Fifth Third Bancorp Announces First Quarter 2011 Net Income of $265 Million

Fifth Third Bancorp (Nasdaq: FITB):

• 1Q11 earnings per diluted common share of $0.10 including effect of the accelerated TARP discount accretion, $0.27 per share excluding it; earnings per diluted share of $0.33 in 4Q10 and net loss per diluted share of $0.09 in 1Q10

• 1Q11 net income of $265 million compared with 4Q10 net income of $333 million and 1Q10 net loss of $10 million; 1Q11 return on assets of 1.0%
• 1Q11 net income available to common shareholders of $88 million compared with $270 million in 4Q10 and a net loss of $72 million in 1Q10
  • 1Q11 net income available to common shareholders reduced by $153 million of discount accretion recorded in preferred dividends accelerated by the February repurchase of $3.408 billion in TARP CPP Preferred Stock;
• February 2011 repurchase of $3.408 billion of TARP CPP Preferred Stock and the March 2011 repurchase of the associated warrant followed completion of successful stock and debt offerings in which the company raised more than $2.7 billion
  • Taxpayers' returns included more than $350 million in cash dividends and $280 million on the warrant
• Pre-provision net revenue (PPNR)* of $545 million
  • Net interest income of $884 million, down 4 percent sequentially driven by lower day count, mortgage warehouse balances, the prior refinancing of the FTPS, LLC loan and the effect of the debt issuance; net interest margin of 3.71 percent, down 4 bps sequentially
  • Noninterest income of $584 million, down 11 percent sequentially driven primarily by lower mortgage-related revenue
  • Noninterest expense of $918 million, down 7 percent sequentially
• Credit trends remain favorable
  • 1Q11 net charge-offs of $367 million (1.92 percent of loans and leases) vs. 4Q10 NCOs of $356 million and 1Q10 NCOs of $582 million; one credit represented $22 million of 1Q11 NCOs
  • Total nonperforming assets of $2.3 billion including held-for-sale declined $126 million or 5 percent sequentially to lowest level since 2Q08; nonperforming assets excluding held-for-sale of $2.1 billion declined $48 million or 2 percent
  • NPA ratio of 2.73 percent down 6 bps from 4Q10, NPL ratio of 2.11 percent down 4 bps from 4Q10; NPL inflows down approximately 12 percent
  • Total delinquencies (includes loans and leases 30-89 days past due and 90 days past due) declined 12 percent sequentially to lowest level since 2006
  • Allowance to loan ratio of 3.62 percent, 132 percent of nonperforming assets, 170 percent of nonperforming loans and leases, and 1.9 times annualized 1Q11 net charge-offs
• Strong capital ratios; exceed fully phased-in Basel III proposed standards
  • Tier 1 common ratio 9.00 percent, up 150 bps sequentially; Tier 1 ratio 12.21 percent, down 173 bps; Total capital ratio 16.29 percent, down 185 bps
  • Tangible common equity ratio of 8.39 percent excluding unrealized gains/losses; 8.61 percent including unrealized gains/losses
• Book value per share of $12.80; tangible book value per share of $10.11

* Pre-provision net revenue (PPNR): net interest income plus noninterest income minus noninterest expense

Fifth Third Bancorp (Nasdaq: FITB) today reported first quarter 2011 net income of $265 million, compared with net income of $333 million in the fourth quarter of 2010 and a net loss of $10 million in the first quarter of 2010. After preferred dividends, first quarter 2011 net income available to common shareholders was $88 million or $0.10 per diluted share, compared with fourth quarter net income of $270 million or $0.33 per diluted share, and a net loss of $72 million or $0.09 per diluted share in the first quarter of 2010. In connection with the repayment of the $3.408 billion TARP investment during the quarter, accretion of the remaining issuance discount was accelerated and reduced net income available to common shareholders by $153 million, or $0.17 per diluted share. This discount accretion was recorded in the preferred dividend line.

First quarter 2010 results included $121 million after-tax in benefits related to the decision to surrender one of our bank-owned life insurance (BOLI) policies.

Earnings Highlights

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Earnings ($ in millions)
Net income (loss) attributable to Bancorp		$265		$333		$238		$192		($10)		(20%)		NM
Net income (loss) available to common shareholders		$88		$270		$175		$130		($72)		(67%)		NM
Common Share Data
Earnings per share, basic		0.10		0.34		0.22		0.16		(0.09)		(71%)		NM
Earnings per share, diluted		0.10		0.33		0.22		0.16		(0.09)		(70%)		NM
Cash dividends per common share		0.06		0.01		0.01		0.01		0.01		500%		500%
Financial Ratios
Return on average assets		0.97%		1.18%		0.84%		0.68%		(.04%)		(18%)		NM
Return on average common equity		3.1		10.4		6.8		5.2		(3.0)		(70%)		NM
Tier I capital		12.21		13.94		13.85		13.65		13.39		(12%)		(9%)
Tier I common equity		9.00		7.50		7.34		7.17		6.96		20%		29%
Net interest margin (a)		3.71		3.75		3.70		3.57		3.63		(1%)		2%
Efficiency (a)		62.5		62.6		56.2		62.1		62.5		-		-
Common shares outstanding (in thousands)		918,728		796,273		796,283		796,320		794,816		15%		16%
Average common shares outstanding (in thousands):
Basic		880,830		791,072		791,017		790,839		790,473		11%		11%
Diluted		894,841		836,225		797,492		802,255		790,473		7%		13%

(a) Presented on a fully taxable equivalent basis

NM: Not Meaningful

"The first quarter was a significant one for Fifth Third,” said Kevin T. Kabat, president and CEO of Fifth Third Bancorp. "We redeemed the preferred stock investment purchased by the U.S. Treasury under the TARP program, as well as the associated warrant. Fifth Third never issued debt guaranteed by the TLGP program and we have thus completely exited all crisis-era government programs. In March, our Board of Directors approved a $0.05 increase in our quarterly common stock dividend to $0.06 per share. We expect that dividend to grow as earnings increase. Our capital position is robust, and all capital ratios exceed proposed Basel III capital standards as if those standards were phased-in today.

