Press release dated April 19, 2007

EX-99.1 2 dex991.htm PRESS RELEASE DATED APRIL 19, 2007 Press release dated April 19, 2007

Exhibit 99.1

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News Release


CONTACTS:	Jeff Richardson (Analysts)	FOR IMMEDIATE RELEASE
	(513) 534-0983	April 19, 2007
	Jim Eglseder (Analysts)
	(513) 534-8424
	Debra DeCourcy, APR (Media)
	(513) 534-4153

FIFTH THIRD BANCORP REPORTS FIRST QUARTER 2007

EARNINGS OF $0.65 PER DILUTED SHARE

Earnings Highlights


	For the Three Months Ended									% Change
	March 2007			December 2006			March 2006			Seq		Yr/Yr
Net income (in millions)	$	359		$	66		$	363		446	%	(1	)%

Common Share Data
Earnings per share, basic		0.65			0.12			0.66		442	%	(2	)%
Earnings per share, diluted		0.65			0.12			0.65		442	%	—
Cash dividends per common share		0.42			0.40			0.38		5	%	11	%

Financial Ratios
Return on average assets		1.47	%		0.25	%		1.41	%	488	%	4	%
Return on average equity		14.60			2.60			15.30		462	%	(5	)%
Tangible equity		7.65			7.79			6.90		(2	)%	11	%
Net interest margin (a)		3.44			3.16			3.08		9	%	12	%
Efficiency (a)		57.0			82.9			54.7		(31	)%	4	%

Common shares outstanding (in thousands)		550,077			556,253			556,501		(1	)%	(1	)%
Average common shares outstanding
(in thousands):
Basic		551,501			554,978			554,398		(1	)%	(1	)%
Diluted		554,175			557,654			556,869		(1	)%	—

(a) Presented on a fully taxable equivalent basis

Fifth Third Bancorp today reported first quarter 2007 earnings of $359 million, or $0.65 per diluted share, compared with $66 million, or $0.12 per diluted share, in the fourth quarter of 2006 and $363 million, or $0.65 per diluted share, for the same period in 2006.

“First quarter results reflect solid performance across the board in a tough environment for banks,” said Kevin T. Kabat, President and CEO of Fifth Third Bancorp. “The prolonged inverted yield curve coupled with some softness in certain areas of the economy makes for a challenging operating environment. We continue to be guardedly optimistic about the outlook for 2007. We continue to have significant flexibility with our capital at current levels, and our management team is focused on executing on our strategic initiatives, creating shareholder value and building a company that is well-positioned for sustainable long-term growth.”

Income Statement Highlights


	For the Three Months Ended							% Change
	March 2007		December 2006			March 2006		Seq		Yr/Yr
Condensed Statements of Income ($ in millions)
Net interest income (taxable equivalent)	$	742	$	744		$	718	—		3	%
Provision for loan and lease losses		84		107			78	(22	)%	8	%
Total noninterest income		648		219			617	196	%	5	%
Total noninterest expense		793		798			731	(1	)%	8	%

Income before income taxes and cumulative effect (taxable equivalent)		513		58			526	786	%	(2	)%

Taxable equivalent adjustment		6		6			7	—		(14	)%
Applicable income taxes		148		(14	)		160	NM		(7	)%
Cumulative effect of change in accounting principle, net of tax (a)		—		—			4	NM		(100	)%

Net income available to common shareholders (b)		359		66			363	447	%	(1	)%

Earnings per share, diluted	$	0.65	$	0.12		$	0.65	442	%	—


(a) Reflects a benefit of $3.5 million (net of $1.7 million of tax) for the adoption of SFAS No. 123(R) as of January 1, 2006 due to the recognition of an estimate of forfeiture experience to be realized for all stock-based awards
(b) Dividends on preferred stock are $.185 million for all quarters presented

Net Interest Income


	For the Three Months Ended									% Change
	March 2007			December 2006			March 2006			Seq		Yr/Yr
Interest Income ($ in millions)
Total interest income (taxable equivalent)	$	1,466		$	1,551		$	1,405		(5	)%	4	%
Total interest expense		724			807			687		(10	)%	5	%

Net interest income (taxable equivalent)	$	742		$	744		$	718		—		3	%

Average Yield
Yield on interest-earning assets		6.79	%		6.58	%		6.03	%
Yield on interest-bearing liabilities		4.07			4.17			3.57

Net interest rate spread (taxable equivalent)		2.72			2.41			2.46

Net interest margin (taxable equivalent)		3.44			3.16			3.08

Loans and leases, including held for sale	$	75,861		$	75,262		$	71,634		1	%	6	%
Total securities and other short-term investments		11,673			18,262			22,917		(36	)%	(49	)%
Total interest-bearing liabilities		72,148			76,769			78,149		(6	)%	(8	)%
Shareholders’ equity		9,970			10,150			9,601		(2	)%	4	%

Net interest income of $742 million on a taxable equivalent basis was down $2 million from the fourth quarter. The incremental benefit from the balance sheet actions taken in the fourth quarter of approximately $18 million was offset by a number of items. The impact of FSP FAS 13-2 related to accounting for leveraged leases reduced net interest income by $7 million and the funding cost of the $386 million deposit with the IRS related to tax years currently under audit reduced net interest income by $4 million. Fewer days in the quarter reduced net interest income by $4 million, and we incurred incremental funding costs of $2 million related to share repurchases. Otherwise, the effect of lower commercial demand deposit balances modestly offset the benefit of higher consumer core deposit levels and higher auto loan and credit card balances. The net interest margin increased 28 bps, primarily due to the previously disclosed fourth quarter 2006 balance sheet actions.

Net interest income increased $24 million, or three percent, from the first quarter of 2006, primarily the result of the fourth quarter balance sheet actions and solid loan and core deposit growth.

In March 2007, the Bancorp issued $750 million of trust preferred securities for general corporate purposes, including share repurchases. During the quarter, we repurchased 7.0 million shares at a total cost of $280 million. We have 8.8 million shares remaining on our current share repurchase authorization.

Average Loans


	For the Three Months Ended						% Change
	March 2007		December 2006		March 2006		Seq		Yr/Yr
Average Loans and Leases ($ in millions)
Commercial:
Commercial loans	$	20,908	$	21,228	$	19,549	(2	)%	7	%
Commercial mortgage		10,566		9,929		9,441	6	%	12	%
Commercial construction		6,014		6,099		6,211	(1	)%	(3	)%
Commercial leases		3,661		3,762		3,686	(3	)%	(1	)%

Subtotal - commercial loans and leases		41,149		41,018		38,887	—		6	%

Consumer:
Residential mortgage		10,166		10,038		9,057	1	%	12	%
Home equity		12,072		12,225		11,879	(1	)%	2	%
Automobile loans		10,230		9,834		9,440	4	%	8	%
Credit card		1,021		915		766	12	%	33	%
Other consumer loans and leases		1,223		1,232		1,605	(1	)%	(24	)%

Subtotal - consumer loans and leases		34,712		34,244		32,747	1	%	6	%

Total average loans and leases	$	75,861	$	75,262	$	71,634	1	%	6	%

Average loan and lease balances grew one percent sequentially and six percent over first quarter last year. Average commercial loans and leases were flat sequentially and grew six percent compared with the year ago quarter. Average commercial loan growth was affected by the reclassification in the fourth quarter of approximately $450 million to commercial mortgage. Prior balances were not restated. Consumer loans and leases grew one percent sequentially and six percent compared with the year ago quarter, reflecting strong auto loan growth offset by the anticipated run-off in the consumer lease portfolio totaling $499 million. Excluding this run-off, consumer loans and leases grew eight percent versus the year ago quarter.

