Fifth Third Bancorp (FITB) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	FITB
Entity Registrant Name	FIFTH THIRD BANCORP
Entity Central Index Key	0000035527
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	794,816,131

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Mar. 31, 2010		Dec. 31, 2009		Mar. 31, 2009
Assets
Cash and due from banks	$2,133	[1]	$2,318		$2,491
Available-for-sale and other securities	16,935	[2]	18,213	[2]	16,916	[2]
Held-to-maturity securities	355	[3]	355	[3]	358	[3]
Trading securities	305		355		1,407
Other short-term investments	3,904	[1]	3,369		1,587
Loans held for sale	1,607	[4]	2,067	[4]	2,602	[4]
Portfolio loans and leases:
Commercial and industrial loans	26,131		25,683		28,617
Commercial mortgage loans	11,744		11,803		12,560
Commercial construction loans	3,277		3,784		4,745
Commercial leases	3,388		3,535		3,521
Residential mortgage loans	7,918	[5]	8,035	[5]	8,875	[5]
Home equity	12,186	[1]	12,174		12,710
Automobile loans	10,180	[1]	8,995		8,688
Credit card	1,863		1,990		1,816
Other consumer loans and leases	736		780		1,037
Portfolio loans and leases	77,423		76,779		82,569
Allowance for loan and lease losses	(3,802)	[1]	(3,749)		(3,070)
Portfolio loans and leases, net	73,621		73,030		79,499
Bank premises and equipment	2,384		2,400		2,490
Operating lease equipment	492		499		470
Goodwill	2,417		2,417		2,623
Intangible assets	94		106		154
Servicing rights	725		700		481
Other assets	7,679	[1]	7,551		8,235
Total Assets	112,651		113,380		119,313
Deposits:
Demand	19,482		19,411		16,370
Interest checking	19,126		19,935		14,510
Savings	19,099		17,898		16,517
Money market	4,782		4,431		4,353
Other time	11,643		12,466		14,571
Certificates - $100,000 and over	6,596		7,700		11,784
Foreign office and other	2,846		2,464		1,677
Total deposits	83,574		84,305		79,782
Federal funds purchased	271		182		363
Other short-term borrowings	1,359		1,415		11,076
Accrued taxes, interest and expenses	633		773		904
Other liabilities	2,459	[1]	2,701		2,908
Long-term debt	10,947	[1]	10,507		12,178
Total Liabilities	99,243		99,883		107,211
Shareholders' Equity
Common stock	1,779	[6]	1,779	[6]	1,295	[6]
Preferred stock	3,620	[7]	3,609	[7]	4,252	[7]
Capital surplus	1,753	[8]	1,743	[8]	841	[8]
Retained earnings	6,169		6,326		5,792
Accumulated other comprehensive income	288		241		151
Treasury stock	(201)		(201)		(229)
Total Shareholders' Equity	13,408		13,497		12,102
Total Liabilities and Shareholders' Equity	112,651		113,380		119,313
Variable Interest Entities [Member]
Assets
Cash and due from banks	71
Other short-term investments	7
Portfolio loans and leases:
Home equity	257
Automobile loans	1,065
Allowance for loan and lease losses	23
Other assets	17
Deposits:
Other liabilities	19
Long-term debt	$1,174
[1]At March 31, 2010, $71 of cash, $7 of other short-term investments, $257 of home equity loans, $1,065 of automobile loans, ($23) of allowance for loan and lease losses, $17 of other assets, $19 of other liabilities and $1,174 of long-term debt from consolidated variable interest entities are included in their respective Balance Sheet captions above. See Note 8.
[2]Amortized cost of $16,523, $17,879 and $16,642 at March 31, 2010, December 31, 2009, and March 31, 2009, respectively.
[3]Fair value of $355, $355 and $358 at March 31, 2010, December 31, 2009, and March 31, 2009, respectively.
[4]Includes $1,089, $1,470 and $1,943 of residential mortgage loans held for sale measured at fair value at March 31, 2010, December 31, 2009 and March 31, 2009, respectively.
[5]Includes $36, $26 and $11 of residential mortgage loans measured at fair value at March 31, 2010, December 31, 2009 and March 31, 2009, respectively.
[6]Common shares: Stated value $2.22 per share; authorized 2,000,000,000; outstanding at March 31, 2010 - 794,816,131 (excludes 6,688,056 treasury shares), December 31, 2009 - 795,068,164 (excludes 6,436,024 treasury shares) and March 31, 2009 - 576,935,997 shares (excludes 6,491,107 treasury shares).
[7]317,680 shares of undesignated no par value preferred stock are authorized of which none had been issued; 5.0% cumulative Series F perpetual preferred stock with a $25,000 liquidation preference: 136,320 issued and outstanding at March 31, 2010, December 31, 2009, and March 31, 2009; 8.5% non-cumulative Series G convertible (into 2,159.8272 common shares) perpetual preferred stock with a $25,000 liquidation preference: 46,000 authorized, 16,451, 16,451, and 44,300 issued and outstanding at March 31, 2010, December 31, 2009 and March 31, 2009, respectively.
[8]Includes ten-year warrants initially valued at $239 to purchase up to 43,617,747 shares of common stock, no par value, related to Series F preferred stock, at an initial exercise price of $11.72 per share.