First quarter results reflect broader trends within the economy, which remain sluggish although continuing to slowly recover. Average portfolio loans increased 2 percent sequentially but were flat on a period end basis, as demand remains below par for this stage of the recovery and low rates have increased borrower refinancings in the capital markets. Deposit growth continued to be strong, including transaction deposit growth of 3 percent sequentially. Net interest income results were not as strong as expected. In addition to a lower day count and the effect of debt issued as part of the repayment of TARP, loan growth was lower than anticipated and yields on new loan originations declined as credit spreads narrowed given robust capital markets conditions. We currently expect stronger net interest income results in the second quarter and second half of the year. As expected, fee income also declined due to lower mortgage-related revenue as long-term rates have reduced refinancing activity. Offsetting those trends were lower operating expenses, due to lower mortgage origination expense, and lower credit-related costs. Credit trends overall remain favorable and we expect further improvement in coming quarters in this area as well.”

Income Statement Highlights

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Condensed Statements of Income ($ in millions)
Net interest income (taxable equivalent)		$884		$919		$916		$887		$901		(4%)		(2%)
Provision for loan and lease losses		168		166		457		325		590		1%		(72%)
Total noninterest income		584		656		827		620		627		(11%)		(7%)
Total noninterest expense		918		987		979		935		956		(7%)		(4%)
Income (loss) before income taxes (taxable equivalent)		382		422		307		247		(18)		(9%)		NM
Taxable equivalent adjustment		5		5		4		5		4		-		25%
Applicable income taxes		112		83		65		50		(12)		35%		NM
Net Income (loss)		265		334		238		192		(10)		(20%)		NM
Less: Net Income (loss) attributable to noncontrolling interest		-		1		-		-		-		(100%)		-
Net income (loss) attributable to Bancorp		265		333		238		192		(10)		(20%)		NM
Dividends on preferred stock		177		63		63		62		62		181%		185%
Net income (loss) available to common shareholders		88		270		175		130		(72)		(67%)		NM
Earnings per share, diluted		$0.10		$0.33		$0.22		$0.16		($0.09)		(70%)		NM
NM: Not Meaningful

Net Interest Income

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Interest Income ($ in millions)
Total interest income (taxable equivalent)		$1,065		$1,109		$1,130		$1,121		$1,147		(4%)		(7%)
Total interest expense		181		190		214		234		246		(5%)		(26%)
Net interest income (taxable equivalent)		$884		$919		$916		$887		$901		(4%)		(2%)
Average Yield
Yield on interest-earning assets		4.47%		4.52%		4.57%		4.51%		4.62%		(1%)		(3%)
Yield on interest-bearing liabilities		1.02%		1.04%		1.13%		1.23%		1.29%		(2%)		(21%)
Net interest rate spread (taxable equivalent)		3.45%		3.48%		3.44%		3.28%		3.33%		(1%)		4%
Net interest margin (taxable equivalent)		3.71%		3.75%		3.70%		3.57%		3.63%		(1%)		2%
Average Balances ($ in millions)
Loans and leases, including held for sale		$79,379		$79,148		$78,854		$78,807		$80,136		-		(1%)
Total securities and other short-term investments		17,290		18,066		19,309		20,891		20,559		(4%)		(16%)
Total interest-earning assets		96,669		97,214		98,163		99,698		100,695		(1%)		(4%)
Total interest-bearing liabilities		72,372		72,657		75,076		76,415		77,655		-		(7%)
Bancorp shareholders' equity		13,052		14,007		13,852		13,563		13,518		(7%)		(3%)

Net interest income of $884 million on a taxable equivalent basis decreased $35 million from the fourth quarter of 2010. The decline in net interest income reflected two fewer days during the quarter (approximately $12 million); the full-quarter effect of the refinancing of the FTPS, LLC loan (approximately $8 million); lower mortgage warehouse balances in loans held-for-sale (approximately $8 million); and the effect of the $1 billion fixed-rate debt issuance done in connection with our TARP repayment (approximately $7 million). Otherwise, net interest income was flat, with the benefit of higher average loan balances, lower interest reversals on nonperforming loans, and lower deposit costs offset by lower yields on new commercial and consumer loan originations and lower loan purchase accounting accretion. The net interest margin was 3.71 percent, a decrease of 4 bps from 3.75 percent in the previous quarter. The full quarter effect of the refinancing of the FTPS, LLC loan reduced the margin by approximately 3 bps and the debt issuance reduced the margin by 3 bps, partially offset by the lower day count which improved the margin by approximately 3 bps. Otherwise, the margin was relatively stable.

Compared with the first quarter of 2010, net interest income decreased $17 million and the net interest margin increased 8 bps. The decrease in net interest income was largely the result of lower average loan balances from a year ago, while the net interest margin improvement largely reflected deposit growth and shift in mix from higher cost term deposits to lower cost deposit products.

Securities

Average securities and other short-term investments were $17.3 billion in the first quarter of 2011, compared with $18.1 billion in the previous quarter and $20.6 billion in the first quarter of 2010. The primary driver of the sequential decline was a $500 million decrease in average short-term investments due to lower cash balances at the Fed. The year-over-year decline was due to our decision not to fully reinvest cash flows from the portfolio in 2010.

Loans

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Average Portfolio Loans and Leases ($ in millions)
Commercial:
Commercial and industrial loans		$27,331		$26,338		$26,344		$26,176		$26,294		4%		4%
Commercial mortgage		10,685		10,985		11,375		11,659		11,708		(3%)		(9%)
Commercial construction		2,030		2,171		2,885		3,160		3,700		(6%)		(45%)
Commercial leases		3,364		3,314		3,257		3,336		3,467		2%		(3%)
Subtotal - commercial loans and leases		43,410		42,808		43,861		44,331		45,169		1%		(4%)
Consumer:
Residential mortgage loans		9,282		8,382		7,837		7,805		7,976		11%		16%
Home equity		11,376		11,655		11,897		12,102		12,338		(2%)		(8%)
Automobile loans		11,070		10,825		10,517		10,170		10,185		2%		9%
Credit card		1,852		1,844		1,838		1,859		1,940		-		(5%)
Other consumer loans and leases		646		722		667		706		773		(11%)		(16%)
Subtotal - consumer loans and leases		34,226		33,428		32,756		32,642		33,212		2%		3%
Total average loans and leases (excluding held for sale)		$77,636		$76,236		$76,617		$76,973		$78,381		2%		(1%)
Average loans held for sale		1,743		2,912		2,237		1,834		1,756		(40%)		(1%)

Average loan and lease balances (excluding loans held-for-sale) increased 2 percent sequentially and declined 1 percent from the first quarter of 2010. Period end loan and lease balances were flat sequentially, as first quarter originations were generally offset by payoffs and pay-downs experienced during the quarter.