Average Deposits


	For the Three Months Ended						% Change
	March 2007		December 2006		March 2006		Seq		Yr/ Yr
Average Deposits ($ in millions)
Demand deposits	$	13,185	$	13,882	$	13,674	(5	)%	(4	)%
Interest checking		15,509		15,744		17,603	(1	)%	(12	)%
Savings		13,689		12,812		11,588	7	%	18	%
Money market		6,377		6,572		6,086	(3	)%	5	%

Subtotal - Transaction deposits		48,760		49,010		48,951	(1	)%	—

Other time		11,037		10,991		9,749	—		13	%

Subtotal - Core deposits		59,797		60,001		58,700	—		2	%

Certificates - $100,000 and over		6,682		6,750		4,670	(1	)%	43	%
Foreign office		1,707		2,758		4,050	(38	)%	(58	)%

Total deposits	$	68,186	$	69,509	$	67,420	(2	)%	1	%

Average core deposits were flat sequentially, as solid growth in savings account deposits was offset by declines in other core deposit categories. Retail core deposit growth was strong, with growth in savings and money market balances more than offsetting modest declines in interest checking and retail CDs. Retail core deposit growth offset lower commercial core deposits, driven by seasonally higher demand deposit balances in the fourth quarter. Compared with the same quarter last year, average core deposits increased two percent on growth in savings and retail CDs, partially offset by lower commercial demand deposit balances reflecting the effect of higher earnings credit rates.

Our weighted average rates paid on interest-bearing core deposits remained relatively steady at 3.43%. This reflected a modest reduction in rates paid across certain product offerings offset by a continued but slowing mix shift toward higher rate deposit products.

Noninterest Income


	For the Three Months Ended							% Change
	March 2007		December 2006			March 2006		Seq		Yr/Yr
Noninterest Income ($ in millions)
Electronic payment processing revenue	$	225	$	232		$	196	(3	)%	15	%
Service charges on deposits		126		122			126	3	%	—
Investment advisory revenue		96		90			91	6	%	5	%
Corporate banking revenue		83		82			76	1	%	9	%
Mortgage banking net revenue		40		30			47	31	%	(16	)%
Other noninterest income		78		58			80	35	%	(2	)%
Securities gains (losses), net		—		(398	)		1	100	%	(100	)%
Securities gains, net - non-qualifying hedges on mortgage servicing rights		—		3			—	(100	)%	NM

Total noninterest income	$	648	$	219		$	617	196	%	5	%

Noninterest income of $648 million increased $429 million sequentially as a result of the $415 million in losses incurred in the fourth quarter on the sale of securities and termination of financing agreements associated with the previously disclosed balance sheet actions. Otherwise, noninterest income rose $14 million sequentially, or two percent, on higher mortgage banking revenue, investment advisory revenue and service charges on deposits, partially offset by seasonally lower electronic payment processing revenue. Compared

with first quarter 2006, noninterest income grew five percent, primarily due to strong performance in electronic payment processing revenue, investment advisory revenue and corporate banking revenue, partially offset by lower mortgage banking revenue.

Electronic payment processing (EPP) revenue of $225 million decreased three percent from seasonally strong fourth quarter levels. EPP revenue increased 15 percent over last year on double-digit growth in merchant processing, card issuer interchange, and financial institutions revenue. The merchant business continues to perform well and large national merchant contracts expected to convert in the second half of 2007 will continue to provide strong growth. The increase in card issuer interchange reflects increased debit card usage and stronger growth in credit card accounts and usage. Financial institutions revenue growth was stronger than normal due to contract termination fees recognized as a result of bank merger-related activity.

Service charges on deposits of $126 million increased three percent sequentially and was flat versus the same quarter last year. Retail service charges increased one percent sequentially, as growth in customer accounts and better fee realization were offset by a seasonal reduction in fee occurrences. Retail deposit revenue grew two percent compared with the year ago quarter. Commercial service charges increased by five percent sequentially on new customer additions and sales of lockbox and electronic disbursement services, and declined two percent compared with last year reflecting the effect of higher earnings credit rates.

Investment advisory revenue of $96 million increased six percent sequentially, primarily due to growth in private client and brokerage revenue. Private client growth reflected seasonal tax preparation fees and continued growth while brokerage revenue growth was driven by higher broker productivity and a shift toward managed accounts. Compared with the same quarter last year, revenue increased five percent, driven by strong growth in private client revenue, modest growth in brokerage and institutional trust, partially offset by lower mutual fund revenue reflecting the ongoing effect of open architecture on proprietary fund sales.

Corporate banking revenue of $83 million increased one percent sequentially, as strong institutional deal flow and customer interest rate derivative sales were largely offset by strong fourth quarter lease syndication fees. Compared with last year, revenue increased nine percent as a result of gains in institutional sales and customer derivatives activity.

Mortgage banking net revenue totaled $40 million, compared with $30 million last quarter and $47 million in the prior year quarter. First quarter origination fees and gains on loan sales were $26 million, compared with $23 million in the fourth quarter and $21 million in first quarter 2006. Mortgage originations of $2.9 billion improved from $2.5 billion in fourth quarter 2006 and $2.2 billion in first quarter 2006. Net servicing revenue, before MSR valuation adjustments, totaled $13 million in the first quarter, compared with $12 million in the fourth quarter and $14 million a year ago. The MSR valuation and related mark-to-market adjustments on free standing derivatives netted to a modest positive adjustment in the quarter, compared with a $5 million negative adjustment in the fourth quarter and a positive $11 million adjustment in the year ago quarter. The mortgage servicing asset, net of the valuation reserve, was $566 million at quarter end on a servicing portfolio of $30.3 billion.

Other noninterest income totaled $78 million in the first quarter, compared with $58 million last quarter and $80 million in the same quarter last year. Fourth quarter results included a loss of $17 million on derivatives related to securities sold as part of our fourth quarter balance sheet actions.

Noninterest Expense


	For the Three Months Ended						% Change
	March 2007		December 2006		March 2006		Seq		Yr/Yr
Noninterest Expense ($ in millions)
Salaries, wages and incentives	$	292	$	300	$	284	(2	)%	3	%
Employee benefits		87		61		87	43	%	—
Net occupancy expense		65		65		58	1	%	12	%
Technology and communications		40		39		33	—		21	%
Equipment expense		29		32		27	(10	)%	10	%
Other noninterest expense		280		301		242	(7	)%	16	%

Total noninterest expense	$	793	$	798	$	731	(1	)%	8	%

Total noninterest expense of $793 million decreased one percent from fourth quarter 2006 and increased eight percent from first quarter 2006. First quarter expense trends included a seasonal increase of $17 million in FICA and unemployment expenses. Fourth quarter results included $39 million in charges associated with the termination of financing agreements as part of the balance sheet actions. Remaining sequential expense growth was two percent. Year-over-year expense growth largely reflected higher de-novo related expenses, investment in technology, and increased volume-related processing expense.

Credit Quality


	For the Three Months Ended
	March 2007			December 2006			September 2006			June 2006			March 2006
Total net losses charged off ($ in millions)
Commercial loans	$	(15	)	$	(29	)	$	(25	)	$	(22	)	$	(32	)
Commercial mortgage loans		(7	)		(11	)		(7	)		(4	)		(2	)
Construction loans		(6	)		(3	)		(1	)		(3	)		—
Commercial leases		(1	)		—			1			(1	)		1
Residential mortgage loans		(7	)		(8	)		(5	)		(6	)		(4	)
Home equity		(17	)		(14	)		(14	)		(13	)		(14	)
Automobile loans		(16	)		(19	)		(15	)		(10	)		(13	)
Credit card		(8	)		(10	)		(8	)		(7	)		(6	)
Other consumer loans and leases		6			(3	)		(5	)		(1	)		(3	)

Total net losses charged off		(71	)		(97	)		(79	)		(67	)		(73	)

Total losses		(99	)		(118	)		(96	)		(96	)		(96	)
Total recoveries		28			21			17			29			23

Total net losses charged off	$	(71	)	$	(97	)	$	(79	)	$	(67	)	$	(73	)
Ratios
Net losses charged off as a percent of average loans and leases		0.39	%		0.52	%		0.43	%		0.37	%		0.42	%
Commercial		0.27	%		0.42	%		0.32	%		0.30	%		0.34	%
Consumer		0.53	%		0.64	%		0.57	%		0.46	%		0.52	%

Net charge-offs as a percentage of average loans and leases were 39 bps in the first quarter, compared with 52 bps last quarter and 42 bps in the first quarter of 2006. The commercial and consumer net charge-off ratios were 27 bps and 53 bps, respectively, down from 42 bps and 64 bps in the fourth quarter. Gross charge-offs and recoveries were 54 bps and 15 bps, respectively, of loans and leases. First quarter net charge-offs included $5 million in losses related to the sale of $39 million in nonperforming commercial loans, and $10 million in recoveries related to the sale of charged-off consumer loans. Fourth quarter 2006 net charge-offs included $9 million related to two large commercial credits as well as seasonally higher indirect auto losses.


