10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2017

Commission File Number 001-33653

(Exact name of Registrant as specified in its charter)

Ohio	31-0854434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Fifth Third Center

Cincinnati, Ohio 45263

(Address of principal executive offices)

Registrant’s telephone number, including area code: (800) 972-3030

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

There were 750,269,402 shares of the Registrant’s common stock, without par value, outstanding as of April 30, 2017.

FINANCIAL CONTENTS

Part I. Financial Information
Glossary of Abbreviations and Acronyms	2
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)
Selected Financial Data	3
Overview	4
Non-GAAP Financial Measures	6
Recent Accounting Standards	8
Critical Accounting Policies	8
Statements of Income Analysis	9
Balance Sheet Analysis	16
Business Segment Review	21
Risk Management—Overview	27
Credit Risk Management	28
Market Risk Management	41
Liquidity Risk Management	45
Operational Risk Management	47
Compliance Risk Management	47
Capital Management	48
Off-Balance Sheet Arrangements	50
Quantitative and Qualitative Disclosures about Market Risk (Item 3)	51
Controls and Procedures (Item 4)	51
Condensed Consolidated Financial Statements and Notes (Item 1)
Balance Sheets (unaudited)	52
Statements of Income (unaudited)	53
Statements of Comprehensive Income (unaudited)	54
Statements of Changes in Equity (unaudited)	55
Statements of Cash Flows (unaudited)	56
Notes to Condensed Consolidated Financial Statements (unaudited)	57
Part II. Other Information
Legal Proceedings (Item 1)	106
Risk Factors (Item 1A)	106
Unregistered Sales of Equity Securities and Use of Proceeds (Item 2)	106
Exhibits (Item 6)	106
Signatures	107
Certifications

FORWARD-LOOKING STATEMENTS

This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “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. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic 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) difficulties from Fifth Third’s investment in, relationship with, and nature of the operations of Vantiv Holding, LLC; (24) loss of income from any sale or potential sale of businesses (25) difficulties in separating the operations of any branches or other assets divested; (26) losses or adverse impacts on the carrying values of branches and long-lived assets in connection with their sales or anticipated sales; (27) inability to achieve expected benefits from branch consolidations and planned sales within desired timeframes, if at all; (28) ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; and (29) the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity.

1

Glossary of Abbreviations and Acronyms

Fifth Third Bancorp provides the following list of abbreviations and acronyms as a tool for the reader that are used in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Condensed Consolidated Financial Statements and the Notes to Condensed Consolidated Financial Statements.

ALCO: Asset Liability Management Committee ALLL: Allowance for Loan and Lease Losses AOCI: Accumulated Other Comprehensive Income ARM: Adjustable Rate Mortgage ASF: Available Stable Funding ASU: Accounting Standards Update ATM: Automated Teller Machine BCBS: Basel Committee on Banking Supervision BHC: Bank Holding Company BOLI: Bank Owned Life Insurance BPO: Broker Price Opinion bps: Basis Points CCAR: Comprehensive Capital Analysis and Review CDC: Fifth Third Community Development Corporation CET1: Common Equity Tier 1 CFPB: Consumer Financial Protection Bureau C&I: Commercial and Industrial DCF: Discounted Cash Flow DFA: Dodd-Frank Wall Street Reform & Consumer Protection Act DIF: Deposit Insurance Fund DTCC: Depository Trust & Clearing Corporation ERM: Enterprise Risk Management ERMC: Enterprise Risk Management Committee EVE: Economic Value of Equity FASB: Financial Accounting Standards Board FDIC: Federal Deposit Insurance Corporation FFIEC: Federal Financial Institutions Examination Council FHA: Federal Housing Administration FHLB: Federal Home Loan Bank FHLMC: Federal Home Loan Mortgage Corporation FICO: Fair Isaac Corporation (credit rating) FINRA: Financial Industry Regulatory Authority FNMA: Federal National Mortgage Association FRB: Federal Reserve Bank FTE: Fully Taxable Equivalent FTP: Funds Transfer Pricing FTS: Fifth Third Securities GDP: Gross Domestic Product GNMA: Government National Mortgage Association GSE: United States Government Sponsored Enterprise HFS: Held for Sale HQLA: High Quality Liquid Assets IPO: Initial Public Offering IRC: Internal Revenue Code IRLC: Interest Rate Lock Commitment ISDA: International Swaps and Derivatives Association, Inc. LCR: Liquidity Coverage Ratio LIBOR: London Interbank Offered Rate LLC: Limited Liability Company LTV: Loan-to-Value MD&A: Management’s Discussion and Analysis of Financial Condition and Results of Operations MSA: Metropolitan Statistical Area MSR: Mortgage Servicing Right N/A: Not Applicable NII: Net Interest Income NM: Not Meaningful NSFR: Net Stable Funding Ratio OAS: Option-Adjusted Spread OCI: Other Comprehensive Income (Loss) OREO: Other Real Estate Owned OTTI: Other-Than-Temporary Impairment PCA: Prompt Corrective Action RCC: Risk Compliance Committee RSF: Required Stable Funding SARs: Stock Appreciation Rights SBA: Small Business Administration SEC: United States Securities and Exchange Commission TBA: To Be Announced TDR: Troubled Debt Restructuring TILA: Truth in Lending Act TRA: Tax Receivable Agreement TruPS: Trust Preferred Securities U.S.: United States of America U.S. GAAP: United States Generally Accepted Accounting Principles VA: United States Department of Veteran Affairs VIE: Variable Interest Entity VRDN: Variable Rate Demand Note

2

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)

The following is Management’s Discussion and Analysis of Financial Condition and Results of Operations of certain significant factors that have affected Fifth Third Bancorp’s (the “Bancorp” or “Fifth Third”) financial condition and results of operations during the periods included in the Condensed Consolidated Financial Statements, which are a part of this filing. Reference to the Bancorp incorporates the parent holding company and all consolidated subsidiaries. The Bancorp’s banking subsidiary is referred to as the Bank.

TABLE 1: Selected Financial Data
		For the three months         ended March  31,					%
($ in millions, except for per share data)		2017			2016(i)		Change
Income Statement Data
Net interest income (U.S. GAAP)	$		933			903		3
Net interest income (FTE)(a)(b)			939			909		3
Noninterest income			523			637		(18	)
Total revenue(a)			1,462			1,546		(5	)
Provision for loan and lease losses			74			119		(38	)
Noninterest expense			986			986			-
Net income attributable to Bancorp			305			326		(6	)
Net income available to common shareholders			290			311		(7	)
Common Share Data
Earnings per share - basic	$		0.38			0.40		(5	)
Earnings per share - diluted			0.38			0.40		(5	)
Cash dividends declared per common share			0.14			0.13		8
Book value per share			20.13			19.46		3
Market value per share			25.40			16.69		52
Financial Ratios
Return on average assets			0.88	%		0.93		(5	)
Return on average common equity			7.8			8.3		(6	)
Return on average tangible common equity(b)			9.3			9.9		(6	)
Dividend payout ratio			36.8			32.5		13
Average total Bancorp shareholders’ equity as a percent of average assets			11.72			11.57		1
Tangible common equity as a percent of tangible assets(b)(h)			9.15			8.55		7
Net interest margin(a)(b)			3.02			2.91		4
Efficiency(a)(b)			67.4			63.8		6
Credit Quality
Net losses charged-off	$		89			96		(7	)
Net losses charged-off as a percent of average portfolio loans and leases			0.40	%		0.42		(5	)
ALLL as a percent of portfolio loans and leases			1.35			1.38		(2	)
Allowance for credit losses as a percent of portfolio loans and leases(c)			1.52			1.54		(1	)
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO			0.79			0.88		(10	)
Average Balances
Loans and leases, including held for sale	$		92,791			94,078		(1	)
Total securities and other short-term investments			33,177			31,573		5
Total assets			140,140			141,582		(1	)
Transaction deposits(d)			97,018			94,680		2
Core deposits(e)			100,845			98,715		2
Wholesale funding(f)			19,129			21,936		(13	)
Bancorp shareholders’ equity			16,429			16,376			-
Regulatory Capital and Liquidity Ratios
CET1 capital(g)			10.76	%		9.81		10
Tier I risk-based capital(g)			11.90			10.91		9
Total risk-based capital(g)			15.45			14.66		5
Tier I leverage(g)			10.15			9.57		6
CET1 capital (fully phased-in)(b)(g)			10.66			9.72		10
Modified LCR			119			118		1

(a) Amounts presented on an FTE basis. The FTE adjustment for both the three months ended March 31, 2017 and 2016 was $6.

(b) These are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.

(c) The allowance for credit losses is the sum of the ALLL and the reserve for unfunded commitments.

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

(e) Includes transaction deposits and other time deposits.

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

(g) Under the U.S. 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 values are added together in the Bancorp’s total risk-weighted assets.

(h) Excludes unrealized gains and losses.

(i) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

3

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

OVERVIEW

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. At March 31, 2017, the Bancorp had $140.2 billion in assets and operated 1,155 full-service banking centers, including 91 Bank Mart® locations open seven days a week, inside select grocery stores, and 2,471 ATMs in ten states throughout the Midwestern and Southeastern regions of the U.S. The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Wealth and Asset Management. The Bancorp also has an approximate 18% interest in Vantiv Holding, LLC. The carrying value of the Bancorp’s investment in Vantiv Holding, LLC was $430 million at March 31, 2017.

This overview of MD&A highlights selected information in the financial results of the Bancorp and may not contain all of the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources and critical accounting policies and estimates, you should carefully read this entire document as well as the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016. Each of these items could have an impact on the Bancorp’s financial condition, results of operations and cash flows. In addition, refer to the Glossary of Abbreviations and Acronyms in this report for a list of terms included as a tool for the reader of this quarterly report on Form 10-Q. The abbreviations and acronyms identified therein are used throughout this MD&A, as well as the Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements.

Net interest income, net interest margin and the efficiency ratio are presented in MD&A on an FTE basis. The FTE basis adjusts for the tax-favored status of income from certain loans and securities held by the Bancorp that are not taxable for federal income tax purposes. The Bancorp believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison between taxable and non-taxable amounts. The FTE basis for presenting net interest income is a non-GAAP measure. For further information, refer to the Non-GAAP Financial Measures section of MD&A.

The Bancorp’s revenues are dependent on both net interest income and noninterest income. For the three months ended March 31, 2017, net interest income on an FTE basis and noninterest income provided 64% and 36% of total revenue, respectively. The Bancorp derives the majority of its revenues within the U.S. from customers domiciled in the U.S. Revenue from foreign countries and external customers domiciled in foreign countries was immaterial to the Condensed Consolidated Financial Statements for the three months ended March 31, 2017. Changes in interest rates, credit quality, economic trends and the capital markets are primary factors that drive the performance of the Bancorp. As discussed later in the Risk Management section of MD&A, risk identification, measurement, monitoring, control and reporting are important to the management of risk and to the financial performance and capital strength of the Bancorp.

Net interest income is the difference between interest income earned on assets such as loans, leases and securities, and interest expense incurred on liabilities such as deposits, other short-term borrowings and long-term debt. Net interest income is affected by the general level of interest rates, the relative level of short-term and long-term interest rates, changes in interest rates and changes in the amount and composition of interest-earning assets and interest-bearing liabilities. Generally, the rates of interest the Bancorp earns on its assets and pays on its liabilities are established for a period of time. The change in market interest rates over time exposes the Bancorp to interest rate risk through potential adverse changes to net interest income and financial position. The Bancorp manages this risk by continually analyzing and adjusting the composition of its assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to changes in market interest rates. Additionally, in the ordinary course of business, the Bancorp enters into certain derivative transactions as part of its overall strategy to manage its interest rate and prepayment risks. The Bancorp is also exposed to the risk of loss on its loan and lease portfolio, as a result of changing expected cash flows caused by borrower credit events, such as, loan defaults and inadequate collateral.

Noninterest income is derived from service charges on deposits, wealth and asset management revenue, corporate banking revenue, card and processing revenue, mortgage banking net revenue, securities gains, net and other noninterest income. Noninterest expense includes personnel costs, net occupancy expense, technology and communication costs, card and processing expense, equipment expense and other noninterest expense.

Accelerated Share Repurchase Transactions

During the three months ended March 31, 2017, the Bancorp settled the accelerated share repurchase transaction entered into on December 20, 2016. For a summary of the transaction, refer to Table 2.

TABLE 2: Summary of Accelerated Share Repurchase Transactions
Repurchase Date	Amount   ($ in millions)		Shares Repurchased on   Repurchase Date		Shares Received from Forward Contract Settlement		Total Shares   Repurchased		Settlement Date
December 20, 2016	$	155		4,843,750		1,044,362		5,888,112		February 6, 2017

Earnings Summary

The Bancorp’s net income available to common shareholders for the first quarter of 2017 was $290 million, or $0.38 per diluted share, which was net of $15 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the first quarter of 2016 was $311 million, or $0.40 per diluted share, which was net of $15 million in preferred stock dividends.

Net interest income on an FTE basis (non-GAAP) was $939 million and $909 million for the three months ended March 31, 2017 and 2016, respectively. Net interest income was positively impacted by an increase in average taxable securities of $2.2 billion and a decrease in average long-term debt of $1.1 billion. Net interest income also benefited from an increase in yields on average loans and leases of 23 bps which included the impact of a $12 million benefit in interest income related to a revised estimate of refunds to be offered to certain bankcard customers and by the decision of the Federal Open Market Committee in December 2016 and March 2017 to raise the target range of the federal funds rate 25 bps.

4

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

These positive impacts were partially offset by a decrease in average loans and leases of $1.3 billion as well as an increase in rates paid on average long-term debt and average interest-bearing core deposits of 43 bps and 6 bps, respectively. Net interest margin on an FTE basis was 3.02% and 2.91% for the three months ended March 31, 2017 and 2016, respectively.

Noninterest income decreased $114 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to decreases in other noninterest income, corporate banking revenue and mortgage banking net revenue. Other noninterest income decreased $59 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to the first quarter of 2016 impact of a $47 million positive valuation adjustment on the stock warrant associated with Vantiv Holding, LLC, an $8 million gain on the sale of its retail branch operations in the St. Louis MSA and a $1 million positive valuation adjustment on the swap associated with Visa, Inc. Class B Shares compared with a negative valuation adjustment of $13 million during the first quarter of 2017. The decrease was partially offset by an $11 million increase in private equity investment income. Corporate banking revenue decreased $28 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily driven by a decrease in lease remarketing fees which included the impact of a $31 million impairment charge related to certain operating lease assets that was recognized during the first quarter of 2017. Mortgage banking net revenue decreased $26 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to a $13 million decrease in origination fees and gains on loan sales and a $13 million decrease in net mortgage servicing revenue.

Noninterest expense was flat for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. Personnel costs increased $19 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily driven by increases in long-term incentive compensation and variable compensation, partially offset by a $14 million decrease in severance costs related to the Bancorp’s voluntary early retirement program in 2016. Other noninterest expense decreased $15 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to decreases in losses and adjustments, the provision for the reserve for unfunded commitments and marketing expense, partially offset by an increase in professional service fees. Card and processing expense decreased $5 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to the impact of renegotiated service contracts.

For more information on net interest income, noninterest income and noninterest expense, refer to the Statements of Income Analysis section of MD&A.

Credit Summary

The provision for loan and lease losses was $74 million and $119 million for the three months ended March 31, 2017 and 2016, respectively. Net losses charged-off as a percent of average portfolio loans and leases were 0.40% during the first quarter of 2017 compared to 0.42% during the first quarter of 2016. At March 31, 2017, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO decreased to 0.79% compared to 0.80% at December 31, 2016. For further discussion on credit quality, refer to the Credit Risk Management subsection of the Risk Management section of MD&A.

Capital Summary

The Bancorp’s capital ratios exceed the “well-capitalized” guidelines as defined by the PCA requirements of the U.S. banking agencies. As of March 31, 2017, as calculated under the Basel III transition provisions, the CET1 capital ratio was 10.76%, the Tier I risk-based capital ratio was 11.90%, the Total risk-based capital ratio was 15.45% and the Tier I leverage ratio was 10.15%.

5

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

NON-GAAP FINANCIAL MEASURES

The following are non-GAAP measures which are important to the reader of the Condensed Consolidated Financial Statements but should be supplemental to primary U.S. GAAP measures.

The FTE basis adjusts for the tax-favored status of income from certain loans and securities held by the Bancorp that are not taxable for federal income tax purposes. The Bancorp believes this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison between taxable and non-taxable amounts.

The following table reconciles the non-GAAP financial measures of net interest income, net interest margin and the efficiency ratio on an FTE basis to U.S. GAAP:

TABLE 3: Non-GAAP Financial Measures - Net Interest Income, Net Interest Margin and Efficiency Ratio on an FTE Basis
		For the three months ended     March 31,
($ in millions)		2017			2016
Net interest income (U.S. GAAP)	$		933			903
Add: FTE adjustment			6			6
Net interest income on an FTE basis (1)	$		939			909
Net interest income on an FTE basis (annualized) (2)			3,808			3,656
Noninterest income (3)	$		523			637
Noninterest expense (4)			986			986
Average interest-earning assets (5)			125,968			125,651
Ratios:
Net interest margin on an FTE basis (2) / (5)			3.02	%		2.91
Efficiency ratio on an FTE basis (4) / (1) + (3)			67.4			63.8
The following table reconciles the non-GAAP financial measure of income before income taxes on an FTE basis to U.S. GAAP:
TABLE 4: Non-GAAP Financial Measure - Income Before Income Taxes on an FTE Basis
		For the three months ended     March 31,
($ in millions)		2017			2016
Income before income taxes (U.S. GAAP)	$		396			435
Add: FTE adjustment			6			6
Income before income taxes on an FTE basis	$		402			441

The Bancorp believes return on average tangible common equity is an important measure for comparative purposes with other financial institutions, but is not defined under U.S. GAAP, and therefore is considered a non-GAAP financial measure. This measure is useful for evaluating the performance of a business as it calculates the return available to common shareholders without the impact of intangible assets and their related amortization.

The following table reconciles the non-GAAP financial measure of return on average tangible common equity to U.S. GAAP for the three months ended:
TABLE 5: Non-GAAP Financial Measures - Return on Average Tangible Common Equity
($ in millions)	March 31,      2017		March 31,  2016(a)
Net income available to common shareholders (U.S. GAAP)	$	290		311
Add: Intangible amortization, net of tax		-		-
Tangible net income available to common shareholders	$	290		311
Tangible net income available to common shareholders (annualized) (1)		1,176		1,251
Average Bancorp’s shareholders’ equity (U.S. GAAP)	$	16,429		16,376
Less: Average preferred stock		(1,331)		(1,331)
Average goodwill		(2,416)		(2,416)
Average intangible assets and other servicing rights		(10)		(12)
Average tangible common equity (2)	$	12,672		12,617
Return on average tangible common equity (1) / (2)		9.3 %		9.9

(a)    A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

The Bancorp considers various measures when evaluating capital utilization and adequacy, including the tangible equity ratio, tangible common equity ratio and tangible book value per share, in addition to capital ratios defined by the U.S. banking agencies. These calculations are intended to complement the capital ratios defined by the U.S. banking agencies for both absolute and comparative purposes. Because U.S. GAAP does not include capital ratio measures, the Bancorp believes there are no comparable U.S. GAAP financial measures to these ratios. These ratios are not formally defined by U.S. GAAP or codified in the federal banking regulations and, therefore, are considered to be non-GAAP financial measures.

6

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Additionally, the Bancorp became subject to the Basel III Final Rule on January 1, 2015 which defined various regulatory capital ratios including the CET1 ratio. The CET1 capital ratio has transition provisions that will be phased out over time. The Bancorp is presenting the CET1 capital ratio on a fully phased-in basis for comparative purposes with other organizations. The Bancorp considers the fully phased-in CET1 ratio a non-GAAP measure since it is not the CET1 ratio in effect for the periods presented. Since analysts and the U.S. banking agencies may assess the Bancorp’s capital adequacy using these ratios, the Bancorp believes they are useful to provide investors the ability to assess its capital adequacy on the same basis. The Bancorp encourages readers to consider its Condensed Consolidated Financial Statements in their entirety and not to rely on any single financial measure.

The following table reconciles non-GAAP capital ratios to U.S. GAAP:

TABLE 6: Non-GAAP Financial Measures - Capital Ratios

As of ($ in millions)		March 31,  2017			December 31, 2016
Total Bancorp Shareholders’ Equity (U.S. GAAP)	$		16,430			16,205
Less:  Preferred stock			(1,331)			(1,331	)
Goodwill			(2,419)			(2,416	)
Intangible assets and other servicing rights			(11)			(10	)
Tangible common equity, including unrealized gains / losses (1)			12,669			12,448
Less:  AOCI			(68)			(59	)
Tangible common equity, excluding unrealized gains / losses (2)			12,601			12,389
Add:  Preferred stock			1,331			1,331
Tangible equity (3)	$		13,932			13,720
Total Assets (U.S. GAAP)	$		140,200			142,177
Less: Goodwill			(2,419)			(2,416	)
Intangible assets and other servicing rights			(11)			(10	)
AOCI, before tax			(105)			(91	)
Tangible assets, excluding unrealized gains / losses (4)	$		137,665			139,660
Common shares outstanding (5)			750			750
Ratios:
Tangible equity as a percentage of tangible assets (3) / (4)			10.12	%		9.82
Tangible common equity as a percentage of tangible assets (2) / (4)			9.15			8.87
Tangible book value per share (1) / (5)	$		16.89			16.60
Basel III Final Rule - Transition to Fully Phased-In
CET1 capital (transitional)	$		12,636			12,426
Less: Adjustments to CET1 capital from transitional to fully phased-in(a)			(2)			(4	)
CET1 capital (fully phased-in) (6)			12,634			12,422
Risk-weighted assets (transitional)(b)			117,407			119,632
Add: Adjustments to risk-weighted assets from transitional to fully phased-in(c)			1,164			1,115
Risk-weighted assets (fully phased-in) (7)	$		118,571			120,747
CET1 capital ratio under Basel III Final Rule (fully phased-in) (6) / (7)			10.66	%		10.29

(a) Primarily relates to disallowed intangible assets (other than goodwill and MSRs, net of associated deferred tax liabilities).

(b) Under the banking agencies’ risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The aggregate dollar amount in each risk category is multiplied by the associated risk-weight of the category. The resulting weighted values are added together, along with the measure for market risk, resulting in the Bancorp’s total risk-weighted assets.

(c) Primarily relates to higher risk weighting for MSRs.

7

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RECENT ACCOUNTING STANDARDS

Note 3 of the Notes to Condensed Consolidated Financial Statements provides a discussion of the significant new accounting standards applicable to the Bancorp and the expected impact of significant accounting standards issued, but not yet required to be adopted.

CRITICAL ACCOUNTING POLICIES

The Bancorp’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. Certain accounting policies require management to exercise judgment in determining methodologies, economic assumptions and estimates that may materially affect the Bancorp’s financial position, results of operations and cash flows. The Bancorp’s critical accounting policies include the accounting for the ALLL, reserve for unfunded commitments, income taxes, valuation of servicing rights, fair value measurements, goodwill and legal contingencies. These accounting policies are discussed in detail in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016. Effective January 1, 2017, the Bancorp elected to adopt the fair value method of measuring all existing classes of its residential mortgage servicing rights as described below. Previously, the Bancorp had measured its servicing rights subsequent to initial recognition using the amortization method. There have been no other material changes to the valuation techniques or models during the three months ended March 31, 2017.

Valuation of Servicing Rights

When the Bancorp sells loans through either securitizations or individual loan sales in accordance with its investment policies, it often obtains servicing rights. Effective January 1, 2017, the Bancorp elected to prospectively adopt the fair value method for all existing classes of its residential mortgage servicing rights portfolio. Upon this election, all servicing rights are measured at fair value at each reporting date and changes in the fair value of servicing rights are reported in earnings in the period in which the changes occur. Servicing rights are valued using internal OAS models. Significant management judgment is necessary to identify key economic assumptions used in estimating the fair value of the servicing rights including the prepayment speeds of the underlying loans, the weighted-average life, the OAS spread and the weighted-average coupon rate, as applicable. The primary risk of material changes to the value of the servicing rights resides in the potential volatility in the economic assumptions used, particularly the prepayment speeds. In order to assist in the assessment of the fair value of servicing rights, the Bancorp obtains external valuations of the servicing rights portfolio from third parties and participates in peer surveys that provide additional confirmation of the reasonableness of key assumptions utilized in the internal OAS model.

Prior to the election of the fair value method, servicing rights were initially recorded at fair value and subsequently amortized in proportion to, and over the period of, estimated net servicing revenue. Servicing rights were assessed for impairment monthly, based on fair value, with temporary impairment recognized through a valuation allowance and other-than-temporary impairment recognized through a write-off of the servicing asset and related valuation allowance.

For additional information on servicing rights, refer to Note 11 of the Notes to Condensed Consolidated Financial Statements.

8

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

STATEMENTS OF INCOME ANALYSIS

Net Interest Income

Net interest income is the interest earned on loans and leases (including yield-related fees), securities and other short-term investments less the interest paid for core deposits (includes transaction deposits and other time deposits) and wholesale funding (includes certificates $100,000 and over, other deposits, federal funds purchased, other short-term borrowings and long-term debt). The net interest margin is calculated by dividing net interest income by average interest-earning assets. Net interest rate spread is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities. Net interest margin is typically greater than net interest rate spread due to the interest income earned on those assets that are funded by noninterest-bearing liabilities, or free funding, such as demand deposits or shareholders’ equity.

Table 7 presents the components of net interest income, net interest margin and net interest rate spread for the three months ended March 31, 2017 and 2016, as well as the relative impact of changes in the balance sheet and changes in interest rates on net interest income. Nonaccrual loans and leases and loans held for sale have been included in the average loan and lease balances. Average outstanding securities balances are based on amortized cost with any unrealized gains or losses on available-for-sale securities included in other assets.

Net interest income on an FTE basis (non-GAAP) was $939 million and $909 million for the three months ended March 31, 2017 and 2016, respectively. Net interest income was positively impacted by an increase in average taxable securities of $2.2 billion and a decrease in average long-term debt of $1.1 billion. Net interest income also benefited from an increase in yields on average loans and leases of 23 bps which included the impact of a $12 million benefit in interest income related to a revised estimate of refunds to be offered to certain bankcard customers. Additionally, net interest income was positively impacted by the decision of the Federal Open Market Committee in December 2016 and March 2017 to raise the target range of the federal funds rate 25 bps coupled with an increase in the net interest rate spread to 2.78% in the first quarter of 2017 from 2.70% in the same period in 2016. Yields on average interest-earning assets increased 17 bps and were partially offset by a 9 bps increase in the rates paid on average interest-bearing liabilities for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. These positive impacts were partially offset by a decrease in average loans and leases of $1.3 billion as well as an increase in rates paid on average long-term debt and average interest-bearing core deposits of 43 bps and 6 bps, respectively.

Net interest margin on an FTE basis was 3.02% for the three months ended March 31, 2017 compared to 2.91% for the three months ended March 31, 2016. The increase from March 31, 2016 was driven primarily by the previously mentioned increase in the net interest rate spread partially offset by a $317 million increase in average interest-earning assets and a decrease in average free funding. The decrease in average free funding balances was driven by a decrease in average demand deposits of $117 million partially offset by an increase in average shareholders’ equity of $49 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

Interest income on an FTE basis from loans and leases increased $35 million compared to the first quarter of 2016 primarily due to an increase in yields on average loans and leases of 23 bps for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The increase was primarily due to increases in yields on average commercial and industrial loans and credit cards. The increase in credit card yields was primarily the result of the aforementioned $12 million benefit in interest income related to a revised estimate of refunds to be offered to certain bankcard customers. These positive impacts were partially offset by a decrease in average loans and leases of $1.3 billion for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to decreases in commercial and industrial loans and automobile loans, partially offset by an increase in residential mortgage loans. For more information on the Bancorp’s loan and lease portfolio, refer to the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A. Interest income from investment securities increased $13 million compared to the three months ended March 31, 2016 primarily as a result of the aforementioned increase in average taxable securities.

Interest expense on core deposits increased $10 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to an increase in the cost of average interest-bearing core deposits to 31 bps for the three months ended March 31, 2017 from 25 bps for the three months ended March 31, 2016. The increase was primarily due to an increase in the cost of average money market deposits and average interest checking deposits. Refer to the Deposits subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s deposits.

Interest expense on average wholesale funding increased $8 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to the aforementioned increase in the rates paid on average long-term debt partially offset by the decrease in average long-term debt. Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. During the three months ended March 31, 2017 and 2016, respectively, average wholesale funding represented 23% and 26% of average interest-bearing liabilities. For more information on the Bancorp’s interest rate risk management, including estimated earnings sensitivity to changes in market interest rates, see the Market Risk Management subsection of the Risk Management section of MD&A.

9

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 7: Condensed Average Balance Sheets and Analysis of Net Interest Income on an FTE Basis
For the three months ended	March 31, 2017								March 31, 2016								Attribution of Change in     Net Interest Income(a)
($ in millions)	Average Balance			Revenue/ Cost		Average Yield/ Rate			Average Balance			Revenue/ Cost		Average Yield/ Rate			Volume			Yield/Rate			Total
Assets:
Interest-earning assets:
Loans and leases:(b)
Commercial and industrial loans	$	41,892			359		3.47	%	$	43,127			347		3.23	%	$	(13	)		25		12
Commercial mortgage loans		6,946			61		3.54			6,908			55		3.27			1			5		6
Commercial construction loans		3,987			37		3.77			3,297			28		3.38			6			3		9
Commercial leases		3,904			26		2.70			3,875			27		2.77			-			(1	)	(1)
Total commercial loans and leases		56,729			483		3.45			57,207			457		3.22			(6	)		32		26
Residential mortgage loans		15,800			140		3.57			14,405			130		3.63			12			(2	)	10
Home equity		7,581			74		3.98			8,241			78		3.80			(8	)		4		(4)
Automobile loans		9,786			68		2.81			11,285			75		2.65			(11	)		4		(7)
Credit card		2,141			68		12.92			2,277			60		10.64			(4	)		12		8
Other consumer loans and leases		754			12		6.49			663			10		6.27			2			-		2
Total consumer loans and leases		36,062			362		4.07			36,871			353		3.85			(9	)		18		9
Total loans and leases	$	92,791			845		3.69	%	$	94,078			810		3.46	%	$	(15	)		50		35
Securities:
Taxable		31,815			244		3.11			29,619			231		3.14			15			(2	)	13
Exempt from income taxes(b)		55			1		5.79			78			1		4.32			-			-		-
Other short-term investments		1,307			2		0.73			1,876			2		0.42			(1	)		1		-
Total interest-earning assets	$	125,968			1,092		3.51	%	$	125,651			1,044		3.34	%	$	(1	)		49		48
Cash and due from banks		2,205								2,335
Other assets		13,220								14,869
Allowance for loan and lease losses		(1,253	)							(1,273	)
Total assets	$	140,140							$	141,582
Liabilities and Equity:
Interest-bearing liabilities:
Interest checking deposits	$	26,760			20		0.31	%	$	25,740			15		0.23	%	$	-			5		5
Savings deposits		14,117			2		0.05			14,601			2		0.04			-			-		-
Money market deposits		20,603			16		0.32			18,655			11		0.25			1			4		5
Foreign office deposits		454			-		0.13			483			-		0.15			-			-		-
Other time deposits		3,827			12		1.23			4,035			12		1.22			-			-		-
Total interest-bearing core deposits		65,761			50		0.31			63,514			40		0.25			1			9		10
Certificates $100,000 and over		2,579			9		1.35			2,815			9		1.28			-			-		-
Other deposits		162			-		0.64			-			-		-			-			-		-
Federal funds purchased		639			1		0.70			608			1		0.36			(1	)		1		-
Other short-term borrowings		1,893			3		0.55			3,564			3		0.39			(1	)		1		-
Long-term debt		13,856			90		2.65			14,949			82		2.22			(7	)		15		8
Total interest-bearing liabilities	$	84,890			153		0.73	%	$	85,450			135		0.64	%	$	(8	)		26		18
Demand deposits		35,084								35,201
Other liabilities		3,710								4,524
Total liabilities	$	123,684							$	125,175
Total equity	$	16,456							$	16,407
Total liabilities and equity	$	140,140							$	141,582
Net interest income (FTE)(c)				$	939							$	909				$	7			23		30
Net interest margin (FTE)(c)							3.02	%							2.91	%
Net interest rate spread (FTE)							2.78								2.70
Interest-bearing liabilities to interest-earning assets							67.39								68.01

(a) Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate.

(b) The FTE adjustments included in the above table were $6 for both the three months ended March 31, 2017 and 2016, respectively.

(c) Net interest income (FTE) and net interest margin (FTE) are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.

Provision for Loan and Lease Losses

The Bancorp provides as an expense an amount for probable loan and lease losses within the loan and lease portfolio that is based on factors previously discussed in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016. The provision is recorded to bring the ALLL to a level deemed appropriate by the Bancorp to cover losses inherent in the portfolio. Actual credit losses on loans and leases are charged against the ALLL. The amount of loans and leases actually removed from the Condensed Consolidated Balance Sheets are referred to as charge-offs. Net charge-offs include current period charge-offs less recoveries on previously charged-off loans and leases.

The provision for loan and lease losses was $74 million and $119 million for the three months ended March 31, 2017 and 2016, respectively. The decrease in provision expense for the three months ended March 31, 2017 compared to the same period in the prior year was primarily due to a decrease in the level of commercial criticized assets, which reflected improvement in the national economy and stabilization of commodity prices, and a decrease in outstanding loan balances. The ALLL decreased $15 million from December 31, 2016 to $1.2 billion at March 31, 2017. At March 31, 2017, the ALLL as a percent of portfolio loans and leases decreased to 1.35%, compared to 1.36% at December 31, 2016.

10

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Refer to the Credit Risk Management subsection of the Risk Management section of MD&A as well as Note 6 of the Notes to Condensed Consolidated Financial Statements for more detailed information on the provision for loan and lease losses, including an analysis of loan portfolio composition, nonperforming assets, net charge-offs, and other factors considered by the Bancorp in assessing the credit quality of the loan and lease portfolio and the ALLL.

Noninterest Income

Noninterest income decreased $114 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

The following table presents the components of noninterest income:

TABLE 8: Components of Noninterest Income

		For the three months ended   March 31,
($ in millions)		2017		2016		% Change
Service charges on deposits	$		138		137	1
Wealth and asset management revenue			108		102	6
Corporate banking revenue			74		102	(27)
Card and processing revenue			74		79	(6)
Mortgage banking net revenue			52		78	(33)
Other noninterest income			77		136	(43)
Securities gains, net			-		3	NM
Total noninterest income	$		523		637	(18)

Wealth and asset management revenue

Wealth and asset management revenue increased $6 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to a $4 million increase in private client service fees and a $2 million increase in securities and brokerage fees. These increases were driven by an increase in assets under management as a result of strong market performance and increased asset production. The Bancorp’s Trust, Brokerage and Insurance businesses had approximately $323 billion and $303 billion in total assets under care as of March 31, 2017 and 2016, respectively, and managed $33 billion and $29 billion in assets, respectively, for individuals, corporations and not-for-profit organizations as of March 31, 2017 and 2016.

Corporate banking revenue

Corporate banking revenue decreased $28 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The decrease from the prior year was primarily driven by a decrease in lease remarketing fees which included the impact of a $31 million impairment charge related to certain operating lease assets that was recognized during the first quarter of 2017.

Card and processing revenue

Card and processing revenue decreased $5 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to higher reward costs and the sale of the agent bankcard portfolio during the second quarter of 2016.

Mortgage banking net revenue

Mortgage banking net revenue decreased $26 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

The following table presents the components of mortgage banking net revenue:

TABLE 9: Components of Mortgage Banking Net Revenue

		For the three months ended   March 31,
($ in millions)		2017			2016
Origination fees and gains on loan sales	$		29			42
Net mortgage servicing revenue:
Gross mortgage servicing fees			47			52
MSR amortization			-			(27	)
Net valuation adjustments on MSRs and free-standing derivatives purchased to economically hedge MSRs			(24	)		11
Net mortgage servicing revenue			23			36
Mortgage banking net revenue	$		52			78

Origination fees and gains on loan sales decreased $13 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to a decrease in originations driven by a decrease in demand due to an increase in interest rates.

Effective January 1, 2017, the Bancorp elected to prospectively adopt the fair value method for all existing classes of its residential mortgage servicing rights portfolio. Upon this election, all servicing rights are measured at fair value at each reporting date and changes in the fair value of servicing rights are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income in the period in which the changes occur.

11

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Prior to the election of the fair value method, servicing rights were initially recorded at fair value and subsequently amortized in proportion to, and over the period of, estimated net servicing revenue. Servicing rights were assessed for impairment monthly, based on fair value, with temporary impairment recognized through a valuation allowance.

Net mortgage servicing revenue decreased $13 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to decreases in net valuation adjustments and gross mortgage servicing fees of $8 million and $5 million, respectively. Refer to Table 10 for the components of net valuation adjustments on the MSR portfolio and the impact of the non-qualifying hedging strategy:

TABLE 10: Components of Net Valuation Adjustments on MSRs

		For the three months ended   March 31,
($ in millions)		2017			2016
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio	$		(1	)		96
Changes in fair value:
Due to changes in inputs or assumptions			4			-
Other changes in fair value			(27	)		-
(Provision for) recovery of MSR impairment			-			(85	)
Net valuation adjustments on MSR and free-standing derivatives purchased to economically hedge MSRs	$		(24	)		11

Mortgage rates increased during the three months ended March 31, 2017 which caused modeled prepayment speeds to slow. The fair value of the MSR increased $4 million due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $27 million due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs during the three months ended March 31, 2017.

Mortgage rates decreased during the three months ended March 31, 2016 which caused modeled prepayment speeds to increase which led to temporary impairment on servicing rights during the three months ended March 31, 2016. Previously, servicing rights were deemed impaired when a borrower’s loan rate was distinctly higher than prevailing rates. Temporary impairment on servicing rights was reversed when the prevailing rates returned to a level commensurate with the borrower’s loan rate.

Further detail on the valuation of MSRs can be found in Note 11 of the Notes to Condensed Consolidated Financial Statements. The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the valuation on the MSR portfolio. Refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for more information on the free-standing derivatives used to economically hedge the MSR portfolio.

The Bancorp’s total residential mortgage loans serviced as of March 31, 2017 and 2016 were $71.4 billion and $72.3 billion, respectively, with $55.4 billion and $57.8 billion, respectively, of residential mortgage loans serviced for others.

12

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Other noninterest income

The following table presents the components of other noninterest income:

TABLE 11: Components of Other Noninterest Income

		For the three months ended   March 31,
($ in millions)		2017			2016
Operating lease income	$		25		24
Private equity investment income			15		4
Cardholder fees			14		11
BOLI income			12		13
Equity method income from interest in Vantiv Holding, LLC			11		13
Consumer loan and lease fees			5		5
Banking center income			5		5
Insurance income			1		3
(Loss) gain on swap associated with the sale of Visa, Inc. class B shares			(13	)	1
Net losses on loan sales			(2	)	(2)
Net (losses) gains on disposition and impairment of bank premises and equipment			(1	)	1
Valuation adjustments on the warrant associated with Vantiv Holding, LLC			-		47
Gain on sale of certain retail branches			-		8
Other, net			5		3
Total other noninterest income	$		77		136

Other noninterest income decreased $59 million in the first quarter of 2017 compared to the first quarter of 2016 primarily due to a valuation adjustment on the stock warrant associated with Vantiv Holding, LLC, gains on the sale of certain retail branch operations and a valuation adjustment on the swap associated with Visa, Inc. Class B Shares. The decrease was partially offset by an increase in private equity investment income.

During the first quarter of 2016, the Bancorp recognized a $47 million positive valuation adjustment on the stock warrant associated with Vantiv Holding, LLC. The stock warrant was not outstanding during 2017 as the Bancorp exercised the remaining warrant in Vantiv Holding, LLC during the fourth quarter of 2016. The fair value of the stock warrant was calculated using the Black-Scholes option-pricing model, which utilized several key inputs (Vantiv, Inc. stock price, strike price of the warrant and several unobservable inputs). The positive valuation adjustment for the three months ended March 31, 2016 was primarily due to an increase of 14% in Vantiv, Inc.’s share price from December 31, 2015 to March 31, 2016.

The Bancorp recognized a $13 million negative valuation adjustment related to the Visa total return swap for the three months ended March 31, 2017 compared to a positive valuation adjustment of $1 million for the three months ended March 31, 2016. For additional information on the valuation of the warrant associated with the sale of Vantiv Holding, LLC and the valuation of the swap associated with the sale of Visa, Inc. Class B Shares, refer to Note 19 of the Notes to Condensed Consolidated Financial Statements. During the first quarter of 2016, the Bancorp recognized an $8 million gain on the sale of its retail branch operations in the St. Louis MSA to Great Southern Bank as part of the previously announced Branch Consolidation and Sales Plan. Private equity investment income increased $11 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to gains on the sale of certain private equity funds.

Noninterest Expense

Noninterest expense was flat for the three months ended March 31, 2017 compared to the three months ended March 31, 2016. The following table presents the components of noninterest expense:

TABLE 12: Components of Noninterest Expense

		For the three months ended     March 31,
($ in millions)		2017			2016		% Change
Salaries, wages and incentives	$		411			403	2
Employee benefits			111			100	11
Net occupancy expense			78			77	1
Technology and communications			58			56	4
Card and processing expense			30			35	(14)
Equipment expense			28			30	(7)
Other noninterest expense			270			285	(5)
Total noninterest expense	$		986			986	-
Efficiency ratio on an FTE basis(a)			67.4	%		63.8

(a) This is a non-GAAP measure. For further information, refer to the Non-GAAP Financial Measures section of MD&A.

Personnel costs increased $19 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily driven by increases in long-term incentive compensation and variable compensation, partially offset by a $14 million decrease in severance costs related to the Bancorp’s voluntary early retirement program in 2016. The increase in the long-term incentive compensation was due to the Bancorp issuing non-executive grants in the first quarter of 2017 where they have historically been issued in the second quarter. Full-time equivalent employees totaled 17,763 at March 31, 2017 compared to 18,200 at March 31, 2016.

13

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Card and processing expense decreased $5 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to the impact of renegotiated service contracts.

The following table presents the components of other noninterest expense:

TABLE 13: Components of Other Noninterest Expense

		For the three months ended   March 31,
($ in millions)		2017			2016
Impairment on affordable housing investments	$		39			42
FDIC insurance and other taxes			33			34
Operating lease			25			20
Loan and lease			22			23
Professional service fees			22			15
Marketing			19			26
Losses and adjustments			15			23
Data processing			13			12
Postal and courier			12			11
Travel			11			12
Recruitment and education			8			9
Supplies			3			4
Insurance			3			4
Donations			2			3
(Benefit from) provision for the reserve for unfunded commitments			(2	)		6
Other, net			45			41
Total other noninterest expense	$		270			285

Other noninterest expense decreased $15 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to decreases in losses and adjustments, the provision for the reserve for unfunded commitments and marketing expense, partially offset by an increase in professional service fees.

Losses and adjustments decreased $8 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily due to the impact of legal reserves established in the first quarter of 2016. The benefit from the reserve for unfunded commitments was $2 million for the three months ended March 31, 2017 compared to a provision for unfunded commitments of $6 million for the same period in the prior year as a result of the decrease in total unfunded commitments outstanding from December 31, 2016. Marketing expense decreased $7 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 due to disciplined expense control. Professional service fees increased $7 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 due to an increase in legal fees.

Applicable Income Taxes

The following table presents the Bancorp’s income before income taxes, applicable income tax expense and effective tax rate:

TABLE 14: Applicable Income Taxes

		For the three months ended              March 31,
($ in millions)		2017		2016(a)
Income before income taxes	$		396		435
Applicable income tax expense			91		109
Effective tax rate			22.9%		25.1

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Applicable income tax expense for all periods includes the benefit from tax-exempt income, tax-advantaged investments, certain gains on sales of leveraged leases that are exempt from federal taxation and tax credits, partially offset by the effect of certain nondeductible expenses. The tax credits are associated with the Low-Income Housing Tax Credit program established under Section 42 of the IRC, the New Markets Tax Credit program established under Section 45D of the IRC, the Rehabilitation Investment Tax Credit program established under Section 47 of the IRC and the Qualified Zone Academy Bond program established under Section 1397E of the IRC.

For stock-based awards, U.S. GAAP requires that the tax consequences for the difference between the expense recognized for financial reporting and the Bancorp’s actual tax deduction for the stock-based awards be recognized through income tax expense in the interim periods in which they occur. The decrease in the effective tax rate for the three months ended March 31, 2017 compared to the same period in the prior year was primarily related to a reduction in income tax expense for the recognition of excess tax benefits related to stock-based awards recorded in the first quarter of 2017.

In 2017, the Bancorp transitioned to granting its annual non-executive stock based compensation awards in the first quarter of the calendar year rather than the second quarter as it had done in previous years. In light of this change to the timing of these annual grants, the Bancorp expects to recognize the excess tax benefits or deficiencies associated with its restricted stock awards primarily in the first and second quarters of 2017, 2018, 2019 and 2020 as these annual awards vest.

14

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Bancorp cannot predict its stock price or whether and when its employees will exercise stock-based awards in the future. Based on its stock price at March 31, 2017, the Bancorp estimates that it may be necessary to recognize $1 million of additional income tax benefit over the next twelve months related to the settlement of stock-based awards. However, the amount of income tax expense or benefit recognized upon settlement may vary significantly from expectations based on the Bancorp’s stock price and the number of SARs exercised by employees.

15

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

BALANCE SHEET ANALYSIS

Loans and Leases

The Bancorp classifies its commercial loans and leases based upon primary purpose and consumer loans and leases based upon product or collateral. Table 15 summarizes end of period loans and leases, including loans held for sale and Table 16 summarizes average total loans and leases, including loans held for sale.

TABLE 15: Components of Total Loans and Leases (including loans held for sale)
		March 31, 2017					December 31, 2016
As of ($ in millions)		Carrying Value		% of Total			Carrying Value		% of Total
Commercial loans and leases:
Commercial and industrial loans	$		41,076		45	$		41,736		46
Commercial mortgage loans			6,931		8			6,904		7
Commercial construction loans			4,283		5			3,903		4
Commercial leases			4,093		4			3,974		4
Total commercial loans and leases	$		56,383		62	$		56,517		61
Consumer loans and leases:
Residential mortgage loans			15,942		17			15,737		17
Home equity			7,469		8			7,695		8
Automobile loans			9,572		10			9,983		11
Credit card			2,070		2			2,237		2
Other consumer loans and leases			808		1			680		1
Total consumer loans and leases	$		35,861		38	$		36,332		39
Total loans and leases	$		92,244		100	$		92,849		100
Total portfolio loans and leases (excluding loans held for sale)	$		91,628			$		92,098

Loans and leases, including loans held for sale, decreased $605 million, or 1%, from December 31, 2016. The decrease from December 31, 2016 was the result of a $471 million, or 1%, decrease in consumer loans and leases and a $134 million decrease in commercial loans and leases.

Consumer loans and leases decreased from December 31, 2016 primarily due to decreases in automobile loans, home equity and credit card, partially offset by an increase in residential mortgage loans. Automobile loans decreased $411 million, or 4%, from December 31, 2016 and home equity decreased $226 million, or 3%, from December 31, 2016 as payoffs exceeded new loan production. Credit card decreased $167 million, or 7%, from December 31, 2016 primarily due to seasonal trends from the paydown of year-end balances which were higher due to holiday spending. Residential mortgage loans increased $205 million, or 1%, from December 31, 2016 primarily due to the continued retention of certain conforming ARMs and certain other fixed-rate loans originated during the three months ended March 31, 2017.

Commercial loans and leases decreased from December 31, 2016 primarily due to a decrease in commercial and industrial loans, partially offset by an increase in commercial construction loans and commercial leases. Commercial and industrial loans decreased $660 million, or 2%, from December 31, 2016 primarily as a result of deliberate exits from certain loans that did not meet the Bancorp’s risk-adjusted profitability targets and softer loan demand. Commercial construction loans increased $380 million, or 10%, from December 31, 2016 primarily as a result of draw levels outpacing attrition. Commercial leases increased $119 million, or 3%, from December 31, 2016 primarily as a result of an increase in origination activity.

TABLE 16: Components of Average Loans and Leases (including loans held for sale)
		March 31, 2017					March 31, 2016
For the three months ended ($ in millions)		Carrying Value		% of Total			Carrying Value		% of Total
Commercial loans and leases:
Commercial and industrial loans	$		41,892		45	$		43,127		46
Commercial mortgage loans			6,946		7			6,908		7
Commercial construction loans			3,987		4			3,297		4
Commercial leases			3,904		4			3,875		4
Total commercial loans and leases	$		56,729		60	$		57,207		61
Consumer loans and leases:
Residential mortgage loans			15,800		18			14,405		15
Home equity			7,581		8			8,241		9
Automobile loans			9,786		11			11,285		12
Credit card			2,141		2			2,277		2
Other consumer loans and leases			754		1			663		1
Total consumer loans and leases	$		36,062		40	$		36,871		39
Total average loans and leases	$		92,791		100	$		94,078		100
Total average portfolio loans and leases (excluding loans held for sale)	$		92,146			$		93,275

Average loans and leases, including loans held for sale, decreased $1.3 billion, or 1%, from March 31, 2016. The decrease from March 31, 2016 was the result of a $809 million, or 2%, decrease in average consumer loans and leases and a $478 million, or 1%, decrease in average commercial loans and leases.

16

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Average consumer loans and leases decreased from March 31, 2016 primarily due to decreases in average automobile loans, average home equity and average credit card, partially offset by an increase in average residential mortgage loans. Average automobile loans decreased $1.5 billion, or 13%, from March 31, 2016 and average home equity decreased $660 million, or 8%, from March 31, 2016 as payoffs exceeded new loan production. Average credit card decreased $136 million, or 6%, primarily due to the sale of the agent bankcard loan portfolio during the second quarter of 2016 and elevated paydowns of mature accounts. Average residential mortgage loans increased $1.4 billion, or 10%, from March 31, 2016 primarily driven by the continued retention of certain conforming ARMs and certain other fixed-rate loans.

Average commercial loans and leases decreased from March 31, 2016 primarily due to a decrease in average commercial and industrial loans, partially offset by an increase in average commercial construction loans. Average commercial and industrial loans decreased $1.2 billion, or 3%, from March 31, 2016 primarily as a result of deliberate exits from certain loans that did not meet the Bancorp’s risk-adjusted profitability targets and softer loan demand. Average commercial construction loans increased $690 million, or 21%, from March 31, 2016 primarily as a result of an increase in new loan origination activity resulting from an increase in demand.

Investment Securities

The Bancorp uses investment securities as a means of managing interest rate risk, providing both liquidity support and collateral for pledging purposes. Total investment securities were $32.2 billion and $31.6 billion at March 31, 2017 and December 31, 2016, respectively. The taxable investment securities portfolio had an effective duration of 5.0 years at March 31, 2017 compared to 4.9 years at December 31, 2016.

Securities are classified as available-for-sale when, in management’s judgment, they may be sold in response to, or in anticipation of, changes in market conditions. Securities that management has the intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. Securities are classified as trading when bought and held principally for the purpose of selling them in the near term. At March 31, 2017, the Bancorp’s investment portfolio consisted primarily of AAA-rated available-for-sale securities. Securities classified as below investment grade were immaterial at both March 31, 2017 and December 31, 2016. The Bancorp’s management has evaluated the securities in an unrealized loss position in the available-for-sale and held-to-maturity portfolios for OTTI.

The following table provides a summary of OTTI by security type:

TABLE 17: Components of OTTI by Security Type
		For the three months ended
		March 31,
($ in millions)		2017		2016
Available-for-sale and other debt securities	$		(10)		(2)
Available-for-sale equity securities			-		(1)
Total OTTI(a)	$		(10)		(3)

(a) Included in securities gains, net, in the Condensed Consolidated Statements of Income.

The following table summarizes the end of period components of investment securities:

TABLE 18: Components of Investment Securities
As of ($ in millions)		March 31,         2017		December 31,         2016
Available-for-sale and other securities (amortized cost basis):
U.S. Treasury and federal agencies securities	$		435		547
Obligations of states and political subdivisions securities			44		44
Mortgage-backed securities:
Agency residential mortgage-backed securities(a)			16,140		15,525
Agency commercial mortgage-backed securities			8,647		9,029
Non-agency commercial mortgage-backed securities			3,269		3,076
Asset-backed securities and other debt securities			2,115		2,106
Equity securities(b)			698		697
Total available-for-sale and other securities	$		31,348		31,024
Held-to-maturity securities (amortized cost basis):
Obligations of states and political subdivisions securities	$		24		24
Asset-backed securities and other debt securities			2		2
Total held-to-maturity securities	$		26		26
Trading securities (fair value):
U.S. Treasury and federal agencies securities	$		18		23
Obligations of states and political subdivisions securities			21		39
Agency residential mortgage-backed securities			265		8
Asset-backed securities and other debt securities			24		15
Equity securities			361		325
Total trading securities	$		689		410

(a) Includes interest-only mortgage-backed securities of $42 and $60 as of March 31, 2017 and December 31, 2016, respectively, recorded at fair value with fair value changes recorded in securities gains, net in the Condensed Consolidated Statements of Income.

(b) Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $359 and $1, respectively, at March 31, 2017 and $248, $358, and $1, respectively, at December 31, 2016, that are carried at cost, and certain mutual fund and equity security holdings.

17

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

On an amortized cost basis, available-for-sale and other securities increased $324 million, or 1%, from December 31, 2016 primarily due to increases in agency residential mortgage-backed securities and non-agency commercial mortgage-backed securities, partially offset by decreases in agency commercial mortgage-backed securities and U.S. Treasury and federal agencies securities.

On an amortized cost basis, available-for-sale and other securities were 25% of total interest-earning assets at March 31, 2017 compared to 24% at December 31, 2016. The estimated weighted-average life of the debt securities in the available-for-sale and other securities portfolio was 6.9 years at March 31, 2017 compared to 6.7 years at December 31, 2016. In addition, at March 31, 2017, the available-for-sale and other securities portfolio had a weighted-average yield of 3.08%, compared to 3.19% at December 31, 2016.

Information presented in Table 19 is on a weighted-average life basis, anticipating future prepayments. Yield information is presented on an FTE basis and is computed using amortized cost balances. Maturity and yield calculations for the total available-for-sale and other securities portfolio exclude equity securities that have no stated yield or maturity. Total net unrealized gains on the available-for-sale and other securities portfolio were $183 million at March 31, 2017 compared to $159 million at December 31, 2016. The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. The fair value of investment securities generally increases when interest rates decrease or when credit spreads contract.

TABLE 19: Characteristics of Available-for-Sale and Other Securities
As of March 31, 2017 ($ in millions)	Amortized Cost		Fair Value		Weighted-Average Life (in years)		Weighted-Average Yield
U.S. Treasury and federal agencies securities:
Average life of 1 year or less	$	-		-		-		2.16 %
Average life 1 – 5 years		140		140		4.5		2.30
Average life 5 – 10 years		295		297		5.1		2.11
Total	$	435		437		4.9		2.17 %
Obligations of states and political subdivisions securities:(a)
Average life of 1 year or less		-		-		0.3		5.77
Average life 1 – 5 years		9		9		1.1		0.11
Average life 5 – 10 years		35		36		6.0		3.93
Total	$	44		45		5.0		3.15 %
Agency residential mortgage-backed securities:
Average life of 1 year or less		38		39		0.7		4.06
Average life 1 – 5 years		3,616		3,676		3.9		3.17
Average life 5 – 10 years		11,568		11,608		7.0		3.10
Average life greater than 10 years		918		922		11.7		3.18
Total	$	16,140		16,245		6.6		3.12 %
Agency commercial mortgage-backed securities:
Average life of 1 year or less		16		16		0.7		2.88
Average life 1 – 5 years		2,100		2,077		3.4		3.02
Average life 5 – 10 years		6,220		6,273		7.5		3.00
Average life greater than 10 years		311		306		12.9		2.99
Total	$	8,647		8,672		6.7		3.01 %
Non-agency commercial mortgage-backed securities:
Average life of 1 year or less		96		97		0.5		2.85
Average life 1 – 5 years		235		240		3.2		3.31
Average life 5 – 10 years		2,938		2,962		7.6		3.29
Total	$	3,269		3,299		7.1		3.28 %
Asset-backed securities and other debt securities:
Average life of 1 year or less		35		36		0.4		3.71
Average life 1 – 5 years		483		488		2.9		3.42
Average life 5 – 10 years		329		332		7.8		2.61
Average life greater than 10 years		1,268		1,278		15.3		2.82
Total	$	2,115		2,134		11.1		2.94 %
Equity securities		698		699
Total available-for-sale and other securities	$	31,348		31,531		6.9		3.08 %

(a) Taxable-equivalent yield adjustments included in the above table are 0.00%, 0.01%, 2.14% and 1.68% for securities with an average life of 1 year or less, 1-5 years, 5-10 years and in total, respectively.

Deposits

The Bancorp’s deposit balances represent an important source of funding and revenue growth opportunity. The Bancorp continues to focus on core deposit growth in its retail and commercial franchises by improving customer satisfaction, building full relationships and offering competitive rates. Core deposits represented 73% and 71% of the Bancorp’s average asset funding base at March 31, 2017 and December 31, 2016, respectively.

18

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table presents the end of period components of deposits:

TABLE 20: Components of Deposits

		March 31, 2017				December 31, 2016
As of ($ in millions)		Balance		% of Total		Balance		% of Total
Demand	$		35,362		33	$	35,782		34
Interest checking			27,230		26		26,679		26
Savings			14,360		14		13,941		13
Money market			20,585		20		20,749		20
Foreign office			521		1		426		1
Transaction deposits			98,058		94		97,577		94
Other time			3,750		4		3,866		4
Core deposits			101,808		98		101,443		98
Certificates $100,000 and over(a)			2,348		2		2,378		2
Total deposits	$		104,156		100	$	103,821		100

(a) Includes $1,256 and $1,280 of certificates $250,000 and over at March 31, 2017 and December 31, 2016, respectively.

Core deposits increased $365 million from December 31, 2016 driven by an increase of $481 million in transaction deposits. Transaction deposits increased from December 31, 2016 primarily due to increases in interest checking deposits and savings deposits, partially offset by decreases in demand deposits and money market deposits. Interest checking deposits increased $551 million, or 2%, from December 31, 2016 driven primarily by higher balances per account for commercial customers. Savings deposits increased $419 million, or 3%, from December 31, 2016 primarily due to consumer customer seasonality. Demand deposits and money market deposits decreased $420 million, or 1%, and $164 million, or 1%, respectively, from December 31, 2016 driven primarily by lower balances per account for commercial customers.

The following table presents the components of average deposits for the three months ended:

TABLE 21: Components of Average Deposits

		March 31, 2017				March 31, 2016
($ in millions)		Balance		% of Total		Balance		% of Total
Demand	$		35,084		34	$	35,201		35
Interest checking			26,760		26		25,740		26
Savings			14,117		14		14,601		14
Money market			20,603		20		18,655		18
Foreign office			454		-		483		-
Transaction deposits			97,018		94		94,680		93
Other time			3,827		4		4,035		4
Core deposits			100,845		98		98,715		97
Certificates $100,000 and over(a)			2,579		2		2,815		3
Other			162		-		-		-
Total average deposits	$		103,586		100	$	101,530		100

(a) Includes $1,263 and $1,395 of average certificates $250,000 and over for the three months ended March 31, 2017 and 2016, respectively.

On an average basis, core deposits increased $2.1 billion, or 2%, from March 31, 2016 primarily due to an increase of $2.3 billion in average transaction deposits. The increase in average transaction deposits was driven by increases in average money market deposits and average interest checking deposits, partially offset by decreases in average savings deposits and average demand deposits. Average money market deposits increased $1.9 billion, or 10%, from March 31, 2016, primarily due to a promotional product offering which drove customer acquisition and balance migration from savings deposits, which decreased $484 million, or 3%, compared to March 31, 2016. Average interest checking deposits increased $1.0 billion, or 4%, from March 31, 2016, primarily due to higher average customer balances per commercial customer account. Average demand deposits decreased $117 million from March 31, 2016 primarily due to lower average balances per institutional account. The increase in average core deposits from March 31, 2016 included the impact of the sale of $511 million of deposits as part of the branches sold in the St. Louis MSA and Pittsburgh MSA during 2016.

Average other deposits increased $162 million from March 31, 2016 primarily driven by an increase in Eurodollar trade deposits. Average certificates $100,000 and over decreased $236 million, or 8%, from March 31, 2016 primarily due to the maturity and run-off of institutional certificates of deposit since March 31, 2016.

Contractual maturities

The contractual maturities of certificates $100,000 and over as of March 31, 2017 are summarized in the following table:

TABLE 22: Contractual Maturities of Certificates $100,000 and Over

($ in millions)
Next 3 months	$	149
3-6 months		222
6-12 months		566
After 12 months		1,411
Total certificates $100,000 and over	$	2,348

19

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The contractual maturities of other time deposits and certificates $100,000 and over as of March 31, 2017 are summarized in the following table:

TABLE 23: Contractual Maturities of Other Time Deposits and Certificates $100,000 and Over

($ in millions)
Next 12 months	$	2,197
13-24 months		1,421
25-36 months		1,554
37-48 months		733
49-60 months		179
After 60 months		14
Total other time deposits and certificates $100,000 and over	$	6,098

Borrowings

The Bancorp accesses a variety of other short-term and long-term funding sources. Borrowings with original maturities of one year or less are classified as short-term and include federal funds purchased and other short-term borrowings. As of March 31, 2017, total borrowings as a percent of average interest-bearing liabilities were 19% compared to 21% at December 31, 2016.

The following table summarizes the end of period components of borrowings:

TABLE 24: Components of Borrowings

As of ($ in millions)		March 31, 2017		December 31, 2016
Federal funds purchased	$		155		132
Other short-term borrowings			2,015		3,535
Long-term debt			13,658		14,388
Total borrowings	$		15,828		18,055

Total borrowings decreased $2.2 billion, or 12%, from December 31, 2016 primarily due to decreases in other short-term borrowings and long-term debt. Other short-term borrowings decreased $1.5 billion from December 31, 2016 driven by a decrease of $1.6 billion in FHLB short-term borrowings. The level of other short-term borrowings can fluctuate significantly from period to period depending on funding needs and which sources are used to satisfy those needs. For further information on the components of other short-term borrowings, refer to Note 13 of the Notes to Condensed Consolidated Financial Statements. Long-term debt decreased $730 million from December 31, 2016 primarily driven by the maturity of $500 million of unsecured subordinated debt and $212 million of pay downs on long-term debt associated with automobile loan securitizations in the first quarter of 2017. For additional information regarding automobile securitizations, refer to Note 10 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes components of borrowings for the three months ended:

TABLE 25: Components of Average Borrowings

($ in millions)		March 31, 2017		March 31, 2016
Federal funds purchased	$		639		608
Other short-term borrowings			1,893		3,564
Long-term debt			13,856		14,949
Total average borrowings	$		16,388		19,121

Total average borrowings decreased $2.7 billion, or 14%, compared to March 31, 2016, primarily due to decreases in average other short-term borrowings and average long-term debt. The decrease in average other short-term borrowings of $1.7 billion was driven by a decrease in FHLB short-term borrowings. The decrease in average long-term debt of $1.1 billion from March 31, 2016 was driven primarily by the maturities of unsecured senior notes and subordinated debt and pay downs on long-term debt associated with automobile loan securitizations, partially offset by issuances of long-term debt. Information on the average rates paid on borrowings is discussed in the Net Interest Income subsection of the Statements of Income Analysis section of MD&A. In addition, refer to the Liquidity Risk Management subsection of the Risk Management section of MD&A for a discussion on the role of borrowings in the Bancorp’s liquidity management.

20

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

BUSINESS SEGMENT REVIEW

The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Wealth and Asset Management. Additional information on each business segment is included in Note 20 of the Notes to Condensed Consolidated Financial Statements. Results of the Bancorp’s business segments are presented based on its management structure and management accounting practices. The structure and accounting practices are specific to the Bancorp; therefore, the financial results of the Bancorp’s business segments are not necessarily comparable with similar information for other financial institutions. The Bancorp refines its methodologies from time to time as management’s accounting practices or businesses change.

The Bancorp manages interest rate risk centrally at the corporate level. By employing an FTP methodology, the business segments are insulated from most benchmark interest rate volatility, enabling them to focus on serving customers through the origination of loans and acceptance of deposits. The FTP methodology assigns charge rates and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of cash flows for each transaction. Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each business segment so its resulting net interest income is insulated from future changes in benchmark interest rates. The Bancorp’s FTP methodology also allocates the contribution to net interest income of the asset-generating and deposit-providing businesses on a duration-adjusted basis to better attribute the driver of the performance. As the asset and liability durations are not perfectly matched, the residual impact of the FTP methodology is captured in General Corporate and Other. The charge and credit rates are determined using the FTP rate curve, which is based on an estimate of Fifth Third’s marginal borrowing cost in the wholesale funding markets. The FTP rate curve is constructed using the U.S. swap curve, brokered CD pricing and unsecured debt pricing.

The Bancorp adjusts the FTP charge and credit rates as dictated by changes in interest rates for various interest-earning assets and interest-bearing liabilities and by the review of behavioural assumptions, such as prepayment rates on interest-earning assets and the estimated durations for indeterminate-lived deposits. Key assumptions, including the credit rates provided for deposit accounts, are reviewed annually. Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions. The credit rates for several deposit products were reset January 1, 2017 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2016, thus net interest income for deposit-providing business segments was positively impacted during 2017. FTP charge rates on assets were affected by the prevailing level of interest rates and by the duration and repricing characteristics of the portfolio. As overall market rates increased, the FTP charge increased for asset-generating business segments during 2017.

The Bancorp’s methodology for allocating provision for loan and lease losses expense to the business segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each business segment. Provision for loan and lease losses expense attributable to loan and lease growth and changes in ALLL factors are captured in General Corporate and Other. The financial results of the business segments include allocations for shared services and headquarters expenses. Additionally, the business segments form synergies by taking advantage of cross-sell opportunities and when funding operations by accessing the capital markets as a collective unit.

The following table summarizes net income (loss) by business segment:

TABLE 26: Net Income (Loss) by Business Segment
		For the three months ended       March 31,
($ in millions)		2017			2016(a)
Income Statement Data
Commercial Banking	$		211			211
Branch Banking			110			110
Consumer Lending			(12	)		8
Wealth and Asset Management			17			23
General Corporate and Other			(21	)		(26	)
Net income			305			326
Less: Net income attributable to noncontrolling interests			-			-
Net income attributable to Bancorp			305			326
Dividends on preferred stock			15			15
Net income available to common shareholders	$		290			311

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

21

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Commercial Banking

Commercial Banking offers credit intermediation, cash management and financial services to large and middle-market businesses and government and professional customers. In addition to the traditional lending and depository offerings, Commercial Banking products and services include global cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing and syndicated finance.

The following table contains selected financial data for the Commercial Banking segment:

TABLE 27: Commercial Banking

		For the three months ended March 31,
($ in millions)		2017		2016
Income Statement Data
Net interest income (FTE)(a)	$		431		457
Provision for loan and lease losses			6		65
Noninterest income:
Corporate banking revenue			73		102
Service charges on deposits			73		73
Other noninterest income			56		48
Noninterest expense:
Personnel costs			85		80
Other noninterest expense			285		283
Income before income taxes (FTE)			257		252
Applicable income tax expense(a)(b)			46		41
Net income	$		211		211
Average Balance Sheet Data
Commercial loans and leases, including held for sale	$		53,733		54,071
Demand deposits			19,944		20,414
Interest checking deposits			9,245		8,975
Savings and money market deposits			6,363		6,733
Other time deposits and certificates $100,000 and over			966		1,126
Foreign office deposits			403		482

(a) Includes FTE adjustments of $6 for both the three months ended March 31, 2017 and 2016.

(b) Applicable income tax expense for all periods includes the tax benefit from tax-exempt income and business tax credits, partially offset by the effect of certain nondeductible expenses. Refer to the Applicable Income Taxes subsection of the Statements of Income Analysis section of MD&A for additional information.

Net income was $211 million for both the three months ended March 31, 2017 and 2016.

Net interest income on an FTE basis decreased $26 million for the three months ended March 31, 2017 compared to the same period in the prior year driven primarily by an increase in FTP charge rates on loans and leases and an increase in the rates paid on core deposits. These decreases in net interest income were partially offset by an increase in yields on average commercial loans and leases of 26 bps.

Provision for loan and lease losses decreased $59 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to a decrease in criticized commercial loans. Net charge-offs as a percent of average portfolio loans and leases decreased to 26 bps for the three months ended March 31, 2017 compared to 37 bps for the same period in the prior year.

Noninterest income decreased $21 million for the three months ended March 31, 2017 compared to the same period in the prior year driven primarily by a decrease in corporate banking revenue partially offset by an increase in other noninterest income. Corporate banking revenue decreased $29 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by a decrease in lease remarketing fees which included the impact of a $31 million impairment charge related to certain operating lease assets that was recognized during the first quarter of 2017. Other noninterest income increased $8 million for the three months ended March 31, 2017 compared to the same period in the prior year driven by an increase in private equity investment income primarily due to gains on the sale of certain private equity investments.

Noninterest expense increased $7 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by increases in personnel costs. Personnel costs increased $5 million for the three months ended March 31, 2017 compared to the same period in the prior year due primarily to higher incentive compensation.

Average commercial loans decreased $338 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to a decrease in average commercial and industrial loans partially offset by increases in average commercial construction loans and average commercial mortgage loans. Average commercial and industrial loans decreased $1.2 billion for the three months ended March 31, 2017 compared to the same period in the prior year primarily as a result of deliberate exits from certain loans that did not meet the Bancorp’s risk-adjusted profitability targets and softer loan demand. Average commercial construction loans increased $681 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily as a result of an increase in new loan origination activity resulting from an increase in demand. Average commercial mortgage loans increased $126 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to an increase in new loan origination activity and lower pay downs.

22

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Average core deposits decreased $651 million for the three months ended March 31, 2017 compared to the same period in the prior year. The decrease was primarily driven by decreases in average demand deposits and average savings and money market deposits which decreased $470 million and $370 million, respectively, for the three months ended March 31, 2017 compared to the same period in the prior year. These decreases were partially offset by an increase in average interest checking deposits of $270 million for the three months ended March 31, 2017 compared to the same period in the prior year.

Branch Banking

Branch Banking provides a full range of deposit and loan products to individuals and small businesses through 1,155 full-service banking centers. Branch Banking offers depository and loan products, such as checking and savings accounts, home equity loans and lines of credit, credit cards and loans for automobiles and other personal financing needs, as well as products designed to meet the specific needs of small businesses, including cash management services.

The following table contains selected financial data for the Branch Banking segment:

TABLE 28: Branch Banking

		For the three months ended              March 31,
($ in millions)		2017		2016
Income Statement Data
Net interest income	$		430		426
Provision for loan and lease losses			42		34
Noninterest income:
Service charges on deposits			65		64
Card and processing revenue			59		61
Wealth and asset management revenue			36		35
Other noninterest income			24		29
Noninterest expense:
Personnel costs			131		132
Net occupancy and equipment expense			60		59
Card and processing expense			29		34
Other noninterest expense			182		186
Income before income taxes			170		170
Applicable income tax expense			60		60
Net income	$		110		110
Average Balance Sheet Data
Consumer loans, including held for sale	$		13,177		13,903
Commercial loans, including held for sale			1,852		1,946
Demand deposits			13,601		13,131
Interest checking deposits			10,157		9,430
Savings and money market deposits			27,156		25,326
Other time deposits and certificates $100,000 and over			5,039		5,210

Net income was $110 million for both the three months ended March 31, 2017 and 2016.

Net interest income increased $4 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to an increase in interest income on credit card which included the impact of a $12 million benefit related to a revised estimate of refunds to be offered to certain bankcard customers and an increase in FTP credits on core deposits driven by higher average balances. These benefits were partially offset by an increase in FTP charge rates on loans and leases and an increase in interest expense on core deposits driven by higher average balances.

Provision for loan and lease losses increased $8 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to an increase in net charge-offs. Net charge-offs as a percent of average portfolio loans and leases increased to 109 bps for the three months ended March 31, 2017 compared to 89 bps for the same period in the prior year.

Noninterest income decreased $5 million for the three months ended March 31, 2017 compared to the same period in the prior year driven by a decrease in other noninterest income. The decrease in other noninterest income was primarily due to the impact of a gain of $8 million on the sale of certain branches in the St. Louis MSA in the first quarter of 2016.

Noninterest expense decreased $9 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by decreases in card and processing expense and other noninterest expense. Card and processing expense decreased $5 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to the impact of renegotiated service contracts. Other noninterest expense decreased $4 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by decreases in marketing expense and operational losses.

Average consumer loans decreased $726 million for the three months ended March 31, 2017 compared to the same period in the prior year. The decrease was primarily driven by decreases in average home equity loans and average residential mortgage loans of $528 million and $223 million, respectively, for the three months ended March 31, 2017 compared to the same period in the prior year as payoffs exceeded new loan production.

23

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Average commercial loans decreased $94 million for the three months ended March 31, 2017 compared to the same period in the prior year. The decrease was primarily driven by decreases in average commercial mortgage loans of $89 million for the three months ended March 31, 2017 compared to the same period in the prior year as payoffs exceeded new loan production.

Average core deposits increased $2.8 billion for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by growth in average savings and money market deposits, average interest checking deposits and average demand deposits of $1.8 billion, $727 million and $470 million, respectively, due to an increase in average balances per customer account and acquisition of new customers.

Consumer Lending

Consumer Lending includes the Bancorp’s residential mortgage, home equity, automobile and other indirect lending activities. Lending activities include the origination, retention and servicing of residential mortgage and home equity loans or lines of credit, sales and securitizations of those loans, pools of loans or lines of credit and all associated hedging activities. Indirect lending activities include extending loans to consumers through correspondent lenders and automobile dealers.

The following table contains selected financial data for the Consumer Lending segment:

TABLE 29: Consumer Lending

		For the three months ended              March 31,
($ in millions)		2017			2016
Income Statement Data
Net interest income	$		61			60
Provision for loan and lease losses			15			12
Noninterest income:
Mortgage banking net revenue			51			77
Other noninterest income			4			6
Noninterest expense:
Personnel costs			48			48
Other noninterest expense			72			70
Income (loss) before income taxes			(19	)		13
Applicable income tax (benefit) expense			(7	)		5
Net income (loss)	$		(12	)		8
Average Balance Sheet Data
Residential mortgage loans, including held for sale	$		11,161			9,836
Home equity			314			384
Automobile loans			9,241			10,772

Consumer Lending incurred a net loss of $12 million for the three months ended March 31, 2017 compared to net income of $8 million for the three months ended March 31, 2016 driven by a decrease in noninterest income.

Provision for loan and lease losses increased $3 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to an increase in net charge-offs on residential mortgage loans and automobile loans. Net charge-offs as a percent of average portfolio loans and leases increased to 31 bps for the three months ended March 31, 2017 compared to 23 bps for the same period in the prior year.

Noninterest income decreased $28 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to a decrease in mortgage banking net revenue. Mortgage banking net revenue decreased $26 million for the three months ended March 31, 2017 compared to the same period in the prior year due to decreases of $13 million in mortgage origination fees and gains on loan sales and $13 million in net mortgage servicing revenue. Refer to the Noninterest Income subsection of the Statements of Income Analysis section of MD&A for additional information on the fluctuations in mortgage banking net revenue.

Average consumer loans and leases decreased $276 million for the three months ended March 31, 2017 compared to the same period in the prior year. Average automobile loans decreased $1.5 billion for the three months ended March 31, 2017 compared to the same period in the prior year as payoffs exceeded new loan production. Average residential mortgage loans increased $1.3 billion for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by the continued retention of certain conforming ARMs and certain other fixed-rate loans.

Wealth and Asset Management

Wealth and Asset Management provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of four main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; ClearArc Capital, Inc., an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Private Bank; and Fifth Third Institutional Services. FTS offers full-service retail brokerage services to individual clients and broker dealer services to the institutional marketplace. ClearArc Capital, Inc. provides asset management services. Fifth Third Private Bank offers holistic strategies to affluent clients in wealth planning, investing, insurance and wealth protection. Fifth Third Institutional Services provides advisory services for institutional clients including states and municipalities.

24

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table contains selected financial data for the Wealth and Asset Management segment:

TABLE 30: Wealth and Asset Management

		For the three months ended              March 31,
($ in millions)		2017		2016
Income Statement Data
Net interest income	$		38		43
Provision for loan and lease losses			4		-
Noninterest income:
Wealth and asset management revenue			105		99
Other noninterest income			1		1
Noninterest expense:
Personnel costs			48		45
Other noninterest expense			65		62
Income before income taxes			27		36
Applicable income tax expense			10		13
Net income	$		17		23
Average Balance Sheet Data
Loans and leases, including held for sale	$		3,240		3,067
Core deposits			9,045		8,864

Net income was $17 million for the three months ended March 31, 2017 compared to net income of $23 million for the same period in the prior year. The decrease in net income was primarily due to an increase in noninterest expense and a decrease in net interest income partially offset by an increase in noninterest income.

Net interest income decreased $5 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to an increase in FTP charges due to an increase in average loan balances as well as an increase in FTP charge rates on loans and leases. Additionally, net interest income was negatively impacted by an increase in the rates paid on interest checking deposits and a decrease in FTP credit rates on interest checking deposits. These negative impacts were partially offset by an increase in interest income on loans and leases driven by an increase in average balances.

Provision for loan and lease losses increased $4 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by an increase in criticized commercial loans.

Noninterest income increased $6 million for the three months ended March 31, 2017 compared to the same period in the prior year driven by an increase in wealth and asset management revenue. The increase in wealth and asset management revenue for the three months ended March 31, 2017 compared to the same period in the prior year was primarily due to a $4 million increase in private client service fees and a $2 million increase in securities and brokerage fees. These increases were driven by an increase in assets under management as a result of strong market performance and increased asset production.

Noninterest expense increased $6 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by increases in personnel costs and other noninterest expense. Personnel costs increased $3 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by higher incentive compensation. Other noninterest expense increased $3 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily driven by an increase in corporate overhead allocations.

Average loans and leases increased $173 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to increases in average residential mortgage loans driven by increases in new loan origination activity. This increase was partially offset by a decline in average home equity balances.

Average core deposits increased $181 million for the three months ended March 31, 2017 compared to the same period in the prior year primarily due to increases in average savings and money market deposits and average interest checking deposits.

General Corporate and Other

General Corporate and Other includes the unallocated portion of the investment securities portfolio, securities gains and losses, certain non-core deposit funding, unassigned equity, unallocated provision for loan and lease losses expense or a benefit from the reduction of the ALLL, the payment of preferred stock dividends and certain support activities and other items not attributed to the business segments.

Net interest income increased $56 million for the three months ended March 31, 2017 compared to the same period in the prior year. The increase was primarily driven by an increase in the benefit related to the FTP charges on loans and leases as well as an increase in interest income on taxable securities. These positive impacts were partially offset by an increase in interest expense on long-term debt.

Noninterest income decreased $65 million for the three months ended March 31, 2017 compared to the same period in the prior year. Noninterest income was impacted by the positive valuation adjustment on the stock warrant associated with Vantiv Holding, LLC of $47 million for the three months ended March 31, 2016. The stock warrant was not outstanding during 2017 as the Bancorp exercised the remaining warrant in Vantiv Holding, LLC during the fourth quarter of 2016.

25

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The decrease in noninterest income also included a $13 million negative valuation adjustment related to the Visa total return swap for the three months ended March 31, 2017 compared to a positive valuation adjustment of $1 million for the three months ended March 31, 2016. Additionally, the decrease in noninterest income included a $2 million decrease in equity method earnings from the Bancorp’s interest in Vantiv Holding, LLC.

Noninterest expense decreased $5 million for the three months ended March 31, 2017 compared to the same period in the prior year. The decrease was primarily due to an increase in corporate overhead allocations from General Corporate and Other to the other business segments and a decrease in the provision for the reserve for unfunded commitments partially offset by an increase in personnel costs.

26

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

RISK MANAGEMENT – OVERVIEW

Risk management is critical for effectively serving customers’ financial needs while protecting the Bancorp and achieving strategic goals. It is also essential to reducing the volatility of earnings and safeguarding our brand and reputation. Further, risk management is integral to the Bancorp’s strategic and capital planning processes. It is essential that the Bancorp’s business strategies consistently align to its overall risk appetite and capital considerations. Maintaining risks within the Bancorp’s risk appetite requires that risks are understood by all employees across the enterprise, and appropriate risk mitigants and controls are in place to limit risk to within the risk appetite. To achieve this, the Bancorp implements a framework for managing risk that encompasses business as usual activities and the utilization of a risk process for identifying, assessing, managing, monitoring and reporting risks.