Average commercial portfolio loan and lease balances increased 1 percent sequentially and declined 4 percent from the first quarter of 2010. Commercial and industrial (C&I) average loans increased 4 percent sequentially, due to the effect of strong levels of originations late in the fourth quarter of 2010 and modestly higher utilization rates in the first quarter. The full quarter effect of the fourth quarter refinancing of the $1.25 billion FTPS, LLC loan reduced first quarter average C&I loans by $277 million. Compared with the first quarter of 2010, C&I average loans increased 4 percent. Average commercial mortgage and commercial construction loan balances declined by a combined 3 percent sequentially and 17 percent from the same period the previous year, reflecting continued low customer demand and tighter underwriting standards. The year-over-year comparison was also affected by the transfer of $961 million of loans to loans held-for-sale at the end of the third quarter 2010. Commercial line usage, on an end of period basis for the first quarter, increased slightly to 33.3 percent of committed lines versus 32.7 percent in the fourth quarter of 2010 and 32.6 percent in the first quarter 2010. Commercial portfolio period end loan balances were down $260 million, or 1 percent, driven by lower commercial mortgage and commercial construction loans as those portfolios continue to experience run-off, partially offset by higher C&I balances.

Average consumer portfolio loan and lease balances were up 2 percent sequentially and increased 3 percent from the first quarter 2010. Average residential mortgage loans increased 11 percent sequentially and 16 percent compared with the first quarter 2010. Residential mortgage average loan balances benefitted by $310 million sequentially from the continued retention of certain shorter-term fixed-rate residential mortgages, largely branch originated. Average auto loans increased 2 percent sequentially and 9 percent year-over-year as continued strong loan origination volumes more than offset higher pay downs. This growth was partially offset by lower home equity loan balances, which declined 2 percent sequentially and 8 percent year-over-year due to lower demand and production.

Average loans held-for-sale of $1.7 billion declined $1.2 billion from fourth quarter levels due primarily to lower mortgage loans in the held-for-sale warehouse. Loans held-for-sale were relatively flat compared with the first quarter of 2010.

Deposits

			For the Three Months Ended										% Change
			March		December		September		June		March
			2011		2010		2010		2010		2010		Seq		Yr/Yr
Average Deposits ($ in millions)
Demand deposits			$21,582		$21,066		$19,362		$19,406		$18,822		2%		15%
Interest checking			18,539		17,578		17,142		18,652		19,533		5%		(5%)
Savings			21,324		20,602		19,905		19,446		18,469		4%		15%
Money market			5,136		4,985		4,940		4,679		4,622		3%		11%
Foreign office (a)			3,580		3,733		3,592		3,325		2,757		(4%)		30%
Subtotal - Transaction deposits			70,161		67,964		64,941		65,508		64,203		3%		9%
Other time			7,363		8,490		10,261		11,336		12,059		(13%)		(39%)
Subtotal - Core deposits			77,524		76,454		75,202		76,844		76,262		1%		2%
Certificates - $100,000 and over			4,226		4,858		6,096		6,354		7,049		(13%)		(40%)
Other			1		9		4		5		8		(85%)		(84%)
Total deposits			$81,751		$81,321		$81,302		$83,203		$83,319		1%		(2%)

(a)		Includes commercial customer Eurodollar sweep balances for which the Bancorp pays rates comparable to other commercial deposit accounts.

Average core deposits increased 1 percent sequentially and 2 percent from the first quarter of 2010, with strong transaction deposit growth partially offset by continued runoff of consumer time deposits (CDs). Average transaction deposits, excluding consumer time deposits, increased 3 percent from the fourth quarter of 2010 and 9 percent year-over-year. Sequential growth was primarily driven by higher interest checking, savings, and demand deposit account (DDA) balances. Year-over-year performance was largely due to growth in savings and DDA balances.

Retail average transaction deposits increased 3 percent sequentially and 14 percent from the first quarter of 2010 and reflected growth across all transaction deposit account categories for each comparison period. Higher average DDA and interest checking account balances contributed to the improvement. Consumer CDs included in core deposits declined 13 percent sequentially and 39 percent year-over-year, driven by ongoing downward pricing adjustments, which continued to reflect our high levels of liquidity as well as customer reluctance to extend CD maturities given the current low rate environment.

Commercial average transaction deposits increased 3 percent sequentially and 2 percent from the previous year. Excluding public funds balances, commercial average transaction deposits increased 1 percent sequentially and 17 percent from the first quarter of 2010 driven by DDA and interest checking balances. Average public funds balances were $5.7 billion, up $574 million sequentially largely due to seasonally strong deposit balances, and down $2.5 billion from the first quarter of 2010 due to ongoing pricing adjustments which continue to reflect our excess liquidity position.

