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Fifth Third Bancorp$29.78$.02.07%

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 Fifth Third Announces Fourth Quarter 2017 Net Income to Common Shareholders of $486 Million, or $0.67 Per Diluted Share
   Tuesday, January 23, 2018 6:31:00 AM ET

--4Q17 net income available to common shareholders of $486 million, or $0.67 per diluted common share

--Results included a net positive $0.15 impact on reported 4Q17 EPS:

-- Items primarily resulting from the Tax Cuts and Jobs Act(a):

--$220 million income tax reduction from a remeasurement of the deferred tax liability

--$68 million pre-tax (~$44 million after-tax)(b) impairment related to affordable housing investments within noninterest expense

--$27 million pre-tax (~$18 million after-tax)(b) remeasurement related to the tax treatment of leveraged leases reducing interest income

--$15 million pre-tax (~$10 million after-tax)(b) expense related to one-time employee bonuses

--$15 million pre-tax (~$10 million after-tax)(b) contribution to the Fifth Third Foundation



-- $20 million tax expense related to a gain on the sale of Vantiv(c) shares sold in 3Q17

-- $11 million pre-tax (~$7 million after-tax)(b) charge related to the valuation of the Visa total return swap

--Net interest income (NII) of $956 million; taxable equivalent NII of $963 million(d), down 1% from 3Q17 and up 6% from 4Q16

--Reported results were negatively impacted by the $27 million leveraged lease remeasurement in 4Q17 and $16 million estimated card refund charge in 4Q16

--Adjusted taxable equivalent NII(d) of $990 million, up 1% from 3Q17 and up 7% from 4Q16, driven by higher interest earning asset yields and higher yielding consumer loans

--Taxable equivalent net interest margin (NIM) of 3.02%(d), down 5 bps from 3Q17 and up 16 bps from 4Q16

--Reported results were negatively impacted by 8 bps from the leveraged lease remeasurement in 4Q17 and 5 bps from the estimated card refund charge in 4Q16

--Adjusted taxable equivalent NIM(d) of 3.10%, up 3 bps from 3Q17 and up 19 bps from 4Q16, impacted by higher securities portfolio and consumer loan yields

--Noninterest income of $577 million, compared with $1.561 billion in 3Q17 and $620 million in 4Q16

--Sequential decrease primarily reflected a gain on the sale of Vantiv shares in 3Q17

--Excluding the Vantiv gain, Visa total return swap charges and securities gains, noninterest income increased 3% from 3Q17 reflecting a $44 million Vantiv TRA payment and higher wealth and asset management revenue

--Noninterest expense of $1.073 billion, up 10% from 3Q17 and up 12 percent from 4Q16

--Sequential increase was driven primarily by the affordable housing impairment, one-time employee bonuses, and contribution to the Fifth Third Foundation in 4Q17

--Excluding these items, noninterest expense of $975 million was flat from 3Q17 reflecting lower other noninterest expense offset by higher employee benefits

--Average portfolio loans and leases of $92.3 billion, flat from 3Q17 and down 1% from 4Q16

--Portfolio nonperforming asset (NPA) ratio of 0.53%, down 7 bps from 3Q17 and down 27 bps from 4Q16

--Net charge-offs (NCOs) of $76 million, up $8 million from 3Q17 and up $3 million from 4Q16; NCO ratio of 0.33% compared to 0.29% in 3Q17 and 0.31% in 4Q16

--4Q17 provision expense of $67 million flat from 3Q17 and up $13 million from 4Q16

--Common equity Tier 1 (CET1)(e) ratio of 10.61%

--Tangible common equity ratio of 8.99%(d); 8.94% excluding unrealized gains/losses(d)

--Book value per share of $21.67, up 2% from 3Q17 and up 9% 4Q16; tangible book value per share(d) of $18.10 up 1% from 3Q17 and up 9% from 4Q16

Fifth Third Bancorp (FITB ) today reported full year 2017 net income of $2.2 billion, up 41 percent from net income of $1.6 billion in 2016. After preferred dividends, 2017 net income available to common shareholders was $2.1 billion, or $2.83 per diluted share, compared with 2016 net income available to common shareholders of $1.5 billion, or $1.93 per diluted share. Results were significantly impacted by Vantiv-related transactions throughout 2016 and 2017 and items resulting from the Tax Cuts and Jobs Act in 2017.

Fourth quarter 2017 net income was $509 million, a decrease of 50 percent from net income of $1.014 billion in the third quarter of 2017 and an increase of 29 percent from net income of $395 million in the fourth quarter of 2016. After preferred dividends, net income available to common shareholders was $486 million, or $0.67 per diluted share, in the fourth quarter 2017, compared with $999 million, or $1.35 per diluted share, in the third quarter of 2017, and $372 million, or $0.49 per diluted share, in the fourth quarter of 2016. Results were significantly impacted by a Vantiv-related transaction in the third quarter of 2017 and items resulting from the Tax Cuts and Jobs Act in the fourth quarter of 2017.

"Our strong fourth quarter and full year 2017 results reflect continued progress toward achieving our long term financial goals. Our business strategies are well aligned with the interests of our shareholders, our customers, our employees, and the communities we serve. Our balance sheet remains strong and positions us well for growth in 2018," said Greg D. Carmichael, President and CEO of Fifth Third Bancorp.

"The investments that we have made following the passage of the new tax law demonstrate our commitment to improving the lives of our employees and our communities. In addition to the immediate positive impact of lower corporate taxes on our company’s results, we are optimistic that the new tax law will help to reinvigorate the economy and support further growth in our businesses."

"Underlying quarterly performance showed continued NIM expansion, disciplined expense management, and another quarter of strong credit metrics. As we discussed at our recent Investor Day, we have continued to generate positive momentum over the past year. We remain focused on driving improved shareholder returns in 2018 and beyond as we execute on our strategic initiatives under Project North Star."