Fifth Third uses a structure consisting of three lines of defense in order to clarify the roles and responsibilities for effective risk management.

The risk taking functions within the lines of business comprise the first line of defense. The first line of defense originates risk through normal business as usual activities; therefore, it is essential that they monitor, assess and manage the risks being taken, implement controls necessary to mitigate those risks and take responsibility for managing their business within the Bancorp’s risk appetite.

Control functions, such as the Risk Management organization, are the second line of defense and are responsible for providing challenge, oversight and governance of activities performed by the first line. The Credit Risk Review division provides an independent assessment of credit risk, which includes evaluating the sufficiency of underwriting, documentation and approval processes for consumer and commercial credits, the accuracy of risk grades assigned to commercial credit exposure, nonaccrual status, specific reserves and monitoring for charge-offs.

The Audit division is the third line of defense and provides an independent assessment of the Bancorp’s internal control structure and related systems and processes.

Fifth Third’s core values and culture provide a foundation for supporting sound risk management practices by setting expectations for appropriate conduct and accountability across the organization.

All employees are expected to conduct themselves in alignment with Fifth Third’s core values and Code of Conduct and Business Ethics while carrying out their responsibilities. Prudent risk management is a responsibility that is expected from all employees across the first, second and third lines of defense and is a foundational element of Fifth Third’s culture.

Below are the Bancorp’s core principles of risk management that are used to ensure the Bancorp is operating in a safe and sound manner:

● Understand the risks taken as a necessary part of business; however, the Bancorp ensures risks taken are in alignment with its strategy and risk appetite.

● Provide transparency and escalate risks and issues as necessary.

● Ensure Fifth Third’s products and services are designed, delivered and maintained to provide value and benefit to its customers and to Fifth Third, and that potential opportunities remain aligned to the core customer base. The Bancorp does not offer products or services that are not appropriate for its customers.

● Avoid risks that cannot be understood, managed and monitored.

● Act with integrity in all activities.

● Focus on providing operational excellence by providing reliable, accurate and efficient services to meet customer’s needs.

● Maintain a strong financial position to ensure that the Bancorp meets its strategic objectives through all economic cycles and are able to access the capital markets at all times, even under stressed conditions.

● Protect the Bancorp’s reputation by thoroughly understanding the consequences of business strategies, products and processes.

● Conduct business in compliance with all applicable laws, rules and regulations and in alignment with internal policies and procedures.

Fifth Third’s success is dependent on effective risk management and understanding and controlling the risks taken in order to deliver sustainable returns for employees and shareholders. The Bancorp’s goal is to ensure that aggregate risks do not exceed its risk capacity, and that risks taken are supportive of the Bancorp’s portfolio diversification and profitability objectives.

Fifth Third’s Risk Management Framework, states its risk appetite and the linkage to strategic and capital planning, defines and sets the tolerance for each of the eight risk types, explains the process used to manage risk across the enterprise and sets forth its risk governance structure.

● The Board of Directors (the “Board”) and executive management define the risk appetite, which is considered in the development of business strategies, and forms the basis for enterprise risk management. The Bancorp’s risk appetite is set annually in alignment with the strategic, capital and financial plans, and is reviewed by the Board on an annual basis.

● The Risk Management Process provides a consistent and integrated approach for managing risks and ensuring appropriate risk mitigants and controls are in place, and risks and issues are appropriately escalated. Five components are utilized for effective risk management; identifying, assessing, managing, monitoring and reporting risks.

● The Board and executive management have identified eight risk types for monitoring the overall risk of the Bancorp; Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Regulatory Compliance Risk, Legal Risk, Reputation Risk and Strategic Risk, and have also qualitatively established a risk tolerance, which is defined as the maximum amount of risk the Bancorp is willing to take for each of the eight risk types. These risk types are assessed on an ongoing basis and reported to the board each quarter, or more frequently, if necessary. In addition, each business and operational function (first line of defense) is accountable for proactively identifying and managing risk using its risk management process.

27

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Risk tolerances and risk limits are also established, where appropriate, in order to ensure that businesses and operational functions across the enterprise are able to monitor and manage risks at a more granular level, while ensuring that aggregate risks across the enterprise do not exceed the overall risk appetite.

● The Bancorp’s risk governance structure includes management committees operating under delegation from, and providing information directly or indirectly to, the Board. The Bancorp Board delegates certain responsibilities to Board sub-committees, including the RCC as outlined in each respective Committee Charter, which may be found on https://www.53.com. The ERMC, which reports to the RCC, comprises senior management from across the Bancorp and reviews and approves risk management frameworks and policies, oversees the management of all risk types to ensure that aggregated risks remain within the Bancorp’s risk appetite, and fosters a risk culture to ensure appropriate escalation and transparency of risks.

CREDIT RISK MANAGEMENT

The objective of the Bancorp’s credit risk management strategy is to quantify and manage credit risk on an aggregate portfolio basis, as well as to limit the risk of loss resulting from the failure of a borrower or counterparty to honor its financial or contractual obligations to the Bancorp. The Bancorp’s credit risk management strategy is based on three core principles: conservatism, diversification and monitoring. The Bancorp believes that effective credit risk management begins with conservative lending practices, which are described below. These practices include the use of intentional risk-based limits for single name exposures and counterparty selection criteria designed to reduce or eliminate exposure to borrowers who have higher than average default risk and defined weaknesses in financial performance. The Bancorp carefully designed and monitors underwriting, documentation and collection standards. The Bancorp’s credit risk management strategy also emphasizes diversification on a geographic, industry and customer level as well as ongoing portfolio monitoring and timely management reviews of large credit exposures and credits experiencing deterioration of credit quality. Credit officers with the authority to extend credit are delegated specific authority amounts, the utilization of which is closely monitored. Underwriting activities are centrally managed, and ERM manages the policy and the authority delegation process directly. The Credit Risk Review function provides independent and objective assessments of the quality of underwriting and documentation, the accuracy of risk grades and the charge-off, nonaccrual and reserve analysis process. The Bancorp’s credit review process and overall assessment of the adequacy of the allowance for credit losses is based on quarterly assessments of the probable estimated losses inherent in the loan and lease portfolio. The Bancorp uses these assessments to promptly identify potential problem loans or leases within the portfolio, maintain an adequate allowance for credit losses and take any necessary charge-offs. The Bancorp defines potential problem loans and leases as those rated substandard that do not meet the definition of a nonaccrual loan or a restructured loan. Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for further information on the Bancorp’s credit grade categories, which are derived from standard regulatory rating definitions. In addition, stress testing is performed on various commercial and consumer portfolios using the CCAR model and for certain portfolios, such as real estate and leveraged lending, the stress testing is performed by Credit Department personnel at the individual loan level during credit underwriting.

The following tables provide a summary of potential problem portfolio loans and leases:

TABLE 31: Potential Problem Portfolio Loans and Leases
As of March 31, 2017 ($ in millions)	Carrying Value		Unpaid   Principal   Balance		Exposure
Commercial and industrial loans	$	1,140		1,141		1,765
Commercial mortgage loans		94		94		95
Commercial leases		27		27		27
Total potential problem portfolio loans and leases	$	1,261		1,262		1,887
TABLE 32: Potential Problem Portfolio Loans and Leases
As of December 31, 2016 ($ in millions)	Carrying Value		Unpaid   Principal   Balance		Exposure
Commercial and industrial loans	$	1,108		1,110		1,807
Commercial mortgage loans		102		102		104
Commercial leases		22		22		22
Total potential problem portfolio loans and leases	$	1,232		1,234		1,933

In addition to the individual review of larger commercial loans that exhibit probable or observed credit weaknesses, the commercial credit review process includes the use of two risk grading systems. The risk grading system currently utilized for allowance for credit loss analysis purposes encompasses ten categories. The Bancorp also maintains a dual risk rating system for credit approval and pricing, portfolio monitoring and capital allocation that includes a “through-the-cycle” rating philosophy for assessing a borrower’s creditworthiness. A “through-the-cycle” rating philosophy uses a grading scale that assigns ratings based on average default rates through an entire business cycle for borrowers with similar financial performance. The dual risk rating system includes thirteen probabilities of default grade categories and an additional eleven grade categories for estimating losses given an event of default. The probability of default and loss given default evaluations are not separated in the ten-category risk rating system. The Bancorp has completed significant validation and testing of the dual risk rating system as a commercial credit risk management tool. The Bancorp is assessing the necessary modifications to the dual risk rating system outputs to develop a U.S. GAAP compliant ALLL as part of the Bancorp’s adoption of ASU 2016-13 “Measurement of Credit Losses on Financial Instruments,” which will be effective for the Bancorp on January 1, 2020. Scoring systems, various analytical tools and portfolio performance monitoring are used to assess the credit risk in the Bancorp’s homogenous consumer and small business loan portfolios.

28

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Overview

Economic growth continues to improve as data has been broadly positive. There have been steady gains in the job market and real GDP is expected to expand at a moderate pace in 2017. Household spending continues to be the strongest driver of the U.S. economy. Inflation continues to run below the FRB’s stated objective, but has increased over the past several months and could rise further if unemployment continues to fall. Improving global conditions are supporting U.S. manufacturing activity and housing prices continue to increase across the country. With regard to commercial real estate, the credit market has become somewhat more selective even though market data and vacancies remain positive.

Commercial Portfolio

The Bancorp’s credit risk management strategy seeks to minimize concentrations of risk through diversification. The Bancorp has commercial loan concentration limits based on industry, lines of business within the commercial segment, geography and credit product type. The risk within the commercial loan and lease portfolio is managed and monitored through an underwriting process utilizing detailed origination policies, continuous loan level reviews, monitoring of industry concentration and product type limits and continuous portfolio risk management reporting.

The Bancorp provides loans to a variety of customers ranging from large multi-national firms to middle market businesses, sole proprietors and high net worth individuals. The origination policies for commercial and industrial loans outline the risks and underwriting requirements for loans to businesses in various industries. Included in the policies are maturity and amortization terms, collateral and leverage requirements, cash flow coverage measures and hold limits. The Bancorp aligns credit and sales teams with specific industry expertise to better monitor and manage different industry segments of the portfolio.

The origination policies for commercial real estate outline the risks and underwriting requirements for owner and nonowner-occupied and construction lending. Included in the policies are maturity and amortization terms, maximum LTVs, minimum debt service coverage ratios, construction loan monitoring procedures, appraisal requirements, pre-leasing requirements (as applicable), sensitivity and pro-forma analysis requirements and interest rate sensitivity. The Bancorp requires a valuation of real estate collateral, which may include third-party appraisals, be performed at the time of origination and renewal in accordance with regulatory requirements and on an as needed basis when market conditions justify. Although the Bancorp does not back test these collateral value assumptions, the Bancorp maintains an appraisal review department to order and review third-party appraisals in accordance with regulatory requirements. Collateral values on criticized assets with relationships exceeding $1 million are reviewed quarterly to assess the appropriateness of the value ascribed in the assessment of charge-offs and specific reserves.

The Bancorp assesses all real estate and non-real estate collateral securing a loan and considers all cross-collateralized loans in the calculation of the LTV ratio. The following tables provide detail on the most recent LTV ratios for commercial mortgage loans greater than $1 million, excluding impaired commercial mortgage loans individually evaluated. The Bancorp does not typically aggregate the LTV ratios for commercial mortgage loans less than $1 million.

TABLE 33: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of March 31, 2017 ($ in millions)	LTV > 100%		LTV 80-100%		LTV < 80%
Commercial mortgage owner-occupied loans	$	81		177		2,060
Commercial mortgage nonowner-occupied loans		22		85		2,588
Total	$	103		262		4,648
TABLE 34: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of December 31, 2016 ($ in millions)	LTV > 100%		LTV 80-100%		LTV < 80%
Commercial mortgage owner-occupied loans	$	106		178		1,953
Commercial mortgage nonowner-occupied loans		22		100		2,598
Total	$	128		278		4,551

29

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table provides detail on commercial loans and leases by industry classification (as defined by the North American Industry Classification System), by loan size and by state, illustrating the diversity and granularity of the Bancorp’s commercial loans and leases as of:

TABLE 35: Commercial Loan and Lease Portfolio (excluding loans held for sale)
	March 31, 2017						December 31, 2016
($ in millions)	Outstanding		Exposure		Nonaccrual		Outstanding		Exposure		Nonaccrual
By Industry:
Manufacturing	$	9,993		18,802		66		10,070		19,646		50
Real estate		7,353		11,987		28		7,206		11,919		26
Financial services and insurance		5,496		11,291		2		5,648		11,522		2
Healthcare		4,618		6,484		14		4,649		6,450		23
Business services		4,271		6,492		44		4,599		6,996		65
Retail trade		4,079		7,626		5		4,048		7,598		6
Wholesale trade		3,464		6,148		24		3,482		6,249		24
Accommodation and food		3,185		4,958		5		3,051		4,817		5
Transportation and warehousing		3,134		4,562		85		3,059		4,473		38
Communication and information		2,982		4,961		-		2,901		4,726		-
Construction		2,241		4,089		4		2,025		3,786		3
Entertainment and recreation		1,798		3,045		2		1,736		2,979		3
Mining		1,216		2,548		199		1,312		2,621		246
Utilities		1,017		2,631		-		1,168		2,799		-
Other services		741		972		38		729		945		24
Public administration		422		463		-		417		463		-
Agribusiness		285		416		2		284		426		2
Individuals		58		81		-		66		83		1
Other		20		40		5		2		2		5
Total	$	56,373		97,596		523		56,452		98,500		523
By Loan Size:
Less than $200,000		1 %		1		3		1		1		3
$200,000 - $1 million		3		2		6		3		3		5
$1 million - $5 million		8		7		13		9		7		16
$5 million - $10 million		6		6		14		7		6		13
$10 million - $25 million		23		20		50		23		20		54
Greater than $25 million		59		64		14		57		63		9
Total		100 %		100		100		100		100		100
By State:
Ohio		14 %		16		5		15		16		4
Florida		8		7		10		8		7		5
Michigan		7		7		4		7		7		5
Illinois		7		6		7		7		7		9
Indiana		4		5		4		4		4		2
North Carolina		4		4		-		4		4		-
Tennessee		3		3		-		3		3		1
Kentucky		3		3		1		3		3		2
Pennsylvania		3		3		3		3		3		4
All other states		47		46		66		46		46		68
Total		100 %		100		100		100		100		100

The Bancorp’s non-power producing energy and nonowner-occupied commercial real estate portfolios have been identified by the Bancorp as loans which it believes represent a higher level of risk compared to the rest of the Bancorp’s commercial loan portfolio due to economic or market conditions within the Bancorp’s key lending areas.

Due to the sensitivity of the non-power producing energy portfolio to downward movements in oil prices, the Bancorp saw a migration into criticized classifications during 2015 through the second quarter of 2016. However, in the second half of 2016 and continuing into 2017, this portfolio has stabilized with some signs of improvement. The reserve-based energy loans that the Bancorp holds are senior secured loans with a borrowing base that is re-determined on a semi-annual basis. In addition to the non-power producing energy lending exposure shown in Table 36, the Bancorp has approximately $177 million of operating lease assets, recorded in operating lease equipment in the Condensed Consolidated Balance Sheets, that are leased to customers in non-power producing energy industries.

30

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following tables provide an analysis of the non-power producing energy loan portfolio:

TABLE 36: Non-Power Producing Energy Portfolio
As of March 31, 2017 ($ in millions)													For the three months ended March 31, 2017
	Pass		Criticized		Outstanding		Exposure		90 Days Past Due		Nonaccrual		Net Charge-Offs
Reserve-based lending	$	382		296		678		1,431		-		142		-
Midstream		290		-		290		1,084		-		-		-
Oil field services		125		77		202		316		-		39		1
Oil and gas		12		57		69		450		-		16		-
Refining		56		-		56		425		-		-		-
Total	$	865		430		1,295		3,706		-		197		1
TABLE 37: Non-Power Producing Energy Portfolio
As of March 31, 2016 ($ in millions)													For the three months ended March 31, 2016
	Pass		Criticized		Outstanding		Exposure		90 Days Past Due		Nonaccrual		Net Charge-Offs
Reserve-based lending	$	197		542		739		1,183		-		144		-
Midstream		327		-		327		1,050		-		-		-
Oil field services		164		104		268		437		-		24		9
Oil and gas		76		52		128		512		-		22		-
Refining		102		1		103		655		-		-		-
Total	$	866		699		1,565		3,837		-		190		9

The following tables provide an analysis of nonowner-occupied commercial real estate loans by state (excluding loans held for sale):

TABLE 38: Nonowner-Occupied Commercial Real Estate (excluding loans held for sale)(a)
As of March 31, 2017 ($ in millions)									For the three months ended March 31, 2017
	Outstanding		Exposure		90 Days  Past Due		Nonaccrual		Net Charge-Offs
By State:
Ohio	$	1,516		1,947		-		3	3
Florida		901		1,478		-		1	-
Illinois		692		1,216		-		-	-
Michigan		603		796		-		2	-
Indiana		648		1,071		-		-	-
North Carolina		580		838		-		-	-
All other states		2,658		4,510		-		3	-
Total	$	7,598		11,856		-		9	3
(a)    Included in commercial mortgage loans and commercial construction loans in the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A.
TABLE 39: Nonowner-Occupied Commercial Real Estate (excluding loans held for sale)(a)
As of March 31, 2016 ($ in millions)									For the three months ended March 31, 2016
	Outstanding		Exposure		90 Days  Past Due		Nonaccrual		Net Charge-Offs
By State:
Ohio	$	1,252		1,618		-		5	-
Florida		759		1,060		-		7	-
Illinois		674		1,108		-		1	-
Michigan		612		720		-		18	-
Indiana		241		446		-		-	-
North Carolina		408		689		-		3	-
All other states		2,560		4,441		-		3	-
Total	$	6,506		10,082		-		37	-

(a) Included in commercial mortgage loans and commercial construction loans in the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A.

31

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Consumer Portfolio

Consumer credit risk management utilizes a framework that encompasses consistent processes for identifying, assessing, managing, monitoring and reporting credit risk. These processes are supported by a credit risk governance structure that includes Board oversight, policies, risk limits and risk committees.    

The Bancorp’s consumer portfolio is materially comprised of four categories of loans: residential mortgage loans, home equity loans, automobile loans and credit card. The Bancorp has identified certain credit characteristics within these four categories of loans which it believes represent a higher level of risk compared to the rest of the consumer loan portfolio. The Bancorp does not update LTV ratios for the consumer portfolio subsequent to origination except as part of the charge-off process for real estate secured loans. Among consumer portfolios, legacy underwritten residential mortgage and brokered home equity portfolios exhibited the most stress during the past credit crisis. As of March 31, 2017, consumer real estate loans, consisting of residential mortgage loans and home equity loans, originated from 2005 through 2008 represent approximately 16% of the consumer real estate portfolio. These loans accounted for 46% of total consumer real estate secured losses for the three months ended March 31, 2017. Current loss rates in the residential mortgage and home equity portfolios are below pre-crisis levels. In addition to the consumer real estate portfolio, credit risk management continues to closely monitor the automobile portfolio performance. The automobile market has exhibited industry-wide gradual loosening of credit standards such as lower FICOs, longer terms and higher LTVs. Fifth Third has adjusted credit standards focused on improving risk adjusted return while maintaining credit risk tolerance. Fifth Third actively manages the automobile portfolio through concentration limits, which mitigates credit risk through limiting the exposure to lower FICO scores, higher advance rates and extended term originations.

Residential mortgage portfolio

The Bancorp manages credit risk in the residential mortgage portfolio through underwriting guidelines that limit exposure to higher LTV ratios and lower FICO scores. Additionally, the portfolio is governed by concentration limits that ensure geographic, product and channel diversification. The Bancorp may also package and sell loans in the portfolio.

The Bancorp does not originate mortgage loans that permit customers to defer principal payments or make payments that are less than the accruing interest. The Bancorp originates both fixed-rate and ARM loans. Within the ARM portfolio, approximately $723 million of ARM loans will have rate resets during the next twelve months. Of these resets, 91% are expected to experience an increase in rate, with an average increase of approximately one half of a percent.

Certain residential mortgage products have contractual features that may increase credit exposure to the Bancorp in the event of a decline in housing values. These types of mortgage products offered by the Bancorp include loans with high LTV ratios, multiple loans on the same collateral that when combined result in a LTV greater than 80% and interest-only loans. The Bancorp has deemed residential mortgage loans with greater than 80% LTV ratios and no mortgage insurance as loans that represent a higher level of risk.

Portfolio residential mortgage loans from 2010 and later vintages represented 89% of the portfolio as of March 31, 2017 and had a weighted-average LTV of 72% and a weighted-average origination FICO of 760.

The following table provides an analysis of the residential mortgage portfolio loans outstanding by LTV at origination as of:

TABLE 40: Residential Mortgage Portfolio Loans by LTV at Origination

		March 31, 2017			December 31, 2016
($ in millions)		Outstanding	Weighted-   Average LTV		Outstanding	Weighted-     Average LTV
LTV £ 80%	$	11,681	66.0  %	$	11,412	65.9%
LTV > 80%, with mortgage insurance		1,289	93.3		1,284	93.3
LTV > 80%, no mortgage insurance		2,366	95.6		2,355	95.7
Total	$	15,336	73.2  %	$	15,051	73.2%

The following tables provide an analysis of the residential mortgage portfolio loans outstanding by state with a greater than 80% LTV ratio and no mortgage insurance:

TABLE 41: Residential Mortgage Portfolio Loans, LTV Greater than 80%, No Mortgage Insurance

As of March 31, 2017 ($ in millions)							For the three months ended March 31, 2017
	Outstanding		90 Days      Past Due		Nonaccrual		Net Charge-offs
By State:
Ohio	$	554		2		4		-
Illinois		464		-		1		-
Florida		338		2		2		1
Michigan		271		-		1		-
Indiana		159		1		1		-
North Carolina		113		-		1		-
Kentucky		91		1		-		-
All other states		376		-		-		-
Total	$	2,366		6		10		1

32

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 42: Residential Mortgage Portfolio Loans, LTV Greater than 80%, No Mortgage Insurance
As of March 31, 2016 ($ in millions)							For the three months ended     March 31, 2016
	Outstanding		90 Days     Past Due		Nonaccrual		Net Charge-offs
By State:
Ohio	$	532		1		4		1
Illinois		380		1		1		-
Florida		291		-		4		-
Michigan		282		1		1		-
Indiana		145		1		1		-
North Carolina		107		-		1		-
Kentucky		85		1		-		-
All other states		362		-		1		-
Total	$	2,184		5		13		1

Home equity portfolio

The Bancorp’s home equity portfolio is primarily comprised of home equity lines of credit. Beginning in the first quarter of 2013, the Bancorp’s newly originated home equity lines of credit have a 10-year interest-only draw period followed by a 20-year amortization period. The home equity line of credit previously offered by the Bancorp was a revolving facility with a 20-year term, minimum payments of interest-only and a balloon payment of principal at maturity. Peak maturity years for the balloon home equity lines of credit are 2025 to 2028 and approximately 26% of the balances mature before 2025.

The aging of 2008 and prior vintages of home equity loans has contributed to declining losses over the past twelve months. These vintages represented 67% of the balances at March 31, 2017 and 93% of the net charge offs during the three months ended March 31, 2017 compared to 72% of the balances at March 31, 2016 and 98% of the net charge offs during the three months ended March 31, 2016.

The ALLL provides coverage for probable and estimable losses in the home equity portfolio. The allowance attributable to the portion of the home equity portfolio that has not been restructured in a TDR is calculated on a pooled basis with senior lien and junior lien categories segmented in the determination of the probable credit losses in the home equity portfolio. The modeled loss factor for the home equity portfolio is based on the trailing twelve month historical loss rate for each category, as adjusted for certain prescriptive loss rate factors and certain qualitative adjustment factors to reflect risks associated with current conditions and trends. The prescriptive loss rate factors include adjustments for delinquency trends, LTV trends and refreshed FICO score trends. The qualitative factors include adjustments for changes in policies or procedures in underwriting, monitoring or collections, economic conditions, portfolio mix, lending and risk management personnel, results of internal audit and quality control reviews, collateral values and geographic concentrations. The Bancorp considers home price index trends when determining the collateral value qualitative factor.

The home equity portfolio is managed in two primary groups: loans outstanding with a combined LTV greater than 80% and those loans with a LTV of 80% or less based upon appraisals at origination. The carrying value of the greater than 80% LTV home equity loans and 80% or less LTV home equity loans were $2.3 billion and $5.2 billion, respectively, as of March 31, 2017. Of the total $7.5 billion of outstanding home equity loans:

● 87% reside within the Bancorp’s Midwest footprint of Ohio, Michigan, Kentucky, Indiana and Illinois as of March 31, 2017;

● 37% are in senior lien positions and 63% are in junior lien positions at March 31, 2017;

● 80% of non-delinquent borrowers made at least one payment greater than the minimum payment during the three months ended March 31, 2017; and

● The portfolio had an average refreshed FICO score of 743 at March 31, 2017.

The Bancorp actively manages lines of credit and makes adjustments in lending limits when it believes it is necessary based on FICO score deterioration and property devaluation. The Bancorp does not routinely obtain appraisals on performing loans to update LTV ratios after origination. However, the Bancorp monitors the local housing markets by reviewing various home price indices and incorporates the impact of the changing market conditions in its ongoing credit monitoring processes. For junior lien home equity loans which become 60 days or more past due, the Bancorp tracks the performance of the senior lien loans in which the Bancorp is the servicer and utilizes consumer credit bureau attributes to monitor the status of the senior lien loans that the Bancorp does not service. If the senior lien loan is found to be 120 days or more past due, the junior lien home equity loan is placed on nonaccrual status unless both loans are well-secured and in the process of collection. Additionally, if the junior lien home equity loan becomes 120 days or more past due and the senior lien loan is also 120 days or more past due, the junior lien home equity loan is assessed for charge-off. Refer to the Analysis of Nonperforming Assets subsection of the Risk Management section of MD&A for more information.

33

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table provides an analysis of home equity portfolio loans outstanding disaggregated based upon refreshed FICO score as of:

TABLE 43: Home Equity Portfolio Loans Outstanding by Refreshed FICO Score
		March 31, 2017					December 31, 2016
($ in millions)		Outstanding	% of Total				Outstanding	% of Total
Senior Liens:
FICO £ 659	$	261		4	%	$	262		3	%
FICO 660-719		403		5			424		6
FICO ³ 720		2,067		28			2,112		27
Total senior liens		2,731		37			2,798		36
Junior Liens:
FICO £ 659		615		8			633		8
FICO 660-719		941		13			975		13
FICO ³ 720		3,182		42			3,289		43
Total junior liens		4,738		63			4,897		64
Total	$	7,469		100	%	$	7,695		100	%

The Bancorp believes that home equity loans with a greater than 80% combined LTV ratio present a higher level of risk. The following table provides an analysis of the home equity loans outstanding in a senior and junior lien position by LTV at origination:

TABLE 44: Home Equity Portfolio Loans Outstanding by LTV at Origination
		March 31, 2017					December 31, 2016
($ in millions)		Outstanding	Weighted-     Average LTV				Outstanding	Weighted-   Average LTV
Senior Liens:
LTV £ 80%	$	2,395		55.1	%	$	2,454		55.1	%
LTV > 80%		336		89.0			344		89.0
Total senior liens		2,731		59.5			2,798		59.5
Junior Liens:
LTV £ 80%		2,790		67.6			2,892		67.6
LTV > 80%		1,948		90.6			2,005		90.7
Total junior liens		4,738		78.6			4,897		78.7
Total	$	7,469		71.2	%	$	7,695		71.2	%

The following tables provide an analysis of home equity portfolio loans by state with a combined LTV greater than 80%:

TABLE 45: Home Equity Portfolio Loans Outstanding with a LTV Greater than 80%
As of March 31, 2017 ($ in millions)									For the three months ended  March 31, 2017
	Outstanding		Exposure		90 Days    Past Due		Nonaccrual		Net Charge-offs
By State:
Ohio	$	1,026		1,848		-		8		2
Michigan		413		643		-		5		-
Illinois		253		391		-		3		1
Indiana		177		293		-		2		-
Kentucky		163		285		-		2		-
Florida		78		110		-		2		-
All other states		174		248		-		4		-
Total	$	2,284		3,818		-		26		3

TABLE 46: Home Equity Portfolio Loans Outstanding with a LTV Greater than 80%
As of March 31, 2016 ($ in millions)									For the three months ended  March 31, 2016
	Outstanding		Exposure		90 Days       Past Due		Nonaccrual		Net Charge-offs
By State:
Ohio	$	1,065		1,827		-		10		2
Michigan		498		750		-		5		-
Illinois		295		445		-		4		1
Indiana		211		340		-		3		-
Kentucky		200		334		-		2		-
Florida		91		126		-		2		-
All other states		217		303		-		4		1
Total	$	2,577		4,125		-		30		4

34

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Automobile portfolio

The Bancorp’s automobile portfolio balances have declined since December 31, 2016 as a result of reduced origination levels. Additionally, the concentration of lower FICO (<690) origination balances remained within targeted credit risk tolerance during the first quarter of 2017. All concentration and guideline changes are monitored monthly to ensure alignment with original credit performance and return projections.

The following table provides an analysis of automobile portfolio loans outstanding disaggregated based upon FICO score as of:

TABLE 47: Automobile Portfolio Loans Outstanding by FICO Score at Origination
		March 31, 2017						December 31, 2016
($ in millions)		Outstanding		% of Total				Outstanding		% of Total
FICO £ 690	$		1,643		17	%	$		1,714		17	%
FICO > 690			7,929		83				8,269		83
Total	$		9,572		100	%	$		9,983		100	%

The automobile portfolio is characterized by direct and indirect lending products to consumers. As of March 31, 2017, 47% of the automobile loan portfolio is comprised of loans collateralized by new automobiles. It is a common industry practice to advance on automobile loans an amount in excess of the automobile value due to the inclusion of taxes, title and other fees paid at closing. The Bancorp monitors its exposure to these higher risk loans.

The following table provides an analysis of automobile portfolio loans outstanding by LTV at origination as of:
TABLE 48: Automobile Portfolio Loans Outstanding by LTV at Origination
		March 31, 2017						December 31, 2016
($ in millions)		Outstanding		Weighted- Average LTV				Outstanding		Weighted-  Average LTV
LTV £ 100%	$		6,306		82.0	%	$		6,637		82.0	%
LTV > 100%			3,266		111.8				3,346		111.7
Total	$		9,572		92.7	%	$		9,983		92.4	%

The following table provides an analysis of the Bancorp’s automobile portfolio loans with a LTV at origination greater than 100%:

TABLE 49: Automobile Portfolio Loans Outstanding with a LTV Greater than 100%
As of ($ in millions)	Outstanding		90 Days Past   Due and Accruing		Nonaccrual		Net Charge-offs for the     Three Months Ended
March 31, 2017	$	3,266		4		1		8
March 31, 2016		3,627		4		2		6

Credit card portfolio

The credit card portfolio consists of predominately prime accounts with 97% of loan balances existing within the Bancorp’s footprint as of both March 31, 2017 and December 31, 2016. At both March 31, 2017 and December 31, 2016, 78% of the outstanding balances were originated through branch based relationships with the remainder coming from direct mail campaigns and online acquisitions.

The following table provides an analysis of credit card portfolio loans outstanding disaggregated based upon FICO score as of:

TABLE 50: Credit Card Portfolio Loans Outstanding by FICO Score at Origination
		March 31, 2017						December 31, 2016
($ in millions)		Outstanding		% of Total				Outstanding		% of Total
FICO £ 659	$		42		2	%	$		45		2	%
FICO 660-719			491		24				521		23
FICO ³ 720			1,537		74				1,671		75
Total	$		2,070		100	%	$		2,237		100	%

European Exposure

The Bancorp has no direct sovereign exposure to any European government as of March 31, 2017. In providing services to our customers, the Bancorp routinely enters into financial transactions with foreign domiciled and U.S. subsidiaries of foreign businesses as well as foreign financial institutions. These financial transactions are in the form of loans, loan commitments, letters of credit, derivatives, guarantees, banker’s acceptances and securities. The Bancorp’s risk appetite for foreign country exposure is managed by having established country exposure limits. The Bancorp’s total exposure to European domiciled or owned businesses and European financial institutions was $2.9 billion and funded exposure was $1.5 billion as of March 31, 2017. Additionally, the Bancorp was within its established country exposure limits for all European countries.

The Bancorp has been closely monitoring the Brexit situation and its potential impact on the Bancorp. The Bancorp’s United Kingdom exposure is shown in the following table.

35

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table provides detail about the Bancorp’s exposure to all European domiciled and U.S. subsidiaries of European businesses as well as European financial institutions as of March 31, 2017:

TABLE 51: European Exposure

		Sovereigns		Financial Institutions		Non-Financial     Institutions		Total
		Total	Funded	Total	Funded	Total	Funded	Total	Funded
($ in millions)		Exposure(a)	Exposure	Exposure(a)	Exposure	Exposure(a)	Exposure	Exposure(a)	Exposure
Peripheral Europe(b)	$	-	-	79	37	117	45	196	82
Other Eurozone(c)		-	-	339	107	1,364	799	1,703	906
Total Eurozone	$	-	-	418	144	1,481	844	1,899	988
United Kingdom		-	-	53	53	836	459	889	512
Other Europe(d)		-	-	1	1	115	34	116	35
Total Europe	$	-	-	472	198	2,432	1,337	2,904	1,535

(a) Total exposure includes funded exposure and unfunded commitments.

(b) Peripheral Europe includes Greece, Ireland, Italy, Portugal and Spain.

(c) Eurozone includes countries participating in the European common currency (Euro).

(d) Other Europe includes European countries not part of the Eurozone (primarily Switzerland, Norway and Sweden).

Analysis of Nonperforming Assets

Nonperforming assets include nonaccrual loans and leases for which ultimate collectability of the full amount of the principal and/or interest is uncertain; restructured commercial and credit card loans which have not yet met the requirements to be classified as a performing asset; restructured consumer loans which are 90 days past due based on the restructured terms unless the loan is both well-secured and in the process of collection; and certain other assets, including OREO and other repossessed property. A summary of nonperforming assets is included in Table 52. For further information on the Bancorp’s policies related to accounting for delinquent and nonperforming loans and leases, refer to the Nonaccrual Loans and Leases section of Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

Nonperforming assets were $730 million at March 31, 2017 compared to $751 million at December 31, 2016. At March 31, 2017, $9 million of nonaccrual loans were held for sale, compared to $13 million at December 31, 2016.

Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO were 0.79% as of March 31, 2017 compared to 0.80% as of December 31, 2016. Nonaccrual loans and leases secured by real estate were 24% of nonaccrual loans and leases as of March 31, 2017 compared to 25% as of December 31, 2016.

Commercial portfolio nonaccrual loans and leases were $523 million at both March 31, 2017 and December 31, 2016. Consumer portfolio nonaccrual loans and leases were $134 million at March 31, 2017, a decrease of $3 million from December 31, 2016. Refer to Table 53 for a rollforward of the nonaccrual loans and leases.

OREO and other repossessed property was $64 million at March 31, 2017 and $78 million at December 31, 2016. The Bancorp recognized $4 million and $3 million in losses on the sale or write-down of OREO properties for the three months ended March 31, 2017 and 2016, respectively.

For the three months ended March 31, 2017 and 2016, approximately $9 million and $11 million, respectively, of interest income would have been recognized if the nonaccrual and renegotiated loans and leases on nonaccrual status had been current in accordance with their original terms. Although these values help demonstrate the costs of carrying nonaccrual credits, the Bancorp does not expect to recover the full amount of interest as nonaccrual loans and leases are generally carried below their principal balance.

36

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 52: Summary of Nonperforming Assets and Delinquent Loans

As of ($ in millions)	March 31, 2017		December 31, 2016
Nonaccrual portfolio loans and leases:
Commercial and industrial loans	$	251		302
Commercial mortgage loans		21		27
Commercial leases		-		2
Residential mortgage loans		21		17
Home equity		53		55
Nonaccrual portfolio restructured loans and leases:
Commercial and industrial loans		233		176
Commercial mortgage loans(c)		16		14
Commercial leases		2		2
Residential mortgage loans		14		17
Home equity		17		18
Automobile loans		2		2
Credit card		27		28
Total nonaccrual portfolio loans and leases(b)		657		660
OREO and other repossessed property		64		78
Total nonperforming portfolio assets		721		738
Nonaccrual loans held for sale		7		4
Nonaccrual restructured loans held for sale		2		9
Total nonperforming assets	$	730		751
Loans and leases 90 days past due and still accruing
Commercial and industrial loans	$	3		4
Residential mortgage loans(a)		45		49
Automobile loans		6		9
Credit card		21		22
Total loans and leases 90 days past due and still accruing	$	75		84
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO		0.79   %		0.80
ALLL as a percent of nonperforming portfolio assets		172		170

(a) Information for all periods presented excludes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. These advances were $302 as of March 31, 2017 and $312 as of December 31, 2016. The Bancorp recognized $2 on these insured or guaranteed loans for both the three months ended March 31, 2017 and March 31, 2016.

(b) Includes $4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at both March 31, 2017 and December 31, 2016 and an immaterial amount and $1 of restructured nonaccrual government insured commercial loans at March 31, 2017 and December 31, 2016, respectively.

(c) Excludes $19 of restructured nonaccrual loans at both March 31, 2017 and December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.

The following tables provide a rollforward of portfolio nonaccrual loans and leases, by portfolio segment:

TABLE 53: Rollforward of Portfolio Nonaccrual Loans and Leases

				Residential
For the three months ended March 31, 2017 ($ in millions)	Commercial			Mortgage		Consumer			Total
Balance, beginning of period	$	523			34		103			660
Transfers to nonaccrual status		128			11		31			170
Transfers to accrual status		-			(5)		(14	)		(19	)
Transfers to held for sale		(3	)		-		-			(3	)
Loans sold from portfolio		-			-		-			-
Loan paydowns/payoffs		(80	)		(2)		(8	)		(90	)
Transfers to OREO		(2	)		(2)		(2	)		(6	)
Charge-offs		(46	)		(1)		(11	)		(58	)
Draws/other extensions of credit		3			-		-			3
Balance, end of period	$	523			35		99			657
TABLE 54: Rollforward of Portfolio Nonaccrual Loans and Leases
				Residential
For the three months ended March 31, 2016 ($ in millions)	Commercial			Mortgage		Consumer			Total
Balance, beginning of period	$	341			51		114			506
Transfers to nonaccrual status		306			13		42			361
Transfers to accrual status		(3	)		(15)		(18	)		(36	)
Transfers to held for sale		(3	)		-		-			(3	)
Loans sold from portfolio		(6	)		-		-			(6	)
Loan paydowns/payoffs		(39	)		(1)		(8	)		(48	)
Transfers to OREO		(1	)		(3)		(3	)		(7	)
Charge-offs		(60	)		(1)		(13	)		(74	)
Draws/other extensions of credit		8			-		-			8
Balance, end of period	$	543			44		114			701

37

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Troubled Debt Restructurings

If a borrower is experiencing financial difficulty, the Bancorp may consider, in certain circumstances, modifying the terms of their loan to maximize collection of amounts due. Typically, these modifications reduce the loan interest rate, extend the loan term, reduce the accrued interest or in limited circumstances, reduce the principal balance of the loan. These modifications are classified as TDRs.

At the time of modification, the Bancorp maintains certain consumer loan TDRs (including residential mortgage loans, home equity loans, and other consumer loans) on accrual status, provided there is reasonable assurance of repayment and performance according to the modified terms based upon a current, well-documented credit evaluation. Commercial loans modified as part of a TDR are maintained on accrual status provided there is a sustained payment history of six months or greater prior to the modification in accordance with the modified terms and all remaining contractual payments under the modified terms are reasonably assured of collection. TDRs of commercial loans and credit card loans that do not have a sustained payment history of six months or greater in accordance with the modified terms remain on nonaccrual status until a six-month payment history is sustained.

Consumer restructured loans on accrual status totaled $950 million and $958 million at March 31, 2017 and December 31, 2016, respectively. As of March 31, 2017, the percent of restructured residential mortgage loans, home equity loans and credit card loans that were past due 30 days or more from their modified terms were 27%, 10% and 30%, respectively.

The following tables summarize portfolio TDRs by loan type and delinquency status:

TABLE 55: Accruing and Nonaccruing Portfolio TDRs
		Accruing
				30-89 Days		90 Days or
As of March 31, 2017 ($ in millions)		Current		Past Due		More Past Due		Nonaccruing		Total
Commercial loans(b)(c)	$		276		1		-		251	528
Residential mortgage loans(a)			480		41		121		14	656
Home equity			262		13		-		17	292
Automobile loans			11		-		-		2	13
Credit card			18		4		-		27	49
Total	$		1,047		59		121		311	1,538
(a)    Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2017, these advances represented $253 of current loans, $33 of 30-89 days past due loans and $106 of 90 days or more past due loans. (b)    As of March 31, 2017, excludes $7 of restructured accruing loans and $19 of restructured nonaccrual loans associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party. (c)    Excludes restructured nonaccrual loans held for sale.
TABLE 56: Accruing and Nonaccruing Portfolio TDRs
		Accruing
				30-89 Days		90 Days or
As of December 31, 2016 ($ in millions)		Current		Past Due		More Past Due		Nonaccruing		Total
Commercial loans(b)(c)	$		319		3		-		192	514
Residential mortgage loans(a)			458		56		121		17	652
Home equity			269		18		-		18	305
Automobile loans			12		-		-		2	14
Credit card			20		4		-		28	52
Total	$		1,078		81		121		257	1,537
(a)    Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2016, these advances represented $230 of current loans, $46 of 30-89 days past due loans and $107 of 90 days or more past due loans. (b)    As of December 31, 2016, excludes $7 of restructured accruing loans and $19 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. (c)    Excludes restructured nonaccrual loans held for sale.

Analysis of Net Loan Charge-offs

Net charge-offs were 40 bps and 42 bps of average portfolio loans and leases for the three months ended March 31, 2017 and 2016, respectively. Table 57 provides a summary of credit loss experience and net charge-offs as a percent of average portfolio loans and leases outstanding by loan category.

The ratio of commercial loan and lease net charge-offs to average portfolio commercial loans and leases decreased to 29 bps during the three months ended March 31, 2017 compared to 38 bps during the three months ended March 31, 2016. The decrease is primarily due to a $10 million decrease in net charge-offs on commercial and industrial loans driven by a $9 million charge-off in the energy portfolio related to oil field services loans during the three months ended March 31, 2016.

The ratio of consumer loan and lease net charge-offs to average portfolio consumer loans and leases increased to 56 bps during the three months ended March 31, 2017 compared to 48 bps during the three months ended March 31, 2016. Residential mortgage loan net charge-offs, which typically involve partial charge-offs based upon appraised values of underlying collateral, increased $3 million for the three months ended March 31, 2017 compared to the same period from the prior year.

38

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Home equity net charge-offs decreased $2 million compared to the three months ended March 31, 2016 primarily due to improvements in loss severities. Management actively manages lines of credit and makes reductions in lending limits when it believes it is necessary based on FICO score deterioration or property devaluation.

Automobile loan charge-offs increased $2 million compared to the three months ended March 31, 2016 primarily as a result of targeting more profitable risk-adjusted returns with lower FICO origination balances.

Credit card and other consumer loan net charge-offs remained relatively flat compared to the same period in the prior year. The Bancorp utilizes a risk-adjusted pricing methodology to ensure adequate compensation is received for those products that have higher credit costs.

TABLE 57: Summary of Credit Loss Experience
		For the three months ended       March  31,
($ in millions)		2017		2016
Losses charged-off:
Commercial and industrial loans	$		(39)		(50)
Commercial mortgage loans			(6)		(8)
Commercial leases			(1)		(2)
Residential mortgage loans			(6)		(4)
Home equity			(9)		(11)
Automobile loans			(17)		(14)
Credit card			(24)		(23)
Other consumer loans and leases			(5)		(4)
Total losses charged-off	$		(107)		(116)
Recoveries of losses previously charged-off:
Commercial and industrial loans	$		3		4
Commercial mortgage loans			1		2
Commercial leases			-		-
Residential mortgage loans			1		2
Home equity			3		3
Automobile loans			6		5
Credit card			2		3
Other consumer loans and leases			2		1
Total recoveries of losses previously charged-off	$		18		20
Net losses charged-off:
Commercial and industrial loans	$		(36)		(46)
Commercial mortgage loans			(5)		(6)
Commercial leases			(1)		(2)
Residential mortgage loans			(5)		(2)
Home equity			(6)		(8)
Automobile loans			(11)		(9)
Credit card			(22)		(20)
Other consumer loans and leases			(3)		(3)
Total net losses charged-off	$		(89)		(96)
Net losses charged-off as a percent of average portfolio loans and leases:
Commercial and industrial loans			0.34 %		0.43
Commercial mortgage loans			0.29		0.35
Commercial leases			0.08		0.20
Total commercial loans and leases			0.29 %		0.38
Residential mortgage loans			0.13		0.07
Home equity			0.33		0.36
Automobile loans			0.48		0.32
Credit card			4.03		3.73
Other consumer loans and leases			2.89		2.28
Total consumer loans and leases			0.56 %		0.48
Total net losses charged-off as a percent of average portfolio loans and leases			0.40 %		0.42

Allowance for Credit Losses

The allowance for credit losses is comprised of the ALLL and the reserve for unfunded commitments. The ALLL provides coverage for probable and estimable losses in the loan and lease portfolio. The Bancorp evaluates the ALLL each quarter to determine its adequacy to cover inherent losses. Several factors are taken into consideration in the determination of the overall ALLL, including an unallocated component. These factors include, but are not limited to, the overall risk profile of the loan and lease portfolios, net charge-off experience, the extent of impaired loans and leases, the level of nonaccrual loans and leases, the level of 90 days past due loans and leases and the overall level of the ALLL as a percent of portfolio loans and leases. The Bancorp also considers overall asset quality trends, credit administration and portfolio management practices, risk identification practices, credit policy and underwriting practices, overall portfolio growth, portfolio concentrations and current economic conditions that might impact the portfolio. More information on the ALLL can be found in the Critical Accounting Policies section of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

39

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

During the three months ended March 31, 2017, the Bancorp did not substantively change any material aspect of its overall approach in the determination of the ALLL and there have been no material changes in assumptions or estimation techniques as compared to prior periods that impacted the determination of the current period allowance. In addition to the ALLL, the Bancorp maintains a reserve for unfunded commitments recorded in other liabilities in the Condensed Consolidated Balance Sheets. The methodology used to determine the adequacy of this reserve is similar to the Bancorp’s methodology for determining the ALLL. The provision for unfunded commitments is included in other noninterest expense in the Condensed Consolidated Statements of Income.

The ALLL attributable to the portion of the residential mortgage and consumer loan and lease portfolio that has not been restructured is determined on a pooled basis with the segmentation based on the similarity of credit risk characteristics. Loss factors for consumer loans are developed for each pool based on the trailing twelve month historical loss rate, as adjusted for certain prescriptive loss rate factors and certain qualitative adjustment factors. The prescriptive loss rate factors and qualitative adjustments are designed to reflect risks associated with current conditions and trends which are not believed to be fully reflected in the trailing twelve month historical loss rate. For real estate backed consumer loans, the prescriptive loss rate factors include adjustments for delinquency trends, LTV trends, refreshed FICO score trends and product mix, and the qualitative factors include adjustments for changes in policies or procedures in underwriting, monitoring or collections, economic conditions, portfolio mix, lending and risk management personnel, results of internal audit and quality control reviews, collateral values and geographic concentrations. The Bancorp considers home price index trends in its footprint and the volatility of collateral valuation trends when determining the collateral value qualitative factor.

The Bancorp’s determination of the ALLL for commercial loans is sensitive to the risk grades it assigns to these loans. In the event that 10% of commercial loans in each risk category would experience a downgrade of one risk category, the allowance for commercial loans would increase by approximately $183 million at March 31, 2017. In addition, the Bancorp’s determination of the ALLL for residential mortgage loans and consumer loans is sensitive to changes in estimated loss rates. In the event that estimated loss rates would increase by 10%, the ALLL for residential mortgage loans and consumer loans would increase by approximately $30 million at March 31, 2017. As several qualitative and quantitative factors are considered in determining the ALLL, these sensitivity analyses do not necessarily reflect the nature and extent of future changes in the ALLL. They are intended to provide insights into the impact of adverse changes to risk grades and estimated loss rates and do not imply any expectation of future deterioration in the risk ratings or loss rates. Given current processes employed by the Bancorp, management believes the risk grades and estimated loss rates currently assigned are appropriate.

TABLE 58: Changes in Allowance for Credit Losses
		For the three months ended       March  31,
($ in millions)		2017			2016
ALLL:
Balance, beginning of period	$		1,253		1,272
Losses charged-off			(107	)	(116)
Recoveries of losses previously charged-off			18		20
Provision for loan and lease losses			74		119
Balance, end of period	$		1,238		1,295
Reserve for unfunded commitments:
Balance, beginning of period	$		161		138
(Benefit from) provision for unfunded commitments			(2	)	6
Balance, end of period	$		159		144

Certain inherent but unconfirmed losses are probable within the loan and lease portfolio. The Bancorp’s current methodology for determining the level of losses is based on historical loss rates, current credit grades, specific allocation on impaired commercial credits above specified thresholds and restructured loans and other qualitative adjustments. Due to the heavy reliance on realized historical losses and the credit grade rating process, the model-derived estimate of ALLL tends to slightly lag behind the deterioration in the portfolio in a stable or deteriorating credit environment, and tends not to be as responsive when improved conditions have presented themselves. Given these model limitations, the qualitative adjustment factors may be incremental or decremental to the quantitative model results.

An unallocated component of the ALLL is maintained to recognize the imprecision in estimating and measuring loss. The unallocated allowance as a percent of total portfolio loans and leases was 0.12% at both March 31, 2017 and December 31, 2016. The unallocated allowance was 9% of the total allowance at both March 31, 2017 and December 31, 2016.

40

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

As shown in Table 59, the ALLL as a percent of portfolio loans and leases was 1.35% at March 31, 2017 and 1.36% at December 31, 2016. The ALLL was $1.2 billion at March 31, 2017 and $1.3 billion at December 31, 2016.

TABLE 59: Attribution of Allowance for Loan and Lease Losses to Portfolio Loans and Leases
As of ($ in millions)		March 31, 2017		December 31, 2016
Attributed ALLL:
Commercial and industrial loans	$	712		718
Commercial mortgage loans		86		82
Commercial construction loans		15		16
Commercial leases		13		15
Residential mortgage loans		96		96
Home equity		54		58
Automobile loans		42		42
Credit card		95		102
Other consumer loans and leases		13		12
Unallocated		112		112
Total ALLL	$	1,238		1,253
Portfolio loans and leases:
Commercial and industrial loans	$	41,074		41,676
Commercial mortgage loans		6,924		6,899
Commercial construction loans		4,283		3,903
Commercial leases		4,092		3,974
Residential mortgage loans		15,336		15,051
Home equity		7,469		7,695
Automobile loans		9,572		9,983
Credit card		2,070		2,237
Other consumer loans and leases		808		680
Total portfolio loans and leases	$	91,628		92,098
Attributed ALLL as a percent of respective portfolio loans and leases:
Commercial and industrial loans		1.73	%	1.72
Commercial mortgage loans		1.24		1.19
Commercial construction loans		0.35		0.41
Commercial leases		0.32		0.38
Residential mortgage loans		0.63		0.64
Home equity		0.72		0.75
Automobile loans		0.44		0.42
Credit card		4.59		4.56
Other consumer loans and leases		1.61		1.76
Unallocated (as a percent of total portfolio loans and leases)		0.12		0.12
Attributed ALLL as a percent of total portfolio loans and leases		1.35	%	1.36

MARKET RISK MANAGEMENT

Market risk is the day-to-day potential for the value of a financial instrument to increase or decrease due to movements in market factors. The Bancorp’s market risk includes risks resulting from movements in interest rates, foreign exchange rates, equity prices and commodity prices. Interest rate risk, a component of market risk, primarily impacts the Bancorp’s NII and interest sensitive fee income categories through changes in interest income on earning assets and cost of interest bearing liabilities, and through fee items that are related to interest sensitive activities such as mortgage origination and servicing income. Management considers interest rate risk a prominent market risk in terms of its potential impact on earnings. Interest rate risk may occur for any one or more of the following reasons:

● Assets and liabilities mature or reprice at different times;

● Short-term and long-term market interest rates change by different amounts; or

● The expected maturities of various assets or liabilities shorten or lengthen as interest rates change.

In addition to the direct impact of interest rate changes on NII, interest rates can indirectly impact earnings through their effect on loan and deposit demand, credit losses, mortgage originations, the value of servicing rights and other sources of the Bancorp’s earnings. Stability of the Bancorp’s net income is largely dependent upon the effective management of interest rate risk. Management continually reviews the Bancorp’s balance sheet composition and earnings flows and models the interest rate risk, and possible actions to reduce this risk, given numerous possible future interest rate scenarios. A series of Policy Limits and Key Risk Indicators are employed to ensure that this risk is managed within the Bancorp’s risk tolerance.

Interest Rate Risk Management Oversight

The Bancorp’s ALCO, which includes senior management representatives and is accountable to the ERMC, monitors and manages interest rate risk within Board approved policy limits. In addition to the risk management activities of ALCO, the Bancorp has a Market Risk Management function as part of ERM that provides independent oversight of market risk activities.

Net Interest Income Sensitivity

The Bancorp employs a variety of measurement techniques to identify and manage its interest rate risk, including the use of an NII simulation model to analyze the sensitivity of NII to changes in interest rates. The model is based on contractual and assumed cash flows and repricing characteristics for all of the Bancorp’s assets, liabilities and off-balance sheet exposures and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and attrition rates of certain liabilities.

41

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The model also includes senior management’s projections of the future volume and pricing of each of the product lines offered by the Bancorp as well as other pertinent assumptions. Actual results may differ from simulated results due to timing, magnitude and frequency of interest rate changes, deviations from projected assumptions, as well as changes in market conditions and management strategies.

The Bancorp’s interest rate risk exposure is evaluated by measuring the anticipated change in NII over 12-month and 24-month horizons assuming 100 bps and 200 bps parallel ramped increases and a 50 bps parallel ramped decrease in interest rates. The analysis would typically include 100 bps and 200 bps parallel ramped decreases in interest rates; however, this analysis is currently omitted due to the current levels of certain interest rates.

In this economic cycle, banks have experienced significant growth in deposit balances, particularly in noninterest-bearing demand deposits. The Bancorp, like other banks, is exposed to deposit balance run-off in a rising interest rate environment. In consideration of this risk, the Bancorp’s NII sensitivity modeling assumes that approximately $2.5 billion of noninterest-bearing demand deposit balances run-off over 24 months above what is included in senior management’s baseline projections for each 100 bps increase in short-term market interest rates. These noninterest-bearing demand deposit balances are modeled to flow into funding products that reprice in conjunction with market rate increases.

Another important deposit modeling assumption is the amount by which interest-bearing deposit rates will increase or decrease when market interest rates increase or decrease. This deposit repricing sensitivity is known as the beta, and it represents the expected amount by which Bancorp deposit rates will change for a given change in short-term market rates. The Bancorp’s NII sensitivity modeling assumes a weighted-average rising rate interest-bearing deposit beta of 69% at March 31, 2017, which is approximately 20 percentage points higher than the beta that the Bancorp experienced in the last FRB tightening cycle from June 2004 to June 2006.

The Bancorp continually evaluates the sensitivity of its interest rate risk measures to these important deposit modeling assumptions. The Bancorp also regularly monitors the sensitivity of other important modeling assumptions, such as loan and security prepayments and early withdrawals on fixed-rate customer liabilities.

The following table shows the Bancorp’s estimated net interest income sensitivity profile and ALCO policy limits as of:

TABLE 60: Estimated NII Sensitivity Profile and ALCO Policy Limits
	March 31, 2017										March 31, 2016
	% Change in NII (FTE)						ALCO Policy Limits				% Change in NII (FTE)			ALCO Policy Limits
Change in Interest Rates (bps)	12 Months			13-24 Months			12   Months		13-24   Months		12 Months		13-24 Months	12  Months	13-24  Months
+200 Ramp over 12 months		2.05	%		6.98			(4.00)		(6.00)		2.12	6.98	(4.00)	(6.00)
+100 Ramp over 12 months		1.20			4.37			N/A		N/A		1.20	4.27	-	-
-50 Ramp over 6 months		(3.48	)		(6.37	)		(6.00)		(8.00)		N/A	N/A	N/A	N/A

At March 31, 2017, the Bancorp’s NII would benefit in both year one and year two under the parallel rate ramp increases. The Bancorp’s NII would decline in both year one and year two under the parallel 50 bps ramped decrease in interest rates. The NII sensitivity profile is attributable to the combination of floating-rate assets, including the predominantly floating-rate commercial loan portfolio, and certain intermediate-term fixed-rate liabilities. The slight changes in the estimated NII sensitivity profile as of March 31, 2017 compared to March 31, 2016 are primarily attributable to balance sheet composition changes.

Tables 61 and 62 provide the Bancorp’s estimated NII profile at March 31, 2017 with changes to certain deposit balances and deposit repricing sensitivity (betas) assumptions.

42

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following table includes the Bancorp’s estimated NII sensitivity profile at March 31, 2017 with an immediate $1 billion decrease and an immediate $1 billion increase in demand deposit balances:

TABLE 61: Estimated NII Sensitivity at March 31, 2017 with a $1 Billion Change in Demand Deposit Assumption
	% Change in NII (FTE)
	Immediate $1 Billion Balance Decrease				Immediate $1 Billion Balance Increase
Change in Interest Rates (bps)	12     Months		13-24   Months		12     Months		13-24   Months
+200 Ramp over 12 months		1.79 %		6.45		2.31		7.50
+100 Ramp over 12 months		1.07		4.11		1.33		4.64
The following table includes the Bancorp’s estimated NII sensitivity profile at March 31, 2017 with a 25% increase and a 25% decrease to the rising rate deposit beta assumptions as of March 31, 2017. The resulting weighted-average interest-bearing deposit betas included in this analysis are approximately 86% and 52%, respectively, as of March 31, 2017:
TABLE 62: Estimated NII Sensitivity at March 31, 2017 with Deposit Beta Assumptions Changes
	% Change in NII (FTE)
	Betas 25% Higher				Betas 25% Lower
Change in Interest Rates (bps)	12 Months		13-24   Months		12     Months		13-24   Months
+200 Ramp over 12 months		(0.96)%		0.95		5.06		13.00
+100 Ramp over 12 months		(0.30)		1.36		2.71		7.39

Economic Value of Equity Sensitivity

The Bancorp also uses EVE as a measurement tool in managing interest rate risk. Whereas the NII sensitivity analysis highlights the impact on forecasted NII on an FTE basis (non-GAAP) over one and two year time horizons, EVE is a point in time analysis of the economic sensitivity of current positions that incorporates all cash flows over their estimated remaining lives. The EVE of the balance sheet is defined as the discounted present value of all asset and net derivative cash flows less the discounted value of all liability cash flows. Due to this longer horizon, the sensitivity of EVE to changes in the level of interest rates is a measure of longer-term interest rate risk. EVE values only the current balance sheet and does not incorporate the balance growth assumptions used in the NII sensitivity analysis. As with the NII simulation model, assumptions about the timing and variability of existing balance sheet cash flows are critical in the EVE analysis. Particularly important are assumptions driving loan and security prepayments and the expected balance attrition and pricing of transaction deposits.

The following table shows the Bancorp’s estimated EVE sensitivity profile as of:

TABLE 63: Estimated EVE Sensitivity Profile
	March 31, 2017		March 31, 2016
Change in Interest Rates (bps)	% Change in EVE	ALCO         Policy Limit	% Change in EVE		ALCO          Policy Limit
+200 Shock	(5.45)%	(12.00)		(2.85)		(12.00)
+100 Shock	(2.21)	N/A		(0.90)		N/A
+25 Shock	(0.40)	N/A		(0.10)		N/A
-100 Shock	(0.19)	N/A		N/A		N/A

The EVE sensitivity to the +200 bps rising rate scenario is moderately negative at March 31, 2017, and is also slightly negative to a 100 bps decline in market rates. The +100 and +200 bps rising rate sensitivities are up from the sensitivities at March 31, 2016. The higher risk is primarily related to increases in market interest rates and growth in fixed-rate loan and securities balances.

While an instantaneous shift in interest rates is used in this analysis to provide an estimate of exposure, the Bancorp believes that a gradual shift in interest rates would have a much more modest impact. Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (e.g., the current fiscal year). Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships and changing product spreads that could mitigate or exacerbate the impact of changes in interest rates. The NII simulations and EVE analyses do not necessarily include certain actions that management may undertake to manage risk in response to actual changes in interest rates.

The Bancorp regularly evaluates its exposures to a static balance sheet forecast, LIBOR, Prime Rate and other basis risks, yield curve twist risks and embedded options risks. In addition, the impact on NII on an FTE basis and EVE of extreme changes in interest rates is modeled, wherein the Bancorp employs the use of yield curve shocks and environment-specific scenarios.

Use of Derivatives to Manage Interest Rate Risk

An integral component of the Bancorp’s interest rate risk management strategy is its use of derivative instruments to minimize significant fluctuations in earnings caused by changes in market interest rates. Examples of derivative instruments that the Bancorp may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, interest rate caps, forward contracts, forward starting interest rate swaps, options, swaptions and TBA securities.

43

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

As part of its overall risk management strategy relative to its mortgage banking activities, the Bancorp enters into forward contracts accounted for as free-standing derivatives to economically hedge IRLCs that are also considered free-standing derivatives. Additionally, the Bancorp economically hedges its exposure to mortgage loans held for sale through the use of forward contracts and mortgage options.

The Bancorp also enters into derivatives contracts with major financial institutions to economically hedge market risks assumed in interest rate derivative contracts with commercial customers. Generally, these contracts have similar terms in order to protect the Bancorp from market volatility. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts, which the Bancorp minimizes through collateral arrangements, approvals, limits and monitoring procedures. For further information including the notional amount and fair values of these derivatives, refer to Note 12 of the Notes to Condensed Consolidated Financial Statements.

Portfolio Loans and Leases and Interest Rate Risk

Although the Bancorp’s portfolio loans and leases contain both fixed and floating/adjustable-rate products, the rates of interest earned by the Bancorp on the outstanding balances are generally established for a period of time. The interest rate sensitivity of loans and leases is directly related to the length of time the rate earned is established.

The following table summarizes the carrying value of the Bancorp’s portfolio loans and leases expected cash flows, excluding interest receivable, as of March 31, 2017:

TABLE 64: Portfolio Loans and Leases Expected Cash Flows
($ in millions)		Less than 1 year			1-5 years		Over 5 years		Total
Commercial and industrial loans	$		22,054			17,587		1,433		41,074
Commercial mortgage loans			2,793			3,645		486		6,924
Commercial construction loans			1,422			2,803		58		4,283
Commercial leases			890			1,998		1,204		4,092
Total commercial loans and leases			27,159			26,033		3,181		56,373
Residential mortgage loans			2,623			6,387		6,326		15,336
Home equity			939			1,415		5,115		7,469
Automobile loans			4,375			5,085		112		9,572
Credit card			414			1,656		-		2,070
Other consumer loans and leases			587			174		47		808
Total consumer loans and leases			8,938			14,717		11,600		35,255
Total portfolio loans and leases	$		36,097			40,750		14,781		91,628
Additionally, the following table displays a summary of expected cash flows, excluding interest receivable, occurring after one year for both fixed and floating/adjustable-rate loans and leases as of March 31, 2017:
TABLE 65: Portfolio Loans and Leases Expected Cash Flows Occurring After 1 Year
					Interest Rate
($ in millions)					Fixed		Floating or Adjustable
Commercial and industrial loans				$		2,531				16,489
Commercial mortgage loans						817				3,314
Commercial construction loans						7				2,854
Commercial leases						3,202				-
Total commercial loans and leases						6,557				22,657
Residential mortgage loans						9,652				3,061
Home equity						481				6,049
Automobile loans						5,145				52
Credit card						511				1,145
Other consumer loans and leases						22				199
Total consumer loans and leases						15,811				10,506
Total portfolio loans and leases				$		22,368				33,163

Residential Mortgage Servicing Rights and Interest Rate Risk

Effective January 1, 2017, the Bancorp elected to prospectively adopt the fair value method for all existing classes of its residential mortgage servicing rights portfolio. Upon this election, all servicing rights are measured at fair value at each reporting date and changes in the fair value of servicing rights are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income in the period in which the changes occur. Prior to the election of the fair value method, servicing rights were initially recorded at fair value and subsequently amortized in proportion to, and over the period of, estimated net servicing revenue. Servicing rights were assessed for impairment monthly, based on fair value, with temporary impairment recognized through a valuation allowance.

The fair value of the residential MSR portfolio was $776 million at March 31, 2017 and the net carrying amount of the residential MSR portfolio was $744 million as of December 31, 2016. The value of servicing rights can fluctuate sharply depending on changes in interest rates and other factors. Generally, as interest rates decline and loans are prepaid to take advantage of refinancing, the total value of existing servicing rights declines because no further servicing fees are collected on repaid loans.

44

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Bancorp maintains a non-qualifying hedging strategy relative to its mortgage banking activity in order to manage a portion of the risk associated with changes in the value of its MSR portfolio as a result of changing interest rates.

Mortgage rates increased during the three months ended March 31, 2017 which caused modeled prepayment speeds to slow which led to fair value adjustments on servicing rights during the three months ended March 31, 2017. The fair value of the MSR increased $4 million due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $27 million due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs during the three months ended March 31, 2017. Mortgage rates decreased during three months ended March 31, 2016 which caused modeled prepayment speeds to increase which led to temporary impairment on servicing rights during the three months ended March 31, 2016. Previously, servicing rights were deemed impaired when a borrower’s loan rate was distinctly higher than prevailing rates. Temporary impairment on servicing rights was reversed when the prevailing rates returned to a level commensurate with the borrower’s loan rate.

The Bancorp recognized net losses of $1 million on derivatives associated with its non-qualifying hedging strategy for the three months ended March 31, 2017 compared to net gains of $96 million during the three months ended March 31, 2016. The Bancorp may adjust its hedging strategy to reflect its assessment of the composition of its MSR portfolio, the cost of hedging and the anticipated effectiveness of the hedges given the economic environment. Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements for further discussion on servicing rights and the instruments used to hedge interest rate risk on MSRs.

Foreign Currency Risk

The Bancorp may enter into foreign exchange derivative contracts to economically hedge certain foreign denominated loans. The derivatives are classified as free-standing instruments with the revaluation gain or loss being recorded in other noninterest income in the Condensed Consolidated Statements of Income. The balance of the Bancorp’s foreign denominated loans at March 31, 2017 and December 31, 2016 was $935 million and $827 million, respectively. The Bancorp also enters into foreign exchange contracts for the benefit of commercial customers to hedge their exposure to foreign currency fluctuations. Similar to the hedging of interest rate risk from interest rate derivative contracts, the Bancorp also enters into foreign exchange contracts with major financial institutions to economically hedge a substantial portion of the exposure from client driven foreign exchange activity. The Bancorp has risk limits and internal controls in place to help ensure excessive risk is not being taken in providing this service to customers. These controls include an independent determination of currency volatility and credit equivalent exposure on these contracts, counterparty credit approvals and country limits performed by the Capital Markets Credit Department and Capital Markets Risk Department.

Commodity Risk

The Bancorp also enters into commodity contracts for the benefit of commercial customers to hedge their exposure to commodity price fluctuations. Similar to the hedging of foreign exchange and interest rate risk from interest rate derivative contracts, the Bancorp also enters into commodity contracts with major financial institutions to economically hedge a substantial portion of the exposure from client driven commodity activity. The Bancorp may also offset this risk with exchange traded commodity contracts. The Bancorp has risk limits and internal controls in place to help ensure excessive risk is not taken in providing this service to customers. These controls include an independent determination of commodity volatility and credit equivalent exposure on these contracts and counterparty credit approvals performed by the Capital Markets Credit Department and Capital Markets Risk Department.

LIQUIDITY RISK MANAGEMENT

The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand, unexpected levels of deposit withdrawals and other contractual obligations. Mitigating liquidity risk is accomplished by maintaining liquid assets in the form of cash and investment securities, maintaining sufficient unused borrowing capacity in the debt markets and delivering consistent growth in core deposits. A summary of certain obligations and commitments to make future payments under contracts is included in Note 14 of the Notes to Condensed Consolidated Financial Statements.

The Bancorp maintains a contingency funding plan that assesses the liquidity needs under various scenarios of market conditions, asset growth and credit rating downgrades. The plan includes liquidity stress testing which measures various sources and uses of funds under the different scenarios. The contingency plan provides for ongoing monitoring of unused borrowing capacity and available sources of contingent liquidity to prepare for unexpected liquidity needs and to cover unanticipated events that could affect liquidity.

Sources of Funds

The Bancorp’s primary sources of funds relate to cash flows from loan and lease repayments, payments from securities related to sales and maturities, the sale or securitization of loans and leases and funds generated by core deposits, in addition to the use of public and private debt offerings.

Table 64 of the Market Risk Management subsection of the Risk Management section of MD&A illustrates the expected maturities from loan and lease repayments. Of the $31.5 billion of securities in the Bancorp’s available-for-sale and other portfolio at March 31, 2017, $3.9 billion in principal and interest is expected to be received in the next 12 months and an additional $3.2 billion is expected to be received in the next 13 to 24 months. For further information on the Bancorp’s securities portfolio, refer to the Investment Securities subsection of the Balance Sheet Analysis section of MD&A.

Asset-driven liquidity is provided by the Bancorp’s ability to sell or securitize loans and leases. In order to reduce the exposure to interest rate fluctuations and to manage liquidity, the Bancorp has developed securitization and sale procedures for several types of interest-sensitive assets. A majority of the long-term, fixed-rate single-family residential mortgage loans underwritten according to FHLMC or FNMA guidelines are sold for cash upon origination. Additional assets such as certain other residential mortgage loans, certain commercial loans, home equity loans, automobile loans and other consumer loans are also capable of being securitized or sold.

45

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

For the three months ended March 31, 2017 and 2016, the Bancorp sold or securitized loans totaling $1.6 billion and $1.3 billion, respectively. For further information on the transfer of financial assets, refer to Note 11 of the Notes to Condensed Consolidated Financial Statements.

Core deposits have historically provided the Bancorp with a sizeable source of relatively stable and low cost funds. The Bancorp’s average core deposits and average shareholders’ equity funded 84% and 81%, respectively, of its average total assets for the three months ended March 31, 2017 and 2016. In addition to core deposit funding, the Bancorp also accesses a variety of other short-term and long-term funding sources, which include the use of the FHLB system. Certificates $100,000 and over and deposits in the Bancorp’s foreign branch located in the Cayman Islands are wholesale funding tools utilized to fund asset growth. Management does not rely on any one source of liquidity and manages availability in response to changing balance sheet needs.

As of March 31, 2017, $8.9 billion of debt or other securities were available for issuance under the current Bancorp’s Board of Directors’ authorizations and the Bancorp is authorized to file any necessary registration statements with the SEC to permit ready access to the public securities markets; however, access to these markets may depend on market conditions. At March 31, 2017, the Bancorp has approximately $44.1 billion of borrowing capacity available through secured borrowing sources including the FHLB and FRB.

The Bank’s global bank note program has a borrowing capacity of $25 billion, of which $17.1 billion is available for issuance as of March 31, 2017.

Liquidity Coverage Ratio and Net Stable Funding Ratio

On October 10, 2014, the U.S. banking agencies published final rules implementing a quantitative liquidity requirement consistent with the LCR standard established by the BCBS for large internationally active banking organizations, generally those with $250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure. In addition, a Modified LCR requirement was finalized for BHCs with $50 billion or more in total consolidated assets that are not internationally active, such as the Bancorp. The Modified LCR requires BHCs to maintain HQLA equal to its calculated net cash outflows over a 30 calendar-day stress period multiplied by a factor of 0.7. The Bancorp’s Modified LCR was 119% at March 31, 2017.

On June 1, 2016, the U.S. banking agencies published a notice of proposed rulemaking to implement a modified NSFR for certain bank holding companies with at least $50 billion but less than $250 billion in total consolidated assets and with less than $10 billion in on-balance sheet foreign exposures, including the Bancorp. Generally consistent with the BCBS’ framework, under the proposed rule banking organizations would be required to hold an amount of ASF over a one-year time horizon that equals or exceeds the institution’s amount of RSF, with the ASF representing the numerator and the RSF representing the denominator of the NSFR. Banking organizations subject to the modified NSFR would multiply the RSF amount by 70%, such that the RSF amount required for these institutions would be equivalent to 70% of the RSF amount that would be required pursuant to the full NSFR generally applicable to institutions with at least $250 billion in total consolidated assets or $10 billion or more in on-balance sheet foreign exposures under the proposed rule.

The Bancorp is currently evaluating the impact of the U.S. banking agencies’ NSFR proposal. If ultimately adopted as currently proposed, the implementation of the NSFR could impact the Bancorp’s liquidity and funding requirements and practices in the future, including by incentivizing increased use of long-term debt as a funding source. Under the proposal, the NSFR becomes effective January 1, 2018 with public disclosure requirements beginning for the calendar quarter that ends on March 31, 2018. The comment period for this proposal ended on August 5, 2016.

Credit Ratings

The cost and availability of financing to the Bancorp and Bank are impacted by its credit ratings. A downgrade to the Bancorp’s or Bank’s credit ratings could affect its ability to access the credit markets and increase its borrowing costs, thereby adversely impacting the Bancorp’s or Bank’s financial condition and liquidity. Key factors in maintaining high credit ratings include a stable and diverse earnings stream, strong credit quality, strong capital ratios and diverse funding sources, in addition to disciplined liquidity monitoring procedures.

The Bancorp’s and Bank’s credit ratings are summarized in Table 66. The ratings reflect the ratings agency’s view on the Bancorp’s and Bank’s capacity to meet financial commitments.*

* As an investor, you should be aware that a security rating is not a recommendation to buy, sell or hold securities, that it may be subject to revision or withdrawal at any time by the assigning rating organization and that each rating should be evaluated independently of any other rating. Additional information on the credit rating ranking within the overall classification system is located on the website of each credit rating agency.

46

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 66: Agency Ratings

As of May 5, 2017	Moody’s		Standard and Poor’s		Fitch		DBRS
Fifth Third Bancorp:
Short-term		No rating		A-2		F1		R-1L
Senior debt		Baa1		BBB+		A		AL
Subordinated debt		Baa1		BBB		A-		BBBH
Fifth Third Bank:
Short-term		P-1		A-2		F1		R-1L
Long-term deposit		Aa3		No rating		A+		A
Senior debt		A3		A-		A		A
Subordinated debt		Baa1		BBB+		A-		AL
Rating Agency Outlook for Fifth Third Bancorp and Fifth Third Bank:		Stable		Stable		Negative		Stable

OPERATIONAL RISK MANAGEMENT

Operational risk is the risk of loss resulting from inadequate or failed processes or systems or due to external events that are neither market nor credit-related. Operational risk is inherent in the Bancorp’s activities and can manifest itself in various ways including fraudulent acts, business interruptions, inappropriate behavior of employees, unintentional failure to comply with applicable laws and regulations, cyber-security incidents and privacy breaches or failure of vendors to perform in accordance with their arrangements. These events could result in financial losses, litigation and regulatory fines, as well as other damage to the Bancorp. The Bancorp’s risk management goal is to keep operational risk at appropriate levels consistent with the Bancorp’s risk appetite, financial strength, the characteristics of its businesses, the markets in which it operates and the competitive and regulatory environment to which it is subject.

To control, monitor and govern operational risk, the Bancorp maintains an overall Risk Management Framework which comprises governance oversight, risk assessment, capital measurement, monitoring and reporting as well as a formal three lines of defense approach. ERM is responsible for prescribing the framework to the lines of business and corporate functions, and to provide independent oversight of its implementation (second line of defense). Business Controls groups are in place in each of the lines of business to ensure consistent implementation and execution of managing day to day operational risk (first line of defense).

The Bancorp’s risk management framework consists of five integrated components, including identifying, assessing, managing, monitoring and independent governance reporting of risk. The corporate Operational Risk Management function within Enterprise Risk is responsible for developing and overseeing the implementation of the Bancorp’s approach to managing operational risk. This includes providing governance, awareness and training, tools, guidance and oversight to support implementation of key risk programs and systems as they relate to operational risk management, such as risk and control self-assessments, new product/initiative risk reviews, key risk indicators, Vendor Risk Management and operational losses. The function is also responsible for developing reports that support the proactive management of operational risk across the enterprise. The lines of business and corporate functions are responsible for managing the operational risks associated with their areas in accordance with the risk management framework. The framework is intended to enable the Bancorp to function with a sound and well-controlled operational environment. These processes support the Bancorp’s goals to minimize future operational losses and strengthen the Bancorp’s performance by maintaining sufficient capital to absorb operational losses that are incurred.

COMPLIANCE RISK MANAGEMENT

Regulatory compliance risk is defined as the risk of legal or regulatory sanctions, financial loss, or damage to reputation as a result of noncompliance with (i) applicable laws, regulations, rules and other regulatory requirements (including but not limited to the risk of consumers experiencing economic loss or other legal harm as a result of noncompliance with consumer protection laws, regulations and requirements); (ii) internal policies and procedures, standards of best practice or codes of conduct; and (iii) principles of integrity and fair dealing applicable to Fifth Third’s activities and functions. Fifth Third focuses on managing regulatory compliance risk in accordance with the Bancorp’s integrated risk management framework, which ensures consistent processes for identifying, assessing, managing, monitoring, and reporting risks. The Bancorp’s risk management goal is to keep compliance risk at appropriate levels consistent with the Bancorp’s risk appetite.

The current regulatory environment, including heightened regulatory expectations and material changes in laws and regulations, increases compliance risk. To mitigate compliance risk, Compliance Risk Management provides independent oversight to ensure consistency and sufficiency in the execution of the program, and ensures that lines of business, regions and support functions are adequately identifying, assessing and monitoring compliance risks and adopting proper mitigation strategies. The lines of business and enterprise functions are responsible for managing the compliance risks associated with their areas. Additionally, Compliance Risk Management implements key compliance programs and processes including but not limited to, risk assessments, key risk indicators, issues tracking, regulatory compliance testing and monitoring, anti-money laundering, privacy and, in partnership with the Corporate Responsibility and Reputation team, oversees the Bancorp’s compliance with the Community Reinvestment Act.

Fifth Third also focuses on the reporting and escalation of compliance issues to senior management and the Board of Directors. The Management Compliance Committee is the key committee that oversees and supports Fifth Third in the management of compliance risk across the enterprise. The Management Compliance Committee oversees Fifth Third-wide compliance issues, industry best practices, legislative developments (in coordination with the Regulatory Change Management Committee), regulatory concerns, and other leading indicators of compliance risk. The Management Compliance Committee reports to the ERMC, which reports to the Risk and Compliance Committee of the Board of Directors.

47

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

CAPITAL MANAGEMENT

Management regularly reviews the Bancorp’s capital levels to help ensure it is appropriately positioned under various operating environments. The Bancorp has established a Capital Committee which is responsible for making capital plan recommendations to management. These recommendations are reviewed by the ERMC and the annual capital plan is approved by the Board of Directors. The Capital Committee is responsible for execution and oversight of the capital actions of the capital plan.

Regulatory Capital Ratios

The Basel III Final Rule was effective for the Bancorp on January 1, 2015 and set minimum regulatory capital ratios as well as defined the measure of “well-capitalized”.

TABLE 67: Prescribed Capital Ratios

	Minimum			Well-Capitalized
CET1 capital		4.50	%		6.50
Tier I risk-based capital		6.00			8.00
Total risk-based capital		8.00			10.00
Tier I leverage		4.00			5.00

On January 1, 2016, the Bancorp became subject to a capital conservation buffer which will be phased in over a three-year period ending January 1, 2019. Once fully phased-in, the capital conservation buffer will be 2.5% in addition to the minimum capital ratios, in order to avoid limitations on certain capital distributions and discretionary bonus payments to executive officers. The capital conservation buffer was 0.625% in 2016 and is 1.25% in 2017. The Bancorp exceeded these “well-capitalized” and “capital conservation buffer” ratios for all periods presented.