Noninterest Income

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Noninterest Income ($ in millions)
Service charges on deposits		$124		$140		$143		$149		$142		(11%)		(12%)
Corporate banking revenue		86		103		86		93		81		(17%)		6%
Mortgage banking net revenue		102		149		232		114		152		(31%)		(33%)
Investment advisory revenue		98		93		90		87		91		5%		8%
Card and processing revenue		80		81		77		84		73		(1%)		10%
Other noninterest income		81		55		195		85		74		48%		8%
Securities gains (losses), net		8		21		4		8		14		(62%)		(43%)
Securities gains, net - non-qualifying hedges
on mortgage servicing rights		5		14		-		-		-		(60%)		NM
Total noninterest income		$584		$656		$827		$620		$627		(11%)		(7%)

NM: Not Meaningful

Noninterest income of $584 million decreased $72 million, or 11 percent, sequentially and decreased $43 million, or 7 percent compared with results a year ago. The sequential decline was driven by lower mortgage-related revenue, investment securities gains, and seasonally lower corporate banking revenue and deposit service charges, partially offset by lower credit-related costs recognized in other noninterest income. The year-over-year decline reflected lower mortgage-related revenue and deposit service charges due to the effect of the August implementation of Regulation E.

First quarter 2011 results included a $2 million negative valuation adjustment on warrants and puts related to the processing business sale, compared with $3 million in positive valuation adjustments on these instruments in the fourth quarter of 2010 and $2 million in negative valuation adjustments in the first quarter of 2010. First quarter 2011 results included a $9 million reduction in income due to the increase in fair value of the liability related to the total return swap entered into as part of the 2009 sale of Visa, Inc. Class B shares. This item reduced noninterest income in the fourth quarter of 2010 and first quarter of 2010 by $5 million and $9 million, respectively. Excluding these items, as well as investment securities gains in all periods, noninterest income decreased $40 million, or 6 percent, from the previous quarter driven by lower mortgage-related revenue, seasonal declines in corporate banking revenue and service charges on deposits, partially offset by lower credit-related costs recognized in other noninterest income. On a year-over-year basis, noninterest income excluding the items mentioned above decreased $37 million, or 6 percent, due to lower mortgage-related revenue and deposit service fees.

Service charges on deposits of $124 million decreased 11 percent sequentially and 12 percent compared with the same quarter last year. Retail service charges declined 16 percent from the previous quarter due primarily to seasonality and declined 26 percent compared with the first quarter of 2010, largely due to the implementation of new overdraft regulations and overdraft policies. Commercial service charges decreased 7 percent sequentially due to seasonality and were consistent with last year.

Corporate banking revenue of $86 million decreased 17 percent from seasonally strong fourth quarter results and increased 6 percent from the same period last year. Sequential results were driven by lower syndication fee revenue and business lending fees as well as lower letter of credit and foreign exchange revenue. On a year-over-year basis, higher revenue from syndication fees and interest rate derivative sales and foreign exchange more than offset lower institutional sales revenue and letters of credit fees.

Investment advisory revenue of $98 million increased 5 percent sequentially and 8 percent from the first quarter of 2010. The sequential growth was driven by higher tax-related private bank revenue, institutional trust revenue, and brokerage fees due to continued market value increases, as well as improved sales production resulting in strong net asset and account growth. On a year-over-year basis, improvement reflected an overall increase in equity and bond market values.

Card and processing revenue was $80 million in the first quarter of 2011, down 1 percent sequentially and up 10 percent from the first quarter of 2010. The sequential decrease reflected lower transaction volumes versus the seasonally strong fourth quarter while the year-over-year comparison reflected higher transaction volumes as general improvement in the economy drove increased spending.

Mortgage banking net revenue was $102 million in the first quarter of 2011, a decrease of $47 million from the fourth quarter of 2010 and a decrease of $50 million from the first quarter of 2010. First quarter 2011 originations were $3.9 billion, a decrease from $7.4 billion in the previous quarter and increase from $3.5 billion in the first quarter of 2010. First quarter 2011 originations resulted in gains of $62 million on mortgages sold compared with gains of $158 million during the previous quarter and $71 million during the first quarter of 2010. Gain on sale margins declined sequentially due to rising mortgage rates in the quarter. Mortgage servicing fees this quarter were $58 million, compared with $59 million in the fourth quarter of 2010 and $53 million in the first quarter of 2010. Mortgage banking revenue is also affected by net servicing asset value adjustments, which include mortgage servicing rights (MSR) amortization and MSR valuation adjustments (including mark-to-market adjustments on free-standing derivatives used to economically hedge the MSR portfolio). These net servicing asset valuation adjustments were negative $18 million in the first quarter of 2011 (reflecting MSR amortization of $28 million and MSR valuation adjustments of positive $10 million); negative $67 million in the fourth quarter of 2010 (MSR amortization of $47 million and MSR valuation adjustments of negative $20 million); and positive $28 million in the first quarter of 2010 (MSR amortization of $23 million and positive $51 million in MSR valuation adjustments). The mortgage-servicing asset, net of the valuation reserve, was $894 million at quarter end on a servicing portfolio of $55 billion.

Gains on securities held as non-qualifying hedges for the MSR were $5 million in the first quarter of 2011 compared with $14 million in the fourth quarter of 2010 and none in the first quarter of 2010.

Other noninterest income totaled $81 million in the first quarter of 2011 compared with $55 million in the previous quarter and $74 million in the first quarter of 2010, largely driven by improvements in net credit-related costs. Other noninterest income for all periods included revenue associated with the transition service agreement (TSA) entered into as part of our processing business sale, revenue from our equity interest in the processing business, any effects of the valuation of warrants and puts related to the processing business sale, and any changes in income related to the valuation of the total return swap entered into as part of the 2009 sale of Visa, Inc. Class B shares. As of March 31, 2011, December 31, 2010, and March 31, 2010, TSA revenue was $11 million, $11 million, and $13 million, respectively; revenue from our processing business equity interest was $9 million, $8 million, and $5 million, respectively; valuation adjustments were negative $2 million, positive $3 million, and negative $2 million, respectively; and reductions in income related to the Visa, Inc. total return swap were $9 million, $5 million, and $9 million, respectively. Excluding these items, other noninterest income increased $44 million from the previous quarter, primarily due to the effects of lower net credit-related costs, and increased $5 million from the first quarter of 2010.