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010		Dec. 31, 2009	Mar. 31, 2009
Cash and due from banks	$2,133	[1]	$2,318	$2,491
Other short-term investments	3,904	[1]	3,369	1,587
Home equity	12,186	[1]	12,174	12,710
Automobile loans	10,180	[1]	8,995	8,688
Allowance for loan and lease losses	3,802	[1]	3,749	3,070
Other assets	7,679	[1]	7,551	8,235
Other liabilities	2,459	[1]	2,701	2,908
Long-term debt	10,947	[1]	10,507	12,178
Available-for-sale and other securities, amortized cost	16,523		17,879	16,642
Held-to-maturity securities, fair value	355		355	358
Loans held for sale, residential mortgage loans held for sale, fair value	1,089		1,470	1,943
Residential mortgage loans, fair value	36		26	11
Common stock, stated value	2.22		2.22	2.22
Common stock, authorized	2,000,000,000		2,000,000,000	2,000,000,000
Common stock, outstanding	794,816,131		795,068,164	576,935,997
Common stock, treasury shares	6,688,056		6,436,024	6,491,107
Variable Interest Entities [Member]
Cash and due from banks	71
Other short-term investments	7
Home equity	257
Automobile loans	1,065
Allowance for loan and lease losses	(23)
Other assets	17
Other liabilities	19
Long-term debt	1,174
Preferred stock
Preferred stock, no par value	$0		$0	$0
Preferred stock, authorized	317,680		317,680	317,680
Preferred stock, issued	0		0	0
Preferred stock Series F
Preferred stock, liquidation preference	$25,000		$25,000	$25,000
Preferred stock, issued	136,320		136,320	136,320
Preferred stock, outstanding	136,320		136,320	136,320
Capital surplus, warrants	$239		$239	$239
Capital surplus, shares of common stock to purchase	43,617,747		43,617,747	43,617,747
Capital surplus, initial exercise price	11.72		11.72	11.72
Preferred stock Series G
Preferred stock, Convertible	2159.83		2159.83	2159.83
Preferred stock, liquidation preference	$25,000		$25,000	$25,000
Preferred stock, authorized	46,000		46,000	46,000
Preferred stock, issued	16,451		16,451	44,300
Preferred stock, outstanding	16,451		16,451	44,300
[1]At March 31, 2010, $71 of cash, $7 of other short-term investments, $257 of home equity loans, $1,065 of automobile loans, ($23) of allowance for loan and lease losses, $17 of other assets, $19 of other liabilities and $1,174 of long-term debt from consolidated variable interest entities are included in their respective Balance Sheet captions above. See Note 8.

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest Income
Interest and fees on loans and leases	$960	$997
Interest on securities	182	180
Interest on other short-term investments	1	1
Total interest income	1,143	1,178
Interest Expense
Interest on deposits	171	274
Interest on other short-term borrowings	1	24
Interest on long-term debt	74	104
Total interest expense	246	402
Net Interest Income	897	776
Provision for loan and lease losses	590	773
Net Interest Income After Provision for Loan and Lease Losses	307	3
Noninterest Income
Mortgage banking net revenue	152	134
Service charges on deposits	142	146
Investment advisory revenue	91	79
Corporate banking revenue	81	113
Card and processing revenue	73	223
Other noninterest income	74	10
Securities gains (losses), net	14	(24)
Securities gains, net - non-qualifying hedges on mortgage servicing rights		16
Total noninterest income	627	697
Noninterest Expense
Salaries, wages and incentives	329	327
Employee benefits	86	83
Net occupancy expense	76	79
Technology and communications	45	45
Equipment expense	30	31
Card and processing expense	25	67
Other noninterest expense	365	330
Total noninterest expense	956	962
Loss Before Income Taxes	(22)	(262)
Applicable income tax benefit	(12)	(312)
Net (Loss) Income	(10)	50
Dividends on preferred stock	62	76
Net Loss Available to Common Shareholders	($72)	($26)
Earnings Per Share	-0.09	-0.04
Earnings Per Diluted Share	-0.09	-0.04

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
In Millions	Common Stock	Preferred stock	Capital Surplus	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock	Total
Beginning Balance at Dec. 31, 2008	$1,295	$4,241	$848	$5,824	$98	($229)	$12,077
Net (loss) income				50			50
Other comprehensive income					53		53
Comprehensive income							103
Cash dividends declared:
Common stock at $0.01 in 2010 and $0.01 in 2009 per share				(5)			(5)
Preferred stock				(66)			(66)
Accretion of preferred dividends, Series F		11		(11)
Stock-based compensation expense			11				11
Change in corporate tax benefit related to stock-based compensation			(18)				(18)
Ending Balance at Mar. 31, 2009	1,295	4,252	841	5,792	151	(229)	12,102
Beginning Balance at Dec. 31, 2009	1,779	3,609	1,743	6,326	241	(201)	13,497
Net (loss) income				(10)			(10)
Other comprehensive income					47		47
Comprehensive income							37
Cash dividends declared:
Common stock at $0.01 in 2010 and $0.01 in 2009 per share				(8)			(8)
Preferred stock				(51)			(51)
Accretion of preferred dividends, Series F		11		(11)
Stock-based compensation expense			10				10
Impact of cumulative effect of change in accounting principle				(77)			(77)
Ending Balance at Mar. 31, 2010	$1,779	$3,620	$1,753	$6,169	$288	($201)	$13,408

3_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $)
	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Common stock, per share	0.01	0.01

4_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Operating Activities
Net (loss) income	($10)		$50
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Provision for loan and lease losses	590		773
Depreciation, amortization and accretion	97		86
Stock-based compensation expense	10		11
Provision for deferred income taxes	12		22
Realized securities gains	(18)
Realized securities gains - non-qualifying hedges on mortgage servicing rights			(22)
Realized securities losses	4		24
Realized securities losses - non-qualifying hedges on mortgage servicing rights			7
Provision for mortgage servicing rights	7		69
Net (gains) losses on sales of loans and fair value adjustments on loans held for sale	(28)		5
Capitalized mortgage servicing rights	(56)		(94)
Proceeds from sales of loans held for sale	4,117		4,285
Loans originated for sale, net of repayments	(3,594)		(5,540)
Dividends representing return on equity method investments	1		2
Net change in:
Trading securities	51		(43)
Other assets	181		749
Accrued taxes, interest and expenses	(161)		(430)
Other liabilities	(293)		(25)
Net Cash Provided by (Used In) Operating Activities	910		(71)
Sales:
Available-for-sale securities	505		972
Loans	49		226
Disposal of bank premises and equipment	2		2
Repayments / maturities:
Available-for-sale securities	966		40,192
Held-to-maturity securities			2
Purchases:
Available-for-sale securities	(1,060)		(45,315)
Bank premises and equipment	(42)		(55)
Restricted cash from the initial consolidation of variable interest entities	63
Dividends representing return of equity method investments	4		1
Net change in:
Other short-term investments	(528)		1,992
Loans and leases	784		831
Operating lease equipment	(3)		(16)
Net Cash Provided by (Used In) Investing Activities	740		(1,168)
Net change in:
Core deposits	399		1,237
Certificates - $100,000 and over, including other foreign office	(1,115)		(70)
Federal funds purchased	89		77
Other short-term borrowings	(178)		1,117
Proceeds from issuance of long-term debt	1		1
Repayment of long-term debt	(971)		(1,299)
Payment of cash dividends	(59)		(72)
Exercise of stock-based awards, net			1
Purchases of treasury stock	(1)		(1)
Net Cash (Used In) Provided by Financing Activities	(1,835)		991
Decrease in Cash and Due from Banks	(185)		(248)
Cash and Due from Banks at Beginning of Period	2,318		2,739
Cash and Due from Banks at End of Period	2,133	[1]	2,491
Cash Payments
Interest	259		422
Income taxes	$19		$7
[1]At March 31, 2010, $71 of cash, $7 of other short-term investments, $257 of home equity loans, $1,065 of automobile loans, ($23) of allowance for loan and lease losses, $17 of other assets, $19 of other liabilities and $1,174 of long-term debt from consolidated variable interest entities are included in their respective Balance Sheet captions above. See Note 8.