The following table summarizes the Bancorp’s capital ratios as of:

TABLE 68: Capital Ratios

($ in millions)		March 31, 2017			December 31, 2016
Average total Bancorp shareholders’ equity as a percent of average assets			11.72	%		11.67
Tangible equity as a percent of tangible assets(a)(c)			10.12			9.82
Tangible common equity as a percentage of tangible assets(a)(c)			9.15			8.87
		Basel III Transitional(b)
CET1 capital	$		12,636			12,426
Tier I capital			13,967			13,756
Total regulatory capital			18,139			17,972
Risk-weighted assets			117,407			119,632
Regulatory capital ratios:
CET1 capital			10.76	%		10.39
Tier I risk-based capital			11.90			11.50
Total risk-based capital			15.45			15.02
Tier I leverage			10.15			9.90
		Basel III Fully Phased-In
CET1 capital(a)			10.66	%		10.29

(a) These are non-GAAP measures. For further information, refer to the Non-GAAP Financial Measures section of MD&A.

(b) Under the U.S. 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.

(c) Excludes unrealized gains and losses.

Stress Tests and CCAR

In 2011 the FRB adopted the capital plan rule, which requires BHCs with consolidated assets of $50 billion or more to submit annual capital plans to the FRB for review. Under the rule, these capital plans must include detailed descriptions of the following: the BHC’s internal processes for assessing capital adequacy; the policies governing capital actions such as common stock issuances, dividends and share repurchases; and all planned capital actions over a nine-quarter planning horizon. Further, each BHC must also report to the FRB the results of stress tests conducted by the BHC under a number of scenarios that assess the sources and uses of capital under baseline and stressed economic scenarios. The FRB launched the 2017 stress testing program and CCAR on February 3, 2017, with submissions of stress test results and capital plans to the FRB due on April 5, 2017, which the Bancorp submitted as required.

The FRB expects to release summary results of its DFAST and CCAR stress tests by June 30, 2017. The results will include supervisory projections of capital ratios, losses and revenue under the supervisory adverse and supervisory severely adverse scenarios. The FRB will also issue an objection or nonobjection to each participating institution’s capital plan submitted under CCAR. The FRB’s summary results will also include an overview of methodologies used for supervisory tests. Additionally, as a CCAR institution, the Bancorp will be required to disclose the results of its company-run stress test as required by the DFA, within 15 days of the date the FRB discloses the results of its DFA supervisory tests. With Fifth Third’s designation as a Large and Non-complex bank, it is no longer subject to the qualitative aspects of the CCAR program. It is, however, subject to the FRB’s Horizontal Capital Review, which will be conducted in the third quarter of 2017.

48

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Dividend Policy and Stock Repurchase Program

The Bancorp’s common stock dividend policy and stock repurchase program reflect its earnings outlook, desired payout ratios, the need to maintain adequate capital levels, the ability of its subsidiaries to pay dividends, the need to comply with safe and sound banking practices as well as meet regulatory requirements and expectations. The Bancorp declared dividends per common share of 0.14 and 0.13 for the three months ended March 31, 2017 and 2016, respectively.

The following table summarizes the monthly share repurchase activity for the three months ended March 31, 2017:

TABLE 69: Share Repurchases

Period	Total Number of Shares Purchased(a)		Average Price     Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(b)
January 1, 2017 - January 31, 2017		240,298	$	26.25		-		81,641,397
February 1, 2017 - February 28, 2017		1,279,256		26.30		1,044,362		80,597,035
March 1, 2017 - March 31, 2017		110,667		25.77		-		80,597,035
Total		1,630,221	$	26.26		1,044,362		80,597,035

(a) Includes 585,859 shares repurchased during the first quarter of 2017 in connection with various employee compensation plans. These purchases do not count against the maximum number of shares that may yet be purchased under the Board of Directors’ authorization.

(b) In March of 2016, the Bancorp announced that its Board of Directors had authorized management to purchase 100 million shares of the Bancorp’s common stock through the open market or in any private party transactions. The authorization does not include specific price targets or an expiration date.

For further information on a subsequent event related to capital actions, refer to Note 21 of the Notes to Condensed Consolidated Financial Statements.

49

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

OFF-BALANCE SHEET ARRANGEMENTS

In the ordinary course of business, the Bancorp enters into financial transactions that are considered off-balance sheet arrangements as they involve varying elements of market, credit and liquidity risk in excess of the amounts recognized in the Bancorp’s Condensed Consolidated Balance Sheets. The Bancorp’s off-balance sheet arrangements include commitments, guarantees, contingent liabilities, and transactions with non-consolidated VIEs. A brief discussion of these transactions is as follows:

Commitments

The Bancorp has certain commitments to make future payments under contracts, including commitments to extend credit, letters of credit, forward contracts related to residential mortgage loans held for sale, noncancelable operating lease obligations, capital commitments for private equity investments, purchase obligations, capital expenditures, and capital lease obligations. Refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for additional information on commitments.

Guarantees and Contingent Liabilities

The Bancorp has performance obligations upon the occurrence of certain events provided in certain contractual arrangements, including residential mortgage loans sold with representation and warranty provisions or credit recourse. Refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for additional information on guarantees and contingent liabilities.

Transactions with Non-consolidated VIEs

The Bancorp engages in a variety of activities that involve VIEs, which are legal entities that lack sufficient equity to finance their activities, or the equity investors of the entities as a group lack any of the characteristics of a controlling interest. The investments in those entities in which the Bancorp was determined not to be the primary beneficiary but holds a variable interest in the entity are accounted for under the equity method of accounting or other accounting standards as appropriate and not consolidated. Refer to Note 10 of the Notes to Condensed Consolidated Financial Statements for additional information on non-consolidated VIEs.

50

Quantitative and Qualitative Disclosure about Market Risk (Item 3)

Information presented in the Market Risk Management section of Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

Controls and Procedures (Item 4)

The Bancorp conducted an evaluation, under the supervision and with the participation of the Bancorp’s management, including the Bancorp’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Bancorp’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on the foregoing, as of the end of the period covered by this report, the Bancorp’s Chief Executive Officer and Chief Financial Officer concluded that the Bancorp’s disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Bancorp files and submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported as and when required and information is accumulated and communicated to the Bancorp’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

To remediate the previously disclosed deficiencies in Bancorp’s disclosure controls and procedures, the Bancorp designed and implemented new controls and procedures to properly ensure the registration of, and prospectus delivery with respect to the Bancorp’s employee benefit plans. The Bancorp’s Chief Executive Officer and Chief Financial Officer have determined the new controls and procedures are effective to remediate the prior control deficiencies.

The Bancorp’s management also conducted an evaluation of internal control over financial reporting to determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Bancorp’s internal control over financial reporting. Based on this evaluation, there has been no such change during the period covered by this report.

51

Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Financial Statements and Notes (Item 1)

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

		As of
($ in millions, except share data)		March 31,       2017			December 31,     2016
Assets
Cash and due from banks(a)	$		2,205			2,392
Available-for-sale and other securities(b)			31,531			31,183
Held-to-maturity securities(c)			26			26
Trading securities			689			410
Other short-term investments			1,644			2,754
Loans held for sale(d)			616			751
Portfolio loans and leases(a)(e)			91,628			92,098
Allowance for loan and lease losses(a)			(1,238	)		(1,253	)
Portfolio loans and leases, net			90,390			90,845
Bank premises and equipment(f)			2,052			2,065
Operating lease equipment			702			738
Goodwill			2,419			2,416
Intangible assets			11			9
Servicing rights(g)			776			744
Other assets(a)			7,139			7,844
Total Assets	$		140,200			142,177
Liabilities
Deposits:
Noninterest-bearing deposits	$		35,362			35,782
Interest-bearing deposits			68,794			68,039
Total deposits			104,156			103,821
Federal funds purchased			155			132
Other short-term borrowings			2,015			3,535
Accrued taxes, interest and expenses			1,655			1,800
Other liabilities(a)			2,104			2,269
Long-term debt(a)			13,658			14,388
Total Liabilities	$		123,743			125,945
Equity
Common stock(h)	$		2,051			2,051
Preferred stock(i)			1,331			1,331
Capital surplus			2,803			2,756
Retained earnings			13,625			13,441
Accumulated other comprehensive income			68			59
Treasury stock(h)			(3,448	)		(3,433	)
Total Bancorp shareholders’ equity	$		16,430			16,205
Noncontrolling interests			27			27
Total Equity			16,457			16,232
Total Liabilities and Equity	$		140,200			142,177

(a) Includes $85 and $85 of cash and due from banks, $1,015 and $1,216 of portfolio loans and leases, $(25) and $(26) of ALLL, $7 and $9 of other assets, $2 and $3 of other liabilities, and $883 and $1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016, respectively. For further information refer to Note 10.

(b) Amortized cost of $31,348 and $31,024 at March 31, 2017 and December 31, 2016, respectively.

(c) Fair value of $26 and $26 at March 31, 2017 and December 31, 2016, respectively.

(d) Includes $606 and $686 of residential mortgage loans held for sale measured at fair value at March 31, 2017 and December 31, 2016, respectively.

(e) Includes $141 and $143 of residential mortgage loans measured at fair value at March 31, 2017 and December 31, 2016, respectively.

(f) Includes $51 and $39 of bank premises and equipment held for sale at March 31, 2017 and December 31, 2016, respectively. For further information refer to Note 7.

(g) Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016. For further information refer to Note 11.

(h) Common shares: Stated value $2.22 per share; authorized 2,000,000,000; outstanding at March 31, 2017 – 750,144,587 (excludes 173,747,994 treasury shares), December 31, 2016 – 750,479,299 (excludes 173,413,282 treasury shares).

(i) 446,000 shares of undesignated no par value preferred stock are authorized and unissued at March 31, 2017 and December 31, 2016; fixed-to-floating rate non-cumulative Series H perpetual preferred stock with a $25,000 liquidation preference: 24,000 authorized shares, issued and outstanding at March 31, 2017 and December 31, 2016; fixed-to-floating rate non-cumulative Series I perpetual preferred stock with a $25,000 liquidation preference; 18,000 authorized shares, issued and outstanding at March 31, 2017 and December 31, 2016; and fixed-to-floating rate non-cumulative Series J perpetual preferred stock with a $25,000 liquidation preference: 12,000 authorized shares, issued and outstanding at March 31, 2017 and December 31, 2016.

Refer to the Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

		For the three months ended     March 31,
($ in millions, except share data)		2017		2016(a)
Interest Income
Interest and fees on loans and leases	$		839		804
Interest on securities			245		232
Interest on other short-term investments			2		2
Total interest income			1,086		1,038
Interest Expense
Interest on deposits			59		49
Interest on federal funds purchased			1		1
Interest on other short-term borrowings			3		3
Interest on long-term debt			90		82
Total interest expense			153		135
Net Interest Income			933		903
Provision for loan and lease losses			74		119
Net Interest Income After Provision for Loan and Lease Losses			859		784
Noninterest Income
Service charges on deposits			138		137
Wealth and asset management revenue			108		102
Corporate banking revenue			74		102
Card and processing revenue			74		79
Mortgage banking net revenue			52		78
Other noninterest income			77		136
Securities gains, net			-		3
Total noninterest income			523		637
Noninterest Expense
Salaries, wages and incentives			411		403
Employee benefits			111		100
Net occupancy expense			78		77
Technology and communications			58		56
Card and processing expense			30		35
Equipment expense			28		30
Other noninterest expense			270		285
Total noninterest expense			986		986
Income Before Income Taxes			396		435
Applicable income tax expense			91		109
Net Income			305		326
Less: Net income attributable to noncontrolling interests			-		-
Net Income Attributable to Bancorp			305		326
Dividends on preferred stock			15		15
Net Income Available to Common Shareholders	$		290		311
Earnings per share - basic	$		0.38		0.40
Earnings per share - diluted	$		0.38		0.40
Average common shares outstanding - basic			747,667,521		773,564,178
Average common shares outstanding - diluted			760,809,239		777,757,934
Cash dividends declared per common share	$		0.14		0.13

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Refer to the Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
		For the three months ended          March 31,
($ in millions)		2017			2016(a)
Net Income	$		305			326
Other Comprehensive Income, Net of Tax:
Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during period			15			452
Reclassification adjustment for net losses (gains) included in net income			1			(5	)
Unrealized gains on cash flow hedge derivatives:
Unrealized holding (losses) gains arising during period			(3	)		48
Reclassification adjustment for net gains included in net income			(5	)		(9	)
Defined benefit pension plans, net:
Reclassification of amounts to net periodic benefit costs			1			1
Other comprehensive income, net of tax			9			487
Comprehensive Income			314			813
Less: Comprehensive income attributable to noncontrolling interests			-			-
Comprehensive Income Attributable to Bancorp	$		314			813

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Refer to the Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)
		Bancorp Shareholders’ Equity
($ in millions, except per share data)		Common Stock		Preferred Stock		Capital Surplus(b)		Retained Earnings(b)		Accumulated Other Comprehensive Income		Treasury Stock			Total Bancorp Shareholders’ Equity			Non- Controlling Interests		Total     Equity
Balance at December 31, 2015	$		2,051		1,331		2,666		12,358		197		(2,764	)		15,839			31	15,870
Net income									326							326				326
Other comprehensive income, net of tax											487					487				487
Cash dividends declared:
Common stock at $0.13 per share									(100)							(100	)			(100)
Preferred stock(a)									(15)							(15	)			(15)
Shares acquired for treasury							(8)						(232	)		(240	)			(240)
Impact of stock transactions under stock compensation plans, net							28						(3	)		25				25
Other							1									1			1	2
Balance at March 31, 2016	$		2,051		1,331		2,687		12,569		684		(2,999	)		16,323			32	16,355
Balance at December 31, 2016	$		2,051		1,331		2,756		13,441		59		(3,433	)		16,205			27	16,232
Net income									305							305				305
Other comprehensive income, net of tax											9					9				9
Cash dividends declared:
Common stock at $0.14 per share									(106)							(106	)			(106)
Preferred stock(a)									(15)							(15	)			(15)
Shares acquired for treasury							23						(23	)		-				-
Impact of stock transactions under stock compensation plans, net							24						8			32				32
Balance at March 31, 2017	$		2,051		1,331		2,803		13,625		68		(3,448	)		16,430			27	16,457

(a) For both the three months ended March 31, 2017 and 2016, dividends were $612.50 per preferred share for Perpetual Preferred Stock, Series J and $414.06 per preferred share for Perpetual Preferred Stock, Series I.

(b) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Refer to the Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For the three months ended March 31,
($ in millions)		2017			2016(a)
Operating Activities
Net income	$		305		326
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses			74		119
Depreciation, amortization and accretion			89		110
Stock-based compensation expense			45		26
(Benefit from) provision for deferred income taxes			(11	)	9
Securities gains, net			(1	)	(1)
MSR fair value adjustment			23		-
Provision for MSR impairment			-		85
Net gains on sales of loans and fair value adjustments on loans held for sale			(34	)	(15)
Net losses (gains) on disposition and impairment of bank premises and equipment			1		(1)
Gains on sales of certain retail branch operations			-		(8)
Net losses on disposition and impairment of operating lease equipment			20		-
Proceeds from sales of loans held for sale			1,627		1,133
Loans originated for sale, net of repayments			(1,483	)	(1,180)
Dividends representing return on equity method investments			9		2
Net change in:
Trading securities			(277	)	(20)
Other assets			115		345
Accrued taxes, interest and expenses			(142	)	(421)
Other liabilities			176		(114)
Net Cash Provided by Operating Activities			536		395
Investing Activities
Proceeds from sales:
Available-for-sale securities			2,191		2,677
Loans			21		7
Bank premises and equipment			6		15
Proceeds from repayments / maturities:
Available-for-sale securities			604		531
Held-to-maturity securities			-		6
Purchases:
Available-for-sale securities			(2,975	)	(4,069)
Bank premises and equipment			(52	)	(41)
MSRs			(29	)	-
Proceeds from sales and dividends representing return of equity method investments			69		9
Net cash paid on sales of certain retail branch operations			-		(43)
Net change in:
Other short-term investments			1,110		893
Loans and leases			368		(1,119)
Operating lease equipment			(6	)	(50)
Net Cash Provided (Used) in Investing Activities			1,307		(1,184)
Financing Activities
Net change in:
Deposits			335		(502)
Federal funds purchased			23		(17)
Other short-term borrowings			(1,520	)	2,016
Dividends paid on common stock			(106	)	(102)
Dividends paid on preferred stock			(38	)	(15)
Proceeds from issuance of long-term debt			-		1,494
Repayment of long-term debt			(714	)	(2,088)
Repurchase of treasury stock and related forward contract			-		(240)
Other			(10	)	1
Net Cash (Used) Provided by Financing Activities			(2,030	)	547
Decrease in Cash and Due from Banks			(187	)	(242)
Cash and Due from Banks at Beginning of Period			2,392		2,540
Cash and Due from Banks at End of Period	$		2,205		2,298

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Refer to the Notes to Condensed Consolidated Financial Statements. Note 2 contains cash payments related to interest and income taxes in addition to non-cash investing and financing activities.

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Notes to Condensed Consolidated Financial Statements (unaudited)

1. Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of the Bancorp and its majority-owned subsidiaries and VIEs in which the Bancorp has been determined to be the primary beneficiary. Other entities, including certain joint ventures, in which the Bancorp has the ability to exercise significant influence over operating and financial policies of the investee, but upon which the Bancorp does not possess control, are accounted for by the equity method and not consolidated. Those entities in which the Bancorp does not have the ability to exercise significant influence are generally carried at the lower of cost or fair value. Intercompany transactions and balances have been eliminated.

In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, which consist of normal recurring accruals, necessary to present fairly the results for the periods presented. In accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial information, these statements do not include certain information and footnote disclosures required for complete annual financial statements and it is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Bancorp’s Annual Report on Form 10-K. The results of operations, comprehensive income, cash flows and changes in equity for the three months ended March 31, 2017 and 2016 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2016 has been derived from the Bancorp’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

2. Supplemental Cash Flow Information

Cash payments related to interest and income taxes in addition to non-cash investing and financing activities are presented in the following table for the three months ended March 31:

($ in millions)	2017		2016
Cash Payments:
Interest	$	208	191
Income taxes		18	334
Transfers:
Portfolio loans to loans held for sale		5	3
Loans held for sale to portfolio loans		3	12
Portfolio loans to OREO		12	12

3. Accounting and Reporting Developments

Standards Adopted in 2017

The Bancorp adopted the following new accounting standards effective January 1, 2017:

ASU 2016-05 – Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships

In March 2016, the FASB issued ASU 2016-05 which clarifies that a change in counterparty in a derivative contract does not, in and of itself, represent a change in critical terms that would require discontinuation of hedge accounting provided that other hedge accounting criteria continue to be met. The Bancorp adopted the amended guidance prospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-06 – Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments

In March 2016, the FASB issued ASU 2016-06 which clarifies the requirements for determining when contingent put and call options embedded in debt instruments should be bifurcated from the debt instrument and accounted for separately as derivatives. A four-step decision sequence should be followed in determining whether such options are clearly and closely related to the economic characteristics and risks of the debt instrument, which determines whether bifurcation is necessary. The Bancorp adopted the amended guidance on January 1, 2017 on a modified retrospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-07 – Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued ASU 2016-07 to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting, eliminating the requirement to retrospectively apply the equity method of accounting back to the date of the initial investment. The Bancorp adopted the amended guidance prospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-17 – Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control

In October 2016, the FASB issued ASU 2016-17 which changes the accounting for the consolidation of VIEs in certain situations involving entities under common control. Specifically, the amendments change how the indirect interests held through related parties that are under common control should be included in a reporting entity’s evaluation of whether it is a primary beneficiary of a VIE.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Under the amended guidance, the reporting entity is only required to include the indirect interests held through related parties that are under common control in a VIE on a proportionate basis. The Bancorp adopted the amended guidance retrospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of March 31, 2017:

ASU 2014-09 – Revenue from Contracts with Customers (Topic 606)

In May 2014, the FASB issued ASU 2014-09 which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequent to the issuance of ASU 2014-09, the FASB has issued additional guidance to clarify certain implementation issues, including ASUs 2016-08 (Principal versus Agent Considerations), 2016-10 (Identifying Performance Obligations and Licensing), 2016-12 (Narrow-Scope Improvements and Practical Expedients), and 2016-20 (Technical Corrections and Improvements) in March, April, May and December 2016, respectively. These amendments do not change the core principles in ASU 2014-09 and the effective date and transition requirements are consistent with those in the original ASU. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018, using a modified retrospective approach, with the cumulative effect of initially applying the amendments recognized at the date of initial application. Because the amended guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, the Bancorp’s preliminary analysis suggests that the adoption of this amended guidance is not expected to have a material impact on its Condensed Consolidated Financial Statements, although the Bancorp will also be subject to expanded disclosure requirements upon adoption and the Bancorp’s revenue recognition processes for wealth and asset management revenue, corporate banking revenue, and card and processing revenue may be affected. However, there are certain areas of the amended guidance, such as credit card interchange fees and related rewards programs, which are subject to interpretation and for which the Bancorp has not made final conclusions regarding the applicability and the related impact, if any. Accordingly, the results of the Bancorp’s materiality analysis, as well as its final adoption method, may change as these conclusions are reached.

ASU 2016-01 – Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01 which revises an entity’s accounting related to 1) the classification and measurement of investments in equity securities, 2) the presentation of certain fair value changes for financial liabilities measured at fair value, and 3) certain disclosure requirements associated with the fair value of financial instruments. The amendments require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes as a result of an observable price change. The amendments also simplify the impairment assessment of equity investments for which fair value is not readily determinable by requiring an entity to perform a qualitative assessment to identify impairment. If qualitative indicators are identified, the entity will be required to measure the investment at fair value. For financial liabilities that an entity has elected to measure at fair value, the amendments require an entity to present separately in other comprehensive income the portion of the change in fair value that results from a change in instrument-specific credit risk. For public business entities, the amendments 1) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate fair value for financial instruments measured at amortized cost and 2) require, for disclosure purposes, the use of an exit price notion in the determination of the fair value of financial instruments. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018. Upon adoption, the Bancorp will be required to make a cumulative-effect adjustment to the Condensed Consolidated Balance Sheets as of the beginning of the fiscal year of adoption. However, for equity securities without a readily determinable fair value, the guidance will be applied prospectively to all equity investments that exist as of the date of adoption. Early adoption of the amendments is not permitted with the exception of the presentation of certain fair value changes for financial liabilities measured at fair value for which early application is permitted. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2016-02 – Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02 which establishes a new accounting model for leases. The amended guidance requires lessees to record lease liabilities on the lessees’ balance sheets along with corresponding right-of-use assets for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s statements of income. From a lessor perspective, the accounting model is largely unchanged, except that the amended guidance includes certain targeted improvements to align, where necessary, lessor accounting with the lessee accounting model and the revenue recognition guidance in ASC Topic 606. The amendments also modify disclosure requirements for an entity’s lease arrangements. The amended guidance is effective for the Bancorp on January 1, 2019, with early adoption permitted. The amendments should be applied to each prior reporting period presented using a modified retrospective approach, although the amended guidance contains certain transition relief provisions that, among other things, permit an entity to elect not to reassess the classification of leases which existed or expired as of the date the amendments are effective. The Bancorp is currently in the process of developing an inventory of all leases and accumulating the lease data necessary to apply the amended guidance. The Bancorp is continuing to evaluate the impact of the amended guidance on its Condensed Consolidated Financial Statements, but the effects of recognizing most operating leases on the Condensed Consolidated Balance Sheets are expected to be material. The Bancorp expects to recognize right-of-use assets and lease liabilities for substantially all of its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption.

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Notes to Condensed Consolidated Financial Statements (unaudited)

ASU 2016-04 – Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products

In March 2016, the FASB issued ASU 2016-04 which permits proportional derecognition of the liability for unused funds on certain prepaid stored-value products (known as breakage) to the extent that it is probable that a significant reversal of the recognized breakage amount will not subsequently occur. The amendments do not apply to any prepaid stored-value products that are attached to a segregated customer deposit account, or products for which unused funds are subject to unclaimed property remittance laws. The amended guidance may be applied retrospectively to all comparable periods presented in the year of adoption or applied on a modified retrospective basis by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018 and is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements. However, the Bancorp’s preliminary analysis suggests that most of its prepaid stored-value products will not be affected by the amended guidance.

ASU 2016-13 – Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13 which establishes a new approach to estimate credit losses on certain types of financial instruments. The new approach changes the impairment model for most financial assets, and will require the use of an “expected credit loss” model for financial instruments measured at amortized cost and certain other instruments, including trade and other receivables, loans, debt securities, net investments in leases, and off-balance-sheet credit exposures (such as loan commitments, standby letters of credit, and financial guarantees not accounted for as insurance). This model requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect. This allowance is deducted from the financial asset’s amortized cost basis to present the net amount expected to be collected. The new expected credit loss model will also apply to purchased financial assets with credit deterioration, superseding current accounting guidance for such assets. The amended guidance also amends the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on such securities is a credit loss, and also eliminating the option for management to consider the length of time a security has been in an unrealized loss position as a factor in concluding whether or not a credit loss exists. The amended model states that an entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra account to the amortized cost basis, instead of a direct reduction of the amortized cost basis of the investment, as under current guidance. As a result, entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings as opposed to in interest income over time. There are also additional disclosure requirements included in this guidance. The amended guidance is effective for the Bancorp on January 1, 2020, with early adoption permitted as early as January 1, 2019. The amended guidance is to be applied on a modified retrospective basis with the cumulative effect of initially applying the amendments recognized in retained earnings at the date of initial application. However, certain provisions of the guidance are only required to be applied on a prospective basis. While the Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements, it currently expects the ALLL to increase upon adoption given that the allowance will be required to cover the full remaining expected life of the portfolio upon adoption, rather than the incurred loss model under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the Bancorp’s loan and lease portfolio at the time of adoption.

ASU 2016-15 – Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash

In August 2016, the FASB issued ASU 2016-15 to clarify the classification of certain cash receipts and payments within an entity’s statement of cash flows. These items include debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of BOLI policies, distributions received from equity method investees, and beneficial interests in securitization transactions. The amended guidance also specifies how to address classification of cash receipts and payments that have aspects of more than one class of cash flows. The amended guidance is effective for the Bancorp on January 1, 2018, with early adoption permitted, and is to be applied on a retrospective basis unless it is impractical to do so. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2016-16 – Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU 2016-16 which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Current U.S. GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The amended guidance is effective for the Bancorp on January 1, 2018, with early adoption permitted, and is applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the fiscal year in which the guidance is effective. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-01 – Business Combinations (Topic 805): Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01 which clarifies the definition of a business in order to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amended guidance provides a screen which states that when substantially all of the fair value of assets acquired (or disposed) is concentrated in a single asset or group of similar assets, then the set of assets and activities would not be considered a business. The amended guidance is effective for the Bancorp on January 1, 2018, and is to be applied prospectively. Upon adoption, the Bancorp will evaluate future transactions to determine if they should be accounted for as acquisitions (or disposals) of assets or businesses based on the amended guidance.

ASU 2017-04 – Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04 which simplifies the test for goodwill impairment by removing the second step, which measures the amount of impairment loss, if any. Instead, the amended guidance states that an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, except that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

This would apply to all reporting units, including those with zero or negative carrying amounts of net assets. The amended guidance is effective for the Bancorp on January 1, 2020, and is to be applied prospectively. Early adoption is permitted. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-05 – Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

In February 2017, the FASB issued ASU 2017-05 which clarifies the scope of Subtopic 610-20 and defines the term “in substance nonfinancial asset.” The amendments require that an entity should initially identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The amendments provide specific guidance on accounting for partial sales of nonfinancial assets, which require an entity to derecognize a distinct nonfinancial asset or in substance nonfinancial asset in a partial sale transaction when it 1) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset and 2) transfers control of the asset. Once an entity transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial asset, it is required to measure any noncontrolling interest it receives (or retains) at fair value. The amended guidance is effective for the Bancorp on January 1, 2018, concurrent with the adoption of ASU 2014-09. It is to be applied using either a retrospective or modified retrospective approach, consistent with the transition method for ASU 2014-09. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-08 Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities

In March 2017, the FASB issued ASU 2017-08 which shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amended guidance is effective for the Bancorp on January 1, 2019, with early adoption permitted, and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Bancorp shall provide a disclosure regarding the change in accounting principle. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

4. Investment Securities

The following tables provide the amortized cost, unrealized gains and losses and fair value for the major categories of the available-for-sale and other and held-to-maturity investment securities portfolios as of:

March 31, 2017 ($ in millions)	Amortized     Cost			Unrealized   Gains		Unrealized   Losses			Fair         Value
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities		$	435		2		-			437
Obligations of states and political subdivisions securities			44		1		-			45
Mortgage-backed securities:
Agency residential mortgage-backed securities(a)			16,140		195		(90	)		16,245
Agency commercial mortgage-backed securities			8,647		88		(63	)		8,672
Non-agency commercial mortgage-backed securities			3,269		46		(16	)		3,299
Asset-backed securities and other debt securities			2,115		36		(17	)		2,134
Equity securities(b)			698		3		(2	)		699
Total available-for-sale and other securities		$	31,348		371		(188	)		31,531
Held-to-maturity securities:
Obligations of states and political subdivisions securities		$	24		-		-			24
Asset-backed securities and other debt securities			2		-		-			2
Total held-to-maturity securities		$	26		-		-			26

(a) Includes interest-only mortgage-backed securities of $42 as of March 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

(b) Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $359 and $1, respectively, at March 31, 2017, that are carried at cost, and certain mutual fund and equity security holdings.

December 31, 2016 ($ in millions)	Amortized     Cost			Unrealized   Gains		Unrealized   Losses			Fair         Value
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities		$	547		2		-			549
Obligations of states and political subdivisions securities			44		1		-			45
Mortgage-backed securities:
Agency residential mortgage-backed securities(a)			15,525		178		(95	)		15,608
Agency commercial mortgage-backed securities			9,029		87		(61	)		9,055
Non-agency commercial mortgage-backed securities			3,076		51		(15	)		3,112
Asset-backed securities and other debt securities			2,106		28		(18	)		2,116
Equity securities(b)			697		3		(2	)		698
Total available-for-sale and other securities		$	31,024		350		(191	)		31,183
Held-to-maturity securities:
Obligations of states and political subdivisions securities		$	24		-		-			24
Asset-backed securities and other debt securities			2		-		-			2
Total held-to-maturity securities		$	26		-		-			26

(a) Includes interest-only mortgage-backed securities of $60 as of December 31, 2016, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

(b) Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $358, and $1, respectively, at December 31, 2016, that are carried at cost, and certain mutual fund and equity security holdings.

The following table presents realized gains and losses that were recognized in income from available-for-sale securities:

		For the three months ended  March 31,
($ in millions)		2017			2016
Realized gains	$		9			15
Realized losses			(1	)		(4)
OTTI			(10	)		(3)
Net realized (losses) gains(a)	$		(2	)		8

(a) Excludes net gains of $1 and net losses of $6 on interest-only mortgage-backed securities for the three months ended March 31, 2017 and 2016, respectively.

The following table provides a summary of OTTI by security type:

		For the three months ended  March 31,
($ in millions)		2017			2016
Available-for-sale and other debt securities	$		(10	)		(2)
Available-for-sale equity securities			-			(1)
Total OTTI(a)	$		(10	)		(3)

(a) Included in securities gains, net, in the Condensed Consolidated Statements of Income.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Trading securities were $689 million as of March 31, 2017, compared to $410 million at December 31, 2016. The following table presents total gains and losses that were recognized in income from trading securities:

		For the three months ended  March 31,
($ in millions)		2017			2016
Realized gains(a)	$		3			2
Realized losses(b)			(2	)		(4)
Net unrealized gains(c)			1			1
Total trading securities gains (losses)	$		2			(1)

(a) Includes realized gains of $3 and $2 for the three months ended March 31, 2017 and 2016, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

(b) Includes realized losses of $2 and $4 for the three months ended March 31, 2017 and 2016, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

(c) Includes an immaterial amount of net unrealized gains for both the three months ended March 31, 2017 and 2016 recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

At March 31, 2017 and December 31, 2016, securities with a fair value of $8.3 billion and $10.1 billion, respectively, were pledged to secure borrowings, public deposits, trust funds, derivative contracts and for other purposes as required or permitted by law.

The expected maturity distribution of the Bancorp’s mortgage-backed securities and the contractual maturity distribution of the remainder of the Bancorp’s available-for-sale and other and held-to-maturity investment securities as of March 31, 2017 are shown in the following table:

		Available-for-Sale and  Other				Held-to-Maturity
($ in millions)		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Debt securities:(a)
Less than 1 year	$		187		189		2	2
1-5 years			6,316		6,362		12	12
5-10 years			21,358		21,481		10	10
Over 10 years			2,789		2,800		2	2
Equity securities			698		699		-	-
Total	$		31,348		31,531		26	26

(a) Actual maturities may differ from contractual maturities when a right to call or prepay obligations exists with or without call or prepayment penalties.

The following table provides the fair value and gross unrealized losses on available-for-sale and other securities in an unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of:

		Less than 12 months					12 months or more					Total
($ in millions)		Fair Value		Unrealized   Losses			Fair Value		Unrealized   Losses			Fair Value		Unrealized       Losses
March 31, 2017
U.S. Treasury and federal agencies	$		101		-			-		-			101		-
Agency residential mortgage-backed securities			5,144		(82	)		161		(8	)		5,305		(90	)
Agency commercial mortgage-backed securities			2,931		(63	)		-		-			2,931		(63	)
Non-agency commercial mortgage-backed securities			1,283		(16	)		-		-			1,283		(16	)
Asset-backed securities and other debt securities			322		(6	)		364		(11	)		686		(17	)
Equity securities			-		-			37		(2	)		37		(2	)
Total	$		9,781		(167	)		562		(21	)		10,343		(188	)
December 31, 2016
U.S. Treasury and federal agencies	$		199		-			-		-			199		-
Agency residential mortgage-backed securities			6,223		(88	)		172		(7	)		6,395		(95	)
Agency commercial mortgage-backed securities			3,183		(61	)		-		-			3,183		(61	)
Non-agency commercial mortgage-backed securities			1,052		(15	)		-		-			1,052		(15	)
Asset-backed securities and other debt securities			422		(8	)		336		(10	)		758		(18	)
Equity securities			-		-			37		(2	)		37		(2	)
Total	$		11,079		(172	)		545		(19	)		11,624		(191	)

At both March 31, 2017 and December 31, 2016, an immaterial amount of unrealized losses in the available-for-sale and other securities portfolio were represented by non-rated securities.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

5. Loans and Leases

The Bancorp diversifies its loan and lease portfolio by offering a variety of loan and lease products with various payment terms and rate structures. Lending activities are generally concentrated within those states in which the Bancorp has banking centers and are primarily located in the Midwestern and Southeastern regions of the U.S. The Bancorp’s commercial loan portfolio consists of lending to various industry types. Management periodically reviews the performance of its loan and lease products to evaluate whether they are performing within acceptable interest rate and credit risk levels and changes are made to underwriting policies and procedures as needed. The Bancorp maintains an allowance to absorb loan and lease losses inherent in the portfolio. For further information on credit quality and the ALLL, refer to Note 6.

The following table provides a summary of commercial loans and leases classified by primary purpose and consumer loans and leases classified based upon product or collateral as of:

($ in millions)	March 31, 2017		December 31,     2016
Loans and leases held for sale:
Commercial and industrial loans	$	2		60
Commercial mortgage loans		7		5
Commercial leases		1		-
Residential mortgage loans		606		686
Total loans and leases held for sale	$	616		751
Portfolio loans and leases:
Commercial and industrial loans	$	41,074		41,676
Commercial mortgage loans		6,924		6,899
Commercial construction loans		4,283		3,903
Commercial leases		4,092		3,974
Total commercial loans and leases	$	56,373		56,452
Residential mortgage loans	$	15,336		15,051
Home equity		7,469		7,695
Automobile loans		9,572		9,983
Credit card		2,070		2,237
Other consumer loans and leases		808		680
Total consumer loans and leases	$	35,255		35,646
Total portfolio loans and leases	$	91,628		92,098

Total portfolio loans and leases are recorded net of unearned income, which totaled $500 million as of March 31, 2017 and $503 million as of December 31, 2016. Additionally, portfolio loans and leases are recorded net of unamortized premiums and discounts, deferred direct loan origination fees and costs and fair value adjustments (associated with acquired loans or loans designated as fair value upon origination) which totaled a net premium of $249 million and $240 million as of March 31, 2017 and December 31, 2016, respectively.

The Bancorp’s FHLB and FRB advances are generally secured by loans. The Bancorp had loans of $13.2 billion and $13.1 billion at March 31, 2017 and December 31, 2016, respectively, pledged at the FHLB, and loans of $39.5 billion and $40.0 billion at March 31, 2017 and December 31, 2016, respectively, pledged at the FRB.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents a summary of the total loans and leases owned by the Bancorp as of:

		Carrying Value				90 Days Past Due and Still Accruing
($ in millions)		March 31, 2017		December 31, 2016		March 31, 2017		December 31,       2016
Commercial and industrial loans	$		41,076		41,736		3		4
Commercial mortgage loans			6,931		6,904		-		-
Commercial construction loans			4,283		3,903		-		-
Commercial leases			4,093		3,974		-		-
Residential mortgage loans			15,942		15,737		45		49
Home equity			7,469		7,695		-		-
Automobile loans			9,572		9,983		6		9
Credit card			2,070		2,237		21		22
Other consumer loans and leases			808		680		-		-
Total loans and leases	$		92,244		92,849		75		84
Less: Loans and leases held for sale	$		616		751
Total portfolio loans and leases	$		91,628		92,098
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)						2017		2016
Commercial and industrial loans						$	36		46
Commercial mortgage loans							5		6
Commercial leases							1		2
Residential mortgage loans							5		2
Home equity							6		8
Automobile loans							11		9
Credit card							22		20
Other consumer loans and leases							3		3
Total net charge-offs						$	89		96

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

6. Credit Quality and the Allowance for Loan and Lease Losses

The Bancorp disaggregates ALLL balances and transactions in the ALLL by portfolio segment. Credit quality related disclosures for loans and leases are further disaggregated by class.

Allowance for Loan and Lease Losses

The following tables summarize transactions in the ALLL by portfolio segment:

For the three months ended March 31, 2017 ($ in millions)	Commercial		Residential   Mortgage		Consumer		Unallocated		Total
Balance, beginning of period	$	831		96		214		112		1,253
Losses charged-off		(46)		(6)		(55)		-		(107)
Recoveries of losses previously charged-off		4		1		13		-		18
Provision for loan and lease losses		37		5		32		-		74
Balance, end of period	$	826		96		204		112		1,238
For the three months ended March 31, 2016 ($ in millions)	Commercial		Residential Mortgage		Consumer		Unallocated		Total
Balance, beginning of period	$	840		100		217		115		1,272
Losses charged-off		(60)		(4)		(52)		-		(116)
Recoveries of losses previously charged-off		6		2		12		-		20
Provision for loan and lease losses		81		-		37		1		119
Balance, end of period	$	867		98		214		116		1,295

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:

As of March 31, 2017 ($ in millions)	Commercial		Residential   Mortgage		Consumer		Unallocated		Total
ALLL:(a)
Individually evaluated for impairment	$	113 (c)		68		42		-		223
Collectively evaluated for impairment		713		28		162		-		903
Unallocated		-		-		-		112		112
Total ALLL	$	826		96		204		112		1,238
Portfolio loans and leases:(b)
Individually evaluated for impairment	$	786 (c)		656		354		-		1,796
Collectively evaluated for impairment		55,587		14,537		19,565		-		89,689
Loans acquired with deteriorated credit quality		-		2		-		-		2
Total portfolio loans and leases	$	56,373		15,195		19,919		-		91,487

(a) Includes $2 related to leveraged leases at March 31, 2017.

(b) Excludes $141 of residential mortgage loans measured at fair value, and includes $703 of leveraged leases, net of unearned income at March 31, 2017.

(c) Includes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26 and an ALLL of $18.

As of December 31, 2016 ($ in millions)	Commercial		Residential   Mortgage		Consumer		Unallocated		Total
ALLL:(a)
Individually evaluated for impairment	$	118 (c)		68		44		-		230
Collectively evaluated for impairment		713		28		170		-		911
Unallocated		-		-		-		112		112
Total ALLL	$	831		96		214		112		1,253
Portfolio loans and leases:(b)
Individually evaluated for impairment	$	904 (c)		652		371		-		1,927
Collectively evaluated for impairment		55,548		14,253		20,224		-		90,025
Loans acquired with deteriorated credit quality		-		3		-		-		3
Total portfolio loans and leases	$	56,452		14,908		20,595		-		91,955

(a) Includes $2 related to leveraged leases at December 31, 2016.

(b) Excludes $143 of residential mortgage loans measured at fair value, and includes $701 of leveraged leases, net of unearned income at December 31, 2016.

(c) Includes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26 and an ALLL of $18.

CREDIT RISK PROFILE

Commercial Portfolio Segment

For purposes of analyzing historical loss rates used in the determination of the ALLL and monitoring the credit quality and risk characteristics of its commercial portfolio segment, the Bancorp disaggregates the segment into the following classes: commercial and industrial, commercial mortgage owner-occupied, commercial mortgage nonowner-occupied, commercial construction and commercial leases.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

To facilitate the monitoring of credit quality within the commercial portfolio segment, and for purposes of analyzing historical loss rates used in the determination of the ALLL for the commercial portfolio segment, the Bancorp utilizes the following categories of credit grades: pass, special mention, substandard, doubtful and loss. The five categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated at least annually based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter.

The Bancorp assigns a special mention rating to loans and leases that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan or lease or the Bancorp’s credit position.

The Bancorp assigns a substandard rating to loans and leases that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans and leases have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans and leases in this grade also are characterized by the distinct possibility that the Bancorp will sustain some loss if the deficiencies noted are not addressed and corrected.

The Bancorp assigns a doubtful rating to loans and leases that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.

Loans and leases classified as loss are considered uncollectible and are charged-off in the period in which they are determined to be uncollectible. Because loans and leases in this category are fully charged-off, they are not included in the following tables.

The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:

As of March 31, 2017 ($ in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial loans	$	38,187		1,255		1,630		2		41,074
Commercial mortgage owner-occupied loans		3,226		74		110		-		3,410
Commercial mortgage nonowner-occupied loans		3,429		25		60		-		3,514
Commercial construction loans		4,238		45		-		-		4,283
Commercial leases		4,007		56		29		-		4,092
Total commercial loans and leases	$	53,087		1,455		1,829		2		56,373
As of December 31, 2016 ($ in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial loans	$	38,844		1,204		1,604		24		41,676
Commercial mortgage owner-occupied loans		3,168		72		117		3		3,360
Commercial mortgage nonowner-occupied loans		3,466		4		69		-		3,539
Commercial construction loans		3,902		1		-		-		3,903
Commercial leases		3,894		54		26		-		3,974
Total commercial loans and leases	$	53,274		1,335		1,816		27		56,452

Residential Mortgage and Consumer Portfolio Segments

For purposes of monitoring the credit quality and risk characteristics of its consumer portfolio segment, the Bancorp disaggregates the segment into the following classes: home equity, automobile loans, credit card and other consumer loans and leases. The Bancorp’s residential mortgage portfolio segment is also a separate class.

The Bancorp considers repayment performance as the best indicator of credit quality for residential mortgage and consumer loans, which includes both the delinquency status and performing versus nonperforming status of the loans. The delinquency status of all residential mortgage and consumer loans is presented by class in the age analysis section while the performing versus nonperforming status is presented in the following table. Refer to the nonaccrual loans and leases section of Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for additional delinquency and nonperforming information.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents a summary of the Bancorp’s residential mortgage and consumer portfolio segments, by class, disaggregated into performing versus nonperforming status as of:

		March 31, 2017				December 31, 2016
($ in millions)		Performing		Nonperforming		Performing		Nonperforming
Residential mortgage loans(a)	$		15,160		35		14,874		34
Home equity			7,399		70		7,622		73
Automobile loans			9,570		2		9,981		2
Credit card			2,043		27		2,209		28
Other consumer loans and leases			808		-		680		-
Total residential mortgage and consumer loans and leases(a)	$		34,980		134		35,366		137

(a) Excludes $141 and $143 of loans measured at fair value at March 31, 2017 and December 31, 2016, respectively.

Age Analysis of Past Due Loans and Leases

The following tables summarize the Bancorp’s recorded investment in portfolio loans and leases, by age and class:

		Current		Past Due								90 Days Past
As of March 31, 2017 ($ in millions)		Loans and Leases(c)		30-89       Days(c)		90 Days     or More(c)		Total         Past Due		Total Loans and Leases		Due and Still         Accruing
Commercial loans and leases:
Commercial and industrial loans	$		40,930		46		98		144		41,074		3
Commercial mortgage owner-occupied loans			3,388		3		19		22		3,410		-
Commercial mortgage nonowner-occupied loans			3,506		1		7		8		3,514		-
Commercial construction loans			4,283		-		-		-		4,283		-
Commercial leases			4,090		-		2		2		4,092		-
Residential mortgage loans(a)(b)			15,087		27		81		108		15,195		45
Consumer loans and leases:
Home equity			7,351		64		54		118		7,469		-
Automobile loans			9,503		60		9		69		9,572		6
Credit card			2,018		27		25		52		2,070		21
Other consumer loans and leases			807		1		-		1		808		-
Total portfolio loans and leases(a)	$		90,963		229		295		524		91,487		75

(a) Excludes $141 of residential mortgage loans measured at fair value at March 31, 2017.

(b) Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2017, $77 of these loans were 30-89 days past due and $302 were 90 days or more past due. The Bancorp recognized $2 of losses during the three months ended March 31, 2017 due to claim denials and curtailments associated with these insured or guaranteed loans.

(c) Includes accrual and nonaccrual loans and leases.

		Current		Past Due								90 Days Past
As of December 31, 2016 ($ in millions)		Loans and Leases(c)		30-89       Days(c)		90 Days     or More(c)		Total         Past Due		Total Loans and Leases		Due and Still         Accruing
Commercial loans and leases:
Commercial and industrial loans	$		41,495		87		94		181		41,676		4
Commercial mortgage owner-occupied loans			3,332		6		22		28		3,360		-
Commercial mortgage nonowner-occupied loans			3,530		2		7		9		3,539		-
Commercial construction loans			3,902		1		-		1		3,903		-
Commercial leases			3,972		-		2		2		3,974		-
Residential mortgage loans(a)(b)			14,790		37		81		118		14,908		49
Consumer loans and leases:
Home equity			7,570		68		57		125		7,695		-
Automobile loans			9,886		85		12		97		9,983		9
Credit card			2,183		28		26		54		2,237		22
Other consumer loans and leases			679		1		-		1		680		-
Total portfolio loans and leases(a)	$		91,339		315		301		616		91,955		84

(a) Excludes $143 of residential mortgage loans measured at fair value at December 31, 2016.

(b) Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2016, $110 of these loans were 30-89 days past due and $312 were 90 days or more past due. The Bancorp recognized $2 of losses during the three months ended March 31, 2016 due to claim denials and curtailments associated with these insured or guaranteed loans.

(c) Includes accrual and nonaccrual loans and leases.

Impaired Portfolio Loans and Leases

Larger commercial loans and leases included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment. The Bancorp also performs an individual review on loans and leases that are restructured in a TDR. The Bancorp considers the current value of collateral, credit quality of any guarantees, the loan structure and other factors when evaluating whether an individual loan or lease is impaired. Other factors may include the geography and industry of the borrower, size and financial condition of the borrower, cash flow and leverage of the borrower, and the Bancorp’s evaluation of the borrower’s management. Smaller-balance homogenous loans or leases that are collectively evaluated for impairment are not included in the following tables.

67

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables summarize the Bancorp’s impaired portfolio loans and leases, by class, that were subject to individual review, which includes all portfolio loans and leases restructured in a TDR:

As of March 31, 2017 ($ in millions)		Unpaid Principal Balance		Recorded     Investment		ALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans	$		449		392		86
Commercial mortgage owner-occupied loans(b)			19		13		3
Commercial mortgage nonowner-occupied loans			16		15		6
Restructured residential mortgage loans			472		468		68
Restructured consumer loans and leases:
Home equity			192		191		29
Automobile loans			11		11		1
Credit card			49		49		12
Total impaired portfolio loans and leases with a related ALLL	$		1,208		1,139		205
With no related ALLL:
Commercial loans and leases:
Commercial and industrial loans	$		264		242		-
Commercial mortgage owner-occupied loans			28		22		-
Commercial mortgage nonowner-occupied loans			74		74		-
Commercial leases			2		2		-
Restructured residential mortgage loans			209		188		-
Restructured consumer loans and leases:
Home equity			104		101		-
Automobile loans			3		2		-
Total impaired portfolio loans and leases with no related ALLL	$		684		631		-
Total impaired portfolio loans and leases	$		1,892		1,770 (a)		205

(a) Includes $277, $642 and $308, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $251, $14 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017.

(b) Excludes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

68

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

As of December 31, 2016 ($ in millions)		Unpaid Principal Balance		Recorded     Investment		ALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans	$		440		414		94
Commercial mortgage owner-occupied loans(b)			24		16		5
Commercial mortgage nonowner-occupied loans			7		6		1
Commercial leases			2		2		-
Restructured residential mortgage loans			471		465		68
Restructured consumer loans and leases:
Home equity			202		201		30
Automobile loans			12		12		2
Credit card			52		52		12
Total impaired portfolio loans and leases with a related ALLL	$		1,210		1,168		212
With no related ALLL:
Commercial loans and leases:
Commercial and industrial loans	$		394		320		-
Commercial mortgage owner-occupied loans			36		35		-
Commercial mortgage nonowner-occupied loans			93		83		-
Commercial leases			2		2		-
Restructured residential mortgage loans			207		187		-
Restructured consumer loans and leases:
Home equity			107		104		-
Automobile loans			3		2		-
Total impaired portfolio loans and leases with no related ALLL	$		842		733		-
Total impaired portfolio loans and leases	$		2,052		1,901 (a)		212

(a) Includes $322, $635 and $323, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $192, $17 and $48, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016.

(b) Excludes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

The following tables summarize the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:

		For the three months ended     March 31, 2017				For the three months ended     March 31, 2016
($ in millions)		Average   Recorded   Investment		Interest     Income     Recognized		Average   Recorded   Investment		Interest     Income     Recognized
Commercial loans and leases:
Commercial and industrial loans	$		683		1		645		2
Commercial mortgage owner-occupied loans(a)			43		-		71		-
Commercial mortgage nonowner-occupied loans			89		1		165		1
Commercial construction loans			-		-		7		-
Commercial leases			3		-		5		-
Restructured residential mortgage loans			654		6		642		6
Restructured consumer loans and leases:
Home equity			298		3		340		3
Automobile loans			14		-		19		-
Credit card			51		1		60		1
Total average impaired portfolio loans and leases	$		1,835		12		1,954		13

(a) Excludes five restructured 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, with an average recorded investment of $26 and $27 at March 31, 2017 and March 31, 2016, respectively, and an immaterial amount of interest income recognized for the both the three months ended March 31, 2017 and March 31, 2016.

69

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Nonperforming Assets

Nonperforming assets include nonaccrual loans and leases for which ultimate collectability of the full amount of the principal and/or interest is uncertain; restructured commercial and credit card loans which have not yet met the requirements to be classified as a performing asset; restructured consumer loans which are 90 days past due based on the restructured terms unless the loan is both well-secured and in the process of collection; and certain other assets, including OREO and other repossessed property.

The following table presents the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of:

($ in millions)		March 31, 2017		December 31,       2016
Commercial loans and leases:
Commercial and industrial loans	$		484		478
Commercial mortgage owner-occupied loans(a)			28		32
Commercial mortgage nonowner-occupied loans			9		9
Commercial leases			2		4
Total nonaccrual portfolio commercial loans and leases			523		523
Residential mortgage loans			35		34
Consumer loans and leases:
Home equity			70		73
Automobile loans			2		2
Credit card			27		28
Total nonaccrual portfolio consumer loans and leases			99		103
Total nonaccrual portfolio loans and leases(b)(c)	$		657		660
OREO and other repossessed property			64		78
Total nonperforming portfolio assets(b)(c)	$		721		738

(a) Excludes $19 of restructured nonaccrual loans at both March 31, 2017 and December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.

(b) Excludes $9 and $13 of nonaccrual loans held for sale at March 31, 2017 and December 31, 2016, respectively.

(c) Includes $4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at both March 31, 2017 and December 31, 2016 and an immaterial amount and $1 of restructured nonaccrual government insured commercial loans at March 31, 2017 and December 31, 2016, respectively.

The Bancorp’s recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction was $273 million and $260 million as of March 31, 2017 and December 31, 2016, respectively.

Troubled Debt Restructurings

If a borrower is experiencing financial difficulty, the Bancorp may consider, in certain circumstances, modifying the terms of their loan to maximize collection of amounts due. Within each of the Bancorp’s loan classes, TDRs typically involve either a reduction of the stated interest rate of the loan, an extension of the loan’s maturity date with a stated rate lower than the current market rate for a new loan with similar risk, or in limited circumstances, a reduction of the principal balance of the loan or the loan’s accrued interest. Modifying the terms of a loan may result in an increase or decrease to the ALLL depending upon the terms modified, the method used to measure the ALLL for a loan prior to modification, and whether any charge-offs were recorded on the loan before or at the time of modification. Refer to the ALLL section of Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the Bancorp’s ALLL methodology. Upon modification of a loan, the Bancorp measures the related impairment as the difference between the estimated future cash flows expected to be collected on the modified loan, discounted at the original effective yield of the loan, and the carrying value of the loan. The resulting measurement may result in the need for minimal or no allowance because it is probable that all cash flows will be collected under the modified terms of the loan. In addition, if the stated interest rate was increased in a TDR, the cash flows on the modified loan, using the pre-modification interest rate as the discount rate, often exceed the recorded investment of the loan. Conversely, upon a modification that reduces the stated interest rate on a loan, the Bancorp recognizes an impairment loss as an increase to the ALLL. If a TDR involves a reduction of the principal balance of the loan or the loan’s accrued interest, that amount is charged off to the ALLL.

As of March 31, 2017, the Bancorp had $115 million and $56 million in line of credit and letter of credit commitments, respectively, compared to $82 million and $57 million in line of credit and letter of credit commitments as of December 31, 2016, respectively, to lend additional funds to borrowers whose terms have been modified in a TDR.

70

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables provide a summary of loans, by class, modified in a TDR by the Bancorp during the three months ended:

March 31, 2017 ($ in millions)(a)	Number of loans modified in a TDR during the period(b)		Recorded investment in loans modified in a TDR during the period		Increase to ALLL upon modification		Charge-offs   recognized upon   modification
Commercial loans:
Commercial and industrial loans		33		$            97		1		2
Commercial mortgage owner-occupied loans		5		2		-		-
Commercial mortgage nonowner-occupied loans		1		-		-		-
Residential mortgage loans		203		29		2		-
Consumer loans:
Home equity		31		2		-		-
Automobile loans		30		-		-		-
Credit card		1,756		7		1		-
Total portfolio loans		2,059		$          137		4		2

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.

(b) Represents number of loans post-modification and excludes loans previously modified in a TDR.

March 31, 2016 ($ in millions)(a)	Number of loans modified in a TDR during the period(b)		Recorded investment in loans modified in a TDR during the period		Increase (Decrease) to ALLL upon modification		Charge-offs   recognized upon   modification
Commercial loans:
Commercial and industrial loans		24		$            56		(2)		-
Commercial mortgage owner-occupied loans		7		6		(2)		-
Commercial mortgage nonowner-occupied loans		2		-		-		-
Residential mortgage loans		243		36		2		-
Consumer loans:
Home equity		64		5		-		-
Automobile loans		78		1		-		-
Credit card		2,592		12		2		1
Total portfolio loans		3,010		$          116		-		1

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.

(b) Represents number of loans post-modification and excludes loans previously modified in a TDR.

The Bancorp considers TDRs that become 90 days or more past due under the modified terms as subsequently defaulted. For commercial loans not subject to individual review for impairment, loss rates that are applied for purposes of determining the ALLL include historical losses associated with subsequent defaults on loans previously modified in a TDR. For consumer loans, the Bancorp performs a qualitative assessment of the adequacy of the consumer ALLL by comparing the consumer ALLL to forecasted consumer losses over the projected loss emergence period (the forecasted losses include the impact of subsequent defaults of consumer TDRs). When a residential mortgage, home equity, automobile or other consumer loan that has been modified in a TDR subsequently defaults, the present value of expected cash flows used in the measurement of the potential impairment loss is generally limited to the expected net proceeds from the sale of the loan’s underlying collateral and any resulting impairment loss is reflected as a charge-off or an increase in ALLL. The Bancorp recognizes ALLL for the entire balance of the credit card loans modified in a TDR that subsequently default.

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended March 31, 2017 and 2016 and were within twelve months of the restructuring date:

March 31, 2017 ($ in millions)(a)	Number of Contracts			Recorded     Investment
Commercial loans:
Commercial and industrial loans		2	$		1
Residential mortgage loans		57			9
Consumer loans:
Home equity		5			1
Credit card		450			2
Total portfolio loans		514	$		13

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

71

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

March 31, 2016 ($ in millions)(a)	Number of Contracts			Recorded     Investment
Commercial loans:
Commercial and industrial loans		1	$		-
Commercial mortgage nonowner-occupied loans		1			-
Residential mortgage loans		53			7
Consumer loans:
Home equity		6			1
Credit card		423			2
Total portfolio loans		484	$		10

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

7. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:

($ in millions)		March 31, 2017		December 31, 2016
Land and improvements(a)	$		649		663
Buildings(a)			1,667		1,672
Equipment			1,773		1,761
Leasehold improvements			392		398
Construction in progress(a)			109		99
Bank premises and equipment held for sale:
Land and improvements			33		29
Buildings			16		9
Equipment			2		1
Accumulated depreciation and amortization			(2,589)		(2,567)
Total bank premises and equipment	$		2,052		2,065

(a) At both March 31, 2017 and December 31, 2016, land and improvements, buildings and construction in progress included $92 associated with parcels of undeveloped land intended for future branch expansion.

The Bancorp monitors changing customer preferences associated with the channels it uses for banking transactions to evaluate the efficiency, competitiveness and quality of the customer service experience in its consumer distribution network. As part of this ongoing assessment, the Bancorp may determine that it is no longer fully committed to maintaining full-service branches at certain of its existing banking center locations. Similarly, the Bancorp may also determine that it is no longer fully committed to building banking centers on certain parcels of land which had previously been held for future branch expansion.

On June 16, 2015, the Bancorp’s Board of Directors authorized management to pursue a plan to further develop its distribution strategy, including a plan to consolidate and/or sell certain operating branch locations and certain parcels of undeveloped land that had been acquired by the Bancorp for future branch expansion (the “Branch Consolidation and Sales Plan”). In addition, the Bancorp announced on September 13, 2016 that it had identified an additional 44 branch locations and 5 parcels of undeveloped land that it planned to consolidate or sell.

As of March 31, 2017, the Bancorp had 43 branch locations and 33 parcels of undeveloped land that had been acquired for future branch expansion that it intended to consolidate or sell. These branch locations and parcels of undeveloped land, which include unsold properties from the Branch Consolidation and Sales Plan as well as properties included in the September 13, 2016 announcement, represent $36 million, $16 million and $2 million of land and improvements, buildings and equipment, respectively, included in bank premises and equipment in the Condensed Consolidated Balance Sheets as of March 31, 2017, of which $33 million, $16 million and $2 million, respectively, were classified as held for sale.

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. Impairment losses associated with such assessments and lower of cost or market adjustments were $3 million and $2 million for the three months ended March 31, 2017 and 2016, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

72

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

8. Operating Lease Equipment

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. As a result of these recoverability assessments, the Bancorp recognized impairment losses associated with certain operating lease assets of $31 million for the three months ended March 31, 2017. The recognized impairment losses were recorded in corporate banking revenue in the Condensed Consolidated Statements of Income.

9. Intangible Assets

Intangible assets consist of core deposit intangibles, customer lists, non-compete agreements and rent intangibles. Intangible assets are amortized on either a straight-line or an accelerated basis over their estimated useful lives.

The details of the Bancorp’s intangible assets are shown in the following table:

($ in millions)		Gross Carry Amount	ing	Accumulated Amortization	Net Carrying       Amount
As of March 31, 2017
Core deposit intangibles	$	34		(28)	6
Other		18		(13)	5
Total intangible assets	$	52		(41)	11
As of December 31, 2016
Core deposit intangibles	$	34		(27)	7
Other		15		(13)	2
Total intangible assets	$	49		(40)	9

As of March 31, 2017, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was immaterial for both the three months ended March 31, 2017 and 2016. The Bancorp’s projections of amortization expense shown on the following table is based on existing balances as of March 31, 2017. Future amortization expense may vary from these projections.

Estimated amortization expense for the remainder of 2017 through 2021 is as follows:

($ in millions)	Total
Remainder of 2017	$	1
2018		2
2019		2
2020		1
2021		1

73

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

10. Variable Interest Entities

The Bancorp, in the normal course of business, engages in a variety of activities that involve VIEs, which are legal entities that lack sufficient equity at risk to finance their activities without additional subordinated financial support or the equity investors of the entities as a group lack any of the characteristics of a controlling interest. The Bancorp evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Bancorp is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that requires a reconsideration. If the Bancorp is determined to be the primary beneficiary of a VIE, it must account for the VIE as a consolidated subsidiary. If the Bancorp is determined not to be the primary beneficiary of a VIE but holds a variable interest in the entity, such variable interests are accounted for under the equity method of accounting or other accounting standards as appropriate.

Consolidated VIEs

The following tables provide a summary of the classifications of consolidated VIE assets, liabilities and noncontrolling interests included in the Condensed Consolidated Balance Sheets as of:

March 31, 2017 ($ in millions)	Automobile Loan Securitizations			CDC Investments		Total
Assets:
Cash and due from banks	$	84			1		85
Commercial mortgage loans		-			46		46
Automobile loans		969			-		969
ALLL		(5	)		(20)		(25	)
Other assets		7			-		7
Total assets	$	1,055			27		1,082
Liabilities:
Other liabilities	$	2			-		2
Long-term debt		883			-		883
Total liabilities	$	885			-		885
Noncontrolling interests	$	-			27		27
December 31, 2016 ($ in millions)	Automobile Loan Securitizations			CDC Investments		Total
Assets:
Cash and due from banks	$	84			1		85
Commercial mortgage loans		-			46		46
Automobile loans		1,170			-		1,170
ALLL		(6	)		(20)		(26	)
Other assets		9			-		9
Total assets	$	1,257			27		1,284
Liabilities
Other liabilities	$	3			-		3
Long-term debt		1,094			-		1,094
Total liabilities	$	1,097			-		1,097
Noncontrolling interests	$	-			27		27

Automobile loan securitizations

The Bancorp has previously completed securitization transactions in which the Bancorp transferred an aggregate amount of $4.5 billion in consumer automobile loans to bankruptcy remote trusts which were deemed to be VIEs. The primary purposes of the VIEs were to issue asset-backed securities with varying levels of credit subordination and payment priority, as well as residual interests, and to provide the Bancorp with access to liquidity for its originated loans. The Bancorp retained residual interests in the VIEs and, therefore, has an obligation to absorb losses and a right to receive benefits from the VIEs that could potentially be significant to the VIEs. In addition, the Bancorp retained servicing rights for the underlying loans and, therefore, holds the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs. As a result, the Bancorp concluded that it is the primary beneficiary of the VIEs and, therefore, has consolidated these VIEs. The assets of the VIEs are restricted to the settlement of the asset-backed securities and other obligations of the VIEs. Third-party holders of the notes do not have recourse to the general assets of the Bancorp.

The economic performance of the VIEs is most significantly impacted by the performance of the underlying loans. The principal risks to which the VIEs are exposed include credit risk and prepayment risk. The credit and prepayment risks are managed through credit enhancements in the form of reserve accounts, overcollateralization, excess interest on the loans and the subordination of certain classes of asset-backed securities to other classes.

74

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

CDC investments

CDC, a wholly-owned indirect subsidiary of the Bancorp, was created to invest in projects to create affordable housing, revitalize business and residential areas and preserve historic landmarks. CDC generally co-invests with other unrelated companies and/or individuals and typically makes investments in a separate legal entity that owns the property under development. The entities are usually formed as limited partnerships and LLCs and CDC typically invests as a limited partner/investor member in the form of equity contributions. The economic performance of the VIEs is driven by the performance of their underlying investment projects as well as the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. The Bancorp’s subsidiaries serve as the managing member of certain LLCs invested in business revitalization projects and have the right to make decisions that most significantly impact the economic performance of the LLCs. Additionally, the investor members do not own substantive kick-out rights or substantive participating rights over the managing member. The Bancorp has provided an indemnification guarantee to the investor member of these LLCs related to the qualification of tax credits generated by the investor members’ investment. Accordingly, the Bancorp concluded that it is the primary beneficiary and, therefore, has consolidated these VIEs. As a result, the investor members’ interests in these VIEs are presented as noncontrolling interests in the Condensed Consolidated Financial Statements. This presentation includes reporting separately the equity attributable to the noncontrolling interests in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Changes in Equity and reporting separately the comprehensive income attributable to the noncontrolling interests in the Condensed Consolidated Statements of Comprehensive Income and the net income attributable to the noncontrolling interests in the Condensed Consolidated Statements of Income. The Bancorp’s maximum exposure related to these indemnifications at March 31, 2017 and December 31, 2016 was $32 million and $31 million, respectively, which is based on an amount required to meet the investor member’s defined target rate of return.

Non-consolidated VIEs

The following tables provide a summary of assets and liabilities carried on the Condensed Consolidated Balance Sheets related to non-consolidated VIEs for which the Bancorp holds an interest, but is not the primary beneficiary of the VIE, as well as the Bancorp’s maximum exposure to losses associated with its interests in the entities as of:

March 31, 2017 ($ in millions)	Total  Assets		Total Liabilities		Maximum Exposure
CDC investments	$	1,424		362		1,424
Private equity investments		121		-		178
Loans provided to VIEs		1,744		-		2,762
December 31, 2016 ($ in millions)	Total  Assets		Total Liabilities		Maximum Exposure
CDC investments	$	1,421		357		1,421
Private equity investments		176		-		232
Loans provided to VIEs		1,735		-		2,672

CDC investments

As noted previously, CDC typically invests in VIEs as a limited partner or investor member in the form of equity contributions and has no substantive kick-out or substantive participating rights over the managing member. The Bancorp has determined that it is not the primary beneficiary of these VIEs because it lacks the power to direct the activities that most significantly impact the economic performance of the underlying project or the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the managing members who exercise full and exclusive control of the operations of the VIEs. Accordingly, the Bancorp accounts for these investments under the equity method of accounting.

The Bancorp’s funding requirements are limited to its invested capital and any additional unfunded commitments for future equity contributions. The Bancorp’s maximum exposure to loss as a result of its involvement with the VIEs is limited to the carrying amounts of the investments, including the unfunded commitments. The carrying amounts of these investments, which are included in other assets in the Condensed Consolidated Balance Sheets, and the liabilities related to the unfunded commitments, which are included in other liabilities in the Condensed Consolidated Balance Sheets, are included in the previous tables for all periods presented. The Bancorp has no other liquidity arrangements or obligations to purchase assets of the VIEs that would expose the Bancorp to a loss. In certain arrangements, the general partner/managing member of the VIE has guaranteed a level of projected tax credits to be received by the limited partners/investor members, thereby minimizing a portion of the Bancorp’s risk.

At both March 31, 2017 and December 31, 2016, the Bancorp’s CDC investments included $1.3 billion of investments in affordable housing tax credits recognized in other assets in the Condensed Consolidated Balance Sheets. The unfunded commitments related to these investments were $356 million and $349 million at March 31, 2017 and December 31, 2016, respectively. The unfunded commitments as of March 31, 2017 are expected to be funded from 2017 to 2034.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The Bancorp has accounted for all of its investments in qualified affordable housing tax credits using the equity method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income relating to investments in qualified affordable housing investments:

	Condensed Consolidated Statements of Income Caption		For the three months ended March 31,
($ in millions)			2017			2016
Pre-tax investment and impairment losses(a)	Other noninterest expense	$		36			36
Tax credits and other benefits	Applicable income tax expense			(56	)		(55)

(a) The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three months ended March 31, 2017 and 2016.

Private equity investments

The Bancorp, through Fifth Third Capital Holdings, a wholly-owned indirect subsidiary of the Bancorp, invests as a limited partner in private equity investments which provide the Bancorp an opportunity to obtain higher rates of return on invested capital, while also creating cross-selling opportunities for the Bancorp’s commercial products. Each of the limited partnerships has an unrelated third-party general partner responsible for appointing the fund manager. The Bancorp has not been appointed fund manager for any of these private equity investments. The funds finance primarily all of their activities from the partners’ capital contributions and investment returns. The Bancorp has determined that it is not the primary beneficiary of the funds because it does not have the obligation to absorb the funds’ expected losses or the right to receive the funds’ expected residual returns that could potentially be significant to the funds and lacks the power to direct the activities that most significantly impact the economic performance of the funds. The Bancorp, as a limited partner, does not have substantive participating or substantive kick-out rights over the general partner. Therefore, the Bancorp accounts for its investments in these limited partnerships under the equity method of accounting.

The Bancorp is exposed to losses arising from the negative performance of the underlying investments in the private equity investments. As a limited partner, the Bancorp’s maximum exposure to loss is limited to the carrying amounts of the investments plus unfunded commitments. The carrying amounts of these investments, which are included in other assets in the Condensed Consolidated Balance Sheets, are included in the previous tables. Also, at March 31, 2017 and December 31, 2016, the unfunded commitment amounts to the funds were $57 million and $56 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $6 million and $2 million during the three months ended March 31, 2017 and 2016, respectively. The Bancorp did not recognize OTTI on its investments in private equity funds during both the three months ended March 31, 2017 and 2016. Refer to Note 19 for further information.

Loans provided to VIEs

The Bancorp has provided funding to certain unconsolidated VIEs sponsored by third parties. These VIEs are generally established to finance certain consumer and small business loans originated by third parties. The entities are primarily funded through the issuance of a loan from the Bancorp or a syndication through which the Bancorp is involved. The sponsor/administrator of the entities is responsible for servicing the underlying assets in the VIEs. Because the sponsor/administrator, not the Bancorp, holds the servicing responsibilities, which include the establishment and employment of default mitigation policies and procedures, the Bancorp does not hold the power to direct the activities that most significantly impact the economic performance of the entity and, therefore, is not the primary beneficiary.

The principal risk to which these entities are exposed is credit risk related to the underlying assets. The Bancorp’s maximum exposure to loss is equal to the carrying amounts of the loans and unfunded commitments to the VIEs. The Bancorp’s outstanding loans to these VIEs are included in commercial loans in Note 5. As of March 31, 2017 and December 31, 2016, the Bancorp’s unfunded commitments to these entities were $1.0 billion and $937 million, respectively. The loans and unfunded commitments to these VIEs are included in the Bancorp’s overall analysis of the ALLL and reserve for unfunded commitments, respectively. The Bancorp does not provide any implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

11. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during the three months ended March 31, 2017 and 2016. In those sales, the Bancorp obtained servicing responsibilities and provided certain standard representations and warranties, however the investors have no recourse to the Bancorp’s other assets for failure of debtors to pay when due. The Bancorp receives annual servicing fees based on a percentage of the outstanding balance. The Bancorp identifies classes of servicing assets based on financial asset type and interest rates.

Information related to residential mortgage loan sales and the Bancorp’s mortgage banking activity, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income, is as follows:

		For the three months ended       March 31,
($ in millions)		2017		2016
Residential mortgage loan sales(a)	$		1,629		1,114
Origination fees and gains on loan sales			29		42
Gross mortgage servicing fees			47		52

(a) Represents the unpaid principal balance at the time of the sale.

Servicing Rights

Effective January 1, 2017, the Bancorp elected to prospectively adopt the fair value method for all classes of its residential mortgage servicing rights portfolio. Upon this election, all servicing rights are measured at fair value at each reporting date and changes in the fair value of servicing rights are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income in the period in which the changes occur. The election of the fair value method did not require a cumulative effect adjustment to retained earnings as there was no difference between the carrying value of the servicing rights, net of valuation allowance, and the fair value.

Prior to the election of the fair value method, servicing rights were initially recorded at fair value and subsequently amortized in proportion to, and over the period of, estimated net servicing revenue. Servicing rights were assessed for impairment monthly, based on fair value, with temporary impairment recognized through a valuation allowance.

The following tables present changes in the servicing rights related to residential mortgage and automobile loans for the three months ended March 31:

($ in millions)	2017
Balance, beginning of period	$	744
Servicing rights originated - residential mortgage loans		26
Servicing rights acquired - residential mortgage loans		29
Changes in fair value:
Due to changes in inputs or assumptions(a)		4
Other changes in fair value(b)		(27)
Balance, end of period	$	776

(a) Primarily reflects changes in prepayment speed and OAS spread assumptions which are updated based on market interest rates.

(b) Primarily reflects changes due to collection of contractual cash flows and the passage of time.

($ in millions)	2016
Carrying amount before valuation allowance:
Balance, beginning of period	$	1,204
Servicing rights that result from the transfer of residential mortgage loans		12
Amortization		(27)
Balance, end of period	$	1,189
Valuation allowance for servicing rights:
Balance, beginning of period	$	(419)
Provision for MSR impairment		(85)
Balance, end of period		(504)
Carrying amount after valuation allowance	$	685

For the three months ended March 31, 2016, temporary impairment, effected through a change in the MSR valuation allowance, was captured as a component of mortgage banking net revenue in the Condensed Consolidated Statements of Income. Amortization recognized on servicing rights for the three months ended March 31, 2016 was $27 million.

The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the value of the MSR portfolio. This strategy includes the purchase of free-standing derivatives and various available-for-sale and trading securities. The interest income, mark-to-market adjustments and gain or loss from sale activities associated with these portfolios are expected to economically hedge a portion of the change in value of the MSR portfolio caused by fluctuating OAS spreads, earnings rates and prepayment speeds. The fair value of the servicing asset is based on the present value of expected future cash flows.

77

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table displays the beginning and ending fair value of the servicing rights for the three months ended March 31:

($ in millions)	2017		2016
Fixed-rate residential mortgage loans:
Balance, beginning of period		$                722		757
Balance, end of period		756		660
Adjustable-rate residential mortgage loans:
Balance, beginning of period		22		27
Balance, end of period		20		25
Fixed-rate automobile loans:
Balance, beginning of period		-		1
Balance, end of period		-		-

The following table presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income:

		For the three months ended                  March 31,
($ in millions)		2017		2016
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio	$		(1)		96
MSR fair value adjustment			(23)		-
Provision for MSR impairment			-		(85)

As of March 31, 2017 and 2016, the key economic assumptions used in measuring the interests in residential mortgage loans that continued to be held by the Bancorp at the date of sale or securitization resulting from transactions completed during the three months ended were as follows:

		March 31, 2017						March 31, 2016
	Rate	Weighted- Average Life (in years)		Prepayment Speed (annual)		OAS Spread (bps)		Weighted- Average Life (in years)		Prepayment Speed (annual)		OAS         Spread (bps)
Residential mortgage loans:
Servicing rights	Fixed		6.7		9.9  %		485		6.3		12.6  %		539
Servicing rights	Adjustable		2.3		34.9		700		3.0		27.5		681

Based on historical credit experience, expected credit losses for residential mortgage loan servicing rights have been deemed immaterial, as the Bancorp sold the majority of the underlying loans without recourse. At March 31, 2017 and December 31, 2016, the Bancorp serviced $55.4 billion and $53.6 billion, respectively, of residential mortgage loans for other investors. The value of MSRs that continue to be held by the Bancorp is subject to credit, prepayment and interest rate risks on the sold financial assets.

At March 31, 2017, the sensitivity of the current fair value of residual cash flows to immediate 10%, 20% and 50% adverse changes in prepayment speed assumptions and immediate 10% and 20% adverse changes in other assumptions are as follows:

						Prepayment Speed Assumption										Residual Servicing Cash Flows
		Fair		Weighted- Average Life						Impact of Adverse Change on Fair Value						OAS Spread			Impact of Adverse Change on Fair Value
($ in millions)(a)	Rate	Value		(in years)		Rate				10%		20%		50%		(bps)			10%		20%
Residential mortgage loans:
Servicing rights	Fixed	$	756		6.0		11.2	%	$		(33)		(63)		(143)		528	$		(15)		(30)
Servicing rights	Adjustable		20		3.3		25.2				(1)		(3)		(6)		757			-		(1)

(a)    The impact of the weighted-average default rate on the current fair value of residual cash flows for all scenarios is immaterial.

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on these variations in the assumptions typically cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. The Bancorp believes variations of these levels are reasonably possible; however, there is the potential that adverse changes in key assumptions could be even greater. Also, in the previous table, the effect of a variation in a particular assumption on the fair value of the interests that continue to be held by the Bancorp is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which might magnify or counteract these sensitivities.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

12. Derivative Financial Instruments

The Bancorp maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate, prepayment and foreign currency volatility. Additionally, the Bancorp holds derivative instruments for the benefit of its commercial customers and for other business purposes. The Bancorp does not enter into unhedged speculative derivative positions.

The Bancorp’s interest rate risk management strategy involves modifying the repricing characteristics of certain financial instruments so that changes in interest rates do not adversely affect the Bancorp’s net interest margin and cash flows. Derivative instruments that the Bancorp may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, interest rate caps, forward contracts, forward starting interest rate swaps, options and swaptions. Interest rate swap contracts are exchanges of interest payments, such as fixed-rate payments for floating-rate payments, based on a stated notional amount and maturity date. Interest rate floors protect against declining rates, while interest rate caps protect against rising interest rates. Forward contracts are contracts in which the buyer agrees to purchase, and the seller agrees to make delivery of, a specific financial instrument at a predetermined price or yield. Options provide the purchaser with the right, but not the obligation, to purchase or sell a contracted item during a specified period at an agreed upon price. Swaptions are financial instruments granting the owner the right, but not the obligation, to enter into or cancel a swap.

Prepayment volatility arises mostly from changes in fair value of the largely fixed-rate MSR portfolio, mortgage loans and mortgage-backed securities. The Bancorp may enter into various free-standing derivatives (principal-only swaps, interest rate swaptions, interest rate floors, mortgage options, TBAs and interest rate swaps) to economically hedge prepayment volatility. Principal-only swaps are total return swaps based on changes in the value of the underlying mortgage principal-only trust. TBAs are a forward purchase agreement for a mortgage-backed securities trade whereby the terms of the security are undefined at the time the trade is made.

Foreign currency volatility occurs as the Bancorp enters into certain loans denominated in foreign currencies. Derivative instruments that the Bancorp may use to economically hedge these foreign denominated loans include foreign exchange swaps and forward contracts.

The Bancorp also enters into derivative contracts (including foreign exchange contracts, commodity contracts and interest rate contracts) for the benefit of commercial customers and other business purposes. The Bancorp economically hedges significant exposures related to these free-standing derivatives by entering into offsetting third-party contracts with approved, reputable and independent counterparties with substantially matching terms and currencies. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bancorp’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. Credit risk is minimized through credit approvals, limits, counterparty collateral and monitoring procedures.

The Bancorp’s derivative assets include certain contractual features in which the Bancorp requires the counterparties to provide collateral in the form of cash and securities to offset changes in the fair value of the derivatives, including changes in the fair value due to credit risk of the counterparty. As of March 31, 2017 and December 31, 2016, the balance of collateral held by the Bancorp for derivative assets was $414 million and $444 million, respectively. For derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlement of the derivative contract, the payments for variation margin of $32 million were applied to reduce the respective derivative contracts and were also not included in the total amount of collateral held as of March 31, 2017. The credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts as of March 31, 2017 and December 31, 2016 was $4 million and $6 million, respectively.

In measuring the fair value of derivative liabilities, the Bancorp considers its own credit risk, taking into consideration collateral maintenance requirements of certain derivative counterparties and the duration of instruments with counterparties that do not require collateral maintenance. When necessary, the Bancorp posts collateral primarily in the form of cash and securities to offset changes in fair value of the derivatives, including changes in fair value due to the Bancorp’s credit risk. As of March 31, 2017 and December 31, 2016, the balance of collateral posted by the Bancorp for derivative liabilities was $320 million and $399 million, respectively, and $49 million of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities as of March 31, 2017 and were also not included in the total amount of collateral posted. Certain of the Bancorp’s derivative liabilities contain credit-risk related contingent features that could result in the requirement to post additional collateral upon the occurrence of specified events. As of March 31, 2017 and December 31, 2016, the fair value of the additional collateral that could be required to be posted as a result of the credit-risk related contingent features being triggered was immaterial to the Condensed Consolidated Financial Statements. The posting of collateral has been determined to remove the need for further consideration of credit risk. As a result, the Bancorp determined that the impact of the Bancorp’s credit risk to the valuation of its derivative liabilities was immaterial to the Condensed Consolidated Financial Statements.