                                                                                                                                                                                                                                                                                                  
Earnings Highlights
                                                                
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                                                                                                                                                                                                                 For the Three Months Ended                                                                                                                                                           % Change
                                                                                      -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                            December                                                       September                                                        June                                                           March                                                        December
                                                                                              2017                     2017                     2017                     2017                     2016                      Seq                   Yr/Yr
                                                                                      -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Income Statement Data ($ in millions)
Net income attributable to Bancorp                                                                    $509                                                         $1,014                                                           $367                                                           $305                                                           $395                                                          (50%)                                       29%
Net income available to common shareholders                                                           $486                                                           $999                                                           $344                                                           $290                                                           $372                                                          (51%)                                       31%
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Earnings Per Share Data
Average common shares outstanding
 (in thousands):
   Basic                                                                                           703,372                                                        721,280                                                        741,401                                                        747,668                                                        746,367                                                           (2%)                                      (6%)
   Diluted                                                                                         716,908                                                        733,285                                                        752,328                                                        760,809                                                        757,704                                                           (2%)                                      (5%)
Earnings per share, basic                                                                            $0.68                                                          $1.37                                                          $0.46                                                          $0.38                                                          $0.49                                                          (50%)                                       39%
Earnings per share, diluted                                                                           0.67                                                           1.35                                                           0.45                                                           0.38                                                           0.49                                                          (50%)                                       37%
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Common Share Data
Cash dividends per common share                                                                      $0.16                                                          $0.16                                                          $0.14                                                          $0.14                                                          $0.14                                                              -                                       14%
Book value per share                                                                                 21.67                                                          21.30                                                          20.42                                                          20.13                                                          19.82                                                             2%                                        9%
Tangible book value per share(d)                                                                     18.10                                                          17.86                                                          17.11                                                          16.89                                                          16.60                                                             1%                                        9%
Common shares outstanding (in thousands)                                                           693,805                                                        705,474                                                        738,873                                                        750,145                                                        750,479                                                           (2%)                                      (8%)
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Financial Ratios                                                                                                                                                                                                                                                                                                                                                                                                                           bps Change
                                                                                                                                                                                                                                                                                                                                                                                                                 ---------------------------------------------------------------
Return on average assets                                                                              1.43 %                                                         2.85 %                                                         1.05 %                                                         0.88 %                                                         1.11 %                                                        (142)                                        32
Return on average common equity                                                                       12.7                                                           25.6                                                            9.0                                                            7.8                                                            9.7                                                         (1290)                                       300
Return on average tangible common equity(d)                                                           15.2                                                           30.4                                                           10.7                                                            9.3                                                           11.6                                                         (1520)                                       360
CET1 capital(e)                                                                                      10.61                                                          10.59                                                          10.63                                                          10.76                                                          10.39                                                              2                                        22
Tier I risk-based capital(e)                                                                         11.74                                                          11.72                                                          11.76                                                          11.90                                                          11.50                                                              2                                        24
Net interest margin (taxable equivalent)(d)                                                           3.02                                                           3.07                                                           3.01                                                           3.02                                                           2.86                                                            (5)                                        16
Efficiency (taxable equivalent)(d)                              69.7                     38.4                     63.4                     67.4                     62.8                     3130                    690
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Net Interest Income
                                                                            
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(Taxable equivalent basis; $ in millions)(d)                                                                                                                                                                                                                                                                                                         For the Three Months Ended                                                                                                                     % Change
                                                                                                                                                                                                                                                                    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------
                                                                                                                                                                                                                                                                          December                                  September                                   June                                      March                                   December
                                                                                                                                                                                                                                                                            2017                   2017                   2017                   2017                   2016                    Seq                         Yr/Yr
                                                                                                                                                                                                                                                                    -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------------------
Interest Income
Total interest income                                                                                                                                                                                                                                                             $1,151                                    $1,159                                    $1,112                                    $1,092                                    $1,058                                      (1%)                                                   9%
Total interest expense                                                                 188                    182                    167                    153                    149                     3%                               26%
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Net interest income                                                                   $963                   $977                   $945                   $939                   $909                   (1%)                                6%
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Average Yield                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         bps Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      --------------------------------------------------------------------------
Yield on interest-earning assets                                                                                                                                                                                                                                                   3.61%                                     3.64%                                     3.54%                                     3.51%                                     3.33%                                       (3)                                28
Adjusted yield on interest-earning assets                                                                                                                                                                                                                                          3.69%                                     3.64%                                     3.54%                                     3.51%                                     3.33%                                         5                                                   36
Rate paid on interest-bearing liabilities                                                                                                                                                                                                                                          0.88%                                     0.85%                                     0.79%                                     0.73%                                     0.70%                                         3                                                   18
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Ratios
Net interest rate spread                                                                                                                                                                                                                                                           2.73%                                     2.79%                                     2.75%                                     2.78%                                     2.63%                                       (6)                                                   10
Net interest margin                                                                                                                                                                                                                                                                3.02%                                     3.07%                                     3.01%                                     3.02%                                     2.86%                                       (5)                                                   16
Adjusted net interest margin                                                                                                                                                                                                                                                       3.10%                                     3.07%                                     3.01%                                     2.98%                                     2.91%                                         3                                                   19
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Average Balances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       % Change
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      --------------------------------------------------------------------------
Loans and leases, including held for sale                                                                                                                                                                                                                                        $92,865                                   $92,617                                   $92,653                                   $92,791                                   $93,981                                         -                                                 (1%)
Total securities and other short-term investments                                                                                                                                                                                                                                 33,756                                    33,826                                    33,481                                    33,177                                    32,567                                         -                                                   4%
Total interest-earning assets                                                                                                                                                                                                                                                    126,621                                   126,443                                   126,134                                   125,968                                   126,548                                         -                                                    -
Total interest-bearing liabilities                                                                                                                                                                                                                                                84,820                                    85,328                                    85,320                                    84,890                                    84,552                                      (1%)                                                    -
Bancorp shareholders’ equity                                                        16,493                 16,820                 16,615                 16,429                 16,545                   (2%)                                 -
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Income Statement Highlights
                                                                                      