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation	1. Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of the Bancorp and its majority-owned subsidiaries and variable interest entities (VIEs) in which the Bancorp has been determined to be the primary beneficiary. Other entities, including certain joint ventures, in which the Bancorp has the ability to exercise significant influence over operating and financial policies of the investee, but upon which the Bancorp does not possess control, are accounted for by the equity method and not consolidated. Those entities in which the Bancorp does not have the ability to exercise significant influence are generally carried at the lower of cost or fair value. Intercompany transactions and balances have been eliminated. In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, which consist of normal recurring accruals, necessary to present fairly the financial position as of March31, 2010 and 2009, the results of operations for the three months ended March31, 2010 and 2009, the cash flows for the three months ended March31, 2010 and 2009 and the changes in shareholders equity for the three months ended March31, 2010 and 2009. In accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the rules and regulations of the United States Securities and Exchange Commission (SEC) for interim financial information, these statements do not include certain information and footnote disclosures required for complete annual financial statements and it is suggested that these condensed consolidated financial statements be read in conjunction with the latest annual financial statements. The results of operations for the three months ended March31, 2010 and 2009 and the cash flows and changes in shareholders equity for the three months ended March31, 2010 and 2009 are not necessarily indicative of the results to be expected for the full year. Financial information as of December31, 2009 has been derived from the annual audited Consolidated Financial Statements of the Bancorp. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain reclassifications have been made to prior periods Condensed Consolidated Financial Statements and related notes to conform to the current period presentation.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended Mar. 31, 2010
Supplemental Cash Flow Information	2. Supplemental Cash Flow Information Noncash investing and financing activities are presented in the following table for the three months ended March31: ($ in millions) 2010 2009 Transfers of portfolio loans to held-for-sale loans $ 67 Transfers of held-for-sale loans to portfolio loans 35 6 Transfers of held-for-sale loans to trading securities 136 Transfers of portfolio loans to other real estate owned 169 90 Impact of change in accounting principle: Decrease in available-for-sale securities, net 941 Increase in portfolio loans 2,217 Decrease in demand deposits 18 Increase in other short-term borrowings 122 Increase in long-term debt 1,344

Accounting and Reporting Develo

Accounting and Reporting Developments
	3 Months Ended Mar. 31, 2010
Accounting and Reporting Developments	3. Accounting and Reporting Developments Transfers of Financial Assets In June 2009, the Financial Accounting Standards Board (FASB) issued guidance amending the accounting for the transfers of financial assets. This amended guidance removes the concept of a qualifying special-purpose entity (QSPE), changes the requirements for derecognizing financial assets and measuring gains or losses on the sale of financial assets, and requires additional disclosures about transfers of financial assets and a transferors continuing involvement in transferred financial assets. The amended guidance was adopted by the Bancorp on January1, 2010 on a prospective basis and will impact the Bancorps structuring of securitizations and other transfers of financial assets, including guaranteed mortgage securitizations, in order to meet the amended sale treatment criteria under the new guidance. In addition, see the discussion below regarding amended guidance on the consolidation of VIEs and the impact on the Bancorps Condensed Consolidated Financial Statements for assets previously transferred to QSPEs. Consolidation of Variable Interest Entities In June 2009, the FASB issued guidance amending the accounting for the consolidation of VIEs. This new guidance, adopted by the Bancorp on January1, 2010, amends the methodology for determining the primary beneficiary (and therefore consolidator) of a VIE and requires such assessment to be performed on an ongoing basis. Under this new guidance, the primary beneficiary of a VIE is defined as the enterprise that has both (1)the power to direct activities of the VIE that most significantly impact the VIEs economic performance, and (2)the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Due to the concurrent issuance and effective date of the previously discussed amended guidance for the transfers of financial assets and the removal of the QSPE concept, the Bancorp was required to assess all VIEs, including those formed as QSPEs in transfers that occurred prior to January1, 2010, to determine whether the Bancorp is the primary beneficiary of the VIE under the amended guidance. The Bancorp is also required under the amended guidance to provide additional disclosures about its involvement with both consolidated and non- consolidated VIEs, any significant changes in risk exposure due to that involvement, and how that involvement affects the Bancorps Condensed Consolidated Financial Statements. See Note 8 for further discussion. In accordance with the transition guidance for the initial consolidation of VIEs resulting from the adoption of the amended guidance, the Bancorp initially measured the assets and liabilities of newly consolidated VIEs at their carrying amounts, defined as the amounts at which the assets and liabilities would have been carried in the Bancorps Condensed Consolidated Financial Statements when the Bancorp first met the conditions to be the primary beneficiary under the amended guidance. The difference between the amounts added to the Bancorps Condensed Consolidated Balance Sheets and the derecognition of previously recognized

Restriction on Dividends

Restriction on Dividends
	3 Months Ended Mar. 31, 2010
Restriction on Dividends	4. Restriction on Dividends The dividends paid by the Bancorps state chartered bank are subject to regulations and limitations prescribed by the appropriate state authority. Under these provisions, the Bancorps state chartered bank was unable to pay a dividend at March31, 2010 and December31, 2009, and the dividend limitation was $588 million at March31, 2009. The Bancorps nonbank subsidiaries are also limited by certain federal and state statutory provisions and regulations covering the amount of dividends that may be paid in any given year. Based on retained earnings at March31, 2010,December31, 2009 and March31, 2009, the dividend limitation of the Bancorps nonbank subsidiaries under these provisions was $7 million, $87 million and $45 million, respectively. On December31, 2008, the Bancorp sold approximately $3.4 billion in senior preferred stock and related warrants to the U.S. Treasury under the terms of the Capital Purchase Program (CPP). The terms include restrictions on common stock dividends which require the U.S. Treasurys consent to increase common stock dividends for a period of three years from the date of investment unless the preferred shares are redeemed in whole or the U.S. Treasury has transferred all of the preferred shares to a third party. For the Bancorp, approval from the U.S. Treasury will be required for common stock dividends in excess of $0.15 per share of common stock. In addition, no dividends can be declared or paid on the Bancorps common stock unless all accrued and unpaid dividends have been paid on the preferred shares and certain other outstanding securities.