The Bancorp holds certain derivative instruments that qualify for hedge accounting treatment and are designated as either fair value hedges or cash flow hedges. Derivative instruments that do not qualify for hedge accounting treatment, or for which hedge accounting is not established, are held as free-standing derivatives. All customer accommodation derivatives are held as free-standing derivatives.

The fair value of derivative instruments is presented on a gross basis, even when the derivative instruments are subject to master netting arrangements. Derivative instruments with a positive fair value are reported in other assets in the Condensed Consolidated Balance Sheets while derivative instruments with a negative fair value are reported in other liabilities in the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative instruments are not added to or netted against the fair value amounts with the exception of certain variation margin payments that are considered legal settlements of the derivative contracts. For derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlements, the variation margin payments are applied to net the fair value of the respective derivative contracts.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables reflect the notional amounts and fair values for all derivative instruments included in the Condensed Consolidated Balance Sheets as of:

					Fair Value
March 31, 2017 ($ in millions)		Notional   Amount			Derivative     Assets		Derivative         Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$		2,955			305		-
Total fair value hedges						305		-
Cash flow hedges:
Interest rate swaps related to C&I loans			4,475			-		18
Total cash flow hedges						-		18
Total derivatives designated as qualifying hedging instruments						305		18
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio			10,602			129		22
Forward contracts related to residential mortgage loans held for sale			1,630			1		5
Swap associated with the sale of Visa, Inc. Class B Shares			1,481			-		97
Foreign exchange contracts			110			-		-
Total free-standing derivatives - risk management and other business purposes						130		124
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers			35,882			190		144
Interest rate lock commitments			780			16		-
Commodity contracts			2,145			79		80
TBAs			36			-		-
Foreign exchange contracts			10,024			126		123
Total free-standing derivatives - customer accommodation						411		347
Total derivatives not designated as qualifying hedging instruments						541		471
Total				$		846		489
					Fair Value
December 31, 2016 ($ in millions)		Notional   Amount			Derivative     Assets		Derivative     Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$		3,455			323		12
Total fair value hedges						323		12
Cash flow hedges:
Interest rate swaps related to C&I loans			4,475			22		-
Total cash flow hedges						22		-
Total derivatives designated as qualifying hedging instruments						345		12
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio			10,522			165		39
Forward contracts related to residential mortgage loans held for sale			1,823			20		3
Swap associated with the sale of Visa, Inc. Class B Shares			1,300			-		91
Foreign exchange contracts			111			-		-
Total free-standing derivatives - risk management and other business purposes						185		133
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers			33,431			205		210
Interest rate lock commitments			701			13		1
Commodity contracts			2,095			107		106
Foreign exchange contracts			11,013			202		204
Total free-standing derivatives - customer accommodation						527		521
Total derivatives not designated as qualifying hedging instruments						712		654
Total				$		1,057		666

80

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Fair Value Hedges

The Bancorp may enter into interest rate swaps to convert its fixed-rate funding to floating-rate. Decisions to convert fixed-rate funding to floating are made primarily through consideration of the asset/liability mix of the Bancorp, the desired asset/liability sensitivity and interest rate levels. For all interest rate swaps as of March 31, 2017, an assessment of hedge effectiveness using regression analysis was performed and such swaps were accounted for using the “long-haul” method. The long-haul method requires a quarterly assessment of hedge effectiveness and measurement of ineffectiveness. For interest rate swaps accounted for as a fair value hedge using the long-haul method, ineffectiveness is the difference between the changes in the fair value of the interest rate swap and changes in fair value of the related hedged item attributable to the risk being hedged. The ineffectiveness on interest rate swaps hedging fixed-rate funding is reported within interest expense in the Condensed Consolidated Statements of Income.

The following table reflects the change in fair value of interest rate contracts, designated as fair value hedges, as well as the change in fair value of the related hedged items attributable to the risk being hedged, included in the Condensed Consolidated Statements of Income:

	Condensed Consolidated Statements of Income Caption		For the three months     ended March 31,
($ in millions)			2017		2016
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$		(21)		83
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt			21		(85)

Cash Flow Hedges

The Bancorp may enter into interest rate swaps to convert floating-rate assets and liabilities to fixed rates or to hedge certain forecasted transactions. The assets or liabilities may be grouped in circumstances where they share the same risk exposure that the Bancorp desires to hedge. The Bancorp may also enter into interest rate caps and floors to limit cash flow variability of floating-rate assets and liabilities. As of March 31, 2017, all hedges designated as cash flow hedges were assessed for effectiveness using regression analysis. Ineffectiveness is generally measured as the amount by which the cumulative change in the fair value of the hedging instrument exceeds the present value of the cumulative change in the hedged item’s expected cash flows attributable to the risk being hedged. Ineffectiveness is reported within other noninterest income in the Condensed Consolidated Statements of Income. The effective portion of the cumulative gains or losses on cash flow hedges are reported within AOCI and are reclassified from AOCI to current period earnings when the forecasted transaction affects earnings. As of March 31, 2017, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 33 months.

Reclassified gains and losses on interest rate contracts related to commercial and industrial loans are recorded within interest income in the Condensed Consolidated Statements of Income. As of March 31, 2017 and December 31, 2016, $2 million and $10 million, respectively, of net deferred gains, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of March 31, 2017, $8 million in net deferred gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to March 31, 2017.

During both the three months ended March 31, 2017 and 2016, there were no gains or losses reclassified from AOCI into earnings associated with the discontinuance of cash flow hedges because it was probable that the original forecasted transaction would no longer occur by the end of the originally specified time period or within the additional period of time as defined by U.S. GAAP.

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:

		For the three months ended March 31,
($ in millions)		2017		2016
Amount of pretax net (losses) gains recognized in OCI	$		(5)		74
Amount of pretax net gains reclassified from OCI into net income			8		14

Free-Standing Derivative Instruments – Risk Management and Other Business Purposes

As part of its overall risk management strategy relative to its mortgage banking activity, the Bancorp may enter into various free-standing derivatives (principal-only swaps, interest rate swaptions, interest rate floors, mortgage options, TBAs and interest rate swaps) to economically hedge changes in fair value of its largely fixed-rate MSR portfolio. Principal-only swaps hedge the mortgage-LIBOR spread because these swaps appreciate in value as a result of tightening spreads. Principal-only swaps also provide prepayment protection by increasing in value when prepayment speeds increase, as opposed to MSRs that lose value in a faster prepayment environment. Receive fixed/pay floating interest rate swaps and swaptions increase in value when interest rates do not increase as quickly as expected.

The Bancorp enters into forward contracts and mortgage options to economically hedge the change in fair value of certain residential mortgage loans held for sale due to changes in interest rates. IRLCs issued on residential mortgage loan commitments that will be held for sale are also considered free-standing derivative instruments and the interest rate exposure on these commitments is economically hedged primarily with forward contracts. Revaluation gains and losses from free-standing derivatives related to mortgage banking activity are recorded as a component of mortgage banking net revenue in the Condensed Consolidated Statements of Income.

81

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

In conjunction with the initial sale of the Bancorp’s 51% interest in Vantiv Holding, LLC, the Bancorp received a warrant which is accounted for as a free-standing derivative. Refer to Note 19 for further discussion of significant inputs and assumptions used in the valuation of the warrant. During the year ended December 31, 2015, the Bancorp both sold and exercised part of the warrant. During the year ended December 31, 2016, the Bancorp exercised the remaining portion of the warrant.

In conjunction with the sale of Visa, Inc. Class B Shares in 2009, the Bancorp entered into a total return swap in which the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Class B Shares into Class A Shares. This total return swap is accounted for as a free-standing derivative. Refer to Note 19 for further discussion of significant inputs and assumptions used in the valuation of this instrument.

The net (losses) gains recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for risk management and other business purposes are summarized in the following table:

	Condensed Consolidated Statements of Income Caption			For the three months        ended March 31,
($ in millions)				2017		2016
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale		Mortgage banking net revenue	$		(21)		(11)
Interest rate contracts related to MSR portfolio		Mortgage banking net revenue			(1)		96
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes		Other noninterest income			(1)		(4)
Equity contracts:
Stock warrant associated with Vantiv Holding, LLC		Other noninterest income			-		47
Swap associated with sale of Visa, Inc. Class B Shares		Other noninterest income			(13)		1

Free-Standing Derivative Instruments – Customer Accommodation

The majority of the free-standing derivative instruments the Bancorp enters into are for the benefit of its commercial customers. These derivative contracts are not designated against specific assets or liabilities on the Condensed Consolidated Balance Sheets or to forecasted transactions; and therefore, do not qualify for hedge accounting. These instruments include foreign exchange derivative contracts entered into for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations and commodity contracts to hedge such items as natural gas and various other derivative contracts. The Bancorp may economically hedge significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. The Bancorp hedges its interest rate exposure on commercial customer transactions by executing offsetting swap agreements with primary dealers. Revaluation gains and losses on interest rate, foreign exchange, commodity and other commercial customer derivative contracts are recorded as a component of corporate banking revenue in the Condensed Consolidated Statements of Income.

The Bancorp enters into risk participation agreements, under which the Bancorp assumes credit exposure relating to certain underlying interest rate derivative contracts. The Bancorp only enters into these risk participation agreements in instances in which the Bancorp has participated in the loan that the underlying interest rate derivative contract was designed to hedge. The Bancorp will make payments under these agreements if a customer defaults on its obligation to perform under the terms of the underlying interest rate derivative contract. As of March 31, 2017 and December 31, 2016, the total notional amount of the risk participation agreements was $2.6 billion and $2.5 billion, respectively, and the fair value was a liability of $5 million and $4 million at March 31, 2017 and December 31, 2016, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of March 31, 2017, the risk participation agreements had a weighted-average remaining life of 3.0 years.

The Bancorp’s maximum exposure in the risk participation agreements is contingent on the fair value of the underlying interest rate derivative contracts in an asset position at the time of default. The Bancorp monitors the credit risk associated with the underlying customers in the risk participation agreements through the same risk grading system currently utilized for establishing loss reserves in its loan and lease portfolio.

Risk ratings of the notional amount of risk participation agreements under this risk rating system are summarized in the following table as of:

($ in millions)	March 31, 2017		December 31,   2016
Pass	$	2,604		2,447
Special mention		8		14
Substandard		11		6
Total	$	2,623		2,467

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:

	Condensed Consolidated     Statements of Income Caption			For the three months   ended March 31,
($ in millions)				2017		2016
Interest rate contracts:
Interest rate contracts for customers (contract revenue)		Corporate banking revenue	$		5		7
Interest rate contracts for customers (credit portion of fair value adjustment)		Other noninterest expense			-		(1)
Interest rate lock commitments		Mortgage banking net revenue			22		42
Commodity contracts:
Commodity contracts for customers (contract revenue)		Corporate banking revenue			1		1
Commodity contracts for customers (credit portion of fair value adjustment)		Other noninterest expense			1		(1)
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)		Corporate banking revenue			13		16
Foreign exchange contracts for customers (credit portion of fair value adjustment)		Other noninterest expense			1		(2)

Offsetting Derivative Financial Instruments

The Bancorp’s derivative transactions are generally governed by ISDA Master Agreements and similar arrangements, which include provisions governing the setoff of assets and liabilities between the parties. When the Bancorp has more than one outstanding derivative transaction with a single counterparty, the setoff provisions contained within these agreements generally allow the non-defaulting party the right to reduce its liability to the defaulting party by amounts eligible for setoff, including the collateral received as well as eligible offsetting transactions with that counterparty, irrespective of the currency, place of payment, or booking office. The Bancorp’s policy is to present its derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis, even when provisions allowing for setoff are in place. However, for derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlements, the fair value of the respective derivative contracts are reported net of the variation margin payments.

Collateral amounts included in the tables below consist primarily of cash and highly-rated government-backed securities and as of March 31, 2017 do not include variation margin payments for derivative contracts with legal rights of setoff.

The following tables provide a summary of offsetting derivative financial instruments:

	Gross Amount Recognized in the   Condensed Consolidated   Balance Sheets(a)		Gross Amounts Not Offset in the       Condensed Consolidated  Balance Sheets
As of March 31, 2017 ($ in millions)			Derivatives		Collateral(b)		Net Amount
Assets:
Derivatives	$	830		(225)		(345)		260
Total assets		830		(225)		(345)		260
Liabilities:
Derivatives		489		(225)		(115)		149
Total liabilities	$	489		(225)		(115)		149

(a) Amount does not include IRLCs because these instruments are not subject to master netting or similar arrangements.

(b) Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

	Gross Amount Recognized in the   Condensed Consolidated   Balance Sheets(a)		Gross Amounts Not Offset in the       Condensed Consolidated  Balance Sheets
As of December 31, 2016 ($ in millions)			Derivatives		Collateral(b)		Net Amount
Assets:
Derivatives	$	1,044		(374)		(377)		293
Total assets		1,044		(374)		(377)		293
Liabilities:
Derivatives		665		(374)		(125)		166
Total liabilities	$	665		(374)		(125)		166

(a) Amount does not include the stock warrant associated with Vantiv Holding, LLC and IRLCs because these instruments are not subject to master netting or similar arrangements.

(b) Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

13. Other Short-Term Borrowings

Borrowings with original maturities of one year or less are classified as short-term. The following table presents a summary of the Bancorp’s other short-term borrowings as of:

($ in millions)	March 31,     2017		December 31,         2016
FHLB advances	$	950		2,500
Securities sold under repurchase agreements		684		661
Derivative collateral		381		374
Total other short-term borrowings	$	2,015		3,535

The Bancorp’s securities sold under repurchase agreements are accounted for as secured borrowings and are collateralized by securities included in available-for-sale and other securities in the Condensed Consolidated Balance Sheets. These securities are subject to changes in market value and, therefore, the Bancorp may increase or decrease the level of securities pledged as collateral based upon these movements in market value.

The following table summarizes the Bancorp’s securities sold under repurchase agreements by the type of collateral securing the borrowing and remaining contractual maturity as of:

($ in millions)	March 31, 2017			December 31, 2016
	Amount		Remaining Contractual Maturity	Amount		Remaining Contractual         Maturity
Type of collateral:
Agency residential mortgage-backed securities	$	684	Overnight		661		Overnight
U.S. Treasury and federal agencies securities		-	Overnight		-		Overnight
Total securities sold under repurchase agreements	$	684			661

14. Commitments, Contingent Liabilities and Guarantees

The Bancorp, in the normal course of business, enters into financial instruments and various agreements to meet the financing needs of its customers. The Bancorp also enters into certain transactions and agreements to manage its interest rate and prepayment risks, provide funding, equipment and locations for its operations and invest in its communities. These instruments and agreements involve, to varying degrees, elements of credit risk, counterparty risk and market risk in excess of the amounts recognized in the Condensed Consolidated Balance Sheets. The creditworthiness of counterparties for all instruments and agreements is evaluated on a case-by-case basis in accordance with the Bancorp’s credit policies. The Bancorp’s significant commitments, contingent liabilities and guarantees in excess of the amounts recognized in the Condensed Consolidated Balance Sheets are discussed in the following sections.

Commitments

The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of:

($ in millions)	March 31,     2017		December 31,   2016
Commitments to extend credit	$	66,980		67,909
Letters of credit		2,525		2,583
Forward contracts related to residential mortgage loans held for sale		1,630		1,823
Noncancelable operating lease obligations		575		576
Purchase obligations		120		57
Capital commitments for private equity investments		57		59
Capital expenditures		49		29
Capital lease obligations		18		19

Commitments to extend credit

Commitments to extend credit are agreements to lend, typically having fixed expiration dates or other termination clauses that may require payment of a fee. Since many of the commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. The Bancorp is exposed to credit risk in the event of nonperformance by the counterparty for the amount of the contract. Fixed-rate commitments are also subject to market risk resulting from fluctuations in interest rates and the Bancorp’s exposure is limited to the replacement value of those commitments. As of March 31, 2017 and December 31, 2016, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $159 million and $161 million, respectively, included in other liabilities in the Condensed Consolidated Balance Sheets. The Bancorp monitors the credit risk associated with commitments to extend credit using the same risk rating system utilized within its loan and lease portfolio.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Risk ratings under this risk rating system are summarized in the following table as of:

($ in millions)	March 31,           2017		December 31,      2016
Pass	$	65,821		66,802
Special mention		404		338
Substandard		743		753
Doubtful		12		16
Total commitments to extend credit	$	66,980		67,909

Letters of credit

Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party and expire as summarized in the following table as of March 31, 2017:

($ in millions)
Less than 1 year(a)	$	1,405
1 - 5 years(a)		1,095
Over 5 years		25
Total letters of credit	$	2,525

(a) Includes $17 and $5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 year and between 1 - 5 years, respectively.

Standby letters of credit accounted for 99% of total letters of credit at both March 31, 2017 and December 31, 2016, and are considered guarantees in accordance with U.S. GAAP. Approximately 62% of the total standby letters of credit were collateralized as of both March 31, 2017 and December 31, 2016. In the event of nonperformance by the customers, the Bancorp has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The reserve related to these standby letters of credit, which was included in the total reserve for unfunded commitments, was $4 million and $3 million at March 31, 2017 and December 31, 2016, respectively. The Bancorp monitors the credit risk associated with letters of credit using the same risk rating system utilized within its loan and lease portfolio.

Risk ratings under this risk rating system are summarized in the following table as of:

($ in millions)	March 31,           2017		December 31,  2016
Pass	$	2,100		2,134
Special mention		79		98
Substandard		282		290
Doubtful		64		61
Total letters of credit	$	2,525		2,583

At March 31, 2017 and December 31, 2016, the Bancorp had outstanding letters of credit that were supporting certain securities issued as VRDNs. The Bancorp facilitates financing for its commercial customers, which consist of companies and municipalities, by marketing the VRDNs to investors. The VRDNs pay interest to holders at a rate of interest that fluctuates based upon market demand. The VRDNs generally have long-term maturity dates, but can be tendered by the holder for purchase at par value upon proper advance notice. When the VRDNs are tendered, a remarketing agent generally finds another investor to purchase the VRDNs to keep the securities outstanding in the market. As of March 31, 2017 and December 31, 2016, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $897 million and $929 million, respectively, of which FTS acted as the remarketing agent to issuers on $760 million and $784 million, respectively. As remarketing agent, FTS is responsible for finding purchasers for VRDNs that are put by investors. The Bancorp issued letters of credit, as a credit enhancement, to $589 million and $609 million of the VRDNs remarketed by FTS, in addition to $138 million and $145 million in VRDNs remarketed by third parties at March 31, 2017 and December 31, 2016, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held an immaterial amount and $6 million of these VRDNs in its portfolio and classified them as trading securities at March 31, 2017 and December 31, 2016, respectively.

Forward contracts related to residential mortgage loans held for sale

The Bancorp enters into forward contracts to economically hedge the change in fair value of certain residential mortgage loans held for sale due to changes in interest rates. The outstanding notional amounts of these forward contracts are included in the summary of significant commitments table for all periods presented.

Noncancelable operating lease obligations and other commitments

The Bancorp’s subsidiaries have entered into a number of noncancelable lease agreements. The minimum rental commitments under noncancelable lease agreements are shown in the summary of significant commitments table. The Bancorp has also entered into a limited number of agreements for work related to banking center construction and to purchase goods or services.

85

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Contingent Liabilities

Legal claims

There are legal claims pending against the Bancorp and its subsidiaries that have arisen in the normal course of business. Refer to Note 15 for additional information regarding these proceedings.

Guarantees

The Bancorp has performance obligations upon the occurrence of certain events under financial guarantees provided in certain contractual arrangements as discussed in the following sections.

Residential mortgage loans sold with representation and warranty provisions

Conforming residential mortgage loans sold to unrelated third parties are generally sold with representation and warranty provisions. A contractual liability arises only in the event of a breach of these representations and warranties and, in general, only when a loss results from the breach. The Bancorp may be required to repurchase any previously sold loan, indemnify or make whole the investor or insurer for which the representation or warranty of the Bancorp proves to be inaccurate, incomplete or misleading. For more information on how the Bancorp establishes the residential mortgage repurchase reserve, refer to Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

As of March 31, 2017 and December 31, 2016, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $12 million and $13 million, respectively, included in other liabilities in the Condensed Consolidated Balance Sheets.

The Bancorp uses the best information available when estimating its mortgage representation and warranty reserve; however, the estimation process is inherently uncertain and imprecise and, accordingly, losses in excess of the amounts reserved as of March 31, 2017 are reasonably possible. The Bancorp currently estimates that it is reasonably possible that it could incur losses related to mortgage representation and warranty provisions in an amount up to approximately $22 million in excess of amounts reserved. This estimate was derived by modifying the key assumptions to reflect management’s judgment regarding reasonably possible adverse changes to those assumptions. The actual repurchase losses could vary significantly from the recorded mortgage representation and warranty reserve or this estimate of reasonably possible losses, depending on the outcome of various factors, including those previously discussed.

For both the three months ended March 31, 2017 and 2016, the Bancorp paid an immaterial amount in the form of make whole payments. For the three months ended March 31, 2017 and 2016, the Bancorp repurchased $2 million and $4 million, respectively, in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended March 31, 2017 and 2016 were $3 million and $6 million, respectively. Total outstanding repurchase demand inventory was $1 million and $2 million at March 31, 2017 and December 31, 2016, respectively.

The following table summarizes activity in the reserve for representation and warranty provisions:

	For the three months ended March 31,
($ in millions)	2017			2016
Balance, beginning of period	$	13			25
Net reductions to the reserve		(1	)		(2)
Losses charged against the reserve		-			-
Balance, end of period	$	12			23

The following tables provide a rollforward of unresolved claims by claimant type for the three months ended:

	GSE					Private Label
March 31, 2017 ($ in millions)	Units			Dollars		Units			Dollars
Balance, beginning of period		13			$             2		-			$             -
New demands		23			3		-			-
Loan paydowns/payoffs		(1	)		-		-			-
Resolved demands		(24	)		(4)		-			-
Balance, end of period		11			$             1		-			$             -
	GSE					Private Label
March 31, 2016 ($ in millions)	Units			Dollars		Units			Dollars
Balance, beginning of period		16			$             4		2			$             -
New demands		71			6		2			-
Loan paydowns/payoffs		(4	)		(1)		-			-
Resolved demands		(68	)		(7)		(3	)		-
Balance, end of period		15			$             2		1			$             -

Residential mortgage loans sold with credit recourse

The Bancorp sold certain residential mortgage loans in the secondary market with credit recourse. In the event of any customer default, pursuant to the credit recourse provided, the Bancorp is required to reimburse the third party. The maximum amount of credit risk in the event of nonperformance by the underlying borrowers is equivalent to the total outstanding balance.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

In the event of nonperformance, the Bancorp has rights to the underlying collateral value securing the loan. The outstanding balances on these loans sold with credit recourse were $360 million and $374 million at March 31, 2017 and December 31, 2016, respectively, and the delinquency rates were 2.5% and 3.2% at March 31, 2017 and December 31, 2016, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $6 million and $7 million at March 31, 2017 and December 31, 2016, respectively, recorded in other liabilities in the Condensed Consolidated Balance Sheets. To determine the credit loss reserve, the Bancorp used an approach that is consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio.

Margin accounts

FTS, an indirect wholly-owned subsidiary of the Bancorp, guarantees the collection of all margin account balances held by its brokerage clearing agent for the benefit of its customers. FTS is responsible for payment to its brokerage clearing agent for any loss, liability, damage, cost or expense incurred as a result of customers failing to comply with margin or margin maintenance calls on all margin accounts. The margin account balance held by the brokerage clearing agent was $14 million and $15 million at March 31, 2017 and December 31, 2016, respectively. In the event of any customer default, FTS has rights to the underlying collateral provided. Given the existence of the underlying collateral provided and negligible historical credit losses, the Bancorp does not maintain a loss reserve related to the margin accounts.

Long-term borrowing obligations

The Bancorp had certain fully and unconditionally guaranteed long-term borrowing obligations issued by wholly-owned issuing trust entities of $62 million at both March 31, 2017 and December 31, 2016.

Visa litigation

The Bancorp, as a member bank of Visa prior to Visa’s reorganization and IPO (the “IPO”) of its Class A common shares (the “Class A Shares”) in 2008, had certain indemnification obligations pursuant to Visa’s certificate of incorporation and by-laws and in accordance with their membership agreements. In accordance with Visa’s by-laws prior to the IPO, the Bancorp could have been required to indemnify Visa for the Bancorp’s proportional share of losses based on the pre-IPO membership interests. As part of its reorganization and IPO, the Bancorp’s indemnification obligation was modified to include only certain known or anticipated litigation (the “Covered Litigation”) as of the date of the restructuring. This modification triggered a requirement for the Bancorp to recognize a liability equal to the fair value of the indemnification liability.

In conjunction with the IPO, the Bancorp received 10.1 million of Visa’s Class B common shares (the “Class B Shares”) based on the Bancorp’s membership percentage in Visa prior to the IPO. The Class B Shares are not transferable (other than to another member bank) until the later of the third anniversary of the IPO closing or the date which the Covered Litigation has been resolved; therefore, the Bancorp’s Class B Shares were classified in other assets and accounted for at their carryover basis of $0. Visa deposited $3 billion of the proceeds from the IPO into a litigation escrow account, established for the purpose of funding judgments in, or settlements of, the Covered Litigation. Since then, when Visa’s litigation committee determined that the escrow account was insufficient; Visa issued additional Class A Shares and deposited the proceeds from the sale of the Class A Shares into the litigation escrow account. When Visa funded the litigation escrow account, the Class B Shares were subjected to dilution through an adjustment in the conversion rate of Class B Shares into Class A Shares.

In 2009, the Bancorp completed the sale of Visa, Inc. Class B Shares and entered into a total return swap in which the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Class B Shares into Class A Shares. The swap terminates on the later of the third anniversary of Visa’s IPO or the date on which the Covered Litigation is settled. Refer to Note 19 for additional information on the valuation of the swap. The counterparty to the swap as a result of its ownership of the Class B Shares will be impacted by dilutive adjustments to the conversion rate of the Class B Shares into Class A Shares caused by any Covered Litigation losses in excess of the litigation escrow account. If actual judgments in, or settlements of, the Covered Litigation significantly exceed current expectations, then additional funding by Visa of the litigation escrow account and the resulting dilution of the Class B Shares could result in a scenario where the Bancorp’s ultimate exposure associated with the Covered Litigation (the “Visa Litigation Exposure”) exceeds the value of the Class B Shares owned by the swap counterparty (the “Class B Value”). In the event the Bancorp concludes that it is probable that the Visa Litigation Exposure exceeds the Class B Value, the Bancorp would record a litigation reserve liability and a corresponding amount of other noninterest expense for the amount of the excess. Any such litigation reserve liability would be separate and distinct from the fair value derivative liability associated with the total return swap.

As of the date of the Bancorp’s sale of the Visa Class B Shares and through March 31, 2017, the Bancorp has concluded that it is not probable that the Visa Litigation Exposure will exceed the Class B value. Based on this determination, upon the sale of Class B Shares, the Bancorp reversed its net Visa litigation reserve liability and recognized a free-standing derivative liability associated with the total return swap. The fair value of the swap liability was $97 million at March 31, 2017 and $91 million at December 31, 2016. Refer to Note 12 and Note 19 for further information.

87

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

After the Bancorp’s sale of the Class B Shares, Visa has funded additional amounts into the litigation escrow account which have resulted in further dilutive adjustments to the conversion of Class B Shares into Class A Shares, and along with other terms of the total return swap, required the Bancorp to make cash payments in varying amounts to the swap counterparty as follows:

Period ($ in millions)	Visa  Funding Amount		Bancorp Cash  Payment Amount
Q2 2010	$	500		20
Q4 2010		800		35
Q2 2011		400		19
Q1 2012		1,565		75
Q3 2012		150		6
Q3 2014		450		18

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

15. Legal and Regulatory Proceedings

Litigation

Visa/Mastercard Merchant Interchange Litigation

In April 2006, the Bancorp was added as a defendant in a consolidated antitrust class action lawsuit originally filed against Visa®, MasterCard® and several other major financial institutions in the United States District Court for the Eastern District of New York. The plaintiffs, merchants operating commercial businesses throughout the U.S. and trade associations, claimed that the interchange fees charged by card-issuing banks were unreasonable and sought injunctive relief and unspecified damages. In addition to being a named defendant, the Bancorp is also subject to a possible indemnification obligation of Visa as discussed in Note 14 and has also entered into judgment and loss sharing agreements with Visa, MasterCard and certain other named defendants. In October 2012, the parties to the litigation entered into a settlement agreement. On January 14, 2014, the trial court entered a final order approving the class settlement. A number of merchants filed appeals from that approval. The U.S. Court of Appeals for the Second Circuit held a hearing on those appeals and on June 30, 2016, reversed the district court’s approval of the class settlement, remanding the case to the district court for further proceedings. In rejecting the settlement, the appellate court found that counsel for plaintiffs was conflicted and thus could not adequately represent the plaintiff-class members of the separate monetary and injunctive relief settlement classes. The appellate court decertified the settlement classes, ordered that the case return to the trial court and directed the trial court to appoint separate counsel for the separate plaintiff classes. On March 27, 2017, the Supreme Court of the United States denied a petition for writ of certiorari seeking to review the Second Circuit’s decision. Pursuant to the terms of the overturned settlement agreement, the Bancorp previously paid $46 million into a class settlement escrow account. Because the appellate court ruling remands the case to the district court for further proceedings, the ultimate outcome in this matter is uncertain. Approximately 8,000 merchants requested exclusion from the class settlement, and therefore, pursuant to the terms of the settlement agreement, 25% of the funds paid into the class settlement escrow account were already returned to the control of the defendants. More than 460 of the merchants who requested exclusion from the class filed separate federal lawsuits against Visa, MasterCard and certain other defendants alleging similar antitrust violations. These “opt-out” federal lawsuits were transferred to the United States District Court for the Eastern District of New York. The Bancorp was not named as a defendant in any of the opt-out federal lawsuits, but may have obligations pursuant to indemnification arrangements and/or the judgment or loss sharing agreements noted above. On July 18, 2015, the court in which all the remaining opt-out federal lawsuits have been consolidated denied defendants’ motion to dismiss the complaints. Refer to Note 14 for further information.

Klopfenstein v. Fifth Third Bank

On August 3, 2012, William Klopfenstein and Adam McKinney filed a lawsuit against Fifth Third Bank in the United States District Court for the Northern District of Ohio (Klopfenstein et al. v. Fifth Third Bank), alleging that the 120% APR that Fifth Third disclosed on its Early Access program was misleading. Early Access is a deposit-advance program offered to eligible customers with checking accounts. The plaintiffs sought to represent a nationwide class of customers who used the Early Access program and repaid their cash advances within 30 days. On October 31, 2012, the case was transferred to the United States District Court for the Southern District of Ohio. In 2013, four similar putative class actions were filed against Fifth Third Bank in federal courts throughout the country (Lori and Danielle Laskaris v. Fifth Third Bank, Janet Fyock v. Fifth Third Bank, Jesse McQuillen v. Fifth Third Bank, and Brian Harrison v. Fifth Third Bank). Those four lawsuits were transferred to the Southern District of Ohio and consolidated with the original lawsuit as In re: Fifth Third Early Access Cash Advance Litigation. On behalf of a putative class, the plaintiffs seek unspecified monetary and statutory damages, injunctive relief, punitive damages, attorney’s fees, and pre- and post-judgment interest. On March 30, 2015, the court dismissed all claims alleged in the consolidated lawsuit except a claim under the TILA. No trial date has been scheduled.

Nina Investments, LLC v. Fifth Third Bank

On July 5, 2012, Nina Investments, LLC (“Nina”) filed a lawsuit against Fifth Third Bank (Nina Investments, LLC. v. Fifth Third Bank, et al.) in the Circuit Court of Cook County, Illinois, alleging fraud and conspiracy to commit fraud related to a credit facility established by Fifth Third Bank in 2007 to finance life insurance premiums. Nina invested funds in an entity related to the borrower under the credit facility and is claiming over $70 million in damages based on its alleged loss of these funds. Nina alleges that it would have made different investment decisions if Fifth Third had disclosed fraud committed by the borrower with the alleged knowledge of Fifth Third employees. Nina filed this lawsuit in response to a lawsuit filed by Fifth Third Bank in the same court on June 11, 2010 against Nina and other defendants (Fifth Third Bank v. Concord Capital Management, LLC, et al.) alleging fraud and breach of contract. In 2015, the court dismissed Fifth Third’s contract and fraud claims against certain defendants. On October 20, 2016, the court denied Fifth Third’s motion to assert a new claim against Nina and other investors for fraudulent inducement of a guarantee related to the credit facility and to reassert claims for breach of guarantee against certain of the investors who also acted as guarantors. On March 17, 2017, after hearing motions for summary judgment, the court dismissed, in part, Nina’s fraud claims against Fifth Third, Fifth Third’s claims against the other defendants and Fifth Third’s claim for fraudulent conveyance against Nina. Nina has filed a Motion for Reconsideration of the court’s summary judgment ruling, which motion was denied on May 1, 2017. Trial on Nina’s remaining claim has been scheduled in these consolidated actions for May 15, 2017.

Helton v. Fifth Third Bank

On August 31, 2015, trust beneficiaries filed an action against Fifth Third Bank, as trustee, in the Probate Court for Hamilton County, Ohio (Helen Clarke Helton, et al. v. Fifth Third Bank). The plaintiffs allege breach of the duty to diversify, breach of the duty of impartiality, breach of trust/fiduciary duty, and unjust enrichment, based on Fifth Third’s alleged failure to diversify assets held in two trusts held for the plaintiffs’ benefit. The lawsuit seeks unspecified monetary damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. On January 5, 2016, the Court denied Fifth Third’s motion to dismiss. Trial is currently scheduled for January 16, 2018.

89

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Upsher-Smith Laboratories, Inc. v. Fifth Third Bank

On February 2, 2012, Upsher-Smith Laboratories, Inc. (“Upsher-Smith”) filed suit against Fifth Third Bank in the Fourth Judicial District, Hennepin County, Minnesota (Upsher-Smith Laboratories Inc. v. Fifth Third Bank), alleging that Fifth Third improperly implemented foreign exchange (“FX”) transactions requested by plaintiff’s authorized employee who allegedly was the victim of fraud by a third party. Plaintiff asserts claims for breach of contract and the implied covenant of good faith and fair dealing under Article 4A-202 of the Uniform Commercial Code, with losses allegedly totalling almost $40 million. On March 3, 2016, Fifth Third removed the case to the United States District Court for the District of Minnesota. Fifth Third filed a motion to transfer venue to the United States District Court for the Southern District of Ohio on April 7, 2016, which was denied on December 29, 2016. Discovery was stayed pending the Court’s ruling on the motion to transfer. No trial date has been scheduled.

The Champions Home Owners Association, Inc. v. Jeffrey D. Quammen, et al.

On September 12, 2013 Fifth Third Bank was named as a defendant in a cross-complaint filed by Royce Pulliam, P&P Real Estate, LLC and Global Fitness Holdings, LLC (“Plaintiffs”) in the Jessamine Circuit Court in Jessamine County, Kentucky. The Plaintiffs allege that Fifth Third Bank breached a contract to provide commercial funding for Plaintiffs’ national fitness franchise. The Plaintiffs claim to have sustained over $50 million in damages from the alleged contract breach. Fifth Third Bank denies that any breach of contract occurred, and further asserts that Plaintiffs executed multiple releases waiving the claims at issue in the litigation. Fifth Third Bank has asserted a $1.5 million claim against Plaintiff Royce Pulliam for breach of guaranty. On February 3, 2017 the Jessamine Circuit Court ruled in favor of Fifth Third Bank granting summary judgment on Fifth Third’s claim for breach of guaranty. The Court denied Fifth Third Bank’s motion for summary judgment seeking dismissal of the Plaintiffs’ claims. A bench trial concluded in late March 2017. Final post-trial briefing is scheduled to be submitted in May 2017, and a decision is expected thereafter.

Other Litigation

The Bancorp and its subsidiaries are not parties to any other material litigation. However, there are other litigation matters that arise in the normal course of business. While it is impossible to ascertain the ultimate resolution or range of financial liability with respect to these contingent matters, management believes that the resulting liability, if any, from these other actions would not have a material effect upon the Bancorp’s consolidated financial position, results of operations or cash flows.

Governmental Investigations and Proceedings

The Bancorp and/or its affiliates are involved in information-gathering requests, reviews, investigations and proceedings (both formal and informal) by various governmental regulatory agencies and law enforcement authorities, including but not limited to the CFPB, FINRA, etc., as well as self-regulatory bodies regarding their respective businesses. Additional matters will likely arise from time to time. Any of these matters may result in material adverse consequences to the Bancorp, its affiliates and/or their respective directors, officers and other personnel, including adverse judgments, findings, settlements, fines, penalties, orders, injunctions or other actions, amendments and/or restatements of the Bancorp’s SEC filings and/or financial statements, as applicable, and/or determinations of material weaknesses in our disclosure controls and procedures. Investigations by regulatory authorities may from time to time result in civil or criminal referrals to law enforcement.

Reasonably Possible Losses in Excess of Accruals

The Bancorp and its subsidiaries are parties to numerous claims and lawsuits as well as threatened or potential actions or claims concerning matters arising from the conduct of its business activities. The outcome of claims or litigation and the timing of ultimate resolution are inherently difficult to predict. The following factors, among others, contribute to this lack of predictability: claims often include significant legal uncertainties, damages alleged by plaintiffs are often unspecified or overstated, discovery may not have started or may not be complete and material facts may be disputed or unsubstantiated. As a result of these factors, the Bancorp is not always able to provide an estimate of the range of reasonably possible outcomes for each claim. An accrual for a potential litigation loss is established when information related to the loss contingency indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Any such accrual is adjusted from time to time thereafter as appropriate to reflect changes in circumstances. The Bancorp also determines, when possible (due to the uncertainties described above), estimates of reasonably possible losses or ranges of reasonably possible losses, in excess of amounts accrued. Under U.S. GAAP, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” Thus, references to the upper end of the range of reasonably possible loss for cases in which the Bancorp is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Bancorp believes the risk of loss is more than slight. For matters where the Bancorp is able to estimate such possible losses or ranges of possible losses, the Bancorp currently estimates that it is reasonably possible that it could incur losses related to legal and regulatory proceedings in an aggregate amount up to approximately $18 million in excess of amounts accrued, with it also being reasonably possible that no losses will be incurred in these matters. The estimates included in this amount are based on the Bancorp’s analysis of currently available information, and as new information is obtained the Bancorp may change its estimates.

For these matters and others where an unfavorable outcome is reasonably possible but not probable, there may be a range of possible losses in excess of the established accrual that cannot be estimated. Based on information currently available, advice of counsel, available insurance coverage and established accruals, the Bancorp believes that the eventual outcome of the actions against the Bancorp and/or its subsidiaries, including the matters described above, will not, individually or in the aggregate, have a material adverse effect on the Bancorp’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of those matters, if unfavorable, may be material to the Bancorp’s results of operations for any particular period, depending, in part, upon the size of the loss or liability imposed and the operating results for the applicable period.

90

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

16. Income Taxes

The applicable income tax expense was $91 million and $109 million for the three months ended March 31, 2017 and 2016, respectively. The effective tax rates for the three months ended March 31, 2017 and 2016 were 22.9% and 25.1%, respectively. A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016. The decrease in the effective tax rate for the three months ended March 31, 2017 compared to the same period in the prior year was primarily related to a reduction in income tax expense for the recognition of excess tax benefits related to stock-based compensation recorded in the first quarter of 2017.

While it is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of the Bancorp’s uncertain tax positions could increase or decrease during the next 12 months, the Bancorp believes it is unlikely that its unrecognized tax benefits will change by a material amount during the next 12 months.

91

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

17. Accumulated Other Comprehensive Income

The tables below present the activity of the components of OCI and AOCI for the three months ended:

		Total Other       Comprehensive Income						Total Accumulated Other       Comprehensive Income
March 31, 2017 ($ in millions)		Pretax   Activity		Tax Effect		Net Activity		Beginning Balance		Net Activity		Ending    Balance
Unrealized holding gains on available-for-sale securities arising during period	$		22		(7)		15
Reclassification adjustment for net losses on available-for-sale securities included in net income			2		(1)		1
Net unrealized gains on available-for-sale securities			24		(8)		16		101		16		117
Unrealized holding losses on cash flow hedge derivatives arising during period			(5)		2		(3)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income			(8)		3		(5)
Net unrealized gains on cash flow hedge derivatives			(13)		5		(8)		10		(8)		2
Reclassification of amounts to net periodic benefit costs			2		(1)		1
Defined benefit pension plans, net			2		(1)		1		(52)		1		(51)
Total	$		13		(4)		9		59		9		68
		Total Other       Comprehensive Income						Total Accumulated Other       Comprehensive Income
March 31, 2016 ($ in millions)		Pretax   Activity		Tax Effect		Net Activity		Beginning Balance		Net Activity		Ending    Balance
Unrealized holding gains on available-for-sale securities arising during period	$		695		(243)		452
Reclassification adjustment for net gains on available-for-sale securities included in net income			(8)		3		(5)
Net unrealized gains on available-for-sale securities			687		(240)		447		238		447		685
Unrealized holding gains on cash flow hedge derivatives arising during period			74		(26)		48
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income			(14)		5		(9)
Net unrealized gains on cash flow hedge derivatives			60		(21)		39		22		39		61
Reclassification of amounts to net periodic benefit costs			2		(1)		1
Defined benefit pension plans, net			2		(1)		1		(63)		1		(62)
Total	$		749		(262)		487		197		487		684

92

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The table below presents reclassifications out of AOCI:

	Condensed Consolidated Statements of Income Caption		For the three months ended           March 31,
Components of AOCI: ($ in millions)			2017	2016
Net unrealized gains on available-for-sale securities:(b)
Net losses included in net income	Securities gains, net	$	(2)	8
	Income before income taxes		(2)	8
	Applicable income tax expense		1	(3)
	Net income		(1)	5
Net unrealized gains on cash flow hedge derivatives:(b)
Interest rate contracts related to C&I loans	Interest and fees on loans and leases		8	14
	Income before income taxes		8	14
	Applicable income tax expense		(3)	(5)
	Net income		5	9
Net periodic benefit costs:(b)
Amortization of net actuarial loss	Employee benefits expense(a)		(2)	(2)
	Income before income taxes		(2)	(2)
	Applicable income tax expense		1	1
	Net income		(1)	(1)
Total reclassifications for the period	Net income	$	3	13

(a) This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 21 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the computation of net periodic benefit cost.

(b) Amounts in parentheses indicate reductions to net income.

93

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

18. Earnings Per Share

The following table provides the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:

				2017						2016(a)
For the three months ended March 31, (in millions, except per share data)		Income		Average    Shares		Per Share    Amount		Income		Average   Shares		Per Share   Amount
Earnings Per Share:
Net income available to common shareholders	$		290						311
Less: Income allocated to participating securities			4						3
Net income allocated to common shareholders	$		286		748		0.38		308		774		0.40
Earnings Per Diluted Share:
Net income available to common shareholders	$		290						311
Effect of dilutive securities:
Stock-based awards			-		13				-		4
Net income available to common shareholders plus assumed conversions			290						311
Less: Income allocated to participating securities			4						3
Net income allocated to common shareholders plus assumed conversions	$		286		761		0.38		308		778		0.40

(a) A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

Shares are excluded from the computation of earnings per diluted share when their inclusion has an anti-dilutive effect on earnings per share. The diluted earnings per share computation for the three months ended March 31, 2017 and March 31, 2016 excludes 6 million and 27 million, respectively, of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

The diluted earnings per share computation for the three months ended March 31, 2016 excludes the impact of the forward contract related to the March 4, 2016 accelerated share repurchase transaction. Based upon the average daily volume weighted-average price of the Bancorp’s common stock during the first quarter of 2016, the counterparty to the transaction would have been required to deliver additional shares for the settlement of the forward contract as of March 31, 2016, and thus the impact of the forward contract related to the accelerated share repurchase transaction would have been anti-dilutive to earnings per share.

94

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

19. Fair Value Measurements

The Bancorp measures certain financial assets and liabilities at fair value in accordance with U.S. GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. For more information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize assets and liabilities measured at fair value on a recurring basis as of:

	Fair Value Measurements Using
March 31, 2017 ($ in millions)	Level 1(c)		Level 2(c)		Level 3		Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	437		-		-		437
Obligations of states and political subdivisions securities		-		45		-		45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		16,245		-		16,245
Agency commercial mortgage-backed securities		-		8,672		-		8,672
Non-agency commercial mortgage-backed securities		-		3,299		-		3,299
Asset-backed securities and other debt securities		-		2,134		-		2,134
Equity securities(a)		90		1		-		91
Available-for-sale and other securities(a)		527		30,396		-		30,923
Trading securities:
U.S. Treasury and federal agencies securities		-		18		-		18
Obligations of states and political subdivisions securities		-		21		-		21
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		265		-		265
Asset-backed securities and other debt securities		-		24		-		24
Equity securities		361		-		-		361
Trading securities		361		328		-		689
Residential mortgage loans held for sale		-		606		-		606
Residential mortgage loans(b)		-		-		141		141
MSRs(f)		-		-		776		776
Derivative assets:
Interest rate contracts		1		624		16		641
Foreign exchange contracts		-		126		-		126
Commodity contracts		23		56		-		79
Derivative assets(d)		24		806		16		846
Total assets	$	912		32,136		933		33,981
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5		179		5		189
Foreign exchange contracts		-		123		-		123
Equity contracts		-		-		97		97
Commodity contracts		8		72		-		80
Derivative liabilities(e)		13		374		102		489
Short positions(e)		21		6		-		27
Total liabilities	$	34		380		102		516

(a) Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $359 and $1, respectively, at March 31, 2017.

(b) Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

(c) During the three months ended March 31, 2017, no assets or liabilities were transferred between Level 1 and Level 2.

(d) Included in other assets in the Condensed Consolidated Balance Sheets.

(e) Included in other liabilities in the Condensed Consolidated Balance Sheets.

(f) Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

95

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

	Fair Value Measurements Using
December 31, 2016 ($ in millions)	Level 1(c)		Level 2(c)		Level 3		Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	471		78		-	549
Obligations of states and political subdivisions securities		-		45		-	45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		15,608		-	15,608
Agency commercial mortgage-backed securities		-		9,055		-	9,055
Non-agency commercial mortgage-backed securities		-		3,112		-	3,112
Asset-backed securities and other debt securities		-		2,116		-	2,116
Equity securities(a)		90		1		-	91
Available-for-sale and other securities(a)		561		30,015		-	30,576
Trading securities:
U.S. Treasury and federal agencies securities		-		23		-	23
Obligations of states and political subdivisions securities		-		39		-	39
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		8		-	8
Asset-backed securities and other debt securities		-		15		-	15
Equity securities		325		-		-	325
Trading securities		325		85		-	410
Residential mortgage loans held for sale		-		686		-	686
Residential mortgage loans(b)		-		-		143	143
Derivative assets:
Interest rate contracts		20		715		13	748
Foreign exchange contracts		-		202		-	202
Commodity contracts		22		85		-	107
Derivative assets(d)		42		1,002		13	1,057
Total assets	$	928		31,788		156	32,872
Liabilities:
Derivative liabilities:
Interest rate contracts	$	3		257		5	265
Foreign exchange contracts		-		204		-	204
Equity contracts		-		-		91	91
Commodity contracts		27		79		-	106
Derivative liabilities(e)		30		540		96	666
Short positions(e)		17		4		-	21
Total liabilities	$	47		544		96	687

(a) Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $358 and $1, respectively, at December 31, 2016.

(b) Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

(c) During the year ended December 31, 2016, no assets or liabilities were transferred between Level 1 and Level 2.

(d) Included in other assets in the Condensed Consolidated Balance Sheets.

(e) Included in other liabilities in the Condensed Consolidated Balance Sheets.

The following is a description of the valuation methodologies used for significant instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale and other securities and trading securities

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasury securities and exchange-traded equities. If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics or DCFs. Level 2 securities include federal agencies securities, obligations of states and political subdivisions securities, agency residential mortgage-backed securities, agency and non-agency commercial mortgage-backed securities, asset-backed securities and other debt securities and equity securities. These securities are generally valued using a market approach based on observable prices of securities with similar characteristics.

Residential mortgage loans held for sale

For residential mortgage loans held for sale for which the fair value election has been made, fair value is estimated based upon mortgage-backed securities prices and spreads to those prices or, for certain ARM loans, DCF models that may incorporate the anticipated portfolio composition, credit spreads of asset-backed securities with similar collateral and market conditions. The anticipated portfolio composition includes the effect of interest rate spreads and discount rates due to loan characteristics such as the state in which the loan was originated, the loan amount and the ARM margin. Residential mortgage loans held for sale that are valued based on mortgage-backed securities prices are classified within Level 2 of the valuation hierarchy as the valuation is based on external pricing for similar instruments. ARM loans classified as held for sale are also classified within Level 2 of the valuation hierarchy due to the use of observable inputs in the DCF model. These observable inputs include interest rate spreads from agency mortgage-backed securities market rates and observable discount rates.

Residential mortgage loans

Residential mortgage loans held for sale that are reclassified to held for investment are transferred from Level 2 to Level 3 of the fair value hierarchy. It is the Bancorp’s policy to value any transfers between levels of the fair value hierarchy based on end of period fair values.

96

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

For residential mortgage loans for which the fair value election has been made, and that are reclassified from held for sale to held for investment, the fair value estimation is based on mortgage-backed securities prices, interest rate risk and an internally developed credit component. Therefore, these loans are classified within Level 3 of the valuation hierarchy. An adverse change in the loss rate or severity assumption would result in a decrease in fair value of the related loan. The Secondary Marketing department, which reports to the Bancorp’s Head of the Consumer Bank, in conjunction with the Consumer Credit Risk department, which reports to the Bancorp’s Chief Risk Officer, are responsible for determining the valuation methodology for residential mortgage loans held for investment. The Secondary Marketing department reviews loss severity assumptions quarterly to determine if adjustments are necessary based on decreases in observable housing market data. This group also reviews trades in comparable benchmark securities and adjusts the values of loans as necessary. Consumer Credit Risk is responsible for the credit component of the fair value which is based on internally developed loss rate models that take into account historical loss rates and loss severities based on underlying collateral values.

MSRs

Effective January 1, 2017, the Bancorp elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. MSRs do not trade in an active, open market with readily observable prices. While sales of MSRs do occur, the precise terms and conditions typically are not readily available. Accordingly, the Bancorp estimates the fair value of MSRs using internal OAS models with certain unobservable inputs, primarily prepayment speed assumptions, OAS and weighted-average lives, resulting in a classification within Level 3 of the valuation hierarchy. Refer to Note 11 for further information on the assumptions used in the valuation of the Bancorp’s MSRs. The Secondary Marketing department and Treasury department are responsible for determining the valuation methodology for MSRs. Representatives from Secondary Marketing, Treasury, Accounting and Risk Management are responsible for reviewing key assumptions used in the internal OAS model. Two external valuations of the MSR portfolio are obtained from third parties that use valuation models in order to assess the reasonableness of the internal OAS model. Additionally, the Bancorp participates in peer surveys that provide additional confirmation of the reasonableness of key assumptions utilized in the MSR valuation process and the resulting MSR prices.

Derivatives

Exchange-traded derivatives valued using quoted prices and certain over-the-counter derivatives valued using active bids are classified within Level 1 of the valuation hierarchy. Most of the Bancorp’s derivative contracts are valued using DCF or other models that incorporate current market interest rates, credit spreads assigned to the derivative counterparties and other market parameters and, therefore, are classified within Level 2 of the valuation hierarchy. Such derivatives include basic and structured interest rate, foreign exchange and commodity swaps and options. Derivatives that are valued based upon models with significant unobservable market parameters are classified within Level 3 of the valuation hierarchy. At March 31, 2017 and December 31, 2016, derivatives classified as Level 3, which are valued using models containing unobservable inputs, consisted primarily of a total return swap associated with the Bancorp’s sale of Visa, Inc. Class B Shares. Level 3 derivatives also include IRLCs, which utilize internally generated loan closing rate assumptions as a significant unobservable input in the valuation process.

During the fourth quarter of 2016, the Bancorp exercised its right to purchase approximately 7.8 million Class C Units underlying the warrant at the $15.98 strike price. This exercise was settled on a net basis for approximately 5.7 million Class C Units, which were then exchanged for approximately 5.7 million shares of Vantiv, Inc. Class A Common Stock of which 4.8 million shares were sold in a secondary offering and 0.9 million shares were repurchased by Vantiv, Inc.

Prior to the aforementioned warrant transaction, the fair value of the warrant was calculated in conjunction with a third party valuation provider by applying Black-Scholes option-pricing models using probability weighted scenarios which contained the following inputs: Vantiv, Inc. stock price, strike price per the Warrant Agreement and unobservable inputs, such as expected term and expected volatility.

For the warrant, an increase in the expected term (years) and the expected volatility assumptions would result in an increase in the fair value; conversely, a decrease in these assumptions would result in a decrease in the fair value. The Accounting and Treasury departments, both of which report to the Bancorp’s Chief Financial Officer, determined the valuation methodology for the warrant. Accounting and Treasury reviewed changes in fair value on a quarterly basis for reasonableness based on changes in historical and implied volatilities, expected terms, probability weightings of the related scenarios and other assumptions.

Under the terms of the total return swap, the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Visa, Inc. Class B Shares into Class A Shares. Additionally, the Bancorp will make a quarterly payment based on Visa’s stock price and the conversion rate of the Visa, Inc. Class B Shares into Class A Shares until the date on which the Covered Litigation is settled. The fair value of the total return swap was calculated using a DCF model based on unobservable inputs consisting of management’s estimate of the probability of certain litigation scenarios, the timing of the resolution of the Covered Litigation and Visa litigation loss estimates in excess, or shortfall, of the Bancorp’s proportional share of escrow funds.

An increase in the loss estimate or a delay in the resolution of the Covered Litigation would result in an increase in fair value; conversely, a decrease in the loss estimate or an acceleration of the resolution of the Covered Litigation would result in a decrease in fair value. The Accounting and Treasury departments determined the valuation methodology for the total return swap. Accounting and Treasury review the changes in fair value on a quarterly basis for reasonableness based on Visa stock price changes, litigation contingencies, and escrow funding.

The net fair value asset of the IRLCs at March 31, 2017 was $16 million. Immediate decreases in current interest rates of 25 bps and 50 bps would result in increases in the fair value of the IRLCs of approximately $6 million and $11 million, respectively. Immediate increases of current interest rates of 25 bps and 50 bps would result in decreases in the fair value of the IRLCs of approximately $7 million and $14 million, respectively.

97

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The decrease in fair value of IRLCs due to immediate 10% and 20% adverse changes in the assumed loan closing rates would be approximately $2 million and $3 million, respectively, and the increase in fair value due to immediate 10% and 20% favorable changes in the assumed loan closing rates would be approximately $2 million and $3 million, respectively. These sensitivities are hypothetical and should be used with caution, as changes in fair value based on a variation in assumptions typically cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear.

The Consumer Line of Business Finance department, which reports to the Bancorp’s Chief Financial Officer, and the aforementioned Secondary Marketing department are responsible for determining the valuation methodology for IRLCs. Secondary Marketing, in conjunction with a third party valuation provider, periodically review loan closing rate assumptions and recent loan sales to determine if adjustments are needed for current market conditions not reflected in historical data.

The following tables are a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended March 31, 2017 ($ in millions)		Residential Mortgage Loans		MSRs(d)		Interest Rate Derivatives, Net(a)		Equity Derivatives, Net(a)		Total Fair Value
Balance, beginning of period	$		143		744		8		(91)		804
Total gains (losses) (realized/unrealized):
Included in earnings			-		(23)		23		(13)		(13)
Purchases/originations			-		55		(1)		-		54
Settlements			(5)		-		(19)		7		(17)
Transfers into Level 3(b)			3		-		-		-		3
Balance, end of period	$		141		776		11		(97)		831
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2017(c)	$		-		(23)		16		(13)		(20)

(a) Net interest rate derivatives include derivative assets and liabilities of $16 and $5, respectively, as of March 31, 2017. Net equity derivatives include derivative assets and liabilities of $0 and $97, respectively, as of March 31, 2017.

(b) Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

(c) Includes interest income and expense.

(d) Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended March 31, 2016 ($ in millions)		Residential Mortgage Loans		Interest Rate Derivatives, Net(a)		Equity Derivatives, Net(a)		Total Fair Value
Balance, beginning of period	$		167		12		201		380
Total gains (realized/unrealized):
Included in earnings			1		42		48		91
Purchases			-		(1)		-		(1)
Settlements			(11)		(28)		4		(35)
Transfers into Level 3(b)			3		-		-		3
Balance, end of period	$		160		25		253		438
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2016(c)	$		1		29		48		78

(a) Net interest rate derivatives include derivative assets and liabilities of $29 and $4, respectively, as of March 31, 2016. Net equity derivatives include derivative assets and liabilities of $308 and $55, respectively, as of March 31, 2016.

(b) Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.

(c) Includes interest income and expense.

The total gains and losses included in earnings for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were recorded in the Condensed Consolidated Statements of Income as follows:

		For the three months ended       March 31,
($ in millions)		2017		2016
Mortgage banking net revenue	$		-		43
Other noninterest income			(13)		48
Total (losses) gains	$		(13)		91

98

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The total gains and losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2017 and 2016 were recorded in the Condensed Consolidated Statements of Income as follows:

		For the three months ended       March 31,
($ in millions)		2017		2016
Mortgage banking net revenue	$		(7)		30
Other noninterest income			(13)		48
Total (losses) gains	$		(20)		78

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a recurring basis:

As of March 31, 2017 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs		Weighted-Average
Residential mortgage loans	$	141	Loss rate model	Interest rate risk factor		(10.6) - 15.4%		2.3%
				Credit risk factor		0 - 46.2%		1.2%
MSRs		776	Discounted cash flow	Prepayment speed		0.7-100%		(Fixed) 11.2% (Adjustable) 25.2%
				OAS spread (bps)		430-1,515		(Fixed) 528 (Adjustable) 757
IRLCs, net		16	Discounted cash flow	Loan closing rates		12.3 - 97.9%		72.2%
Swap associated with the sale of Visa, Inc. Class B shares		(97)	Discounted cash flow	Timing of the resolution     of the Covered Litigation		12/31/2018 - 12/31/2022		NM

As of March 31, 2016 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs		Weighted-Average
Residential mortgage loans	$	160	Loss rate model	Interest rate risk factor		(6.0) - 16.5%		4.4%
				Credit risk factor		0 - 80.5%		1.4%
IRLCs, net		29	Discounted cash flow	Loan closing rates		5.6 - 94.0%		75.0%
Stock warrant associated with Vantiv		308	Black-Scholes option-	Expected term (years)		2.0 - 13.3		5.8
Holding, LLC			pricing model	Expected volatility(a)		23.0 - 30.4%		25.9%
Swap associated with the sale of Visa, Inc. Class B shares		(55)	Discounted cash flow	Timing of the resolution     of the Covered Litigation		12/31/2016 - 3/31/2021		NM

(a) Based on historical and implied volatilities of Vantiv, Inc. and comparable companies assuming similar expected terms.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following tables provide the fair value hierarchy and carrying amount of all assets that were held as of March 31, 2017 and 2016, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2017 and 2016, and the related gains and losses from fair value adjustments on assets sold during the period as well as assets still held as of the end of the period.

		Fair Value Measurements Using								Total Losses
As of March 31, 2017 ($ in millions)		Level 1		Level 2		Level 3		Total		For the three months     ended March 31, 2017
Commercial loans held for sale	$		-		-		1		1	(19)
Commercial and industrial loans			-		-		318		318	(26)
Commercial mortgage loans			-		-		25		25	(2)
Commercial leases			-		-		2		2	(1)
OREO			-		-		19		19	(4)
Bank premises and equipment			-		-		15		15	(3)
Operating lease equipment			-		-		55		55	(20)
Total	$		-		-		435		435	(75)

99

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		Fair Value Measurements Using								Total (Losses) Gains
As of March 31, 2016 ($ in millions)		Level 1		Level 2		Level 3		Total		For the three months ended March 31, 2016
Commercial loans held for sale	$		-		-		5		5		(2)
Commercial and industrial loans			-		-		347		347		(47)
Commercial mortgage loans			-		-		85		85		6
Commercial construction loans			-		-		-		-		2
MSRs(a)			-		-		685		685		(85)
OREO			-		-		27		27		(3)
Bank premises and equipment			-		-		12		12		1
Total	$		-		-		1,161		1,161		(128)

(a) Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at March 31, 2016.

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured on a nonrecurring basis:

As of March 31, 2017 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable   Inputs	Ranges of     Inputs	Weighted-Average
Commercial loans held for sale		$         1	Appraised value	Appraised value	NM	NM
Commercial and industrial loans		318	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		25	Appraised value	Collateral value	NM	NM
Commercial leases		2	Appraised value	Collateral value	NM	NM
OREO		19	Appraised value	Appraised value	NM	NM
Bank premises and equipment		15	Appraised value	Appraised value	NM	NM
Operating lease equipment		55	Appraised value	Appraised value	NM	NM

As of March 31, 2016 ($ in millions)
Financial Instrument	Fair Value		Valuation Technique	Significant Unobservable   Inputs	Ranges of     Inputs	Weighted-Average
Commercial loans held for sale		$         5	Appraised value	Appraised Value Costs to sell	NM NM	NM 10.0%
Commercial and industrial loans		347	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		85	Appraised value	Collateral value	NM	NM
Commercial construction loans		-	Appraised value	Collateral value	NM	NM
MSRs		685	Discounted cash flow	Prepayment speed	0-100%	(Fixed) 14.1% (Adjustable) 27.8%
				OAS spread (bps)	364-1,515	(Fixed) 603 (Adjustable) 713
OREO		27	Appraised value	Appraised value	NM	NM
Bank premises and equipment		12	Appraised value	Appraised value	NM	NM

Commercial loans held for sale

During the three months ended March 31, 2017 and 2016, respectively, the Bancorp transferred $18 million and $5 million of commercial loans from the portfolio to loans held for sale that upon transfer were measured at lower of cost or fair value. There were $17 million and an immaterial amount of fair value adjustments for the three months ended March 31, 2017 and 2016, respectively, that were generally based on appraisals of the underlying collateral or were estimated by discounting future cash flows using the current market rates of loans to borrowers with similar credit characteristics, similar remaining maturities, prepayment speeds and loss severities and were, therefore, classified within Level 3 of the valuation hierarchy. Additionally, there were immaterial amounts of fair value adjustments on existing commercial loans held for sale for both the three months ended March 31, 2017 and 2016. The fair value adjustments were also based on appraisals of the underlying collateral. During both the three months ended March 31, 2017 and 2016, the Bancorp recognized a $2 million loss on the sale of commercial loans held for sale.

The Accounting department determines the procedures for the valuation of commercial loans held for sale using appraised value which may include a comparison to recently executed transactions of similar type loans. A monthly review of the portfolio is performed for reasonableness. Quarterly, appraisals approaching a year old are updated and the Real Estate Valuation group, which reports to the Bancorp’s Chief Risk Officer, in conjunction with the Commercial Line of Business review the third party appraisals for reasonableness. Additionally, the Commercial Line of Business Finance department, which reports to the Bancorp’s Chief Financial Officer, in conjunction with the Accounting department reviews all loan appraisal values, carry values and vintages. The Treasury department, which reports to the Bancorp’s Chief Financial Officer, is responsible for the estimate of fair value adjustments when a discounted future cash flow valuation technique is employed.

100

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Commercial loans held for investment

During the three months ended March 31, 2017 and 2016, the Bancorp recorded nonrecurring impairment adjustments to certain commercial and industrial loans, commercial mortgage loans, commercial construction loans and commercial leases held for investment. Larger commercial loans included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment. The Bancorp considers the current value of collateral, credit quality of any guarantees, the guarantor’s liquidity and willingness to cooperate, the loan structure and other factors when evaluating whether an individual loan is impaired. When the loan is collateral dependent, the fair value of the loan is generally based on the fair value of the underlying collateral supporting the loan and therefore these loans were classified within Level 3 of the valuation hierarchy. In cases where the carrying value exceeds the fair value, an impairment loss is recognized. The fair values and recognized impairment losses are reflected in the previous tables. Commercial Credit Risk, which reports to the Bancorp’s Chief Risk Officer, is responsible for preparing and reviewing the fair value estimates for commercial loans held for investment.

MSRs

Effective January 1, 2017, the Bancorp elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and under the amortization method at December 31, 2016. Mortgage interest rates decreased during the three months ended March 31, 2016 and the Bancorp recognized temporary impairment in certain classes of the MSR portfolio and the carrying value was adjusted to the fair value. Refer to the MSRs section of the Assets and Liabilities Measured at Fair Value on a Recurring Basis discussion for additional information.

OREO

During the three months ended March 31, 2017 and 2016, the Bancorp recorded nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO and measured at the lower of carrying amount or fair value. These nonrecurring losses were primarily due to declines in real estate values of the properties recorded in OREO. For both the three months ended March 31, 2017 and 2016, these losses include $2 million recorded as charge-offs, on new OREO properties transferred from loans during the respective periods and $2 million and $1 million, respectively, recorded as negative fair value adjustments on OREO in other noninterest expense in the Bancorp’s Condensed Consolidated Statements of Income subsequent to their transfer from loans. As discussed in the following paragraphs, the fair value amounts are generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. The previous tables reflect the fair value measurements of the properties before deducting the estimated costs to sell.

The Real Estate Valuation department is solely responsible for managing the appraisal process and evaluating the appraisal for commercial properties transferred to OREO. All appraisals on commercial OREO properties are updated on at least an annual basis.

The Real Estate Valuation department reviews the BPO data and internal market information to determine the initial charge-off on residential real estate loans transferred to OREO. Once the foreclosure process is completed, the Bancorp performs an interior inspection to update the initial fair value of the property. These properties are reviewed at least every 30 days after the initial interior inspections are completed. The Asset Manager receives a monthly status report for each property, which includes the number of showings, recently sold properties, current comparable listings and overall market conditions.

Bank premises and equipment

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. These properties were written down to their lower of cost or market values. At least annually thereafter, the Bancorp will review these properties for market fluctuations. The fair value amounts were generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. Corporate Facilities, which reports to the Bancorp’s Chief Administrative Officer, in conjunction with Accounting, are responsible for preparing and reviewing the fair value estimates for bank premises and equipment. For further information on bank premises and equipment and discussion on changes to the branch network, refer to Note 7.

Operating lease equipment

During the three months ended March 31, 2017, the Bancorp recorded nonrecurring impairment adjustments to certain operating lease equipment. When evaluating whether an individual asset is impaired, the Bancorp considers the current fair value of the asset, the changes in overall market demand for the asset and the rate of change in advancements associated with technological improvements that impact the demand for the specific asset under review. As part of this ongoing assessment, the Bancorp determined that the carrying values of certain operating lease equipment were not recoverable and as a result, the Bancorp recorded an impairment loss equal to the amount by which the carrying value of the assets exceeded the fair value. The fair value amounts were generally based on appraised values of the assets, resulting in a classification within Level 3 of the valuation hierarchy. During the three months ended March 31, 2017, the Bancorp recorded net losses of $20 million as a reduction to corporate banking revenue in the Condensed Consolidated Statements of Income. The Commercial Leasing department, which reports to the Bancorp’s Chief Operating Officer, is responsible for preparing and reviewing the fair value estimates for operating lease equipment. Refer to Note 8 for further information on impairment charges related to certain operating lease equipment.

101

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Fair Value Option

The Bancorp elected to measure certain residential mortgage loans held for sale under the fair value option as allowed under U.S. GAAP. Electing to measure residential mortgage loans held for sale at fair value reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Management’s intent to sell residential mortgage loans classified as held for sale may change over time due to such factors as changes in the overall liquidity in markets or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified to loans held for investment and maintained in the Bancorp’s loan portfolio. In such cases, the loans will continue to be measured at fair value.

Fair value changes recognized in earnings for instruments held at March 31, 2017 and 2016 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $22 million and $6 million, respectively. These gains are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

Valuation adjustments related to instrument-specific credit risk for residential mortgage loans measured at fair value negatively impacted the fair value of those loans by $2 million at both March 31, 2017 and December 31, 2016. Interest on residential mortgage loans measured at fair value is accrued as it is earned using the effective interest method and is reported as interest income in the Condensed Consolidated Statements of Income.

The following table summarizes the difference between the fair value and the unpaid principal balance for residential mortgage loans measured at fair value as of:

($ in millions)		Aggregate         Fair Value		Aggregate Unpaid     Principal Balance		Difference
March 31, 2017
Residential mortgage loans measured at fair value	$		747		725		22
Past due loans of 90 days or more			2		2		-
Nonaccrual loans			1		1		-
December 31, 2016
Residential mortgage loans measured at fair value	$		829		823		6
Past due loans of 90 days or more			2		2		-
Nonaccrual loans			1		1		-

Fair Value of Certain Financial Instruments

The following tables summarize the carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments measured at fair value on a recurring basis:

	Net Carrying			Fair Value Measurements Using						Total
As of March 31, 2017 ($ in millions)	Amount			Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and due from banks		$                          2,205			2,205		-		-		2,205
Other securities		608			-		608		-		608
Held-to-maturity securities		26			-		-		26		26
Other short-term investments		1,644			1,644		-		-		1,644
Loans held for sale		10			-		-		10		10
Portfolio loans and leases:
Commercial and industrial loans		40,362			-		-		41,567		41,567
Commercial mortgage loans		6,838			-		-		6,776		6,776
Commercial construction loans		4,268			-		-		4,238		4,238
Commercial leases		4,079			-		-		3,700		3,700
Residential mortgage loans		15,099			-		-		15,459		15,459
Home equity		7,415			-		-		8,194		8,194
Automobile loans		9,530			-		-		9,246		9,246
Credit card		1,975			-		-		2,307		2,307
Other consumer loans and leases		795			-		-		830		830
Unallocated ALLL		(112	)		-		-		-		-
Total portfolio loans and leases, net		$                          90,249			-		-		92,317		92,317
Financial liabilities:
Deposits		$                        104,156			-		104,148		-		104,148
Federal funds purchased		155			155		-		-		155
Other short-term borrowings		2,015			-		2,015		-		2,015
Long-term debt		13,658			13,608		527		-		14,135

102

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		Net Carrying			Fair Value Measurements Using						Total
As of December 31, 2016 ($ in millions)		Amount			Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and due from banks	$		2,392			2,392		-		-		2,392
Other securities			607			-		607		-		607
Held-to-maturity securities			26			-		-		26		26
Other short-term investments			2,754			2,754		-		-		2,754
Loans held for sale			65			-		-		65		65
Portfolio loans and leases:
Commercial and industrial loans			40,958			-		-		41,976		41,976
Commercial mortgage loans			6,817			-		-		6,735		6,735
Commercial construction loans			3,887			-		-		3,853		3,853
Commercial leases			3,959			-		-		3,651		3,651
Residential mortgage loans			14,812			-		-		15,415		15,415
Home equity			7,637			-		-		8,421		8,421
Automobile loans			9,941			-		-		9,640		9,640
Credit card			2,135			-		-		2,503		2,503
Other consumer loans and leases			668			-		-		678		678
Unallocated ALLL			(112	)		-		-		-		-
Total portfolio loans and leases, net	$		90,702			-		-		92,872		92,872
Financial liabilities:
Deposits	$		103,821			-		103,811		-		103,811
Federal funds purchased			132			132		-		-		132
Other short-term borrowings			3,535			-		3,535		-		3,535
Long-term debt			14,388			14,288		545		-		14,833

Cash and due from banks, other securities, other short-term investments, deposits, federal funds purchased and other short-term borrowings

For financial instruments with a short-term or no stated maturity, prevailing market rates and limited credit risk, carrying amounts approximate fair value. Those financial instruments include cash and due from banks, other securities consisting of FHLB, FRB and DTCC restricted stock, other short-term investments, certain deposits (demand, interest checking, savings, money market, foreign office deposits and other deposits), federal funds purchased, and other short-term borrowings excluding FHLB borrowings. Fair values for other time deposits, certificates of deposit $100,000 and over and FHLB borrowings were estimated using a DCF calculation that applies prevailing LIBOR/swap interest rates and a spread for new issuances with similar terms.

Held-to-maturity securities

The Bancorp’s held-to-maturity securities are primarily composed of instruments that provide income tax credits as the economic return on the investment. The fair value of these instruments is estimated based on current U.S. Treasury tax credit rates.

Loans held for sale

Fair values for commercial loans held for sale were valued based on executable bids when available, or on DCF models incorporating appraisals of the underlying collateral, as well as assumptions about investor return requirements and amounts and timing of expected cash flows. Fair values for residential mortgage loans held for sale were valued based on estimated third-party valuations utilizing recent sales data from similar transactions. Broker opinion statements were also obtained as additional evidence to support the third-party valuations. Fair values for other consumer loans held for sale were based on contractual values upon which the loans may be sold to a third party, and approximate their carrying value.

Portfolio loans and leases, net

Fair values were estimated based on either appraisals of the underlying collateral or by discounting future cash flows using the current market rates of loans to borrowers with similar credit characteristics, similar remaining maturities, prepayment speeds and loss severities. The Bancorp estimates fair values at the transaction level whenever possible. For certain products with a large number of homogenous transactions, the Bancorp employs a pool approach. This approach involves stratifying and sorting the entire population of transactions into a smaller number of pools with like characteristics. Characteristics may include maturity date, coupon, origination date and principal amortization method.

Long-term debt

Fair value of long-term debt was based on quoted market prices, when available, or a DCF calculation using LIBOR/swap interest rates and, in some cases, Fifth Third credit and/or debt instrument spreads for new issuances with similar terms.

103

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

20. Business Segments

The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Wealth and Asset Management. Results of the Bancorp’s business segments are presented based on its management structure and management accounting practices. The structure and accounting practices are specific to the Bancorp; therefore, the financial results of the Bancorp’s business segments are not necessarily comparable with similar information for other financial institutions. The Bancorp refines its methodologies from time to time as management’s accounting practices and businesses change.

The Bancorp manages interest rate risk centrally at the corporate level. By employing an FTP methodology, the business segments are insulated from most benchmark interest rate volatility, enabling them to focus on serving customers through the origination of loans and acceptance of deposits. The FTP methodology assigns charge rates and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of cash flows for each transaction. Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each business segment so its resulting net interest income is insulated from future changes in benchmark interest rates. The Bancorp’s FTP methodology also allocates the contribution to net interest income of the asset-generating and deposit-providing businesses on a duration-adjusted basis to better attribute the driver of the performance. As the asset and liability durations are not perfectly matched, the residual impact of the FTP methodology is captured in General Corporate and Other. The charge and credit rates are determined using the FTP rate curve, which is based on an estimate of Fifth Third’s marginal borrowing cost in the wholesale funding markets. The FTP curve is constructed using the U.S. swap curve, brokered CD pricing and unsecured debt pricing.

The Bancorp adjusts the FTP charge and credit rates as dictated by changes in interest rates for various interest-earning assets and interest-bearing liabilities and by the review of behavioral assumptions, such as prepayment rates on interest-earning assets and the estimated durations for indeterminate-lived deposits. Key assumptions, including the credit rates provided for deposit accounts, are reviewed annually. Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions. The credit rates for several deposit products were reset January 1, 2017 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2016, thus net interest income for deposit-providing business segments was positively impacted during 2017. FTP charge rates on assets were affected by the prevailing level of interest rates and by the duration and repricing characteristics of the portfolio. As overall market rates increased, the FTP charge increased for asset-generating business segments during 2017.

The Bancorp’s methodology for allocating provision for loan and lease losses expense to the business segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each business segment. Provision for loan and lease losses expense attributable to loan and lease growth and changes in ALLL factors are captured in General Corporate and Other. The financial results of the business segments include allocations for shared services and headquarters expenses. Additionally, the business segments form synergies by taking advantage of cross-sell opportunities and when funding operations by accessing the capital markets as a collective unit.

The following is a description of each of the Bancorp’s business segments and the products and services they provide to their respective client bases.

Commercial Banking offers credit intermediation, cash management and financial services to large and middle-market businesses and government and professional customers. In addition to the traditional lending and depository offerings, Commercial Banking products and services include global cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing and syndicated finance.

Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through 1,155 full-service banking centers. Branch Banking offers depository and loan products, such as checking and savings accounts, home equity loans and lines of credit, credit cards and loans for automobiles and other personal financing needs, as well as products designed to meet the specific needs of small businesses, including cash management services.

Consumer Lending includes the Bancorp’s residential mortgage, home equity, automobile and other indirect lending activities. Direct lending activities include the origination, retention and servicing of residential mortgage and home equity loans or lines of credit, sales and securitizations of those loans, pools of loans or lines of credit and all associated hedging activities. Indirect lending activities include extending loans to consumers through correspondent lenders and automobile dealers.

Wealth and Asset Management provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of four main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; ClearArc Capital, Inc., an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Private Bank; and Fifth Third Institutional Services. FTS offers full service retail brokerage services to individual clients and broker dealer services to the institutional marketplace. ClearArc Capital, Inc. provides asset management services. Fifth Third Private Bank offers holistic strategies to affluent clients in wealth planning, investing, insurance and wealth protection. Fifth Third Institutional Services provides advisory services for institutional clients including states and municipalities.

104

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present the results of operations and assets by business segment for the three months ended:

March 31, 2017 ($ in millions)		Commercial Banking			Branch Banking			Consumer Lending			Wealth and Asset Management		General Corporate and Other			Eliminations		Total
Net interest income	$		425			430			61			38		(21	)		-	933
Provision for loan and lease losses			6			42			15			4		7			-	74
Net interest income after provision for loan and lease losses			419			388			46			34		(28	)		-	859
Total noninterest income			202 (	c)		184 (	b)		55			106		10			(34)(a)	523
Total noninterest expense			370			402			120			113		15			(34)	986
Income (loss) before income taxes			251			170			(19	)		27		(33	)		-	396
Applicable income tax expense (benefit)			40			60			(7	)		10		(12	)		-	91
Net income (loss)			211			110			(12	)		17		(21	)		-	305
Less: Net income attributable to noncontrolling interests			-			-			-			-		-			-	-
Net income (loss) attributable to Bancorp			211			110			(12	)		17		(21	)		-	305
Dividends on preferred stock			-			-			-			-		15			-	15
Net income (loss) available to common shareholders	$		211			110			(12	)		17		(36	)		-	290
Total goodwill	$		613			1,655			-			151		-			-	2,419
Total assets	$		57,672			57,876			21,994			9,641		(6,983)(	d)		-	140,200
(a)    Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income. (b)    Includes impairment charges of $3 for branches and land. For more information refer to Note 7 and Note 19. (c)    Includes impairment charges of $31 for operating lease equipment. For more information refer to Note 8 and Note 19. (d)    Includes bank premises and equipment of $51 classified as held for sale. For more information, refer to Note 7.
March 31, 2016 ($ in millions)		Commercial Banking			Branch Banking			Consumer Lending			Wealth and Asset Management		General Corporate and Other(d)			Eliminations		Total(d)
Net interest income	$		451			426			60			43		(77	)		-	903
Provision for loan and lease losses			65			34			12			-		8			-	119
Net interest income after provision for loan and lease losses			386			392			48			43		(85	)		-	784
Total noninterest income			223			189 (	b)		83			100		75			(33)(a)	637
Total noninterest expense			363			411			118			107		20			(33)	986
Income (loss) before income taxes			246			170			13			36		(30	)		-	435
Applicable income tax expense			35			60			5			13		(4	)		-	109
Net income (loss)			211			110			8			23		(26	)		-	326
Less: Net income attributable to noncontrolling interests			-			-			-			-		-			-	-
Net income (loss) attributable to Bancorp			211			110			8			23		(26	)		-	326
Dividends on preferred stock			-			-			-			-		15			-	15
Net income (loss) available to common shareholders	$		211			110			8			23		(41	)		-	311
Total goodwill	$		613			1,655			-			148		-			-	2,416
Total assets	$		59,652			54,528			22,475			8,900		(3,125)(	c)		-	142,430
(a)    Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income. (b)    Includes impairment charges of $2 for branches and land. For more information, refer to Note 7 and Note 19. (c)    Includes bank premises and equipment of $68 classified as held for sale. For more information, refer to Note 7. (d)    A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

21. Subsequent Event

On April 26, 2017, the Bancorp entered into an accelerated share repurchase transaction with a counterparty pursuant to which the Bancorp will pay approximately $342 million on May 1, 2017 to repurchase shares of its outstanding common stock. The Bancorp is repurchasing the shares of its common stock as part of its Board approved 100 million share repurchase program previously announced on March 15, 2016. The Bancorp expects the settlement of the transaction to occur on or before July 26, 2017.

