Loans with Deteriorated Credit Quality Acquired in a Transfer

12 Months Ended

Dec. 31, 2011

Loans with Deteriorated Credit Quality Acquired in a Transfer

7. LOANS WITH DETERIORATED CREDIT QUALITY ACQUIRED IN A TRANSFER

The Bancorp has acquired in prior years certain loans for which there was evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. During the years ended December 31, 2011, 2010 and 2009, the Bancorp recorded provision expense for loans acquired with deteriorated credit quality of $7 million, $6 million and $21 million, respectively, in the Consolidated Statements of Income. In addition, as of December 31, 2011 and 2010, the Bancorp maintained an allowance for loan and lease losses of $2 million and $3 million, respectively, on these loans.

The following table reflects the outstanding balance of all contractually required payments and carrying amounts of loans acquired with deteriorated credit quality at December 31:

($ in millions)		2011	2010
Commercial	$	9	15
Consumer		28	58
Outsanding balance	$	37	73
Carrying Amount	$	11	24

A summary of activity in the accretable yield is provided.

			Accretable
($ in millions)			Yield
Balance as of December 31, 2008		$	28
	Additions		-
	Accretion		(6)
	Disposals		-
	Reclassifications from (to) nonaccretable differences, net		(13)
Balance as of December 31, 2009		$	9
	Additions		-
	Accretion		(2)
	Disposals		(2)
	Reclassifications from (to) nonaccretable differences, net		(3)
Balance as of December 31, 2010		$	2
	Additions		-
	Accretion		(2)
	Disposals		-
	Reclassifications from (to) nonaccretable differences, net		-
Balance as of December 31, 2011		$	-

The following table reflects loans that were acquired with deteriorated credit quality during the years ended December 31:

($ in millions)		2011	2010	2009
Contractually required payments receivable at acquisition:
Commercial	$	-	-	-
Consumer		-	23	-
Total	$	-	23	-
Cash flows expected to be collected at acquisition	$	-	8	-
Fair value of acquired loans at acquisition		-	8	-