Net credit-related costs recognized in noninterest income were $3 million in the first quarter of 2011 versus $34 million last quarter and $1 million in the first quarter of 2010. First quarter 2011 results included $17 million of net gains on sales of commercial loans held-for-sale and $16 million of fair value charges on commercial loans held-for-sale, as well as $2 million of losses on other real estate owned (OREO). Fourth quarter 2010 results included $21 million of net gains on sales of commercial loans held-for-sale and $35 million of fair value charges on commercial loans held-for-sale, as well as $19 million of losses on OREO. First quarter 2010 results included net gains of $25 million on the sale of loans held-for-sale, $9 million of fair value charges on commercial loans held-for-sale, and $16 million of losses on OREO.

Net gains on investment securities were $8 million in the first quarter of 2011, compared with investment securities gains of $21 million in the previous quarter and $14 million in the first quarter of 2010.

Noninterest Expense

		For the Three Months Ended										% Change
		March		December		September		June		March
		2011		2010		2010		2010		2010		Seq		Yr/Yr
Noninterest Expense ($ in millions)
Salaries, wages and incentives		$351		$385		$360		$356		$329		(9%)		7%
Employee benefits		97		73		82		73		86		33%		13%
Net occupancy expense		77		76		72		73		76		1%		1%
Technology and communications		45		52		48		45		45		(13%)		-
Equipment expense		29		32		30		31		30		(8%)		(2%)
Card and processing expense		29		26		26		31		25		10%		17%
Other noninterest expense		290		343		361		326		365		(15%)		(21%)
Total noninterest expense		$918		$987		$979		$935		$956		(7%)		(4%)

Noninterest expense of $918 million in the first quarter 2011 decreased from $987 million in the fourth quarter 2010 and $956 million a year ago. Excluding $17 million of expenses related to the termination of $1 billion in FHLB funding in the fourth quarter 2010, noninterest expense declined $52 million sequentially. This remaining sequential decline was driven primarily by lower revenue-based compensation as well as lower credit-related expenses, partially offset by a $23 million seasonal increase in FICA and unemployment costs. Excluding a $4 million charge to increase the litigation reserve associated with bank card memberships in the first quarter 2010, noninterest expense declined $34 million from a year ago, due to significantly lower credit-related expenses. Each period included operating expenses related to the processing business that were largely offset by revenue under the TSA reported in other noninterest income.

Noninterest expenses related to problem assets totaled $31 million in the first quarter of 2011, compared with $53 million in the fourth quarter of 2010 and $91 million in the first quarter of 2010. First quarter credit-related expenses included provision expense for mortgage repurchases of $8 million, compared with $20 million in the fourth quarter of 2010 and $39 million a year ago. (Realized mortgage repurchase losses were $24 million in the first quarter of 2011, compared with $23 million last quarter and $13 million in the first quarter of 2010.) Provision for unfunded commitments was a benefit of $16 million in the current quarter, compared with a benefit of $4 million last quarter and $9 million of expense to increase this reserve a year ago. Derivative valuation adjustments related to customer credit risk were a net zero this quarter versus positive $1 million last quarter and $8 million in expense a year ago. OREO expense was $13 million this quarter, compared with $11 million last quarter and $6 million a year ago. Other work out-related expenses were $26 million in the first quarter, compared with $27 million the previous quarter and $29 million in the same period last year.

Credit Quality

		For the Three Months Ended
		March		December		September		June		March
		2011		2010		2010		2010		2010
Total net losses charged off ($ in millions)
Commercial and industrial loans		($83)		($85)		($237)		($104)		($161)
Commercial mortgage loans		(54)		(80)		(268)		(78)		(99)
Commercial construction loans		(26)		(11)		(121)		(43)		(78)
Commercial leases		(1)		3		(1)		-		(4)
Residential mortgage loans		(65)		(62)		(204)		(85)		(88)
Home equity		(63)		(65)		(66)		(61)		(73)
Automobile loans		(20)		(19)		(17)		(20)		(31)
Credit card		(31)		(33)		(36)		(42)		(44)
Other consumer loans and leases		(24)		(4)		(6)		(1)		(4)
Total net losses charged off		(367)		(356)		(957)		(434)		(582)
Total losses		(397)		(399)		(992)		(472)		(622)
Total recoveries		30		43		35		38		40
Total net losses charged off		($367)		($356)		($957)		($434)		($582)
Ratios (annualized)
Net losses charged off as a percent of
average loans and leases (excluding held for sale)		1.92%		1.86%		4.95%		2.26%		3.01%
Commercial		1.52%		1.59%		5.66%		2.03%		3.07%
Consumer		2.43%		2.20%		4.00%		2.57%		2.93%

Net charge-offs were $367 million in the first quarter of 2011, or 192 bps of average loans on an annualized basis. Fourth quarter 2010 net charge-offs were $356 million, or 186 bps of average loans on an annualized basis. The increase in net charge-offs from the prior quarter was primarily the result of a commercial loan that was foreclosed upon in the fourth quarter 2010 which was collateralized by individual consumer loans. These loans were subsequently moved to other consumer loans in the fourth quarter 2010. We recorded $22 million of charge-offs related to these loans in the first quarter of 2011, recorded in "other consumer loans and leases.” First quarter 2010 net charge-offs were $582 million, or 301 bps of average loans on an annualized basis. The decrease in net charge-offs from the prior year reflected continued improvement in the credit quality of loans in our portfolio as well as the impact of the credit actions taken during the third quarter of 2010.

Commercial net charge-offs were $164 million, or 152 bps, compared with $173 million, or 159 bps, in the fourth quarter of 2010. Commercial net charge-offs decreased $9 million sequentially with improvement in commercial mortgage and C&I partially offset by higher commercial construction losses. C&I net losses were $83 million, compared with net losses of $85 million in the previous quarter. Commercial mortgage net losses totaled $54 million compared with net losses of $80 million in the fourth quarter. Commercial construction net losses were $26 million, compared with net losses of $11 million in the prior quarter. Net losses on residential builder and developer portfolio loans across the C&I and commercial real estate categories totaled $22 million. Originations of homebuilder/developer loans were suspended in 2007 and the remaining portfolio balance is $651 million, down from a peak of $3.3 billion in the second quarter of 2008.