105

PART II. OTHER INFORMATION

Legal Proceedings (Item 1)

Refer to Note 15 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 for information regarding legal proceedings.

Risk Factors (Item 1A)

There have been no material changes made during the first quarter of 2017 to any of the risk factors as previously disclosed in the Bancorp’s most recent annual report as filed with the SEC.

Unregistered Sales of Equity Securities and Use of Proceeds (Item 2)

Refer to the “Capital Management” section within Management’s Discussion and Analysis in Part I, Item 2 for information regarding purchases and sales of equity securities by the Bancorp during the first quarter of 2017.

Defaults Upon Senior Securities (Item 3)

None.

Mine Safety Disclosures (Item 4)

Not applicable.

Other Information (Item 5)

None.

Exhibits (Item 6)

3.1	Amended Articles of Incorporation of Fifth Third Bancorp, as amended. Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014.
3.2	Code of Regulations of Fifth Third Bancorp as Amended as of September 15, 2014. Incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K filed with the SEC on February 25, 2016.
12.1	Computations of Consolidated Ratios of Earnings to Fixed Charges.
12.2	Computations of Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements.
31(i)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
31(ii)	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
32(i)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
32(ii)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Changes in Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements tagged as blocks of text and in detail.

* Denotes management contract or compensatory plan or arrangement.

106

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Fifth Third Bancorp
	Registrant
Date: May 5, 2017
	/s/ Tayfun Tuzun
	Tayfun Tuzun
	Executive Vice President and
	Chief Financial Officer

107

EX-12.1

Exhibit 12.1

Fifth Third Bancorp

Computations of Consolidated Ratios of Earnings to Fixed Charges

($ in millions)

	Three Months Ended  March 31, 2017
Excluding Interest on Deposits:
Fixed Charges:
Interest Expense (excluding interest on deposits)		$94
One-Third of Rents, Net of Income from Subleases		9
Total Fixed Charges		$103
Earnings:
Income Before Income Taxes		$396
Fixed Charges		103
Total Earnings		$499
Ratio of Earnings to Fixed Charges, Excluding Interest on Deposits		4.84x
Including Interest on Deposits:
Fixed Charges:
Interest Expense		$153
One-Third of Rents, Net of Income from Subleases		9
Total Fixed Charges		$162
Earnings:
Income Before Income Taxes		$396
Fixed Charges		162
Total Earnings		$558
Ratio of Earnings to Fixed Charges, Including Interest on Deposits		3.44x

EX-12.2

Exhibit 12.2

Fifth Third Bancorp

Computations of Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements

($ in millions)

	Three Months Ended
	March 31, 2017
Excluding Interest on Deposits:
Fixed Charges:
Interest Expense (excluding interest on deposits)		$94
One-Third of Rents, Net of Income from Subleases		9
Preferred Stock Dividends		15
Total Fixed Charges		$118
Earnings:
Income Before Income Taxes		$396
Fixed Charges, Excluding Preferred Stock Dividends		103
Total Earnings		$499
Ratio of Earnings to Fixed Charges, Excluding Interest on Deposits		4.23x
Including Interest on Deposits:
Fixed Charges:
Interest Expense		$153
One-Third of Rents, Net of Income from Subleases		9
Preferred Stock Dividends		15
Total Fixed Charges		$177
Earnings:
Income Before Income Taxes		$396
Fixed Charges, Excluding Preferred Stock Dividends		162
Total Earnings		$558
Ratio of Earnings to Fixed Charges, Including Interest on Deposits		3.15x

EX-31.(I)

Exhibit 31(i)

CERTIFICATION PURSUANT

TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Greg D. Carmichael, certify that:

1. I have reviewed this report on Form 10-Q of Fifth Third Bancorp (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Greg D. Carmichael

Greg D. Carmichael

President and Chief Executive Officer

May 5, 2017

EX-31.(II)

Exhibit 31(ii)

CERTIFICATION PURSUANT

TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Tayfun Tuzun, certify that:

1. I have reviewed this report on Form 10-Q of Fifth Third Bancorp (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Tayfun Tuzun

Tayfun Tuzun

Executive Vice President and

Chief Financial Officer

May 5, 2017

EX-32.(I)

Exhibit 32(i)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fifth Third Bancorp (the “Registrant”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg D. Carmichael, President and Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Greg D. Carmichael

Greg D. Carmichael

President and Chief Executive Officer

May 5, 2017

EX-32.(II)

Exhibit 32(ii)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fifth Third Bancorp (the “Registrant”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tayfun Tuzun, Executive Vice President and Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Tayfun Tuzun

Tayfun Tuzun

Executive Vice President and

Chief Financial Officer

May 5, 2017

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	FITB
Entity Registrant Name	FIFTH THIRD BANCORP
Entity Central Index Key	0000035527
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		750,269,402
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Assets
Cash and due from banks	[1]	$ 2,205		$ 2,392
Available-for-sale and other securities	[2]	31,531		31,183
Held-to-matury securities	[3]	26		26
Trading securities		689		410
Other short-term investments		1,644		2,754
Loans held for sale	[4]	616		751
Portfolio loans and leases	[1],[5]	91,628		92,098
ALLL		(1,238)	[6]	(1,253)	[1],[7]
Portfolio loans and leases, net		90,390		90,845
Bank premises and equipment	[8]	2,052		2,065
Operating lease equipment		702		738
Goodwill		2,419		2,416
Intangible assets		11		9
Servicing rights	[9]	776		744
Other assets	[1]	7,139		7,844
Total Assets		140,200		142,177
Deposits
Noninterest-bearing deposits		35,362		35,782
Interest-bearing deposits		68,794		68,039
Total deposits		104,156		103,821
Federal funds purchased		155		132
Other short-term borrowings		2,015		3,535
Accrued taxes, interest and expenses		1,655		1,800
Other liabilities	[1]	2,104		2,269
Long-term debt	[1]	13,658		14,388
Total liabilities		123,743		125,945
Equity
Common stock	[10]	2,051		2,051
Preferred stock	[11]	1,331		1,331
Capital surplus		2,803		2,756
Retained earnings		13,625		13,441
Accumulated other comprehensive income		68		59
Treasury stock	[10]	(3,448)		(3,433)
Total Bancorp Shareholders' Equity		16,430		16,205
Noncontrolling interests		27		27
Total Equity		16,457		16,232
Total Liabilities and Equity		$ 140,200		$ 142,177

[1] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[2] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

[3] Fair value of $ 26 and $ 26 at March 31, 2017 and December 31, 2016 , respectively.

[4] Includes $ 606 and $ 686 of residential mortgage loans held for sale measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[5] Includes $ 141 and $ 143 of residential mortgage loans measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[6] Includes $ 2 related to leveraged leases at March 31, 2017 .

[7] Includes $ 2 related to leveraged leases at December 31, 2016 .

[8] Includes $ 51 and $ 39 of bank premises and equipment held for sale at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 7.

[9] Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its r esidential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016. For further information refer to Note 11 .

[10] Common shares: Stated value $2.22 per share; authorized 2,000,000,000 ; outstanding at March 31, 2017 – 750,144,587 (excludes 173,747,994 treasury shares), December 31, 2016 – 750,479,299 (excludes 173,413,282 treasury shares).

[11] 446,000 shares of unde signated no par value preferred stock are authorized and unissued at March 31, 2017 and December 31, 2016 ; fixed-to-floating rate non-cumulative Series H perpetual preferred stock with a $25,000 liquidation preference: 24,000 authorized shares, issued and outstanding at March 31, 2017 and December 31, 2016 ; fixed-to-floating rate non-cumulative Series I perpetual preferred stock with a $25,000 liquidation preference; 18,000 authorized shares, issued and outstanding at March 31, 2017 and December 3 1, 2016 ; and fixed-to-floating rate non-cumulative Series J perpetual preferred stock with a $25,000 liquidation preference: 12,000 authorized shares, issued and outstanding at March 31, 2017 and December 31, 2016 .

XML

CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (Parenthetical) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Cash and due from banks	[1]	$ 2,205		$ 2,392
Portfolio loans and leases	[1],[2]	91,628		92,098
ALLL		(1,238)	[3]	(1,253)	[1],[4]
Other assets	[1]	7,139		7,844
Other liabilities	[1]	2,104		2,269
Long-term debt	[1]	13,658		14,388
Available-for-sale and other securities, amortized cost		31,348		31,024
Held-to-maturity securities, fair value		26		26
Residential mortgage loans held for sale measured at FV		606		686
Bank premises and equipment held for sale		$ 51		$ 39
Common stock, stated value		$ 2.22		$ 2.22
Common stock, authorized		2,000,000,000		2,000,000,000
Common stock, outstanding		750,144,587		750,479,299
Common stock, treasury shares		173,747,994		173,413,282
Residential Mortgage
Residential mortgage loans measured at FV		$ 141		$ 143
Variable Interest Entities
Cash and due from banks		85		85
Portfolio loans and leases		1,015		1,216
ALLL		(25)		(26)
Other assets		7		9
Other liabilities		2		3
Long-term debt		$ 883		$ 1,094
Preferred Stock
Preferred stock, authorized		446,000		446,000
Preferred stock Series H
Preferred stock, authorized		24,000		24,000
Preferred stock, liquidation preference		$ 25,000		$ 25,000
Preferred stock, issued		24,000		24,000
Preferred stock, outstanding		24,000		24,000
Preferred stock Series I
Preferred stock, authorized		18,000		18,000
Preferred stock, liquidation preference		$ 25,000		$ 25,000
Preferred stock, issued		18,000		18,000
Preferred stock, outstanding		18,000		18,000
Preferred stock Series J
Preferred stock, authorized		12,000		12,000
Preferred stock, liquidation preference		$ 25,000		$ 25,000
Preferred stock, issued		12,000		12,000
Preferred stock, outstanding		12,000		12,000

[1] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[2] Includes $ 141 and $ 143 of residential mortgage loans measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[3] Includes $ 2 related to leveraged leases at March 31, 2017 .

[4] Includes $ 2 related to leveraged leases at December 31, 2016 .

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	[1]
Interest Income
Interest and fees on loans and leases	$ 839	$ 804
Interest on securities	245	232
Interest on other short-term investments	2	2
Total interest income	1,086	1,038
Interest Expense
Interest on deposits	59	49
Interest on federal funds purchased	1	1
Interest on other short-term borrowings	3	3
Interest on long-term debt	90	82
Total interest expense	153	135
Net Interest Income	933	903
Provision for loan and lease losses	74	119
Net Interest Income After Provision for Loan and Lease Losses	859	784
Noninterest Income
Service charges on deposits	138	137
Wealth and asset management revenue	108	102
Corporate banking revenue	74	102
Card and processing revenue	74	79
Mortgage banking net revenue	52	78
Other noninterest income	77	136
Securities gains, net	0	3
Total noninterest income	523	637
Noninterest Expense
Salaries, wages and incentives	411	403
Employee benefits	111	100
Net occupancy expense	78	77
Technology and communications	58	56
Card and processing expense	30	35
Equipment expense	28	30
Other noninterest expense	270	285
Total noninterest expense	986	986
Income (Loss) Before Income Taxes	396	435
Applicable income tax expense	91	109
Net Income (loss)	305	326	[2]
Less: Net income attributable to noncontrolling interests	0	0
Net income attributable to Bancorp	305	326	[3]
Dividends on preferred stock	15	15	[3]
Net income (loss) available to common shareholders	$ 290	$ 311	[3]
Earnings per share - basic	$ 0.38	$ 0.4	[3]
Earnings per share - diluted	$ 0.38	$ 0.4	[3]
Average common shares outstanding- basic	747,667,521	773,564,178	[3]
Average common shares oustanding - diluted	760,809,239	777,757,934	[3]
Common stock dividends declared per share	$ 0.14	$ 0.13

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[3] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016 .

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited (Parenthetical) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Income Statement
Net tax deficiency reclassified from capital surplus to applicable income tax expense	$ 1

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	[1]
Statement Of Income And Comprehensive Income
Net income (loss)	$ 305	$ 326	[2]
Other Comprehensive Income (Loss), Net of Tax
Unrealized holding gains (losses) on available-for-sale securities arising during period	15	452
Reclassification adjustment for net (gains) losses included in net income	1	(5)
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(3)	48
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(5)	(9)
Reclassification of amounts to net periodic benefit costs	1	1
Other comprehensive income (loss), Net of Tax	9	487
Comprehensive income	314	813
Comprehensive income attributable to noncontrolling interests	0	0
Comprehensive income attributable to Bancorp	$ 314	$ 813

[1] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited (Parenthetical) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Statement Of Income And Comprehensive Income
Net tax deficiency reclassified from capital surplus to applicable income tax expense	$ 1

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Unaudited - USD ($) $ in Millions		Total		Common Stock	Preferred Stock	Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income(Loss)	Treasury Stock	Total Bancorp Shareholders' Equity	Non- Controlling Interest
Beginning Balance at Dec. 31, 2015		$ 15,870		$ 2,051	$ 1,331	$ 2,666	[1]	$ 12,358	[1]	$ 197	$ (2,764)	$ 15,839	$ 31
Net income (loss)		326	[2],[3]					326	[1]			326
Other comprehensive income (loss), Net of Tax		487	[2]							487		487
Cash dividends declared:
Common stock at $0.14 in 2017 and $0.13 in 2016 per share		(100)						(100)	[1]			(100)
Preferred stock	[4]	(15)						(15)	[1]			(15)
Shares acquired for treasury		(240)				(8)	[1]				(232)	(240)
Impact of stock transactions under stock compensation plans, net		25				28	[1]				(3)	25
Other		2				1	[1]					1	1
Ending Balance at Mar. 31, 2016		16,355		2,051	1,331	2,687	[1]	12,569	[1]	684	(2,999)	16,323	32
Beginning Balance at Dec. 31, 2016		16,232		2,051	1,331	2,756		13,441		59	(3,433)	16,205	27
Net income (loss)		305						305				305
Other comprehensive income (loss), Net of Tax		9								9		9
Cash dividends declared:
Common stock at $0.14 in 2017 and $0.13 in 2016 per share		(106)						(106)				(106)
Preferred stock	[4]	(15)						(15)				(15)
Shares acquired for treasury		0				23					(23)	0
Impact of stock transactions under stock compensation plans, net		32				24					8	32
Ending Balance at Mar. 31, 2017		$ 16,457		$ 2,051	$ 1,331	$ 2,803		$ 13,625		$ 68	$ (3,448)	$ 16,430	$ 27

[1] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[3] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[4] For both the three months ended March 31, 2017 and 2016 , dividends were $ 612 .50 per preferred share for Per petual Preferred Stock, Series J and $ 414.06 per preferred share for Perpetual Preferred Stock, Series I

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Unaudited (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Common stock, per share	$ 0.14	$ 0.13	[1]
Net tax deficiency reclassified from capital surplus to applicable income tax expense		$ 1
Preferred stock Series I
Preferred stock, per share	414.06	$ 414.06
Preferred stock Series J
Preferred stock, per share	$ 612.5	$ 612.5

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017		Mar. 31, 2016
Operating Activities
Net income	$ 305		$ 326	[1],[2]
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (benefit from) loan and lease losses	74		119	[2]
Depreciation, amortization and accretion	89		110	[3]
Stock-based compensation expense	45		26	[3]
Provision for (benefit from) deferred income taxes	(11)		9	[3]
Securities gains, net	(1)		(1)	[3]
MSR Fair Value Adjustment	23		0	[3]
Provision for MSR impairment	0		85	[3]
Net gains on sales of loans and fair value adjustments on loans held for sale	(34)		(15)	[3]
Net losses (gains) on disposition and impairment of bank premises and equipment	(1)		1	[3]
Gain on sales of certain retail branch operations	0		(8)	[3]
Net losses on disposition and impairment of operating lease equipment	(20)		0	[3]
Proceeds from sales of loans held for sale	1,627		1,133	[3]
Loans originated for sale, net of repayments	(1,483)		(1,180)	[3]
Dividends representing return on equity method investments	9		2	[3]
Net change in:
Trading securities	(277)		(20)	[3]
Other assets	115		345	[3]
Accrued taxes, interest and expenses	(142)		(421)	[3]
Other liabilities	176		(114)	[3]
Net Cash Provided by (Used in) Operating Activities	536		395	[3]
Proceeds from sales:
Available-for-sale securities	2,191		2,677	[3]
Loans	21		7	[3]
Bank premises and equipment	6		15	[3]
Proceeds from repayments / maturities:
Available-for-sale securities	604		531	[3]
Held-to-maturity securities	0		6	[3]
Purchases:
Available-for-sale securities	(2,975)		(4,069)	[3]
Bank premises and equipment	(52)		(41)	[3]
MSRs	(29)		0
Proceeds from sale and dividends representing return of equity method investments	69		9	[3]
Net cash paid on sales of certain retail branch operations	0		(43)	[3]
Net change in:
Other short-term investments	1,110		893	[3]
Loans and leases	368		(1,119)	[3]
Operating lease equipment	(6)		(50)	[3]
Net Cash Provided by (Used in) Investing Activities	1,307		(1,184)	[3]
Net change in:
Deposits	335		(502)	[3]
Federal funds purchased	23		(17)	[3]
Other short-term borrowings	(1,520)		2,016	[3]
Dividends paid on common stock	(106)		(102)	[3]
Dividends paid on preferred stock	(38)		(15)	[3]
Proceeds from issuance of long-term debt	0		1,494	[3]
Repayment of long-term debt	(714)		(2,088)	[3]
Repurchase of treasury stock and related forward contract	0		240	[3]
Other	(10)		1	[3]
Net Cash Provided by (Used in) Financing Activities	(2,030)		547	[3]
Increase (Decrease) in Cash and Due from Banks	(187)		(242)	[3]
Cash and Due from Banks at Beginning of Period	2,392	[4]	2,540
Cash and Due from Banks at End of Period	$ 2,205	[4]	$ 2,298

[1] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[3] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[4] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (Parenthetical) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Statement of Cash Flows
Net tax deficiency reclassified from capital surplus to applicable income tax expense	$ 1

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Basis of Presentation

3 Months Ended

Mar. 31, 2017

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

The Condensed Consolidated Financial Statements include the accounts of the Bancorp and its majority-owned subsidiaries and VIEs in which the Bancorp has been determined to be the primary beneficiary. Other entities, including certain joint ventures, in which the Bancorp has the ability to exercise significant influence over operating and financial policies of the investee, but upon which the Bancorp does not possess control, are accounted for by the equity method and not consolidated. Those entities in which the Bancorp does not have the ability to exercise significant influence are generally carried at the lower of cost or fair value. Intercompany transactions and balances have been eliminated.

In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, which consist of normal recurring accruals, necessary to present fairly the results for the periods presented. In accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial information, these statements do not include certain information and footnote disclosures required for complete annual financial statements and it is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Bancorp’s Annual Report on Form 10-K. The results of operations, comprehensive income, cash flows and changes in equity for the three months ended March 31, 2017and 2016 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2016 has been derived from the Bancorp’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2017

Supplemental Cash Flow

Supplemental Cash Flow Information

2. Supplemental Cash Flow Information

Cash payments related to interest and income taxes in addition to non-cash investing and financing activities are presented in the following table for the three months ended March 31:
($ in millions)		2017	2016
Cash Payments:
Interest	$	208	191
Income taxes		18	334
Transfers:
Portfolio loans to loans held for sale		5	3
Loans held for sale to portfolio loans		3	12
Portfolio loans to OREO		12	12

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Accounting and Reporting Developments

3 Months Ended

Mar. 31, 2017

Accounting and Reporting Developments

Accounting and Reporting Developments

3. Accounting and Reporting Developments

Standards Adopted in 2017

The Bancorp adopted the following new accounting standards effective January 1, 2017:

ASU 2016-05 – Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships

In March 2016, the FASB issued ASU 2016-05 which clarifies that a change in counterparty in a derivative contract does not, in and of itself, represent a change in critical terms that would require discontinuation of hedge accounting provided that other hedge accounting criteria continue to be met. The Bancorp adopted the amended guidance prospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-06 – Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments

In March 2016, the FASB issued ASU 2016-06 which clarifies the requirements for determining when contingent put and call options embedded in debt instruments should be bifurcated from the debt instrument and accounted for separately as derivatives. A four-step decision sequence should be followed in determining whether such options are clearly and closely related to the economic characteristics and risks of the debt instrument, which determines whether bifurcation is necessary. The Bancorp adopted the amended guidance on January 1, 2017 on a modified retrospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-07 – Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

In March 2016, the FASB issued ASU 2016-07 to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting, eliminating the requirement to retrospectively apply the equity method of accounting back to the date of the initial investment. The Bancorp adopted the amended guidance prospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2016-17 – Consolidation (Topic 810): Interests Held Through Related Parties That Are Under Common Control

In October 2016, the FASB issued ASU 2016-17 which changes the accounting for the consolidation of VIEsin certain situations involving entities under common control. Specifically, the amendments change how the indirect interests held through related parties that are under common control should be included in a reporting entity’s evaluation of whether it is a primary beneficiary of a VIE. Under the amended guidance, the reporting entity is only required to include the indirect interests held through related parties that are under common control in a VIE on a proportionate basis. The Bancorp adopted the amended guidance retrospectively on January 1, 2017. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of March 31, 2017:

ASU 2014-09 – Revenue from Contracts with Customers (Topic 606)

In May 2014, the FASB issued ASU 2014-09 which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequent to the issuance of ASU 2014-09, the FASB has issued additional guidance to clarify certain implementation issues, including ASUs 2016-08 (Principal versus Agent Considerations), 2016-10 (Identifying Performance Obligations and Licensing), 2016-12 (Narrow-Scope Improvements and Practical Expedients), and 2016-20 (Technical Corrections and Improvements) in March, April, May and December 2016, respectively. These amendments do not change the core principles in ASU 2014-09 and the effective date and transition requirements are consistent with those in the original ASU. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018, using a modified retrospective approach, with the cumulative effect of initially applying the amendments recognized at the date of initial application. Because the amended guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, the Bancorp’s preliminary analysis suggests that the adoption of this amended guidance is not expected to have a material impact on its Condensed Consolidated Financial Statements, although the Bancorp will also be subject to expanded disclosure requirements upon adoption and the Bancorp’s revenue recognition processes for wealth and asset management revenue, corporate banking revenue, and card and processing revenue may be affected. However, there are certain areas of the amended guidance, such as credit card interchange fees and related rewards programs, which are subject to interpretation and for which the Bancorp has not made final conclusions regarding the applicability and the related impact, if any. Accordingly, the results of the Bancorp’s materiality analysis, as well as its final adoption method, may change as these conclusions are reached.

ASU 2016-01 – Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01 which revises an entity’s accounting related to 1) the classification and measurement of investments in equity securities, 2) the presentation of certain fair value changes for financial liabilities measured at fair value, and 3) certain disclosure requirements associated with the fair value of financial instruments. The amendments require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes as a result of an observable price change. The amendments also simplify the impairment assessment of equity investments for which fair value is not readily determinable by requiring an entity to perform a qualitative assessment to identify impairment. If qualitative indicators are identified, the entity will be required to measure the investment at fair value. For financial liabilities that an entity has elected to measure at fair value, the amendments require an entity to present separately in other comprehensive income the portion of the change in fair value that results from a change in instrument-specific credit risk. For public business entities, the amendments 1) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate fair value for financial instruments measured at amortized cost and 2) require, for disclosure purposes, the use of an exit price notion in the determination of the fair value of financial instruments. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018. Upon adoption, the Bancorp will be required to make a cumulative-effect adjustment to the Condensed Consolidated Balance Sheets as of the beginning of the fiscal year of adoption. However, for equity securities without a readily determinable fair value, the guidance will be applied prospectively to all equity investments that exist as of the date of adoption. Early adoption of the amendments is not permitted with the exception of the presentation of certain fair value changes for financial liabilities measured at fair value for which early application is permitted. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2016-02 – Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02 which establishes a new accounting model for leases. The amended guidance requires lessees to record lease liabilities on the lessees’ balance sheets along with corresponding right-of-use assets for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s statements of income. From a lessor perspective, the accounting model is largely unchanged, except that the amended guidance includes certain targeted improvements to align, where necessary, lessor accounting with the lessee accounting model and the revenue recognition guidance in ASC Topic 606. The amendments also modify disclosure requirements for an entity’s lease arrangements. The amended guidance is effective for the Bancorp on January 1, 2019, with early adoption permitted. The amendments should be applied to each prior reporting period presented using a modified retrospective approach, although the amended guidance contains certain transition relief provisions that, among other things, permit an entity to elect not to reassess the classification of leases which existed or expired as of the date the amendments are effective. The Bancorp is currently in the process of developing an inventory of all leases and accumulating the lease data necessary to apply the amended guidance. The Bancorp is continuing to evaluate the impact of the amended guidance on its Condensed Consolidated Financial Statements, but the effects of recognizing most operating leases on the Condensed Consolidated Balance Sheets are expected to be material. The Bancorp expects to recognize right-of-use assets and lease liabilities for substantially all of its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption.

ASU 2016-04 – Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products

In March 2016, the FASB issued ASU 2016-04 which permits proportional derecognition of the liability for unused funds on certain prepaid stored-value products (known as breakage) to the extent that it is probable that a significant reversal of the recognized breakage amount will not subsequently occur. The amendments do not apply to any prepaid stored-value products that are attached to a segregated customer deposit account, or products for which unused funds are subject to unclaimed property remittance laws. The amended guidance may be applied retrospectively to all comparable periods presented in the year of adoption or applied on a modified retrospective basis by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Bancorp plans to adopt the amended guidance on its required effective date of January 1, 2018 and is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements. However, the Bancorp’s preliminary analysis suggests that most of its prepaid stored-value products will not be affected by the amended guidance.

ASU 2016-13 – Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13 which establishes a new approach to estimate credit losses on certain types of financial instruments. The new approach changes the impairment model for most financial assets, and will require the use of an “expected credit loss” model for financial instruments measured at amortized cost and certain other instruments, including trade and other receivables, loans, debt securities, net investments in leases, and off-balance-sheet credit exposures (such as loan commitments, standby letters of credit, and financial guarantees not accounted for as insurance). This model requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect. This allowance is deducted from the financial asset’s amortized cost basis to present the net amount expected to be collected. The new expected credit loss model will also apply to purchased financial assets with credit deterioration, superseding current accounting guidance for such assets. The amended guidance also amends the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on such securities is a credit loss, and also eliminating the option for management to consider the length of time a security has been in an unrealized loss position as a factor in concluding whether or not a credit loss exists. The amended model states that an entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra account to the amortized cost basis, instead of a direct reduction of the amortized cost basis of the investment, as under current guidance. As a result, entities will recognize improvements to estimated credit losses on available-for-sale debt securities immediately in earnings as opposed to in interest income over time. There are also additional disclosure requirements included in this guidance. The amended guidance is effective for the Bancorp on January 1, 2020, with early adoption permitted as early as January 1, 2019. The amended guidance is to be applied on a modified retrospective basis with the cumulative effect of initially applying the amendments recognized in retained earnings at the date of initial application. However, certain provisions of the guidance are only required to be applied on a prospective basis. While the Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements, it currently expects the ALLL to increase upon adoption given that the allowance will be required to cover the full remaining expected life of the portfolio upon adoption, rather than the incurred loss model under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the Bancorp’s loan and lease portfolio at the time of adoption.

ASU 2016-15 – Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash

In August 2016, the FASB issued ASU 2016-15 to clarify the classification of certain cash receipts and payments within an entity’s statement of cash flows. These items include debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of BOLI policies, distributions received from equity method investees, and beneficial interests in securitization transactions. The amended guidance also specifies how to address classification of cash receipts and payments that have aspects of more than one class of cash flows. The amended guidance is effective for the Bancorp on January 1, 2018, with early adoption permitted, and is to be applied on a retrospective basis unless it is impractical to do so. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2016-16 – Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU 2016-16 which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Current U.S. GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The amended guidance is effective for the Bancorp on January 1, 2018, with early adoption permitted, and is applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the fiscal year in which the guidance is effective. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-01 – Business Combinations (Topic 805): Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01 which clarifies the definition of a business in order to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amended guidance provides a screen which states that when substantially all of the fair value of assets acquired (or disposed) is concentrated in a single asset or group of similar assets, then the set of assets and activities would not be considered a business. The amended guidance is effective for the Bancorp on January 1, 2018, and is to be applied prospectively. Upon adoption, the Bancorp will evaluate future transactions to determine if they should be accounted for as acquisitions (or disposals) of assets or businesses based on the amended guidance.

ASU 2017-04 – Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04 which simplifies the test for goodwill impairment by removing the second step, which measures the amount of impairment loss, if any. Instead, the amended guidance states that an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, except that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This would apply to all reporting units, including those with zero or negative carrying amounts of net assets. The amended guidance is effective for the Bancorp on January 1, 2020, and is to be applied prospectively. Early adoption is permitted. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-05 – Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

In February 2017, the FASB issued ASU 2017-05 which clarifies the scope of Subtopic 610-20 and defines the term “in substance nonfinancial asset.” The amendments require that an entity should initially identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The amendments provide specific guidance on accounting for partial sales of nonfinancial assets, which require an entity to derecognize a distinct nonfinancial asset or in substance nonfinancial asset in a partial sale transaction when it 1) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset and 2) transfers control of the asset. Once an entity transfers control of a distinct nonfinancial asset or distinct in substance nonfinancial asset, it is required to measure any noncontrolling interest it receives (or retains) at fair value. The amended guidance is effective for the Bancorp on January 1, 2018, concurrent with the adoption of ASU 2014-09. It is to be applied using either a retrospective or modified retrospective approach, consistent with the transition method for ASU 2014-09. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

ASU 2017-08 Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities

In March 2017, the FASB issued ASU 2017-08 which shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amended guidance is effective for the Bancorp on January 1, 2019, with early adoption permitted, and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Bancorp shall provide a disclosure regarding the change in accounting principle. The Bancorp is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements.

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Investment Securities

3 Months Ended

Mar. 31, 2017

Securities

Securities

4. Investment Securities

The following tables provide the amortized cost, unrealized gains and losses and fair value for the major categories of the available-for-sale and other and held-to-maturity investment securities portfolios as of:
				Amortized	Unrealized	Unrealized	Fair
March 31, 2017 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale and other securities:
	U.S. Treasury and federal agencies securities		$	435	2	-	437
	Obligations of states and political subdivisions securities			44	1	-	45
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		16,140	195	(90)	16,245
		Agency commercial mortgage-backed securities		8,647	88	(63)	8,672
		Non-agency commercial mortgage-backed securities		3,269	46	(16)	3,299
	Asset-backed securities and other debt securities			2,115	36	(17)	2,134
	Equity securities(b)			698	3	(2)	699
Total available-for-sale and other securities			$	31,348	371	(188)	31,531
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	24	-	-	24
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	26	-	-	26

• Includes interest-only mortgage-backed securities of $42as of March 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net,in the Condensed Consolidated Statements of Income.
• Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $359 and $1, respectively,at March 31, 2017,that are carried at cost, and certain mutual fund and equity security holdings.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2016 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale and other securities:
	U.S. Treasury and federal agencies securities		$	547	2	-	549
	Obligations of states and political subdivisions securities			44	1	-	45
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		15,525	178	(95)	15,608
		Agency commercial mortgage-backed securities		9,029	87	(61)	9,055
		Non-agency commercial mortgage-backed securities		3,076	51	(15)	3,112
	Asset-backed securities and other debt securities			2,106	28	(18)	2,116
	Equity securities(b)			697	3	(2)	698
Total available-for-sale and other securities			$	31,024	350	(191)	31,183
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	24	-	-	24
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	26	-	-	26

• Includes interest-only mortgage-backed securities of $60 as of December 31, 2016, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.
• Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of$248, $358, and $1, respectively, at December 31, 2016, that are carried at cost, and certain mutual fund and equity security holdings.

The following table presents realized gains and losses that were recognized in income from available-for-sale securities:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Realized gains	$	9	15
Realized losses		(1)	(4)
OTTI		(10)	(3)
Net realized (losses) gains(a)	$	(2)	8

(a) Excludes net gains of $1 and net losses of $6 on interest-only mortgage-backed securities for the three months ended March 31, 2017 and 2016, respectively.

The following table provides a summary of OTTI by security type:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Available-for-sale and other debt securities	$	(10)	(2)
Available-for-sale equity securities		-	(1)
Total OTTI(a)	$	(10)	(3)

(a) Included in securities gains, net, in the Condensed Consolidated Statements of Income.

Trading securities were $689 million as of March 31, 2017, compared to $410 million at December 31, 2016. The following table presents total gains and losses that were recognized in income from trading securities:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Realized gains(a)	$	3	2
Realized losses(b)		(2)	(4)
Net unrealized gains(c)		1	1
Total trading securities gains (losses)	$	2	(1)

• Includes realized gains of $3 and $2 for the three months ended March 31, 2017and 2016,respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes realized losses of $2 and $4 for the three months ended March 31, 2017and 2016,respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes an immaterial amount of net unrealized gains for both the three months ended March 31, 2017and 2016 recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

At March 31, 2017 and December 31, 2016, securities with a fair value of $8.3billion and $10.1 billion, respectively, were pledged to secure borrowings, public deposits, trust funds, derivative contracts and for other purposes as required or permitted by law.

The expected maturity distribution of the Bancorp’s mortgage-backed securities and the contractual maturity distribution of the remainder of the Bancorp’s available-for-sale and other and held-to-maturity investment securities as of March 31, 2017 are shown in the following table:
			Available-for-Sale and Other		Held-to-Maturity
($ in millions)			Amortized Cost	Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
	Less than 1 year	$	187	189	2	2
	1-5 years		6,316	6,362	12	12
	5-10 years		21,358	21,481	10	10
	Over 10 years		2,789	2,800	2	2
Equity securities			698	699	-	-
Total		$	31,348	31,531	26	26

(a) Actual maturities may differ from contractual maturities when a right to call or prepay obligations exists with or without call or prepayment penalties.

The following table provides the fair value and gross unrealized losses on available-for-sale and other securities in an unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of:
		Less than 12 months		12 months or more		Total
			Unrealized		Unrealized		Unrealized
($ in millions)		Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
March 31, 2017
U.S. Treasury and federal agencies	$	101	-	-	-	101	-
Agency residential mortgage-backed securities		5,144	(82)	161	(8)	5,305	(90)
Agency commercial mortgage-backed securities		2,931	(63)	-	-	2,931	(63)
Non-agency commercial mortgage-backed securities		1,283	(16)	-	-	1,283	(16)
Asset-backed securities and other debt securities		322	(6)	364	(11)	686	(17)
Equity securities		-	-	37	(2)	37	(2)
Total	$	9,781	(167)	562	(21)	10,343	(188)
December 31, 2016
U.S. Treasury and federal agencies	$	199	-	-	-	199	-
Agency residential mortgage-backed securities		6,223	(88)	172	(7)	6,395	(95)
Agency commercial mortgage-backed securities		3,183	(61)	-	-	3,183	(61)
Non-agency commercial mortgage-backed securities		1,052	(15)	-	-	1,052	(15)
Asset-backed securities and other debt securities		422	(8)	336	(10)	758	(18)
Equity securities		-	-	37	(2)	37	(2)
Total	$	11,079	(172)	545	(19)	11,624	(191)

At both March 31, 2017 and December 31, 2016, an immaterial amount of unrealized losses in the available-for-sale and other securities portfolio were represented by non-rated securities.

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Loans and Leases

3 Months Ended

Mar. 31, 2017

Loans and Leases Receivable

Loans and Leases

5. Loans and Leases

The Bancorp diversifies its loan and lease portfolio by offering a variety of loan and lease products with various payment terms and rate structures. Lending activities are generally concentrated within those states in which the Bancorp has banking centers and are primarily located in the Midwestern and Southeastern regions of the U.S. The Bancorp’s commercial loan portfolio consists of lending to various industry types. Management periodically reviews the performance of its loan and lease products to evaluate whether they are performing within acceptable interest rate and credit risk levels and changes are made to underwriting policies and procedures as needed. The Bancorp maintains an allowance to absorb loan and lease losses inherent in the portfolio. For further information on credit quality and the ALLL, refer to Note 6.

The following table provides a summary of commercial loans and leases classified by primary purpose and consumer loans and leases classified based upon product or collateral as of:
			March 31,	December 31,
($ in millions)			2017	2016
Loans and leases held for sale:
	Commercial and industrial loans	$	2	60
	Commercial mortgage loans		7	5
	Commercial leases		1	-
	Residential mortgage loans		606	686
Total loans and leases held for sale		$	616	751
Portfolio loans and leases:
	Commercial and industrial loans	$	41,074	41,676
	Commercial mortgage loans		6,924	6,899
	Commercial construction loans		4,283	3,903
	Commercial leases		4,092	3,974
Total commercial loans and leases		$	56,373	56,452
	Residential mortgage loans	$	15,336	15,051
	Home equity		7,469	7,695
	Automobile loans		9,572	9,983
	Credit card		2,070	2,237
	Other consumer loans and leases		808	680
Total consumer loans and leases		$	35,255	35,646
Total portfolio loans and leases		$	91,628	92,098

Total portfolio loans and leases are recorded net of unearned income, which totaled $500 million as of March 31, 2017 and$503 million as of December 31, 2016. Additionally, portfolio loans and leases are recorded net of unamortized premiums and discounts, deferred direct loan origination fees and costs and fair value adjustments (associated with acquired loans or loans designated as fair value upon origination) which totaled a net premium of $249 million and $240 million as of March 31, 2017 and December 31, 2016, respectively.

The Bancorp’s FHLB and FRB advances are generally secured by loans. The Bancorp had loans of $13.2 billion and $13.1billion at March 31, 2017 and December 31, 2016, respectively, pledged at the FHLB, and loans of $39.5 billion and $40.0 billion at March 31, 2017 and December 31, 2016, respectively, pledged at the FRB.

The following table presents a summary of the total loans and leases owned by the Bancorp as of:
					90 Days Past Due
		Carrying Value			and Still Accruing
		March 31,	December 31,		March 31,	December 31,
($ in millions)		2017	2016		2017	2016
Commercial and industrial loans	$	41,076	41,736		3	4
Commercial mortgage loans		6,931	6,904		-	-
Commercial construction loans		4,283	3,903		-	-
Commercial leases		4,093	3,974		-	-
Residential mortgage loans		15,942	15,737		45	49
Home equity		7,469	7,695		-	-
Automobile loans		9,572	9,983		6	9
Credit card		2,070	2,237		21	22
Other consumer loans and leases		808	680		-	-
Total loans and leases	$	92,244	92,849		75	84
Less: Loans and leases held for sale	$	616	751
Total portfolio loans and leases	$	91,628	92,098
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)					2017	2016
Commercial and industrial loans				$	36	46
Commercial mortgage loans					5	6
Commercial leases					1	2
Residential mortgage loans					5	2
Home equity					6	8
Automobile loans					11	9
Credit card					22	20
Other consumer loans and leases					3	3
Total net charge-offs				$	89	96

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Credit Quality and the Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2017

Credit Quality and the Allowance for Loan and Leases Losses

Credit Quality and the Allowance for Loan and Lease Losses

6. Credit Quality and the Allowance for Loan and Lease Losses

The Bancorp disaggregates ALLL balances and transactions in the ALLL by portfolio segment. Credit quality related disclosures for loans and leases are further disaggregated by class.

Allowance for Loan and Lease Losses
The following tables summarize transactions in the ALLL by portfolio segment:
				Residential
For the three months ended March 31, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	831	96	214	112	1,253
	Losses charged-off		(46)	(6)	(55)	-	(107)
	Recoveries of losses previously charged-off		4	1	13	-	18
	Provision for loan and lease losses		37	5	32	-	74
Balance, end of period		$	826	96	204	112	1,238
				Residential
For the three months ended March 31, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	840	100	217	115	1,272
	Losses charged-off		(60)	(4)	(52)	-	(116)
	Recoveries of losses previously charged-off		6	2	12	-	20
	Provision for loan and lease losses		81	-	37	1	119
Balance, end of period		$	867	98	214	116	1,295

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
					Residential
As of March 31, 2017 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	113	(c)	68	42	-	223
	Collectively evaluated for impairment		713		28	162	-	903
	Unallocated		-		-	-	112	112
Total ALLL		$	826		96	204	112	1,238
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	786	(c)	656	354	-	1,796
	Collectively evaluated for impairment		55,587		14,537	19,565	-	89,689
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	56,373		15,195	19,919	-	91,487

• Includes $2 related to leveraged leases at March 31, 2017.
• Excludes $141of residential mortgage loans measured at fair value, and includes $703of leveraged leases, net of unearned income at March 31, 2017.
• Includes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26and an ALLL of $18.

					Residential
As of December 31, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	118	(c)	68	44	-	230
	Collectively evaluated for impairment		713		28	170	-	911
	Unallocated		-		-	-	112	112
Total ALLL		$	831		96	214	112	1,253
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	904	(c)	652	371	-	1,927
	Collectively evaluated for impairment		55,548		14,253	20,224	-	90,025
	Loans acquired with deteriorated credit quality		-		3	-	-	3
Total portfolio loans and leases		$	56,452		14,908	20,595	-	91,955

• Includes $2 related to leveraged leases at December 31, 2016.
• Excludes $143 of residential mortgage loans measured at fair value, and includes $701 of leveraged leases, net of unearned income at December 31, 2016.
• Includes five restructured loans at December 31, 2016associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26 and an ALLL of $18.

CREDIT RISK PROFILE

Commercial Portfolio Segment

For purposes of analyzing historical loss rates used in the determination of the ALLL and monitoring the credit quality and risk characteristics of its commercial portfolio segment, the Bancorp disaggregates the segment into the following classes: commercial and industrial, commercial mortgage owner-occupied, commercial mortgage nonowner-occupied, commercial construction and commercial leases.

To facilitate the monitoring of credit quality within the commercial portfolio segment, and for purposes of analyzing historical loss rates used in the determination of the ALLL for the commercial portfolio segment, the Bancorp utilizes the following categories of credit grades: pass, special mention, substandard, doubtful and loss. The five categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated at least annually based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter.

The Bancorp assigns a special mention rating to loans and leases that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan or lease or the Bancorp’s credit position. 

The Bancorp assigns a substandard rating to loans and leases that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans and leases have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans and leases in this grade also are characterized by the distinct possibility that the Bancorp will sustain some loss if the deficiencies noted are not addressed and corrected.

The Bancorp assigns a doubtful rating to loans and leases that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.

Loans and leases classified as loss are considered uncollectible and are charged-off in the period in which they are determined to be uncollectible. Because loans and leases in this category are fully charged-off, they are not included in the following tables.

The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:
			Special
As of March 31, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,187	1,255	1,630	2	41,074
Commercial mortgage owner-occupied loans		3,226	74	110	-	3,410
Commercial mortgage nonowner-occupied loans		3,429	25	60	-	3,514
Commercial construction loans		4,238	45	-	-	4,283
Commercial leases		4,007	56	29	-	4,092
Total commercial loans and leases	$	53,087	1,455	1,829	2	56,373

			Special
As of December 31, 2016 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,844	1,204	1,604	24	41,676
Commercial mortgage owner-occupied loans		3,168	72	117	3	3,360
Commercial mortgage nonowner-occupied loans		3,466	4	69	-	3,539
Commercial construction loans		3,902	1	-	-	3,903
Commercial leases		3,894	54	26	-	3,974
Total commercial loans and leases	$	53,274	1,335	1,816	27	56,452

Residential Mortgage and Consumer Portfolio Segments

For purposes of monitoring the credit quality and risk characteristics of its consumer portfolio segment, the Bancorp disaggregates the segment into the following classes: home equity, automobile loans, credit card and other consumer loans and leases. The Bancorp’s residential mortgage portfolio segment is also a separate class.

The Bancorp considers repayment performance as the best indicator of credit quality for residential mortgage and consumer loans, which includes both the delinquency status and performing versus nonperforming status of the loans. The delinquency status of all residential mortgage and consumer loans is presented by class in the age analysis section while the performing versus nonperforming status is presented in the following table.Refer to the nonaccrual loans and leases section of Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for additional delinquency and nonperforming information.

The following table presents a summary of the Bancorp’s residential mortgage and consumer portfolio segments, by class, disaggregated into performing versus nonperforming status as of:
		March 31, 2017		December 31, 2016
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,160	35	14,874	34
Home equity		7,399	70	7,622	73
Automobile loans		9,570	2	9,981	2
Credit card		2,043	27	2,209	28
Other consumer loans and leases		808	-	680	-
Total residential mortgage and consumer loans and leases(a)	$	34,980	134	35,366	137

(a) Excludes $141and $143 of loans measured at fair value at March 31, 2017 and December 31, 2016, respectively.

Age Analysis of Past Due Loans and Leases
The following tables summarize the Bancorp’s recorded investment in portfolio loans and leases, by age and class:
			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of March 31, 2017 ($ in millions)			Leases(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	40,930	46	98	144	41,074	3
	Commercial mortgage owner-occupied loans		3,388	3	19	22	3,410	-
	Commercial mortgage nonowner-occupied loans		3,506	1	7	8	3,514	-
	Commercial construction loans		4,283	-	-	-	4,283	-
	Commercial leases		4,090	-	2	2	4,092	-
Residential mortgage loans(a)(b)			15,087	27	81	108	15,195	45
Consumer loans and leases:
	Home equity		7,351	64	54	118	7,469	-
	Automobile loans		9,503	60	9	69	9,572	6
	Credit card		2,018	27	25	52	2,070	21
	Other consumer loans and leases		807	1	-	1	808	-
Total portfolio loans and leases(a)		$	90,963	229	295	524	91,487	75

• Excludes $141 of residential mortgage loans measured at fair value at March 31, 2017.
• Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2017, $77of these loans were 30-89 days past due and $302 were 90 days or more past due. The Bancorp recognized $2of lossesduring the three months ended March 31, 2017due to claim denials and curtailments associated with these insured or guaranteed loans.
• Includes accrual and nonaccrual loans and leases.

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2016 ($ in millions)			Leases(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,495	87	94	181	41,676	4
	Commercial mortgage owner-occupied loans		3,332	6	22	28	3,360	-
	Commercial mortgage nonowner-occupied loans		3,530	2	7	9	3,539	-
	Commercial construction loans		3,902	1	-	1	3,903	-
	Commercial leases		3,972	-	2	2	3,974	-
Residential mortgage loans(a)(b)			14,790	37	81	118	14,908	49
Consumer loans and leases:
	Home equity		7,570	68	57	125	7,695	-
	Automobile loans		9,886	85	12	97	9,983	9
	Credit card		2,183	28	26	54	2,237	22
	Other consumer loans and leases		679	1	-	1	680	-
Total portfolio loans and leases(a)		$	91,339	315	301	616	91,955	84

• Excludes $143 of residential mortgage loans measured at fair value at December 31, 2016.
• Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2016, $110of these loans were 30-89 days past due and $312 were 90 days or more past due. The Bancorp recognized $2 of losses during the three months ended March 31, 2016due to claim denials and curtailments associated with these insured or guaranteed loans.
• Includes accrual and nonaccrual loans and leases.

Impaired Portfolio Loans and Leases

Larger commercial loans and leases included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment. The Bancorp also performs an individual review on loans and leases that are restructured in a TDR. The Bancorp considers the current value of collateral, credit quality of any guarantees, the loan structure and other factors when evaluating whether an individual loan or lease is impaired. Other factors may include the geography and industry of the borrower, size and financial condition of the borrower, cash flow and leverage of the borrower, and the Bancorp’s evaluation of the borrower’s management. Smaller-balance homogenous loans or leases that are collectively evaluated for impairment are not included in the following tables.

The following tables summarize the Bancorp’s impaired portfolio loans and leases, by class, that were subject to individual review, which includes all portfolio loans and leases restructured in a TDR:
			Unpaid
			Principal	Recorded
As of March 31, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	449	392		86
	Commercial mortgage owner-occupied loans(b)		19	13		3
	Commercial mortgage nonowner-occupied loans		16	15		6
Restructured residential mortgage loans			472	468		68
Restructured consumer loans and leases:
	Home equity		192	191		29
	Automobile loans		11	11		1
	Credit card		49	49		12
Total impaired portfolio loans and leases with a related ALLL		$	1,208	1,139		205
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	264	242		-
	Commercial mortgage owner-occupied loans		28	22		-
	Commercial mortgage nonowner-occupied loans		74	74		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			209	188		-
Restructured consumer loans and leases:
	Home equity		104	101		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	684	631		-
Total impaired portfolio loans and leases		$	1,892	1,770	a(a)	205

• Includes $277, $642 and $308, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $251, $14 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017.
• Excludes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

			Unpaid
			Principal	Recorded
As of December 31, 2016 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	440	414		94
	Commercial mortgage owner-occupied loans(b)		24	16		5
	Commercial mortgage nonowner-occupied loans		7	6		1
	Commercial leases		2	2		-
Restructured residential mortgage loans			471	465		68
Restructured consumer loans and leases:
	Home equity		202	201		30
	Automobile loans		12	12		2
	Credit card		52	52		12
Total impaired portfolio loans and leases with a related ALLL		$	1,210	1,168		212
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	394	320		-
	Commercial mortgage owner-occupied loans		36	35		-
	Commercial mortgage nonowner-occupied loans		93	83		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			207	187		-
Restructured consumer loans and leases:
	Home equity		107	104		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	842	733		-
Total impaired portfolio loans and leases		$	2,052	1,901	a(a)	212

• Includes $322, $635 and $323, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $192, $17 and $48, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016.
• Excludes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

The following tables summarize the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:
			For the three months ended		For the three months ended
			March 31, 2017		March 31, 2016
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	683	1	645	2
	Commercial mortgage owner-occupied loans(a)		43	-	71	-
	Commercial mortgage nonowner-occupied loans		89	1	165	1
	Commercial construction loans		-	-	7	-
	Commercial leases		3	-	5	-
Restructured residential mortgage loans			654	6	642	6
Restructured consumer loans and leases:
	Home equity		298	3	340	3
	Automobile loans		14	-	19	-
	Credit card		51	1	60	1
Total average impaired portfolio loans and leases		$	1,835	12	1,954	13

(a) Excludes five restructured 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, with an average recorded investment of $26 and $27 at March 31, 2017 and March 31, 2016, respectively, and an immaterial amount of interest income recognized for the both the three months ended March 31, 2017and March 31, 2016.

Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases for which ultimate collectability of the full amount of the principal and/or interest is uncertain; restructured commercial and credit card loans which have not yet met the requirements to be classified as a performing asset; restructured consumer loans which are 90 days past due based on the restructured terms unless the loan is both well-secured and in the process of collection; and certain other assets, including OREO and other repossessed property. The following table presents the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of:
			March 31,	December 31,
($ in millions)			2017	2016
Commercial loans and leases:
	Commercial and industrial loans	$	484	478
	Commercial mortgage owner-occupied loans(a)		28	32
	Commercial mortgage nonowner-occupied loans		9	9
	Commercial leases		2	4
Total nonaccrual portfolio commercial loans and leases			523	523
Residential mortgage loans			35	34
Consumer loans and leases:
	Home equity		70	73
	Automobile loans		2	2
	Credit card		27	28
Total nonaccrual portfolio consumer loans and leases			99	103
Total nonaccrual portfolio loans and leases(b)(c)		$	657	660
OREO and other repossessed property			64	78	a
Total nonperforming portfolio assets(b)(c)		$	721	738

• Excludes $19 of restructured nonaccrual loans at both March 31, 2017 and December 31, 2016associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.
• Excludes $9and $13 of nonaccrual loans held for sale at March 31, 2017 and December 31, 2016, respectively.
• Includes $4of nonaccrual government insured commercial loans whose repayments are insured by the SBA at bothMarch 31, 2017 and December 31, 2016and an immaterial amount and $1 of restructured nonaccrual government insured commercial loans at March 31, 2017and December 31, 2016, respectively.

The Bancorp’s recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction was $273 million and $260 million as of March 31, 2017 and December 31, 2016, respectively.

Troubled Debt Restructurings

If a borrower is experiencing financial difficulty, the Bancorp may consider, in certain circumstances, modifying the terms of their loan to maximize collection of amounts due. Within each of the Bancorp’s loan classes, TDRs typically involve either a reduction of the stated interest rate of the loan, an extension of the loan’s maturity date with a stated rate lower than the current market rate for a new loan with similar risk, or in limited circumstances, a reduction of the principal balance of the loan or the loan’s accrued interest. Modifying the terms of a loan may result in an increase or decrease to the ALLL depending upon the terms modified, the method used to measure the ALLL for a loan prior to modification, and whether any charge-offs were recorded on the loan before or at the time of modification. Refer to the ALLL section of Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the Bancorp’s ALLL methodology. Upon modification of a loan, the Bancorp measures the related impairment as the difference between the estimated future cash flowsexpected to becollected on the modified loan, discounted at the original effective yield of the loan, and the carrying value of the loan. The resulting measurement may result in the need for minimal or no allowance because it is probable that all cash flows will be collected under the modified terms of the loan. In addition, if the stated interest rate was increased in a TDR, the cash flows on the modified loan, using the pre-modification interest rate as the discount rate, often exceed the recorded investment of the loan. Conversely, upon a modification that reduces the stated interest rate on a loan, the Bancorp recognizes an impairment loss as an increase to the ALLL. If a TDR involves a reduction of the principal balance of the loan or the loan’s accrued interest, that amount is charged off to the ALLL.

As of March 31, 2017, the Bancorp had $115 million and $56 million in line of credit and letter of credit commitments, respectively, compared to $82 million and $57 million in line of credit and letter of credit commitments as of December 31, 2016, respectively, to lend additional funds to borrowers whose terms have been modified in a TDR.

The following tables provide a summary of loans, by class, modified in a TDR by the Bancorp during the three months ended:
			Recorded investment
		Number of loans	in loans modified		Increase	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
March 31, 2017 ($ in millions)(a)		during the period(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	33	$	97	1	2
	Commercial mortgage owner-occupied loans	5		2	-	-
	Commercial mortgage nonowner-occupied loans	1		-	-	-
Residential mortgage loans		203		29	2	-
Consumer loans:
	Home equity	31		2	-	-
	Automobile loans	30		-	-	-
	Credit card	1,756		7	1	-
Total portfolio loans		2,059	$	137	4	2

• Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
• Represents number of loans post-modification and excludes loans previously modified in a TDR.

			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
March 31, 2016 ($ in millions)(a)		during the period(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	24	$	56	(2)	-
	Commercial mortgage owner-occupied loans	7		6	(2)	-
	Commercial mortgage nonowner-occupied loans	2		-	-	-
Residential mortgage loans		243		36	2	-
Consumer loans:
	Home equity	64		5	-	-
	Automobile loans	78		1	-	-
	Credit card	2,592		12	2	1
Total portfolio loans		3,010	$	116	-	1

• Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
• Represents number of loans post-modification and excludes loans previously modified in a TDR.

The Bancorp considers TDRs that become 90 days or more past due under the modified terms as subsequently defaulted. For commercial loans not subject to individual review for impairment, loss rates that are applied for purposes of determining the ALLL include historical losses associated with subsequent defaults on loans previously modified in a TDR. For consumer loans, the Bancorp performs a qualitative assessment of the adequacy of the consumer ALLL by comparing the consumer ALLL to forecasted consumer losses over the projected loss emergence period (the forecasted losses include the impact of subsequent defaults of consumer TDRs). When a residential mortgage, home equity, automobile or other consumer loan that has been modified in a TDR subsequently defaults, the present value of expected cash flows used in the measurement of the potential impairment loss is generally limited to the expected net proceeds from the sale of the loan’s underlying collateral and any resulting impairment loss is reflected as a charge-off or an increase in ALLL. The Bancorp recognizes ALLL for the entire balance of the credit card loans modified in a TDR that subsequently default.

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended March 31, 2017 and 2016 and were within twelve months of the restructuring date:
		Number of		Recorded
March 31, 2017 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	1
Residential mortgage loans		57		9
Consumer loans:
	Home equity	5		1
	Credit card	450		2
Total portfolio loans		514	$	13

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

		Number of		Recorded
March 31, 2016 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	-
	Commercial mortgage nonowner-occupied loans	1		-
Residential mortgage loans		53		7
Consumer loans:
	Home equity	6		1
	Credit card	423		2
Total portfolio loans		484	$	10

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

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Bank Premises and Equipment

3 Months Ended

Mar. 31, 2017

Bank Premises and Equipment

Bank Premises and Equipment

7. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:
($ in millions)		March 31, 2017	December 31, 2016
Land and improvements(a)	$	649	663
Buildings(a)		1,667	1,672
Equipment		1,773	1,761
Leasehold improvements		392	398
Construction in progress(a)		109	99
Bank premises and equipment held for sale:
Land and improvements		33	29
Buildings		16	9
Equipment		2	1
Accumulated depreciation and amortization		(2,589)	(2,567)
Total bank premises and equipment	$	2,052	2,065

(a) At both March 31, 2017 and December 31, 2016, land and improvements, buildings and construction in progress included $92associated with parcels of undeveloped land intended for future branch expansion.

The Bancorp monitors changing customer preferences associated with the channels it uses for banking transactions to evaluate the efficiency, competitiveness and quality of the customer service experience in its consumer distribution network. As part of this ongoing assessment, the Bancorp may determine that it is no longer fully committed to maintaining full-service branches at certain of its existing banking center locations. Similarly, the Bancorp may also determine that it is no longer fully committed to building banking centers on certain parcels of land which had previously been held for future branch expansion.

On June 16, 2015, the Bancorp’s Board of Directors authorized management to pursue a plan to further develop its distribution strategy, including a plan to consolidate and/or sell certain operating branch locations and certain parcels of undeveloped land that had been acquired by the Bancorp for future branch expansion (the “Branch Consolidation and Sales Plan”).In addition, the Bancorp announced on September 13, 2016 that it had identified an additional 44 branch locations and 5 parcels of undeveloped land that it planned to consolidate or sell.

As of March 31, 2017, the Bancorp had43 branch locations and 33 parcels of undeveloped land that had been acquired for future branch expansion that it intended to consolidate or sell. These branch locations and parcels of undeveloped land, which include unsold properties from the Branch Consolidation and Sales Plan as well as propertiesincluded in the September 13, 2016 announcement, represent $36 million, $16 million and $2 million of land and improvements, buildings and equipment, respectively, included in bank premises and equipment in the Condensed Consolidated Balance Sheets as of March 31, 2017, of which $33 million, $16 million and $2 million, respectively, were classified as held for sale.

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. Impairment losses associated with such assessments and lower of cost or market adjustments were $3 million and $2 million for the three months ended March 31, 2017 and 2016, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

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Operating Lease Equipment

3 Months Ended

Mar. 31, 2017

Operating Lease Equipment

Operating Lease Equipment

8. Operating Lease Equipment

The Bancorp performs assessments of the recoverability of long-livedassets when events or changes in circumstances indicate thattheir carrying values may not be recoverable. As a result of these recoverability assessments, the Bancorp recognized impairmentlosses associated with certain operating lease assets of $31 millionfor the three months ended March 31, 2017. The recognized impairment losses were recorded incorporate banking revenue in the Condensed Consolidated Statements ofIncome.

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Intangible Assets

3 Months Ended

Mar. 31, 2017

Intangible Assets

Intangible Assets

9. Intangible Assets

Intangible assets consist of core deposit intangibles, customer lists, non-compete agreements and rent intangibles. Intangible assetsare amortized on either a straight-line or an accelerated basis over their estimated useful lives.

The details of the Bancorp’s intangible assets are shown in the following table:
			Gross Carrying	Accumulated	Net Carrying
($ in millions)			Amount	Amortization	Amount
As of March 31, 2017
	Core deposit intangibles	$	34	(28)	6
	Other		18	(13)	5
Total intangible assets		$	52	(41)	11
As of December 31, 2016
	Core deposit intangibles	$	34	(27)	7
	Other		15	(13)	2
Total intangible assets		$	49	(40)	9

As of March 31, 2017, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was immaterial for both the three months ended March 31, 2017and2016. The Bancorp’s projections of amortization expense shown on the following table is based on existing balances as of March 31, 2017. Future amortization expense may vary from these projections.

Estimated amortization expense for the remainder of 2017 through 2021 is as follows:
($ in millions)		Total
Remainder of 2017	$	1
2018		2
2019		2
2020		1
2021		1

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VIE

3 Months Ended

Mar. 31, 2017

Variable Interest Entities

Variable Interest Entities

10. Variable Interest Entities

The Bancorp, in the normal course of business, engages in a variety of activities that involve VIEs, which are legal entities that lack sufficient equity at risk to finance their activities without additional subordinated financial support or the equity investors of the entities as a group lack any of the characteristics of a controlling interest. The Bancorp evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Bancorp is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that requires a reconsideration. If the Bancorp is determined to be the primary beneficiary of a VIE, it must account for the VIE as a consolidated subsidiary. If the Bancorp is determined not to be the primary beneficiary of a VIE but holds a variable interest in the entity, such variable interests are accounted for under the equity method of accounting or other accounting standards as appropriate.

Consolidated VIEs

The following tables provide a summary of the classifications of consolidated VIE assets, liabilities and noncontrolling interests included in the Condensed Consolidated Balance Sheets as of:
			Automobile Loan	CDC
March 31, 2017 ($ in millions)			Securitizations	Investments	Total
Assets:
	Cash and due from banks	$	84	1	85
	Commercial mortgage loans		-	46	46
	Automobile loans		969	-	969
	ALLL		(5)	(20)	(25)
	Other assets		7	-	7
Total assets		$	1,055	27	1,082
Liabilities:
	Other liabilities	$	2	-	2
	Long-term debt		883	-	883
Total liabilities		$	885	-	885
Noncontrolling interests		$	-	27	27

			Automobile Loan	CDC
December 31, 2016 ($ in millions)			Securitizations	Investments	Total
Assets:
	Cash and due from banks	$	84	1	85
	Commercial mortgage loans		-	46	46
	Automobile loans		1,170	-	1,170
	ALLL		(6)	(20)	(26)
	Other assets		9	-	9
Total assets		$	1,257	27	1,284
Liabilities
	Other liabilities	$	3	-	3
	Long-term debt		1,094	-	1,094
Total liabilities		$	1,097	-	1,097
Noncontrolling interests		$	-	27	27

Automobile loan securitizations

The Bancorp has previously completedsecuritization transactionsin which the Bancorp transferred an aggregate amount of $4.5 billion in consumer automobile loans to bankruptcy remote trusts which were deemed to be VIEs. The primary purposes of the VIEs were to issue asset-backed securities with varying levels of credit subordination and payment priority, as well as residual interests, and to provide the Bancorp with access to liquidity for its originated loans. The Bancorp retained residual interests in the VIEs and, therefore, has an obligation to absorb losses and a right to receive benefits from the VIEs that could potentially be significant to the VIEs. In addition, the Bancorp retained servicing rights for the underlying loans and, therefore, holds the power to direct the activities of the VIEs that most significantly impact the economic performance of the VIEs. As a result, the Bancorp concluded that it is the primary beneficiary of the VIEs and, therefore, has consolidated these VIEs. The assets of the VIEs are restricted to the settlement of the asset-backed securities and other obligations of the VIEs. Third-party holders of the notes do not have recourse to the general assets of the Bancorp.

The economic performance of the VIEs is most significantly impacted by the performance of the underlying loans. The principal risks to which the VIEs are exposed include credit risk and prepayment risk. The credit and prepayment risks are managed through credit enhancements in the form of reserve accounts, overcollateralization, excess interest on the loans and the subordination of certain classes of asset-backed securities to other classes.

CDC investments

CDC, a wholly-owned indirect subsidiary of the Bancorp, was created to invest in projects to create affordable housing, revitalize business and residential areas and preserve historic landmarks. CDC generally co-invests with other unrelated companies and/or individuals and typically makes investments in a separate legal entity that owns the property under development. The entities are usually formed as limited partnerships and LLCs and CDC typically invests as a limited partner/investor member in the form of equity contributions. The economic performance of the VIEs is driven by the performance of their underlying investment projects as well as the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. The Bancorp’s subsidiaries serve as the managing member of certain LLCs invested in business revitalization projects and have the right to make decisions that most significantly impact the economic performance of the LLCs. Additionally, the investor members do not own substantive kick-out rights or substantive participating rights over the managing member. The Bancorp has provided an indemnification guarantee to the investor member of these LLCs related to the qualification of tax credits generated by the investor members’ investment. Accordingly, the Bancorp concluded that it is the primary beneficiary and, therefore, has consolidated these VIEs. As a result, the investor members’ interests in these VIEs are presented as noncontrolling interests in the Condensed Consolidated Financial Statements. This presentation includes reporting separately the equity attributable to the noncontrolling interests in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Changes in Equity and reporting separately the comprehensive income attributable to the noncontrolling interests in the Condensed Consolidated Statements of Comprehensive Income and the net income attributable to the noncontrolling interests in the Condensed Consolidated Statements of Income. The Bancorp’s maximum exposure related to these indemnifications at March 31, 2017 and December 31, 2016 was $32 million and $31 million, respectively, which is based on an amount required to meet the investor member’s defined target rate of return.

Non-consolidated VIEs
The following tables provide a summary of assets and liabilities carried on the Condensed Consolidated Balance Sheets related to non-consolidated VIEs for which the Bancorp holds an interest, but is not the primary beneficiary of the VIE, as well as the Bancorp’s maximum exposure to losses associated with its interests in the entities as of:
		Total	Total	Maximum
March 31, 2017 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,424	362	1,424
Private equity investments		121	-	178
Loans provided to VIEs		1,744	-	2,762

		Total	Total	Maximum
December 31, 2016 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,421	357	1,421
Private equity investments		176	-	232
Loans provided to VIEs		1,735	-	2,672

CDC investments

As noted previously, CDC typically invests in VIEs as a limited partner or investor member in the form of equity contributions and has no substantive kick-out or substantive participating rights over the managing member. The Bancorp has determined that it is not the primary beneficiary of these VIEs because it lacks the power to direct the activities that most significantly impact the economic performance of the underlying project or the VIEs’ ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the managing members who exercise full and exclusive control of the operations of the VIEs. Accordingly, the Bancorp accounts for these investments under the equity method of accounting.

The Bancorp’s funding requirements are limited to its invested capital and any additional unfunded commitments for future equity contributions. The Bancorp’s maximum exposure to loss as a result of its involvement with the VIEs is limited to the carrying amounts of the investments, including the unfunded commitments. The carrying amounts of these investments, which are included in other assets in the Condensed Consolidated Balance Sheets, and the liabilities related to the unfunded commitments, which are included in other liabilities in the Condensed Consolidated Balance Sheets, are included in the previous tables for all periods presented. The Bancorp has no other liquidity arrangements or obligations to purchase assets of the VIEs that would expose the Bancorp to a loss. In certain arrangements, the general partner/managing member of the VIE has guaranteed a level of projected tax credits to be received by the limited partners/investor members, thereby minimizing a portion of the Bancorp’s risk.

Atboth March 31, 2017 and December 31, 2016, the Bancorp’s CDC investments included $1.3 billion of investments in affordable housing tax credits recognized in other assets in the Condensed Consolidated Balance Sheets.The unfunded commitments related to these investments were $356 million and $349 million atMarch 31, 2017 and December 31, 2016, respectively. The unfunded commitments as of March 31, 2017 are expected to be funded from 2017 to 2034.

The Bancorp has accounted for all of its investments in qualified affordable housing tax credits using the equity method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income relating to investments in qualified affordable housing investments:
	Condensed Consolidated		For the three months ended March 31,
($ in millions)	Statements of Income Caption		2017	2016
Pre-tax investment and impairment losses(a)	Other noninterest expense	$	36	36
Tax credits and other benefits	Applicable income tax expense		(56)	(55)

(a) The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three months ended March 31, 2017 and 2016.

Private equity investments

The Bancorp, through Fifth Third Capital Holdings, a wholly-owned indirect subsidiary of the Bancorp, invests as a limited partner in private equity investments which provide the Bancorp an opportunity to obtain higher rates of return on invested capital, while also creating cross-selling opportunities for the Bancorp’s commercial products. Each of the limited partnerships has an unrelated third-party general partner responsible for appointing the fund manager. The Bancorp has not been appointed fund manager for any of these private equity investments. The funds finance primarily all of their activities from the partners’ capital contributions and investment returns. The Bancorp has determined that it is not the primary beneficiary of the funds because it does not have the obligation to absorb the funds’ expected losses or the right to receive the funds’ expected residual returns that could potentially be significant to the funds and lacks the power to direct the activities that most significantly impact the economic performance of the funds. The Bancorp, as a limited partner, does not have substantive participating or substantive kick-out rights over the general partner. Therefore, the Bancorp accounts for its investments in these limited partnerships under the equity method of accounting.

The Bancorp is exposed to losses arising from the negative performance of the underlying investments in the private equity investments. As a limited partner, the Bancorp’s maximum exposure to loss is limited to the carrying amounts of the investments plus unfunded commitments. The carrying amounts of these investments, which are included in other assets in the Condensed Consolidated Balance Sheets, are included in the previous tables. Also, atMarch 31, 2017 and December 31, 2016, the unfunded commitment amounts to the funds were $57 million and $56 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $6 million and $2million during the three months ended March 31, 2017 and 2016, respectively.The Bancorp did not recognize OTTI on its investments in private equity funds during both the three months ended March 31, 2017 and 2016. Refer to Note 19 for further information.

Loans provided to VIEs

The Bancorp has provided funding to certain unconsolidated VIEs sponsored by third parties. These VIEs are generally established to finance certain consumer and small business loans originated by third parties. The entities are primarily funded through the issuance of a loan from the Bancorp or a syndication through which the Bancorp is involved. The sponsor/administrator of the entities is responsible for servicing the underlying assets in the VIEs. Because the sponsor/administrator, not the Bancorp, holds the servicing responsibilities, which include the establishment and employment of default mitigation policies and procedures, the Bancorp does not hold the power to direct the activities that most significantly impact the economic performance of the entity and, therefore, is not the primary beneficiary.

The principal risk to which these entities are exposed is credit risk related to the underlying assets. The Bancorp’s maximum exposure to loss is equal to the carrying amounts of the loans and unfunded commitments to the VIEs. The Bancorp’s outstanding loans to these VIEs are included in commercial loans in Note 5. As of March 31, 2017 and December 31, 2016, the Bancorp’s unfunded commitments to these entities were $1.0billion and $937 million, respectively. The loans and unfunded commitments to these VIEs are included in the Bancorp’s overall analysis of the ALLL and reserve for unfunded commitments, respectively. The Bancorp does not provide any implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.

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Sales of Receivables and Servicing Rights

3 Months Ended

Mar. 31, 2017

Sales of Receivables and Servicing Rights

Sales of Receivables and Servicing Rights

11. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during the three months ended March 31, 2017 and 2016. In those sales, the Bancorp obtained servicing responsibilities and provided certain standard representations and warranties, however the investors have no recourse to the Bancorp’s other assets for failure of debtors to pay when due. The Bancorp receives annual servicing fees based on a percentage of the outstanding balance. The Bancorp identifies classes of servicing assets based on financial asset type and interest rates.

Information related to residential mortgage loan sales and the Bancorp’s mortgage banking activity, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income, is as follows:
		For the three months ended
		March 31,
($ in millions)		2017		2016
Residential mortgage loan sales(a)	$	1,629	a	1,114
Origination fees and gains on loan sales		29		42
Gross mortgage servicing fees		47		52

Represents the unpaid principal balance at the time of the sale.

Servicing Rights

Effective January 1, 2017, the Bancorp elected to prospectively adopt the fair value method for all classes of its residential mortgage servicing rights portfolio. Upon this election, all servicing rights are measured at fair value at each reporting date and changes in the fair value of servicing rights are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income in the period in which the changes occur. The election of the fair value method did not require a cumulative effect adjustment to retained earnings as there was no difference between the carrying value of the servicing rights, net of valuation allowance, and the fair value.

Prior to the election of the fair value method, servicing rights were initially recorded at fair value and subsequently amortized in proportion to, and over the period of, estimated net servicing revenue. Servicing rights were assessed for impairment monthly, based on fair value, with temporary impairment recognized through a valuation allowance.

The following tables present changes in the servicing rights related to residential mortgage and automobile loans for the three months ended March 31:
($ in millions)		2017
Balance, beginning of period	$	744
Servicing rights originated - residential mortgage loans		26
Servicing rights acquired - residential mortgage loans		29
Changes in fair value:
Due to changes in inputs or assumptions(a)		4
Other changes in fair value(b)		(27)
Balance, end of period	$	776

• Primarily reflects changes in prepayment speed and OAS spread assumptions which are updated based on market interest rates.
• Primarily reflects changes due to collection of contractual cash flows and the passage of time.

($ in millions)		2016
Carrying amount before valuation allowance:
Balance, beginning of period	$	1,204
Servicing rights that result from the transfer of residential mortgage loans		12
Amortization		(27)
Balance, end of period	$	1,189
Valuation allowance for servicing rights:
Balance, beginning of period	$	(419)
Provision for MSR impairment		(85)
Balance, end of period		(504)
Carrying amount after valuation allowance	$	685

For the three months ended March 31, 2016, temporary impairment, effected through a change in the MSR valuation allowance, was captured as a component of mortgage banking net revenue in the Condensed Consolidated Statements of Income. Amortization recognized on servicing rights for the three months ended March 31, 2016 was $27 million.

The Bancorp maintains a non-qualifying hedging strategy to manage a portion of the risk associated with changes in the value of the MSR portfolio. This strategy includes the purchase of free-standing derivatives and various available-for-sale and trading securities. The interest income, mark-to-market adjustments and gain or loss from sale activities associated with these portfolios are expected to economically hedge a portion of the change in value of the MSR portfolio caused by fluctuating OAS spreads, earnings rates and prepayment speeds. The fair value of the servicing asset is based on the present value of expected future cash flows.

The following table displays the beginning and ending fair value of the servicing rights for the three months ended March 31:
($ in millions)		2017	2016
Fixed-rate residential mortgage loans:
Balance, beginning of period	$	722	757
Balance, end of period		756	660
Adjustable-rate residential mortgage loans:
Balance, beginning of period		22	27
Balance, end of period		20	25
Fixed-rate automobile loans:
Balance, beginning of period		-	1
Balance, end of period		-	-

The following table presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio	$	(1)	96
MSR fair value adjustment		(23)	-
Provision for MSR impairment		-	(85)

As of March 31, 2017 and 2016, the key economic assumptions used in measuring the interests in residential mortgage loans that continued to be held by the Bancorp at the date of sale or securitization resulting from transactions completed during the three months ended were as follows:
		March 31, 2017				March 31, 2016
	Rate	Weighted-Average Life (in years)	Prepayment Speed (annual)		OAS Spread (bps)	Weighted-Average Life (in years)	Prepayment Speed (annual)		OAS Spread (bps)
Residential mortgage loans:
Servicing rights	Fixed	6.7	9.9	%	485	6.3	12.6	%	539
Servicing rights	Adjustable	2.3	34.9		700	3.0	27.5		681

Based on historical credit experience, expected credit losses for residential mortgage loan servicing rights have been deemed immaterial, as the Bancorp sold the majority of the underlying loans without recourse. At March 31, 2017 and December 31, 2016, the Bancorp serviced $55.4 billion and $53.6 billion, respectively, of residential mortgage loans for other investors. The value of MSRs that continue to be held by the Bancorp is subject to credit, prepayment and interest rate risks on the sold financial assets.

At March 31, 2017, the sensitivity of the current fair value of residual cash flows to immediate 10%, 20% and 50% adverse changes in prepayment speed assumptions and immediate 10% and 20% adverse changes in other assumptions are as follows:
					Prepayment						Residual Servicing
					Speed Assumption						Cash Flows
			Fair	Weighted-Average Life				Impact of Adverse Change on Fair Value			OASSpread		Impact of Adverse Change on Fair Value
($ in millions)(a)	Rate		Value	(in years)	Rate			10%	20%	50%	(bps)		10%	20%
Residential mortgage loans:
Servicing rights	Fixed	$	756	6.0	11.2	%	$	(33)	(63)	(143)	528	$	(15)	(30)
Servicing rights	Adjustable		20	3.3	25.2			(1)	(3)	(6)	757		-	(1)

(a) The impact of the weighted-average default rate on the current fair value of residual cash flows for all scenarios is immaterial.

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on these variations in the assumptions typically cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. The Bancorp believes variations of these levels are reasonably possible; however, there is the potential that adverse changes in key assumptions could be even greater. Also, in the previous table, the effect of a variation in a particular assumption on the fair value of the interests that continue to be held by the Bancorp is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which might magnify or counteract these sensitivities.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Financial Instruments

Derivative Financial Instruments

12. Derivative Financial Instruments

The Bancorp maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce certain risks related to interest rate, prepayment and foreign currency volatility. Additionally, the Bancorp holds derivative instruments for the benefit of its commercial customers and for other business purposes. The Bancorp does not enter into unhedged speculative derivative positions.

The Bancorp’s interest rate risk management strategy involves modifying the repricing characteristics of certain financial instruments so that changes in interest rates do not adversely affect the Bancorp’s net interest margin and cash flows. Derivative instruments that the Bancorp may use as part of its interest rate risk management strategy include interest rate swaps, interest rate floors, interest rate caps, forward contracts, forward starting interest rate swaps, options and swaptions. Interest rate swap contracts are exchanges of interest payments, such as fixed-rate payments for floating-rate payments, based on a stated notional amount and maturity date. Interest rate floors protect against declining rates, while interest rate caps protect against rising interest rates. Forward contracts are contracts in which the buyer agrees to purchase, and the seller agrees to make delivery of, a specific financial instrument at a predetermined price or yield. Options provide the purchaser with the right, but not the obligation, to purchase or sell a contracted item during a specified period at an agreed upon price. Swaptions are financial instruments granting the owner the right, but not the obligation, to enter into or cancel a swap.

Prepayment volatility arises mostly from changes in fair value of the largely fixed-rate MSR portfolio, mortgage loans and mortgage-backed securities. The Bancorp may enter into various free-standing derivatives (principal-only swaps, interest rate swaptions, interest rate floors, mortgage options, TBAs and interest rate swaps) to economically hedge prepayment volatility. Principal-only swaps are total return swaps based on changes in the value of the underlying mortgage principal-only trust. TBAs are a forward purchase agreement for a mortgage-backed securities trade whereby the terms of the security are undefined at the time the trade is made.

Foreign currency volatility occurs as the Bancorp enters into certain loans denominated in foreign currencies. Derivative instruments that the Bancorp may use to economically hedge these foreign denominated loans include foreign exchange swaps and forward contracts.

The Bancorp also enters into derivative contracts (including foreign exchange contracts, commodity contracts and interest rate contracts) for the benefit of commercial customers and other business purposes. The Bancorp economically hedges significant exposures related to these free-standing derivatives by entering into offsetting third-party contracts with approved, reputable and independent counterparties with substantially matching terms and currencies. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Bancorp’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. Credit risk is minimized through credit approvals, limits, counterparty collateral and monitoring procedures.

The Bancorp’s derivative assets include certain contractual features in which the Bancorp requires the counterparties to provide collateral in the form of cash and securities to offset changes in the fair value of the derivatives, including changes in the fair value due to credit risk of the counterparty. As of March 31, 2017 and December 31, 2016, the balance of collateral held by the Bancorp for derivative assets was $414 million and $444 million, respectively. For derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlement of the derivative contract, the payments for variation margin of $32 million were applied to reduce the respective derivative contracts and were also not included in the total amount of collateral held as of March 31, 2017. The credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts as of March 31, 2017 and December 31, 2016was $4 million and $6 million, respectively.

In measuring the fair value of derivative liabilities, the Bancorp considers its own credit risk, taking into consideration collateral maintenance requirements of certain derivative counterparties and the duration of instruments with counterparties that do not require collateral maintenance. When necessary, the Bancorp posts collateral primarily in the form of cash and securities to offset changes in fair value of the derivatives, including changes in fair value due to the Bancorp’s credit risk. As of March 31, 2017 and December 31, 2016, the balance of collateral posted by the Bancorp for derivative liabilities was $320 million and $399 million, respectively, and $49 million of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities as of March 31, 2017 and were also not included in the total amount of collateral posted. Certain of the Bancorp’s derivative liabilities contain credit-risk related contingent features that could result in the requirement to post additional collateral upon the occurrence of specified events. As of March 31, 2017 and December 31, 2016, the fair value of the additional collateral that could be required to be posted as a result of the credit-risk related contingent features being triggered was immaterial to the Condensed Consolidated Financial Statements.The posting of collateral has been determined to remove the need forfurther consideration of credit risk. As a result, the Bancorp determined that the impact of the Bancorp’s credit risk to the valuation of its derivative liabilities was immaterial to the Condensed Consolidated Financial Statements.