	For the Three Months Ended
	March 2007			December 2006			September 2006			June 2006			March 2006
Allowance for Credit Losses ($ in millions)

Allowance for loan and lease losses, beginning	$	771		$	761		$	753		$	749		$	744
Total net losses charged off		(71	)		(97	)		(79	)		(67	)		(73	)
Provision for loan and lease losses		84			107			87			71			78

Allowance for loan and lease losses, ending		784			771			761			753			749

Reserve for unfunded commitments, beginning		76			76			74			69			70
Provision for unfunded commitments		3			—			2			5			(1	)

Reserve for unfunded commitments, ending		79			76			76			74			69

Components of allowance for credit losses:
Allowance for loan and lease losses		784			771			761			753			749
Reserve for unfunded commitments		79			76			76			74			69

Total allowance for credit losses	$	863		$	847		$	837		$	827		$	818

Ratios

Allowance for loan and lease losses as a percent of loans and leases		1.05	%		1.04	%		1.04	%		1.04	%		1.05	%

Provision for loan and lease losses totaled $84 million in the first quarter compared with $107 million last quarter and $78 million in the same quarter last year. The allowance for loan and lease losses represented 1.05 percent of total loans and leases outstanding as of quarter end, compared with 1.04 percent last quarter and 1.05 percent in the same quarter last year.


	For the Three Months Ended
	March 2007			December 2006			September 2006			June 2006			March 2006
	March 2007			December 2006			September 2006			June 2006			March 2006
Nonperforming Assets and Delinquent Loans ($ in millions)

Nonaccrual loans and leases	$	390		$	352		$	320		$	281		$	291
Other assets, including other real estate owned		104			103			91			77			73

Total nonperforming assets		494			455			411			358			364
Ninety days past due loans and leases		243			210			196			191			160

Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned		0.66	%		0.61	%		0.56	%		0.49	%		0.51	%

Nonperforming assets (NPAs) at quarter end were $494 million, or 66 bps of total loans and leases and other real estate owned, up from 61 bps last quarter and 51 bps in the first quarter a year ago. The sequential increase in NPAs of $39 million, or 9 percent, occurred primarily in the commercial mortgage portfolio. Commercial NPA growth was concentrated in Florida, driven by a single large NPA, and in Michigan. During the quarter, we sold $39 million in commercial NPAs and realized a $5 million loss on the sale. In the fourth quarter of 2006, we sold $13 million in commercial NPAs at a loss of $1 million.

Capital Position


	As of
	March 2007 (a)		December 2006		September 2006		June 2006		March 2006
	March 2007 (a)		December 2006		September 2006		June 2006		March 2006
Capital Position
Average shareholders’ equity to average assets	10.05	%	9.70	%	9.33	%	9.09	%	9.17	%
Tangible equity	7.65	%	7.79	%	7.40	%	6.92	%	6.90	%
Regulatory capital ratios:
Tier I capital	8.74	%	8.39	%	8.64	%	8.56	%	8.56	%
Total risk-based capital	11.24	%	11.07	%	10.61	%	10.50	%	10.56	%
Tier I leverage	9.33	%	8.44	%	8.52	%	8.38	%	8.24	%

(a) Current period regulatory capital ratios are estimated.

Capital levels remained strong in the first quarter. Tangible equity declined 14 bps sequentially due to share repurchases and the $96 million reduction of equity related to the adoption of FSP FAS 13-2. Tangible equity increased 75 bps compared to the prior year first quarter primarily due to lower tangible assets as a result of the fourth quarter 2006 balance sheet actions. Regulatory capital ratios improved sequentially as the issuance $750 million of Tier 1-qualifying trust preferred securities offset the negative effect of share repurchases. This issue contributed approximately 75 bps to each of our regulatory capital ratios.

Outlook

The following outlook represents currently expected full year growth rates compared with full year 2006 results. Our outlook is based on current expectations as of the date of this release for results within our businesses; prevailing views related to economic growth, inflation, unemployment and other economic factors; and market forward interest rate expectations. These expectations are inherently subject to risks and uncertainties. There are a number of factors that could cause results to differ materially from historical performance and these expectations. We undertake no obligation to update these expectations after the date of this release. Please refer to the cautionary statement at the end of this release for more information.


Category		Growth, percentage, or bps range

Net interest income		Mid-to-high single digits

Net interest margin		3.35-3.45%

Noninterest income*		High single digits

Noninterest expense**		Mid single digits

Loans		Mid-to-high single digits

Core deposits		Mid single digits

Net charge-offs		Low 50 bps range

Effective tax rate [non-tax equivalent]		29-30%

Tangible equity/tangible asset ratio		2007 target >7%



* comparison with the prior year excludes $415 million of losses recorded in noninterest income related to fourth quarter 2006 balance sheet actions ** comparison with the prior year excludes $49 million of charges: $10 million in third quarter 2006 related to the early retirement of debt, and $39 million in fourth quarter 2006 related to termination of financing agreements

Conference Call

Fifth Third will host a conference call to discuss these financial results at 9:00 a.m. (Eastern Time) today. Investors, analysts and other interested parties may dial into the conference call at 877-309-0967 for domestic access and 706-679-3977 for international access (password: Fifth Third). A replay of the conference call will be available for approximately seven days by dialing 800-642-1687 for domestic access and 706-645-9291 for international access (passcode: 5023636#).

Corporate Profile

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $99.8 billion in assets, operates 18 affiliates with 1,161 full-service Banking Centers, including 109 Bank Mart^® locations open seven days a week inside select grocery stores and 2,104 Jeanie^® ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania and Missouri. Fifth Third operates five main businesses: Commercial Banking, Branch Banking, Consumer Lending, Investment Advisors and Fifth Third Processing Solutions. Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2007, has $225 billion in assets under care, of which it managed $34 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed at www.53.com. Fifth Third’s common stock is traded through the NASDAQ^® National Global Select Market System under the symbol “FITB.”

FORWARD-LOOKING STATEMENTS

This report may contain forward-looking statements about Fifth Third Bancorp and/or the company as combined acquired entities within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. This report may contain certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of Fifth Third Bancorp and/or the combined company including statements preceded by, followed by or that include the words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic conditions, either national or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, are less favorable than expected; (2) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (3) changes in the interest rate environment reduce interest margins; (4) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (5) changes and trends in capital markets; (6) competitive pressures among depository institutions increase significantly; (7) effects of critical accounting policies and judgments; (8) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; (9) 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; (10) ability to maintain favorable ratings from rating agencies; (11) fluctuation of Fifth Third’s stock price; (12) ability to attract and retain key personnel; (13) ability to receive dividends from its subsidiaries; (14) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (15) difficulties in combining the operations of acquired entities; (16) ability to secure confidential information through the use of computer systems and telecommunications network; and (17) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements is available in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the United States Securities and Exchange Commission (SEC).Copies of this filing are available at no cost on the SEC’s Web site at www.sec.gov or on the Fifth Third’s Web site at www.53.com. Fifth Third undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report.