Securities

Securities
	3 Months Ended Mar. 31, 2010
Securities	5. Securities The following tables provide the amortized cost, unrealized gains and losses and fair value for the major categories of the available-for-sale and held-to-maturity securities portfolios: As of March31, 2010 ($ in millions) Amortized Cost Unrealized Gains Unrealized Losses FairValue Available-for-sale and other: U.S. Treasury and Government agencies $ 474 1 (7 ) $ 468 U.S. Government sponsored agencies 2,141 32 (24 ) 2,149 Obligations of states and political subdivisions 221 3 224 Agency mortgage-backed securities 11,069 379 (3 ) 11,445 Other bonds, notes and debentures 1,186 43 (14 ) 1,215 Other securities (a) 1,432 2 1,434 Total $ 16,523 460 (48 ) $ 16,935 Held-to-maturity: Obligations of states and political subdivisions $ 350 $ 350 Other debt securities 5 5 Total $ 355 $ 355 As of December31, 2009 ($ in millions) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Available-for-sale and other: U.S. Treasury and Government agencies $ 464 2 (8 ) $ 458 U.S. Government sponsored agencies 2,143 32 (33 ) 2,142 Obligations of states and political subdivisions 240 3 243 Agency mortgage-backed securities 11,074 315 (7 ) 11,382 Other bonds, notes and debentures 2,541 57 (29 ) 2,569 Other securities (a) 1,417 2 1,419 Total $ 17,879 411 (77 ) $ 18,213 Held-to-maturity: Obligations of states and political subdivisions $ 350 $ 350 Other debt securities 5 5 Total $ 355 $ 355 As of March31, 2009 ($ in millions) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Available-for-sale and other: U.S. Treasury and Government agencies $ 185 3 $ 188 U.S. Government sponsored agencies 2,351 54 (13 ) 2,392 Obligations of states and political subdivisions 300 2 302 Agency mortgage-backed securities 9,391 265 (2 ) 9,654 Other bonds, notes and debentures 3,097 20 (55 ) 3,062 Other securities (a) 1,318 1,318 Total $ 16,642 344 (70 ) $ 16,916 Held-to-maturity: Obligations of states and political subdivisions $ 353 $ 353 Other debt securities 5 5 Total $ 358 $ 358 (a) Other securities consist of FHLB and Federal Reserve Bank restricted stock holdings of $551 and $342, respectively at March31, 2010 and December31, 2009, and $551 and $294, respect

Loans and Leases and Allowance

Loans and Leases and Allowance for Loan and Lease Losses
	3 Months Ended Mar. 31, 2010
Loans and Leases and Allowance for Loan and Lease Losses	6. Loans and Leases and Allowance for Loan and Lease Losses The Bancorp diversifies its loan and lease portfolio by offering a variety of loan and lease products with various payment terms and rate structures. Lending activities are concentrated within those states in which the Bancorp has banking centers and are primarily located in the Midwestern and Southeastern regions of the United States. The following table provides a summary of the total loans and leases classified by primary purpose as of: ($ in millions) March31, 2010 December31, 2009 March31, 2009 Loans and leases held for sale: Commercial and industrial loans $ 3 $ 4 10 Commercial mortgage loans 121 134 208 Commercial construction loans 119 87 185 Commercial leases 1 Residential mortgage loans 1,321 1,811 2,097 Other consumer loans and leases 42 31 102 Total loans and leases held for sale $ 1,607 2,067 $ 2,602 Portfolio loans and leases: Commercial and industrial loans $ 26,131 25,683 28,617 Commercial mortgage loans 11,744 11,803 12,560 Commercial construction loans 3,277 3,784 4,745 Commercial leases 3,388 3,535 3,521 Total commercial loans and leases 44,540 44,805 49,443 Residential mortgage loans 7,918 8,035 8,875 Home equity 12,186 12,174 12,710 Automobile loans 10,180 8,995 8,688 Credit card 1,863 1,990 1,816 Other consumer loans and leases 736 780 1,037 Total consumer loans and leases 32,883 31,974 33,126 Total portfolio loans and leases $ 77,423 76,779 82,569 Total portfolio loans and leases are recorded net of unearned income, which totaled $1.1 billion, $1.2 billion and $1.3 billion as of March31, 2010,December31, 2009 and March31, 2009, respectively. Additionally, portfolio loans and leases are recorded net of unamortized premiums and discounts, deferred loan fees and costs, and fair value adjustments (associated with acquired loans or loans designated as fair value upon origination) which totaled $218 million, $242 million and $358 million as of March31, 2010,December31, 2009 and March31, 2009, respectively. The following table summarizes the Bancorps nonperforming and delinquent loans included in the Bancorps portfolio of loans and leases: ($ in millions) March31, 2010 December31, 2009 March31, 2009 Nonaccrual loans and leases $ 2,423 $ 2,642 $ 2,229 Restructured nonaccrual loans and leases 310 305 167 Total nonperforming loans and leases 2,733 2,947 2,396 Repossessed personal property and other real estate owned 396 297 252 Total nonperforming assets (a) $ 3,129 $ 3,244 $ 2,648 Total 90 days past due loans and l