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($ in millions, except per-share data)                                                                                                                                                                                                                                                                             For the Three Months Ended                                                                                                                                                           % Change
                                                                                                                                                                                        -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                                                                                                                                         December                                                       September                                                        June                                                           March                                                        December
                                                                                                                                                                                                           2017                                        2017                                        2017                                        2017                                        2016                              Seq                   Yr/Yr
                                                                                                                                                                                        -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- --------------------
Condensed Statements of Income
Net interest income (taxable equivalent)(d)                                                                                                                                                                                  $963                                                           $977                                                           $945                                                           $939                                                           $909                                      (1%)                                        6%
Provision for loan and lease losses                                                                                                                                                                                            67                                                             67                                                             52                                                             74                                                             54                                         -                                       24%
Total noninterest income                                                                                                                                                                                                      577                                                          1,561                                                            564                                                            523                                                            620                                     (63%)                                      (7%)
Total noninterest expense                                                                                 1,073                                         975                                         957                                         986                                         960                    10%                    12%
--------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- --------------------
Income before income taxes (taxable equivalent)(d)                                                         $400                                      $1,496                                        $500                                        $402                                        $515                  (73%)                  (22%)
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Taxable equivalent adjustment                                                                                                                                                                                                   7                                                              7                                                              6                                                              6                                                              6                                         -                                       17%
Applicable income tax (benefit) expense                                                                   (116)                                         475                                         127                                          91                                         114                     NM                     NM
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Net income                                                                                                                                                                                                                   $509                                                         $1,014                                                           $367                                                           $305                                                           $395                                     (50%)                                       29%
Less: Net income attributable to noncontrolling interests                                                     -                                           -                                           -                                           -                                           -                     NM                     NM
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Net income attributable to Bancorp                                                                                                                                                                                           $509                                                         $1,014                                                           $367                                                           $305                                                           $395                                     (50%)                                       29%
Dividends on preferred stock                                                                                 23                                          15                                          23                                          15                                          23                    53%                      -
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Net income available to common shareholders                                                                $486                                        $999                                        $344                                        $290                                        $372                  (51%)                    31%
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Earnings per share, diluted                                                                               $0.67                                       $1.35                                       $0.45                                       $0.38                                       $0.49                  (50%)                    37%
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Taxable equivalent net interest income of $963 million in the fourth quarter of 2017 was down $14 million, or 1 percent from the prior quarter, primarily due to the $27 million impact from the leveraged lease remeasurement described on page 1. Excluding the remeasurement, taxable equivalent net interest income of $990 million in the fourth quarter of 2017 was up $13 million, or 1 percent from the prior quarter, reflecting higher interest earning asset yields as well as the continued shift into higher yielding consumer loans. The taxable equivalent net interest margin of 3.02 percent was negatively impacted 8 bps from the aforementioned remeasurement. The adjusted taxable equivalent net interest margin was 3.10 percent, up 3 bps sequentially, primarily driven by higher securities portfolio and consumer loan yields, partially offset by an increase in funding costs associated with deposit rate changes and the full quarter impact of an auto securitization executed in third quarter of 2017.

Compared to the fourth quarter of 2016, taxable equivalent net interest income was up $54 million, or 6 percent, primarily driven by higher short-term market rates and the $16 million estimated card refund charge during the fourth quarter of 2016, partially offset by the aforementioned leveraged lease remeasurement. Excluding the leveraged lease remeasurement and the estimated card refund charge, adjusted taxable equivalent net interest income was up 7 percent. The year-over-year increase was primarily driven by higher short-term market rates. The taxable equivalent net interest margin increased 16 bps from the fourth quarter of 2016, primarily driven by higher short-term market rates and a 5 bps positive impact from the estimated card refund charge, partially offset by a negative 8 bps impact from the leveraged lease remeasurement. Excluding the remeasurement and card refunds impact, adjusted taxable equivalent net interest margin was up 19 bps from the fourth quarter of 2016. The year-over-year increase was primarily driven by higher-short-term market rates.

Securities

Average securities and other short-term investments were $33.8 billion in the fourth quarter of 2017 compared to $33.8 billion in the previous quarter and $32.6 billion in the fourth quarter of 2016. Available-for-sale securities were $31.8 billion in the fourth quarter of 2017 up $340 million, or 1 percent, sequentially and up $637 million, or 2 percent, from the fourth quarter of 2016.

                                                                                                                                                                                                                                                                            
Loans
                                                             
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($ in millions)                                                                                                                                                                                               For the Three Months Ended                                                                                                                                                           % Change
                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                                    December                                                       September                                                        June                                                           March                                             December
                                                                                                      2017                                        2017                                        2017                                        2017                             2016                      Seq                   Yr/Yr
                                                                                   -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Average Portfolio Loans and Leases
Commercial loans and leases:
   Commercial and industrial loans                                                              $41,438                                                        $41,302                                                        $41,601                                                        $41,854                                                        $42,548                                                              -                                      (3%)
   Commercial mortgage loans                                                                      6,751                                                          6,807                                                          6,845                                                          6,941                                                          6,957                                                           (1%)                                      (3%)
   Commercial construction loans                                                                  4,660                                                          4,533                                                          4,306                                                          3,987                                                          3,890                                                             3%                                       20%
   Commercial leases                                        4,016                    4,072                    4,036                    3,901                    3,921                     (1%)                     2%
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Total commercial loans and leases                         $56,865                  $56,714                  $56,788                  $56,683                  $57,316                        -                   (1%)
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Consumer loans and leases:
   Residential mortgage loans                                                                   $15,590                                                        $15,523                                                        $15,417                                                        $15,200                                                        $14,854                                                              -                                        5%
   Home equity                                                                                    7,066                                                          7,207                                                          7,385                                                          7,581                                                          7,779                                                           (2%)                                      (9%)
   Automobile loans                                                                               9,175                                                          9,267                                                          9,410                                                          9,786                                                         10,162                                                           (1%)                                     (10%)
   Credit card                                                                                    2,202                                                          2,140                                                          2,080                                                          2,141                                                          2,180                                                             3%                                        1%
   Other consumer loans and leases                          1,352                    1,055                      892                      755                      673                      28%                     NM
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Total consumer loans and leases                           $35,385                  $35,192                  $35,184                  $35,463                  $35,648                       1%                   (1%)
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Total average portfolio loans and leases                                                        $92,250                                                        $91,906                                                        $91,972                                                        $92,146                                                        $92,964                                                              -                                      (1%)
                                                                                                                                                                                                                                                                                                                                                                                                                                                         
Average loans held for sale                                  $615                     $711                     $681                     $645                   $1,017                    (14%)                  (40%)
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Average portfolio loan and lease balances were flat sequentially and decreased 1 percent from the fourth quarter of 2016. Sequential performance was primarily driven by increases in commercial real estate and other consumer loans and leases, offset by decreases in home equity and automobile loans. The year-over-year decrease was primarily driven by declines in commercial and industrial (C&I) and automobile loans, partially offset by increases in commercial real estate and other consumer loans and leases. Period end portfolio loans and leases of $92.0 billion were flat sequentially and year-over-year.