# # #

LOGO

Quarterly Financial Review for March 31, 2007

Table of Contents


Financial Highlights		11-12
Consolidated Statements of Income		13
Consolidated Statements of Income (Taxable Equivalent)		14
Consolidated Balance Sheets		15-16
Consolidated Statements of Changes in Shareholders’ Equity		17
Average Balance Sheet and Yield Analysis		18-19
Summary of Loans and Leases		20
Regulatory Capital		21
Asset Quality		22

Fifth Third Bancorp and Subsidiaries

Financial Highlights

$ in millions, except per share data

(unaudited)


	For the Three Months Ended									% Change
	March			December			March
	2007			2006			2006			Seq		Yr/Yr
Income Statement Data
Net interest income (a)	$	742		$	744		$	718		—		3	%
Noninterest income		648			219			617		196	%	5	%
Total revenue (a)		1,390			963			1,335		44	%	4	%
Provision for loan and lease losses		84			107			78		(22	)%	8	%
Noninterest expense		793			798			731		(1	)%	8	%
Net income		359			66			363		446	%	(1	)%

Common Share Data
Earnings per share, basic	$	0.65		$	0.12		$	0.66		442	%	(2	)%
Earnings per share, diluted		0.65			0.12			0.65		442	%	—
Cash dividends per common share	$	0.42		$	0.40		$	0.38		5	%	11	%
Book value per share		17.82			18.02			17.01		(1	)%	5	%
Dividend payout ratio		64.6	%		333.3	%		58.5	%	(81	)%	10	%
Market price per share:
High	$	41.41		$	41.57		$	41.43		—		—
Low		37.93			37.75			36.30		—		4	%
End of period		38.69			40.93			39.36		(5	)%	(2	)%
Common shares outstanding (in thousands)		550,077			556,253			556,501		(1	)%	(1	)%
Average common shares outstanding (in thousands):
Basic		551,501			554,978			554,398		(1	)%	(1	)%
Diluted		554,175			557,654			556,869		(1	)%	—
Market capitalization	$	21,282		$	22,767		$	21,904		(7	)%	(3	)%
Price/earnings ratio (b)		18.08			19.13			14.52		(5	)%	25	%

Financial Ratios
Return on average assets		1.47	%		0.25	%		1.41	%	488	%	4	%
Return on average equity		14.6	%		2.6	%		15.3	%	462	%	(5	)%
Noninterest income as a percent of total revenue		47	%		23	%		46	%	104	%	2	%
Average equity as a percent of average assets		10.05	%		9.70	%		9.17	%	4	%	10	%
Tangible equity		7.65	%		7.79	%		6.90	%	(2	)%	11	%
Net interest margin (a)		3.44	%		3.16	%		3.08	%	9	%	12	%
Efficiency (a)		57.0	%		82.9	%		54.7	%	(31	)%	4	%
Effective tax rate		29.3	%		(27.0	)%		30.7	%	NM		(5	)%

Credit Quality
Net losses charged off	$	71		$	97		$	73		(27	)%	(3	)%
Net losses charged off as a percent of average loans and leases		0.39	%		0.52	%		0.42	%	(25	)%	(7	)%
Allowance for loan and lease losses as a percent of loans and leases		1.05	%		1.04	%		1.05	%	1	%	—
Allowance for credit losses as a percent of loans and leases		1.15	%		1.14	%		1.14	%	1	%	1	%
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned		0.66	%		0.61	%		0.51	%	8	%	29	%

Average Balances
Loans and leases, including held for sale	$	75,861		$	75,262		$	71,634		1	%	6	%
Total securities and other short-term investments		11,673			18,262			22,917		(36	)%	(49	)%
Total assets		99,192			104,602			104,736		(5	)%	(5	)%
Transaction deposits (d)		48,760			49,010			48,951		(1	)%	—
Core deposits (e)		59,797			60,001			58,700		—		2	%
Wholesale funding (f)		25,536			30,650			33,123		(17	)%	(23	)%
Shareholders’ equity		9,970			10,150			9,601		(2	)%	4	%

Regulatory Capital Ratios (c)
Tier I capital		8.74	%		8.39	%		8.56	%	4	%	2	%
Total risk-based capital		11.24	%		11.07	%		10.56	%	2	%	6	%
Tier I leverage		9.33	%		8.44	%		8.24	%	11	%	13	%

Operations
Banking centers		1,161			1,150			1,132		1	%	3	%
ATMs		2,104			2,096			2,025		—		4	%
Full-time equivalent employees		21,442			21,362			21,497		—		—

(a)	Presented on a fully taxable equivalent basis

(b)	Based on the most recent twelve-month diluted earnings per share and end of period stock prices

(c)	Current period regulatory capital ratios are estimates

(d)	Includes demand, interest checking, savings and money market deposits

(e)	Includes transaction deposits plus other time deposits

(f)	Includes certificates $100,000 and over, foreign office deposits, federal funds purchased, short-term borrowings and long-term debt

Fifth Third Bancorp and Subsidiaries

Financial Highlights

$ in millions, except per share data

(unaudited)


	For the Three Months Ended
	March 2007			December 2006			September 2006			June 2006			March 2006
Income Statement Data
Net interest income (a)	$	742		$	744		$	719		$	716		$	718
Noninterest income		648			219			662			655			617
Total revenue (a)		1,390			963			1,381			1,371			1,335
Provision for loan and lease losses		84			107			87			71			78
Noninterest expense		793			798			767			759			731
Net income		359			66			377			382			363

Common Share Data
Earnings per share, basic	$	0.65		$	0.12		$	0.68		$	0.69		$	0.66
Earnings per share, diluted		0.65			0.12			0.68			0.69			0.65
Cash dividends per common share	$	0.42		$	0.40		$	0.40		$	0.40		$	0.38
Book value per share		17.82			18.02			17.96			17.13			17.01
Dividend payout ratio		64.6	%		333.3	%		58.8	%		58.0	%		58.5	%
Market price per share:
High	$	41.41		$	41.57		$	40.18		$	41.02		$	41.43
Low		37.93			37.75			35.95			35.86			36.30
End of period		38.69			40.93			38.08			36.95			39.36
Common shares outstanding (in thousands)		550,077			556,253			558,066			557,894			556,501
Average common shares outstanding (in thousands):
Basic		551,501			554,978			555,565			554,978			554,398
Diluted		554,175			557,654			557,949			557,489			556,869
Market capitalization	$	21,282		$	22,767		$	21,251		$	20,614		$	21,904
Price/earnings ratio (b)		18.08			19.13			14.53			13.94			14.52

Financial Ratios
Return on average assets		1.47	%		0.25	%		1.41	%		1.45	%		1.41	%
Return on average equity		14.6	%		2.6	%		15.1	%		16.0	%		15.3	%
Noninterest income as a percent of total revenue		47	%		23	%		48	%		48	%		46	%
Average equity as a percent of average assets		10.05	%		9.70	%		9.33	%		9.09	%		9.17	%
Tangible equity		7.65	%		7.79	%		7.40	%		6.92	%		6.90	%
Net interest margin (a)		3.44	%		3.16	%		2.99	%		3.01	%		3.08	%
Efficiency (a)		57.0	%		82.9	%		55.5	%		55.3	%		54.7	%
Effective tax rate		29.3	%		(27.0	)%		27.6	%		28.5	%		30.7	%

Credit Quality
Net losses charged off	$	71		$	97		$	79		$	67		$	73
Net losses charged off as a percent of average loans and leases		0.39	%		0.52	%		0.43	%		0.37	%		0.42	%
Allowance for loan and lease losses as a percent of loans and leases		1.05	%		1.04	%		1.04	%		1.04	%		1.05	%
Allowance for credit losses as a percent of loans and leases		1.15	%		1.14	%		1.14	%		1.14	%		1.14	%
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned		0.66	%		0.61	%		0.56	%		0.49	%		0.51	%

Average Balances
Loans and leases, including held for sale	$	75,861		$	75,262		$	73,938		$	73,093		$	71,634
Total securities and other short-term investments		11,673			18,262			21,582			22,439			22,917
Total assets		99,192			104,602			105,868			105,741			104,736
Transaction deposits (d)		48,760			49,010			48,543			49,282			48,951
Core deposits (e)		59,797			60,001			59,337			59,731			58,700
Wholesale funding (f)		25,536			30,650			33,040			32,903			33,123
Shareholders’ equity		9,970			10,150			9,878			9,607			9,601