Intangible Assets

Intangible Assets
	3 Months Ended Mar. 31, 2010
Intangible Assets	7. Intangible Assets Intangible assets consist of servicing rights, core deposit intangibles, customer lists, non-compete agreements and cardholder relationships. Intangible assets, excluding servicing rights, are amortized on either a straight-line or an accelerated basis over their estimated useful lives and have an estimated weighted-average life at March31, 2010 of 3.0 years. The Bancorp reviews intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For more information on servicing rights, see Note 9. The details of the Bancorps intangible assets are shown in the following table. ($ in millions) GrossCarrying Amount Accumulated Amortization Valuation Allowance NetCarrying Amount As of March31, 2010: Mortgage servicing rights $ 2,043 (1,031 ) (287 ) 725 Core deposit intangibles 487 (408 ) 79 Other 52 (37 ) 15 Total intangible assets $ 2,582 (1,476 ) (287 ) 819 As of December31, 2009: Mortgage servicing rights $ 1,987 (1,008 ) (280 ) 699 Core deposit intangibles 487 (397 ) 90 Other consumer and commercial servicing rights 12 (11 ) 1 Other 53 (37 ) 16 Total intangible assets $ 2,539 (1,453 ) (280 ) 806 As of March31, 2009: Mortgage servicing rights $ 1,708 (905 ) (325 ) 478 Core deposit intangibles 487 (360 ) 127 Other consumer and commercial servicing rights 13 (10 ) 3 Other 63 (36 ) 27 Total intangible assets $ 2,271 (1,311 ) (325 ) 635 As of March31, 2010, all of the Bancorps intangible assets were being amortized. Amortization expense recognized on intangible assets, including servicing rights, for the three months ending March31, 2010 and 2009 was $35 million and $59 million, respectively. Estimated amortization expense for the years ending December31, 2010 through 2014 is as follows: ($ in millions) Mortgage ServicingRights OtherIntangible Assets Total Remainder of 2010 $ 149 31 $ 180 2011 160 27 187 2012 128 11 139 2013 103 8 111 2014 83 4 87

Variable Interest Entities

Variable Interest Entities
	3 Months Ended Mar. 31, 2010
Variable Interest Entities	8. Variable Interest Entities The Bancorp, in the normal course of business, engages in a variety of activities that involve VIEs. A VIE is a legal entity that lacks sufficient equity to finance its activities, or the equity investors of the entity as a group lack any of the characteristics of a controlling interest. The primary beneficiary of a VIE is the enterprise that has both (1)the power to direct the activities most significant to the economic performance of the VIE and (2)the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If the Bancorp is determined to be the primary beneficiary of a VIE, it must account for the VIE as a consolidated subsidiary. If the Bancorp is determined not to be the primary beneficiary of a VIE but holds a variable interest in the entity, such variable interests are accounted for under the equity method of accounting or other accounting standards as appropriate. Consolidated VIEs The following table provides a summary of the classifications of consolidated VIE assets and liabilities included on the Bancorps Condensed Consolidated Balance Sheets as of March31, 2010: ($ in millions) Home Equity Securitization AutomobileLoan Securitizations Cash and due from banks 3 68 Other short-term investments 7 Home equity 257 Automobile loans 1,065 Allowance for loan and lease losses (6 ) (17 ) Other assets 3 14 Total assets 257 1,137 Other liabilities 19 Long-term debt 176 998 Total liabilities 176 1,017 The Bancorp previously sold $903 million of home equity lines of credit to an isolated trust. Additionally, during 2008, the Bancorp sold $2.7 billion of automobile loans to an isolated trust and conduits in three separate transactions. Each of these transactions isolated the related loans through the use of a VIE that, under accounting guidance effective prior to January1, 2010, was not consolidated by the Bancorp. The VIEs were funded through loans from large multi-seller asset-backed commercial paper conduits sponsored by third party agents, asset-backed securities issued with varying levels of credit subordination and payment priority, and residual interests. The Bancorp retained residual interests in these entities and, therefore, has an obligation to absorb losses and a right to receive benefits from the VIEs that could potentially be significant to the VIEs. In addition, the Bancorp retained servicing rights for the underlying loans and, therefore, holds the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs. As a result, the Bancorp determined it is the primary beneficiary of these VIEs and, effective January1, 2010, these VIEs have been consolidated in the Bancorps Condensed Consolidated Financial Statements. The assets of each VIE are restricted to the settlement of the long-term debt and other liabilities of the respective entity. Third-party holders of this debt do not have recourse to the general assets of the B

Sales of Receivables and Servic

Sales of Receivables and Servicing Rights
	3 Months Ended Mar. 31, 2010
Sales of Receivables and Servicing Rights	9. Sales of Receivables and Servicing Rights Residential Mortgage Loan Sales The Bancorp sold fixed and adjustable rate residential mortgage loans during the three months ended March31, 2010 and 2009. In those sales, the Bancorp obtained servicing responsibilities and the investors have no recourse to the Bancorps other assets for failure of debtors to pay when due. The Bancorp receives annual servicing fees based on a percentage of the outstanding balance. The Bancorp identifies classes of servicing assets based on the financial asset type and interest rates. For the three months ended March31, 2010 and 2009, the Bancorp recognized gains of $71 million and $130 million, respectively, on residential mortgage loan sales activity of $3.7 billion and $4.2 billion, respectively. Additionally, the Bancorp recognized $53 million and $45 million in servicing fees on residential mortgages for the three months ended March31, 2010 and 2009, respectively. The gains on sales of residential mortgages and servicing fees related to residential mortgages are included in mortgage banking net revenue in the Condensed Consolidated Statements of Income. Servicing Assets and Residual Interests As of March31, 2010 and 2009, the key economic assumptions used in measuring the interests that continued to be held by the Bancorp at the date of sale resulting from transactions completed during the three months ended March31, 2010 and March31, 2009 were as follows: March31, 2010 March31, 2009 Rate Weighted- Average Life (in years) Prepayment Speed (annual) Discount Rate (annual) Weighted- Average Default Rate Weighted- Average Life (in years) Prepayment Speed (annual) Discount Rate (annual) Weighted- Average Default Rate Residential mortgage loans: Servicing assets Fixed 6.8 10.8 % 9.5 % N/A 7.2 10.6 % 9.9 % N/A Servicing assets Adjustable 4.0 20.6 10.0 N/A 1.7 44.6 11.0 N/A Based on historical credit experience, expected credit losses for residential mortgage loan servicing assets have been deemed immaterial, as the Bancorp sold the majority of the underlying loans without credit recourse. At March31, 2010,December31, 2009 and March31, 2009, the Bancorp serviced $50.3 billion, $48.6 billion and $41.5 billion, respectively, of residential mortgage loans for other investors. The value of interests that continue to be held by the Bancorp is subject to credit, prepayment and interest rate risks on the sold financial assets. At March31, 2010, the sensitivity of the current fair value of residual cash flows to immediate 10% and 20% adverse changes in those assumptions are as follows: Prepayment Speed Assumption Residual Servicing Cash Flows Weighted-Average Default ($ in millions) Rate Fair Value Weighted- Average Life (in years) Rate Impactof AdverseChange onFairValue Discount Rate Impactof Adverse ChangeonFair Value Rate Impactof Adverse ChangeonFair Value 10%