Consumer net charge-offs were $203 million, or 243 bps, in the first quarter of 2011, compared with $183 million, or 220 bps, in the fourth quarter. Consumer net charge-offs increased $20 million as a result of higher losses in other consumer loans, as discussed earlier. Net charge-offs on residential mortgage loans in the portfolio were $65 million, compared with portfolio losses of $62 million in the previous quarter. Home equity net charge-offs were $63 million, compared with portfolio losses of $65 million in the fourth quarter of 2010. Net losses on brokered home equity loans represented 38 percent of first quarter home equity losses and 15 percent of the total home equity portfolio. The home equity portfolio included $1.6 billion of brokered loans, down from a peak of $2.6 billion in 2007; originations of these loans were discontinued in 2007. Net charge-offs in the auto portfolio of $20 million was consistent with the prior quarter, and net losses on consumer credit card loans were $31 million, down $2 million from the previous quarter. Net charge-offs in other consumer loans were $24 million, up $20 million from the previous quarter due to the previously mentioned commercial loan that was foreclosed upon in the fourth quarter of 2010.

		For the Three Months Ended
		March		December		September		June		March
		2011		2010		2010		2010		2010
Allowance for Credit Losses ($ in millions)
Allowance for loan and lease losses, beginning		$3,004		$3,194		$3,693		$3,802		$3,749
Impact of cumulative effect of change in accounting principle		-		-		-		-		45
Total net losses charged off		(367)		(356)		(956)		(434)		(582)
Provision for loan and lease losses		168		166		457		325		590
Allowance for loan and lease losses, ending		2,805		3,004		3,194		3,693		3,802
Reserve for unfunded commitments, beginning		227		231		254		260		294
Impact of cumulative effect of change in accounting principle		-		-		-		-		(43)
Provision for unfunded commitments		(16)		(4)		(23)		(6)		9
Reserve for unfunded commitments, ending		211		227		231		254		260
Components of allowance for credit losses:
Allowance for loan and lease losses		2,805		3,004		3,194		3,693		3,802
Reserve for unfunded commitments		211		227		231		254		260
Total allowance for credit losses		$3,016		$3,231		$3,425		$3,947		$4,062
Allowance for loan and lease losses ratio
As a percent of loans and leases		3.62%		3.88%		4.20%		4.85%		4.91%
As a percent of nonperforming loans and leases (a)		170%		179%		202%		146%		139%
As a percent of nonperforming assets (a)		132%		138%		153%		124%		122%

(a) Excludes non accrual loans and leases in loans held for sale

Provision for loan and lease losses totaled $168 million in the first quarter of 2011, up $2 million from the fourth quarter and down $422 million from the first quarter of 2010. The allowance for loan and lease losses represented 3.62 percent of total loans and leases outstanding as of quarter end, compared with 3.88 percent last quarter, and represented 170 percent of nonperforming loans and leases, 132 percent of nonperforming assets, and 188 percent of first quarter annualized net charge-offs.

	As of
	March		December		September		June		March
Nonperforming Assets and Delinquent Loans ($ in millions)	2011		2010		2010		2010		2010
Nonaccrual portfolio loans and leases:
Commercial and industrial loans(a)	$477		$473		$525		$731		$746
Commercial mortgage loans	415		407		464		773		853
Commercial construction loans	159		182		211		383		479
Commercial leases	11		11		30		45		55
Residential mortgage loans	140		152		124		282		266
Home equity	24		23		23		21		23
Automobile loans	1		1		1		1		1
Other consumer loans and leases(a)	60		84		-		-		-
Total nonaccrual loans and leases	$1,287		$1,333		$1,378		$2,236		$2,423
Restructured loans and leases - commercial (nonaccrual)	149		141		31		48		39
Restructured loans and leases - consumer (nonaccrual)	209		206		175		246		271
Total nonperforming loans and leases	$1,645		$1,680		$1,584		$2,530		$2,733
Repossessed personal property	20		27		29		16		21
Other real estate owned(b)	461		467		469		423		375
Total nonperforming assets(c)	$2,126		$2,174		$2,082		$2,969		$3,129
Nonaccrual loans held for sale	184		247		680		163		239
Restructured loans - commercial (nonaccrual) held for sale	32		47		19		4		4
Total nonperforming assets including loans held for sale	$2,342		$2,468		$2,781		$3,136		$3,372
Restructured Consumer loans and leases (accrual)	$1,564		$1,560		$1,652		$1,561		$1,480
Restructured Commercial loans and leases (accrual)	$243		$228		$146		$109		$76
Total loans and leases 90 days past due	$266		$274		$317		$397		$436
Nonperforming loans and leases as a percent of portfolio loans, leases and other assets, including other real estate owned(c)	2.11%		2.15%		2.07%		3.30%		3.51%
Nonperforming assets as a percent of portfolio loans, leases and other assets, including other real estate owned(c)	2.73%		2.79%		2.72%		3.87%		4.02%

(a)		Nonaccrual loans and leases at December 31, 2010 reflect a reclassification of $84 million in nonperforming loans from commercial and industrial loans to other consumer loans and leases which occurred after the Bancorp's Form 8-K was filed on January 19, 2011. This reclassification was primarily a result of the determination that consumer loans obtained in the foreclosure of a commercial loan were more appropriately categorized as other consumer loans and leases in accordance with regulatory guidelines.
(b)		Excludes government insured advances.
(c)		Does not include nonaccrual loans held-for-sale.

Total nonperforming assets, including loans held-for-sale, were $2.3 billion, a decline of $126 million, or 5 percent, from the previous quarter. Nonperforming assets held-for-investment (NPAs) at quarter end were $2.1 billion or 2.73 percent of total loans, leases and OREO, and decreased $48 million, or 2 percent, from the previous quarter. Nonperforming loans held-for-investment (NPLs) at quarter end were $1.6 billion or 2.11 percent of total loans and leases, and decreased $35 million, or 2 percent, from the fourth quarter. The decrease in total nonperforming assets was driven by the sale of assets from held-for-sale during the quarter and by decreases in NPLs and OREO in the held-for-investment portfolio.