The Bancorp holds certain derivative instruments that qualify for hedge accounting treatment and are designated as either fair value hedges or cash flow hedges. Derivative instruments that do not qualify for hedge accounting treatment, or for which hedge accounting is not established, are held as free-standing derivatives. All customer accommodation derivatives are held as free-standing derivatives.

The fair value of derivative instruments is presented on a gross basis, even when the derivative instruments are subject to master netting arrangements. Derivative instruments with a positive fair value are reported in other assets in the Condensed Consolidated Balance Sheets while derivative instruments with a negative fair value are reported in other liabilities in the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative instruments are not added to or netted against the fair value amounts with the exception of certain variation margin payments that are considered legal settlements of the derivative contracts. For derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlements, the variation margin payments are applied to net the fair value of the respective derivative contracts.

The following tables reflect the notional amounts and fair values for all derivative instruments included in the Condensed Consolidated Balance Sheets as of:
				Fair Value
		Notional		Derivative	Derivative
March 31, 2017 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	2,955		305	-
Total fair value hedges				305	-
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		-	18
Total cash flow hedges				-	18
Total derivatives designated as qualifying hedging instruments				305	18
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,602		129	22
Forward contracts related to residential mortgage loans held for sale		1,630		1	5
Swap associated with the sale of Visa, Inc. Class B Shares		1,481		-	97
Foreign exchange contracts		110		-	-
Total free-standing derivatives - risk management and other business purposes				130	124
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers		35,882		190	144
Interest rate lock commitments		780		16	-
Commodity contracts		2,145		79	80
TBAs		36		-	-
Foreign exchange contracts		10,024		126	123
Total free-standing derivatives - customer accommodation				411	347
Total derivatives not designated as qualifying hedging instruments				541	471
Total			$	846	489

				Fair Value
		Notional		Derivative	Derivative
December 31, 2016 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,455		323	12
Total fair value hedges				323	12
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		22	-
Total cash flow hedges				22	-
Total derivatives designated as qualifying hedging instruments				345	12
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,522		165	39
Forward contracts related to residential mortgage loans held for sale		1,823		20	3
Swap associated with the sale of Visa, Inc. Class B Shares		1,300		-	91
Foreign exchange contracts		111		-	-
Total free-standing derivatives - risk management and other business purposes				185	133
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers		33,431		205	210
Interest rate lock commitments		701		13	1
Commodity contracts		2,095		107	106
Foreign exchange contracts		11,013		202	204
Total free-standing derivatives - customer accommodation				527	521
Total derivatives not designated as qualifying hedging instruments				712	654
Total			$	1,057	666

Fair Value Hedges

The Bancorp may enter into interest rate swaps to convert its fixed-rate funding to floating-rate. Decisions to convert fixed-rate funding to floating are made primarily through consideration of the asset/liability mix of the Bancorp, the desired asset/liability sensitivity and interest rate levels. For all interest rate swaps as of March 31, 2017, an assessment of hedge effectiveness using regression analysis was performed and such swaps were accounted for using the “long-haul” method. The long-haul method requires a quarterly assessment of hedge effectiveness and measurement of ineffectiveness. For interest rate swaps accounted for as a fair value hedge using the long-haul method, ineffectiveness is the difference between the changes in the fair value of the interest rate swap and changes in fair value of the related hedged item attributable to the risk being hedged. The ineffectiveness on interest rate swaps hedging fixed-rate funding is reported within interest expense in the Condensed Consolidated Statements of Income.

The following table reflects the change in fair value of interest rate contracts, designated as fair value hedges, as well as the change in fair value of the related hedged items attributable to the risk being hedged, included in the Condensed Consolidated Statements of Income:
	Condensed Consolidated		For the three months
	Statements of		ended March 31,
($ in millions)	Income Caption		2017	2016
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	(21)	83
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		21	(85)

Cash Flow Hedges

The Bancorp may enter into interest rate swaps to convert floating-rate assets and liabilities to fixed rates or to hedge certain forecasted transactions. The assets or liabilities may be grouped in circumstances where they share the same risk exposure that the Bancorp desires to hedge. The Bancorp may also enter into interest rate caps and floors to limit cash flow variability of floating-rate assets and liabilities. As of March 31, 2017, all hedges designated as cash flow hedges were assessed for effectiveness using regression analysis. Ineffectiveness is generally measured as the amount by which the cumulative change in the fair value of the hedging instrument exceeds the present value of the cumulative change in the hedged item’s expected cash flows attributable to the risk being hedged. Ineffectiveness is reported within other noninterest income in the Condensed Consolidated Statements of Income. The effective portion of the cumulative gains or losses on cash flow hedges are reported within AOCI and are reclassified from AOCI to current period earnings when the forecasted transaction affects earnings. As of March 31, 2017, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 33 months.

Reclassified gains and losses on interest rate contracts related to commercial and industrial loans are recorded withininterest income in the Condensed Consolidated Statements of Income. As of March 31, 2017 and December 31, 2016, $2 million and $10 million, respectively, of net deferred gains, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of March 31, 2017, $8 million in net deferred gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to March 31, 2017.

During boththethreemonths ended March 31, 2017 and 2016, there were no gains or losses reclassified from AOCI into earnings associated with the discontinuance of cash flow hedges because it was probable that the original forecasted transaction would no longer occur by the end of the originally specified time period or within the additional period of time as defined by U.S. GAAP.

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Amount of pretax net (losses) gains recognized in OCI	$	(5)	74
Amount of pretax net gains reclassified from OCI into net income		8	14

Free-Standing Derivative Instruments – Risk Management and Other Business Purposes

As part of its overall risk management strategy relative to its mortgage banking activity, the Bancorp may enter into various free-standing derivatives (principal-only swaps, interest rate swaptions, interest rate floors, mortgage options, TBAs and interest rate swaps) to economically hedge changes in fair value of its largely fixed-rate MSR portfolio. Principal-only swaps hedge the mortgage-LIBOR spread because these swaps appreciate in value as a result of tightening spreads. Principal-only swaps also provide prepayment protection by increasing in value when prepayment speeds increase, as opposed to MSRs that lose value in a faster prepayment environment. Receive fixed/pay floating interest rate swaps and swaptions increase in value when interest rates do not increase as quickly as expected.

The Bancorp enters into forward contracts and mortgage options to economically hedge the change in fair value of certain residential mortgage loans held for sale due to changes in interest rates. IRLCs issued on residential mortgage loan commitments that will be held for sale are also considered free-standing derivative instruments and the interest rate exposure on these commitments is economically hedged primarily with forward contracts. Revaluation gains and losses from free-standing derivatives related to mortgage banking activity are recorded as a component of mortgage banking net revenue in the Condensed Consolidated Statements of Income.

In conjunction with the initial sale of the Bancorp’s 51% interest in Vantiv Holding, LLC, the Bancorp received a warrantwhich is accounted for as a free-standing derivative. Refer to Note 19 for further discussion of significant inputs and assumptions used in the valuation of the warrant. During the year ended December 31, 2015, the Bancorp both sold and exercised part of the warrant. During the year ended December 31, 2016, the Bancorp exercised the remaining portion of the warrant.

In conjunction with the sale of Visa, Inc. Class B Shares in 2009, the Bancorp entered into a total return swap in which the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Class B Shares into Class A Shares. This total return swap is accounted for as a free-standing derivative. Refer to Note 19 for further discussion of significant inputs and assumptions used in the valuation of this instrument.

The net (losses) gains recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for risk management and other business purposes are summarized in the following table:
	Condensed Consolidated		For the three months
	Statements of		ended March 31,
($ in millions)	Income Caption		2017	2016
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale	Mortgage banking net revenue	$	(21)	(11)
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		(1)	96
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		(1)	(4)
Equity contracts:
Stock warrant associated with Vantiv Holding, LLC	Other noninterest income		-	47
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(13)	1

Free-Standing Derivative Instruments – Customer Accommodation

The majority of the free-standing derivative instruments the Bancorp enters into are for the benefit of its commercial customers. These derivative contracts are not designated against specific assets or liabilities on the Condensed Consolidated Balance Sheets or to forecasted transactions; and therefore, do not qualify for hedge accounting. These instruments include foreign exchange derivative contracts entered into for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations and commodity contracts to hedge such items as natural gas and various other derivative contracts. The Bancorp may economically hedge significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. The Bancorp hedges its interest rate exposure on commercial customer transactions by executing offsetting swap agreements with primary dealers. Revaluation gains and losses on interest rate, foreign exchange, commodity and other commercial customer derivative contracts are recorded as a component of corporate banking revenue in the Condensed Consolidated Statements of Income.

The Bancorp enters into risk participation agreements, under which the Bancorp assumes credit exposure relating to certain underlying interest rate derivative contracts. The Bancorp only enters into these risk participation agreements in instances in which the Bancorp has participated in the loan that the underlying interest rate derivative contract was designed to hedge. The Bancorp will make payments under these agreements if a customer defaults on its obligation to perform under the terms of the underlying interest rate derivative contract. As of March 31, 2017 and December 31, 2016, the total notional amount of the risk participation agreements was $2.6 billion and $2.5 billion, respectively, and the fair value was a liability of $5 million and $4 million at March 31, 2017 andDecember 31, 2016, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of March 31, 2017, the risk participation agreements had a weighted-average remaining life of 3.0 years.

The Bancorp’s maximum exposure in the risk participation agreements is contingent on the fair value of the underlying interest rate derivative contracts in an asset position at the time of default. The Bancorp monitors the credit risk associated with the underlying customers in the risk participation agreements through the same risk grading system currently utilized for establishing loss reserves in its loan and lease portfolio.

Risk ratings of the notional amount of risk participation agreements under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	2,604	2,447
Special mention		8	14
Substandard		11	6
Total	$	2,623	2,467

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:
			For the three months
	Condensed Consolidated		ended March 31,
($ in millions)	Statements of Income Caption		2017	2016
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	5	7
Interest rate contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		-	(1)
Interest rate lock commitments	Mortgage banking net revenue		22	42
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		1	1
Commodity contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	(1)
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)	Corporate banking revenue		13	16
Foreign exchange contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	(2)

Offsetting Derivative Financial Instruments

The Bancorp’s derivative transactions are generally governed by ISDA Master Agreements and similar arrangements, which include provisions governing the setoff of assets and liabilities between the parties. When the Bancorp has more than one outstanding derivative transaction with a single counterparty, the setoff provisions contained within these agreements generally allow the non-defaulting party the right to reduce its liability to the defaulting party by amounts eligible for setoff, including the collateral received as well as eligible offsetting transactions with that counterparty, irrespective of the currency, place of payment, or booking office. The Bancorp’s policy is to present its derivative assets and derivative liabilities on the Condensed Consolidated Balance Sheets on a gross basis, even when provisions allowing for setoff are in place. However, for derivative contracts cleared through certain central clearing parties who have modified their rules to treat variation margin payments as settlements, the fair value of the respective derivative contracts are reported net of the variation margin payments.

Collateral amounts included in the tables below consist primarily of cash and highly-rated government-backed securities and as of March 31, 2017 do not include variation margin payments for derivative contracts with legal rights of setoff.

The following tables provide a summary of offsetting derivative financial instruments:
	Gross Amount		Gross Amounts Not Offset in the
	Recognized in the		Condensed Consolidated Balance Sheets
	Condensed Consolidated
As of March 31, 2017 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	830	(225)	(345)		260
Total assets		830	(225)	(345)		260
Liabilities:
Derivatives		489	(225)	(115)		149
Total liabilities	$	489	(225)	(115)		149

• Amount does not include IRLCs because these instruments are not subject to master netting or similar arrangements.
• Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

	Gross Amount		Gross Amounts Not Offset in the
	Recognized in the		Condensed Consolidated Balance Sheets
	Condensed Consolidated
As of December 31, 2016 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	1,044	(374)	(377)		293
Total assets		1,044	(374)	(377)		293
Liabilities:
Derivatives		665	(374)	(125)		166
Total liabilities	$	665	(374)	(125)		166

• Amount does not include the stock warrant associated with Vantiv Holding, LLC andIRLCs because these instruments are not subject to master netting or similar arrangements.
• Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

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Other Short Term Borrowings

3 Months Ended

Mar. 31, 2017

Other Short Term Borrowings

Other Short Term Borrowings

13. Other Short-Term Borrowings

Borrowings with original maturities of one year or less are classified as short-term. The following table presents a summary of the Bancorp's other short-term borrowings as of:
		March 31,	December 31,
($ in millions)		2017	2016
FHLB advances	$	950	2,500
Securities sold under repurchase agreements		684	661
Derivative collateral		381	374
Total other short-term borrowings	$	2,015	3,535

The Bancorp’s securities sold under repurchase agreements are accounted for as secured borrowings and are collateralized by securities included in available-for-sale and other securities in the Condensed Consolidated Balance Sheets. These securities are subject to changes in market value and, therefore, the Bancorp may increase or decrease the level of securities pledged as collateral based upon these movements in market value.

The following table summarizes the Bancorp's securities sold under repurchase agreements by the type of collateral securing the borrowing and remaining contractual maturity as of:
($ in millions)			March 31, 2017		December 31, 2016
			Amount	Remaining Contractual Maturity	Amount	Remaining Contractual Maturity
Type of collateral:
	Agency residential mortgage-backed securities	$	684	Overnight	661	Overnight
	U.S. Treasury and federal agencies securities		-	Overnight	-	Overnight
Total securities sold under repurchase agreements		$	684		661

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Commitments, Contingent Liabilities and Guarantees

3 Months Ended

Mar. 31, 2017

Commitments, Contingent Liabilities and Guarantees

Commitments, Contingent Liabilities and Guarantees

14. Commitments, Contingent Liabilities and Guarantees

The Bancorp, in the normal course of business, enters into financial instruments and various agreements to meet the financing needs of its customers. The Bancorp also enters into certain transactions and agreements to manage its interest rate and prepayment risks, provide funding, equipment and locations for its operations and invest in its communities. These instruments and agreements involve, to varying degrees, elements of credit risk, counterparty risk and market risk in excess of the amounts recognized in the Condensed Consolidated Balance Sheets. The creditworthiness of counterparties for all instruments and agreements is evaluated on a case-by-case basis in accordance with the Bancorp’s credit policies. The Bancorp’s significant commitments, contingent liabilities and guarantees in excess of the amounts recognized in the Condensed Consolidated Balance Sheets are discussed in the following sections.

Commitments
The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of:
		March 31,	December 31,
($ in millions)		2017	2016
Commitments to extend credit	$	66,980	67,909
Letters of credit		2,525	2,583
Forward contracts related to residential mortgage loans held for sale		1,630	1,823
Noncancelable operating lease obligations		575	576
Purchase obligations		120	57
Capital commitments for private equity investments		57	59
Capital expenditures		49	29
Capital lease obligations		18	19

Commitments to extend credit

Commitments to extend credit are agreements to lend, typically having fixed expiration dates or other termination clauses that may require payment of a fee. Since many of the commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. The Bancorp is exposed to credit risk in the event of nonperformance by the counterparty for the amount of the contract. Fixed-rate commitments are also subject to market risk resulting from fluctuations in interest rates and the Bancorp’s exposure is limited to the replacement value of those commitments. As of March 31, 2017 and December 31, 2016, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $159 million and $161 million, respectively, included in other liabilities in the Condensed Consolidated Balance Sheets. The Bancorp monitors the credit risk associated with commitments to extend credit using the same risk rating system utilized within its loan and lease portfolio.

Risk ratings under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	65,821	66,802
Special mention		404	338
Substandard		743	753
Doubtful		12	16
Total commitments to extend credit	$	66,980	67,909

Letters of credit

Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party and expire as summarized in the following table as of March 31, 2017:
($ in millions)
Less than 1 year(a)	$	1,405
1 - 5 years(a)		1,095
Over 5 years		25
Total letters of credit	$	2,525

(a) Includes $17 and $5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 year and between 1 - 5 years, respectively.

Standby letters of credit accounted for 99% of total letters of credit at both March 31, 2017 and December 31, 2016, and are considered guarantees in accordance with U.S. GAAP. Approximately 62% of the total standby letters of credit were collateralized as of bothMarch 31, 2017 and December 31, 2016. In the event of nonperformance by the customers, the Bancorp has rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and marketable securities. The reserve related to these standby letters of credit, which was included in the total reserve for unfunded commitments, was $4 million and $3 million at March 31, 2017 and December 31, 2016, respectively. The Bancorp monitors the credit risk associated with letters of credit using the same risk rating system utilized within its loan and lease portfolio.

Risk ratings under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	2,100	2,134
Special mention		79	98
Substandard		282	290
Doubtful		64	61
Total letters of credit	$	2,525	2,583

At March 31, 2017 and December 31, 2016, the Bancorp had outstanding letters of credit that were supporting certain securities issued as VRDNs. The Bancorp facilitates financing for its commercial customers, which consist of companies and municipalities, by marketing the VRDNs to investors. The VRDNs pay interest to holders at a rate of interest that fluctuates based upon market demand. The VRDNs generally have long-term maturity dates, but can be tendered by the holder for purchase at par value upon proper advance notice. When the VRDNs are tendered, a remarketing agent generally finds another investor to purchase the VRDNs to keep the securities outstanding in the market. As of March 31, 2017 and December 31, 2016, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $897 million and $929 million, respectively, of which FTS acted as the remarketing agent to issuers on $760 million and $784 million, respectively. As remarketing agent, FTS is responsible for finding purchasers for VRDNs that are put by investors. The Bancorp issued letters of credit, as a credit enhancement, to $589 million and $609 million of the VRDNs remarketed by FTS, in addition to $138 million and $145million in VRDNs remarketed by third parties at March 31, 2017 and December 31, 2016, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held an immaterial amount and $6 million of these VRDNs in its portfolio and classified them as trading securities at March 31, 2017 and December 31, 2016, respectively.

Forward contracts related to residential mortgage loans held for sale

The Bancorp enters into forward contracts to economically hedge the change in fair value of certain residential mortgage loans held for sale due to changes in interest rates. The outstanding notional amounts of these forward contracts are included in the summary of significant commitments table for all periods presented.

Noncancelable operating lease obligations and other commitments

The Bancorp’s subsidiaries have entered into a number of noncancelable lease agreements. The minimum rental commitments under noncancelable lease agreements are shown in the summary of significant commitments table. The Bancorp has also entered into a limited number of agreements for work related to banking center construction and to purchase goods or services.

Contingent Liabilities

Legal claims

There are legal claims pending against the Bancorp and its subsidiaries that have arisen in the normal course of business. Refer to Note 15 for additional information regarding these proceedings.

Guarantees

The Bancorp has performance obligations upon the occurrence of certain events under financial guarantees provided in certain contractual arrangements as discussed in the following sections.

Residential mortgage loans sold with representation and warranty provisions

Conforming residential mortgage loans sold to unrelated third parties are generally sold with representation and warranty provisions. A contractual liability arises only in the event of a breach of these representations and warranties and, in general, only when a loss results from the breach. The Bancorp may be required to repurchase any previously sold loan, indemnify or make whole the investor or insurer for which the representation or warranty of the Bancorp proves to be inaccurate, incomplete or misleading. For more information on how the Bancorp establishes the residential mortgage repurchase reserve, refer to Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

As of March 31, 2017 and December 31, 2016, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $12 million and $13 million, respectively, included in other liabilities in the Condensed Consolidated Balance Sheets.

The Bancorp uses the best information available when estimating its mortgage representation and warranty reserve; however, the estimation process is inherently uncertain and imprecise and, accordingly, losses in excess of the amounts reserved as of March 31, 2017 are reasonably possible. The Bancorp currently estimates that it is reasonably possible that it could incur losses related to mortgage representation and warranty provisions in an amount up to approximately $22 million in excess of amounts reserved. This estimate was derived by modifying the key assumptions to reflect management's judgment regarding reasonably possible adverse changes to those assumptions. The actual repurchase losses could vary significantly from the recorded mortgage representation and warranty reserve or this estimate of reasonably possible losses, depending on the outcome of various factors, including those previously discussed.

For both the three months ended March 31, 2017 and 2016, the Bancorp paid an immaterial amount in the form of make whole payments.For the three months ended March 31, 2017 and 2016, the Bancorprepurchased $2 million and $4 million, respectively, in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended March 31, 2017 and 2016 were $3 million and $6 million, respectively. Total outstanding repurchase demand inventory was $1 million and $2 million at March 31, 2017 and December 31, 2016, respectively.

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended March 31,
($ in millions)		2017	2016
Balance, beginning of period	$	13	25
Net reductions to the reserve		(1)	(2)
Losses charged against the reserve		-	-
Balance, end of period	$	12	23

The following tables provide a rollforward of unresolved claims by claimant type for the three months ended:
	GSE			Private Label
March 31, 2017 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	13	$	2	-	$	-
New demands	23		3	-		-
Loan paydowns/payoffs	(1)		-	-		-
Resolved demands	(24)		(4)	-		-
Balance, end of period	11	$	1	-	$	-

	GSE			Private Label
March 31, 2016 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	16	$	4	2	$	-
New demands	71		6	2		-
Loan paydowns/payoffs	(4)		(1)	-		-
Resolved demands	(68)		(7)	(3)		-
Balance, end of period	15	$	2	1	$	-

Residential mortgage loans sold with credit recourse

The Bancorp sold certain residential mortgage loans in the secondary market with credit recourse. In the event of any customer default, pursuant to the credit recourse provided, the Bancorp is required to reimburse the third party. The maximum amount of credit risk in the event of nonperformance by the underlying borrowers is equivalent to the total outstanding balance. In the event of nonperformance, the Bancorp has rights to the underlying collateral value securing the loan. The outstanding balances on these loans sold with credit recourse were $360 million and $374 million at March 31, 2017 and December 31, 2016, respectively, and the delinquency rates were 2.5% and 3.2% at March 31, 2017 and December 31, 2016, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $6 million and $7 million at March 31, 2017 and December 31, 2016, respectively, recorded in other liabilities in the Condensed Consolidated Balance Sheets. To determine the credit loss reserve, the Bancorp used an approach that is consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio.

Margin accounts

FTS, an indirect wholly-owned subsidiary of the Bancorp, guarantees the collection of all margin account balances held by its brokerage clearing agent for the benefit of its customers. FTS is responsible for payment to its brokerage clearing agent for any loss, liability, damage, cost or expense incurred as a result of customers failing to comply with margin or margin maintenance calls on all margin accounts. The margin account balance held by the brokerage clearing agent was $14 million and $15million at March 31, 2017 and December 31, 2016, respectively. In the event of any customer default, FTS has rights to the underlying collateral provided. Given the existence of the underlying collateral provided and negligible historical credit losses, the Bancorp does not maintain a loss reserve related to the margin accounts.

Long-term borrowing obligations

The Bancorp had certain fully and unconditionally guaranteed long-term borrowing obligations issued by wholly-owned issuing trust entities of $62 million at both March 31, 2017 and December 31, 2016.

Visa litigation

The Bancorp, as a member bank of Visa prior to Visa’s reorganization and IPO (the “IPO”) of its Class A common shares (the “Class A Shares”) in 2008, had certain indemnification obligations pursuant to Visa’s certificate of incorporation and by-laws and in accordance with their membership agreements. In accordance with Visa’s by-laws prior to the IPO, the Bancorp could have been required to indemnify Visa for the Bancorp’s proportional share of losses based on the pre-IPO membership interests. As part of its reorganization and IPO, the Bancorp’s indemnification obligation was modified to include only certain known or anticipated litigation (the “Covered Litigation”) as of the date of the restructuring. This modification triggered a requirement for the Bancorp to recognize a liability equal to the fair value of the indemnification liability.

In conjunction with the IPO, the Bancorp received 10.1 million of Visa’s Class B common shares (the “Class B Shares”) based on the Bancorp’s membership percentage in Visa prior to the IPO. The Class B Shares are not transferable (other than to another member bank) until the later of the third anniversary of the IPO closing or the date which the Covered Litigation has been resolved; therefore, the Bancorp’s Class B Shares were classified in other assets and accounted for at their carryover basis of $0. Visa deposited $3 billion of the proceeds from the IPO into a litigation escrow account, established for the purpose of funding judgments in, or settlements of, the Covered Litigation. Since then, when Visa’s litigation committee determined that the escrow account was insufficient; Visa issued additional Class A Shares and deposited the proceeds from the sale of the Class A Shares into the litigation escrow account. When Visa funded the litigation escrow account, the Class B Shares were subjected to dilution through an adjustment in the conversion rate of Class B Shares into Class A Shares.

In 2009, the Bancorp completed the sale of Visa, Inc. Class B Shares and entered into a total return swap in which the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Class B Shares into Class A Shares. The swap terminates on the later of the third anniversary of Visa’s IPO or the date on which the Covered Litigation is settled. Refer to Note 19 for additional information on the valuation of the swap. The counterparty to the swap as a result of its ownership of the Class B Shares will be impacted by dilutive adjustments to the conversion rate of the Class B Shares into Class A Shares caused by any Covered Litigation losses in excess of the litigation escrow account. If actual judgments in, or settlements of, the Covered Litigation significantly exceed current expectations, then additional funding by Visa of the litigation escrow account and the resulting dilution of the Class B Shares could result in a scenario where the Bancorp’s ultimate exposure associated with the Covered Litigation (the “Visa Litigation Exposure”) exceeds the value of the Class B Shares owned by the swap counterparty (the “Class B Value”). In the event the Bancorp concludes that it is probable that the Visa Litigation Exposure exceeds the Class B Value, the Bancorp would record a litigation reserve liability and a corresponding amount of other noninterest expense for the amount of the excess. Any such litigation reserve liability would be separate and distinct from the fair value derivative liability associated with the total return swap.

As of the date of the Bancorp’s sale of the Visa Class B Shares and through March 31, 2017, the Bancorp has concluded that it is not probable that the Visa Litigation Exposure will exceed the Class B value. Based on this determination, upon the sale of Class B Shares, the Bancorp reversed its net Visa litigation reserve liability and recognized a free-standing derivative liability associated with the total return swap. The fair value of the swap liability was $97 million at March 31, 2017 and $91 million at December 31, 2016. Refer to Note 12 and Note 19 for further information.

After the Bancorp’s sale of the Class B Shares, Visa has funded additional amounts into the litigation escrow account which have resulted in further dilutive adjustments to the conversion of Class B Shares into Class A Shares, and along with other terms of the total return swap, required the Bancorp to make cash payments in varying amounts to the swap counterparty as follows:

		Visa	Bancorp Cash
Period ($ in millions)		Funding Amount	Payment Amount
Q2 2010	$	500	20
Q4 2010		800	35
Q2 2011		400	19
Q1 2012		1,565	75
Q3 2012		150	6
Q3 2014		450	18	i

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Legal and Regulatory Proceedings

3 Months Ended

Mar. 31, 2017

Legal And Regulatory Proceedings

Legal and Regulatory Proceedings

15. Legal and Regulatory Proceedings

Litigation

Visa/Mastercard Merchant Interchange Litigation

In April 2006, the Bancorp was added as a defendant in a consolidated antitrust class action lawsuit originally filed against Visa®, MasterCard® and several other major financial institutions in the United States District Court for the Eastern District of New York. The plaintiffs, merchants operating commercial businesses throughout the U.S. and trade associations, claimed that the interchange fees charged by card-issuing banks were unreasonable and sought injunctive relief and unspecified damages. In addition to being a named defendant, the Bancorp is also subject to a possible indemnification obligation of Visa as discussed in Note 14and has also entered into judgment and loss sharing agreements with Visa, MasterCard and certain other named defendants. In October 2012, the parties to the litigation entered into a settlement agreement. On January 14, 2014, the trial court entered a final order approving the class settlement. A number of merchants filed appeals from that approval. The U.S. Court of Appeals for the Second Circuit held a hearing on those appeals and on June 30, 2016, reversed the district court’s approval of the class settlement, remanding the case to the district court for further proceedings. In rejecting the settlement, the appellate court found that counsel for plaintiffs was conflicted and thus could not adequately represent the plaintiff-class members of the separate monetary and injunctive relief settlement classes. The appellate court decertified the settlement classes, ordered that the case return to the trial court and directed the trial court to appoint separate counsel for the separate plaintiff classes. On March 27, 2017, the Supreme Court of the United States denied a petition for writ of certiorari seeking to review the Second Circuit’s decision. Pursuant to the terms of the overturned settlement agreement, the Bancorp previously paid $46 million into a class settlement escrow account. Because the appellate court ruling remands the case to the district court for further proceedings, the ultimate outcome in this matter is uncertain. Approximately 8,000 merchants requested exclusion from the class settlement, and therefore, pursuant to the terms of the settlement agreement, 25% of the funds paid into the class settlement escrow account were already returned to the control of the defendants. More than 460 of the merchants who requested exclusion from the class filed separate federal lawsuits against Visa, MasterCard and certain other defendants alleging similar antitrust violations. These “opt-out” federal lawsuits were transferred to the United States District Court for the Eastern District of New York. The Bancorp was not named as a defendant in any of the opt-out federal lawsuits, but may have obligations pursuant to indemnification arrangements and/or the judgment or loss sharing agreements noted above. On July 18, 2015, the court in which all the remaining opt-out federal lawsuits have been consolidated denied defendants’ motion to dismiss the complaints. Refer to Note 14 for further information.

Klopfenstein v. Fifth Third Bank

On August 3, 2012, William Klopfenstein and Adam McKinney filed a lawsuit against Fifth Third Bank in the United States District Court for the Northern District of Ohio (Klopfenstein et al. v. Fifth Third Bank), alleging that the 120% APR that Fifth Third disclosed on its Early Access program was misleading. Early Access is a deposit-advance program offered to eligible customers with checking accounts. The plaintiffs sought to represent a nationwide class of customers who used the Early Access program and repaid their cash advances within 30 days. On October 31, 2012, the case was transferred to the United States District Court for the Southern District of Ohio. In 2013, four similar putative class actions were filed against Fifth Third Bank in federal courts throughout the country (Lori and Danielle Laskaris v. Fifth Third Bank, Janet Fyock v. Fifth Third Bank, Jesse McQuillen v. Fifth Third Bank, and Brian Harrison v. Fifth Third Bank). Those four lawsuits were transferred to the Southern District of Ohio and consolidated with the original lawsuit as In re: Fifth Third Early Access Cash Advance Litigation. On behalf of a putative class, the plaintiffs seek unspecified monetary and statutory damages, injunctive relief, punitive damages, attorney’s fees, and pre- and post-judgment interest. On March 30, 2015, the court dismissed all claims alleged in the consolidated lawsuit except a claim under the TILA. No trial date has been scheduled.

Nina Investments, LLC v. Fifth Third Bank

On July 5, 2012, Nina Investments, LLC (“Nina”) filed a lawsuit against Fifth Third Bank (Nina Investments, LLC. v. Fifth Third Bank, et al.)in the Circuit Court of Cook County, Illinois, alleging fraud and conspiracy to commit fraud related to a credit facility established by Fifth Third Bank in 2007 to finance life insurance premiums. Nina invested funds in an entity related to the borrower under the credit facility and is claiming over $70 million in damages based on its alleged loss of these funds. Nina alleges that it would have made different investment decisions if Fifth Third had disclosed fraud committed by the borrower with the alleged knowledge of Fifth Third employees. Nina filed this lawsuit in response to a lawsuit filed by Fifth Third Bank in the same court on June 11, 2010 against Nina and other defendants (Fifth Third Bank v. Concord Capital Management, LLC, et al.) alleging fraud and breach of contract. In 2015, the court dismissed Fifth Third's contract and fraud claims against certain defendants. On October 20, 2016, the court denied Fifth Third’s motion to assert a new claim against Nina and other investors for fraudulent inducement of a guarantee related to the credit facility and to reassert claims for breach of guarantee against certain of the investors who also acted as guarantors. On March 17, 2017, after hearing motions for summary judgment, the court dismissed, in part, Nina’s fraud claims against Fifth Third, Fifth Third’s claims against the other defendants and Fifth Third’s claim for fraudulent conveyance against Nina. Nina filed a Motion for Reconsideration of the court’s summary judgment ruling, which motion was denied on May 1, 2017. Trial on Nina’s remaining claim has been scheduled in these consolidated actions for May 15, 2017.

Helton v. Fifth Third Bank

On August 31, 2015, trust beneficiaries filed an action against Fifth Third Bank, as trustee, in the Probate Court for Hamilton County, Ohio (Helen Clarke Helton, et al. v. Fifth Third Bank). The plaintiffs allege breach of the duty to diversify, breach of the duty of impartiality, breach of trust/fiduciary duty, and unjust enrichment, based on Fifth Third’s alleged failure to diversify assets held in two trusts held for the plaintiffs’ benefit. The lawsuit seeks unspecified monetary damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. On January 5, 2016, the Court denied Fifth Third’s motion to dismiss. Trial is currently scheduled for January 16, 2018.

Upsher-Smith Laboratories, Inc. v. Fifth Third Bank

On February 2, 2012, Upsher-Smith Laboratories, Inc. (“Upsher-Smith”) filed suit against Fifth Third Bank in the Fourth Judicial District, Hennepin County, Minnesota (Upsher-Smith Laboratories Inc. v. Fifth Third Bank), alleging that Fifth Third improperly implemented foreign exchange (“FX”) transactions requested by plaintiff’s authorized employee who allegedly was the victim of fraud by a third party. Plaintiff asserts claims for breach of contract and the implied covenant of good faith and fair dealing under Article 4A-202 of the Uniform Commercial Code, with losses allegedly totalling almost $40 million. On March 3, 2016, Fifth Third removed the case to the United States District Court for the District of Minnesota. Fifth Third filed a motion to transfer venue to the United States District Court for the Southern District of Ohio on April 7, 2016, which was denied on December 29, 2016. Discovery was stayed pending the Court’s ruling on the motion to transfer. No trial date has been scheduled.

The Champions Home Owners Association, Inc. v. Jeffrey D. Quammen, et al.

On September 12, 2013 Fifth Third Bank was named as a defendant in a cross-complaint filed by Royce Pulliam, P&P Real Estate, LLC and Global Fitness Holdings, LLC (“Plaintiffs”) in the Jessamine Circuit Court in Jessamine County, Kentucky.  The Plaintiffs allege that Fifth Third Bank breached a contract to provide commercial funding for Plaintiffs’ national fitness franchise. The Plaintiffs claim to have sustained over $50 million in damages from the alleged contract breach. Fifth Third Bank denies that any breach of contract occurred, and further asserts that Plaintiffs executed multiple releases waiving the claims at issue in the litigation. Fifth Third Bank has asserted a $1.5 million claim against Plaintiff Royce Pulliam for breach of guaranty. On February 3, 2017 the Jessamine Circuit Court ruled in favor of Fifth Third Bank granting summary judgment on Fifth Third’s claim for breach of guaranty. The Court denied Fifth Third Bank’s motion for summary judgment seeking dismissal of the Plaintiffs’ claims. A bench trial concluded in late March 2017. Final post-trial briefing is scheduled to be submitted in May 2017, and decision is expected thereafter.

Other Litigation

The Bancorp and its subsidiaries are not parties to any other material litigation. However, there are other litigation matters that arise in the normal course of business. While it is impossible to ascertain the ultimate resolution or range of financial liability with respect to these contingent matters, management believes that the resulting liability, if any, from these other actions would not have a material effect upon the Bancorp’s consolidated financial position, results of operations or cash flows.

Governmental Investigations and Proceedings

The Bancorp and/or its affiliates are involved in information-gathering requests, reviews, investigations and proceedings (both formal and informal) by various governmental regulatory agencies and law enforcement authorities, including but not limited to the CFPB, FINRA, etc., as well as self-regulatory bodies regarding their respective businesses. Additional matters will likely arise from time to time. Any of these matters may result in material adverse consequences to the Bancorp, its affiliates and/or their respective directors, officers and other personnel, including adverse judgments, findings, settlements, fines, penalties, orders, injunctions or other actions, amendments and/or restatements of the Bancorp’s SEC filings and/or financial statements, as applicable, and/or determinations of material weaknesses in our disclosure controls and procedures. Investigations by regulatory authorities may from time to time result in civil or criminal referrals to law enforcement.

Reasonably Possible Losses in Excess of Accruals

The Bancorp and its subsidiaries are parties to numerous claims and lawsuits as well as threatened or potential actions or claims concerning matters arising from the conduct of its business activities. The outcome of claims or litigation and the timing of ultimate resolution are inherently difficult to predict. The following factors, among others, contribute to this lack of predictability: claims often include significant legal uncertainties, damages alleged by plaintiffs are often unspecified or overstated, discovery may not have started or may not be complete and material facts may be disputed or unsubstantiated. As a result of these factors, the Bancorp is not always able to provide an estimate of the range of reasonably possible outcomes for each claim. An accrual for a potential litigation loss is established when information related to the loss contingency indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Any such accrual is adjusted from time to time thereafter as appropriate to reflect changes in circumstances. The Bancorp also determines, when possible (due to the uncertainties described above), estimates of reasonably possible losses or ranges of reasonably possible losses, in excess of amounts accrued. Under U.S. GAAP, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” Thus, references to the upper end of the range of reasonably possible loss for cases in which the Bancorp is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Bancorp believes the risk of loss is more than slight. For matters where the Bancorp is able to estimate such possible losses or ranges of possible losses, the Bancorp currently estimates that it is reasonably possible that it could incur losses related to legal and regulatory proceedings in an aggregate amount up to approximately $18 million in excess of amounts accrued, with it also being reasonably possible that no losses will be incurred in these matters. The estimates included in this amount are based on the Bancorp’s analysis of currently available information, and as new information is obtained the Bancorp may change its estimates.

For these matters and others where an unfavorable outcome is reasonably possible but not probable, there may be a range of possible losses in excess of the established accrual that cannot be estimated. Based on information currently available, advice of counsel, available insurance coverage and established accruals, the Bancorp believes that the eventual outcome of the actions against the Bancorp and/or its subsidiaries, including the matters described above, will not, individually or in the aggregate, have a material adverse effect on the Bancorp’s consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of those matters, if unfavorable, may be material to the Bancorp’s results of operations for any particular period, depending, in part, upon the size of the loss or liability imposed and the operating results for the applicable period.

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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Taxes

Income Taxes

16. Income Taxes

The applicable income tax expense was $91 million and $109 million for the three months ended March 31, 2017 and 2016, respectively. The effective tax rates for the three months ended March 31, 2017 and 2016 were 22.9% and 25.1%, respectively. A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016. The decrease in the effective tax rate for the three months ended March 31, 2017 compared to the same period in the prior year was primarily related to a reduction in income tax expense for the recognition of excess tax benefits related to stock-based compensation recorded in the first quarter of 2017.

While it is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of the Bancorp’s uncertain tax positions could increase or decrease during the next 12 months, the Bancorp believes it is unlikely that its unrecognized tax benefits will change by a material amount during the next 12 months.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

17. Accumulated Other Comprehensive Income

The tables below present the activity of the components of OCI and AOCI for the three months ended:
			Total Other			Total Accumulated Other
			Comprehensive Income			Comprehensive Income
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2017 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale securities arising
	during period	$	22	(7)	15
Reclassification adjustment for net losses on available-for-sale
	securities included in net income		2	(1)	1
Net unrealized gains on available-for-sale securities			24	(8)	16	101	16	117
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(5)	2	(3)
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(8)	3	(5)
Net unrealized gains on cash flow hedge derivatives			(13)	5	(8)	10	(8)	2
Reclassification of amounts to net periodic benefit costs			2	(1)	1
Defined benefit pension plans, net			2	(1)	1	(52)	1	(51)
Total		$	13	(4)	9	59	9	68

			Total Other			Total Accumulated Other
			Comprehensive Income			Comprehensive Income
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2016 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale securities arising
	during period	$	695	(243)	452
Reclassification adjustment for net gains on available-for-sale
	securities included in net income		(8)	3	(5)
Net unrealized gains on available-for-sale securities			687	(240)	447	238	447	685
Unrealized holding gains on cash flow hedge derivatives arising
	during period		74	(26)	48
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(14)	5	(9)
Net unrealized gains on cash flow hedge derivatives			60	(21)	39	22	39	61
Reclassification of amounts to net periodic benefit costs			2	(1)	1
Defined benefit pension plans, net			2	(1)	1	(63)	1	(62)
Total		$	749	(262)	487	197	487	684

The table below presents reclassifications out of AOCI:
		Condensed ConsolidatedStatements of Income Caption		For the three months ended March 31,
Components of AOCI: ($ in millions)				2017	2016
Net unrealized gains on available-for-sale securities:(b)
	Net losses included in net income	Securities gains, net	$	(2)	8
		Income before income taxes		(2)	8
		Applicable income tax expense		1	(3)
		Net income		(1)	5
Net unrealized gains on cash flow hedge derivatives:(b)
	Interest rate contracts related to C&I loans	Interest and fees on loans and leases		8	14
		Income before income taxes		8	14
		Applicable income tax expense		(3)	(5)
		Net income		5	9
Net periodic benefit costs:(b)
	Amortization of net actuarial loss	Employee benefits expense(a)		(2)	(2)
		Income before income taxes		(2)	(2)
		Applicable income tax expense		1	1
		Net income		(1)	(1)
Total reclassifications for the period		Net income	$	3	13

• This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 21of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the computation of net periodic benefit cost.
• Amounts in parentheses indicate reductions to net income.

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Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share

Earnings Per Share

18. Earnings Per Share

The following table provides the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:
		2017				2016(a)
For the three months ended March 31,			Average	Per Share		Average	Per Share
(in millions, except per share data)		Income	Shares	Amount	Income	Shares	Amount
Earnings Per Share:
Net income available to common shareholders	$	290			311
Less: Income allocated to participating securities		4			3
Net income allocated to common shareholders	$	286	748	0.38	308	774	0.40
Earnings Per Diluted Share:
Net income available to common shareholders	$	290			311
Effect of dilutive securities:
Stock-based awards		-	13		-	4
Net income available to common shareholders		290			311
plus assumed conversions
Less: Income allocated to participating securities		4			3
Net income allocated to common shareholders
plus assumed conversions	$	286	761	0.38	308	778	0.40

A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016

Shares are excluded from the computation of earnings per diluted share when their inclusion has an anti-dilutive effect on earnings per share. The diluted earnings per share computation for the three months ended March 31, 2017 and March 31, 2016excludes 6million and 27 million, respectively, of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

The diluted earnings per share computation for the three months ended March 31, 2016 excludes the impact of the forward contract related to the March 4, 2016 accelerated share repurchase transaction. Based upon the average daily volume weighted-average price of the Bancorp’s common stock during the first quarter of 2016, the counterparty to the transaction would have been required to deliver additional shares for the settlement of the forward contract as of March 31, 2016, and thus the impact of theforward contract related to the accelerated share repurchase transaction would have been anti-dilutive to earnings per share.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Measurements

Fair Value Measurements

19. Fair Value Measurements

The Bancorp measures certain financial assets and liabilities at fair value in accordance with U.S. GAAP, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. For more information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016.

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables summarize assets and liabilities measured at fair value on a recurring basis as of:
	Fair Value Measurements Using
March 31, 2017 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	437	-	-	437
Obligations of states and political subdivisions securities		-	45	-	45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	16,245	-	16,245
Agency commercial mortgage-backed securities		-	8,672	-	8,672
Non-agency commercial mortgage-backed securities		-	3,299	-	3,299
Asset-backed securities and other debt securities		-	2,134	-	2,134
Equity securities(a)		90	1	-	91
Available-for-sale and other securities(a)		527	30,396	-	30,923
Trading securities:
U.S. Treasury and federal agencies securities		-	18	-	18
Obligations of states and political subdivisions securities		-	21	-	21
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	265	-	265
Asset-backed securities and other debt securities		-	24	-	24
Equity securities		361	-	-	361
Trading securities		361	328	-	689
Residential mortgage loans held for sale		-	606	-	606
Residential mortgage loans(b)		-	-	141	141
MSRs(f)		-	-	776	776
Derivative assets:
Interest rate contracts		1	624	16	641
Foreign exchange contracts		-	126	-	126
Commodity contracts		23	56	-	79
Derivative assets(d)		24	806	16	846
Total assets	$	912	32,136	933	33,981
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	179	5	189
Foreign exchange contracts		-	123	-	123
Equity contracts		-	-	97	97
Commodity contracts		8	72	-	80
Derivative liabilities(e)		13	374	102	489
Short positions(e)		21	6	-	27
Total liabilities	$	34	380	102	516

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $359 and $1, respectively, at March 31, 2017.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the three months endedMarch 31, 2017, no assets or liabilities were transferred between Level 1 and Level 2.
• Included in other assets in the Condensed Consolidated Balance Sheets.
• Included in other liabilities in the Condensed Consolidated Balance Sheets.
• Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

	Fair Value Measurements Using
December 31, 2016 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	471	78	-	549
Obligations of states and political subdivisions securities		-	45	-	45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,608	-	15,608
Agency commercial mortgage-backed securities		-	9,055	-	9,055
Non-agency commercial mortgage-backed securities		-	3,112	-	3,112
Asset-backed securities and other debt securities		-	2,116	-	2,116
Equity securities(a)		90	1	-	91
Available-for-sale and other securities(a)		561	30,015	-	30,576
Trading securities:
U.S. Treasury and federal agencies securities		-	23	-	23
Obligations of states and political subdivisions securities		-	39	-	39
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	8	-	8
Asset-backed securities and other debt securities		-	15	-	15
Equity securities		325	-	-	325
Trading securities		325	85	-	410
Residential mortgage loans held for sale		-	686	-	686
Residential mortgage loans(b)		-	-	143	143
Derivative assets:
Interest rate contracts		20	715	13	748
Foreign exchange contracts		-	202	-	202
Commodity contracts		22	85	-	107
Derivative assets(d)		42	1,002	13	1,057
Total assets	$	928	31,788	156	32,872
Liabilities:
Derivative liabilities:
Interest rate contracts	$	3	257	5	265
Foreign exchange contracts		-	204	-	204
Equity contracts		-	-	91	91
Commodity contracts		27	79	-	106
Derivative liabilities(e)		30	540	96	666
Short positions(e)		17	4	-	21
Total liabilities	$	47	544	96	687

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $358 and $1, respectively, at December 31, 2016.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the year ended December 31, 2016, no assets or liabilities were transferred between Level 1 and Level 2.
• Included in other assets in the Condensed Consolidated Balance Sheets.
• Included in other liabilities in the Condensed Consolidated Balance Sheets.

The following is a description of the valuation methodologies used for significant instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Available-for-sale and other securities and trading securities

Where quoted prices are available in an active market, securities areclassified within Level 1 of the valuation hierarchy. Level 1 securitiesinclude U.S. Treasury securities and exchange-traded equities. Ifquoted market prices are not available, then fair values are estimatedusing pricing models, quoted prices of securities with similarcharacteristics or DCFs. Level 2 securities include federalagencies securities, obligations of states and political subdivisionssecurities, agency residential mortgage-backed securities, agency andnon-agency commercial mortgage-backed securities, asset-backedsecurities and other debt securities and equity securities. These securities aregenerally valued using a market approach based on observableprices of securities with similar characteristics.

Residential mortgage loans held for sale

For residential mortgage loans held for sale for which the fair valueelection has been made, fair value is estimated based uponmortgage-backed securities prices and spreads to those prices or, forcertain ARM loans, DCF models that may incorporate theanticipated portfolio composition, credit spreads of asset-backedsecurities with similar collateral and market conditions. Theanticipated portfolio composition includes the effect of interest ratespreads and discount rates due to loan characteristics such as thestate in which the loan was originated, the loan amount and theARM margin. Residential mortgage loans held for sale that arevalued based on mortgage-backed securities prices are classified within Level 2 of the valuation hierarchy as the valuation is based onexternal pricing for similar instruments. ARM loans classified asheld for sale are also classified within Level 2 of the valuationhierarchy due to the use of observable inputs in the DCF model.These observable inputs include interest rate spreads from agencymortgage-backed securities market rates and observable discountrates.

Residential mortgage loans

Residential mortgage loans held for sale that are reclassified to held for investment are transferred from Level 2 to Level 3 of the fair value hierarchy. It is the Bancorp’s policy to value any transfers between levels of the fair value hierarchy based on end of period fair values.

For residential mortgage loans for which the fair value electionhas been made, and that are reclassified from held for sale to heldfor investment, the fair value estimation is based on mortgage-backedsecurities prices, interest rate risk and an internallydeveloped credit component. Therefore, these loans are classifiedwithin Level 3 of the valuation hierarchy. An adverse change in theloss rate or severity assumption would result in a decrease in fairvalue of the related loan. The Secondary Marketing department,which reports to the Bancorp’s Head of the Consumer Bank, inconjunction with the Consumer Credit Risk department, whichreports to the Bancorp’s Chief Risk Officer, are responsible fordetermining the valuation methodology for residential mortgageloans held for investment. The Secondary Marketing departmentreviews loss severity assumptions quarterly to determine ifadjustments are necessary based on decreases in observable housingmarket data. This group also reviews trades in comparablebenchmark securities and adjusts the values of loans as necessary.Consumer Credit Risk is responsible for the credit component ofthe fair value which is based on internally developed loss ratemodels that take into account historical loss rates and loss severitiesbased on underlying collateral values.

MSRs

Effective January 1, 2017, the Bancorp elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. MSRs do not trade in an active, open market with readily observable prices. While sales of MSRs do occur, the precise terms and conditions typically are not readily available. Accordingly, the Bancorp estimates the fair value of MSRs using internal OAS models with certain unobservable inputs, primarily prepayment speed assumptions, OAS and weighted-average lives, resulting in a classification within Level 3 of the valuation hierarchy. Refer to Note 11 for further information on the assumptions used in the valuation of the Bancorp’s MSRs. The Secondary Marketing department and Treasury department are responsible for determining the valuation methodology for MSRs. Representatives from Secondary Marketing, Treasury, Accounting and Risk Management are responsible for reviewing key assumptions used in the internal OAS model. Two external valuations of the MSR portfolio are obtained from third parties that use valuation models in order to assess the reasonableness of the internal OAS model. Additionally, the Bancorp participates in peer surveys that provide additional confirmation of the reasonableness of key assumptions utilized in the MSR valuation process and the resulting MSR prices.

Derivatives

Exchange-traded derivatives valued using quoted prices and certain over-the-counter derivatives valued using active bids are classified within Level 1 of the valuation hierarchy. Most of the Bancorp’s derivative contracts are valued using DCF or other models that incorporate current market interest rates, credit spreads assigned to the derivative counterparties and other market parameters and, therefore, are classified within Level 2 of the valuation hierarchy. Such derivatives include basic and structured interest rate, foreign exchange and commodity swaps and options. Derivatives that are valued based upon models with significant unobservable market parameters are classified within Level 3 of the valuation hierarchy. At March 31, 2017 and December 31, 2016, derivatives classified as Level 3, which are valued using models containing unobservable inputs, consisted primarily of a total return swap associated with the Bancorp’s sale of Visa, Inc. Class B Shares. Level 3 derivatives also include IRLCs, which utilize internally generated loan closing rate assumptions as a significant unobservable input in the valuation process.

During the fourth quarter of 2016, the Bancorp exercised its right to purchase approximately 7.8 million Class C Units underlying the warrant at the $15.98 strike price. This exercise was settled on a net basis for approximately 5.7 million Class C Units, which were then exchanged for approximately 5.7 million shares of Vantiv, Inc. Class A Common Stock of which 4.8 million shares were sold in a secondary offering and 0.9 million shares were repurchased by Vantiv, Inc.

Prior to the aforementioned warrant transaction, the fair value of the warrant was calculated in conjunction with a third party valuation provider by applying Black-Scholes option-pricing models using probability weighted scenarios which contained the following inputs: Vantiv, Inc. stock price, strike price per the Warrant Agreement and unobservable inputs, such as expected term and expected volatility.

For the warrant, an increase in the expected term (years) and the expected volatility assumptions would result in an increase in the fair value; conversely, a decrease in these assumptions would result in a decrease in the fair value. The Accounting and Treasury departments, both of which report to the Bancorp’s Chief Financial Officer, determined the valuation methodology for the warrant. Accounting and Treasury reviewed changes in fair value on a quarterly basis for reasonableness based on changes in historical and implied volatilities, expected terms, probability weightings of the related scenarios and other assumptions.

Under the terms of the total return swap, the Bancorp will make or receive payments based on subsequent changes in the conversion rate of the Visa, Inc. Class B Shares into Class A Shares. Additionally, the Bancorp will make a quarterly payment based on Visa’s stock price and the conversion rate of the Visa, Inc. Class B Shares into Class A Shares until the date on which the Covered Litigation is settled. The fair value of the total return swap was calculated using a DCF model based on unobservable inputs consisting of management’s estimate of the probability of certain litigation scenarios, the timing of the resolution of the Covered Litigation and Visa litigation loss estimates in excess, or shortfall, of the Bancorp’s proportional share of escrow funds.

An increase in the loss estimate or a delay in the resolution of the Covered Litigation would result in an increase in fair value; conversely, a decrease in the loss estimate or an acceleration of the resolution of the Covered Litigation would result in a decrease in fair value. The Accounting and Treasury departments determined the valuation methodology for the total return swap. Accounting and Treasury review the changes in fair value on a quarterly basis for reasonableness based on Visa stock price changes, litigation contingencies, and escrow funding.

The net fair value asset of the IRLCs at March 31, 2017 was $16million. Immediate decreases in current interest rates of 25 bps and 50 bps would result in increases in the fair value of the IRLCs of approximately $6 million and $11 million, respectively. Immediate increases of current interest rates of 25 bps and 50 bps would result in decreases in the fair value of the IRLCs of approximately $7 million and $14 million, respectively. The decrease in fair value of IRLCs due to immediate 10% and 20% adverse changes in the assumed loan closing rates would be approximately $2 million and $3 million, respectively, and the increase in fair value due to immediate 10% and 20% favorable changes in the assumed loan closing rates would be approximately $2 million and $3 million, respectively.These sensitivities are hypothetical and should be used with caution, as changes in fair value based on a variation in assumptions typically cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear.

The Consumer Line of Business Finance department, which reports to the Bancorp’s Chief Financial Officer, and the aforementioned Secondary Marketing department are responsible for determining the valuation methodology for IRLCs. Secondary Marketing, in conjunction with a third party valuation provider, periodically review loan closing rate assumptions and recent loan sales to determine if adjustments are needed for current market conditions not reflected in historical data.

The following tables are a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Residential		Interest Rate	Equity
		Mortgage		Derivatives,	Derivatives,	Total
For the three months ended March 31, 2017 ($ in millions)		Loans	MSRs(d)	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	143	744	8	(91)		804
Total gains (losses) (realized/unrealized):
Included in earnings		-	(23)	23	(13)		(13)
Purchases/originations		-	55	(1)	-		54
Settlements		(5)	-	(19)	7		(17)
Transfers into Level 3(b)		3	-	-	-		3
Balance, end of period	$	141	776	11	(97)		831
The amount of total gains (losses) for the period
included in earnings attributable to the change in unrealized
gains or losses relating to assets still held at March 31, 2017(c)	$	-	(23)	16	(13)		(20)

• Net interest rate derivatives include derivative assets and liabilities of $16and $5, respectively, as of March 31, 2017. Net equity derivatives include derivative assets and liabilities of $0 and $97, respectively, as of March 31, 2017.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.
• Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Residential	Interest Rate	Equity
		Mortgage	Derivatives,	Derivatives,	Total
For the three months ended March 31, 2016 ($ in millions)		Loans	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	167	12	201		380
Total gains (realized/unrealized):
Included in earnings		1	42	48		91
Purchases		-	(1)	-		(1)
Settlements		(11)	(28)	4		(35)
Transfers into Level 3(b)		3	-	-		3
Balance, end of period	$	160	25	253		438
The amount of total gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to assets still held at March 31, 2016(c)	$	1	29	48		78

• Net interest rate derivatives include derivative assets and liabilities of $29 and $4, respectively, as of March 31, 2016. Net equity derivatives include derivative assets and liabilities of $308and $55, respectively, as ofMarch 31, 2016.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.

The total gains and losses included in earnings for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Mortgage banking net revenue	$	-	43
Other noninterest income		(13)	48
Total (losses) gains	$	(13)	91

The total gains and losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2017 and 2016 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Mortgage banking net revenue	$	(7)	30
Other noninterest income		(13)	48
Total (losses) gains	$	(20)	78

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a recurring basis:
As of March 31, 2017 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	141	Loss rate model	Interest rate risk factor	(10.6) - 15.4%	2.3%
				Credit risk factor	0 - 46.2%	1.2%
MSRs		776	Discounted cash flow	Prepayment speed	0.7-100%	(Fixed) 11.2%(Adjustable) 25.2%
				OAS spread (bps)	430-1,515	(Fixed) 528(Adjustable) 757
IRLCs, net		16	Discounted cash flow	Loan closing rates	12.3 - 97.9%	72.2%
Swap associated with the sale of Visa, Inc.		(97)	Discounted cash flow	Timing of the resolution	12/31/2018 -	NM
Class B shares				of the Covered Litigation	12/31/2022

As of March 31, 2016 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	160	Loss rate model	Interest rate risk factor	(6.0) - 16.5%	4.4%
				Credit risk factor	0 - 80.5%	1.4%
IRLCs, net		29	Discounted cash flow	Loan closing rates	5.6 - 94.0%	75.0%
Stock warrant associated with Vantiv		308	Black-Scholes option-	Expected term (years)	2.0 - 13.3	5.8
Holding, LLC			pricing model	Expected volatility(a)	23.0 - 30.4%	25.9%
Swap associated with the sale of Visa, Inc.		(55)	Discounted cash flow	Timing of the resolution	12/31/2016 -	NM
Class B shares				of the Covered Litigation	3/31/2021

(a) Based on historical and implied volatilities of Vantiv, Inc. and comparable companies assuming similar expected terms.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following tables provide the fair value hierarchy and carrying amount of all assets that were held as of March 31, 2017 and 2016, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2017 and 2016, and the related gains and losses from fair value adjustments on assets sold during the period as well as assets still held as of the end of the period.
		Fair Value Measurements Using				Total Losses
						For the three months
As of March 31, 2017 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2017
Commercial loans held for sale	$	-	-	1	1	(19)
Commercial and industrial loans		-	-	318	318	(26)
Commercial mortgage loans		-	-	25	25	(2)
Commercial leases		-	-	2	2	(1)
OREO		-	-	19	19	(4)
Bank premises and equipment		-	-	15	15	(3)
Operating lease equipment		-	-	55	55	(20)
Total	$	-	-	435	435	(75)

		Fair Value Measurements Using				Total (Losses) Gains
						For the three months
As of March 31, 2016 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2016
Commercial loans held for sale	$	-	-	5	5	(2)
Commercial and industrial loans		-	-	347	347	(47)
Commercial mortgage loans		-	-	85	85	6
Commercial construction loans		-	-	-	-	2
MSRs(a)		-	-	685	685	(85)
OREO		-	-	27	27	(3)
Bank premises and equipment		-	-	12	12	1
Total	$	-	-	1,161	1,161	(128)

Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured on a nonrecurring basis:
As of March 31, 2017 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans held for sale	$	1	Appraised value	Appraised value	NM	NM
Commercial and industrial loans		318	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		25	Appraised value	Collateral value	NM	NM
Commercial leases		2	Appraised value	Collateral value	NM	NM
OREO		19	Appraised value	Appraised value	NM	NM
Bank premises and equipment		15	Appraised value	Appraised value	NM	NM
Operating lease equipment		55	Appraised value	Appraised value	NM	NM

As of March 31, 2016 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans held for sale	$	5	Appraised value	Appraised Value	NM	NM
				Costs to sell	NM	10.0%
Commercial and industrial loans		347	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		85	Appraised value	Collateral value	NM	NM
Commercial construction loans		-	Appraised value	Collateral value	NM	NM
MSRs		685	Discounted cash flow	Prepayment speed	0-100%	(Fixed) 14.1%(Adjustable) 27.8%
				OAS spread (bps)	364-1,515	(Fixed) 603(Adjustable) 713
OREO		27	Appraised value	Appraised value	NM	NM
Bank premises and equipment		12	Appraised value	Appraised value	NM	NM

Commercial loans held for sale

During the three months ended March 31, 2017 and 2016, respectively, the Bancorp transferred $18 million and $5 million of commercial loans from the portfolio to loans held for sale that upon transfer were measured at lower of cost or fair value. There were $17 million and an immaterial amount of fair value adjustments for the three months ended March 31, 2017 and 2016, respectively, that were generally based on appraisals of the underlying collateral or were estimated by discounting future cash flows using the current market rates of loans to borrowers with similar credit characteristics, similar remaining maturities, prepayment speeds and loss severities and were, therefore, classified within Level 3 of the valuation hierarchy. Additionally, there were immaterial amounts of fair value adjustments on existing commercial loans held for sale for both the three months ended March 31, 2017 and 2016. The fair value adjustments were also based on appraisals of the underlying collateral. During both the three months ended March 31, 2017 and 2016, the Bancorp recognized a $2 million loss on the sale of commercial loans held for sale.

The Accounting department determines the procedures for the valuation of commercial loans held for sale using appraised value which may include a comparison to recently executed transactions of similar type loans. A monthly review of the portfolio is performed for reasonableness. Quarterly, appraisals approaching a year old are updated and the Real Estate Valuation group, which reports to the Bancorp’s Chief Risk Officer, in conjunction with the Commercial Line of Business review the third party appraisals for reasonableness. Additionally, the Commercial Line of Business Finance department, which reports to the Bancorp’s Chief Financial Officer, in conjunction with the Accounting department reviews all loan appraisal values, carry values and vintages. The Treasury department, which reports to the Bancorp’s Chief Financial Officer, is responsible for the estimate of fair value adjustments when a discounted future cash flow valuation technique is employed.

Commercial loans held for investment

During the three months ended March 31, 2017 and 2016, the Bancorp recorded nonrecurring impairment adjustments to certain commercial and industrial loans, commercial mortgage loans, commercial construction loans and commercial leases held for investment. Larger commercial loans included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment. The Bancorp considers the current value of collateral, credit qualityof any guarantees, the guarantor’s liquidity and willingness tocooperate, the loan structure and other factors when evaluatingwhether an individual loan is impaired. When the loan is collateraldependent, the fair value of the loan is generally based on the fairvalue of the underlying collateral supporting the loan and thereforethese loans were classified within Level 3 of the valuation hierarchy.In cases where the carrying value exceeds the fair value, animpairment loss is recognized. The fair values and recognizedimpairment losses are reflected in the previous tables. CommercialCredit Risk, which reports to the Bancorp’s Chief Risk Officer, is responsible for preparing and reviewing the fair value estimates forcommercial loans held for investment.

MSRs

Effective January 1, 2017, the Bancorp elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and under the amortization method at December 31, 2016. Mortgage interest rates decreased during the three months ended March 31, 2016 and the Bancorp recognized temporary impairment in certain classes of the MSR portfolio and the carrying value was adjusted to the fair value. Refer to the MSRs section of the Assets and Liabilities Measured at Fair Value on a Recurring Basis discussion for additional information.

OREO

During the three months ended March 31, 2017 and 2016, the Bancorp recorded nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO and measured at the lower of carrying amount or fair value. These nonrecurring losses were primarily due to declines in real estate values of the properties recorded in OREO. For both the three months ended March 31, 2017 and 2016, these losses include $2 million recorded as charge-offs, on new OREO properties transferred from loans during the respective periods and $2 million and $1 million, respectively, recorded as negative fair value adjustments on OREO in other noninterest expense in the Bancorp’s Condensed Consolidated Statements of Incomesubsequent to their transfer from loans. As discussed in the following paragraphs, the fair value amounts are generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. The previous tables reflect the fair value measurements of the properties before deducting the estimated costs to sell.

The Real Estate Valuation department is solely responsible for managing the appraisal process and evaluating the appraisal for commercial properties transferred to OREO. All appraisals on commercial OREO properties are updated on at least an annual basis.

The Real Estate Valuation department reviews the BPO data and internal market information to determine the initial charge-off on residential real estate loans transferred to OREO. Once the foreclosure process is completed, the Bancorp performs an interior inspection to update the initial fair value of the property. These properties are reviewed at least every 30 days after the initial interior inspections are completed. The Asset Manager receives a monthly status report for each property, which includes the number of showings, recently sold properties, current comparable listings and overall market conditions.

Bank premises and equipment

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. These properties were written down to their lower of cost or market values. At least annually thereafter, the Bancorp will review these properties for market fluctuations. The fair value amounts were generally based on appraisals of the property values, resulting in a classification within Level 3 of the valuation hierarchy. Corporate Facilities, which reports to the Bancorp’s Chief Administrative Officer, in conjunction with Accounting, are responsible for preparing and reviewing the fair value estimates for bank premises and equipment. For further information on bank premises and equipment and discussion on changes to the branch network, refer to Note 7.

Operating lease equipment

During the three months ended March 31, 2017, the Bancorp recorded nonrecurring impairment adjustments to certain operating lease equipment. When evaluating whether an individual asset is impaired, the Bancorp considers the current fair value of the asset, the changes in overall market demand for the asset and the rate of change in advancements associated with technological improvements that impact the demand for the specific asset under review. As part of this ongoing assessment, the Bancorp determined that the carrying values of certain operating lease equipment were not recoverable and as a result, the Bancorp recorded an impairment loss equal to the amount by which the carrying value of the assets exceeded the fair value. The fair value amounts were generally based on appraised values of the assets, resulting in a classification within Level 3 of the valuation hierarchy. During the three months ended March 31, 2017, the Bancorp recorded net losses of $20 million as a reduction to corporate banking revenue in the Condensed Consolidated Statements of Income. The Commercial Leasing department, which reports to the Bancorp’s Chief Operating Officer, is responsible for preparing and reviewing the fair value estimates for operating lease equipment. Refer to Note 8for further information on impairment charges related to certain operating lease equipment.

Fair Value Option

The Bancorp elected to measure certain residential mortgage loans held for sale under the fair value option as allowed under U.S. GAAP. Electing to measure residential mortgage loans held for sale at fair value reduces certain timing differences and better matches changes in the value of these assets with changes in the value of derivatives used as economic hedges for these assets. Management’s intent to sell residential mortgage loans classified as held for sale may change over time due to such factors as changes in the overall liquidity in markets or changes in characteristics specific to certain loans held for sale. Consequently, these loans may be reclassified to loans held for investment and maintained in the Bancorp’s loan portfolio. In such cases, the loans will continue to be measured at fair value.

Fair value changes recognized in earnings for instruments held at March 31, 2017 and 2016 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $22 million and $6 million, respectively. These gains are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

Valuation adjustments related to instrument-specific credit risk for residential mortgage loans measured at fair value negatively impacted the fair value of those loans by $2 million at both March 31, 2017 and December 31, 2016. Interest on residential mortgage loans measured at fair value is accrued as it is earned using the effective interest method and is reported as interest income in the Condensed Consolidated Statements of Income.

The following table summarizes the difference between the fair value and the unpaid principal balance for residential mortgage loans measured at fair value as of:
		Aggregate	Aggregate Unpaid
($ in millions)		Fair Value	Principal Balance	Difference
March 31, 2017
Residential mortgage loans measured at fair value	$	747	725	22
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-
December 31, 2016
Residential mortgage loans measured at fair value	$	829	823	6
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-

Fair Value of Certain Financial Instruments
The following tables summarize the carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments measured at fair value on a recurring basis:
		Net Carrying	Fair Value Measurements Using			Total
As of March 31, 2017 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,205	2,205	-	-	2,205
Other securities		608	-	608	-	608
Held-to-maturity securities		26	-	-	26	26
Other short-term investments		1,644	1,644	-	-	1,644
Loans held for sale		10	-	-	10	10
Portfolio loans and leases:
Commercial and industrial loans		40,362	-	-	41,567	41,567
Commercial mortgage loans		6,838	-	-	6,776	6,776
Commercial construction loans		4,268	-	-	4,238	4,238
Commercial leases		4,079	-	-	3,700	3,700
Residential mortgage loans		15,099	-	-	15,459	15,459
Home equity		7,415	-	-	8,194	8,194
Automobile loans		9,530	-	-	9,246	9,246
Credit card		1,975	-	-	2,307	2,307
Other consumer loans and leases		795	-	-	830	830
Unallocated ALLL		(112)	-	-	-	-
Total portfolio loans and leases, net	$	90,249	-	-	92,317	92,317
Financial liabilities:
Deposits	$	104,156	-	104,148	-	104,148
Federal funds purchased		155	155	-	-	155
Other short-term borrowings		2,015	-	2,015	-	2,015
Long-term debt		13,658	13,608	527	-	14,135

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2016 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,392	2,392	-	-	2,392
Other securities		607	-	607	-	607
Held-to-maturity securities		26	-	-	26	26
Other short-term investments		2,754	2,754	-	-	2,754
Loans held for sale		65	-	-	65	65
Portfolio loans and leases:
Commercial and industrial loans		40,958	-	-	41,976	41,976
Commercial mortgage loans		6,817	-	-	6,735	6,735
Commercial construction loans		3,887	-	-	3,853	3,853
Commercial leases		3,959	-	-	3,651	3,651
Residential mortgage loans		14,812	-	-	15,415	15,415
Home equity		7,637	-	-	8,421	8,421
Automobile loans		9,941	-	-	9,640	9,640
Credit card		2,135	-	-	2,503	2,503
Other consumer loans and leases		668	-	-	678	678
Unallocated ALLL		(112)	-	-	-	-
Total portfolio loans and leases, net	$	90,702	-	-	92,872	92,872
Financial liabilities:
Deposits	$	103,821	-	103,811	-	103,811
Federal funds purchased		132	132	-	-	132
Other short-term borrowings		3,535	-	3,535	-	3,535
Long-term debt		14,388	14,288	545	-	14,833

Cash and due from banks, other securities, other short-term investments, deposits, federal funds purchased and other short-term borrowings

For financial instruments with a short-term or no stated maturity, prevailing market rates and limited credit risk, carrying amounts approximate fair value. Those financial instruments include cash and due from banks, other securities consisting of FHLB, FRB and DTCC restricted stock, other short-term investments, certain deposits (demand, interest checking, savings, money market, foreign office deposits and other deposits), federal funds purchased, and other short-term borrowings excluding FHLB borrowings. Fair values for other time deposits, certificatesof deposit $100,000 and over and FHLB borrowings were estimated using a DCF calculation that applies prevailing LIBOR/swap interest rates and a spread for new issuances with similar terms.

Held-to-maturity securities

The Bancorp’s held-to-maturity securities are primarily composed of instruments that provide income tax credits as the economic return on the investment. The fair value of these instruments is estimated based on current U.S. Treasury tax credit rates.

Loans held for sale

Fair values for commercial loans held for sale were valued based on executable bids when available, or on DCF models incorporating appraisals of the underlying collateral, as well as assumptions about investor return requirements and amounts and timing of expected cash flows. Fair values for residential mortgage loans held for sale were valued based on estimated third-party valuations utilizing recent sales data from similar transactions. Broker opinion statements were also obtained as additional evidence to support the third-party valuations. Fair values for other consumer loans held for sale were based on contractual values upon which the loans may be sold to a third party, and approximate their carrying value.

Portfolio loans and leases, net

Fair values were estimated based on either appraisals of theunderlying collateral or by discounting future cash flows usingthecurrent market rates of loans to borrowers with similar creditcharacteristics, similar remaining maturities, prepaymentspeeds andloss severities. The Bancorp estimates fair values at the transaction level whenever possible. For certain products with a large number of homogenous transactions, the Bancorp employs a pool approach. This approach involves stratifying and sorting the entire population of transactions into a smaller number of pools with like characteristics. Characteristics may include maturity date, coupon, origination date and principal amortization method.

Long-term debt

Fair value of long-term debt was based on quoted market prices, when available, or a DCF calculation using LIBOR/swap interest rates and, in some cases, Fifth Third credit and/or debt instrument spreads for new issuances with similar terms.

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Business Segments

3 Months Ended

Mar. 31, 2017

Segment Reporting

Business Segments

20.Business Segments

The Bancorp reports on four business segments: Commercial Banking, Branch Banking, Consumer Lending and Wealth and Asset Management. Results of the Bancorp’s business segments are presented based on its management structure and management accounting practices. The structure and accounting practices are specific to the Bancorp; therefore, the financial results of the Bancorp’s business segments are not necessarily comparable with similar information for other financial institutions. The Bancorp refines its methodologies from time to time as management’s accounting practices and businesses change.

The Bancorp manages interest rate risk centrally at the corporate level. By employing an FTP methodology, the business segments are insulated from most benchmark interest rate volatility, enabling them to focus on serving customers through the origination of loans and acceptance of deposits. The FTP methodology assigns charge rates and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of cash flows for each transaction. Assigning the FTP rate based on matching the duration of cash flows allocates interest income and interest expense to each business segment so its resulting net interest income is insulated from future changes in benchmark interest rates. The Bancorp’s FTP methodology also allocates the contribution to net interest income of the asset-generating and deposit-providing businesses on a duration-adjusted basis to better attribute the driver of the performance. As the asset and liability durations are not perfectly matched, the residual impact of the FTP methodology is captured in General Corporate and Other. The charge and credit rates are determined using the FTP rate curve, which is based on an estimate of Fifth Third’s marginal borrowing cost in the wholesale funding markets. The FTP curve is constructed using the U.S. swap curve, brokered CD pricing and unsecured debt pricing.

The Bancorp adjusts the FTP charge and credit rates as dictated by changes in interest rates for various interest-earning assets and interest-bearing liabilities and by the review of behavioral assumptions, such as prepayment rates on interest-earning assets and the estimated durations for indeterminate-lived deposits. Key assumptions, including the credit rates provided for deposit accounts, are reviewed annually. Credit rates for deposit products and charge rates for loan products may be reset more frequently in response to changes in market conditions. The credit rates for several deposit products were reset January 1,2017 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2016, thus net interest income for deposit-providing business segments was positively impacted during 2017. FTP charge rates on assets were affected by the prevailing level of interest rates and by the duration and repricing characteristics of the portfolio. As overall market rates increased, the FTP charge increased for asset-generating business segments during 2017.

The Bancorp’s methodology for allocating provision for loan and lease losses expense to the business segments includes charges or benefits associated with changes in criticized commercial loan levels in addition to actual net charge-offs experienced by the loans and leases owned by each business segment. Provision for loan and lease losses expense attributable to loan and lease growth and changes in ALLL factors are captured in General Corporate and Other. The financial results of the business segments include allocations for shared services and headquarters expenses. Additionally, the business segments form synergies by taking advantage of cross-sell opportunities and when funding operations by accessing the capital markets as a collective unit.

The following is a description of each of the Bancorp’s business segments and the products and services they provide to their respective client bases.

Commercial Banking offers credit intermediation, cash management and financial services to large and middle-market businesses and government and professional customers. In addition to the traditional lending and depository offerings, Commercial Banking products and services include global cash management, foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing and syndicated finance.

Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through 1,155 full-service banking centers. Branch Banking offers depository and loan products, such as checking and savings accounts, home equity loans and lines of credit, credit cards and loans for automobiles and other personal financing needs, as well as products designed to meet the specific needs of small businesses, including cash management services.

Consumer Lending includes the Bancorp’s residential mortgage, home equity, automobile and other indirect lending activities. Direct lending activities include the origination, retention and servicing of residential mortgage and home equity loans or lines of credit, sales and securitizations of those loans, pools of loans or lines of credit and all associated hedging activities. Indirect lending activities include extending loans to consumers through correspondent lenders and automobile dealers.

Wealth and Asset Management provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of four main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; ClearArc Capital, Inc., an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Private Bank; and Fifth Third Institutional Services. FTS offers full service retail brokerage services to individual clients and broker dealer services to the institutional marketplace. ClearArc Capital, Inc. provides asset management services. Fifth Third Private Bank offers holistic strategies to affluent clients in wealth planning, investing, insurance and wealth protection. Fifth Third Institutional Services provides advisory services for institutional clients including states and municipalities.

The following tables present the results of operations and assets by business segment for the three months ended:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
March 31, 2017 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	425	430	61	38	(21)	-	933
Provision for loan and lease losses		6	42	15	4	7	-	74
Net interest income after provision for loan and lease losses		419	388	46	34	(28)	-	859
Total noninterest income		202 (c)	184 (b)	55	106	10	(34)(a)	523
Total noninterest expense		370	402	120	113	15	(34)	986
Income (loss) before income taxes		251	170	(19)	27	(33)	-	396
Applicable income tax expense (benefit)		40	60	(7)	10	(12)	-	91
Net income (loss)		211	110	(12)	17	(21)	-	305
Less: Net income attributable to noncontrolling interests		-	-	-	-	-	-	-
Net income (loss) attributable to Bancorp		211	110	(12)	17	(21)	-	305
Dividends on preferred stock		-	-	-	-	15	-	15
Net income (loss) available to common shareholders	$	211	110	(12)	17	(36)	-	290
Total goodwill	$	613	1,655	-	151	-	-	2,419
Total assets	$	57,672	57,876	21,994	9,641	(6,983)(d)	-	140,200

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $3 for branches and land. For more information refer to Note 7 and Note 19.
• Includes impairment charges of $31 for operating lease equipment. For more information refer to Note 8 and Note 19.
• Includes bank premises and equipment of $51 classified as held for sale. For more information, refer to Note 7.

					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
March 31, 2016 ($ in millions)		Banking	Banking	Lending	Management	and Other(d)	Eliminations	Total(d)
Net interest income	$	451	426	60	43	(77)	-	903
Provision for loan and lease losses		65	34	12	-	8	-	119
Net interest income after provision for loan and lease losses		386	392	48	43	(85)	-	784
Total noninterest income		223	189 (b)	83	100	75	(33)(a)	637
Total noninterest expense		363	411	118	107	20	(33)	986
Income (loss) before income taxes		246	170	13	36	(30)	-	435
Applicable income tax expense		35	60	5	13	(4)	-	109
Net income (loss)		211	110	8	23	(26)	-	326
Less: Net income attributable to noncontrolling interests		-	-	-	-	-	-	-
Net income (loss) attributable to Bancorp		211	110	8	23	(26)	-	326
Dividends on preferred stock		-	-	-	-	15	-	15
Net income (loss) available to common shareholders	$	211	110	8	23	(41)	-	311
Total goodwill	$	613	1,655	-	148	-	-	2,416
Total assets	$	59,652	54,528	22,475	8,900	(3,125)(c)	-	142,430

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $2 for branches and land. For more information, refer to Note 7 and Note 19.
• Includes bank premises and equipment of $68classified as held for sale. For more information, refer to Note 7.
• A net taxdeficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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Subsequent Event

3 Months Ended

Mar. 31, 2017

Subsequent Event [Abstract]

Subsequent Event

21. Subsequent Event

On April 26, 2017, the Bancorp entered into an accelerated share repurchase transaction with a counterparty pursuant to which the Bancorp will pay approximately $342 million on May 1, 2017 to repurchase shares of its outstanding common stock. The Bancorp is repurchasing the shares of its common stock as part of its Board approved 100 million share repurchase program previously announced on March 15, 2016. The Bancorp expects the settlement of the transaction to occur on or before July 26, 2017.

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2017

Supplemental Cash Flow

Noncash Investing and Financing Activities

Cash payments related to interest and income taxes in addition to non-cash investing and financing activities are presented in the following table for the three months ended March 31:
($ in millions)		2017	2016
Cash Payments:
Interest	$	208	191
Income taxes		18	334
Transfers:
Portfolio loans to loans held for sale		5	3
Loans held for sale to portfolio loans		3	12
Portfolio loans to OREO		12	12

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2017

Securities

Available-for-Sale and Other and Held-to-Maturity Securities

The following tables provide the amortized cost, unrealized gains and losses and fair value for the major categories of the available-for-sale and other and held-to-maturity investment securities portfolios as of:
				Amortized	Unrealized	Unrealized	Fair
March 31, 2017 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale and other securities:
	U.S. Treasury and federal agencies securities		$	435	2	-	437
	Obligations of states and political subdivisions securities			44	1	-	45
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		16,140	195	(90)	16,245
		Agency commercial mortgage-backed securities		8,647	88	(63)	8,672
		Non-agency commercial mortgage-backed securities		3,269	46	(16)	3,299
	Asset-backed securities and other debt securities			2,115	36	(17)	2,134
	Equity securities(b)			698	3	(2)	699
Total available-for-sale and other securities			$	31,348	371	(188)	31,531
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	24	-	-	24
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	26	-	-	26

• Includes interest-only mortgage-backed securities of $42as of March 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net,in the Condensed Consolidated Statements of Income.
• Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $359 and $1, respectively,at March 31, 2017,that are carried at cost, and certain mutual fund and equity security holdings.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2016 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale and other securities:
	U.S. Treasury and federal agencies securities		$	547	2	-	549
	Obligations of states and political subdivisions securities			44	1	-	45
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		15,525	178	(95)	15,608
		Agency commercial mortgage-backed securities		9,029	87	(61)	9,055
		Non-agency commercial mortgage-backed securities		3,076	51	(15)	3,112
	Asset-backed securities and other debt securities			2,106	28	(18)	2,116
	Equity securities(b)			697	3	(2)	698
Total available-for-sale and other securities			$	31,024	350	(191)	31,183
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	24	-	-	24
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	26	-	-	26

• Includes interest-only mortgage-backed securities of $60 as of December 31, 2016, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.
• Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of$248, $358, and $1, respectively, at December 31, 2016, that are carried at cost, and certain mutual fund and equity security holdings.