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Mar. 31, 2010
Derivative Financial Instruments	10. Derivative Financial Instruments The Bancorp maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate, prepayment and foreign currency volatility. Additionally, the Bancorp holds derivative instruments for the benefit of its commercial customers. The Bancorp does not enter into unhedged speculative derivative positions. The Bancorps interest rate risk management strategy involves modifying the repricing characteristics of certain financial instruments so that changes in interest rates do not adversely affect the Bancorps net interest margin and cash flows. Derivative instruments that the Bancorp may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, interest rate caps, forward contracts, options and swaptions. Interest rate swap contracts are exchanges of interest payments, such as fixed-rate payments for floating-rate payments, based on a common notional amount and maturity date. Interest rate floors protect against declining rates, while interest rate caps protect against rising interest rates. Forward contracts are contracts in which the buyer agrees to purchase, and the seller agrees to make delivery of, a specific financial instrument at a predetermined price or yield. Options provide the purchaser with the right, but not the obligation, to purchase or sell a contracted item during a specified period at an agreed upon price. Swaptions are financial instruments granting the owner the right, but not the obligation, to enter into or cancel a swap. Prepayment volatility arises mostly from changes in fair value of the largely fixed-rate MSR portfolio, mortgage loans and mortgage-backed securities. The Bancorp may enter into various free-standing derivatives (principal-only swaps, swaptions, floors, options and interest rate swaps) to economically hedge prepayment volatility. Principal-only swaps are total return swaps based on changes in the value of the underlying mortgage principal-only trust. Foreign currency volatility occurs as the Bancorp enters into certain loans denominated in foreign currencies. Derivative instruments that the Bancorp may use to economically hedge these foreign denominated loans include foreign exchange swaps and forward contracts. The Bancorp also enters into derivative contracts (including foreign exchange contracts, commodity contracts and interest rate swaps, floors and caps) for the benefit of commercial customers and other business purposes. The Bancorp may economically hedge significant exposures related to these free-standing derivatives by entering into offsetting third-party contracts with approved, reputable counterparties with substantially matching terms and currencies. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bancorps exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. The Bancorp minimizes the credit risk through credit approvals, limits, counterparty collateral and monitoring procedures. For the three months e

Commitments, Contingent Liabili

Commitments, Contingent Liabilities and Guarantees
	3 Months Ended Mar. 31, 2010
Commitments, Contingent Liabilities and Guarantees	11. Commitments, Contingent Liabilities and Guarantees The Bancorp, in the normal course of business, enters into financial instruments and various agreements to meet the financing needs of its customers. The Bancorp also enters into certain transactions and agreements to manage its interest rate and prepayment risks, provide funding, equipment and locations for its operations and invest in its communities. These instruments and agreements involve, to varying degrees, elements of credit risk, counterparty risk and market risk in excess of the amounts recognized in the Bancorps Condensed Consolidated Balance Sheets. The creditworthiness of counterparties for all instruments and agreements is evaluated on a case-by-case basis in accordance with the Bancorps credit policies. The Bancorps significant commitments, contingent liabilities and guarantees in excess of the amounts recognized in the Condensed Consolidated Balance Sheets are discussed in further detail as follows: Commitments The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of: ($ in millions) March31, 2010 December31, 2009 March31, 2009 Commitments to extend credit $ 42,570 42,591 46,268 Letters of credit (including standby letters of credit) 6,403 6,657 8,647 Forward contracts to sell mortgage loans 3,583 3,633 6,229 Noncancelable lease obligations 892 906 957 Capital commitments for private equity investments 83 90 80 Purchase obligations 48 25 38 Capital lease obligations 45 44 36 Capital expenditures 36 27 54 Commitments to extend credit Commitments to extend credit are agreements to lend, typically having fixed expiration dates or other termination clauses that may require payment of a fee. Since many of the commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. The Bancorp is exposed to credit risk in the event of nonperformance by the counterparty for the amount of the contract. Fixed-rate commitments are also subject to market risk resulting from fluctuations in interest rates and the Bancorps exposure is limited to the replacement value of those commitments. As of March31, 2010,December31, 2009 and March31, 2009, the Bancorp had a reserve for unfunded commitments totaling $260 million, $294 million and $231 million, respectively, included in other liabilities in the Condensed Consolidated Balance Sheets. Letters of credit Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. At March31, 2010, approximately $2.3 billion of letters of credit expire within one year (including $29 million issued on behalf of commercial customers to facilitate trade payments in dollars and foreign currencies), $3.8 billion expire between one and five years and $278 million expire thereafter. Standby letters of credit are considered guarantees in accordance with U.S. GAAP. The reserv