Average commercial portfolio loan and lease balances were flat sequentially, and decreased 1 percent from the fourth quarter of 2016. Sequential performance was primarily driven by an increase in commercial real estate loans, offset by a decrease in commercial leases. Average C&I loans were flat sequentially and decreased 3 percent from the fourth quarter of 2016. The year-over-year decline in C&I loans was primarily due to deliberate exits from certain C&I loans that did not meet our targeted risk or return profile. Average commercial real estate loans increased $71 million, or 1 percent, from the prior quarter and increased $564 million, or 5 percent, from the fourth quarter of 2016. Period end commercial line utilization of 34 percent was flat from both the third quarter of 2017 and the fourth quarter of 2016.

Average consumer portfolio loan and lease balances were up 1 percent sequentially and decreased 1 percent from the fourth quarter of 2016. The sequential increase was primarily driven by the increase in other consumer loans and leases, partially offset by a decline in average home equity loans. The year-over-year decrease was primarily driven by the decline in average automobile loans which continues to reflect a decision to reduce lower-return originations to improve returns on capital.

                                                                                                                                                                                                                                                                                       
Deposits
                                                     
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($ in millions)                                                                                                                                                                                       For the Three Months Ended                                                                                                                                                           % Change
                                                                           -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                            December                                                       September                                                        June                                                           March                                                        December
                                                                                              2017                                        2017                                        2017                                        2017                                        2016                              Seq                   Yr/Yr
                                                                           -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- --------------------
Average Deposits
Demand                                                                                  $35,519                                                        $34,850                                                        $34,915                                                        $35,084                                                        $36,412                                                             2%                                      (2%)
Interest checking                                                                        26,992                                                         25,765                                                         26,014                                                         26,760                                                         25,644                                                             5%                                        5%
Savings                                                                                  13,593                                                         13,889                                                         14,238                                                         14,117                                                         13,979                                                           (2%)                                      (3%)
Money market                                                                             20,023                                                         20,028                                                         20,278                                                         20,603                                                         20,476                                                              -                                      (2%)
Foreign office(f)                                     323                      395                      380                      454                      497                    (18%)                  (35%)
-------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total transaction deposits                                                              $96,450                                                        $94,927                                                        $95,825                                                        $97,018                                                        $97,008                                                             2%                                      (1%)
Other time                                          3,792                    3,722                    3,745                    3,827                    3,941                       2%                   (4%)
-------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total core deposits                                                                    $100,242                                                        $98,649                                                        $99,570                                                       $100,845                                                       $100,949                                                             2%                                      (1%)
Certificates - $100,000 and over                                                          2,429                                                          2,625                                                          2,623                                                          2,579                                                          2,539                                                           (7%)                                      (4%)
Other                                                 119                      560                      264                      162                      115                    (79%)                     3%
-------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total average deposits                           $102,790                 $101,834                 $102,457                 $103,586                 $103,603                       1%                   (1%)
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Average core deposits increased 2 percent sequentially and decreased 1 percent from the fourth quarter of 2016. Average transaction deposits increased 2 percent sequentially and decreased 1 percent from the fourth quarter of 2016. The sequential increase was primarily driven by increases in commercial interest checking deposit and commercial demand deposit account balances, partially offset by lower consumer savings and commercial money market account balances. Year-over-year performance was primarily driven by lower commercial money market and commercial demand deposit account balances, largely offset by higher consumer money market and commercial interest checking deposit account balances. Other time deposits increased by 2 percent sequentially and decreased 4 percent year-over-year.

Average total commercial transaction deposits of $43 billion increased 4 percent sequentially and decreased 4 percent from the fourth quarter of 2016. Average total consumer transaction deposits of $53 billion were flat sequentially and increased 3 percent from the fourth quarter of 2016.

                                                                                                                                                                                                                                                                                       
Wholesale Funding
                                                     
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($ in millions)                                                                                                                                                                                       For the Three Months Ended                                                                                                                                                           % Change
                                                                           -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                            December                                                       September                                                        June                                                           March                                                        December
                                                                                              2017                                        2017                                        2017                                        2017                                        2016                              Seq                   Yr/Yr
                                                                           -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- --------------------
Average Wholesale Funding
Certificates - $100,000 and over                                                         $2,429                                                         $2,625                                                         $2,623                                                         $2,579                                                         $2,539                                                           (7%)                                      (4%)
Other deposits                                                                              119                                                            560                                                            264                                                            162                                                            115                                                          (79%)                                        3%
Federal funds purchased                                                                     602                                                            675                                                            311                                                            639                                                            280                                                          (11%)                                        NM
Other short-term borrowings                                                               2,316                                                          4,212                                                          4,194                                                          1,893                                                          1,908                                                          (45%)                                       21%
Long-term debt                                     14,631                   13,457                   13,273                   13,856                   15,173                       9%                   (4%)
-------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total average wholesale funding                   $20,097                  $21,529                  $20,665                  $19,129                  $20,015                     (7%)                      -
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Average wholesale funding of $20.1 billion decreased $1.4 billion, or 7 percent, sequentially and was flat compared with the fourth quarter of 2016. The sequential decline was primarily due to a decrease in other short-term borrowings reflecting higher core deposit balances, partially offset by an increase in long-term debt from 3-year bank debt issued in October of 2017. The year-over-year results reflect an increase in other short-term borrowings, largely offset by a decrease in long-term debt.

                                                                                                                                                                                             
Noninterest Income
                                                          
----------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
($ in millions)                                                                                                                                                            For the Three Months Ended                                                                                                               % Change
                                                                                          ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------
                                                                                                December                                  September                                   June                                      March                                   December
                                                                                                  2017                   2017                   2017                   2017                   2016                    Seq                   Yr/Yr
                                                                                          -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Noninterest Income
Service charges on deposits                                                                               $138                                      $138                                      $139                                      $138                                      $141                                         -                                      (2%)
Corporate banking revenue                                                                                   77                                       101                                       101                                        74                                       101                                     (24%)                                     (24%)
Mortgage banking net revenue                                                                                54                                        63                                        55                                        52                                        65                                     (14%)                                     (17%)
Wealth and asset management revenue                                                                        106                                       102                                       103                                       108                                       100                                        4%                                        6%
Card and processing revenue                                                                                 80                                        79                                        79                                        74                                        79                                        1%                                        1%
Other noninterest income                                                                                   123                                     1,076                                        85                                        77                                       137                                     (89%)                                     (10%)
Securities gains (losses), net                                                                               1                                         -                                         -                                         -                                       (3)                                        NM                                        NM
Securities gains (losses), net - non-qualifying
   hedges on mortgage servicing rights                               (2)                      2                      2                      -                      -                     NM                     NM
----------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total noninterest income                                            $577                 $1,561                   $564                   $523                   $620                  (63%)                   (7%)
----------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                       

Noninterest income of $577 million decreased $984 million sequentially and decreased $43 million compared with prior year results. The sequential and year-over-year comparisons reflect the impact of the following items.