Regulatory Capital Ratios (c)
Tier I capital		8.74	%		8.39	%		8.64	%		8.56	%		8.56	%
Total risk-based capital		11.24	%		11.07	%		10.61	%		10.50	%		10.56	%
Tier I leverage		9.33	%		8.44	%		8.52	%		8.38	%		8.24	%

Operations
Banking centers		1,161			1,150			1,145			1,138			1,132
ATMs		2,104			2,096			2,114			2,034			2,025
Full-time equivalent employees		21,442			21,362			21,301			21,230			21,497

(a)	Presented on a fully taxable equivalent basis

(b)	Based on the most recent twelve-month diluted earnings per share and end of period stock prices

(c)	Current period regulatory capital ratios are estimates

(d)	Includes demand, interest checking, savings and money market deposits

(e)	Includes transaction deposits plus other time deposits

(f)	Includes certificates $100,000 and over, foreign office deposits, federal funds purchased, short-term borrowings and long-term debt

Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Income

$ in millions

(unaudited)


	For the Three Months Ended							% Change
	March		December			March
	2007		2006			2006		Seq		Yr/Yr
Interest Income
Interest and fees on loans and leases	$	1,314	$	1,332		$	1,146	(1	)%	15	%
Interest on securities		143		199			250	(28	)%	(43	)%
Interest on other short-term investments		3		14			2	(78	)%	64	%

Total interest income		1,460		1,545			1,398	(6	)%	4	%

Interest Expense
Interest on deposits		498		518			411	(4	)%	21	%
Interest on short-term borrowings		59		100			95	(42	)%	(38	)%
Interest on long-term debt		167		189			181	(11	)%	(8	)%

Total interest expense		724		807			687	(10	)%	5	%


Net Interest Income		736		738			711	—		3	%
Provision for loan and lease losses		84		107			78	(22	)%	8	%

Net interest income after provision for loan and lease losses		652		631			633	3	%	3	%

Noninterest Income
Electronic payment processing revenue		225		232			196	(3	)%	15	%
Service charges on deposits		126		122			126	3	%	—
Investment advisory revenue		96		90			91	6	%	5	%
Corporate banking revenue		83		82			76	1	%	9	%
Mortgage banking net revenue		40		30			47	31	%	(16	)%
Other noninterest income		78		58			80	35	%	(2	)%
Securities gains (losses), net		—		(398	)		1	100	%	(100	)%
Securities gains, net - non-qualifying hedges on mortgage servicing rights		—		3			—	(100	)%	NM

Total noninterest income		648		219			617	196	%	5	%

Noninterest Expense
Salaries, wages and incentives		292		300			284	(2	)%	3	%
Employee benefits		87		61			87	43	%	—
Net occupancy expense		65		65			58	1	%	12	%
Technology and communications		40		39			33	—		21	%
Equipment expense		29		32			27	(10	)%	10	%
Other noninterest expense		280		301			242	(7	)%	16	%

Total noninterest expense		793		798			731	(1	)%	8	%

Income before income taxes and cumulative effect		507		52			519	880	%	(2	)%
Applicable income taxes		148		(14	)		160	NM		(7	)%

Income before cumulative effect		359		66			359	444	%	—
Cumulative effect of change in accounting principle, net of tax (a)		—		—			4	NM		(100	)%

Net income	$	359	$	66		$	363	446	%	(1	)%

Net income available to common shareholders (b)	$	359	$	66		$	363	447	%	(1	)%

(a)	Reflects a benefit of $3.5 million (net of $1.7 million of tax) for the adoption of SFAS No. 123(R) as of January 1, 2006 due to the recognition of an estimate of forfeiture experience to be realized for all stock-based awards

(b)	Dividends on preferred stock are $.185 million for all quarters presented

Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Income (Taxable Equivalent)

$ in millions

(unaudited)


	For the Three Months Ended
	March 2007		December 2006			September 2006		June 2006		March 2006
Interest Income
Interest and fees on loans and leases	$	1,314	$	1,332		$	1,294	$	1,227	$	1,146
Interest on securities		143		199			238		247		250
Interest on other short-term investments		3		14			2		3		2

Total interest income		1,460		1,545			1,534		1,477		1,398
Taxable equivalent adjustment		6		6			6		6		7

Total interest income (taxable equivalent)		1,466		1,551			1,540		1,483		1,405

Interest Expense
Interest on deposits		498		518			510		471		411
Interest on short-term borrowings		59		100			106		100		95
Interest on long-term debt		167		189			205		196		181

Total interest expense		724		807			821		767		687


Net interest income (taxable equivalent)		742		744			719		716		718

Provision for loan and lease losses		84		107			87		71		78

Net interest income (taxable equivalent) after provision for loan and lease losses		658		637			632		645		640

Noninterest Income
Electronic payment processing revenue		225		232			218		211		196
Service charges on deposits		126		122			134		135		126
Investment advisory revenue		96		90			89		96		91
Corporate banking revenue		83		82			79		82		76
Mortgage banking net revenue		40		30			36		41		47
Other noninterest income		78		58			87		76		80
Securities gains (losses), net		—		(398	)		19		14		1
Securities gains, net—non-qualifying hedges on mortgage servicing rights		—		3			—		—		—

Total noninterest income		648		219			662		655		617

Noninterest Expense
Salaries, wages and incentives		292		300			288		303		284
Employee benefits		87		61			74		69		87
Net occupancy expense		65		65			63		59		58
Technology and communications		40		39			36		34		33
Equipment expense		29		32			34		29		27
Other noninterest expense		280		301			272		265		242

Total noninterest expense		793		798			767		759		731

Income before income taxes and cumulative effect (taxable equivalent)		513		58			527		541		526
Taxable equivalent adjustment		6		6			6		6		7

Income before income taxes and cumulative effect		507		52			521		535		519
Applicable income taxes		148		(14	)		144		153		160

Income before cumulative effect		359		66			377		382		359
Cumulative effect of change in accounting principle, net of tax (a)		—		—			—		—		4

Net income	$	359	$	66		$	377	$	382	$	363

Net income available to common shareholders (b)	$	359	$	66		$	377	$	382	$	363

(a)	Reflects a benefit of $3.5 million (net of $1.7 million of tax) for the adoption of SFAS No. 123(R) as of January 1, 2006 due to the recognition of an estimate of forfeiture experience to be realized for all stock-based awards

(b)	Dividends on preferred stock are $.185 million for all quarters presented

Fifth Third Bancorp and Subsidiaries

Consolidated Balance Sheets

$ in millions, except per share data

(unaudited)


	As of									% Change
	March			December			March
	2007			2006			2006			Seq		Yr/Yr
Assets
Cash and due from banks	$	2,244		$	2,737		$	2,494		(18	)%	(10	)%
Available-for-sale and other securities (a)		10,592			11,053			21,276		(4	)%	(50	)%
Held-to-maturity securities (b)		347			356			365		(3	)%	(5	)%
Trading securities		160			187			156		(14	)%	2	%
Other short-term investments		223			809			159		(72	)%	40	%
Loans held for sale		1,382			1,150			744		20	%	86	%
Portfolio loans and leases:
Commercial loans		21,479			20,831			19,966		3	%	8	%
Commercial mortgage loans		10,906			10,405			9,861		5	%	11	%
Commercial construction loans		5,688			6,168			5,883		(8	)%	(3	)%
Commercial leases		4,953			4,984			4,911		(1	)%	1	%
Residential mortgage loans		8,484			8,830			8,425		(4	)%	1	%
Home equity		11,926			12,153			11,894		(2	)%	—
Automobile loans		10,400			10,028			9,453		4	%	10	%
Credit card		1,111			1,004			763		11	%	46	%
Other consumer loans and leases		1,235			1,196			1,589		3	%	(22	)%
Unearned income		(1,361	)		(1,246	)		(1,323	)	9	%	3	%

Portfolio loans and leases		74,821			74,353			71,422		1	%	5	%
Allowance for loan and lease losses		(784	)		(771	)		(749	)	2	%	5	%