Realized Gains and Losses Recognized in Income from Securities

The following table presents realized gains and losses that were recognized in income from available-for-sale securities:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Realized gains	$	9	15
Realized losses		(1)	(4)
OTTI		(10)	(3)
Net realized (losses) gains(a)	$	(2)	8

(a) Excludes net gains of $1 and net losses of $6 on interest-only mortgage-backed securities for the three months ended March 31, 2017 and 2016, respectively.

Trading securities were $689 million as of March 31, 2017, compared to $410 million at December 31, 2016. The following table presents total gains and losses that were recognized in income from trading securities:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Realized gains(a)	$	3	2
Realized losses(b)		(2)	(4)
Net unrealized gains(c)		1	1
Total trading securities gains (losses)	$	2	(1)

• Includes realized gains of $3 and $2 for the three months ended March 31, 2017and 2016,respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes realized losses of $2 and $4 for the three months ended March 31, 2017and 2016,respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes an immaterial amount of net unrealized gains for both the three months ended March 31, 2017and 2016 recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

Other Than Temporary Impairment Credit Losses Recognized In Earnings

The following table provides a summary of OTTI by security type:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Available-for-sale and other debt securities	$	(10)	(2)
Available-for-sale equity securities		-	(1)
Total OTTI(a)	$	(10)	(3)

(a) Included in securities gains, net, in the Condensed Consolidated Statements of Income.

Amortized Cost and Fair Value of Available-for-Sale and Other and Held-to-Maturity Securities

The expected maturity distribution of the Bancorp’s mortgage-backed securities and the contractual maturity distribution of the remainder of the Bancorp’s available-for-sale and other and held-to-maturity investment securities as of March 31, 2017 are shown in the following table:
			Available-for-Sale and Other		Held-to-Maturity
($ in millions)			Amortized Cost	Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
	Less than 1 year	$	187	189	2	2
	1-5 years		6,316	6,362	12	12
	5-10 years		21,358	21,481	10	10
	Over 10 years		2,789	2,800	2	2
Equity securities			698	699	-	-
Total		$	31,348	31,531	26	26

(a) Actual maturities may differ from contractual maturities when a right to call or prepay obligations exists with or without call or prepayment penalties.

Fair Value and Gross Unrealized Loss of Securities Available for Sale

The following table provides the fair value and gross unrealized losses on available-for-sale and other securities in an unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position as of:
		Less than 12 months		12 months or more		Total
			Unrealized		Unrealized		Unrealized
($ in millions)		Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
March 31, 2017
U.S. Treasury and federal agencies	$	101	-	-	-	101	-
Agency residential mortgage-backed securities		5,144	(82)	161	(8)	5,305	(90)
Agency commercial mortgage-backed securities		2,931	(63)	-	-	2,931	(63)
Non-agency commercial mortgage-backed securities		1,283	(16)	-	-	1,283	(16)
Asset-backed securities and other debt securities		322	(6)	364	(11)	686	(17)
Equity securities		-	-	37	(2)	37	(2)
Total	$	9,781	(167)	562	(21)	10,343	(188)
December 31, 2016
U.S. Treasury and federal agencies	$	199	-	-	-	199	-
Agency residential mortgage-backed securities		6,223	(88)	172	(7)	6,395	(95)
Agency commercial mortgage-backed securities		3,183	(61)	-	-	3,183	(61)
Non-agency commercial mortgage-backed securities		1,052	(15)	-	-	1,052	(15)
Asset-backed securities and other debt securities		422	(8)	336	(10)	758	(18)
Equity securities		-	-	37	(2)	37	(2)
Total	$	11,079	(172)	545	(19)	11,624	(191)

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Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2017

Loans and Leases Receivable

Loans and Leases Classified by Primary Purpose

The following table provides a summary of commercial loans and leases classified by primary purpose and consumer loans and leases classified based upon product or collateral as of:
			March 31,	December 31,
($ in millions)			2017	2016
Loans and leases held for sale:
	Commercial and industrial loans	$	2	60
	Commercial mortgage loans		7	5
	Commercial leases		1	-
	Residential mortgage loans		606	686
Total loans and leases held for sale		$	616	751
Portfolio loans and leases:
	Commercial and industrial loans	$	41,074	41,676
	Commercial mortgage loans		6,924	6,899
	Commercial construction loans		4,283	3,903
	Commercial leases		4,092	3,974
Total commercial loans and leases		$	56,373	56,452
	Residential mortgage loans	$	15,336	15,051
	Home equity		7,469	7,695
	Automobile loans		9,572	9,983
	Credit card		2,070	2,237
	Other consumer loans and leases		808	680
Total consumer loans and leases		$	35,255	35,646
Total portfolio loans and leases		$	91,628	92,098

Total Loans And Leases Owned By The Bancorp

The following table presents a summary of the total loans and leases owned by the Bancorp as of:
					90 Days Past Due
		Carrying Value			and Still Accruing
		March 31,	December 31,		March 31,	December 31,
($ in millions)		2017	2016		2017	2016
Commercial and industrial loans	$	41,076	41,736		3	4
Commercial mortgage loans		6,931	6,904		-	-
Commercial construction loans		4,283	3,903		-	-
Commercial leases		4,093	3,974		-	-
Residential mortgage loans		15,942	15,737		45	49
Home equity		7,469	7,695		-	-
Automobile loans		9,572	9,983		6	9
Credit card		2,070	2,237		21	22
Other consumer loans and leases		808	680		-	-
Total loans and leases	$	92,244	92,849		75	84
Less: Loans and leases held for sale	$	616	751
Total portfolio loans and leases	$	91,628	92,098
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)					2017	2016
Commercial and industrial loans				$	36	46
Commercial mortgage loans					5	6
Commercial leases					1	2
Residential mortgage loans					5	2
Home equity					6	8
Automobile loans					11	9
Credit card					22	20
Other consumer loans and leases					3	3
Total net charge-offs				$	89	96

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Credit Quality and the Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2017

Credit Quality and the Allowance for Loan and Leases Losses

Summary of Transactions in the ALLL

Allowance for Loan and Lease Losses
The following tables summarize transactions in the ALLL by portfolio segment:
				Residential
For the three months ended March 31, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	831	96	214	112	1,253
	Losses charged-off		(46)	(6)	(55)	-	(107)
	Recoveries of losses previously charged-off		4	1	13	-	18
	Provision for loan and lease losses		37	5	32	-	74
Balance, end of period		$	826	96	204	112	1,238
				Residential
For the three months ended March 31, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	840	100	217	115	1,272
	Losses charged-off		(60)	(4)	(52)	-	(116)
	Recoveries of losses previously charged-off		6	2	12	-	20
	Provision for loan and lease losses		81	-	37	1	119
Balance, end of period		$	867	98	214	116	1,295

Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
					Residential
As of March 31, 2017 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	113	(c)	68	42	-	223
	Collectively evaluated for impairment		713		28	162	-	903
	Unallocated		-		-	-	112	112
Total ALLL		$	826		96	204	112	1,238
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	786	(c)	656	354	-	1,796
	Collectively evaluated for impairment		55,587		14,537	19,565	-	89,689
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	56,373		15,195	19,919	-	91,487

• Includes $2 related to leveraged leases at March 31, 2017.
• Excludes $141of residential mortgage loans measured at fair value, and includes $703of leveraged leases, net of unearned income at March 31, 2017.
• Includes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26and an ALLL of $18.

					Residential
As of December 31, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	118	(c)	68	44	-	230
	Collectively evaluated for impairment		713		28	170	-	911
	Unallocated		-		-	-	112	112
Total ALLL		$	831		96	214	112	1,253
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	904	(c)	652	371	-	1,927
	Collectively evaluated for impairment		55,548		14,253	20,224	-	90,025
	Loans acquired with deteriorated credit quality		-		3	-	-	3
Total portfolio loans and leases		$	56,452		14,908	20,595	-	91,955

• Includes $2 related to leveraged leases at December 31, 2016.
• Excludes $143 of residential mortgage loans measured at fair value, and includes $701 of leveraged leases, net of unearned income at December 31, 2016.
• Includes five restructured loans at December 31, 2016associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $26 and an ALLL of $18.

Loan and leases balances by credit quality indicator

The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:
			Special
As of March 31, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,187	1,255	1,630	2	41,074
Commercial mortgage owner-occupied loans		3,226	74	110	-	3,410
Commercial mortgage nonowner-occupied loans		3,429	25	60	-	3,514
Commercial construction loans		4,238	45	-	-	4,283
Commercial leases		4,007	56	29	-	4,092
Total commercial loans and leases	$	53,087	1,455	1,829	2	56,373

			Special
As of December 31, 2016 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,844	1,204	1,604	24	41,676
Commercial mortgage owner-occupied loans		3,168	72	117	3	3,360
Commercial mortgage nonowner-occupied loans		3,466	4	69	-	3,539
Commercial construction loans		3,902	1	-	-	3,903
Commercial leases		3,894	54	26	-	3,974
Total commercial loans and leases	$	53,274	1,335	1,816	27	56,452

The following table presents a summary of the Bancorp’s residential mortgage and consumer portfolio segments, by class, disaggregated into performing versus nonperforming status as of:
		March 31, 2017		December 31, 2016
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,160	35	14,874	34
Home equity		7,399	70	7,622	73
Automobile loans		9,570	2	9,981	2
Credit card		2,043	27	2,209	28
Other consumer loans and leases		808	-	680	-
Total residential mortgage and consumer loans and leases(a)	$	34,980	134	35,366	137

(a) Excludes $141and $143 of loans measured at fair value at March 31, 2017 and December 31, 2016, respectively.

Summary by Age and Class of the Recorded Investment in Delinquencies Included in the Bancorp's Portfolio of Loans and Leases

Age Analysis of Past Due Loans and Leases
The following tables summarize the Bancorp’s recorded investment in portfolio loans and leases, by age and class:
			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of March 31, 2017 ($ in millions)			Leases(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	40,930	46	98	144	41,074	3
	Commercial mortgage owner-occupied loans		3,388	3	19	22	3,410	-
	Commercial mortgage nonowner-occupied loans		3,506	1	7	8	3,514	-
	Commercial construction loans		4,283	-	-	-	4,283	-
	Commercial leases		4,090	-	2	2	4,092	-
Residential mortgage loans(a)(b)			15,087	27	81	108	15,195	45
Consumer loans and leases:
	Home equity		7,351	64	54	118	7,469	-
	Automobile loans		9,503	60	9	69	9,572	6
	Credit card		2,018	27	25	52	2,070	21
	Other consumer loans and leases		807	1	-	1	808	-
Total portfolio loans and leases(a)		$	90,963	229	295	524	91,487	75

• Excludes $141 of residential mortgage loans measured at fair value at March 31, 2017.
• Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2017, $77of these loans were 30-89 days past due and $302 were 90 days or more past due. The Bancorp recognized $2of lossesduring the three months ended March 31, 2017due to claim denials and curtailments associated with these insured or guaranteed loans.
• Includes accrual and nonaccrual loans and leases.

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2016 ($ in millions)			Leases(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,495	87	94	181	41,676	4
	Commercial mortgage owner-occupied loans		3,332	6	22	28	3,360	-
	Commercial mortgage nonowner-occupied loans		3,530	2	7	9	3,539	-
	Commercial construction loans		3,902	1	-	1	3,903	-
	Commercial leases		3,972	-	2	2	3,974	-
Residential mortgage loans(a)(b)			14,790	37	81	118	14,908	49
Consumer loans and leases:
	Home equity		7,570	68	57	125	7,695	-
	Automobile loans		9,886	85	12	97	9,983	9
	Credit card		2,183	28	26	54	2,237	22
	Other consumer loans and leases		679	1	-	1	680	-
Total portfolio loans and leases(a)		$	91,339	315	301	616	91,955	84

• Excludes $143 of residential mortgage loans measured at fair value at December 31, 2016.
• Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2016, $110of these loans were 30-89 days past due and $312 were 90 days or more past due. The Bancorp recognized $2 of losses during the three months ended March 31, 2016due to claim denials and curtailments associated with these insured or guaranteed loans.
• Includes accrual and nonaccrual loans and leases.

Summarizes the Bancorp's Recorded Investment in Impaired Loans and Related Allowance by Class

The following tables summarize the Bancorp’s impaired portfolio loans and leases, by class, that were subject to individual review, which includes all portfolio loans and leases restructured in a TDR:
			Unpaid
			Principal	Recorded
As of March 31, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	449	392		86
	Commercial mortgage owner-occupied loans(b)		19	13		3
	Commercial mortgage nonowner-occupied loans		16	15		6
Restructured residential mortgage loans			472	468		68
Restructured consumer loans and leases:
	Home equity		192	191		29
	Automobile loans		11	11		1
	Credit card		49	49		12
Total impaired portfolio loans and leases with a related ALLL		$	1,208	1,139		205
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	264	242		-
	Commercial mortgage owner-occupied loans		28	22		-
	Commercial mortgage nonowner-occupied loans		74	74		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			209	188		-
Restructured consumer loans and leases:
	Home equity		104	101		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	684	631		-
Total impaired portfolio loans and leases		$	1,892	1,770	a(a)	205

• Includes $277, $642 and $308, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $251, $14 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017.
• Excludes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

			Unpaid
			Principal	Recorded
As of December 31, 2016 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	440	414		94
	Commercial mortgage owner-occupied loans(b)		24	16		5
	Commercial mortgage nonowner-occupied loans		7	6		1
	Commercial leases		2	2		-
Restructured residential mortgage loans			471	465		68
Restructured consumer loans and leases:
	Home equity		202	201		30
	Automobile loans		12	12		2
	Credit card		52	52		12
Total impaired portfolio loans and leases with a related ALLL		$	1,210	1,168		212
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	394	320		-
	Commercial mortgage owner-occupied loans		36	35		-
	Commercial mortgage nonowner-occupied loans		93	83		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			207	187		-
Restructured consumer loans and leases:
	Home equity		107	104		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	842	733		-
Total impaired portfolio loans and leases		$	2,052	1,901	a(a)	212

• Includes $322, $635 and $323, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $192, $17 and $48, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016.
• Excludes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $26, a recorded investment of $26 and an ALLL of $18.

The following tables summarize the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:
			For the three months ended		For the three months ended
			March 31, 2017		March 31, 2016
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	683	1	645	2
	Commercial mortgage owner-occupied loans(a)		43	-	71	-
	Commercial mortgage nonowner-occupied loans		89	1	165	1
	Commercial construction loans		-	-	7	-
	Commercial leases		3	-	5	-
Restructured residential mortgage loans			654	6	642	6
Restructured consumer loans and leases:
	Home equity		298	3	340	3
	Automobile loans		14	-	19	-
	Credit card		51	1	60	1
Total average impaired portfolio loans and leases		$	1,835	12	1,954	13

(a) Excludes five restructured 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, with an average recorded investment of $26 and $27 at March 31, 2017 and March 31, 2016, respectively, and an immaterial amount of interest income recognized for the both the three months ended March 31, 2017and March 31, 2016.

Summary of the Bancorp's Nonperforming Loans and Leases by Class

Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases for which ultimate collectability of the full amount of the principal and/or interest is uncertain; restructured commercial and credit card loans which have not yet met the requirements to be classified as a performing asset; restructured consumer loans which are 90 days past due based on the restructured terms unless the loan is both well-secured and in the process of collection; and certain other assets, including OREO and other repossessed property. The following table presents the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of:
			March 31,	December 31,
($ in millions)			2017	2016
Commercial loans and leases:
	Commercial and industrial loans	$	484	478
	Commercial mortgage owner-occupied loans(a)		28	32
	Commercial mortgage nonowner-occupied loans		9	9
	Commercial leases		2	4
Total nonaccrual portfolio commercial loans and leases			523	523
Residential mortgage loans			35	34
Consumer loans and leases:
	Home equity		70	73
	Automobile loans		2	2
	Credit card		27	28
Total nonaccrual portfolio consumer loans and leases			99	103
Total nonaccrual portfolio loans and leases(b)(c)		$	657	660
OREO and other repossessed property			64	78	a
Total nonperforming portfolio assets(b)(c)		$	721	738

• Excludes $19 of restructured nonaccrual loans at both March 31, 2017 and December 31, 2016associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.
• Excludes $9and $13 of nonaccrual loans held for sale at March 31, 2017 and December 31, 2016, respectively.
• Includes $4of nonaccrual government insured commercial loans whose repayments are insured by the SBA at bothMarch 31, 2017 and December 31, 2016and an immaterial amount and $1 of restructured nonaccrual government insured commercial loans at March 31, 2017and December 31, 2016, respectively.

Summary of Loans Modified in a TDR

The following tables provide a summary of loans, by class, modified in a TDR by the Bancorp during the three months ended:
			Recorded investment
		Number of loans	in loans modified		Increase	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
March 31, 2017 ($ in millions)(a)		during the period(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	33	$	97	1	2
	Commercial mortgage owner-occupied loans	5		2	-	-
	Commercial mortgage nonowner-occupied loans	1		-	-	-
Residential mortgage loans		203		29	2	-
Consumer loans:
	Home equity	31		2	-	-
	Automobile loans	30		-	-	-
	Credit card	1,756		7	1	-
Total portfolio loans		2,059	$	137	4	2

• Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
• Represents number of loans post-modification and excludes loans previously modified in a TDR.

			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
March 31, 2016 ($ in millions)(a)		during the period(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	24	$	56	(2)	-
	Commercial mortgage owner-occupied loans	7		6	(2)	-
	Commercial mortgage nonowner-occupied loans	2		-	-	-
Residential mortgage loans		243		36	2	-
Consumer loans:
	Home equity	64		5	-	-
	Automobile loans	78		1	-	-
	Credit card	2,592		12	2	1
Total portfolio loans		3,010	$	116	-	1

• Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
• Represents number of loans post-modification and excludes loans previously modified in a TDR.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended March 31, 2017 and 2016 and were within twelve months of the restructuring date:
		Number of		Recorded
March 31, 2017 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	1
Residential mortgage loans		57		9
Consumer loans:
	Home equity	5		1
	Credit card	450		2
Total portfolio loans		514	$	13

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

		Number of		Recorded
March 31, 2016 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	-
	Commercial mortgage nonowner-occupied loans	1		-
Residential mortgage loans		53		7
Consumer loans:
	Home equity	6		1
	Credit card	423		2
Total portfolio loans		484	$	10

(a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

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Bank Premises and Equipment (Tables)

3 Months Ended

Mar. 31, 2017

Bank Premises and Equipment

Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:
($ in millions)		March 31, 2017	December 31, 2016
Land and improvements(a)	$	649	663
Buildings(a)		1,667	1,672
Equipment		1,773	1,761
Leasehold improvements		392	398
Construction in progress(a)		109	99
Bank premises and equipment held for sale:
Land and improvements		33	29
Buildings		16	9
Equipment		2	1
Accumulated depreciation and amortization		(2,589)	(2,567)
Total bank premises and equipment	$	2,052	2,065

(a) At both March 31, 2017 and December 31, 2016, land and improvements, buildings and construction in progress included $92associated with parcels of undeveloped land intended for future branch expansion.

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2017

Intangible Assets

Intangible Assets

The details of the Bancorp’s intangible assets are shown in the following table:
			Gross Carrying	Accumulated	Net Carrying
($ in millions)			Amount	Amortization	Amount
As of March 31, 2017
	Core deposit intangibles	$	34	(28)	6
	Other		18	(13)	5
Total intangible assets		$	52	(41)	11
As of December 31, 2016
	Core deposit intangibles	$	34	(27)	7
	Other		15	(13)	2
Total intangible assets		$	49	(40)	9

Estimated Amortization Expense

Estimated amortization expense for the remainder of 2017 through 2021 is as follows:
($ in millions)		Total
Remainder of 2017	$	1
2018		2
2019		2
2020		1
2021		1

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2017

Variable Interest Entities

Consolidation of Variable Interest Entities Disclosure

The following tables provide a summary of the classifications of consolidated VIE assets, liabilities and noncontrolling interests included in the Condensed Consolidated Balance Sheets as of:
			Automobile Loan	CDC
March 31, 2017 ($ in millions)			Securitizations	Investments	Total
Assets:
	Cash and due from banks	$	84	1	85
	Commercial mortgage loans		-	46	46
	Automobile loans		969	-	969
	ALLL		(5)	(20)	(25)
	Other assets		7	-	7
Total assets		$	1,055	27	1,082
Liabilities:
	Other liabilities	$	2	-	2
	Long-term debt		883	-	883
Total liabilities		$	885	-	885
Noncontrolling interests		$	-	27	27

			Automobile Loan	CDC
December 31, 2016 ($ in millions)			Securitizations	Investments	Total
Assets:
	Cash and due from banks	$	84	1	85
	Commercial mortgage loans		-	46	46
	Automobile loans		1,170	-	1,170
	ALLL		(6)	(20)	(26)
	Other assets		9	-	9
Total assets		$	1,257	27	1,284
Liabilities
	Other liabilities	$	3	-	3
	Long-term debt		1,094	-	1,094
Total liabilities		$	1,097	-	1,097
Noncontrolling interests		$	-	27	27

Assets and Liabilities Related to Non-consolidated VIEs and Maximum Exposure to Losses

Non-consolidated VIEs
The following tables provide a summary of assets and liabilities carried on the Condensed Consolidated Balance Sheets related to non-consolidated VIEs for which the Bancorp holds an interest, but is not the primary beneficiary of the VIE, as well as the Bancorp’s maximum exposure to losses associated with its interests in the entities as of:
		Total	Total	Maximum
March 31, 2017 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,424	362	1,424
Private equity investments		121	-	178
Loans provided to VIEs		1,744	-	2,762

		Total	Total	Maximum
December 31, 2016 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,421	357	1,421
Private equity investments		176	-	232
Loans provided to VIEs		1,735	-	2,672

Investments in Qualified Affordable Housing Tax Credits

The Bancorp has accounted for all of its investments in qualified affordable housing tax credits using the equity method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income relating to investments in qualified affordable housing investments:
	Condensed Consolidated		For the three months ended March 31,
($ in millions)	Statements of Income Caption		2017	2016
Pre-tax investment and impairment losses(a)	Other noninterest expense	$	36	36
Tax credits and other benefits	Applicable income tax expense		(56)	(55)

(a) The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three months ended March 31, 2017 and 2016.

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Sales of Receivables and Servicing Rights (Tables)

3 Months Ended

Mar. 31, 2017

Sales of Receivables and Servicing Rights

Activity Related to Mortgage Banking Net Revenue

Information related to residential mortgage loan sales and the Bancorp’s mortgage banking activity, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income, is as follows:
		For the three months ended
		March 31,
($ in millions)		2017		2016
Residential mortgage loan sales(a)	$	1,629	a	1,114
Origination fees and gains on loan sales		29		42
Gross mortgage servicing fees		47		52

Represents the unpaid principal balance at the time of the sale.

Changes in the Servicing Assets

The following tables present changes in the servicing rights related to residential mortgage and automobile loans for the three months ended March 31:
($ in millions)		2017
Balance, beginning of period	$	744
Servicing rights originated - residential mortgage loans		26
Servicing rights acquired - residential mortgage loans		29
Changes in fair value:
Due to changes in inputs or assumptions(a)		4
Other changes in fair value(b)		(27)
Balance, end of period	$	776

• Primarily reflects changes in prepayment speed and OAS spread assumptions which are updated based on market interest rates.
• Primarily reflects changes due to collection of contractual cash flows and the passage of time.

($ in millions)		2016
Carrying amount before valuation allowance:
Balance, beginning of period	$	1,204
Servicing rights that result from the transfer of residential mortgage loans		12
Amortization		(27)
Balance, end of period	$	1,189
Valuation allowance for servicing rights:
Balance, beginning of period	$	(419)
Provision for MSR impairment		(85)
Balance, end of period		(504)
Carrying amount after valuation allowance	$	685

Fair Value of the Servicing Assets

The following table displays the beginning and ending fair value of the servicing rights for the three months ended March 31:
($ in millions)		2017	2016
Fixed-rate residential mortgage loans:
Balance, beginning of period	$	722	757
Balance, end of period		756	660
Adjustable-rate residential mortgage loans:
Balance, beginning of period		22	27
Balance, end of period		20	25
Fixed-rate automobile loans:
Balance, beginning of period		-	1
Balance, end of period		-	-

Activity Related to the MSR Portfolio

The following table presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy, which is included in mortgage banking net revenue in the Condensed Consolidated Statements of Income:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio	$	(1)	96
MSR fair value adjustment		(23)	-
Provision for MSR impairment		-	(85)

Servicing Assets and Residual Interests Economic Assumptions

As of March 31, 2017 and 2016, the key economic assumptions used in measuring the interests in residential mortgage loans that continued to be held by the Bancorp at the date of sale or securitization resulting from transactions completed during the three months ended were as follows:
		March 31, 2017				March 31, 2016
	Rate	Weighted-Average Life (in years)	Prepayment Speed (annual)		OAS Spread (bps)	Weighted-Average Life (in years)	Prepayment Speed (annual)		OAS Spread (bps)
Residential mortgage loans:
Servicing rights	Fixed	6.7	9.9	%	485	6.3	12.6	%	539
Servicing rights	Adjustable	2.3	34.9		700	3.0	27.5		681

Sensitivity of the Current Fair Value of Residual Cash Flows to Immediate 10%, 20% and 50% Adverse Changes in Assumptions

At March 31, 2017, the sensitivity of the current fair value of residual cash flows to immediate 10%, 20% and 50% adverse changes in prepayment speed assumptions and immediate 10% and 20% adverse changes in other assumptions are as follows:
					Prepayment						Residual Servicing
					Speed Assumption						Cash Flows
			Fair	Weighted-Average Life				Impact of Adverse Change on Fair Value			OASSpread		Impact of Adverse Change on Fair Value
($ in millions)(a)	Rate		Value	(in years)	Rate			10%	20%	50%	(bps)		10%	20%
Residential mortgage loans:
Servicing rights	Fixed	$	756	6.0	11.2	%	$	(33)	(63)	(143)	528	$	(15)	(30)
Servicing rights	Adjustable		20	3.3	25.2			(1)	(3)	(6)	757		-	(1)

(a) The impact of the weighted-average default rate on the current fair value of residual cash flows for all scenarios is immaterial.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Derivative Financial Instruments

Notional Amounts and Fair Values for All Derivative Instruments Included in the Consolidated Balance Sheets

The following tables reflect the notional amounts and fair values for all derivative instruments included in the Condensed Consolidated Balance Sheets as of:
				Fair Value
		Notional		Derivative	Derivative
March 31, 2017 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	2,955		305	-
Total fair value hedges				305	-
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		-	18
Total cash flow hedges				-	18
Total derivatives designated as qualifying hedging instruments				305	18
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,602		129	22
Forward contracts related to residential mortgage loans held for sale		1,630		1	5
Swap associated with the sale of Visa, Inc. Class B Shares		1,481		-	97
Foreign exchange contracts		110		-	-
Total free-standing derivatives - risk management and other business purposes				130	124
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers		35,882		190	144
Interest rate lock commitments		780		16	-
Commodity contracts		2,145		79	80
TBAs		36		-	-
Foreign exchange contracts		10,024		126	123
Total free-standing derivatives - customer accommodation				411	347
Total derivatives not designated as qualifying hedging instruments				541	471
Total			$	846	489

				Fair Value
		Notional		Derivative	Derivative
December 31, 2016 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,455		323	12
Total fair value hedges				323	12
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		22	-
Total cash flow hedges				22	-
Total derivatives designated as qualifying hedging instruments				345	12
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,522		165	39
Forward contracts related to residential mortgage loans held for sale		1,823		20	3
Swap associated with the sale of Visa, Inc. Class B Shares		1,300		-	91
Foreign exchange contracts		111		-	-
Total free-standing derivatives - risk management and other business purposes				185	133
Free-standing derivatives - customer accommodation:
Interest rate contracts for customers		33,431		205	210
Interest rate lock commitments		701		13	1
Commodity contracts		2,095		107	106
Foreign exchange contracts		11,013		202	204
Total free-standing derivatives - customer accommodation				527	521
Total derivatives not designated as qualifying hedging instruments				712	654
Total			$	1,057	666

Net Gains (Losses) Recognized in the Income Statement Related to Derivatives in Fair Value Hedging Relationships

The following table reflects the change in fair value of interest rate contracts, designated as fair value hedges, as well as the change in fair value of the related hedged items attributable to the risk being hedged, included in the Condensed Consolidated Statements of Income:
	Condensed Consolidated		For the three months
	Statements of		ended March 31,
($ in millions)	Income Caption		2017	2016
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	(21)	83
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		21	(85)

Net Gains (Losses) Relating to Derivative Instruments Designated as Cash Flow Hedges

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Amount of pretax net (losses) gains recognized in OCI	$	(5)	74
Amount of pretax net gains reclassified from OCI into net income		8	14

Schedule of Price Risk Derivatives

The net (losses) gains recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for risk management and other business purposes are summarized in the following table:
	Condensed Consolidated		For the three months
	Statements of		ended March 31,
($ in millions)	Income Caption		2017	2016
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale	Mortgage banking net revenue	$	(21)	(11)
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		(1)	96
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		(1)	(4)
Equity contracts:
Stock warrant associated with Vantiv Holding, LLC	Other noninterest income		-	47
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(13)	1

Risk Ratings of the Notional Amount of Risk Participation Agreements

Risk ratings of the notional amount of risk participation agreements under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	2,604	2,447
Special mention		8	14
Substandard		11	6
Total	$	2,623	2,467

Net Gains (Losses) Recognized in the Income Statement Related to Free-Standing Derivative Instruments Used For Customer Accomodation

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:
			For the three months
	Condensed Consolidated		ended March 31,
($ in millions)	Statements of Income Caption		2017	2016
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	5	7
Interest rate contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		-	(1)
Interest rate lock commitments	Mortgage banking net revenue		22	42
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		1	1
Commodity contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	(1)
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)	Corporate banking revenue		13	16
Foreign exchange contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	(2)

Offsetting Derivative Financial Instruments

The following tables provide a summary of offsetting derivative financial instruments:
	Gross Amount		Gross Amounts Not Offset in the
	Recognized in the		Condensed Consolidated Balance Sheets
	Condensed Consolidated
As of March 31, 2017 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	830	(225)	(345)		260
Total assets		830	(225)	(345)		260
Liabilities:
Derivatives		489	(225)	(115)		149
Total liabilities	$	489	(225)	(115)		149

• Amount does not include IRLCs because these instruments are not subject to master netting or similar arrangements.
• Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

	Gross Amount		Gross Amounts Not Offset in the
	Recognized in the		Condensed Consolidated Balance Sheets
	Condensed Consolidated
As of December 31, 2016 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	1,044	(374)	(377)		293
Total assets		1,044	(374)	(377)		293
Liabilities:
Derivatives		665	(374)	(125)		166
Total liabilities	$	665	(374)	(125)		166

• Amount does not include the stock warrant associated with Vantiv Holding, LLC andIRLCs because these instruments are not subject to master netting or similar arrangements.
• Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

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Other Short Term Borrowings (Tables)

3 Months Ended

Mar. 31, 2017

Short-term Debt

Schedule Of Short Term Debt

Borrowings with original maturities of one year or less are classified as short-term. The following table presents a summary of the Bancorp's other short-term borrowings as of:
		March 31,	December 31,
($ in millions)		2017	2016
FHLB advances	$	950	2,500
Securities sold under repurchase agreements		684	661
Derivative collateral		381	374
Total other short-term borrowings	$	2,015	3,535

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets

The following table summarizes the Bancorp's securities sold under repurchase agreements by the type of collateral securing the borrowing and remaining contractual maturity as of:
($ in millions)			March 31, 2017		December 31, 2016
			Amount	Remaining Contractual Maturity	Amount	Remaining Contractual Maturity
Type of collateral:
	Agency residential mortgage-backed securities	$	684	Overnight	661	Overnight
	U.S. Treasury and federal agencies securities		-	Overnight	-	Overnight
Total securities sold under repurchase agreements		$	684		661

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Commitments, Contingent Liabilities and Guarantees (Tables)

3 Months Ended

Mar. 31, 2017

Commitments, Contingent Liabilities and Guarantees

Summary of Significant Commitments

Commitments
The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of:
		March 31,	December 31,
($ in millions)		2017	2016
Commitments to extend credit	$	66,980	67,909
Letters of credit		2,525	2,583
Forward contracts related to residential mortgage loans held for sale		1,630	1,823
Noncancelable operating lease obligations		575	576
Purchase obligations		120	57
Capital commitments for private equity investments		57	59
Capital expenditures		49	29
Capital lease obligations		18	19

Credit Risk Associated With Commitments

Risk ratings under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	65,821	66,802
Special mention		404	338
Substandard		743	753
Doubtful		12	16
Total commitments to extend credit	$	66,980	67,909

Standby and Commercial Letters of Credit, Conditional Commitments Issued to Guarantee the Performance of a Customer to a Third Party

Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party and expire as summarized in the following table as of March 31, 2017:
($ in millions)
Less than 1 year(a)	$	1,405
1 - 5 years(a)		1,095
Over 5 years		25
Total letters of credit	$	2,525

(a) Includes $17 and $5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 year and between 1 - 5 years, respectively.

Credit Risk associated with Letters of Credit

Risk ratings under this risk rating system are summarized in the following table as of:
		March 31,	December 31,
($ in millions)		2017	2016
Pass	$	2,100	2,134
Special mention		79	98
Substandard		282	290
Doubtful		64	61
Total letters of credit	$	2,525	2,583

Activity in Reserve for Representation and Warranty Provisions

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended March 31,
($ in millions)		2017	2016
Balance, beginning of period	$	13	25
Net reductions to the reserve		(1)	(2)
Losses charged against the reserve		-	-
Balance, end of period	$	12	23

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following tables provide a rollforward of unresolved claims by claimant type for the three months ended:
	GSE			Private Label
March 31, 2017 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	13	$	2	-	$	-
New demands	23		3	-		-
Loan paydowns/payoffs	(1)		-	-		-
Resolved demands	(24)		(4)	-		-
Balance, end of period	11	$	1	-	$	-

	GSE			Private Label
March 31, 2016 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	16	$	4	2	$	-
New demands	71		6	2		-
Loan paydowns/payoffs	(4)		(1)	-		-
Resolved demands	(68)		(7)	(3)		-
Balance, end of period	15	$	2	1	$	-

Visa Funding and Bancorp Cash Payments

After the Bancorp’s sale of the Class B Shares, Visa has funded additional amounts into the litigation escrow account which have resulted in further dilutive adjustments to the conversion of Class B Shares into Class A Shares, and along with other terms of the total return swap, required the Bancorp to make cash payments in varying amounts to the swap counterparty as follows:

		Visa	Bancorp Cash
Period ($ in millions)		Funding Amount	Payment Amount
Q2 2010	$	500	20
Q4 2010		800	35
Q2 2011		400	19
Q1 2012		1,565	75
Q3 2012		150	6
Q3 2014		450	18	i

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income

Activity of the Components of Other Comprehensive Income and Accumulated Other Comprehensive Income

The tables below present the activity of the components of OCI and AOCI for the three months ended:
			Total Other			Total Accumulated Other
			Comprehensive Income			Comprehensive Income
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2017 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale securities arising
	during period	$	22	(7)	15
Reclassification adjustment for net losses on available-for-sale
	securities included in net income		2	(1)	1
Net unrealized gains on available-for-sale securities			24	(8)	16	101	16	117
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(5)	2	(3)
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(8)	3	(5)
Net unrealized gains on cash flow hedge derivatives			(13)	5	(8)	10	(8)	2
Reclassification of amounts to net periodic benefit costs			2	(1)	1
Defined benefit pension plans, net			2	(1)	1	(52)	1	(51)
Total		$	13	(4)	9	59	9	68

			Total Other			Total Accumulated Other
			Comprehensive Income			Comprehensive Income
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2016 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale securities arising
	during period	$	695	(243)	452
Reclassification adjustment for net gains on available-for-sale
	securities included in net income		(8)	3	(5)
Net unrealized gains on available-for-sale securities			687	(240)	447	238	447	685
Unrealized holding gains on cash flow hedge derivatives arising
	during period		74	(26)	48
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(14)	5	(9)
Net unrealized gains on cash flow hedge derivatives			60	(21)	39	22	39	61
Reclassification of amounts to net periodic benefit costs			2	(1)	1
Defined benefit pension plans, net			2	(1)	1	(63)	1	(62)
Total		$	749	(262)	487	197	487	684

Reclassification Out of Accumulated Other Comprehensive Income to Net Income

The table below presents reclassifications out of AOCI:
		Condensed ConsolidatedStatements of Income Caption		For the three months ended March 31,
Components of AOCI: ($ in millions)				2017	2016
Net unrealized gains on available-for-sale securities:(b)
	Net losses included in net income	Securities gains, net	$	(2)	8
		Income before income taxes		(2)	8
		Applicable income tax expense		1	(3)
		Net income		(1)	5
Net unrealized gains on cash flow hedge derivatives:(b)
	Interest rate contracts related to C&I loans	Interest and fees on loans and leases		8	14
		Income before income taxes		8	14
		Applicable income tax expense		(3)	(5)
		Net income		5	9
Net periodic benefit costs:(b)
	Amortization of net actuarial loss	Employee benefits expense(a)		(2)	(2)
		Income before income taxes		(2)	(2)
		Applicable income tax expense		1	1
		Net income		(1)	(1)
Total reclassifications for the period		Net income	$	3	13

• This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 21of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the computation of net periodic benefit cost.
• Amounts in parentheses indicate reductions to net income.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share

Calculation of Earnings Per Share and the Reconciliation of Earnings Per Share to Earnings Per Diluted Share

The following table provides the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:
		2017				2016(a)
For the three months ended March 31,			Average	Per Share		Average	Per Share
(in millions, except per share data)		Income	Shares	Amount	Income	Shares	Amount
Earnings Per Share:
Net income available to common shareholders	$	290			311
Less: Income allocated to participating securities		4			3
Net income allocated to common shareholders	$	286	748	0.38	308	774	0.40
Earnings Per Diluted Share:
Net income available to common shareholders	$	290			311
Effect of dilutive securities:
Stock-based awards		-	13		-	4
Net income available to common shareholders		290			311
plus assumed conversions
Less: Income allocated to participating securities		4			3
Net income allocated to common shareholders
plus assumed conversions	$	286	761	0.38	308	778	0.40

A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables summarize assets and liabilities measured at fair value on a recurring basis as of:
	Fair Value Measurements Using
March 31, 2017 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	437	-	-	437
Obligations of states and political subdivisions securities		-	45	-	45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	16,245	-	16,245
Agency commercial mortgage-backed securities		-	8,672	-	8,672
Non-agency commercial mortgage-backed securities		-	3,299	-	3,299
Asset-backed securities and other debt securities		-	2,134	-	2,134
Equity securities(a)		90	1	-	91
Available-for-sale and other securities(a)		527	30,396	-	30,923
Trading securities:
U.S. Treasury and federal agencies securities		-	18	-	18
Obligations of states and political subdivisions securities		-	21	-	21
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	265	-	265
Asset-backed securities and other debt securities		-	24	-	24
Equity securities		361	-	-	361
Trading securities		361	328	-	689
Residential mortgage loans held for sale		-	606	-	606
Residential mortgage loans(b)		-	-	141	141
MSRs(f)		-	-	776	776
Derivative assets:
Interest rate contracts		1	624	16	641
Foreign exchange contracts		-	126	-	126
Commodity contracts		23	56	-	79
Derivative assets(d)		24	806	16	846
Total assets	$	912	32,136	933	33,981
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	179	5	189
Foreign exchange contracts		-	123	-	123
Equity contracts		-	-	97	97
Commodity contracts		8	72	-	80
Derivative liabilities(e)		13	374	102	489
Short positions(e)		21	6	-	27
Total liabilities	$	34	380	102	516

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $359 and $1, respectively, at March 31, 2017.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the three months endedMarch 31, 2017, no assets or liabilities were transferred between Level 1 and Level 2.
• Included in other assets in the Condensed Consolidated Balance Sheets.
• Included in other liabilities in the Condensed Consolidated Balance Sheets.
• Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

	Fair Value Measurements Using
December 31, 2016 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale and other securities:
U.S. Treasury and federal agencies securities	$	471	78	-	549
Obligations of states and political subdivisions securities		-	45	-	45
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,608	-	15,608
Agency commercial mortgage-backed securities		-	9,055	-	9,055
Non-agency commercial mortgage-backed securities		-	3,112	-	3,112
Asset-backed securities and other debt securities		-	2,116	-	2,116
Equity securities(a)		90	1	-	91
Available-for-sale and other securities(a)		561	30,015	-	30,576
Trading securities:
U.S. Treasury and federal agencies securities		-	23	-	23
Obligations of states and political subdivisions securities		-	39	-	39
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	8	-	8
Asset-backed securities and other debt securities		-	15	-	15
Equity securities		325	-	-	325
Trading securities		325	85	-	410
Residential mortgage loans held for sale		-	686	-	686
Residential mortgage loans(b)		-	-	143	143
Derivative assets:
Interest rate contracts		20	715	13	748
Foreign exchange contracts		-	202	-	202
Commodity contracts		22	85	-	107
Derivative assets(d)		42	1,002	13	1,057
Total assets	$	928	31,788	156	32,872
Liabilities:
Derivative liabilities:
Interest rate contracts	$	3	257	5	265
Foreign exchange contracts		-	204	-	204
Equity contracts		-	-	91	91
Commodity contracts		27	79	-	106
Derivative liabilities(e)		30	540	96	666
Short positions(e)		17	4	-	21
Total liabilities	$	47	544	96	687

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $358 and $1, respectively, at December 31, 2016.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the year ended December 31, 2016, no assets or liabilities were transferred between Level 1 and Level 2.
• Included in other assets in the Condensed Consolidated Balance Sheets.
• Included in other liabilities in the Condensed Consolidated Balance Sheets.

Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following tables are a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Residential		Interest Rate	Equity
		Mortgage		Derivatives,	Derivatives,	Total
For the three months ended March 31, 2017 ($ in millions)		Loans	MSRs(d)	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	143	744	8	(91)		804
Total gains (losses) (realized/unrealized):
Included in earnings		-	(23)	23	(13)		(13)
Purchases/originations		-	55	(1)	-		54
Settlements		(5)	-	(19)	7		(17)
Transfers into Level 3(b)		3	-	-	-		3
Balance, end of period	$	141	776	11	(97)		831
The amount of total gains (losses) for the period
included in earnings attributable to the change in unrealized
gains or losses relating to assets still held at March 31, 2017(c)	$	-	(23)	16	(13)		(20)

• Net interest rate derivatives include derivative assets and liabilities of $16and $5, respectively, as of March 31, 2017. Net equity derivatives include derivative assets and liabilities of $0 and $97, respectively, as of March 31, 2017.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.
• Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Residential	Interest Rate	Equity
		Mortgage	Derivatives,	Derivatives,	Total
For the three months ended March 31, 2016 ($ in millions)		Loans	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	167	12	201		380
Total gains (realized/unrealized):
Included in earnings		1	42	48		91
Purchases		-	(1)	-		(1)
Settlements		(11)	(28)	4		(35)
Transfers into Level 3(b)		3	-	-		3
Balance, end of period	$	160	25	253		438
The amount of total gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to assets still held at March 31, 2016(c)	$	1	29	48		78

• Net interest rate derivatives include derivative assets and liabilities of $29 and $4, respectively, as of March 31, 2016. Net equity derivatives include derivative assets and liabilities of $308and $55, respectively, as ofMarch 31, 2016.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.

Total Gains and Losses Included in Earnings for Assets and Liabilites Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The total gains and losses included in earnings for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Mortgage banking net revenue	$	-	43
Other noninterest income		(13)	48
Total (losses) gains	$	(13)	91

The total gains and losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2017 and 2016 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2017	2016
Mortgage banking net revenue	$	(7)	30
Other noninterest income		(13)	48
Total (losses) gains	$	(20)	78

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following tables provide the fair value hierarchy and carrying amount of all assets that were held as of March 31, 2017 and 2016, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2017 and 2016, and the related gains and losses from fair value adjustments on assets sold during the period as well as assets still held as of the end of the period.
		Fair Value Measurements Using				Total Losses
						For the three months
As of March 31, 2017 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2017
Commercial loans held for sale	$	-	-	1	1	(19)
Commercial and industrial loans		-	-	318	318	(26)
Commercial mortgage loans		-	-	25	25	(2)
Commercial leases		-	-	2	2	(1)
OREO		-	-	19	19	(4)
Bank premises and equipment		-	-	15	15	(3)
Operating lease equipment		-	-	55	55	(20)
Total	$	-	-	435	435	(75)

		Fair Value Measurements Using				Total (Losses) Gains
						For the three months
As of March 31, 2016 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2016
Commercial loans held for sale	$	-	-	5	5	(2)
Commercial and industrial loans		-	-	347	347	(47)
Commercial mortgage loans		-	-	85	85	6
Commercial construction loans		-	-	-	-	2
MSRs(a)		-	-	685	685	(85)
OREO		-	-	27	27	(3)
Bank premises and equipment		-	-	12	12	1
Total	$	-	-	1,161	1,161	(128)

Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

Quantitative Information About Significant Unobservable Level 3 Fair Value Measurement Inputs

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured at fair value on a recurring basis:
As of March 31, 2017 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	141	Loss rate model	Interest rate risk factor	(10.6) - 15.4%	2.3%
				Credit risk factor	0 - 46.2%	1.2%
MSRs		776	Discounted cash flow	Prepayment speed	0.7-100%	(Fixed) 11.2%(Adjustable) 25.2%
				OAS spread (bps)	430-1,515	(Fixed) 528(Adjustable) 757
IRLCs, net		16	Discounted cash flow	Loan closing rates	12.3 - 97.9%	72.2%
Swap associated with the sale of Visa, Inc.		(97)	Discounted cash flow	Timing of the resolution	12/31/2018 -	NM
Class B shares				of the Covered Litigation	12/31/2022

As of March 31, 2016 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	160	Loss rate model	Interest rate risk factor	(6.0) - 16.5%	4.4%
				Credit risk factor	0 - 80.5%	1.4%
IRLCs, net		29	Discounted cash flow	Loan closing rates	5.6 - 94.0%	75.0%
Stock warrant associated with Vantiv		308	Black-Scholes option-	Expected term (years)	2.0 - 13.3	5.8
Holding, LLC			pricing model	Expected volatility(a)	23.0 - 30.4%	25.9%
Swap associated with the sale of Visa, Inc.		(55)	Discounted cash flow	Timing of the resolution	12/31/2016 -	NM
Class B shares				of the Covered Litigation	3/31/2021

(a) Based on historical and implied volatilities of Vantiv, Inc. and comparable companies assuming similar expected terms.

The following tables present information as of March 31, 2017 and 2016 about significant unobservable inputs related to the Bancorp’s material categories of Level 3 financial assets and liabilities measured on a nonrecurring basis:
As of March 31, 2017 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans held for sale	$	1	Appraised value	Appraised value	NM	NM
Commercial and industrial loans		318	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		25	Appraised value	Collateral value	NM	NM
Commercial leases		2	Appraised value	Collateral value	NM	NM
OREO		19	Appraised value	Appraised value	NM	NM
Bank premises and equipment		15	Appraised value	Appraised value	NM	NM
Operating lease equipment		55	Appraised value	Appraised value	NM	NM

As of March 31, 2016 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial loans held for sale	$	5	Appraised value	Appraised Value	NM	NM
				Costs to sell	NM	10.0%
Commercial and industrial loans		347	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		85	Appraised value	Collateral value	NM	NM
Commercial construction loans		-	Appraised value	Collateral value	NM	NM
MSRs		685	Discounted cash flow	Prepayment speed	0-100%	(Fixed) 14.1%(Adjustable) 27.8%
				OAS spread (bps)	364-1,515	(Fixed) 603(Adjustable) 713
OREO		27	Appraised value	Appraised value	NM	NM
Bank premises and equipment		12	Appraised value	Appraised value	NM	NM

Difference Between the Aggregate Fair Value and the Aggregate Unpaid Principal Balance for Residential Mortgage Loans Measured at Fair Value

The following table summarizes the difference between the fair value and the unpaid principal balance for residential mortgage loans measured at fair value as of:
		Aggregate	Aggregate Unpaid
($ in millions)		Fair Value	Principal Balance	Difference
March 31, 2017
Residential mortgage loans measured at fair value	$	747	725	22
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-
December 31, 2016
Residential mortgage loans measured at fair value	$	829	823	6
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-

Carrying Amounts and Estimated Fair Values for Certain Financial Instruments

Fair Value of Certain Financial Instruments
The following tables summarize the carrying amounts and estimated fair values for certain financial instruments, excluding financial instruments measured at fair value on a recurring basis:
		Net Carrying	Fair Value Measurements Using			Total
As of March 31, 2017 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,205	2,205	-	-	2,205
Other securities		608	-	608	-	608
Held-to-maturity securities		26	-	-	26	26
Other short-term investments		1,644	1,644	-	-	1,644
Loans held for sale		10	-	-	10	10
Portfolio loans and leases:
Commercial and industrial loans		40,362	-	-	41,567	41,567
Commercial mortgage loans		6,838	-	-	6,776	6,776
Commercial construction loans		4,268	-	-	4,238	4,238
Commercial leases		4,079	-	-	3,700	3,700
Residential mortgage loans		15,099	-	-	15,459	15,459
Home equity		7,415	-	-	8,194	8,194
Automobile loans		9,530	-	-	9,246	9,246
Credit card		1,975	-	-	2,307	2,307
Other consumer loans and leases		795	-	-	830	830
Unallocated ALLL		(112)	-	-	-	-
Total portfolio loans and leases, net	$	90,249	-	-	92,317	92,317
Financial liabilities:
Deposits	$	104,156	-	104,148	-	104,148
Federal funds purchased		155	155	-	-	155
Other short-term borrowings		2,015	-	2,015	-	2,015
Long-term debt		13,658	13,608	527	-	14,135

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2016 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,392	2,392	-	-	2,392
Other securities		607	-	607	-	607
Held-to-maturity securities		26	-	-	26	26
Other short-term investments		2,754	2,754	-	-	2,754
Loans held for sale		65	-	-	65	65
Portfolio loans and leases:
Commercial and industrial loans		40,958	-	-	41,976	41,976
Commercial mortgage loans		6,817	-	-	6,735	6,735
Commercial construction loans		3,887	-	-	3,853	3,853
Commercial leases		3,959	-	-	3,651	3,651
Residential mortgage loans		14,812	-	-	15,415	15,415
Home equity		7,637	-	-	8,421	8,421
Automobile loans		9,941	-	-	9,640	9,640
Credit card		2,135	-	-	2,503	2,503
Other consumer loans and leases		668	-	-	678	678
Unallocated ALLL		(112)	-	-	-	-
Total portfolio loans and leases, net	$	90,702	-	-	92,872	92,872
Financial liabilities:
Deposits	$	103,821	-	103,811	-	103,811
Federal funds purchased		132	132	-	-	132
Other short-term borrowings		3,535	-	3,535	-	3,535
Long-term debt		14,388	14,288	545	-	14,833

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting

Results of Operations and Average Assets by Segment

The following tables present the results of operations and assets by business segment for the three months ended:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
March 31, 2017 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	425	430	61	38	(21)	-	933
Provision for loan and lease losses		6	42	15	4	7	-	74
Net interest income after provision for loan and lease losses		419	388	46	34	(28)	-	859
Total noninterest income		202 (c)	184 (b)	55	106	10	(34)(a)	523
Total noninterest expense		370	402	120	113	15	(34)	986
Income (loss) before income taxes		251	170	(19)	27	(33)	-	396
Applicable income tax expense (benefit)		40	60	(7)	10	(12)	-	91
Net income (loss)		211	110	(12)	17	(21)	-	305
Less: Net income attributable to noncontrolling interests		-	-	-	-	-	-	-
Net income (loss) attributable to Bancorp		211	110	(12)	17	(21)	-	305
Dividends on preferred stock		-	-	-	-	15	-	15
Net income (loss) available to common shareholders	$	211	110	(12)	17	(36)	-	290
Total goodwill	$	613	1,655	-	151	-	-	2,419
Total assets	$	57,672	57,876	21,994	9,641	(6,983)(d)	-	140,200

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $3 for branches and land. For more information refer to Note 7 and Note 19.
• Includes impairment charges of $31 for operating lease equipment. For more information refer to Note 8 and Note 19.
• Includes bank premises and equipment of $51 classified as held for sale. For more information, refer to Note 7.

					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
March 31, 2016 ($ in millions)		Banking	Banking	Lending	Management	and Other(d)	Eliminations	Total(d)
Net interest income	$	451	426	60	43	(77)	-	903
Provision for loan and lease losses		65	34	12	-	8	-	119
Net interest income after provision for loan and lease losses		386	392	48	43	(85)	-	784
Total noninterest income		223	189 (b)	83	100	75	(33)(a)	637
Total noninterest expense		363	411	118	107	20	(33)	986
Income (loss) before income taxes		246	170	13	36	(30)	-	435
Applicable income tax expense		35	60	5	13	(4)	-	109
Net income (loss)		211	110	8	23	(26)	-	326
Less: Net income attributable to noncontrolling interests		-	-	-	-	-	-	-
Net income (loss) attributable to Bancorp		211	110	8	23	(26)	-	326
Dividends on preferred stock		-	-	-	-	15	-	15
Net income (loss) available to common shareholders	$	211	110	8	23	(41)	-	311
Total goodwill	$	613	1,655	-	148	-	-	2,416
Total assets	$	59,652	54,528	22,475	8,900	(3,125)(c)	-	142,430

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $2 for branches and land. For more information, refer to Note 7 and Note 19.
• Includes bank premises and equipment of $68classified as held for sale. For more information, refer to Note 7.
• A net taxdeficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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Supplemental Cash Flow (Noncash Investing and Financing Activities) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest paid
Interest	$ 208	$ 191
Income taxes paid, net
Income taxes	18	334
Transfers:
Portfolio loans to loans held for sale	5	3
Loans held for sale to portfolio loans	3	12
Portfolio loans to OREO	$ 12	$ 12

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Securities (Available-for-Sale and Held-to-Maturity Securities) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Investment Holdings
Available-for-sale securities, fair value	[1]	$ 31,531		$ 31,183
Available-for-sale securities, unrealized losses		(188)		(191)
Available-for-sale securities, unrealized gains		371		350
Available-for-sale and other securities, Amortized Cost		31,348		31,024
Held-to-maturity securities, fair value		26		26
Held-to-maturity, unrealized losses		0		0
Held-to-maturity, unrealized gains		0		0
Held-to-maturity securities, amortized cost	[2]	26		26
U.S. Treasury and federal agencies
Investment Holdings
Available-for-sale securities, fair value		437		549
Available-for-sale securities, unrealized losses		0		0
Available-for-sale securities, unrealized gains		2		2
Available-for-sale and other securities, Amortized Cost		435		547
Obligations of states and political subdivisions
Investment Holdings
Available-for-sale securities, fair value		45		45
Available-for-sale securities, unrealized losses		0		0
Available-for-sale securities, unrealized gains		1		1
Available-for-sale and other securities, Amortized Cost		44		44
Held-to-maturity securities, fair value		24		24
Held-to-maturity, unrealized losses		0		0
Held-to-maturity, unrealized gains		0		0
Held-to-maturity securities, amortized cost		24		24
Agency mortgage-backed securities | Residential mortgage backed securities
Investment Holdings
Available-for-sale securities, fair value		16,245	[3]	15,608	[4]
Available-for-sale securities, unrealized losses		(90)	[3]	(95)	[4]
Available-for-sale securities, unrealized gains		195	[3]	178	[4]
Available-for-sale and other securities, Amortized Cost		16,140	[3]	15,525	[4]
Agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings
Available-for-sale securities, fair value		8,672		9,055
Available-for-sale securities, unrealized losses		(63)		(61)
Available-for-sale securities, unrealized gains		88		87
Available-for-sale and other securities, Amortized Cost		8,647		9,029
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings
Available-for-sale securities, fair value		3,299		3,112
Available-for-sale securities, unrealized losses		(16)		(15)
Available-for-sale securities, unrealized gains		46		51
Available-for-sale and other securities, Amortized Cost		3,269		3,076
Asset-backed securities and other debt securities
Investment Holdings
Available-for-sale securities, fair value		2,134		2,116
Available-for-sale securities, unrealized losses		(17)		(18)
Available-for-sale securities, unrealized gains		36		28
Available-for-sale and other securities, Amortized Cost		2,115		2,106
Held-to-maturity securities, fair value		2		2
Held-to-maturity, unrealized losses		0		0
Held-to-maturity, unrealized gains		0		0
Held-to-maturity securities, amortized cost		2		2
Equity securities
Investment Holdings
Available-for-sale securities, fair value		699	[5]	698	[6]
Available-for-sale securities, unrealized losses		(2)	[5]	(2)	[6]
Available-for-sale securities, unrealized gains		3	[5]	3	[6]
Available-for-sale and other securities, Amortized Cost		$ 698	[5]	$ 697	[6]

[1] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

[2] Fair value of $ 26 and $ 26 at March 31, 2017 and December 31, 2016 , respectively.

[3] Includes interest-only mortgage- backed securities of $ 42 as of March 31, 2017 , recorded at fair value with fair value changes re corded in securities gains, net , in the Condensed Consolidated Statement s of Income.

[4] Includes interest-only mortgage-backed securities of $ 60 as of December 31, 2016 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

[5] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 359 and $ 1 , respectively , at March 31, 2017 , that are carried at cost, and certain mutual fund and equity security holdings.

[6] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 358 , and $ 1 , respectively, at December 31, 2016 , that are carried at cost, and certain mutual fund and equity security holdings

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Securities (Available-for-Sale and Held-to-Maturity Securities) (Parenthetical) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Investment Holdings
FHLB, restricted stock holdings		$ 248	$ 248
FRB, restricted stock holdings		359	358
Available-for-sale and other securities	[1]	31,531	31,183
DTCC, restricted stock holdings		1	1
Interest-Only Mortgage-Backed Securities
Investment Holdings
Available-for-sale and other securities		$ 42	$ 60

[1] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

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Securities (Realized Gains and Losses Recognized in Income from Available-for-Sale Securities) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Investments, Unrealized Loss Position
OTTI	[1]	$ (10)	$ (3)
Available-for-sale Securities
Investments, Unrealized Loss Position
Realized gains		9	15
Realized losses		(1)	(4)
OTTI		(10)	(3)
Net realized gains (losses)	[2]	$ (2)	$ 8

[1] (a) Included in securities gains, net, in the Condensed Consolidated Statements of Income

[2] (a) Excludes net gains of $ 1 and net losses of $ 6 on interest-only mortgage-backed securities for the three months ended March 31, 201 7 and 20 1 6, respectively.

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Securities (Realized Gains and Losses Recognized in Income from Available-for-Sale Securities) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest-Only Mortgage-Backed Securities
Investment Holdings
Net gains/losses on interest-only mortgage-backed securities	$ 1	$ (6)

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Securities (Other Than Temporary Impairment Recognized) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Investments, Unrealized Loss Position
OTTI	[1]	$ (10)	$ (3)
Available-for-sale securities | Equity securities
Investments, Unrealized Loss Position
OTTI		0	(1)
Available-for-sale securities | Debt securities
Investments, Unrealized Loss Position
OTTI		$ (10)	$ (2)

[1] (a) Included in securities gains, net, in the Condensed Consolidated Statements of Income

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Securities (Gains and Losses Recognized in Income from Trading Securities) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Securities
Realized gains	[1]	$ 3	$ 2
Realized losses	[2]	(2)	(4)
Net unrealized gains (losses)	[3]	1	1
Total trading securities gains (losses)		$ 2	$ (1)

[1] Includes realized gains of $ 3 and $ 2 for the three months ended March 31, 2017 and 2016 , respectively, reco rded in corporate banking revenu e and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

[2] Includes realized losses of $ 2 and $ 4 for the three months ended March 31, 2017 and 2016 , respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

[3] Includes an immaterial amount of net unrealized gains for both the three months ended March 31, 2017 and 2016 recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

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Securities (Gains and Losses Recognized in Income from Trading Securities) (Parenthetical) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Schedule Of Trading Securities And Other Trading Assets
Realized gains	[1]	$ 3	$ 2
Realized losses	[2]	2	4
Net unrealized gains (losses)	[3]	1	1
Corporate Banking Revenue and Wealth and Asset Management Revenue
Schedule Of Trading Securities And Other Trading Assets
Realized gains		3	2
Realized losses		$ 2	$ 4

[1] Includes realized gains of $ 3 and $ 2 for the three months ended March 31, 2017 and 2016 , respectively, reco rded in corporate banking revenu e and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

[2] Includes realized losses of $ 2 and $ 4 for the three months ended March 31, 2017 and 2016 , respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

[3] Includes an immaterial amount of net unrealized gains for both the three months ended March 31, 2017 and 2016 recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

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Securities (Securities - Additional Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Investment Holdings
Trading securities	$ 689	$ 410
Securities with a fair value, pledged as collateral	$ 8,300	$ 10,100

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Securities (Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Securities) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Debt securities:
Less than 1 year	[1]	$ 187
1-5 years	[1]	6,316
5-10 years	[1]	21,358
Over 10 years	[1]	2,789
Equity securities		698
Available-for-sale and other securities, Amortized Cost		31,348	$ 31,024
Debt securities:
Less than 1 year	[1]	189
1-5 years	[1]	6,362
5-10 years	[1]	21,481
Over 10 years	[1]	2,800
Equity securities		699
Available-for-sale and other securities, fair value	[2]	31,531	31,183
Debt securities:
Less than 1 year	[1]	2
1-5 years	[1]	12
5-10 years	[1]	10
Over 10 years	[1]	2
Equity securities		0
Held-to-maturity securities, amortized cost	[3]	26	26
Debt securities:
Under 1 year	[1]	2
1-5 years	[1]	12
5-10 years	[1]	10
Over 10 years	[1]	2
Equity securities		0
Held-to-maturity securities, fair value		$ 26	$ 26

[1] (a) Actual maturities may differ from contractual maturities when a right to call or prepay obligations exists with or without call or prepayment penalties .

[2] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

[3] Fair value of $ 26 and $ 26 at March 31, 2017 and December 31, 2016 , respectively.

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Securities (Fair Value and Gross Unrealized Losses on Available-for-Sale Securities) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016
Investments, Unrealized Loss Position
Less than 12 months Fair Value	$ 9,781		$ 11,079
Less than 12 months Unrealized Losses	(167)		(172)
12 months or more Fair Value	562		545
12 months or more Unrealized Losses	(21)		(19)
Total Fair Value	10,343		11,624
Total Unrealized Losses	(188)		(191)
U.S. Treasury and federal agencies
Investments, Unrealized Loss Position
Less than 12 months Fair Value	101		199
Less than 12 months Unrealized Losses	0		0
12 months or more Fair Value	0		0
12 months or more Unrealized Losses	0		0
Total Fair Value	101		199
Total Unrealized Losses	0		0
Agency mortgage-backed securities | Residential mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	5,144		6,223
Less than 12 months Unrealized Losses	(82)		(88)
12 months or more Fair Value	161		172
12 months or more Unrealized Losses	(8)		(7)
Total Fair Value	5,305		6,395
Total Unrealized Losses	(90)	[1]	(95)	[2]
Agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	2,931		3,183
Less than 12 months Unrealized Losses	(63)		(61)
12 months or more Fair Value	0		0
12 months or more Unrealized Losses	0		0
Total Fair Value	2,931		3,183
Total Unrealized Losses	(63)		(61)
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	1,283		1,052
Less than 12 months Unrealized Losses	(16)		(15)
12 months or more Fair Value	0		0
12 months or more Unrealized Losses	0		0
Total Fair Value	1,283		1,052
Total Unrealized Losses	(16)		(15)
Asset-backed securities and other debt securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	322		422
Less than 12 months Unrealized Losses	(6)		(8)
12 months or more Fair Value	364		336
12 months or more Unrealized Losses	(11)		(10)
Total Fair Value	686		758
Total Unrealized Losses	(17)		(18)
Equity securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	0		0
Less than 12 months Unrealized Losses	0		0
12 months or more Fair Value	37		37
12 months or more Unrealized Losses	(2)		(2)
Total Fair Value	37		37
Total Unrealized Losses	$ (2)	[3]	$ (2)	[4]

[1] Includes interest-only mortgage- backed securities of $ 42 as of March 31, 2017 , recorded at fair value with fair value changes re corded in securities gains, net , in the Condensed Consolidated Statement s of Income.

[2] Includes interest-only mortgage-backed securities of $ 60 as of December 31, 2016 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

[3] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 359 and $ 1 , respectively , at March 31, 2017 , that are carried at cost, and certain mutual fund and equity security holdings.

[4] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 358 , and $ 1 , respectively, at December 31, 2016 , that are carried at cost, and certain mutual fund and equity security holdings

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Loans & Leases (Loans and Leases Classified by Primary Purpose) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Loans held for sale:
Loans held for sale	[1]	$ 616	$ 751
Portfolio loans and leases:
Commercial and industrial loans		41,074	41,676
Commercial mortgage loans		6,924	6,899
Commercial construction loans		4,283	3,903
Commercial leases		4,092	3,974
Residential mortgage loans		15,336	15,051
Home equity		7,469	7,695
Automobile loans		9,572	9,983
Credit card		2,070	2,237
Other consumer loans and leases		808	680
Portfolio loans and leases	[2],[3]	91,628	92,098
Commercial Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases		56,373	56,452
Commercial Portfolio Segment | Commercial and industrial loans
Loans held for sale:
Loans held for sale		2	60
Commercial Portfolio Segment | Commercial mortgage loans
Loans held for sale:
Loans held for sale		7	5
Commercial Portfolio Segment | Commercial leases
Loans held for sale:
Loans held for sale		1	0
Residential Mortgage Loans | Residential mortgage loans
Loans held for sale:
Loans held for sale		606	686
Consumer Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases		$ 35,255	$ 35,646

[1] Includes $ 606 and $ 686 of residential mortgage loans held for sale measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[2] Includes $ 141 and $ 143 of residential mortgage loans measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[3] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

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Loans & Leases (Loans and Leases - Additional Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable
Unamortized premiums and discounts, deferred direct loan origination fees and costs, and fair value adjustments	$ 249	$ 240
Unearned Income	500	503
Loans pledged at the FHLB	13,200	13,100
Loans pledged at the FRB	$ 39,500	$ 40,000

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Loans & Leases (Total Loans And Leases Managed By The Bancorp) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	$ 91,628		$ 92,098
Net Charge-Offs	89	$ 96
Commercial and Industrial Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	41,076		41,736
Balance of Loans 90 days or More Past Due	3		4
Net Charge-Offs	36	46
Commercial Mortgage Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	6,931		6,904
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	5	6
Commercial Construction Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	4,283		3,903
Balance of Loans 90 days or More Past Due	0		0
Commercial Leases
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	4,093		3,974
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	1	2
Residential Mortgage
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	15,942		15,737
Balance of Loans 90 days or More Past Due	45		49
Net Charge-Offs	5	2
Home Equity
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	7,469		7,695
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	6	8
Automobile Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	9,572		9,983
Balance of Loans 90 days or More Past Due	6		9
Net Charge-Offs	11	9
Credit Card
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	2,070		2,237
Balance of Loans 90 days or More Past Due	21		22
Net Charge-Offs	22	20
Other Consumer Loans and Leases
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	808		680
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	3	$ 3
Loans Held For Sale
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	616		751
Loans and Leases Managed and Securitized
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	92,244		92,849
Balance of Loans 90 days or More Past Due	$ 75		$ 84

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Credit Quality (Summary of Transactions in the ALLL by Portfolio segment) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017		Mar. 31, 2016
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	$ 1,253	[1],[2]	$ 1,272
Losses charged-off	(107)		(116)
Recoveries of losses previously charged- off	18		20
Provision for (benefit from) loan and lease losses	74		119
Balance, end of period	1,238	[3]	1,295
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	831	[1]	840
Losses charged-off	(46)		(60)
Recoveries of losses previously charged- off	4		6
Provision for (benefit from) loan and lease losses	37		81
Balance, end of period	826	[3]	867
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	96	[1]	100
Losses charged-off	(6)		(4)
Recoveries of losses previously charged- off	1		2
Provision for (benefit from) loan and lease losses	5		0
Balance, end of period	96	[3]	98
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	214	[1]	217
Losses charged-off	(55)		(52)
Recoveries of losses previously charged- off	13		12
Provision for (benefit from) loan and lease losses	32		37
Balance, end of period	204	[3]	214
Unallocated
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	112	[1]	115
Losses charged-off	0		0
Recoveries of losses previously charged- off	0		0
Provision for (benefit from) loan and lease losses	0		1
Balance, end of period	$ 112	[3]	$ 116

[1] Includes $ 2 related to leveraged leases at December 31, 2016 .

[2] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[3] Includes $ 2 related to leveraged leases at March 31, 2017 .

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Credit Quality (Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016		Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	$ 223	[1]	$ 230	[2]
Collectively evaluated for impairment	903	[1]	911	[2]
Unallocated	112	[1]	112	[2]
Total allowance for loan and lease losses	1,238	[1]	1,253	[2],[3]	$ 1,295	$ 1,272
Individually evaluated for impairment	1,796	[4]	1,927	[5]
Collectively evaluated for impairment	89,689	[4]	90,025	[5]
Loans acquired with deteriorated credit quality	2	[4]	3	[5]
Total portfolio loans and leases	91,487	[4],[6]	91,955	[5],[7]
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	113	[1],[8]	118	[2],[9]
Collectively evaluated for impairment	713	[1]	713	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	826	[1]	831	[2]	867	840
Individually evaluated for impairment	786	[4],[8]	904	[5],[9]
Collectively evaluated for impairment	55,587	[4]	55,548	[5]
Loans acquired with deteriorated credit quality	0	[4]	0	[5]
Total portfolio loans and leases	56,373	[4]	56,452	[5]
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	68	[1]	68	[2]
Collectively evaluated for impairment	28	[1]	28	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	96	[1]	96	[2]	98	100
Individually evaluated for impairment	656	[4]	652	[5]
Collectively evaluated for impairment	14,537	[4]	14,253	[5]
Loans acquired with deteriorated credit quality	2	[4]	3	[5]
Total portfolio loans and leases	15,195	[4]	14,908	[5]
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	42	[1]	44	[2]
Collectively evaluated for impairment	162	[1]	170	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	204	[1]	214	[2]	214	217
Individually evaluated for impairment	354	[4]	371	[5]
Collectively evaluated for impairment	19,565	[4]	20,224	[5]
Loans acquired with deteriorated credit quality	0	[4]	0	[5]
Total portfolio loans and leases	19,919	[4]	20,595	[5]
Unallocated
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	0	[1]	0	[2]
Collectively evaluated for impairment	0	[1]	0	[2]
Unallocated	112	[1]	112	[2]
Total allowance for loan and lease losses	112	[1]	112	[2]	$ 116	$ 115
Individually evaluated for impairment	0	[4]	0	[5]
Collectively evaluated for impairment	0	[4]	0	[5]
Loans acquired with deteriorated credit quality	0	[4]	0	[5]
Total portfolio loans and leases	$ 0	[4]	$ 0	[5]

[1] Includes $ 2 related to leveraged leases at March 31, 2017 .

[2] Includes $ 2 related to leveraged leases at December 31, 2016 .

[3] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[4] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[5] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

[6] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[7] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[8] Includes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $ 26 and an ALLL of $ 18 .

[9] Includes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $ 26 and an ALLL of $ 18 .

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Credit Quality (Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment) (Parenthetical) (Detail) $ in Millions	3 Months Ended				12 Months Ended
	Mar. 31, 2017 USD ($)		Mar. 31, 2016 USD ($)		Dec. 31, 2016 USD ($)		Dec. 31, 2015 USD ($)
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	$ 1,238	[1]	$ 1,295		$ 1,253	[2],[3]	$ 1,272
Portfolio loans and leases	$ 91,487	[4],[5]			91,955	[6],[7]
Number of contracts	2,059	[8],[9]	3,010	[10],[11]
Recorded investment	$ 1,770	[12]			1,901	[13]
Variable Interest Entity, Primary Beneficiary
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	25				26
Commercial | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	$ 18				$ 18
Number of contracts	5				5
Recorded investment	$ 26				$ 26
Leveraged Leases
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	2				2
Portfolio loans and leases	703				701
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Portfolio loans and leases at fair value	$ 141				$ 143

[1] Includes $ 2 related to leveraged leases at March 31, 2017 .

[2] Includes $ 2 related to leveraged leases at December 31, 2016 .

[3] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[4] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[5] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[6] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[7] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

[8] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[9] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[10] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[11] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[12] Includes $ 277 , $ 642 and $ 308 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 251 , $ 14 an d $ 46 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017 .

[13] Includes $ 322 , $ 635 and $ 323 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 192 , $ 17 and $ 48 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016 .

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Credit Quality (Summary of the Credit Risk Profile of the Bancorp's Commercial Portfolio Segment by Class) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016
Financing Receivable, Modifications
Total loans and leases	$ 91,487	[1],[2]	$ 91,955	[3],[4]
Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	56,373		56,452
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	41,074		41,676
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	3,410		3,360
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	3,514		3,539
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	4,283		3,903
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	4,092		3,974
Pass | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	53,087		53,274
Pass | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	38,187		38,844
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	3,226		3,168
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	3,429		3,466
Pass | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	4,238		3,902
Pass | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	4,007		3,894
Special Mention | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	1,455		1,335
Special Mention | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	1,255		1,204
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	74		72
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	25		4
Special Mention | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	45		1
Special Mention | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	56		54
Substandard | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	1,829		1,816
Substandard | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	1,630		1,604
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	110		117
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	60		69
Substandard | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	0		0
Substandard | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	29		26
Doubtful | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	2		27
Doubtful | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	2		24
Doubtful | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	0		3
Doubtful | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	0		0
Doubtful | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	0		0
Doubtful | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	$ 0		$ 0

[1] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[2] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[3] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[4] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

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Credit Quality (Summary of the Credit Risk Profile of the Bancorp's Residential Mortgage and Consumer Portfolio Segments by Class) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Total loans and leases		$ 91,487	[1],[2]	$ 91,955	[3],[4]
Home Equity | Consumer Portfolio Segment
Total loans and leases		7,469		7,695
Automobile Loans | Consumer Portfolio Segment
Total loans and leases		9,572		9,983
Credit Card | Consumer Portfolio Segment
Total loans and leases		2,070		2,237
Other consumer loans and leases | Consumer Portfolio Segment
Total loans and leases		808		680
Performing Financing Receivable
Total loans and leases	[5]	34,980		35,366
Performing Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	[5]	15,160		14,874
Performing Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases		7,399		7,622
Performing Financing Receivable | Automobile Loans | Consumer Portfolio Segment
Total loans and leases		9,570		9,981
Performing Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases		2,043		2,209
Performing Financing Receivable | Other consumer loans and leases | Consumer Portfolio Segment
Total loans and leases		808		680
Nonperforming Financing Receivable
Total loans and leases	[5]	134		137
Nonperforming Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	[5]	35		34
Nonperforming Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases		70		73
Nonperforming Financing Receivable | Automobile Loans | Consumer Portfolio Segment
Total loans and leases		2		2
Nonperforming Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases		27		28
Nonperforming Financing Receivable | Other consumer loans and leases | Consumer Portfolio Segment
Total loans and leases		$ 0		$ 0

[1] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[2] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[3] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[4] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

[5] (a) Excludes $ 141 and $ 143 of loans measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

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Credit Quality (Summary of the Credit Risk Profile of the Bancorp's Residential Mortgage and Consumer Portfolio Segments by Class) (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Residential Mortgage Loans
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Portfolio loans and leases at fair value	$ 141	$ 143

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Credit Quality (Summarizes the Bancorp's Recorded Investment in Portfolio Loans and Leases by Age and Class) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	$ 90,963	[1],[2]	$ 91,339	[3],[4]
Total Past Due	524	[2]	616	[4]
Total portfolio loans and leases	91,487	[2],[5]	91,955	[4],[6]
90-Days past Due and Still Accruing	75	[2]	84	[4]
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	229	[1],[2]	315	[3],[4]
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	295	[1],[2]	301	[3],[4]
Commercial Portfolio Segment
Financing Receivable, Recorded Investment, Past Due
Total portfolio loans and leases	56,373		56,452
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	40,930	[1]	41,495	[3]
Total Past Due	144		181
Total portfolio loans and leases	41,074		41,676
90-Days past Due and Still Accruing	3		4
Commercial Portfolio Segment | Commercial and Industrial Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	46	[1]	87	[3]
Commercial Portfolio Segment | Commercial and Industrial Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	98	[1]	94	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	3,388	[1]	3,332	[3]
Total Past Due	22		28
Total portfolio loans and leases	3,410		3,360
90-Days past Due and Still Accruing	0		0
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	3	[1]	6	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	19	[1]	22	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	3,506	[1]	3,530	[3]
Total Past Due	8		9
Total portfolio loans and leases	3,514		3,539
90-Days past Due and Still Accruing	0		0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	1	[1]	2	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	7	[1]	7	[3]
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	4,283	[1]	3,902	[3]
Total Past Due	0		1
Total portfolio loans and leases	4,283		3,903
90-Days past Due and Still Accruing	0		0
Commercial Portfolio Segment | Commercial Construction Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	0	[1]	1	[3]
Commercial Portfolio Segment | Commercial Construction Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	0	[1]	0	[3]
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	4,090	[1]	3,972	[3]
Total Past Due	2		2
Total portfolio loans and leases	4,092		3,974
90-Days past Due and Still Accruing	0		0
Commercial Portfolio Segment | Commercial Leases | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	0	[1]	0	[3]
Commercial Portfolio Segment | Commercial Leases | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	2	[1]	2	[3]
Residential Mortgage
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	15,087	[1],[2],[7]	14,790	[3],[4],[8]
Total Past Due	108	[2],[7]	118	[4],[8]
Total portfolio loans and leases	15,195	[2],[7]	14,908	[4],[8]
90-Days past Due and Still Accruing	45	[2],[7]	49	[4],[8]
Residential Mortgage | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	27	[1],[2],[7]	37	[3],[4],[8]
Residential Mortgage | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	81	[1],[2],[7]	81	[3],[4],[8]
Consumer Portfolio Segment | Home Equity
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	7,351	[1]	7,570	[3]
Total Past Due	118		125
Total portfolio loans and leases	7,469		7,695
90-Days past Due and Still Accruing	0		0
Consumer Portfolio Segment | Home Equity | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	64	[1]	68	[3]
Consumer Portfolio Segment | Home Equity | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	54	[1]	57	[3]
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	9,503	[1]	9,886	[3]
Total Past Due	69		97
Total portfolio loans and leases	9,572		9,983
90-Days past Due and Still Accruing	6		9
Consumer Portfolio Segment | Automobile Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	60	[1]	85	[3]
Consumer Portfolio Segment | Automobile Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	9	[1]	12	[3]
Consumer Portfolio Segment | Credit Card
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	2,018	[1]	2,183	[3]
Total Past Due	52		54
Total portfolio loans and leases	2,070		2,237
90-Days past Due and Still Accruing	21		22
Consumer Portfolio Segment | Credit Card | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	27	[1]	28	[3]
Consumer Portfolio Segment | Credit Card | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	25	[1]	26	[3]
Consumer Portfolio Segment | Other Consumer Loans and Leases
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	807	[1]	679	[3]
Total Past Due	1		1
Total portfolio loans and leases	808		680
90-Days past Due and Still Accruing	0		0
Consumer Portfolio Segment | Other Consumer Loans and Leases | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	1	[1]	1	[3]
Consumer Portfolio Segment | Other Consumer Loans and Leases | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 0	[1]	$ 0	[3]

[1] Includes accrual and nonaccrual loans and leases.