 
Noninterest Income excluding certain items
                                                      
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
($ in millions)                                                                                               For the Three Months Ended                                                                                            % Change
                                                                                        ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                                         December                         September                December                                 
                                                                                                           2017                             2017                     2016                      Seq                   Yr/Yr
                                                                                        -------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Noninterest Income excluding certain items
   Noninterest income (U.S. GAAP)                                                                       $577                                                         $1,561                                                           $620
   Valuation of Visa total return swap                                                                    11                                                             47                                                            (6)
   Gain on sale of Vantiv shares                                                                           -                                                        (1,037)                                                              -
   Vantiv warrant valuation                                                                                -                                                              -                                                            (9)
   Securities (gains) / losses                                                                           (1)                        -                        3          
                                                                                        -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Noninterest income excluding certain items(d)                     $587                     $571                     $608                       3%                   (3%)
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                

Excluding the items in the table above, noninterest income of $587 million was up 3 percent from the previous quarter and decreased 3 percent from the fourth quarter of 2016. The sequential increase was primarily due to $44 million in revenue recognized from Vantiv related to the tax receivable agreement in the fourth quarter of 2017, and an increase in wealth and asset management revenue. This was partially offset by declines in corporate banking and mortgage banking revenue. Corporate banking revenue was negatively impacted by a $25 million lease remarketing impairment in the fourth quarter of 2017. The year-over-year decrease was driven by lower corporate banking and mortgage banking revenue.

Corporate banking revenue of $77 million was down 24 percent both sequentially and year-over-year. The sequential and year-over-year decreases were primarily driven by the aforementioned lease remarketing impairment. Excluding the impact of the lease impairment, corporate banking revenue was flat sequentially and year-over-year.

                                                                                                                                                                                           
Mortgage Banking Net Revenue
                                                        
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
($ in millions)                                                                                                                                                          For the Three Months Ended                                                                                                               % Change
                                                                                        ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------
                                                                                              December                                  September                                   June                                      March                                   December
                                                                                                2017                   2017                   2017                   2017                   2016                    Seq                   Yr/Yr
                                                                                        -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Mortgage Banking Net Revenue
Origination fees and gains on loan sales                                                                 $32                                       $40                                       $37                                       $29                                       $30                                     (20%)                                        7%
Net mortgage servicing revenue:
   Gross mortgage servicing fees                                                                          54                                        56                                        49                                        47                                        48                                      (4%)                                       13%
   MSR amortization                                                                                        -                                         -                                         -                                         -                                      (35)                                        NM                                        NM
   Net valuation adjustments on MSRs and                                                                (32)                                      (33)                                      (31)                                      (24)                                        22                                      (3%)                                        NM
       free-standing derivatives purchased to
       economically hedge MSRs                                             
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net mortgage servicing revenue                                      22                     23                     18                     23                     35                   (4%)                  (37%)
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total mortgage banking net revenue                                 $54                    $63                    $55                    $52                    $65                  (14%)                  (17%)
--------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                     

Mortgage banking net revenue was $54 million in the fourth quarter of 2017, down $9 million from the third quarter of 2017 and down $11 million from the fourth quarter of 2016. The sequential decrease was driven by lower origination fees and gains on loan sales. The year-over-year decrease was driven by a reduction in net valuation adjustments (including MSR amortization) of $19 million. Originations of $1.9 billion in the current quarter decreased 10 percent sequentially and decreased 30 percent from the fourth quarter of 2016.

Wealth and asset management revenue of $106 million increased 4 percent from the third quarter of 2017 and increased 6 percent from the fourth quarter of 2016. The sequential and year-over-year increase was primarily driven by higher personal asset management revenue.

Card and processing revenue of $80 million in the fourth quarter of 2017 was up 1 percent both sequentially and year-over-year. The sequential and year-over-year performance reflected increased credit card spend volume, largely offset by higher rewards.

Other noninterest income totaled $123 million in the fourth quarter of 2017, compared with $1.076 billion in the previous quarter and $137 million in the fourth quarter of 2016. The reported results included Vantiv-related transactions and adjustments and the valuation of the Visa total return swap in the table on page 8. For the fourth quarter of 2017, excluding these items, other noninterest income of $134 million increased approximately $48 million, or 56 percent, from the third quarter of 2017 and increased $12 million, or 10 percent, from the fourth quarter of 2016. The sequential increase was primarily due to the $44 million in revenue recognized from Vantiv related to the tax receivable agreement in the fourth quarter of 2017. The year-over-year increase was due to an $11 million increase in the aforementioned tax receivable agreement.

Net gains on investment securities were $1 million in the fourth quarter of 2017, compared with no gains or losses in the third quarter of 2017 and a $3 million net loss in the fourth quarter of 2016. Net gains/losses on securities held as non-qualifying hedges for the MSR portfolio were net losses of $2 million in the fourth quarter of 2017 and net gains of $2 million in the third quarter of 2017.

                                                                                                                                                                                                         
Noninterest Expense
                                                   
------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
($ in millions)                                                                                                                                                                                     For the Three Months Ended                                                                                                                                                           % Change
                                                                         -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ---------------------------------------------------------------
                                                                                          December                                            September                                                        June                                                           March                                                        December
                                                                                            2017                             2017                     2017                     2017                     2016                      Seq                   Yr/Yr
                                                                         -------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Noninterest Expense
Salaries, wages and incentives                                                           $418                                                           $407                                                           $397                                                           $411                                                           $403                                                             3%                                        4%
Employee benefits                                                                          82                                                             77                                                             86                                                            111                                                             76                                                             6%                                        8%
Net occupancy expense                                                                      74                                                             74                                                             70                                                             78                                                             73                                                              -                                        1%
Technology and communications                                                              68                                                             62                                                             57                                                             58                                                             56                                                            10%                                       21%
Equipment expense                                                                          29                                                             30                                                             29                                                             28                                                             29                                                           (3%)                                         -
Card and processing expense                                                                34                                                             32                                                             33                                                             30                                                             31                                                             6%                                       10%
Other noninterest expense                           368                      293                      285                      270                      292                      26%                    26%
------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total noninterest expense                        $1,073                     $975                     $957                     $986                     $960                      10%                    12%
------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                               

Noninterest expense of $1.073 billion increased $98 million, or 10 percent, compared with the third quarter of 2017, and increased $113 million, or 12 percent, compared with the fourth quarter of 2016. Results reflected the affordable housing impairment, one-time employee bonuses, and the Fifth Third Foundation contribution referenced on page 2. Excluding these items, noninterest expense of $975 million was flat compared with the third quarter of 2017, impacted by lower other noninterest expense and salaries, wages and incentives, offset by higher employee benefits and technology and communications expense. Excluding the aforementioned items, noninterest expense increased 2 percent compared to the fourth quarter of 2016, impacted by higher employee benefits and technology and communications expense, offset by lower other noninterest expense.