Portfolio loans and leases, net		74,037			73,582			70,673		1	%	5	%
Bank premises and equipment		2,001			1,940			1,798		3	%	11	%
Operating lease equipment		212			202			137		5	%	55	%
Goodwill		2,192			2,193			2,194		—		—
Intangible assets		158			166			189		(5	)%	(17	)%
Servicing rights		572			524			468		9	%	22	%
Other assets		5,704			5,770			4,391		(1	)%	30	%

Total assets	$	99,824		$	100,669		$	105,044		(1	)%	(5	)%


Liabilities
Deposits:
Demand	$	13,510		$	14,331		$	14,134		(6	)%	(4	)%
Interest checking		15,755			15,993			17,511		(1	)%	(10	)%
Savings		14,256			13,181			11,902		8	%	20	%
Money market		6,336			6,584			6,399		(4	)%	(1	)%
Other time		10,869			10,987			10,105		(1	)%	8	%
Certificates—$100,000 and over		6,776			6,628			5,085		2	%	33	%
Foreign office		1,686			1,676			3,874		1	%	(56	)%

Total deposits		69,188			69,380			69,010		—		—
Federal funds purchased		1,622			1,421			3,715		14	%	(56	)%
Other short-term borrowings		2,383			2,796			4,472		(15	)%	(47	)%
Accrued taxes, interest and expenses		2,324			2,283			2,169		2	%	7	%
Other liabilities		1,883			2,209			1,463		(15	)%	29	%
Long-term debt		12,620			12,558			14,746		—		(14	)%

Total liabilities		90,020			90,647			95,575		(1	)%	(6	)%
Total shareholders’ equity (c)		9,804			10,022			9,469		(2	)%	4	%

Total liabilities and shareholders’ equity	$	99,824		$	100,669		$	105,044		(1	)%	(5	)%

(a) Amortized cost	$	10,754		$	11,236		$	22,127		(4	)%	(51	)%
(b) Market values		347			356			365		(3	)%	(5	)%
(c) Common shares, stated value $2.22 per share (in thousands):
Authorized		1,300,000			1,300,000			1,300,000		—		—
Outstanding, excluding treasury		550,077			556,253			556,501		(1	)%	(1	)%
Treasury		33,350			27,174			26,926		23	%	24	%

Fifth Third Bancorp and Subsidiaries

Consolidated Balance Sheets

$ in millions, except per share data

(unaudited)


	As of
	March 2007			December 2006			September 2006			June 2006			March 2006
Assets
Cash and due from banks	$	2,244		$	2,737		$	2,399		$	2,670		$	2,494
Available-for-sale and other securities (a)		10,592			11,053			19,514			20,345			21,276
Held-to-maturity securities (b)		347			356			359			358			365
Trading securities		160			187			164			173			156
Other short-term investments		223			809			125			207			159
Loans held for sale		1,382			1,150			872			931			744
Portfolio loans and leases:
Commercial loans		21,479			20,831			21,260			20,717			19,966
Commercial mortgage loans		10,906			10,405			9,879			9,792			9,861
Commercial construction loans		5,688			6,168			5,879			5,950			5,883
Commercial leases		4,953			4,984			4,895			4,899			4,911
Residential mortgage loans		8,484			8,830			8,811			8,623			8,425
Home equity		11,926			12,153			12,235			12,087			11,894
Automobile loans		10,400			10,028			9,599			9,512			9,453
Credit card		1,111			1,004			876			846			763
Other consumer loans and leases		1,235			1,196			1,301			1,432			1,589
Unearned income		(1,361	)		(1,246	)		(1,255	)		(1,281	)		(1,323	)

Portfolio loans and leases		74,821			74,353			73,480			72,577			71,422
Allowance for loan and lease losses		(784	)		(771	)		(761	)		(753	)		(749	)

Portfolio loans and leases, net		74,037			73,582			72,719			71,824			70,673
Bank premises and equipment		2,001			1,940			1,902			1,853			1,798
Operating lease equipment		212			202			142			150			137
Goodwill		2,192			2,193			2,193			2,194			2,194
Intangible assets		158			166			175			185			189
Servicing rights		572			524			504			489			468
Other assets		5,704			5,770			4,760			4,732			4,391

Total assets	$	99,824		$	100,669		$	105,828		$	106,111		$	105,044


Liabilities
Deposits:
Demand	$	13,510		$	14,331		$	13,883		$	14,078		$	14,134
Interest checking		15,755			15,993			15,855			16,788			17,511
Savings		14,256			13,181			12,392			12,061			11,902
Money market		6,336			6,584			6,462			6,505			6,399
Other time		10,869			10,987			10,818			10,627			10,105
Certificates—$100,000 and over		6,776			6,628			6,871			5,691			5,085
Foreign office		1,686			1,676			2,362			4,773			3,874

Total deposits		69,188			69,380			68,643			70,523			69,010
Federal funds purchased		1,622			1,421			5,434			2,493			3,715
Other short-term borrowings		2,383			2,796			3,833			5,275			4,472
Accrued taxes, interest and expenses		2,324			2,283			2,156			1,995			2,169
Other liabilities		1,883			2,209			1,570			1,767			1,463
Long-term debt		12,620			12,558			14,170			14,502			14,746

Total liabilities		90,020			90,647			95,806			96,555			95,575
Total shareholders’ equity (c)		9,804			10,022			10,022			9,556			9,469

Total liabilities and shareholders’ equity	$	99,824		$	100,669		$	105,828		$	106,111		$	105,044

(a) Amortized cost	$	10,754		$	11,236		$	20,103		$	21,376		$	22,127
(b) Market values		347			356			359			358			365
(c) Common shares, stated value $2.22 per share (in thousands):
Authorized		1,300,000			1,300,000			1,300,000			1,300,000			1,300,000
Outstanding, excluding treasury		550,077			556,253			558,066			557,894			556,501
Treasury		33,350			27,174			25,361			25,533			26,926

Fifth Third Bancorp and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

$ in millions (unaudited)


	For the Three Months Ended
	March			March
	2007			2006
Total shareholders’ equity, beginning	$	10,022		$	9,446
Net income		359			363
Other comprehensive income, net of tax:
Change in unrealized gains and (losses):
Available-for-sale securities		14			(158	)
Qualifying cash flow hedges		1			3
Change in accumulated other comprehensive income related to employee benefit plans		1			—

Comprehensive income		375			208
Cash dividends declared:
Common stock		(231	)		(211	)
Preferred stock (a)		—			—
Stock-based awards exercised, including treasury shares issued		18			15
Stock-based compensation expense		17			15
Loans repaid (issued) related to exercise of stock-based awards, net		2			3
Change in corporate tax benefit related to stock-based compensation		(5	)		(1	)
Shares acquired for treasury		(280	)		—
Impact of cumulative effect of change in accounting principle (b)		(98	)		(6	)
Other		(16	)		—

Total shareholders’ equity, ending	$	9,804		$	9,469

(a)	Dividends on preferred stock are $.185 million for all quarters presented

(b)

2007 includes $96 million impact due to the adoption of FSP FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leverage Lease Transaction” on January 1, 2007 and $2 million impact due to the adoption of FIN No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109” on January 1, 2007. 2006 impact is due to the adoption of SFAS No. 123(R) “Share-Based Payment” on January 1, 2006.