[2] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[3] Includes accrual and nonaccrual loans and leases.

[4] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[5] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[6] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

[7] Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2017 , $ 77 of these loans were 30-89 days past due and $ 302 were 90 days or more past due. The Bancorp recognized $ 2 of losses during the three months ended March 31, 2017 due to claim denials and curtailments associated with these insured or guaranteed loans.

[8] Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA . As of December 31 , 2016 , $ 110 of these loa ns were 30-89 days past due and $ 312 were 90 days or more past due. The Bancorp recognized $ 2 o f losses during the three months ended March 31, 2016 due to claim denials and cu rtailments associated with these insured or guaranteed loans .

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Credit Quality (Summarizes the Bancorp's Recorded Investment in Portfolio Loans and Leases by Age and Class) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017		Mar. 31, 2016	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 524	[1]		$ 616	[2]
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	229	[1],[3]		315	[2],[4]
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	295	[1],[3]		301	[2],[4]
Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due
Portfolio loans and leases at fair value	141			143
Residential Mortgage Loans | Federal Housing Administration Loan
Financing Receivable, Recorded Investment, Past Due
Losses Due To Claim Denials And Curtailments	2		$ 2
Residential Mortgage Loans | Federal Housing Administration Loan | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	77			110
Residential Mortgage Loans | Federal Housing Administration Loan | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 302			$ 312

[1] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[2] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[3] Includes accrual and nonaccrual loans and leases.

[4] Includes accrual and nonaccrual loans and leases.

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Credit Quality (Summarizes the Bancorp's Recorded Investment in Impaired Loans and Related Allowance by Class) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	$ 1,208		$ 1,210
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	684		842
Unpaid Principal Balance	1,892		2,052
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	1,139		1,168
Impaired Financing Receivable With No Related Allowance Recorded Investment	631		733
Recorded investment	1,770	[1]	1,901	[2]
Allowance	205		212
Commercial Portfolio Segment | Commercial and Industrial Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	449		440
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	264		394
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	392		414
Impaired Financing Receivable With No Related Allowance Recorded Investment	242		320
Allowance	86		94
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	19	[3]	24	[4]
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	28		36
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	13	[3]	16	[4]
Impaired Financing Receivable With No Related Allowance Recorded Investment	22		35
Allowance	3	[3]	5	[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	16		7
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	74		93
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	15		6
Impaired Financing Receivable With No Related Allowance Recorded Investment	74		83
Allowance	6		1
Commercial Portfolio Segment | Commercial Leases
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance			2
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	2		2
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment			2
Impaired Financing Receivable With No Related Allowance Recorded Investment	2		2
Residential Mortgage Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	472		471
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	209		207
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	468		465
Impaired Financing Receivable With No Related Allowance Recorded Investment	188		187
Allowance	68		68
Consumer Portfolio Segment | Home Equity
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	192		202
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	104		107
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	191		201
Impaired Financing Receivable With No Related Allowance Recorded Investment	101		104
Allowance	29		30
Consumer Portfolio Segment | Automobile Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	11		12
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	3		3
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	11		12
Impaired Financing Receivable With No Related Allowance Recorded Investment	2		2
Allowance	1		2
Consumer Portfolio Segment | Credit Card
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	49		52
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	49		52
Allowance	$ 12		$ 12

[1] Includes $ 277 , $ 642 and $ 308 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 251 , $ 14 an d $ 46 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017 .

[2] Includes $ 322 , $ 635 and $ 323 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 192 , $ 17 and $ 48 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016 .

[3] Excludes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $ 26 , a recorded investment of $ 26 and an ALLL of $ 18 .

[4] Excludes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $ 26 , a recorded investment of $ 26 and an ALLL of $ 18 .

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Credit Quality (Summarizes the Bancorp's Recorded Investment in Impaired Loans and Related Allowance by Class) (Parenthetical) (Detail) $ in Millions	3 Months Ended				12 Months Ended
	Mar. 31, 2017 USD ($)		Mar. 31, 2016 USD ($)		Dec. 31, 2016 USD ($)
Financing Receivable, Impaired
Unpaid principal balance	$ 1,892				$ 2,052
Recorded investment	1,770	[1]			1,901	[2]
Allowance	$ 205				212
Number of contracts	2,059	[3],[4]	3,010	[5],[6]
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Impaired
Allowance	$ 86				94
Number of contracts	33	[3],[4]	24	[5],[6]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Allowance	$ 3	[7]			5	[8]
Number of contracts	5	[3],[4]	7	[5],[6]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Impaired
Unpaid principal balance	$ 26				26
Recorded investment	26				26
Allowance	$ 18				$ 18
Number of contracts	5		5		5
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Impaired
Allowance	$ 6				$ 1
Number of contracts	1	[3],[4]	2	[5],[6]
Commercial Portfolio Segment | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	$ 277				322
Commercial Portfolio Segment | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	251				192
Residential Mortgage Loans
Financing Receivable, Impaired
Allowance	$ 68				68
Number of contracts	203	[3],[4]	243	[5],[6]
Residential Mortgage Loans | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	$ 642				635
Residential Mortgage Loans | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	14				17
Consumer Portfolio Segment | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	308				323
Consumer Portfolio Segment | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	$ 46				$ 48

[1] Includes $ 277 , $ 642 and $ 308 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 251 , $ 14 an d $ 46 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2017 .

[2] Includes $ 322 , $ 635 and $ 323 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 192 , $ 17 and $ 48 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016 .

[3] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[4] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[5] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[6] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[7] Excludes five restructured loans at March 31, 2017 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $ 26 , a recorded investment of $ 26 and an ALLL of $ 18 .

[8] Excludes five restructured loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $ 26 , a recorded investment of $ 26 and an ALLL of $ 18 .

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Credit Quality (Summary of Average Impaired Loans and Leases and Interest Income by Class) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Impaired
Average Recorded Investment		$ 1,835	$ 1,954
Interest Income Recognized		12	13
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Impaired
Average Recorded Investment		683	645
Interest Income Recognized		1	2
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Average Recorded Investment	[1]	43	71
Interest Income Recognized	[1]	0	0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Impaired
Average Recorded Investment		89	165
Interest Income Recognized		1	1
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Impaired
Average Recorded Investment		0	7
Interest Income Recognized		0	0
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Impaired
Average Recorded Investment		3	5
Interest Income Recognized		0	0
Residential Mortgage Loans
Financing Receivable, Impaired
Average Recorded Investment		654	642
Interest Income Recognized		6	6
Consumer Portfolio Segment | Home Equity
Financing Receivable, Impaired
Average Recorded Investment		298	340
Interest Income Recognized		3	3
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Impaired
Average Recorded Investment		14	19
Interest Income Recognized		0	0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Impaired
Average Recorded Investment		51	60
Interest Income Recognized		$ 1	$ 1

[1] (a) Excludes five restructured 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, with an average recorded investment of $ 2 6 and $ 27 at March 31, 2017 and March 31, 2016 , respectively, and an immaterial amount of interest income recognized for the both the three months ended March 31, 2017 and March 31, 2016 .

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Credit Quality (Summary of Average Impaired Loans and Leases and Interest Income by Class) (Parenthetical) (Detail) $ in Millions		3 Months Ended				12 Months Ended
		Mar. 31, 2017 USD ($)		Mar. 31, 2016 USD ($)		Dec. 31, 2016
Financing Receivable, Impaired
Average Recorded Investment		$ 1,835		$ 1,954
Number of contracts		2,059	[1],[2]	3,010	[3],[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Average Recorded Investment	[5]	$ 43		$ 71
Number of contracts		5	[1],[2]	7	[3],[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Impaired
Average Recorded Investment		$ 26		$ 27
Number of contracts		5		5		5

[1] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[2] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[3] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[4] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[5] (a) Excludes five restructured 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, with an average recorded investment of $ 2 6 and $ 27 at March 31, 2017 and March 31, 2016 , respectively, and an immaterial amount of interest income recognized for the both the three months ended March 31, 2017 and March 31, 2016 .

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Credit Quality (Summary of the Bancorp's Nonperforming Loans and Leases by Class) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases	[1],[2]	$ 657	$ 660
OREO and other repossessed property		64	78
Nonperforming portfolio assets	[1],[2]	721	738
Commercial Portfolio Segment
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		523	523
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		484	478
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases	[3]	28	32
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		9	9
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		2	4
Residential Mortgage Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		35	34
Consumer Portfolio Segment
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		99	103
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		70	73
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		2	2
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		$ 27	$ 28

[1] Excludes $ 9 and $ 1 3 of nonaccrual loans held for sale at March 31, 2017 and December 31, 2016 , respectively.

[2] Includes $ 4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at both March 31, 2017 and Dec ember 31, 2016 and an immaterial amount and $ 1 of restructured nonaccrual government insured commercial loans at March 31, 2017 and December 31, 2016 , respectively .

[3] Excludes $ 19 of restructured nonaccrual loans at both March 31, 2017 and December 31, 2016 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.

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Credit Quality (Summary of the Bancorp's Nonperforming Loans and Leases by Class) (Parenthetical) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Financing Receivable, Modifications
Loans held for sale	[1]	$ 616		$ 751
OREO and other repossessed property		64		78
Portfolio loans and leases		91,487	[2],[3]	91,955	[4],[5]
Commercial Portfolio Segment
Financing Receivable, Modifications
Portfolio loans and leases		56,373		56,452
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Portfolio loans and leases		3,410		3,360
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Modifications
Restructured nonaccrual loans and leases		19		19
Nonperforming Financing Receivable
Financing Receivable, Modifications
Loans held for sale		9		13
Portfolio loans and leases	[6]	134		137
Nonperforming Financing Receivable | Government Insured | Commercial Portfolio Segment
Financing Receivable, Modifications
Restructured nonaccrual loans and leases				1
Nonperforming Financing Receivable | Government Insured | Commercial Portfolio Segment | Small Business Administration
Financing Receivable, Modifications
Portfolio loans and leases		$ 4		$ 4

[1] Includes $ 606 and $ 686 of residential mortgage loans held for sale measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[2] Excludes $ 141 of residential mortgage loans measured at fair value, and includes $ 7 03 of leveraged leases, net of unearned income at March 31, 2017 .

[3] Excludes $ 141 of residential mortgage loans measured at fair value at March 31, 2017 .

[4] Excludes $ 143 of residential mortgage loans measured at fair value at December 31, 2016 .

[5] Excludes $ 143 of residential mortgage loans measured at fair value, and includes $ 701 of leveraged leases, net of unearned income at December 31, 2016 .

[6] (a) Excludes $ 141 and $ 143 of loans measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

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Credit Quality (Credit Quality Additional Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Troubled Debt Restructuring
Line of credit commitments for modified troubled debt restructurings	$ 115	$ 82
Letter of credit commitments for modified troubled debt restructurings	56	57
Mortgage loans in process of foreclosure amount	273	$ 260
Commercial aggregate borrower relationship subject to individual review for impairment	$ 1

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Credit Quality (Summary of Loans Modified in a TDR) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)	[2]	Mar. 31, 2016 USD ($)	[4]
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	2,059	[1]	3,010	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 137		$ 116
Increase (Decrease) to ALLL Upon Modification	4		0
Charge-offs Recognized Upon Modification	$ 2		$ 1
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	33	[1]	24	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 97		$ 56
Increase (Decrease) to ALLL Upon Modification	1		(2)
Charge-offs Recognized Upon Modification	$ 2		$ 0
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	5	[1]	7	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 2		$ 6
Increase (Decrease) to ALLL Upon Modification	0		(2)
Charge-offs Recognized Upon Modification	$ 0		$ 0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	1	[1]	2	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 0		$ 0
Increase (Decrease) to ALLL Upon Modification	0		0
Charge-offs Recognized Upon Modification	$ 0		$ 0
Residential Mortgage Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	203	[1]	243	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 29		$ 36
Increase (Decrease) to ALLL Upon Modification	2		2
Charge-offs Recognized Upon Modification	$ 0		$ 0
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	31	[1]	64	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 2		$ 5
Increase (Decrease) to ALLL Upon Modification	0		0
Charge-offs Recognized Upon Modification	$ 0		$ 0
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	30	[1]	78	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 0		$ 1
Increase (Decrease) to ALLL Upon Modification	0		0
Charge-offs Recognized Upon Modification	$ 0		$ 0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	1,756	[1]	2,592	[3]
Recorded Investment in Loans Modified in a TDR During the Period	$ 7		$ 12
Increase (Decrease) to ALLL Upon Modification	1		2
Charge-offs Recognized Upon Modification	$ 0		$ 1

[1] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[2] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

[3] Represents number of loans post-modification and excludes loans previously modified in a TDR .

[4] Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool .

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Credit Quality (Summary of Subsequent Defaults) (Detail) $ in Millions		3 Months Ended
		Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)
Financing Receivable, Modifications
Number of contracts	[1]	514	484
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 13	$ 10
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Number of contracts	[1]	2	1
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 1	$ 0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Number of contracts	[1]		1
Recorded Investment in Loans Modified in a TDR During the Period	[1]		$ 0
Residential Mortgage Loans
Financing Receivable, Modifications
Number of contracts	[1]	57	53
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 9	$ 7
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Number of contracts	[1]	5	6
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 1	$ 1
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Number of contracts	[1]	450	423
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 2	$ 2

[1] (a) Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.

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Bank Premises & Equipment (Bank Premises and Equipment) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Bank Premises and Equipment
Land and improvements	[1]	$ 649	$ 663
Buildings	[1]	1,667	1,672
Equipment		1,773	1,761
Leasehold improvements		392	398
Construction in progress	[1]	109	99
Land and improvements held for sale		33	29
Buildings held for sale		16	9
Equipment held for sale		2	1
Accumulated depreciation and amortization		(2,589)	(2,567)
Total bank premises and equipment	[2]	$ 2,052	$ 2,065

[1] (a ) At both March 31, 2017 and December 31, 2016 , land and improvements , buildings and construction in progress i ncluded $ 92 associated w ith parcels of undeveloped land intended for future branch expansion.

[2] Includes $ 51 and $ 39 of bank premises and equipment held for sale at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 7.

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Bank Premises & Equipment (Bank Premises and Equipment) (Parenthetical) (Detail) - USD ($) $ in Millions		Mar. 31, 2017	Dec. 31, 2016
Bank Premises and Equipment
Land and improvements	[1]	$ 649	$ 663
Branches and undeveloped parcels of land
Bank Premises and Equipment
Land and improvements		$ 92	$ 92

[1] (a ) At both March 31, 2017 and December 31, 2016 , land and improvements , buildings and construction in progress i ncluded $ 92 associated w ith parcels of undeveloped land intended for future branch expansion.

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Bank Premises & Equipment (Bank Premises and Equipment - Additional Information) (Detail) $ in Millions		3 Months Ended
		Mar. 31, 2017 USD ($)	Sep. 30, 2016	Mar. 31, 2016 USD ($)		Dec. 31, 2016 USD ($)
Bank Premises and Equipment
Gain on Branch Consolidation and Sales Plan		$ 0		$ 8	[1]
Land and improvements held for sale		33				$ 29
Buildings held for sale		16				9
Equipment Held For Sale		2				1
Land and improvements	[2]	649				663
Buildings	[2]	1,667				1,672
Equipment		1,773				1,761
Branch Banking
Bank Premises and Equipment
Bank premises impairment		$ 3		$ 2
Disposal group classified as held for sale
Bank Premises and Equipment
Operating Branch Locations		43
Parcels Of Undeveloped Land		33
Disposal group classified as held for sale | September 13 2016 Announcement
Bank Premises and Equipment
Parcels Of Undeveloped Land			5
Branches and undeveloped parcels of land
Bank Premises and Equipment
Land and improvements		$ 92				$ 92
Branches and undeveloped parcels of land | September 13 2016 Announcement
Bank Premises and Equipment
Operating Branch Locations			44
Branch Consolidation and Sales Plan | Disposal group classified as held for sale | Bank Premises And Equipment | September 13 2016 Announcement
Bank Premises and Equipment
Land and improvements held for sale		33
Buildings held for sale		16
Equipment Held For Sale		2
Land and improvements		36
Buildings		16
Equipment		$ 2

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] (a ) At both March 31, 2017 and December 31, 2016 , land and improvements , buildings and construction in progress i ncluded $ 92 associated w ith parcels of undeveloped land intended for future branch expansion.

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Operating Lease Equipment (Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	[1]
Operating Lease Equipment
Other Asset Impairment Charges	$ (20)	$ 0
Operating lease equipment | Commercial Banking
Operating Lease Equipment
Other Asset Impairment Charges	$ 31

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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Intangible Assets (Intangible Assets) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 52	$ 49
Accumulated Amortization	(41)	(40)
Net Carrying Amount	11	9
Core Deposits
Finite-Lived Intangible Assets
Gross Carrying Amount	34	34
Accumulated Amortization	(28)	(27)
Net Carrying Amount	6	7
Other Intangible Assets
Finite-Lived Intangible Assets
Gross Carrying Amount	18	15
Accumulated Amortization	(13)	(13)
Net Carrying Amount	$ 5	$ 2

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Intangible Assets (Estimated Amortization Expense Other Intangible Assets) (Detail) - Other Intangible Assets $ in Millions	Mar. 31, 2017 USD ($)
Finite-Lived Intangible Assets
Remainder of 2017	$ 1
2018	2
2019	2
2020	1
2021	$ 1

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VIE (Classifications of Consolidated VIE Assets, Liabilities and Noncontrolling Interest Included in the Bancorp's Consolidated Balance Sheets) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016		Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and due from banks		$ 2,205	[1]	$ 2,392	[1]	$ 2,298	$ 2,540
Commercial mortgage loans		6,924		6,899
Automobile loans		9,572		9,983
ALLL		(1,238)	[2]	(1,253)	[1],[3]	$ (1,295)	$ (1,272)
Other assets	[1]	7,139		7,844
Liabilities
Other liabilities	[1]	2,104		2,269
Long-term debt	[1]	13,658		14,388
Noncontrolling interests		27		27
Variable Interest Entity, Primary Beneficiary
Assets
Cash and due from banks		85		85
Commercial mortgage loans		46		46
Automobile loans		969		1,170
ALLL		(25)		(26)
Other assets		7		9
Total Assets		1,082		1,284
Liabilities
Other liabilities		2		3
Long-term debt		883		1,094
Total liabilities		885		1,097
Noncontrolling interests		27		27
Variable Interest Entity, Primary Beneficiary | Automobile Loans
Assets
Cash and due from banks		84		84
Commercial mortgage loans		0		0
Automobile loans		969		1,170
ALLL		(5)		(6)
Other assets		7		9
Total Assets		1,055		1,257
Liabilities
Other liabilities		2		3
Long-term debt		883		1,094
Total liabilities		885		1,097
Noncontrolling interests		0		0
Variable Interest Entity, Primary Beneficiary | Fifth Third Community Development Corporation Investments
Assets
Cash and due from banks		1		1
Commercial mortgage loans		46		46
Automobile loans		0		0
ALLL		(20)		(20)
Other assets		0		0
Total Assets		27		27
Liabilities
Other liabilities		0		0
Long-term debt		0		0
Total liabilities		0		0
Noncontrolling interests		$ 27		$ 27

[1] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[2] Includes $ 2 related to leveraged leases at March 31, 2017 .

[3] Includes $ 2 related to leveraged leases at December 31, 2016 .

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VIE (Variable Interest Entities - Additional Information) (Detail) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2016
Variable Interest Entity
OTTI	[1]	$ 10	$ 3
Variable Interest Entity, Primary Beneficiary | Automobile Loans
Variable Interest Entity
Carry Value Of Loans Leases Or Lines Of Credit Securitized				$ 4,500
Variable Interest Entity, Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity
Maximum Exposure		32			$ 31
Variable Interest Entity, Not Primary Beneficiary | Loans Provided to VIEs
Variable Interest Entity
Unfunded commitment amounts		1,000			937
Variable Interest Entity, Not Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity
Maximum Exposure		1,424			1,421
Bancorp's Investment in Affordable Housing Tax Credits		1,424			1,421
Variable Interest Entity, Not Primary Beneficiary | Fifth Third Community Development Corporation Investments | Qualified Affordable Housing Tax Credits
Variable Interest Entity
Bancorp's Investment in Affordable Housing Tax Credits		1,300			1,300
Unfunded commitments		$ 356			349
Unfunded commitments expected funding date		2034
Variable Interest Entity, Not Primary Beneficiary | Private Equity Investments
Variable Interest Entity
Maximum Exposure		$ 178			232
Bancorp's Investment in Affordable Housing Tax Credits		121			176
Unfunded commitment amounts		57			$ 56
Capital Contribution To Private Equity Investments		6	2
OTTI		$ 0	$ 0

[1] (a) Included in securities gains, net, in the Condensed Consolidated Statements of Income

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VIE (Assets and Liabilities Related to Non-consolidated VIEs and Maximum Exposure to Losses) (Detail) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fifth Third Community Development Corporation Investments
Variable Interest Entity
Total Assets	$ 1,424	$ 1,421
Total Liabilities	362	357
Maximum Exposure	1,424	1,421
Private Equity Investments
Variable Interest Entity
Total Assets	121	176
Total Liabilities	0	0
Maximum Exposure	178	232
Loans Provided to VIEs
Variable Interest Entity
Total Assets	1,744	1,735
Total Liabilities	0	0
Maximum Exposure	$ 2,762	$ 2,672

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VIE (Investments in Qualified Affordable Housing Tax Credits) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Other noninterest expense
Schedule of Equity Method Investments
Pre-tax investment and impairment losses	[1]	$ 36	$ 36
Applicable income tax expense
Schedule of Equity Method Investments
Tax credits and other benefits		$ (56)	$ (55)

[1] (a) The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credi ts or other circumstances during both the three months ended March 31, 2017 and 2016 .

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MSR (Activity Related to Mortgage Banking Net Revenue) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale
Residential mortgage loan sales	[1]	$ 1,629	$ 1,114
Origination fees and gains on loan sales		29	42
Gross Mortgage Servicing Fees		$ 47	$ 52

[1] Represents the unpaid principal balance at the time of the sale.

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MSR (Changes in the Servicing Assets) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017		Mar. 31, 2016	Dec. 31, 2016	[1]
Servicing Assets at Fair Value
Carrying amount before valuation allowance as of the beginning of the period				$ 1,204
Servicing rights that result from the transfer of residential mortgage loans				12
Amortization				(27)
Carrying amount before valuation allowance				1,189
Valuation allowance for servicing rights:
Beginning balance				(419)
(Provision for) recovery of MSR impairment				(85)
Ending balance				(504)
Carrying amount as of the end of the period		$ 776	[1]	$ 685	$ 744
Fair value at beginning of period		744
Servicing rights originated		26
Servicing rights acquired		29
Changes in fair value due to changes in inputs or assumptions	[2]	4
Changes in fair value due to other changes in fair value	[3]	(27)
Fair value at end of period		$ 776

[1] Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its r esidential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016. For further information refer to Note 11 .

[2] Primarily reflects changes in prepayment speed and OAS spread assumptions which are updated based on market interest rates

[3] Primarily reflects changes due to collection of contractual cash flows and the passage of time

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MSR (Fair Value of the Servicing Rights) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Servicing Assets at Fair Value
Fair value at beginning of period	$ 744
Fair value at end of period	776	$ 744
Fixed Rate Residential Mortgage Loans
Servicing Assets at Fair Value
Fair value at beginning of period	722	660	$ 757
Fair value at end of period	756	722	660
Adjustable Rate Residential Mortgage Loans
Servicing Assets at Fair Value
Fair value at beginning of period	22	25	27
Fair value at end of period	20	22	25
Fixed Rate Automobile Loans
Servicing Assets at Fair Value
Fair value at beginning of period	0	0	1
Fair value at end of period	$ 0	$ 0	$ 0

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MSR (Activity Related to the MSR Portfolio) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Servicing Assets at Fair Value
Recovery of (provision for) MSR impairment (Mortgage banking net revenue)	$ 0	$ (85)	[1]
MSR Fair Value Adjustment	23	0	[1]
Interest Rate Contract | Servicing Rights | Mortgage Banking Revenue
Servicing Assets at Fair Value
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio (Mortgage banking net revenue)	$ (1)	$ 96

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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MSR (Servicing Assets and Residual Interests Economic Assumptions) (Detail)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fixed Rate Residential Mortgage Loans
Servicing Assets at Amortized Value
Weighted- Average Life (in years)	6 years 8 months 12 days	6 years 3 months 18 days
Prepayment Speed (annual)	9.90%	12.60%
OAS spread (bps)	4.85%	5.39%
Adjustable Rate Residential Mortgage Loans
Servicing Assets at Amortized Value
Weighted- Average Life (in years)	2 years 3 months 18 days	3 years
Prepayment Speed (annual)	34.90%	27.50%
OAS spread (bps)	7.00%	6.81%

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MSR (Sales of Receivables and Servicing Rights - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016
Disclosure - Activity Related to Mortgage Banking Net Revenue [Abstract]
Sevicing of residential mortgage loans for other investors		$ 55,400	$ 53,600
Amortization	$ (27)

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MSR (Sensitivity of the Current Fair Value of Residual Cash Flows to Immediate 10%, 20% and 50% Adverse Changes in Assumptions) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)	[1]
Fixed Rate Residential Mortgage Loans
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption
Fair Value	$ 756
Weighted- Average Life (in years)	6 years
Prepayment Speed (annual)	11.20%
Impact of Adverse Change on Fair Value 10%	$ (33)
Impact of Adverse Change on Fair Value 20%	(63)
Impact of Adverse Change on Fair Value 50%	$ (143)
OAS spread (bps)	5.28%
Impact of Adverse Change on Fair Value 10%	$ (15)
Impact of Adverse Change on Fair Value 20%	(30)
Adjustable Rate Residential Mortgage Loans
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption
Fair Value	$ 20
Weighted- Average Life (in years)	3 years 3 months 18 days
Prepayment Speed (annual)	25.20%
Impact of Adverse Change on Fair Value 10%	$ (1)
Impact of Adverse Change on Fair Value 20%	(3)
Impact of Adverse Change on Fair Value 50%	$ (6)
OAS spread (bps)	7.57%
Impact of Adverse Change on Fair Value 10%	$ 0
Impact of Adverse Change on Fair Value 20%	$ (1)

[1] (a) The impact of the weighted-average default rate on the current fair value of residual cash flows for all scenarios is immaterial .

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Derivatives (Derivative Financial Instruments - Additional Information) (Detail) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Jun. 30, 2009	Mar. 31, 2017	Dec. 31, 2016
Derivative
Valuation adjustments related to the credit risk associated with counterparties of customer accomodation derivative contracts		$ 4	$ 6
Notional amount of the risk participation agreements		$ 2,623	2,467
Percentage of Vantiv Holding, LLC sold to Advent for cash and warrants	51.00%
Interest Rate Contract | Credit Risk
Derivative
Credit Risk Derivatives Average Remaining Life		3 years
Fair value of risk participation agreements		$ 5	4
Interest Rate Contract | Cash Flow Hedging
Derivative
Maximum length of time hedged in cash flow hedge		2 years 9 months
Deferred gains, net of tax, on cash flow hedges were recorded in accumulated other comprehensive income		$ 2	10
Net deferred gains, net of tax, recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months		8
Total collateral
Derivative
Derivative Asset, Fair Value, Amount Not Offset Against Collateral		414	444
Derivative Liability, Fair Value, Amount Offset Against Collateral		320	$ 399
Amount of variation margin payment applied to derivative asset contracts		32
Amount of variation margin payment applied to derivative liability contracts		$ 49

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Derivatives (Notional Amounts and Fair Values for All Derivative Instruments Included in the Consolidated Balance Sheets) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Derivatives, Fair Value
Fair value - Derivative Assets	$ 846	$ 1,057
Fair value - Derivative Liabilities	489	666
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges
Derivatives, Fair Value
Fair value - Derivative Assets	305	345
Fair value - Derivative Liabilities	18	12
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging
Derivatives, Fair Value
Fair value - Derivative Assets	305	323
Fair value - Derivative Liabilities	0	12
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging | Interest Rate Swap | Long-Term Debt
Derivatives, Fair Value
Notional amount	2,955	3,455
Fair value - Derivative Assets	305	323
Fair value - Derivative Liabilities	0	12
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging
Derivatives, Fair Value
Fair value - Derivative Assets	0	22
Fair value - Derivative Liabilities	18	0
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging | Interest Rate Swap | Commercial and Industrial Loans
Derivatives, Fair Value
Notional amount	4,475	4,475
Fair value - Derivative Assets	0	22
Fair value - Derivative Liabilities	18	0
Nondesignated
Derivatives, Fair Value
Fair value - Derivative Assets	541	712
Fair value - Derivative Liabilities	471	654
Nondesignated | Risk Management and Other Business Purposes
Derivatives, Fair Value
Fair value - Derivative Assets	130	185
Fair value - Derivative Liabilities	124	133
Nondesignated | Risk Management and Other Business Purposes | Interest Rate Contract | Servicing Rights
Derivatives, Fair Value
Notional amount	10,602	10,522
Fair value - Derivative Assets	129	165
Fair value - Derivative Liabilities	22	39
Nondesignated | Risk Management and Other Business Purposes | Forward Contracts | Assets Held For Sale
Derivatives, Fair Value
Notional amount	1,630	1,823
Fair value - Derivative Assets	1	20
Fair value - Derivative Liabilities	5	3
Nondesignated | Risk Management and Other Business Purposes | Swap
Derivatives, Fair Value
Notional amount	1,481	1,300
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	97	91
Nondesignated | Risk Management and Other Business Purposes | Foreign Exchange Contract
Derivatives, Fair Value
Notional amount	110	111
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation
Derivatives, Fair Value
Fair value - Derivative Assets	411	527
Fair value - Derivative Liabilities	347	521
Nondesignated | Customer Accommodation | Interest Rate Contract
Derivatives, Fair Value
Notional amount	35,882	33,431
Fair value - Derivative Assets	190	205
Fair value - Derivative Liabilities	144	210
Nondesignated | Customer Accommodation | Interest Rate Lock Commitments
Derivatives, Fair Value
Notional amount	780	701
Fair value - Derivative Assets	16	13
Fair value - Derivative Liabilities	0	1
Nondesignated | Customer Accommodation | Commodity Contract
Derivatives, Fair Value
Notional amount	2,145	2,095
Fair value - Derivative Assets	79	107
Fair value - Derivative Liabilities	80	106
Nondesignated | Customer Accommodation | TBAs
Derivatives, Fair Value
Notional amount	36
Fair value - Derivative Assets	0
Fair value - Derivative Liabilities	0
Nondesignated | Customer Accommodation | Foreign Exchange Contract
Derivatives, Fair Value
Notional amount	10,024	11,013
Fair value - Derivative Assets	126	202
Fair value - Derivative Liabilities	$ 123	$ 204

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Derivatives (Change in the Fair Value for Interest Rate Contracts and the Related Hedged Items) (Detail) - Fair Value Hedging - Interest Rate Contract - Interest Expense, Long-Term Debt - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivatives, Fair Value
Change in fair value of interest rate swaps hedging long-term debt	$ (21)	$ 83
Change in fair value of hedged long-term debt	$ 21	$ (85)

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Derivatives (Net Gains (Losses) Relating to Derivative Instruments Designated as Cash Flow Hedges) (Detail) - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative Instruments, Gain (Loss)
Amount of pretax net (losses) gains recognized in OCI	$ (5)	$ 74
Interest Income (Expense) Net
Derivative Instruments, Gain (Loss)
Amount of pretax net gains reclassified from OCI into net income	$ 8	$ 14

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Derivatives (Net Gains (Losses) Recorded in the Consolidated Statements of Income Relating to Free-Standing Derivative Instruments Used For Risk Management) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Rate Contract | Forward Contracts | Loans Held For Sale | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ (21)	$ (11)
Interest Rate Contract | Servicing Rights | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	(1)	96
Foreign Exchange Contract | Forward Contracts | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	(1)	(4)
Equity Contract | Warrant | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	0	47
Equity Contract | Swap | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ (13)	$ 1

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Derivatives (Risk Ratings of the Notional Amount of Risk Participation Agreements) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Derivatives, Fair Value
Notional amount of the risk participation agreements	$ 2,623	$ 2,467
Pass
Derivatives, Fair Value
Notional amount of the risk participation agreements	2,604	2,447
Risk Level, Special Mention
Derivatives, Fair Value
Notional amount of the risk participation agreements	8	14
Risk Level, Substandard
Derivatives, Fair Value
Notional amount of the risk participation agreements	$ 11	$ 6

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Derivatives (Net Gains (Losses) Recorded in the Consolidated Statements of Income Relating to Free-Standing Derivative Instruments Used For Customer Accommodation) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Rate Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ 5	$ 7
Interest Rate Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	0	(1)
Interest Rate Contract | Interest Rate Lock Commitments | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	22	42
Commodity Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	1	1
Commodity Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	1	(1)
Foreign Exchange Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	13	16
Foreign Exchange Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ 1	$ (2)

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Derivatives (Offsetting Derivative Financial Instruments) (Detail) - USD ($) $ in Millions	Mar. 31, 2017		Dec. 31, 2016
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	$ 846		$ 1,057
Derivative, Collateral, Obligation to Return Cash	(381)		(374)
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	489		666
Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	830	[1]	1,044	[2]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(225)		(374)
Derivative, Collateral, Obligation to Return Cash	(345)	[3]	(377)	[4]
Derivative, Fair Value, Amount Offset Against Collateral, Net	260		293
Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	489	[1]	665	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(225)		(374)
Derivative, Collateral, Right to Reclaim Cash	(115)	[3]	(125)	[4]
Derivative Fair Value Amount Offset Against Collateral Net	149		166
Derivative | Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	830	[1]	1,044	[2]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(225)		(374)
Derivative, Collateral, Obligation to Return Cash	(345)	[3]	(377)	[4]
Derivative, Fair Value, Amount Offset Against Collateral, Net	260		293
Derivative | Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	489	[1]	665	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(225)		(374)
Derivative, Collateral, Right to Reclaim Cash	(115)	[3]	(125)	[4]
Derivative Fair Value Amount Offset Against Collateral Net	$ 149		$ 166

[1] Amount does not includ e IRLCs because these instruments are not subject to master netting or similar arrangements .

[2] Amount does not includ e the stock warrant associated with Vantiv Holding, LLC and IRLCs because these instruments are not subject to master netting or similar arrangements .

[3] Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

[4] Amount of collateral received as an offset to asset positions or pledged as an offset to liability positions. Collateral values in excess of related derivative amounts recognized in the Condensed Consolidated Balance Sheets were excluded from this table.

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Other Short-Term Borrowings (Components of Other Short-Term Borrowings) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Short Term Debt
FHLB advances	$ 950	$ 2,500
Securities sold under repurchase agreements	684	661
Derivative collateral	381	374
Total other short-term borrowings	$ 2,015	$ 3,535

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Other Short-Term Borrowings (Securities Sold Under Repurchase Agreements By Collateral Type) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Short Term Debt
Securities sold under repurchase agreements	$ 684	$ 661
Overnight maturity | U.S. Treasury and federal agencies
Short Term Debt
Securities sold under repurchase agreements	0	0
Overnight maturity | Agency mortgage-backed securities | Residential mortgage backed securities
Short Term Debt
Securities sold under repurchase agreements	$ 684	$ 661

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Commitments (Summary of Significant Commitments) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Commitments to extend credit
Long-term Purchase Commitment
Commitments	$ 66,980	$ 67,909
Letters of credit
Long-term Purchase Commitment
Commitments	2,525	2,583
Forward contracts related to residential mortgage loans held for sale
Long-term Purchase Commitment
Commitments	1,630	1,823
Noncancelable operating lease obligations
Long-term Purchase Commitment
Commitments	575	576
Purchase obligations
Long-term Purchase Commitment
Commitments	120	57
Capital commitments for private equity investments
Long-term Purchase Commitment
Commitments	57	59
Capital expenditures
Long-term Purchase Commitment
Commitments	49	29
Capital lease obligations
Long-term Purchase Commitment
Commitments	$ 18	$ 19

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Commitments (Risk Rating Under the Risk Rating System) (Detail) - Commitments to Extend Credit - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Line of Credit Facility
Commitments	$ 66,980	$ 67,909
Pass
Line of Credit Facility
Commitments	65,821	66,802
Special Mention
Line of Credit Facility
Commitments	404	338
Substandard
Line of Credit Facility
Commitments	743	753
Doubtful
Line of Credit Facility
Commitments	$ 12	$ 16

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Commitments (Commitments, Contingent Liabilities and Guarantees - Additional Information) (Detail) - USD ($) shares in Millions, $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2017		Mar. 31, 2016	Dec. 31, 2016		Dec. 31, 2015	Sep. 30, 2014	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Dec. 31, 2009
Loss Contingencies
Letters of credit	$ 2,525			$ 2,583
Margin account balance held by the brokerage clearing agent	14			15
Amount in excess of amounts reserved	18
Credit loss reserve	1,238	[1]	$ 1,295	1,253	[2],[3]	$ 1,272
Residential Mortgage
Loss Contingencies
Amount in excess of amounts reserved	22
Outstanding balances on residential mortgage loans sold with representation and warranty provisions	12		23	13		$ 25
Outstanding balances on residential mortgage loans sold with credit recourse	$ 360			$ 374
Delinquency Rates	2.50%			3.20%
Credit loss reserve	$ 6			$ 7
Repurchased Outstanding Principal	2		4
Repurchase Demand Request	3		$ 6
Outstanding Repurchase Demand Inventory	1			2
Secured Debt
Loss Contingencies
Fully and unconditionally guaranteed certain long-term borrowing obligations issued by wholly-owned issuing trust entities	62			62
Standby Letters of Credit
Loss Contingencies
Reserve for unfunded commitments	$ 4			$ 3
Standby letters of credit as a percentage of total letters of credit	99.00%			99.00%
Standby Letters of Credit | Secured Debt
Loss Contingencies
Standby letters of credit as a percentage of total letters of credit	62.00%			62.00%
Variable Rate Demand Note
Loss Contingencies
Fifth Third Securities, Inc. (FTS) acted as the remarketing agent to issuers of VRDNs	$ 760			$ 784
Letters of credit	138			145
Total Variable Rate Demand Notes	897			929
Letters of credit issued by the Bancorp related to variable rate demand notes	589			609
Variable Rate Demand Note | Trading Securities
Loss Contingencies
Total Variable Rate Demand Notes				6
Other Liabilities
Loss Contingencies
Reserve for unfunded commitments	159			161
Other Liabilities | Residential Mortgage
Loss Contingencies
Outstanding balances on residential mortgage loans sold with representation and warranty provisions	12			13
Visa Litigation
Loss Contingencies
Recorded share of litigation formally settled by Visa and for probable future litigation settlements	$ 97			$ 91
Escrow Deposit													$ 3,000
Visa
Loss Contingencies
Visa IPO, shares of Visa's Class B common stock received													10.1
Visa Class B shares carryover basis													$ 0
Escrow Deposit							$ 450	$ 150	$ 1,565	$ 400	$ 800	$ 500

[1] Includes $ 2 related to leveraged leases at March 31, 2017 .

[2] Includes $ 2 related to leveraged leases at December 31, 2016 .

[3] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

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Commitments (Standby and Commercial Letters of Credit, Conditional Commitments Issued to Guarantee the Performance of a Customer to a Third Party) (Detail) - Financial Standby Letter of Credit $ in Millions	Mar. 31, 2017 USD ($)
Line of Credit Facility
Commitments	$ 2,525
Less Than One Year From The Balance Sheet Date
Line of Credit Facility
Commitments	1,405	[1]
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	1,095	[1]
More than Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	$ 25

[1] ( a) Includes $ 17 and $ 5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 y ear and between 1 - 5 years, respectively.

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Commitments (Standby and Commercial Letters of Credit, Conditional Commitments Issued to Guarantee the Performance of a Customer to a Third Party) (Parenthetical) (Detail) - Financial Standby Letter of Credit $ in Millions	Mar. 31, 2017 USD ($)
Line of Credit Facility
Commitments	$ 2,525
Less Than One Year From The Balance Sheet Date
Line of Credit Facility
Commitments	1,405	[1]
Less Than One Year From The Balance Sheet Date | Commercial
Line of Credit Facility
Commitments	17
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	1,095	[1]
More than One and within Five Years from Balance Sheet Date | Commercial
Line of Credit Facility
Commitments	5
More than Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	$ 25

[1] ( a) Includes $ 17 and $ 5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 y ear and between 1 - 5 years, respectively.

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Commitments (Letters of Credit) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	$ 2,525	$ 2,583
Pass
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	2,100	2,134
Special Mention
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	79	98
Substandard
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	282	290
Doubtful
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	$ 64	$ 61

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Commitments (Activity in Reserve for Representation and Warranty Provisions) (Detail) - Residential Mortgage - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Valuation And Qualifying Accounts Disclosure
Balance, beginning of period	$ 13	$ 25
Net (reductions) additions to the reserve	(1)	(2)
Losses charged against the reserve	0	0
Balance, end of period	$ 12	$ 23

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Commitments (Unresolved Claims by Claimant) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($)
GSE
Loss Contingencies Dollars
Balance, beginning of period	$ 2	$ 4
New demands	3	6
Loan paydowns/payoffs	0	(1)
Resolved demands	(4)	(7)
Balance, end of period	$ 1	$ 2
Loss Contingencies Units
Balance, beginning of period	13	16
New demands	23	71
Loan paydowns/payoffs	(1)	(4)
Resolved demands	(24)	(68)
Balance, end of period	11	15
Private Label
Loss Contingencies Dollars
Balance, beginning of period	$ 0	$ 0
New demands	0	0
Loan paydowns/payoffs	0	0
Resolved demands	0	0
Balance, end of period	$ 0	$ 0
Loss Contingencies Units
Balance, beginning of period	0	2
New demands	0	2
Loan paydowns/payoffs	0	0
Resolved demands	0	(3)
Balance, end of period	0	1

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Commitments (Visa Funding and Bancorp Cash Payments) (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Visa Funding
Loss Contingencies
Escrow Deposit	$ 450	$ 150	$ 1,565	$ 400	$ 800	$ 500
Bancorp Cash Payment
Loss Contingencies
Reduction of liability in cash to the swap counterparty	$ 18	$ 6	$ 75	$ 19	$ 35	$ 20

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Legal & Regulatory Proceedings (Legal and Regulatory Proceedings - Additional Information) (Detail) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2013	Sep. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Sep. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)
Loss Contingencies
Amount in excess of amounts reserved	$ 18.0
APR Percentage Allegedly Misleading					120.00%
Number Of Putative Class Actions Filed		4
Damages Claimed By Plaintiff			$ 50.0		$ 70.0	$ 40.0
Damages Claimed By Defendant			$ 1.5
Federal Lawsuits
Loss Contingencies
Number of merchants requesting exclusion	460
Class Action Settlement
Loss Contingencies
Number of merchants requesting exclusion	8,000
Percentage of escrow funds returned to defendants	25.00%
Escrow Deposit				$ 46.0

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Income Taxes (Income Taxes - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Taxes
Applicable income tax expense	$ 91	$ 109	[1]
Effective tax rate	22.90%	25.10%
Net tax deficiency reclassified from capital surplus to applicable income tax expense		$ 1

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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AOCI (Activity of the Components of Other Comprehensive Income and Accumulated Other Comprehensive Income) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net activity for accumulated net unrealized gain (loss) on available-for-sale securities
Unrealized holding gains (losses) on available-for-sale securities arising during period	$ 15	$ 452	[1]
Reclassification adjustment for net (gains) losses included in net income	1	(5)	[1]
Net activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(3)	48	[1]
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(5)	(9)	[1]
Net activity for defined benefit plans, net
Reclassification of amounts to net periodic benefit costs	(1)	(1)	[1]
Total Other Comprehensive Activity
Pre-tax activity total	13	749
Total, Tax	(4)	(262)
Other comprehensive income (loss)	9	487	[1]
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	59	197
Other comprehensive income (loss), Net of Tax	9	487	[1]
Total Accumulated Other Comprehensive Income - Ending Balance	68	684
Accumulated Net Unrealized Investment Gain (Loss)
Pre-tax activity for accumulated net unrealized gain (loss) on available-for-sale securities
Unrealized holding gains (losses) on available-for-sale securities arising during period	22	695
Reclassification adjustment for net losses (gains) included in net income	2	(8)
Net unrealized gains on available-for-sale securities	24	687
Tax effect for accumulated net unrealized gain (loss) on available-for-sale securities
Unrealized holding gains (losses) on available-for-sale securities arising during period	(7)	(243)
Reclassification adjustment for net losses (gains) included in net income	(1)	3
Net unrealized gains on available-for-sale securities	(8)	(240)
Net activity for accumulated net unrealized gain (loss) on available-for-sale securities
Unrealized holding gains (losses) on available-for-sale securities arising during period	15	452
Reclassification adjustment for net (gains) losses included in net income	1	(5)
Net unrealized gains on available-for-sale securities	16	447
Total Other Comprehensive Activity
Other comprehensive income (loss)	16	447
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	101	238
Other comprehensive income (loss), Net of Tax	16	447
Total Accumulated Other Comprehensive Income - Ending Balance	117	685
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Pre-tax activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(5)	74
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(8)	(14)
Net unrealized gains on cash flow hedge derivatives	(13)	60
Tax effect for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	2	(26)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	3	5
Net unrealized gains on cash flow hedge derivatives	5	(21)
Net activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(3)	48
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(5)	(9)
Net unrealized gains on cash flow hedge derivatives	(8)	39
Total Other Comprehensive Activity
Other comprehensive income (loss)	(8)	39
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	10	22
Other comprehensive income (loss), Net of Tax	(8)	39
Total Accumulated Other Comprehensive Income - Ending Balance	2	61
Accumulated Defined Benefit Plans Adjustment
Pre-tax activity for defined benefit plans, net
Reclassification of amounts to net periodic benefit costs	2	2
Defined benefit plans, net	2	2
Tax effect for defined benefit plans, net
Reclassification of amounts to net periodic benefit costs	(1)	(1)
Defined benefit plans, net	(1)	(1)
Net activity for defined benefit plans, net
Reclassification of amounts to net periodic benefit costs	1	1
Defined benefit plans, net	1	1
Total Other Comprehensive Activity
Other comprehensive income (loss)	(1)	(1)
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	(52)	(63)
Other comprehensive income (loss), Net of Tax	(1)	(1)
Total Accumulated Other Comprehensive Income - Ending Balance	$ (51)	$ (62)

[1] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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AOCI (Reclassifications Out of Accumulated Other Comprehensive Income) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Reclassifications Out Of Accumulated Other Comprehensive Income
Income Before Income Taxes		$ 396	$ 435	[1]
Applicable income tax expense		91	109	[1]
Net income		305	326	[1],[2]
Total Reclassifications For The Period
Reclassifications Out Of Accumulated Other Comprehensive Income
Net income		3	13
Net Unrealized Gains On Available For Sale Securities
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassification adjustment for net losses (gains) included in net income		(2)	8
Net Unrealized Gains On Available For Sale Securities | Net Losses Included In Net Income
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassification adjustment for net losses (gains) included in net income	[3]	(2)	8
Income Before Income Taxes	[3]	(2)	8
Applicable income tax expense	[3]	1	(3)
Net income	[3]	(1)	5
Net Unrealized Gains On Cash Flow Hedge Activities
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income		8	14
Income Before Income Taxes	[3]	8	14
Applicable income tax expense	[3]	(3)	(5)
Net income	[3]	5	9
Net Unrealized Gains On Cash Flow Hedge Activities | Interest Rate Contracts Related To C&I Loans
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	[3]	8	14
Amortization Of Defined Benefit Pension Items | Net Actuarial Loss
Reclassifications Out Of Accumulated Other Comprehensive Income
Net periodic pension cost	[3],[4]	(2)	(2)
Income Before Income Taxes	[3]	(2)	(2)
Applicable income tax expense	[3]	1	1
Net income	[3]	$ (1)	$ (1)

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016 .

[3] Amounts in parentheses indicate reductions to net income

[4] This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 21 of the Notes to the Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 for information on the computation of net periodic benefit cost .

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EPS (Calculation of Earnings Per Share and the Reconciliation of Earnings Per Share to Earnings Per Diluted Share) (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	[2]
Earnings per share:
Net income (loss) attributable to Bancorp	$ 305	$ 326	[1]
Dividends on preferred stock	15	15	[1]
Net income (loss) available to common shareholders	290	311	[1]
Less: Income allocated to participating securities	4	3
Earnings per share - basic	286	308
Earnings per diluted share:
Net income available to common shareholders	290	311	[1]
Stock-based awards	0	0
Net income available to common shareholders plus assumed conversions	290	311
Less: Income allocated to participating securities	4	3
Net income allocated to common shareholders	$ 286	$ 308
Earnings per share:
Net income allocated to common shareholders	747,667,521	773,564,178	[1]
Effect of dilutive securities:
Stock-based awards	13,000,000	4,000,000
Net income allocated to common shareholders	760,809,239	777,757,934	[1]
Earnings per share:
Earnings per share - basic	$ 0.38	$ 0.4	[1]
Earnings per diluted share:
Earnings per share - diluted	$ 0.38	$ 0.4	[1]

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016 .

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EPS (Calculation of Earnings Per Share and the Reconciliation of Earnings Per Sahre to Earnings Per Diluted Share) (Parenthetical) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Earnings Per Share [Abstract]
Net tax deficiency reclassified from capital surplus to applicable income tax expense	$ 1

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EPS (Earnings Per Share - Additional Information) (Detail) - shares shares in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock Appreciation Rights
Earnings Per Share Disclosure
Anti-dilutive securities	6	27

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016
Assets:
Available-for-sale securities, fair value	[1]	$ 31,531		$ 31,183
Trading securities		689		410
Fair value, recurring
Assets:
Available-for-sale securities, fair value		30,923	[2]	30,576	[3]
Trading securities		689		410
Residential mortgage loans held for sale		606		686
Residential mortgage loans measured at FV	[4]	141	[5]	143
Mortgage servicing rights	[6]	776
Derivative assets	[7]	846		1,057
Total assets		33,981		32,872
Liabilities:
Derivative liabilities	[8]	489		666
Short positions	[8]	27		21
Total liabilities		516		687
Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		641		748
Liabilities:
Derivative liabilities		189		265
Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets		126		202
Liabilities:
Derivative liabilities		123		204
Equity Contract | Fair value, recurring
Assets:
Derivative assets		0		0
Liabilities:
Derivative liabilities		97		91
Commodity Contract | Fair value, recurring
Assets:
Derivative assets		79		107
Liabilities:
Derivative liabilities		80		106
U.S. Treasury and federal agencies
Assets:
Available-for-sale securities, fair value		437		549
U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale securities, fair value		437		549
Trading securities		18		23
Obligations of states and political subdivisions
Assets:
Available-for-sale securities, fair value		45		45
Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale securities, fair value		45		45
Trading securities		21		39
Agency mortgage-backed securities | Residential mortgage backed securities
Assets:
Available-for-sale securities, fair value		16,245	[9]	15,608	[10]
Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		16,245		15,608
Trading securities		265		8
Agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale securities, fair value		8,672		9,055
Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		8,672		9,055
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale securities, fair value		3,299		3,112
Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		3,299		3,112
Asset-backed securities and other debt securities
Assets:
Available-for-sale securities, fair value		2,134		2,116
Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		2,134		2,116
Trading securities		24		15
Equity securities
Assets:
Available-for-sale securities, fair value		699	[11]	698	[12]
Equity securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		91	[2]	91	[3]
Trading securities		361		325
Fair Value, Inputs, Level 1 | Fair value, recurring
Assets:
Available-for-sale securities, fair value		527	[2],[13]	561	[3],[14]
Trading securities		361	[13]	325	[14]
Derivative assets	[7]	24	[13]	42	[14]
Total assets		912	[13]	928	[14]
Liabilities:
Derivative liabilities	[8]	13	[13]	30	[14]
Short positions	[8]	21	[13]	17	[14]
Total liabilities		34	[13]	47	[14]
Fair Value, Inputs, Level 1 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		1	[13]	20	[14]
Liabilities:
Derivative liabilities		5	[13]	3	[14]
Fair Value, Inputs, Level 1 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets		23	[13]	22	[14]
Liabilities:
Derivative liabilities		8	[13]	27	[14]
Fair Value, Inputs, Level 1 | U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale securities, fair value		437	[13]	471	[14]
Fair Value, Inputs, Level 1 | Equity securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		90	[2],[13]	90	[3],[14]
Trading securities		361	[13]	325	[14]
Fair Value, Inputs, Level 2 | Fair value, recurring
Assets:
Available-for-sale securities, fair value		30,396	[2],[13]	30,015	[3],[14]
Trading securities		328	[13]	85	[14]
Residential mortgage loans held for sale		606	[13]	686	[14]
Derivative assets	[7]	806	[13]	1,002	[14]
Total assets		32,136	[13]	31,788	[14]
Liabilities:
Derivative liabilities	[8]	374	[13]	540	[14]
Short positions	[8]	6	[13]	4	[14]
Total liabilities		380	[13]	544	[14]
Fair Value, Inputs, Level 2 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		624	[13]	715	[14]
Liabilities:
Derivative liabilities		179	[13]	257	[14]
Fair Value, Inputs, Level 2 | Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets		126	[13]	202	[14]
Liabilities:
Derivative liabilities		123	[13]	204	[14]
Fair Value, Inputs, Level 2 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets		56	[13]	85	[14]
Liabilities:
Derivative liabilities		72	[13]	79	[14]
Fair Value, Inputs, Level 2 | U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale securities, fair value		0	[13]	78	[14]
Trading securities		18	[13]	23	[14]
Fair Value, Inputs, Level 2 | Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale securities, fair value		45	[13]	45	[14]
Trading securities		21	[13]	39	[14]
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		16,245	[13]	15,608	[14]
Trading securities		265	[13]	8	[14]
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		8,672	[13]	9,055	[14]
Fair Value, Inputs, Level 2 | Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		3,299	[13]	3,112	[14]
Fair Value, Inputs, Level 2 | Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		2,134	[13]	2,116	[14]
Trading securities		24	[13]	15	[14]
Fair Value, Inputs, Level 2 | Equity securities | Fair value, recurring
Assets:
Available-for-sale securities, fair value		1	[2],[13]	1	[3],[14]
Fair Value, Inputs, Level 3 | Fair value, recurring
Assets:
Residential mortgage loans measured at FV	[4]	141	[5]	143
Mortgage servicing rights	[6]	776
Derivative assets	[7]	16		13
Total assets		933		156
Liabilities:
Derivative liabilities	[8]	102		96
Total liabilities		102		96
Fair Value, Inputs, Level 3 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		16		13
Liabilities:
Derivative liabilities		5		5
Fair Value, Inputs, Level 3 | Equity Contract | Fair value, recurring
Assets:
Derivative assets		0		0
Liabilities:
Derivative liabilities		$ 97		$ 91

[1] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

[2] Excludes FHLB, FRB and DTCC restricted stock holdings totaling $ 248 , $ 359 and $ 1 , respectively, at March 31, 2017 .

[3] Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $358 and $1 , respectively, at December 31, 2016 .

[4] Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

[5] Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.

[6] Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measu red under the amortization method at December 31, 2016.

[7] Included in other assets in the Condensed Consolidated Balance Sheets.

[8] Included in other liabilities in the Condensed Consolidat ed Balance Sheets.

[9] Includes interest-only mortgage- backed securities of $ 42 as of March 31, 2017 , recorded at fair value with fair value changes re corded in securities gains, net , in the Condensed Consolidated Statement s of Income.

[10] Includes interest-only mortgage-backed securities of $ 60 as of December 31, 2016 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

[11] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 359 and $ 1 , respectively , at March 31, 2017 , that are carried at cost, and certain mutual fund and equity security holdings.

[12] Equity securities consist of FHLB, FRB and DTCC restricted stock holdings of $ 248 , $ 358 , and $ 1 , respectively, at December 31, 2016 , that are carried at cost, and certain mutual fund and equity security holdings

[13] During the three months ended March 31, 2017 , no assets or liabilities were transferred between Level 1 and Level 2.

[14] During the year ended December 31, 2016 , no assets or liabilities were transferred between Level 1 and Level 2.

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Federal Home Loan Bank Stock	$ 248	$ 248
Federal Reserve Bank Stock	359	358
DTCC Stock	$ 1	$ 1

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Fair Value Measurements (Fair Value Measurements - Additional Information) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Net fair value of the interest rate lock commitments	$ 16
Change in the fair value of the interest rate lock commitments, due to decrease in current interest rates of 25 bp	6
Change in the fair value of the interest rate lock commitments, due to decrease in current interest rates of 50 bp	11
Change in the fair value of the interest rate lock commitments, due to increase in current interest rates of 25 bp	7
Change in the fair value of the interest rate lock commitments, due to increase in current interest rates of 50 bp	14
Change in fair value of interest rate lock commitments, due to 10% adverse changes in the assumed loan closing rates	2
Change in fair value of interest rate lock commitments, due to 20% adverse changes in the assumed loan closing rates	3
Change in fair value of interest rate lock commitments, due to 10% favorable changes in the assumed loan closing rates	2
Change in fair value of interest rate lock commitments, due to 20% favorable changes in the assumed loan closing rates	3
Portfolio loans to loans held for sale	5		$ 3
Existing loans held for sale, further adjusted	606	$ 686		$ 686
Residential loans transferred to the Bancorp's portfolio	3		12
Fair value changes included in earnings for instruments for which the fair value option was elected	22		6
Net Losses On Operating Lease Equipment	20
Larger commercial loans, subject to impairment review	1
Vantiv Holding, LLC
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Vantiv Holding, LLC Warrant Exercise Price		$ 15.98		$ 15.98
Vantiv Holding, LLC | Class C Units
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Exchange Of Class C Shares For Class A Shares		5.7
Warrant Exercised Total Shares Settled		7.8
Vantiv, Inc. | Class A Units
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Exchange Of Class C Shares For Class A Shares		5.7
Vantiv, Inc. | Class A Units | Shares Sold In Secondary Offering
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Exchange Of Class C Shares For Class A Shares		4.8
Vantiv, Inc. | Class A Units | Shares repurchased by Vantiv Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Exchange Of Class C Shares For Class A Shares		0.9
Commercial Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Portfolio loans to loans held for sale	18		5
Net impact related to fair value adjustments	17
Gain Loss On Sales Of Loans Net	2		2
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Net impact related to fair value adjustments	2		1
Nonrecurring Losses Included As Charge-Offs	2		$ 2
Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of loans	$ 2			$ 2

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Fair Value Measurements (Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Level 3) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017		Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		$ 804		$ 380
Included in earnings		(13)		91
Purchases/originations		54		(1)
Settlements		(17)		(35)
Transfers Into Level 3	[1]	3		3
Ending Balance		831		438
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held	[2]	(20)		78
Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		143		167
Included in earnings		0		1
Purchases/originations		0		0
Settlements		(5)		(11)
Transfers Into Level 3	[1]	3		3
Ending Balance		141		160
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held	[2]	0		1
Mortgage servicing rights
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	[3]	744
Included in earnings	[3]	(23)
Purchases/originations	[3]	55
Settlements	[3]	0
Transfers Into Level 3	[1],[3]	0
Ending Balance	[3]	776
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held	[2],[3]	(23)
Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		8	[4]	12	[5]
Included in earnings		23	[4]	42	[5]
Purchases/originations		(1)	[4]	(1)	[5]
Settlements		(19)	[4]	(28)	[5]
Transfers Into Level 3	[1]	0	[4]	0	[5]
Ending Balance		11	[4]	25	[5]
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held	[2]	16	[4]	29	[5]
Equity Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		(91)	[4]	201	[5]
Included in earnings		(13)	[4]	48	[5]
Purchases/originations		0	[4]	0	[5]
Settlements		7	[4]	4	[5]
Transfers Into Level 3	[1]	0	[4]	0	[5]
Ending Balance		(97)	[4]	253	[5]
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held	[2]	$ (13)	[4]	$ 48	[5]

[1] Includes certain residential mortgage loans originated as held for sale that were transferred to held for invest ment.

[2] Includes interest income and expense.

[3] Eff ective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing r ights were measured at fair value at March 31, 2017 and were measured under the amortiza tion method at December 31, 2016.

[4] Net interest rate derivatives include derivative assets and liabilities of $ 16 and $ 5 , respectively , as of March 31, 2017 . Net equity derivatives include derivative assets and liabilities of $ 0 and $ 97 , respectively, as of March 31, 2017 .

[5] Net interest rate derivatives include derivative assets and liabilities of $ 29 and $ 4 , respectively, as of March 31, 2016 . Net equity derivatives include derivative assets and liabilities of $ 308 and $ 55 , respectively, as of March 31, 2016 .

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Fair Value Measurements (Reconciliation of Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Level 3) (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets	$ 831	$ 804	$ 438	$ 380
Interest Rates
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets	16		29
Derivative liabilities	5		4
Equity Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets	0		308
Derivative liabilities	$ 97		$ 55

XML

Fair Value Measurements (Total Gains and Losses Included in Earnings for Assets and Liabilites Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Level 3) (Detail) - Fair Value, Inputs, Level 3 - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	$ (13)	$ 91
Mortgage Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	0	43
Other Noninterest Income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	$ (13)	$ 48

XML

Fair Value Measurements (Total Gains and Losses Included in Earning Attributable to Changes in Unrealized Gains and Losses Related to Level 3 Assets and Liabilites Still Held at Year End) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset And Liabilities Change In Unrealized Gains Losses Included In Earnings	$ (20)	$ 78
Mortgage Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset And Liabilities Change In Unrealized Gains Losses Included In Earnings	(7)	30
Other Noninterest Income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset And Liabilities Change In Unrealized Gains Losses Included In Earnings	$ (13)	$ 48

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Fair Value Measurements (Fair Values of Assets and Liabilities (Significant Unobservable Level 3 Inputs Recurring Basis)) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments		$ 846		$ 1,057
Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Residential mortgage loans measured at FV		141	$ 160
Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Mortgage servicing rights		776
IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments		16	29
Stock warrants associated with Vantiv Holding, LLC
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments			308
Swap associated with the sale of Visa, Inc. Class B shares
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments		$ (97)	$ (55)
Minimum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor		(10.60%)	(6.00%)
Credit risk factor		0.00%	0.00%
Minimum | Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed		0.70%	0.00%
OAS spread (bps)		4.30%	3.64%
Minimum | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates		12.30%	5.60%
Minimum | Stock warrants associated with Vantiv Holding, LLC
Quantitative Information About Level 3 Fair Value Measurements
Expected term (years)			2 years
Expected volatility	[1]		23.00%
Minimum | Swap associated with the sale of Visa, Inc. Class B shares
Quantitative Information About Level 3 Fair Value Measurements
Timing of the resolution of the covered litigation		Dec. 31, 2018	Dec. 31, 2016
Maximum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor		15.40%	16.50%
Credit risk factor		46.20%	80.50%
Maximum | Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed		100.00%	100.00%
OAS spread (bps)		15.15%	15.15%
Maximum | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates		97.90%	94.00%
Maximum | Stock warrants associated with Vantiv Holding, LLC
Quantitative Information About Level 3 Fair Value Measurements
Expected term (years)			13 years 3 months 18 days
Expected volatility	[1]		30.40%
Maximum | Swap associated with the sale of Visa, Inc. Class B shares
Quantitative Information About Level 3 Fair Value Measurements
Timing of the resolution of the covered litigation		Dec. 31, 2022	Mar. 31, 2021
Weighted average | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor		2.30%	4.40%
Credit risk factor		1.20%	1.40%
Weighted average | Mortgage servicing rights | Fixed
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed		11.20%	14.10%
OAS spread (bps)		5.28%	6.03%
Weighted average | Mortgage servicing rights | Adjustable
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed		25.20%	27.80%
OAS spread (bps)		7.57%	7.13%
Weighted average | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates		72.20%	75.00%
Weighted average | Stock warrants associated with Vantiv Holding, LLC
Quantitative Information About Level 3 Fair Value Measurements
Expected term (years)			5 years 9 months 18 days
Expected volatility	[1]		25.90%

[1] (a) Based on historical and implied volatilities of Vantiv, Inc. and comparable companies assuming similar expected terms.

XML

Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		$ 435	$ 1,161
Fair Value Measured On Nonrecurring Basis Gains Losses		(75)	(128)
Commercial Loans Held-for-Sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		1	5
Fair Value Measured On Nonrecurring Basis Gains Losses		(19)	(2)
Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		318	347
Fair Value Measured On Nonrecurring Basis Gains Losses		(26)	(47)
Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		25	85
Fair Value Measured On Nonrecurring Basis Gains Losses		(2)	6
Commercial Construction Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements			0
Fair Value Measured On Nonrecurring Basis Gains Losses			2
Commercial Leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		2
Fair Value Measured On Nonrecurring Basis Gains Losses		(1)
Servicing Rights
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	[1]		685
Fair Value Measured On Nonrecurring Basis Gains Losses	[1]		(85)
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		19	27
Fair Value Measured On Nonrecurring Basis Gains Losses		(4)	(3)
Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		15	12
Fair Value Measured On Nonrecurring Basis Gains Losses		(3)	1
Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		55
Fair Value Measured On Nonrecurring Basis Gains Losses		(20)
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		435	1,161
Fair Value, Inputs, Level 3 | Commercial Loans Held-for-Sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		1	5
Fair Value, Inputs, Level 3 | Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		318	347
Fair Value, Inputs, Level 3 | Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		25	85
Fair Value, Inputs, Level 3 | Commercial Construction Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements			0
Fair Value, Inputs, Level 3 | Commercial Leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		2
Fair Value, Inputs, Level 3 | Servicing Rights
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	[1]		685
Fair Value, Inputs, Level 3 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		19	27
Fair Value, Inputs, Level 3 | Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		15	$ 12
Fair Value, Inputs, Level 3 | Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements		$ 55

[1] Effective January 1, 2017, the Bancorp has elected the fair value measurement method for all existing classes of its residential mortgage servicing rights. The servicing rights were measured at fair value at March 31, 2017 and were measured under the amortization method at December 31, 2016.

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Fair Value Measurements (Fair Values of Assets and Liabilities (Significant Unobservable Level 3 Inputs Nonrecurring Basis)) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Commercial Loans Held For Sale | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	$ 1	$ 5
Commercial and Industrial Loans | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	318	347
Commercial Mortgage Loans | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	25	85
Commercial construction loans | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets		0
Commercial Leases | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	2
Servicing Rights
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets		685
OREO Property
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	19	27
Bank premises and equipment
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	15	$ 12
Operating lease equipment
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	$ 55
Minimum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	(10.60%)	(6.00%)
Credit risk factor	0.00%	0.00%
Minimum | Servicing Rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	0.70%	0.00%
OAS spread (bps)	4.30%	3.64%
Maximum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	15.40%	16.50%
Credit risk factor	46.20%	80.50%
Maximum | Servicing Rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	100.00%	100.00%
OAS spread (bps)	15.15%	15.15%
Weighted average | Commercial Loans Held For Sale
Quantitative Information About Level 3 Fair Value Measurements
Cost to sell		10.00%
Weighted average | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	2.30%	4.40%
Credit risk factor	1.20%	1.40%
Weighted average | Fixed | Servicing Rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	11.20%	14.10%
OAS spread (bps)	5.28%	6.03%
Weighted average | Adjustable | Servicing Rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	25.20%	27.80%
OAS spread (bps)	7.57%	7.13%

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Fair Value Measurements (Difference Between the Aggregate Fair Value and the Aggregate Unpaid Principal Balance for Residential Mortgage Loans Measured at Fair Value) (Detail) - Residential mortgage loans - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Aggregate fair value
Residential mortgage loans measured at fair value	$ 747	$ 829
Past due loans of 90 days or more	2	2
Nonaccrual loans	1	1
Aggregate unpaid principal balance
Residential mortgage loans measured at fair value	725	823
Past due loans of 90 days or more	2	2
Nonaccrual loans	1	1
Difference
Residential mortgage loans measured at fair value	22	6
Past due loans of 90 days or more	0	0
Nonaccrual loans	$ 0	$ 0

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Fair Value Measurements (Carrying Amounts and Estimated Fair Values for Certain Financial Instruments) (Detail) - USD ($) $ in Millions		Mar. 31, 2017		Dec. 31, 2016		Mar. 31, 2016	Dec. 31, 2015
Financial assets:
Cash and due from banks		$ 2,205	[1]	$ 2,392	[1]	$ 2,298	$ 2,540
Held-to-maturity securities, amortized cost	[2]	26		26
Other short-term investments		1,644		2,754
Loans held for sale	[3]	616		751
Portfolio loans and leases, net		90,390		90,845
Other securities, fair value	[4]	31,531		31,183
Held-to-maturity securities, fair value		26		26
Loans held for sale		606		686
Financial liabilities:
Deposits		104,156		103,821
Federal funds purchased		155		132
Other short-term borrowings		2,015		3,535
Long-term debt	[1]	13,658		14,388
Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		141				$ 160
Carrying (Reported) Amount, Fair Value Disclosure
Financial assets:
Cash and due from banks		2,205		2,392
Held-to-maturity securities, amortized cost		26		26
Other short-term investments		1,644		2,754
Loans held for sale		10		65
Portfolio loans and leases, net		90,249		90,702
Unallocated Allowance For Loan And Lease Losses		(112)		(112)
Financial liabilities:
Deposits		104,156		103,821
Federal funds purchased		155		132
Other short-term borrowings		2,015		3,535
Long-term debt		13,658		14,388
Carrying (Reported) Amount, Fair Value Disclosure | FHLB and FRB restricted stock holdings
Financial assets:
Other securities		608		607
Carrying (Reported) Amount, Fair Value Disclosure | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases, net		40,362		40,958
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases, net		6,838		6,817
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases, net		4,268		3,887
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases, net		4,079		3,959
Carrying (Reported) Amount, Fair Value Disclosure | Residential Mortgage
Financial assets:
Portfolio loans and leases, net		15,099		14,812
Carrying (Reported) Amount, Fair Value Disclosure | Home Equity
Financial assets:
Portfolio loans and leases, net		7,415		7,637
Carrying (Reported) Amount, Fair Value Disclosure | Automobile Loans
Financial assets:
Portfolio loans and leases, net		9,530		9,941
Carrying (Reported) Amount, Fair Value Disclosure | Credit Card
Financial assets:
Portfolio loans and leases, net		1,975		2,135
Carrying (Reported) Amount, Fair Value Disclosure | Other Consumer Loans and Leases
Financial assets:
Portfolio loans and leases, net		795		668
Total Fair Value
Financial assets:
Cash and due from banks, fair value		2,205		2,392
Held-to-maturity securities, fair value		26		26
Other short term investments, fair value		1,644		2,754
Portfolio loans and leases at fair value		92,317		92,872
Financial liabilities:
Deposits, fair value		104,148		103,811
Federal funds purchased, fair value		155		132
Other short-term borrowings, fair value		2,015		3,535
Long term debt, fair value		14,135		14,833
Total Fair Value | Non Fair Value Option HFS Loans
Financial assets:
Loans held for sale		10		65
Total Fair Value | FHLB and FRB restricted stock holdings
Financial assets:
Other securities, fair value		608		607
Total Fair Value | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		41,567		41,976
Total Fair Value | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		6,776		6,735
Total Fair Value | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		4,238		3,853
Total Fair Value | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases at fair value		3,700		3,651
Total Fair Value | Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		15,459		15,415
Total Fair Value | Home Equity
Financial assets:
Portfolio loans and leases at fair value		8,194		8,421
Total Fair Value | Automobile Loans
Financial assets:
Portfolio loans and leases at fair value		9,246		9,640
Total Fair Value | Credit Card
Financial assets:
Portfolio loans and leases at fair value		2,307		2,503
Total Fair Value | Other Consumer Loans and Leases
Financial assets:
Portfolio loans and leases at fair value		830		678
Total Fair Value | Fair Value, Inputs, Level 1
Financial assets:
Cash and due from banks, fair value		2,205		2,392
Other short term investments, fair value		1,644		2,754
Financial liabilities:
Federal funds purchased, fair value		155		132
Long term debt, fair value		13,608		14,288
Total Fair Value | Fair Value, Inputs, Level 2
Financial liabilities:
Deposits, fair value		104,148		103,811
Other short-term borrowings, fair value		2,015		3,535
Long term debt, fair value		527		545
Total Fair Value | Fair Value, Inputs, Level 2 | FHLB and FRB restricted stock holdings
Financial assets:
Other securities, fair value		608		607
Total Fair Value | Fair Value, Inputs, Level 3
Financial assets:
Held-to-maturity securities, fair value		26		26
Portfolio loans and leases at fair value		92,317		92,872
Total Fair Value | Fair Value, Inputs, Level 3 | Non Fair Value Option HFS Loans
Financial assets:
Loans held for sale		10		65
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		41,567		41,976
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		6,776		6,735
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		4,238		3,853
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases at fair value		3,700		3,651
Total Fair Value | Fair Value, Inputs, Level 3 | Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		15,459		15,415
Total Fair Value | Fair Value, Inputs, Level 3 | Home Equity
Financial assets:
Portfolio loans and leases at fair value		8,194		8,421
Total Fair Value | Fair Value, Inputs, Level 3 | Automobile Loans
Financial assets:
Portfolio loans and leases at fair value		9,246		9,640
Total Fair Value | Fair Value, Inputs, Level 3 | Credit Card
Financial assets:
Portfolio loans and leases at fair value		2,307		2,503
Total Fair Value | Fair Value, Inputs, Level 3 | Other Consumer Loans and Leases
Financial assets:
Portfolio loans and leases at fair value		$ 830		$ 678

[1] Includes $ 85 and $ 85 of cash and due from banks, $ 1,015 and $ 1,216 of portfolio loans and leases , $ (25) and $ (26) of ALLL, $ 7 and $ 9 of other assets, $ 2 and $ 3 of other liabilities , and $ 883 and $ 1,094 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2017 and December 31, 2016 , respectively. For further information refer to Note 10 .

[2] Fair value of $ 26 and $ 26 at March 31, 2017 and December 31, 2016 , respectively.

[3] Includes $ 606 and $ 686 of residential mortgage loans held for sale measured at fair value at March 31, 2017 and December 31, 2016 , respectively.

[4] Amortized cost of $ 31,348 and $ 31,024 at March 31, 2017 and December 31, 2016 , respectively.

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Segments (Results of Operations and Average Assets by Segment - Additional Information) (Detail)	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements
Full-service Banking Centers	1,155

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Segments (Results of Operations and Average Assets by Segment) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017		Mar. 31, 2016		Dec. 31, 2016
Segment Reporting Information
Net interest income		$ 933		$ 903	[1]
Provision for (benefit from) loan and lease losses		74		119	[1]
Net interest income after provision for loan and lease losses		859		784	[1]
Total noninterest income		523		637	[1]
Total noninterest expense		986		986	[1]
Income (Loss) Before Income Taxes		396		435	[1]
Applicable income tax expense (benefit)		91		109	[1]
Net income (loss)		305		326	[1],[2]
Less: Net income attributable to noncontrolling interests		0		0	[1]
Net income (loss) attributable to Bancorp		305		326	[1],[3]
Dividends on preferred stock		15		15	[1],[3]
Net income (loss) available to common shareholders		290		311	[1],[3]
Total goodwill		2,419		2,416		$ 2,416
Total Assets		140,200		142,430		$ 142,177
Intersegment Elimination
Segment Reporting Information
Total noninterest income	[4]	(34)		(33)
Total noninterest expense		(34)		(33)
Commercial Banking
Segment Reporting Information
Net interest income		425		451
Provision for (benefit from) loan and lease losses		6		65
Net interest income after provision for loan and lease losses		419		386
Total noninterest income		202	[5]	223
Total noninterest expense		370		363
Income (Loss) Before Income Taxes		251		246
Applicable income tax expense (benefit)		40		35
Net income (loss)		211		211
Less: Net income attributable to noncontrolling interests		0		0
Net income (loss) attributable to Bancorp		211		211
Dividends on preferred stock		0		0
Net income (loss) available to common shareholders		211		211
Total goodwill		613		613
Total Assets		57,672		59,652
Branch Banking
Segment Reporting Information
Net interest income		430		426
Provision for (benefit from) loan and lease losses		42		34
Net interest income after provision for loan and lease losses		388		392
Total noninterest income		184	[6]	189	[7]
Total noninterest expense		402		411
Income (Loss) Before Income Taxes		170		170
Applicable income tax expense (benefit)		60		60
Net income (loss)		110		110
Less: Net income attributable to noncontrolling interests		0		0
Net income (loss) attributable to Bancorp		110		110
Dividends on preferred stock		0		0
Net income (loss) available to common shareholders		110		110
Total goodwill		1,655		1,655
Total Assets		57,876		54,528
Consumer Lending
Segment Reporting Information
Net interest income		61		60
Provision for (benefit from) loan and lease losses		15		12
Net interest income after provision for loan and lease losses		46		48
Total noninterest income		55		83
Total noninterest expense		120		118
Income (Loss) Before Income Taxes		(19)		13
Applicable income tax expense (benefit)		(7)		5
Net income (loss)		(12)		8
Less: Net income attributable to noncontrolling interests		0		0
Net income (loss) attributable to Bancorp		(12)		8
Dividends on preferred stock		0		0
Net income (loss) available to common shareholders		(12)		8
Total goodwill		0		0
Total Assets		21,994		22,475
Wealth and Asset Management
Segment Reporting Information
Net interest income		38		43
Provision for (benefit from) loan and lease losses		4		0
Net interest income after provision for loan and lease losses		34		43
Total noninterest income		106		100
Total noninterest expense		113		107
Income (Loss) Before Income Taxes		27		36
Applicable income tax expense (benefit)		10		13
Net income (loss)		17		23
Less: Net income attributable to noncontrolling interests		0		0
Net income (loss) attributable to Bancorp		17		23
Dividends on preferred stock		0		0
Net income (loss) available to common shareholders		17		23
Total goodwill		151		148
Total Assets		9,641		8,900
General Corporate and Other
Segment Reporting Information
Net interest income		(21)		(77)	[8]
Provision for (benefit from) loan and lease losses		7		8	[8]
Net interest income after provision for loan and lease losses		(28)		(85)	[8]
Total noninterest income		10		75	[8]
Total noninterest expense		15		20	[8]
Income (Loss) Before Income Taxes		(33)		(30)	[8]
Applicable income tax expense (benefit)		(12)		(4)	[8]
Net income (loss)		(21)		(26)	[8]
Less: Net income attributable to noncontrolling interests		0		0	[8]
Net income (loss) attributable to Bancorp		(21)		(26)	[8]
Dividends on preferred stock		15		15	[8]
Net income (loss) available to common shareholders		(36)		(41)	[8]
Total goodwill		0		0	[8]
Total Assets		$ (6,983)	[9]	$ (3,125)	[8],[10]

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[2] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adop tion of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[3] A net tax deficiency of $1 million was reclassified from capital surplus to applicable income tax expense and average common shares outstanding – diluted were adjusted at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016 .

[4] Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.

[5] Includes impairment charges of $ 31 for operating lease equipment. For more information refer to Note 8 and Note 19.

[6] Includes impairment charges of $3 for branches and land. For more information refer to Note 7 and Note 19.

[7] Includes impairment charges of $ 2 for branches and land. For more information, refer to Note 7 and Note 19.

[8] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

[9] Includes bank premises and equipment of $ 51 classified as h eld for sale. For more information, refer to Note 7

[10] Includes bank premises and equipment of $ 68 classified as held for sale. For more information, refer to Note 7 .

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Segments (Results of Operations and Average Assets by Segment) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016		Dec. 31, 2016
Segment Reporting Information
Other Asset Impairment Charges	$ (20)	$ 0	[1]
Bank premises and equipment held for sale	51			$ 39
Net tax deficiency reclassified from capital surplus to applicable income tax expense		1
Branch Banking
Segment Reporting Information
Impairment of Branches and Land	3	2
Bank premises and equipment held for sale	51	68
Commercial Banking | Operating lease equipment
Segment Reporting Information
Other Asset Impairment Charges	$ 31
General Corporate and Other
Segment Reporting Information
Net tax deficiency reclassified from capital surplus to applicable income tax expense		$ 1

[1] A net tax deficiency of $ 1 million was reclassified from capital surplus to applicable income tax expense at March 31, 2016, related to the early adoption of ASU 2016-09 during the fourth quarter of 2016, with an effective date of January 1, 2016.

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Subsequent Event (Subsequent Event - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Subsequent Event
Shares acquired for treasury	$ 0	$ 240
Subsequent Event Date	Apr. 26, 2017
March 2016 Repurchase Program
Subsequent Event
Shares acquired for treasury	$ 342
Redemption Date	May 01, 2017
Settlement date	Jul. 26, 2017