                                                                                                                                                                                                                                                      
Summary of Credit Loss Experience
                                                                             
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
($ in millions)                                                                                                                                                                                                                         For the Three Months Ended
                                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              December                                                       September                                                        June                                                           March                                             December
                                                                                                                                2017                                        2017                                        2017                                        2017                             2016
                                                                                                             -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- --------------------
Net losses charged-off
Commercial and industrial loans                                                                                             ($32)                                                          ($27)                                                          ($18)                                                          ($36)                                                          ($25)
Commercial mortgage loans                                                                                                       1                                                            (3)                                                            (5)                                                            (5)                                                            (2)
Commercial leases                                                                                                             (1)                                                              -                                                            (1)                                                            (1)                                                            (1)
Residential mortgage loans                                                                                                    (1)                                                              1                                                            (2)                                                            (5)                                                            (2)
Home equity                                                                                                                   (4)                                                            (3)                                                            (5)                                                            (6)                                                            (6)
Automobile loans                                                                                                             (10)                                                            (8)                                                            (6)                                                           (11)                                                           (11)
Credit card                                                                                                                  (20)                                                           (20)                                                           (22)                                                           (22)                                                           (19)
Other consumer loans and leases                                                         (9)                      (8)                      (5)                      (3)                      (7)
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total net losses charged-off                                                                                                ($76)                                                          ($68)                                                          ($64)                                                          ($89)                                                          ($73)
                                                                                                                                                                                                                                                                                                                                                                          
Total losses charged-off                                                                                                    ($94)                                                          ($85)                                                          ($95)                                                         ($107)                                                          ($97)
Total recoveries of losses previously charged-off                                        18                       17                       31                       18                       24
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total net losses charged-off                                                                                                ($76)                                                          ($68)                                                          ($64)                                                          ($89)                                                          ($73)
                                                                                                                                                                                                                                                                                                                                                                          
Ratios (annualized)
Net losses charged-off as a percent of average portfolio loans and
   leases (excluding held for sale)                                                                                         0.33%                                                          0.29%                                                          0.28%                                                          0.40%                                                          0.31%
      Commercial                                                                                                            0.22%                                                          0.21%                                                          0.17%                                                          0.29%                                                          0.20%
      Consumer                                                                        0.51%                    0.43%                    0.46%                    0.56%                    0.49%
------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                          

Net charge-offs were $76 million, or 33 bps of average portfolio loans and leases on an annualized basis, in the fourth quarter of 2017 compared with net charge-offs of $68 million, or 29 bps, in the third quarter of 2017 and $73 million, or 31 bps, in the fourth quarter of 2016.

Commercial net charge-offs of $32 million, or 22 bps, increased $2 million sequentially. This primarily reflected a $5 million increase in net charge-offs of C&I loans, partially offset by a $4 million reduction in net charge-offs of commercial mortgage loans.

Consumer net charge-offs of $44 million, or 51 bps, increased $6 million sequentially. This primarily reflected a $2 million increase in net charge-offs on residential mortgage loans and the automobile loans.

                                                 
-------------------------------------------------------------- -------------------- -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                                                                                                                                   For the Three Months Ended
                                                                                                         -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   December                      September                       June                          March                   December
                                                                                                                     2017                          2017                          2017                          2017                      2016
                                                                                                         ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ --------------------
Allowance for Credit Losses
Allowance for loan and lease losses, beginning                                                           $1,205                                           $1,226                                           $1,238                                           $1,253                                                         $1,272
   Total net losses charged-off                                                                            (76)                                             (68)                                             (64)                                             (89)                                                           (73)
   Provision for loan and lease losses                                                                       67                                               67                                               52                                               74                                                             54
   Deconsolidation of a variable interest entity                        -       (20)          -          -                        -
-------------------------------------------------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- --------------------
Allowance for loan and lease losses, ending                                                              $1,196                                           $1,205                                           $1,226                                           $1,238                                                         $1,253
                                                                                                                                                                                                                                                                                                              
Reserve for unfunded commitments, beginning                                                                $157                                             $162                                             $159                                             $161                                                           $162
   Provision for unfunded commitments                                   4        (5)          3        (2)                      (1)
-------------------------------------------------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- --------------------
Reserve for unfunded commitments, ending                                                                   $161                                             $157                                             $162                                             $159                                                           $161
                                                                                                                                                                                                                                                                                                              
Components of allowance for credit losses:
   Allowance for loan and lease losses                                                                   $1,196                                           $1,205                                           $1,226                                           $1,238                                                         $1,253
   Reserve for unfunded commitments                                   161        157        162        159                      161
-------------------------------------------------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- --------------------
Total allowance for credit losses                                                                        $1,357                                           $1,362                                           $1,388                                           $1,397                                                         $1,414
Allowance for loan and lease losses ratio
   As a percent of portfolio loans and leases                                                             1.30%                                            1.31%                                            1.34%                                            1.35%                                                          1.36%
   As a percent of nonperforming portfolio loans and leases(g)                                             274%                                             238%                                             200%                                             188%                                                           190%
   As a percent of nonperforming portfolio assets(g)                 245%       217%       185%       172%                     170%
-------------------------------------------------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                              

The provision for loan and lease losses totaled $67 million in the fourth quarter of 2017, flat sequentially, reflecting improvement in criticized assets and nonperforming loans, offset by an increase in net charge-offs and higher period-end portfolio loan balances. Provision expense increased $13 million from the fourth quarter of 2016.