Fifth Third Bancorp and Subsidiaries

Average Balance Sheet and Yield Analysis

$ in millions, except share data

(unaudited)


	For the Three Months Ended									% Change
	March 2007			December 2006			March 2006			Seq		Yr/Yr
Assets
Interest-earning assets:
Loans and leases	$	75,861		$	75,262		$	71,634		1	%	6	%
Taxable securities		10,951			16,685			22,116		(34	)%	(50	)%
Tax exempt securities		534			568			644		(6	)%	(17	)%
Other short-term investments		188			1,009			157		(81	)%	19	%

Total interest-earning assets		87,534			93,524			94,551		(6	)%	(7	)%
Cash and due from banks		2,287			2,398			2,668		(5	)%	(14	)%
Other assets		10,140			9,440			8,261		7	%	23	%
Allowance for loan and lease losses		(769	)		(760	)		(744	)	1	%	3	%

Total assets	$	99,192		$	104,602		$	104,736		(5	)%	(5	)%


Liabilities
Interest-bearing liabilities:
Interest checking	$	15,509		$	15,744		$	17,603		(1	)%	(12	)%
Savings		13,689			12,812			11,588		7	%	18	%
Money market		6,377			6,572			6,086		(3	)%	5	%
Other time		11,037			10,991			9,749		—		13	%
Certificates—$100,000 and over		6,682			6,750			4,670		(1	)%	43	%
Foreign office		1,707			2,758			4,050		(38	)%	(58	)%
Federal funds purchased		2,505			3,615			4,553		(31	)%	(45	)%
Other short-term borrowings		2,400			4,468			4,718		(46	)%	(49	)%
Long-term debt		12,242			13,059			15,132		(6	)%	(19	)%

Total interest-bearing liabilities		72,148			76,769			78,149		(6	)%	(8	)%
Demand deposits		13,185			13,882			13,674		(5	)%	(4	)%
Other liabilities		3,889			3,801			3,312		2	%	17	%

Total liabilities		89,222			94,452			95,135		(6	)%	(6	)%
Shareholders’ equity		9,970			10,150			9,601		(2	)%	4	%

Total liabilities and shareholders’ equity	$	99,192		$	104,602		$	104,736		(5	)%	(5	)%


Average common shares outstanding (in thousands):
Basic		551,501			554,978			554,398		(1	)%	(1	)%
Diluted		554,175			557,654			556,869		(1	)%	—


Yield Analysis
Interest-earning assets:
Loans and leases		7.04	%		7.03	%		6.51	%
Taxable securities		5.06	%		4.57	%		4.44	%
Tax exempt securities		7.40	%		7.30	%		7.59	%
Other short-term investments		6.82	%		5.56	%		4.98	%

Total interest-earning assets		6.79	%		6.58	%		6.03	%

Interest-bearing liabilities:
Interest checking		2.31	%		2.41	%		2.28	%
Savings		3.27	%		3.24	%		2.67	%
Money market		4.46	%		4.40	%		3.64	%
Other time		4.59	%		4.46	%		3.74	%
Certificates—$100,000 and over		5.17	%		5.15	%		4.15	%
Foreign office		4.53	%		4.91	%		4.39	%
Federal funds purchased		5.30	%		5.31	%		4.50	%
Other short-term borrowings		4.37	%		4.61	%		3.82	%
Long-term debt		5.54	%		5.70	%		4.85	%

Total interest-bearing liabilities		4.07	%		4.17	%		3.57	%

Ratios:
Net interest margin (taxable equivalent)		3.44	%		3.16	%		3.08	%
Net interest rate spread (taxable equivalent)		2.72	%		2.41	%		2.46	%
Interest-bearing liabilities to interest-earning assets		82.42	%		82.08	%		82.65	%

Fifth Third Bancorp and Subsidiaries

Average Balance Sheet and Yield Analysis

$ in millions, except share data

(unaudited)


	For the Three Months Ended
	March			December			September			June			March
	2007			2006			2006			2006			2006
Assets
Interest-earning assets:
Loans and leases	$	75,861		$	75,262		$	73,938		$	73,093		$	71,634
Taxable securities		10,951			16,685			20,836			21,642			22,116
Tax exempt securities		534			568			587			616			644
Other short-term investments		188			1,009			159			181			157

Total interest-earning assets		87,534			93,524			95,520			95,532			94,551
Cash and due from banks		2,287			2,398			2,355			2,564			2,668
Other assets		10,140			9,440			8,745			8,393			8,261
Allowance for loan and lease losses		(769	)		(760	)		(752	)		(748	)		(744	)

Total assets	$	99,192		$	104,602		$	105,868		$	105,741		$	104,736


Liabilities
Interest-bearing liabilities:
Interest checking	$	15,509		$	15,744		$	16,251		$	17,025		$	17,603
Savings		13,689			12,812			12,279			12,064			11,588
Money market		6,377			6,572			6,371			6,429			6,086
Other time		11,037			10,991			10,794			10,449			9,749
Certificates—$100,000 and over		6,682			6,750			6,415			5,316			4,670
Foreign office		1,707			2,758			3,668			4,382			4,050
Federal funds purchased		2,505			3,615			4,546			3,886			4,553
Other short-term borrowings		2,400			4,468			4,056			4,854			4,718
Long-term debt		12,242			13,059			14,355			14,465			15,132

Total interest-bearing liabilities		72,148			76,769			78,735			78,870			78,149
Demand deposits		13,185			13,882			13,642			13,764			13,674
Other liabilities		3,889			3,801			3,613			3,500			3,312

Total liabilities		89,222			94,452			95,990			96,134			95,135
Shareholders’ equity		9,970			10,150			9,878			9,607			9,601

Total liabilities and shareholders’ equity	$	99,192		$	104,602		$	105,868		$	105,741		$	104,736


Average common shares outstanding (in thousands):
Basic		551,501			554,978			555,565			554,978			554,398
Diluted		554,175			557,654			557,949			557,489			556,869


Yield Analysis
Interest-earning assets:
Loans and leases		7.04	%		7.03	%		6.96	%		6.75	%		6.51	%
Taxable securities		5.06	%		4.57	%		4.39	%		4.43	%		4.44	%
Tax exempt securities		7.40	%		7.30	%		7.29	%		7.33	%		7.59	%
Other short-term investments		6.82	%		5.56	%		5.69	%		5.60	%		4.98	%

Total interest-earning assets		6.79	%		6.58	%		6.40	%		6.23	%		6.03	%

Interest-bearing liabilities:
Interest checking		2.31	%		2.41	%		2.49	%		2.39	%		2.28	%
Savings		3.27	%		3.24	%		3.08	%		2.90	%		2.67	%
Money market		4.46	%		4.40	%		4.30	%		4.01	%		3.64	%
Other time		4.59	%		4.46	%		4.24	%		4.00	%		3.74	%
Certificates—$100,000 and over		5.17	%		5.15	%		5.03	%		4.64	%		4.15	%
Foreign office		4.53	%		4.91	%		5.05	%		4.77	%		4.39	%
Federal funds purchased		5.30	%		5.31	%		5.33	%		4.97	%		4.50	%
Other short-term borrowings		4.37	%		4.61	%		4.42	%		4.31	%		3.82	%
Long-term debt		5.54	%		5.70	%		5.66	%		5.45	%		4.85	%

Total interest-bearing liabilities		4.07	%		4.17	%		4.14	%		3.90	%		3.57	%

Ratios:
Net interest margin (taxable equivalent)		3.44	%		3.16	%		2.99	%		3.01	%		3.08	%
Net interest rate spread (taxable equivalent)		2.72	%		2.41	%		2.26	%		2.33	%		2.46	%
Interest-bearing liabilities to interest-earning assets		82.42	%		82.08	%		82.43	%		82.56	%		82.65	%

Fifth Third Bancorp and Subsidiaries

Summary of Loans and Leases

$ in millions

(unaudited)


	For the Three Months Ended
	March 2007		December 2006		September 2006		June 2006		March 2006
Average Loans and Leases (including unearned income)
Commercial:
Commercial loans	$	20,908	$	21,228	$	20,879	$	20,338	$	19,549
Commercial mortgage loans		10,566		9,929		9,833		9,980		9,441
Commercial construction loans		6,014		6,099		5,913		5,840		6,211
Commercial leases		3,661		3,762		3,740		3,729		3,686

Subtotal—commercial		41,149		41,018		40,365		39,887		38,887
Consumer:
Residential mortgage loans		10,166		10,038		9,699		9,491		9,057
Home equity		12,072		12,225		12,174		11,999		11,879
Automobile loans		10,230		9,834		9,522		9,480		9,440
Credit card		1,021		915		870		797		766
Other consumer loans and leases		1,223		1,232		1,308		1,439		1,605