Legal and Regulatory Proceeding

Legal and Regulatory Proceedings
	3 Months Ended Mar. 31, 2010
Legal and Regulatory Proceedings	12. Legal and Regulatory Proceedings During April 2006, the Bancorp was added as a defendant in a consolidated antitrust class action lawsuit originally filed against Visa, MasterCard and several other major financial institutions in the United States District Court for the Eastern District of New York. The plaintiffs, merchants operating commercial businesses throughout the U.S. and trade associations, claim that the interchange fees charged by card-issuing banks are unreasonable and seek injunctive relief and unspecified damages. In addition to being a named defendant, the Bancorp is also subject to a possible indemnification obligation of Visa as discussed in Note 11. Accordingly, prior to the sale of its Class B shares during 2009, the Bancorp had recorded a litigation reserve of $243 million to account for its potential exposure in this and related litigation. Additionally, the Bancorp had also recorded its proportional share of $199 million of the Visa escrow account funded with proceeds from the Visa IPO along with several subsequent fundings. Upon the Bancorps sale of its Visa, Inc. Class B shares during 2009, and the recognition of the total return swap that transfers conversion risk of the Class B shares back to the Bancorp, the Bancorp reversed the remaining net litigation reserve related to the Bancorps exposure through Visa. Additionally, the Bancorp has remaining reserves related to this litigation of $26 million and $22 million as of March31, 2010 and December31, 2009, respectively. Refer to Note 11 for further information regarding the Bancorps net litigation reserve and ownership interest in Visa. This antitrust litigation is still in the pre-trial phase. In September 2007, Ronald A. Katz Technology Licensing, L.P. (Katz) filed a suit in the United States District Court for the Southern District of Ohio against the Bancorp and its Ohio banking subsidiary. In the suit, Katz alleges that the Bancorp and its Ohio bank are infringing on Katzs patents for interactive call processing technology by offering certain automated telephone banking and other services. This lawsuit is one of many related patent infringement suits brought by Katz in various courts against numerous other defendants. Katz is seeking unspecified monetary damages and penalties as well as injunctive relief in the suit. Management believes there are substantial defenses to these claims and intends to defend them vigorously. The impact of the final disposition of this lawsuit cannot be assessed at this time. For the year ended December31, 2008, five putative securities class action complaints were filed against the Bancorp and its Chief Executive Officer, among other parties. The five cases have been consolidated, and are currently pending in the United States District Court for the Southern District of Ohio. The lawsuits allege violations of federal securities laws related to disclosures made by the Bancorp in press releases and filings with the SEC regarding its quality and sufficiency of capital, credit losses and related matters, and seeking unquantified damages on behalf of putative classes of persons who either purchased the Bancorps securities, or

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes	13. Income Taxes At March31, 2010, December31, 2009 and March31, 2009, the Bancorp had unrecognized tax benefits of $12 million, $82 million, and $84 million, respectively. Those balances included $12 million, $81 million, and $80 million of tax positions at March31, 2010,December31, 2009, and March31, 2009, respectively, that, if recognized, would impact the effective tax rate. The remaining $2 million and $4 million, as of December31, 2009 and March31, 2009, respectively, is related to tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of the deductions. Substantially all of the reduction of uncertain tax positions from December31, 2009 and March31, 2009 relate to the settlement of certain items with the IRS. Any interest and penalties incurred in connection with income taxes are accrued as a component of tax expense. At March31, 2010,December31, 2009, and March31, 2009, the Bancorp had accrued interest liabilities, net of the related tax benefits, of $2 million, $13 million, and $10 million, respectively. No material liabilities were recorded for penalties. Substantially all of the reduction of accrued interest from December31, 2009 and March31, 2009 relate to the settlement of certain items with the IRS. While it is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Bancorps uncertain tax positions could increase or decrease during the next 12 months, the Bancorp does not expect any change to be material to the Bancorps Condensed Consolidated Financial Statements. An estimate of the range of the reasonably possible changes to the unrecognized tax benefits cannot be made at this time. Deferred income taxes are included as a component of other assets in the Condensed Consolidated Balance Sheets. Where applicable, deferred tax assets relating to state net operating losses are presented net of specific valuation allowances, primarily at the Leasing subsidiary. The Bancorp determined that a valuation allowance is not needed against the remaining deferred tax assets as of March31, 2010,December31, 2009, and March31, 2009 as the Bancorp considered the positive and negative evidence and based upon that evidence believes it is more likely than not that the deferred tax assets will be realized. The statute of limitations for Federal income tax returns remains open for tax years 2004 through 2009 and on a limited basis from 1998 through 2003; however, all significant issues have been settled with the IRS through 2005. The Bancorp is currently under audit for 2006 and 2007. With the exception of certain states with insignificant uncertain liabilities, the statutes of limitations for state income tax returns remain open for tax years in accordance with the various states statutes.

Retirement and Benefit Plans

Retirement and Benefit Plans
	3 Months Ended Mar. 31, 2010
Retirement and Benefit Plans	14. Retirement and Benefit Plans Net periodic pension cost is recorded as a component of employee benefits expense in the Condensed Consolidated Statements of Income. The plan assumptions are evaluated annually and are updated as necessary. The discount rate assumption reflects the yield on a portfolio of high quality fixed-income instruments that have a similar duration to the plans liabilities. The expected long-term rate of return assumption reflects the average return expected on the assets invested to provide for the plans liabilities. In determining the expected long-term rate of return, the Bancorp evaluated actuarial and economic inputs, including long-term inflation rate assumptions and broad equity and bond indices long-term return projections, as well as actual long-term historical plan performance. The Bancorp did not make any cash contributions to its pension plans during the three months ended March31, 2010 and 2009. Based on the current actuarial assumptions, the Bancorp does not expect any cash contributions to its pension plans during 2010. The following table summarizes the components of net periodic pension cost for the three months ended March31: ($ in millions) 2010 2009 Service cost $ Interest cost 3 3 Expected return on assets (3 ) (2 ) Amortization of actuarial loss 3 4 Amortization of net prior service cost Settlement Net periodic pension cost $ 3 5

