including Clos du Bois and Wild Horse.
The BWE Acquisition supports the Company’s strategy of strengthening its portfolio with fast-growing super-premium and above wines.
The BWE Acquisition strengthens the Company’s position as the leading wine company in the world and the leading premium wine company in the U. S.  Total consideration paid in cash was $877.3 million.
In addition, the Company incurred direct acquisition costs of $1.4 million.
The purchase price was financed with the net proceeds from the Company’s December 2007 Senior Notes (as defined in Note 11) and revolver borrowings under the Company’s June 2006 Credit Agreement, as amended in February 2007 and November 2007 (as defined in Note 11).
In accordance with the purchase method of accounting, the acquired net assets are recorded at fair value at the date of acquisition.
The purchase price was based primarily on the estimated future operating results of the BWE business, including the factors described above.
In June 2008, the Company sold certain businesses consisting of several of the California wineries and wine brands acquired in the BWE Acquisition, as well as certain wineries and wine brands from the states of Washington and Idaho (collectively, the “Pacific Northwest Business”) (see Note 7).
The results of operations of the BWE business are reported in the Constellation Wines segment and are included in the consolidated results of operations of the Company from the date of acquisition.
The following table summarizes the fair values of the assets acquired and liabilities assumed in the BWE Acquisition at the date of acquisition.
## Table 2 ##
The trademarks are not subject to amortization.
All of the goodwill is expected to be deductible for tax purposes.
Acquisition of SVEDKA – On March 19, 2007, the Company acquired the SVEDKA Vodka brand (“SVEDKA”) in connection with the acquisition of Spirits Marque One LLC and related business (the “SVEDKA Acquisition”).
SVEDKA is a premium Swedish vodka.
At the time of the acquisition, the SVEDKA Acquisition supported the Company’s strategy of expanding the Company’s premium spirits business and provided a foundation from which the Company looked to leverage its existing and future premium spirits portfolio for growth.
In addition, SVEDKA complemented the Company’s then existing portfolio of super-premium and value vodka brands by adding a premium vodka brand.
Total consideration paid in cash for the SVEDKA Acquisition was $385.8 million.
In addition, the Company incurred direct acquisition costs of $1.3 million.
The purchase price was financed with revolver borrowings under the Company’s June 2006 Credit Agreement, as amended in February 2007.
In accordance with the purchase method of accounting, the acquired net assets are recorded at fair value at the date of acquisition.
The purchase price was based primarily on the estimated future operating results of the SVEDKA business, including the factors described above.
The results of operations of the SVEDKA business are reported in the Constellation Wines segment and are included in the consolidated results of operations of the Company from the date of acquisition.

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td colspan="2">2008</td><td colspan="2">2007</td></tr><tr><td> ($ in millions) </td><td> Amount</td><td>Ratio</td><td>Amount</td><td>Ratio</td></tr><tr><td>Total risk-based capital (to risk-weighted assets):</td><td></td><td></td><td></td><td></td></tr><tr><td>Fifth Third Bancorp (Consolidated)</td><td> $16,646</td><td>14.78%</td><td>$11,733</td><td>10.16%</td></tr><tr><td>Fifth Third Bank (Ohio)</td><td> 6,444</td><td>10.92</td><td>6,058</td><td>10.39</td></tr><tr><td>Fifth Third Bank (Michigan)</td><td> 6,664</td><td>12.95</td><td>5,787</td><td>10.13</td></tr><tr><td>Fifth Third Bank, N.A.</td><td> 948</td><td>17.59</td><td>519</td><td>21.76</td></tr><tr><td>Tier I capital (to risk-weighted assets):</td><td></td><td></td><td></td><td></td></tr><tr><td>Fifth Third Bancorp (Consolidated)</td><td> 11,924</td><td>10.59</td><td>8,924</td><td>7.72</td></tr><tr><td>Fifth Third Bank (Ohio)</td><td> 4,799</td><td>8.13</td><td>4,744</td><td>8.13</td></tr><tr><td>Fifth Third Bank (Michigan)</td><td> 5,692</td><td>11.06</td><td>5,191</td><td>9.09</td></tr><tr><td>Fifth Third Bank, N.A.</td><td> 880</td><td>16.33</td><td>503</td><td>21.07</td></tr><tr><td>Tier I leverage (to average assets):</td><td></td><td></td><td></td><td></td></tr><tr><td>Fifth Third Bancorp (Consolidated)</td><td> 11,924</td><td>10.27</td><td>8,924</td><td>8.50</td></tr><tr><td>Fifth Third Bank (Ohio)</td><td> 4,799</td><td>7.03</td><td>4,744</td><td>8.11</td></tr><tr><td>Fifth Third Bank (Michigan)</td><td> 5,692</td><td>10.45</td><td>5,191</td><td>10.55</td></tr><tr><td>Fifth Third Bank, N.A.</td><td> 880</td><td>14.11</td><td>503</td><td>25.59</td></tr></table>
<table><tr><td> As of February 22, 2013</td><td>Moody’s</td><td>Standard and Poor’s</td><td>Fitch</td><td>DBRS</td></tr><tr><td>Fifth Third Bancorp:</td><td></td><td></td><td></td><td></td></tr><tr><td>Short-term</td><td>No rating</td><td>A-2</td><td>F1</td><td>R-1L</td></tr><tr><td>Senior debt</td><td>Baa1</td><td>BBB</td><td>A—</td><td>AL</td></tr><tr><td>Subordinated debt</td><td>Baa2</td><td>BBB-</td><td>BBB+</td><td>BBBH</td></tr><tr><td>Fifth Third Bank:</td><td></td><td></td><td></td><td></td></tr><tr><td>Short-term</td><td>P-2</td><td>A-2</td><td>F1</td><td>R-1L</td></tr><tr><td>Long-term deposit</td><td>A3</td><td>No rating</td><td>A</td><td>A</td></tr><tr><td>Senior debt</td><td>A3</td><td>BBB+</td><td>A—</td><td>A</td></tr><tr><td>Subordinated debt</td><td>Baa1</td><td>BBB</td><td>BBB+</td><td>A (low)</td></tr></table>
<table><tr><td>Current assets</td><td>$288.4</td></tr><tr><td>Property, plant and equipment</td><td>232.8</td></tr><tr><td>Goodwill</td><td>334.6</td></tr><tr><td>Trademarks</td><td>97.9</td></tr><tr><td>Other assets</td><td>30.2</td></tr><tr><td>Total assets acquired</td><td>983.9</td></tr><tr><td>Current liabilities</td><td>103.9</td></tr><tr><td>Long-term liabilities</td><td>1.3</td></tr><tr><td>Total liabilities assumed</td><td>105.2</td></tr><tr><td>Net assets acquired</td><td>$878.7</td></tr></table>

Question: In which year is Total risk-based capital (to risk-weighted assets) of Fifth Third Bank (Ohio) greater than Total risk-based capital (to risk-weighted assets) of Fifth Third Bank (Michigan) for Amount?
Answer: 2007