As of quarter end, the allowance for loan and lease loss ratio represented 1.30 percent of total portfolio loans and leases outstanding, compared with 1.31 percent last quarter, and represented 274 percent of nonperforming loans and leases, and 245 percent of nonperforming assets.

                                                     
------------------------------------------------------------------ -------------------- -------------------- ----------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                                                                                                          As of
                                                                                                             ----------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             December    September   June    March        December
Nonperforming Assets and Delinquent Loans                                                                      2017        2017      2017    2017           2016
                                                                                                             -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
Nonaccrual portfolio loans and leases:
    Commercial and industrial loans                                                                              $144                           $144                       $225                       $251                                      $302
    Commercial mortgage loans                                                                                      12                             14                         15                         21                                        27
    Commercial leases                                                                                               -                              1                          1                          -                                         2
    Residential mortgage loans                                                                                     17                             19                         19                         21                                        17
    Home equity                                                              56          56      52      53                     55
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
Total nonaccrual portfolio loans and leases (excludes restructured                                               $229                           $234                       $312                       $346                                      $403
loans)
Nonaccrual restructured portfolio commercial loans and leases(h)                                                  150                            214                        244                        251                                       192
Nonaccrual restructured portfolio consumer loans and leases                  58          58      58      60                     65
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
Total nonaccrual portfolio loans and leases                                                                      $437                           $506                       $614                       $657                                      $660
Repossessed property                                                                                                9                             10                         11                         14                                        15
OREO                                                                         43         39i     37i     50i                    63i
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
Total nonperforming portfolio assets(g)                                                                          $489                           $555                       $662                       $721                                      $738
Nonaccrual loans held for sale                                                                                      5                             18                          7                          7                                         4
Nonaccrual restructured loans held for sale                                   1           2       1       2                      9
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
Total nonperforming assets                                                 $495        $575    $670    $730                   $751
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
                                                                                                                                                                                                                                 
Restructured portfolio consumer loans and leases (accrual)                                                       $927                           $929                       $933                       $950                                      $959
Restructured portfolio commercial loans and leases (accrual)(h)                                                  $249                           $232                       $224                       $277                                      $321
                                                                                                                                                                                                                                 
Total loans and leases 30-89 days past due (accrual)                                                             $280                           $252                       $190                       $180                                      $231
Total loans and leases 90 days past due (accrual)                                                                 $97                            $77                        $75                        $75                                       $84
                                                                                                                                                                                                                                 
Nonperforming portfolio loans and leases as a percent of portfolio
    loans and leases and OREO(g)                                                                                0.48%                          0.55%                      0.67%                      0.72%                                     0.72%
Nonperforming portfolio assets as a percent of portfolio loans and
    leases and OREO(g)                                                    0.53%       0.60%   0.72%   0.79%                  0.80%
------------------------------------------------------------------ -------------------- -------------------- -------- -------------------- --------- -------------------- ----- -------------------- ----- -------------------- --------------------
                                                                                                                                                                                                                                 

Total nonperforming portfolio assets decreased $66 million, or 12 percent, from the previous quarter to $489 million. Portfolio nonperforming loans and leases (NPLs) at quarter-end decreased $69 million from the previous quarter to $437 million. NPLs as a percent of total loans, leases and OREO at quarter end decreased 7 bps from the previous quarter to 0.48 percent.

Commercial portfolio NPLs decreased $67 million from last quarter to $306 million, or 0.54 percent of commercial portfolio loans, leases and OREO. Consumer portfolio NPLs decreased $2 million from last quarter to $131 million, or 0.37 percent of consumer portfolio loans, leases and OREO.

OREO balances increased $4 million from the prior quarter to $43 million, and included $18 million in commercial OREO and $25 million in consumer OREO. Repossessed personal property decreased $1 million from the prior quarter to $9 million.

Loans over 90 days past due and still accruing increased $20 million from the third quarter of 2017 at $97 million. Loans 30-89 days past due of $280 million increased $28 million from the previous quarter.

                                                                                                                                                                                                                            
Capital and Liquidity Position
                                                                      
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                         For the Three Months Ended
                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         December                                                       September                                             June                                                 March                                             December
                                                                                                                           2017                                        2017                             2017                              2017                             2016
                                                                                                        -------------------------------------------------------------- -------------------------------------------------------------- -------------------- -------------------- -------------------------------------------------------------- --------------------
Capital Position
Average total Bancorp shareholders’ equity to average assets                                                          11.69%                                                         11.93%                                                         11.84%                                    11.72%                                                         11.66%
Tangible equity(d)                                                                                                     9.90%                                                          9.84%                                                          9.98%                                    10.12%                                                          9.82%
Tangible common equity (excluding unrealized gains/losses)(d)                                                          8.94%                                                          8.89%                                                          9.02%                                     9.15%                                                          8.87%
Tangible common equity (including unrealized gains/losses)(d)                                                          8.99%                                                          9.00%                                                          9.12%                                     9.20%                                                          8.91%
                                                                                                                                                                                                                                                                                                                                                
Regulatory Capital and Liquidity Ratios
CET1 capital(e)                                                                                                       10.61%                                                         10.59%                                                         10.63%                                    10.76%                                                         10.39%
Tier I risk-based capital(e)                                                                                          11.74%                                                         11.72%                                                         11.76%                                    11.90%                                                         11.50%
Total risk-based capital(e)                                                                                           15.16%                                                         15.16%                                                         15.22%                                    15.45%                                                         15.02%
Tier I leverage                                                                                                       10.01%                                                          9.97%                                                         10.07%                                    10.15%                                                          9.90%
Modified liquidity coverage ratio (LCR)(i)                                        129%                     124%                     115%                   119%                     128%
------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                

Capital ratios remained strong during the quarter. The CET1 ratio was 10.61 percent, the tangible common equity to tangible assets ratio(d) was 8.94 percent (excluding unrealized gains/losses), and 8.99 percent (including unrealized gains/losses). The Tier I risk-based capital ratio was 11.74 percent, the Total risk-based capital ratio was 15.16 percent, and the Tier I leverage ratio was 10.01 percent.

Fifth Third entered into or completed multiple share repurchases during the quarter. Below is a summary of those share repurchases.

-- On December 18, 2017, Fifth Third settled the forward contract related to the August 15, 2017 $990 million share repurchase agreement. An additional 4.3 million shares were repurchased in connection with the completion of this agreement.