Subtotal—consumer		34,712		34,244		33,573		33,206		32,747

Total average loans and leases	$	75,861	$	75,262	$	73,938	$	73,093	$	71,634


End of Period Loans and Leases Serviced
Commercial:
Commercial loans	$	21,479	$	20,831	$	21,260	$	20,717	$	19,966
Commercial mortgage loans		10,906		10,405		9,879		9,792		9,861
Commercial construction loans		5,688		6,168		5,879		5,950		5,883
Commercial leases		3,687		3,841		3,751		3,740		3,726

Subtotal—commercial		41,760		41,245		40,769		40,199		39,436
Consumer:
Residential mortgage loans		8,484		8,830		8,811		8,623		8,425
Home equity		11,926		12,153		12,235		12,087		11,894
Automobile loans		10,400		10,028		9,599		9,512		9,453
Credit card		1,111		1,004		876		846		763
Other consumer loans and leases		1,140		1,093		1,190		1,310		1,451

Subtotal—consumer		33,061		33,108		32,711		32,378		31,986

Total portfolio loans and leases		74,821		74,353		73,480		72,577		71,422

Loans held for sale		1,382		1,150		872		931		744

Operating lease equipment		212		202		142		150		137

Loans and Leases Serviced for Others:
Residential mortgage (a)		30,253		28,688		27,823		27,057		26,399
Commercial mortgage (b)		621		769		756		890		2,183
Commercial loans (c)		3,377		3,390		3,404		3,332		3,182
Commercial leases (b)		250		263		256		258		271
Consumer loans (d)		463		520		596		677		774

Total loans and leases serviced for others		34,964		33,630		32,835		32,214		32,809

Total loans and leases serviced	$	111,379	$	109,335	$	107,329	$	105,872	$	105,112

(a)	Fifth Third sells certain residential mortgage loans, primarily conforming and fixed-rate in nature and retains servicing responsibilities

(b)	Fifth Third sells certain commercial mortgage loans and commercial leases and retains servicing responsibilities

(c)	Fifth Third transfers, subject to credit recourse and with servicing retained, certain primarily investment grade commercial loans to an unconsolidated qualified special purpose entity, which is wholly-owned by an independent third party

(d)	Fifth Third sells certain consumer loans and retains servicing responsibilities

Fifth Third Bancorp and Subsidiaries

Regulatory Capital (a)

$ in millions

(unaudited)


	As of
	March 2007			December 2006			September 2006			June 2006			March 2006
Tier I capital:
Shareholders’ equity	$	9,804		$	10,022		$	10,022		$	9,556		$	9,469
Goodwill and certain other intangibles		(2,328	)		(2,336	)		(2,345	)		(2,351	)		(2,357	)
Unrealized (gains) losses		164			176			385			674			561
Other		1,388			763			748			781			761

Total tier I capital	$	9,028		$	8,625		$	8,810		$	8,660		$	8,434

Total risk-based capital:
Tier I capital	$	9,028		$	8,625		$	8,810		$	8,660		$	8,434
Qualifying allowance for credit losses		885			867			857			849			840
Qualifying subordinated notes		1,696			1,893			1,150			1,108			1,126

Total risk-based capital	$	11,609		$	11,385		$	10,817		$	10,617		$	10,400

Risk-weighted assets	$	103,299		$	102,823		$	101,940		$	101,126		$	98,511
Ratios:
Average shareholders’ equity to average assets		10.05	%		9.70	%		9.33	%		9.09	%		9.17	%
Regulatory capital:
Tier I capital		8.74	%		8.39	%		8.64	%		8.56	%		8.56	%
Total risk-based capital		11.24	%		11.07	%		10.61	%		10.50	%		10.56	%
Tier I leverage		9.33	%		8.44	%		8.52	%		8.38	%		8.24	%

(a)	Current period regulatory capital data and ratios are estimated

Fifth Third Bancorp and Subsidiaries

Asset Quality

$ in millions

(unaudited)


	For the Three Months Ended
	March			December			September			June			March
	2007			2006			2006			2006			2006
Summary of Credit Loss Experience
Losses charged off:
Commercial loans	$	(19	)	$	(37	)	$	(29	)	$	(31	)	$	(35	)
Commercial mortgage loans		(7	)		(11	)		(8	)		(5	)		(2	)
Commercial construction loans		(6	)		(3	)		(1	)		(3	)		—
Commercial leases		(1	)		(1	)		—			(2	)		(1	)
Residential mortgage loans		(7	)		(8	)		(5	)		(6	)		(4	)
Home equity		(19	)		(16	)		(16	)		(16	)		(17	)
Automobile loans		(25	)		(25	)		(21	)		(19	)		(22	)
Credit card		(11	)		(11	)		(9	)		(9	)		(7	)
Other consumer loans and leases		(4	)		(6	)		(7	)		(5	)		(8	)

Total losses		(99	)		(118	)		(96	)		(96	)		(96	)

Recoveries of losses previously charged off:
Commercial loans		4			8			4			9			3
Commercial mortgage loans		—			—			1			1			—
Commercial construction loans		—			—			—			—			—
Commercial leases		—			1			1			1			2
Residential mortgage loans		—			—			—			—			—
Home equity		2			2			2			3			3
Automobile loans		9			6			6			9			9
Credit card		3			1			1			2			1
Other consumer loans and leases		10			3			2			4			5

Total recoveries		28			21			17			29			23

Net losses charged off:
Commercial loans		(15	)		(29	)		(25	)		(22	)		(32	)
Commercial mortgage loans		(7	)		(11	)		(7	)		(4	)		(2	)
Commercial construction loans		(6	)		(3	)		(1	)		(3	)		—
Commercial leases		(1	)		—			1			(1	)		1
Residential mortgage loans		(7	)		(8	)		(5	)		(6	)		(4	)
Home equity		(17	)		(14	)		(14	)		(13	)		(14	)
Automobile loans		(16	)		(19	)		(15	)		(10	)		(13	)
Credit card		(8	)		(10	)		(8	)		(7	)		(6	)
Other consumer loans and leases		6			(3	)		(5	)		(1	)		(3	)

Total net losses charged off	$	(71	)	$	(97	)	$	(79	)	$	(67	)	$	(73	)


Allowance for loan and lease losses, beginning	$	771		$	761		$	753		$	749		$	744
Total net losses charged off		(71	)		(97	)		(79	)		(67	)		(73	)
Provision for loan and lease losses		84			107			87			71			78

Allowance for loan and lease losses, ending	$	784		$	771		$	761		$	753		$	749

Reserve for unfunded commitments, beginning	$	76		$	76		$	74		$	69		$	70
Provision for unfunded commitments		3			—			2			5			(1	)
Acquisitions		—			—			—			—			—

Reserve for unfunded commitments, ending	$	79		$	76		$	76		$	74		$	69


Components of allowance for credit losses:
Allowance for loan and lease losses	$	784		$	771		$	761		$	753		$	749
Reserve for unfunded commitments		79			76			76			74			69

Total allowance for credit losses	$	863		$	847		$	837		$	827		$	818


Nonperforming Assets and Delinquent Loans
Nonaccrual loans and leases (a)	$	390		$	352		$	320		$	281		$	291
Renegotiated loans and leases		—			—			—			—			—
Other assets, including other real estate owned		104			103			91			77			73

Total nonperforming assets	$	494		$	455		$	411		$	358		$	364

Ninety days past due loans and leases (a)	$	243		$	210		$	196		$	191		$	160


Ratios
Net losses charged off as a percent of average loans and leases 0.39%		0.39	%		0.52	%		0.43	%		0.37	%		0.42	%
Allowance for loan and lease losses as a percent of loans and leases 1.05%		1.05	%		1.04	%		1.04	%		1.04	%		1.05	%
Allowance for credit losses as a percent of loans and leases 1.15%		1.15	%		1.14	%		1.14	%		1.14	%		1.14	%
Nonperforming assets as a percent of loans, leases and other assets, including other real estate owned		0.66	%		0.61	%		0.56	%		0.49	%		0.51	%

(a)	Nonaccrual includes $38 million and Ninety Days Past Due includes $78 million of residential mortgage loans as of March 31, 2007.