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income
	3 Months Ended Mar. 31, 2010
Accumulated Other Comprehensive Income	15. Accumulated Other Comprehensive Income The activity of the components of other comprehensive income and accumulated other comprehensive income as of and for the three months ended March31, 2010 and 2009 was as follows: Total Other Comprehensive Income Total Accumulated Other Comprehensive Income ($ in millions) Pretax Activity Tax Effect Net Activity Beginning Balance Net Activity Ending Balance 2010 Unrealized holding gains on available-for-sale securities arising during period $ 91 (32 ) 59 Reclassification adjustment for net gains included in net loss (12 ) 4 (8 ) Net unrealized gains on available-for-sale securities 79 (28 ) 51 216 51 267 Unrealized holding gains on cash flow hedge derivatives arising during period 1 1 Reclassification adjustment for net gain on cash flow hedge derivatives included in net loss (11 ) 4 (7 ) Net unrealized gains (losses) on cash flow hedge derivatives (10 ) 4 (6 ) 105 (6 ) 99 Defined benefit plans: Net prior service cost Net actuarial loss 3 (1 ) 2 Defined benefit plans, net 3 (1 ) 2 (80 ) 2 (78 ) Total $ 72 (25 ) 47 241 47 288 2009 Unrealized holding gains on available-for-sale securities arising during period $ 89 (31 ) 58 Reclassification adjustment for net losses included in net income 8 (3 ) 5 Net unrealized gains on available-for-sale securities 97 (34 ) 63 115 63 178 Unrealized holding losses on cash flow hedge derivatives (9 ) 3 (6 ) Reclassification adjustment for net gains on cash flow hedge derivatives included in net income (10 ) 4 (6 ) Net unrealized gains (losses) on cash flow hedge derivatives (19 ) 7 (12 ) 88 (12 ) 76 Defined benefit plans: Net prior service cost Net actuarial loss 4 (2 ) 2 Defined benefit plans, net 4 (2 ) 2 (105 ) 2 (103 ) Total $ 82 (29 ) 53 98 53 151

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share	16. Earnings Per Share The Bancorp calculates earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share separately for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. For purposes of calculating earnings per share under the two-class method, restricted shares that contain nonforfeitable rights to dividends are considered participating securities until vested. While the dividends declared per share on such restricted shares are the same as dividends declared per common share outstanding, the dividends recognized on such restricted shares may be less because dividends paid on restricted shares that are expected to be forfeited are reclassified to compensation expense during the period when forfeiture is expected. The calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted shares were as follows: 2010 2009 For the three months ended March31, (in millions, except per share data) Loss Average Shares Per Share Amount Income (Loss) Average Shares Per Share Amount Earnings per share: Net income (loss) $ (10 ) $ 50 Dividends on preferred stock 62 76 Net loss available to common shareholders (72 ) (26 ) Net loss allocated to common shareholders $ (72 ) 790 $ (0.09 ) $ (26 ) 572 $ (0.04 ) Earnings per diluted share: Net loss available to common shareholders $ (72 ) $ (26 ) Effect of dilutive securities: Stock based awards Convertible preferred stock Net loss allocated to common shareholders plus assumed conversions $ (72 ) 790 $ (0.09 )$ (26 ) 572 $ (0.04 ) Due to the net loss for the three months ended March31, 2010, the diluted earnings per share calculation excludes all common stock equivalents, including 12million stock options, 28million stock appreciation rights, 4million shares of restricted stock, 36million common shares from convertible preferred stock and 44million shares under warrants related to the Capital Purchase Plan (CPP), as their inclusion would have been anti-dilutive to earnings per share. Due to the net loss for the three months ended March31, 2009, the diluted earnings per share calculation excludes all common stock equivalents, including 17million stock options, 22million stock appreciation rights, 5million shares of restricted stock, 96million common shares from convertible preferred stock and 44million shares under warrants related to the CPP, as their inclusion would have been anti-dilutive to earnings per share.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements	17. Fair Value Measurements The Bancorp measures certain financial assets and liabilities at fair value in accordance with U.S. GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instruments fair value measurement. The three levels within the fair value hierarchy are described as follows: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Bancorp has the ability to access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Bancorps own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include the Bancorps own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables summarize assets and liabilities measured at fair value on a recurring basis, including financial instruments in which the Bancorp has elected the fair value option. FairValueMeasurementsUsing TotalFairValue As of March31, 2010 ($ in millions) Level 1 Level 2 Level3 Assets: Available-for-sale securities: U.S. Treasury and Government agencies $ 468 $ 468 U.S. Government sponsored agencies 2,149 2,149 Obligations of states and political subdivisions 224 224 Agency mortgage-backed securities 11,445 11,445 Other bonds, notes and debentures 1,215 1,215 Other securities (a) 532 9 541 Available-for-sale securities (a) 1,000 15,042 16,042 Trading securities:

Business Segments

Business Segments
	3 Months Ended Mar. 31, 2010
Business Segments	18. Business Segments The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Investment Advisors. Results of the Bancorps business segments are presented based on its management structure and management accounting practices. The structure and accounting practices are specific to the Bancorp; therefore, the financial results of the Bancorps business segments are not necessarily comparable with similar information for other financial institutions. The Bancorp refines its methodologies from time to time as management accounting practices are improved and businesses change. On June30, 2009, the Bancorp completed the Processing Business Sale, which represented the sale of a majority interest in the Bancorps merchant acquiring and financial institutions Processing Businesses. Financial data for the merchant acquiring and financial institutions processing businesses was originally reported in the former Processing Solutions segment through June30, 2009. As a result of the sale, the Bancorp no longer presents Processing Solutions as a segment and therefore, historical financial information for the merchant acquiring and financial institutions Processing Businesses has been reclassified under General Corporate and Other for all periods presented. Interchange revenue previously recorded in the Processing Solutions segment and associated with cards currently included in Branch Banking, is now included in the Branch Banking segment for all periods presented. Additionally, the Bancorp retained its retail credit card and commercial multi-card service businesses, which were also originally reported in the former Processing Solutions segment through June30, 2009, and are now included in the Consumer Lending and Commercial Banking segments, respectively, for all periods presented. Revenue from the remaining ownership interest in the Processing Businesses is recorded in General Corporate and Other as noninterest income. The Bancorp manages interest rate risk centrally at the corporate level by employing a funds transfer pricing (FTP) methodology. This methodology insulates the business segments from interest rate volatility, enabling them to focus on serving customers through loan originations and deposit taking. The FTP system assigns charge rates and credit rates to classes of assets and liabilities, respectively, based on expected duration and the LIBOR swap curve. Matching duration allocates interest income and interest expense to each segment so its resulting net interest income is insulated from interest rate risk. In a rising rate environment, the Bancorp benefits from the widening spread between deposit costs and wholesale funding costs. However, the Bancorps FTP system credits this benefit to deposit-providing businesses, such as Branch Banking and Investment Advisors, on a duration-adjusted basis. The net impact of the FTP methodology is captured in General Corporate and Other. The business segments are charged provision expense based on the actual net charge-offs experienced by the loans owned by each segment. Provision expense attributable to loan growth and changes in factors in the allow