Commercial portfolio NPAs at quarter-end were $1.6 billion, or 3.64 percent of commercial loans, leases and OREO, and increased $10 million, or 1 percent, from the fourth quarter. Commercial portfolio NPLs were $1.2 billion, or 2.78 percent of commercial loans and leases, and decreased $3 million from last quarter. Commercial construction portfolio NPAs were $248 million, a decline of $11 million from the previous quarter. Commercial mortgage portfolio NPAs were $696 million, up $18 million from the prior quarter. Commercial real estate loans in Michigan and Florida represented 48 percent of commercial real estate NPAs and 37 percent of our total commercial real estate portfolio. C&I portfolio NPAs of $620 million increased $8 million from the previous quarter. Within the overall commercial loan portfolio, residential real estate builder and developer portfolio NPAs declined $10 million from the fourth quarter to $249 million, of which $75 million were commercial construction assets, $160 million were commercial mortgage assets and $14 million were C&I assets. Commercial portfolio NPAs included $149 million of nonaccrual troubled debt restructurings (TDRs), compared with $141 million last quarter.

Consumer portfolio NPAs of $538 million, or 1.57 percent of consumer loans, leases and OREO, decreased $58 million from the fourth quarter. Consumer portfolio NPLs were $434 million, or 1.26 percent of consumer loans and leases, and decreased $32 million from last quarter. Of consumer NPAs, $409 million were in residential real estate portfolios. Residential mortgage NPAs were $338 million, down $29 million from the previous quarter, with Florida representing 47 percent of residential mortgage NPAs and 19 percent of total residential mortgage loans. Home equity NPAs were consistent with last quarter at $71 million. Credit card NPAs declined $2 million from the previous quarter to $54 million. Other consumer NPAs declined $24 million to $60 million, due to charge-offs on loans that collateralized the previously mentioned commercial loan foreclosed upon in the fourth quarter 2010. Consumer nonaccrual TDRs were $209 million in the first quarter of 2011, compared with $206 million in the fourth quarter of 2010.

Fourth quarter OREO balances included in portfolio NPA balances described above were $461 million compared with $467 million in the fourth quarter of 2010, and included $323 million in commercial real estate assets, $77 million in residential mortgage assets, $46 million in C&I assets, and $15 million in home equity assets. Repossessed personal property of $20 million consisted largely of autos.

Loans still accruing over 90 days past due were $266 million, down $8 million or 3 percent from the fourth quarter of 2010. Commercial balances 90 days past due of $39 million increased $9 million sequentially. Consumer balances 90 days past due of $227 million declined $17 million from the previous quarter. Loans 30-89 days past due of $538 million decreased $98 million, or 15 percent, from the previous quarter. Commercial balances 30-89 days past due of $187 million declined $20 million, or 10 percent, sequentially and consumer balances 30-89 days past due of $351 million declined $78 million, or 18 percent, from the seasonally high fourth quarter.

At quarter-end, we held $216 million of commercial nonaccrual loans for sale, compared with $294 million at the end of the fourth quarter. During the quarter, we transferred approximately $43 million of commercial loans from the portfolio to loans held-for-sale, and we transferred approximately $10 million of loans from loans held-for-sale to OREO. We recorded negative valuation adjustments of $16 million on held-for-sale loans and we recorded net gains of $17 million on loans that were sold or settled during the quarter.

Capital Position

		For the Three Months Ended
		March		December		September		June		March
		2011		2010		2010		2010		2010
Capital Position
Average shareholders' equity to average assets		11.77%		12.52%		12.38%		12.04%		11.92%
Tangible equity (a)		8.76%		10.42%		10.04%		9.89%		9.67%
Tangible common equity (excluding unrealized gains/losses) (a)		8.39%		7.04%		6.70%		6.55%		6.37%
Tangible common equity (including unrealized gains/losses) (a)		8.61%		7.30%		7.06%		6.91%		6.61%
Tangible common equity as a percent of risk-weighted assets (excluding unrealized gains/losses) (a) (b)		9.09%		7.59%		7.40%		7.23%		7.04%
Regulatory capital ratios: (c)
Tier I capital		12.21%		13.94%		13.85%		13.65%		13.39%
Total risk-based capital		16.29%		18.14%		18.28%		17.99%		17.54%
Tier I leverage		11.20%		12.79%		12.54%		12.24%		12.00%
Tier I common equity (a)		9.00%		7.50%		7.34%		7.17%		6.96%
Book value per share		12.80		13.06		12.86		12.65		12.31
Tangible book value per share (a)		10.11		9.94		9.74		9.51		9.16

(a)		The tangible equity, tangible common equity, tier I common equity and tangible book value per share ratios, while not required by accounting principles generally accepted in the United States of America (U.S. GAAP), are considered to be critical metrics with which to analyze banks. The ratios have been included herein to facilitate a greater understanding of the Bancorp's capital structure and financial condition. See the Regulation G Non-GAAP Reconciliation table for a reconciliation of these ratios to U.S. GAAP.
(b)		Under the banking agencies risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together resulting in the Bancorp's total risk weighted assets.
(c)		Current period regulatory capital data ratios are estimated.

Capital ratios remained strong during the quarter. Compared with the prior quarter, the Tier 1 common equity ratio increased 150 bps to 9.00 percent, the Tier 1 capital ratio decreased 173 bps to 12.21 percent and the Total capital ratio decreased 185 bps to 16.29 percent. The tangible common equity to tangible assets ratio increased 135 bps to 8.39 percent excluding unrealized gains/losses, and increased 131 bps to 8.61 percent including unrealized gains/losses. The Tier 1 common and tangible common equity ratios increased due to the issuance of $1.7 billion in common equity during the first quarter in connection with the redemption of the TARP preferred stock of $3.4 billion, as well higher retained earnings. The Tier 1 capital, total capital, and other ratios that include preferred stock declined due to the net $1.7 billion reduction in preferred and common stock, partially offset by higher retained earnings.

Book value per share at March 31, 2011 was $12.80 and tangible book value per share was $10.11, compared with December 31, 2010 book value per share of $13.06 and tangible book value per share of $9.94. Book value and tangible book value per share were increased by higher retained earnings and the issuance of common stock at a premium, offset by the effect of the repurchase of the TARP warrant from the U.S. Treasury.