-- On December 19, 2017, Fifth Third initially settled a share repurchase agreement whereby Fifth Third would purchase $273 million of its outstanding stock. This reduced fourth quarter common shares outstanding by 7.7 million shares. Settlement of the forward contract related to this agreement is expected to occur on or before March 19, 2018.

In total, common shares outstanding decreased by approximately 11.7 million shares in the fourth quarter of 2017 from the third quarter of 2017.

Tax Rate

An income tax benefit was recognized in the fourth quarter of 2017. This was a result of the new tax legislation and was primarily due to the remeasurement of deferred tax liabilities at the lower statutory rate. The benefit was partially offset by a tax expense related to a gain on the sale of Vantiv shares sold in the prior quarter. The prior quarter’s tax rate was also impacted by the aforementioned gain on the sale of Vantiv shares. On a full year basis, the 2017 effective rate was 20.8 percent compared with 24.4 percent for the full year of 2016.

Other

As of December 31, 2017, Fifth Third Bank owned approximately 15 million units representing an 8.6 percent interest in Vantiv Holding, LLC, convertible into shares of Vantiv, Inc., a publicly traded firm. Based upon Vantiv’s closing price of $73.55 on December 31, 2017, our interest in Vantiv was valued at approximately $1.1 billion. The difference between the market value and the book value of Fifth Third’s interest in Vantiv’s shares is not recognized in Fifth Third’s equity or capital.

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 and may be accessed through the Fifth Third Investor Relations website at www.53.com (click on "About Us" then "Investor Relations").

Those unable to listen to the live webcast may access a webcast replay through the Fifth Third Investor Relations website at the same web address. Additionally, a telephone replay of the conference call will be available after the conference call until approximately February 6, 2018 by dialing 800-585-8367 for domestic access or 404-537-3406 for international access (passcode 8195768#).

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. As of December 31, 2017, the Company had $142 billion in assets and operates 1,154 full-service Banking Centers, and 2,469 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina. In total, Fifth Third provides its customers with access to more than 54,000 fee-free ATMs across the United States. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Wealth & Asset Management. As of December 31, 2017, Fifth Third also had an 8.6% interest in Vantiv Holding, LLC. Fifth Third is among the largest money managers in the Midwest and, as of December 31, 2017, had $362 billion in assets under care, of which it managed $37 billion for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded on the NASDAQ(R) Global Select Market under the symbol "FITB."

Earnings Release End Notes

(a)   Certain tax legislation amounts are considered reasonable
                         estimates as of December 31, 2017. As a result, the amounts could
                         be adjusted during the measurement period, which will end in
                         December 2018.
                          
(b)                      Assumes a 35% tax rate.
                          
(c)                      On January 16, 2018, Vantiv, Inc. changed its name to Worldpay,
                         Inc. and completed the previously announced acquisition of
                         Worldpay Group Limited, formerly Worldpay Group plc.
                          
(d)                      Non-GAAP measure; see discussion of non-GAAP and Reg. G
                         reconciliation beginning on page 30 in Exhibit 99.1 of 8-K filing
                         dated 1/23/2018.
                          
(e)                      Under the banking agencies’ Basel III Final Rule, assets and
                         credit equivalent amounts of off-balance sheet exposures are
                         calculated according to the standardized approach for
                         risk-weighted assets. The resulting weighted values are added
                         together resulting in the total risk-weighted assets. Under the
                         banking agencies’ Final Rule published in November 2017 pertaining
                         to certain regulatory capital items for banks subject to the
                         standardized approach, the Bancorp is no longer subject to certain
                         transition provisions and phase-outs beyond 2017. Current period
                         regulatory capital ratios are estimated.
                          
(f)                      Includes commercial customer Eurodollar sweep balances for
                         which the Bancorp pays rates comparable to other commercial
                         deposit accounts.
                          
(g)                      Excludes nonaccrual loans held for sale.
                          
(h)                      As of June 30, 2017, March 31, 2017 and December 31, 2016,
                         excludes $7 million of restructured accruing loans and $19 million
                         of restructured nonaccrual loans associated with a consolidated
                         VIE in which the Bancorp has no continuing credit risk due to the
                         risk being assumed by a third party.
                          
(i)                      The Bancorp became subject to the Modified LCR regulations
                         effective January 1, 2016. Current period LCR is estimated.
                          

FORWARD-LOOKING STATEMENTS

This 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," "anticipates," "potential," "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 as updated from time to time by our Quarterly Reports on Form 10-Q. 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 is a risk that additional information may become known during the company’s quarterly closing process or as a result of subsequent events that could affect the accuracy of the statements and financial information contained herein.

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 or real estate market conditions, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, weaken or 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 and adequate sources of funding and liquidity 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) changes in customer preferences or information technology systems; (12) effects of critical accounting policies and judgments; (13) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (14) 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 Dodd-Frank Wall Street Reform and Consumer Protection Act; (15) ability to maintain favorable ratings from rating agencies; (16) failure of models or risk management systems or controls; (17) fluctuation of Fifth Third’s stock price; (18) ability to attract and retain key personnel; (19) ability to receive dividends from its subsidiaries; (20) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (21) declines in the value of Fifth Third’s goodwill or other intangible assets; (22) effects of accounting or financial results of one or more acquired entities; (23) loss of income from any sale or potential sale of businesses (24) difficulties in separating the operations of any branches or other assets divested; (25) losses or adverse impacts on the carrying values of branches and long-lived assets in connection with their sales or anticipated sales; (26) inability to achieve expected benefits from branch consolidations and planned sales within desired timeframes, if at all; (27) ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (28) the acquisition of Worldpay Group Limited, formerly Worldpay Group plc. by Worldpay, Inc., formerly Vantiv, Inc.; and(29)difficulties from Fifth Third’s investment in, relationship with, and nature of operations of Worldpay, Inc. and (30) 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.

In this release, we may sometimes provide non-GAAP financial information. Please note that although non-GAAP financial measures provide useful insight to analysts, investors and regulators, they should not be considered in isolation or relied upon as a substitute for analysis using GAAP measures. We provide a discussion of these non-GAAP measures and reconciliation to the most directly comparable GAAP measures beginning on page 31 in Exhibit 99.1 of 8-K filing dated 1/23/2018.

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SOURCE: Fifth Third Bancorp

Fifth Third Bancorp 
Investors 
Sameer Gokhale, 513-534-2219 
or 
Media 
Katrina Booker, 513-534-6858


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