Average diluted common shares of 895 million shares increased 59 million shares from 836 million shares in the fourth quarter of 2010. During the first quarter, we issued 122 million common shares in connection with the redemption of TARP preferred stock. However, the acceleration of the discount accretion associated with the TARP preferred stock reduced earnings below the level at which our Series G convertible preferred shares are included in the fully diluted common share count (in other words, absent this item, the 36 million shares underlying the Series G convertible preferred shares would have been included in the fully diluted share count). Fourth quarter 2010 earnings per share were computed using the "if converted” method, which resulted in an increase in our diluted share count for the quarter. In most previous quarters, these shares were excluded from the diluted EPS calculation, as their impact would have been anti-dilutive to EPS. Period end common shares outstanding were 918.7 million in the first quarter of 2011, up 122.4 million compared with 796.3 million in the fourth quarter of 2010, due to the issuance of 122.4 million shares during the quarter. The inclusion or exclusion of the fully dilutive effect of the common shares underlying the Series G shares has no impact on end of period shares.

The Bank for International Settlements (BIS) recently proposed new capital rules for Internationally Active banks, known as "Basel III.” Fifth Third is subject to U.S. bank regulations for capital, which have not yet been issued in response to the Basel proposals. Fifth Third’s capital levels exceed current U.S. "well-capitalized” standards and proposed Basel III standards, and we expect Fifth Third’s capital levels to continue to exceed U.S. "well-capitalized” standards including the adoption of U.S. rules that incorporate changes contemplated under Basel III.

Fifth Third’s Tier 1 and Total capital levels at March 31, 2011 included $2.8 billion of Trust Preferred securities, or 2.8 percent of risk weighted assets. Under the Dodd-Frank financial reform legislation recently passed, these Trust Preferred securities are intended to be phased out of Tier 1 capital over three years beginning in 2013. The BIS also issued proposals that would include a phase-out of these securities, although over a longer period. To the extent these securities remain outstanding during and after the phase-in period, they would be expected to continue to be included in Total capital, subject to prevailing U.S. capital standards. The BIS has also proposed adjustments to definitions of capital, including what is to be included in the definition of Tier 1 common, and to risk weightings applied to certain types of assets. We do not currently expect these proposed adjustments to negatively affect Fifth Third’s Tier 1 common capital levels and for any positive effect to be modest.

Fifth Third was one of 19 bank holding companies that submitted a capital plan for the years 2011 and 2012, approved by its board of directors, to the Federal Reserve as part of the Comprehensive Capital Analysis and Review. The Board of Governors of the Federal Reserve System did not object to the proposed capital actions in its capital plan, which included an increase in the quarterly common stock dividend in the first quarter of 2011 and the possible future redemption of certain trust preferred securities. The board of directors approved an increase to the quarterly common stock dividend to $0.06 per share on March 22, 2011 from $0.01 per share.

We expect to manage our capital structure – including the components represented by common equity and non-common equity – over time to adapt to the effect of legislation, changes in U.S. bank capital regulations reflecting changes to BIS capital rules, and our goals for capital levels and capital composition as appropriate given any changes in rules.

Conference Call

Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. This conference call will be webcast live by Thomson Financial and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on "About Fifth Third” then "Investor Relations”). The webcast also is being distributed over Thomson Financial’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Financial’s individual investor center at www.earnings.com or by visiting any of the investor sites in Thomson Financial’s Individual Investor Network. Institutional investors can access the call via Thomson Financial’s password-protected event management site, StreetEvents (www.streetevents.com).

Those unable to listen to the live webcast may access a webcast replay or podcast through the Fifth Third Investor Relations website at the same web address. Additionally, a telephone replay of the conference call will be available beginning approximately two hours after the conference call until Thursday, May 5^th by dialing 800-642-1687 for domestic access and 706-645-9291 for international access (passcode 49810171#).

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of March 31, 2011, the Company had $110 billion in assets and operated 15 affiliates with 1,310 full-service Banking Centers, including 101 Bank Mart® locations open seven days a week inside select grocery stores and 2,453 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third also has a 49% interest in Fifth Third Processing Solutions, LLC. Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2011, had $274 billion in assets under care, of which it managed $26 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the NASDAQ® National Global Select Market under the symbol "FITB.”

Forward-Looking Statements

This news release contains statements that we believe are "forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as "will likely result,” "may,” "are expected to,” "is anticipated,” "estimate,” "forecast,” "projected,” "intends to,” or may include other similar words or phrases such as "believes,” "plans,” "trend,” "objective,” "continue,” "remain,” or similar expressions, or future or conditional verbs such as "will,” "would,” "should,” "could,” "might,” "can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us.

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic conditions and weakening in the economy, specifically the real estate market, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, are less favorable than expected; (2) deteriorating credit quality; (3) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (4) changes in the interest rate environment reduce interest margins; (5) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (6) Fifth Third’s ability to maintain required capital levels and adequate sources of funding and liquidity; (7) maintaining capital requirements may limit Fifth Third’s operations and potential growth; (8) changes and trends in capital markets; (9) problems encountered by larger or similar financial institutions may adversely affect the banking industry and/or Fifth Third (10) competitive pressures among depository institutions increase significantly; (11) effects of critical accounting policies and judgments; (12) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (13) legislative or regulatory changes or actions, or significant litigation, adversely affect Fifth Third, one or more acquired entities and/or the combined company or the businesses in which Fifth Third, one or more acquired entities and/or the combined company are engaged, including the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain favorable ratings from rating agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to attract and retain key personnel; (17) ability to receive dividends from its subsidiaries; (18) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (19) effects of accounting or financial results of one or more acquired entities; (20) difficulties in separating Fifth Third Processing Solutions from Fifth Third; (21) loss of income from any sale or potential sale of businesses that could have an adverse effect on Fifth Third’s earnings and future growth;(22) ability to secure confidential information through the use of computer systems and telecommunications networks; and (23) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity.

You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or "SEC,” for further information on other factors, which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements.