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, 2018

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 685,495,676 shares of the Registrant’s common stock, without par value, outstanding as of April 30, 2018.

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	15
Business Segment Review	20
Risk Management—Overview	26
Credit Risk Management	27
Market Risk Management	40
Liquidity Risk Management	44
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
Signature	107

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 the Risk Factors section in Item 1A 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) deteriorating credit quality; (2) loan concentration by location or industry of borrowers or collateral; (3) problems encountered by other financial institutions; (4) inadequate sources of funding or liquidity; (5) unfavorable actions of rating agencies; (6) inability to maintain or grow deposits; (7) limitations on the ability to receive dividends from subsidiaries; (8) cyber-security risks; (9) Fifth Third’s ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; (10) failures by third-party service providers; (11) inability to manage strategic initiatives and/or organizational changes; (12) inability to implement technology system enhancements; (13) failure of internal controls and other risk management systems; (14) losses related to fraud, theft or violence; (15) inability to attract and retain skilled personnel; (16) adverse impacts of government regulation; (17) governmental or regulatory changes or other actions; (18) failures to meet applicable capital requirements; (19) regulatory objections to Fifth Third’s capital plan; (20) regulation of Fifth Third’s derivatives activities; (21) regulatory objections to Fifth Third’s resolution plan; (22) deposit insurance premiums; (23) assessments for the orderly liquidation fund; (24) changes in LIBOR; (25) weakness in the national or local economies; (26) global political and economic uncertainty or negative actions; (27) changes in interest rates; (28) changes and trends in capital markets; (29) fluctuation of Fifth Third’s stock price; (30) volatility in mortgage banking revenue; (31) litigation, investigations, and enforcement proceedings by governmental authorities; (32) breaches of contractual covenants, representations and warranties; (33) competition and changes in the financial services industry; (34) changing retail distribution strategies, customer preferences and behavior; (35) difficulties in identifying, acquiring or integrating suitable strategic partnerships, investments or acquisitions; (36) potential dilution from future acquisitions; (37) loss of income and/or difficulties encountered in the sale and separation of businesses, investments or other assets; (38) results of Vantiv Holding, LLC, a subsidiary of Worldpay, Inc. or other investments or acquired entities; (39) difficulties from or changes in Fifth Third’s investment in, relationship with, and nature of the operations of Vantiv Holding, LLC, a subsidiary of Worldpay, Inc.; (40) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (41) inaccuracies or other failures from the use of models; (42) effects of critical accounting policies and judgments or the use of inaccurate estimates; (43) weather related events or other natural disasters; and (44) the impact of reputational risk created by these or other 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 (Loss) APR: Annual Percentage Rate 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 DFAST: Dodd-Frank Act Stress Test 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 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 FOMC: Federal Open Market Committee 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 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 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 SAR: Stock Appreciation Right SBA: Small Business Administration SCB: Stress Capital Buffer SEC: United States Securities and Exchange Commission SLB: Stress Leverage Buffer TBA: To Be Announced TCJA: Tax Cuts and Jobs Act TDR: Troubled Debt Restructuring 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)		2018			2017		Change
Income Statement Data
Net interest income (U.S. GAAP)	$		996			933		7
Net interest income (FTE)(a)(b)			999			939		6
Noninterest income			909			523		74
Total revenue(a)			1,908			1,462		31
Provision for loan and lease losses			23			74		(69	)
Noninterest expense			1,046			986		6
Net income attributable to Bancorp			704			305		131
Net income available to common shareholders			689			290		138
Common Share Data
Earnings per share - basic	$		0.99			0.38		161
Earnings per share - diluted			0.97			0.38		155
Cash dividends declared per common share			0.16			0.14		14
Book value per share			21.68			20.13		8
Market value per share			31.75			25.40		25
Financial Ratios
Return on average assets			2.02	%		0.88		130
Return on average common equity			18.6			7.8		138
Return on average tangible common equity(b)			22.4			9.3		141
Dividend payout ratio			16.2			36.8		(56	)
Average total Bancorp shareholders’ equity as a percent of average assets			11.52			11.72		(2	)
Tangible common equity as a percent of tangible assets(b)(h)			9.14			9.15		-
Net interest margin(a)(b)			3.18			3.02		5
Net interest rate spread (a)(b)			2.88			2.78		4
Efficiency(a)(b)			54.8			67.4		(19	)
Credit Quality
Net losses charged-off	$		81			89		(9	)
Net losses charged-off as a percent of average portfolio loans and leases			0.36	%		0.40		(10	)
ALLL as a percent of portfolio loans and leases			1.24			1.35		(8	)
Allowance for credit losses as a percent of portfolio loans and leases(c)			1.40			1.52		(8	)
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO			0.55			0.79		(30	)
Average Balances
Loans and leases, including held for sale	$		92,869			92,791		-
Total securities and other short-term investments			34,677			33,177		5
Total assets			141,565			140,140		1
Transaction deposits(d)			97,018			97,018		-
Core deposits(e)			100,874			100,845		-
Wholesale funding(f)			20,558			19,129		7
Bancorp shareholders’ equity			16,313			16,429		(1	)
Regulatory Capital and Liquidity Ratios
CET1 capital(g)			10.82	%		10.76		1
Tier I risk-based capital(g)			11.95			11.90		-
Total risk-based capital(g)			15.25			15.45		(1	)
Tier I leverage			10.11			10.15		-
Modified LCR			113			119		(5	)

(a) Amounts presented on an FTE basis. The FTE adjustment for the three months ended March 31, 2018 and 2017 was $3 and $6, respectively.

(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.

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, 2018, the Bancorp had $141.5 billion in assets and operated 1,153 full-service banking centers and 2,459 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 4.9% interest in Vantiv Holding, LLC. The carrying value of the Bancorp’s investment in Vantiv Holding, LLC was $632 million at March 31, 2018.

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, 2017. 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 Condensed Consolidated Financial Statements.

Net interest income, net interest margin, net interest rate spread 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, 2018, net interest income on an FTE basis and noninterest income provided 52% and 48% 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, 2018. 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, net securities gains or losses and other noninterest income. Noninterest expense includes personnel costs, net occupancy expense, technology and communication costs, equipment expense, card and processing expense and other noninterest expense.

Vantiv, Inc. and Vantiv Holding, LLC Transactions

On January 16, 2018, Vantiv, Inc. completed its previously announced acquisition of Worldpay Group plc. with the resulting combined company named Worldpay, Inc. As a result of this transaction, the Bancorp recognized a gain of $414 million in other noninterest income during the first quarter of 2018 associated with the dilution in its ownership interest in Vantiv Holding, LLC from approximately 8.6% to approximately 4.9%. The Bancorp’s remaining interest in Vantiv Holding, LLC of $632 million continues to be accounted for as an equity method investment given the nature of Vantiv Holding, LLC’s structure as a limited liability company and contractual arrangements between Vantiv Holding, LLC and the Bancorp.

Accelerated Share Repurchase Transactions

During the three months ended March 31, 2018, the Bancorp entered into or settled accelerated share repurchase transactions. As part of these transactions, the Bancorp entered into forward contracts in which the final number of shares delivered at settlement was based generally on a discount to the average daily volume weighted-average price of the Bancorp’s common stock during the term of the repurchase agreements. For more information on the accelerated share repurchase program, refer to Note 14 of the Notes to Condensed Consolidated Financial Statements. For a summary of the Bancorp’s accelerated share repurchase transactions that were entered into or settled during the three months ended March 31, 2018, refer to Table 2.

4

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

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 19, 2017	$	273		7,727,273		824,367		8,551,640		March 19, 2018
February 12, 2018		318		8,691,318		1,015,731		9,707,049		March 26, 2018

Senior Notes Offering

On March 14, 2018, the Bancorp issued and sold $650 million of 3.95% senior fixed-rate notes, with a maturity of ten years, due on March 14, 2028. These notes will be redeemable by the Bancorp, in whole or in part, on or after the date that is 30 days prior to the maturity date at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.

Earnings Summary

The Bancorp’s net income available to common shareholders for the first quarter of 2018 was $689 million, or $0.97 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 2017 was $290 million, or $0.38 per diluted share, which was net of $15 million in preferred stock dividends.

Net interest income on an FTE basis (non-GAAP) was $999 million and $939 million for the three months ended March 31, 2018 and 2017, respectively. Net interest income was positively impacted by an increase in yields on average loans and leases of 42 bps and an increase in average taxable securities of $1.3 billion for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. Additionally, net interest income was positively impacted by the decisions of the FOMC to raise the target range of the federal funds rate 25 bps in June 2017, December 2017 and March 2018. These positive impacts were partially offset by increases in the rates paid on average interest-bearing core deposits, average long-term debt and average other short-term borrowings for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. Net interest margin on an FTE basis (non-GAAP) was 3.18% and 3.02% for the three months ended March 31, 2018 and 2017, respectively.

Noninterest income increased $386 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to an increase in other noninterest income. Other noninterest income increased $383 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to the gain related to Vantiv, Inc’s acquisition of Worldpay Group plc. and an increase in private equity investment income, partially offset by an increase in the loss on the swap associated with the sale of Visa, Inc. Class B Shares, a reduction in equity method income from the Bancorp’s interest in Vantiv Holding, LLC and an increase in the losses on disposition and impairment of bank premises and equipment.

Noninterest expense increased $60 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to increases in personnel costs, technology and communications expense and other noninterest expense. Personnel costs increased $35 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily driven by increases in base compensation, variable compensation and severance costs, partially offset by a decrease in medical expenses. Technology and communications expense increased $10 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 driven primarily by increased investment in regulatory, compliance and growth initiatives. Other noninterest expense increased $16 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to increases in marketing expense and impairment on affordable housing investments, partially offset by a decrease in professional service fees and an increase in the benefit from the reserve for unfunded commitments.

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 $23 million and $74 million for the three months ended March 31, 2018 and 2017, respectively. Net losses charged-off as a percent of average portfolio loans and leases were 0.36% during the first quarter of 2018 compared to 0.40% during the first quarter of 2017. At March 31, 2018, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO increased to 0.55% compared to 0.53% at December 31, 2017. 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, 2018, as calculated under the Basel III standardized approach, the CET1 capital ratio was 10.82%, the Tier I risk-based capital ratio was 11.95%, the Total risk-based capital ratio was 15.25% and the Tier I leverage ratio was 10.11%.

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 provide useful insight to the reader of the Condensed Consolidated Financial Statements but should be supplemental to primary U.S. GAAP measures and should not be read in isolation or relied upon as a substitute for the 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 on an FTE basis, interest income on an FTE basis, net interest margin, net interest rate spread and the efficiency ratio to U.S. GAAP:

TABLE 3: Non-GAAP Financial Measures - Financial Measures and Ratios on an FTE basis

		For the three months ended         March 31,
($ in millions)			2018	2017
Net interest income (U.S. GAAP)	$		996	933
Add: FTE adjustment			3	6
Net interest income on an FTE basis (1)	$		999	939
Net interest income on an FTE basis (annualized) (2)			4,052	3,808
Interest income (U.S. GAAP)	$		1,206	1,086
Add: FTE adjustment			3	6
Interest income on an FTE basis	$		1,209	1,092
Interest income on an FTE basis (annualized) (3)			4,903	4,429
Interest expense (annualized) (4)	$		852	621
Noninterest income (5)			909	523
Noninterest expense (6)			1,046	986
Average interest-earning assets (7)			127,546	125,968
Average interest-bearing liabilities (8)			87,607	84,890
Ratios:
Net interest margin on an FTE basis (2) / (7)			3.18  %	3.02
Net interest spread on an FTE basis (3) / (7) - (4) / (8)			2.88	2.78
Efficiency ratio on an FTE basis (6) / (1) + (5)			54.8	67.4

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)			2018	2017
Income before income taxes (U.S. GAAP)	$		836	396
Add: FTE adjustment			3	6
Income before income taxes on an FTE basis	$		839	402

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.

6

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

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,     2018		March 31,   2017
Net income available to common shareholders (U.S. GAAP)	$	689		290
Add: Intangible amortization, net of tax		1		-
Tangible net income available to common shareholders	$	690		290
Tangible net income available to common shareholders (annualized) (1)		2,798		1,176
Average Bancorp’s shareholders’ equity (U.S. GAAP)	$	16,313		16,429
Less:    Average preferred stock		(1,331)		(1,331)
Average goodwill		(2,455)		(2,416)
Average intangible assets		(27)		(10)
Average tangible common equity (2)	$	12,500		12,672
Return on average tangible common equity (1) / (2)		22.4 %		9.3

The Bancorp considers various measures when evaluating capital utilization and adequacy, including the tangible equity ratio and tangible common equity ratio, 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. 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,   2018			December 31,     2017
Total Bancorp Shareholders’ Equity (U.S. GAAP)	$	16,184			16,365
Less:    Preferred stock		(1,331	)		(1,331)
Goodwill		(2,462	)		(2,445)
Intangible assets		(30	)		(27)
AOCI		389			(73)
Tangible common equity, excluding unrealized gains / losses (1)		12,750			12,489
Add: Preferred stock		1,331			1,331
Tangible equity (2)	$	14,081			13,820
Total Assets (U.S. GAAP)	$	141,500			142,193
Less:    Goodwill		(2,462	)		(2,445)
Intangible assets		(30	)		(27)
AOCI, before tax		492			(92)
Tangible assets, excluding unrealized gains / losses (3)	$	139,500			139,629
Ratios:
Tangible equity as a percentage of tangible assets (2) / (3)		10.09	%		9.90
Tangible common equity as a percentage of tangible assets (1) / (3)		9.14			8.94

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, 2017. There have been no material changes to the valuation techniques or models during the three months ended March 31, 2018.

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, 2018 and 2017, 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 and leases 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 included in other assets.

Net interest income on an FTE basis (non-GAAP) was $999 million and $939 million for the three months ended March 31, 2018 and March 31, 2017, respectively. Net interest income was positively impacted by an increase in yields on average loans and leases of 42 bps and an increase in average taxable securities of $1.3 billion for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. Additionally, net interest income was positively impacted by the decisions of the FOMC to raise the target range of the federal funds rate 25 bps in June 2017, December 2017 and March 2018. These positive impacts were partially offset by increases in the rates paid on average interest-bearing core deposits, average long-term debt and average other short-term borrowings for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. The rates paid on both average interest-bearing core deposits and average long-term debt increased 21 bps and the rates paid on average other short-term borrowings increased 79 bps for the three months ended March 31, 2018 compared to the same period in the prior year.

Net interest rate spread on an FTE basis (non-GAAP) was 2.88% during the three months ended March 31, 2018 compared to 2.78% in the same period in 2017. Yields on average interest-earning assets increased 34 bps, partially offset by a 24 bps increase in the rates paid on average interest-bearing liabilities for the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

Net interest margin on an FTE basis (non-GAAP) was 3.18% for the three months ended March 31, 2018 compared to 3.02% for the three months ended March 31, 2017. The increase from March 31, 2017 was driven primarily by the previously mentioned increase in the net interest rate spread, partially offset by a decrease in average free funding balances. The decrease in average free funding balances was driven by a decrease in average demand deposits of $1.3 billion for the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

Interest income on an FTE basis from loans and leases (non-GAAP) increased $96 million during the three months ended March 31, 2018 compared to the three months ended March 31, 2017. The increase was primarily due to an increase in yields on average commercial and industrial loans, average construction loans, average commercial mortgage loans and average home equity 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 and other short-term investments increased $21 million during the three months ended March 31, 2018 compared to the three months ended March 31, 2017 driven by the aforementioned increases in average taxable securities and yields on average taxable securities.

Interest expense on core deposits increased $36 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to an increase in the cost of average interest-bearing core deposits to 52 bps for the three months ended March 31, 2018 from 31 bps for the three months ended March 31, 2017. The increase in the cost of average interest-bearing core deposits was primarily due to an increase in the cost of average interest checking deposits and average money market 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 $21 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to the aforementioned increase in the rates paid on average other short-term borrowings and average long-term debt coupled with an increase 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 both the three months ended March 31, 2018 and 2017, average wholesale funding represented 23% 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, 2018							March 31, 2017							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	$	41,799		409		3.96	%	$	41,892		359		3.47	%	$(1)	51	50
Commercial mortgage loans		6,588		68		4.20			6,946		61		3.54		(4)	11	7
Commercial construction loans		4,671		53		4.59			3,987		37		3.77		7	9	16
Commercial leases		3,960		27		2.78			3,904		26		2.70		-	1	1
Total commercial loans and leases		57,018		557		3.96			56,729		483		3.45		2	72	74
Residential mortgage loans		16,086		143		3.60			15,800		140		3.57		2	1	3
Home equity		6,889		78		4.62			7,581		74		3.98		(7)	11	4
Automobile loans		9,064		70		3.12			9,786		68		2.81		(5)	7	2
Credit card		2,224		68		12.36			2,141		68		12.92		3	(3)	-
Other consumer loans		1,588		25		6.58			754		12		6.49		13	-	13
Total consumer loans		35,851		384		4.35			36,062		362		4.07		6	16	22
Total loans and leases	$	92,869		941		4.11	%	$	92,791		845		3.69	%	$8	88	96
Securities:
Taxable		33,133		263		3.21			31,815		244		3.11		11	8	19
Exempt from income taxes(b)		73		-		1.40			55		1		5.79		-	(1)	(1)
Other short-term investments		1,471		5		1.37			1,307		2		0.73		1	2	3
Total interest-earning assets	$	127,546		1,209		3.85	%	$	125,968		1,092		3.51	%	$20	97	117
Cash and due from banks		2,175							2,205
Other assets		13,039							13,220
Allowance for loan and lease losses		(1,195)							(1,253)
Total assets	$	141,565						$	140,140
Liabilities and Equity:
Interest-bearing liabilities:
Interest checking deposits	$	28,403		44		0.63	%	$	26,760		20		0.31	%	$1	23	24
Savings deposits		13,546		3		0.07			14,117		2		0.05		-	1	1
Money market deposits		20,750		27		0.53			20,603		16		0.32		-	11	11
Foreign office deposits		494		-		0.13			454		-		0.13		-	-	-
Other time deposits		3,856		12		1.25			3,827		12		1.23		-	-	-
Total interest-bearing core deposits		67,049		86		0.52			65,761		50		0.31		1	35	36
Certificates $100,000 and over		2,284		8		1.49			2,579		9		1.35		(2)	1	(1)
Other deposits		379		1		1.44			162		-		0.64		1	-	1
Federal funds purchased		692		2		1.43			639		1		0.70		-	1	1
Other short-term borrowings		2,423		8		1.34			1,893		3		0.55		-	5	5
Long-term debt		14,780		105		2.86			13,856		90		2.65		8	7	15
Total interest-bearing liabilities	$	87,607		210		0.97	%	$	84,890		153		0.73	%	$8	49	57
Demand deposits		33,825							35,084
Other liabilities		3,800							3,710
Total liabilities	$	125,232						$	123,684
Total equity	$	16,333						$	16,456
Total liabilities and equity	$	141,565						$	140,140
Net interest income (FTE)(c)			$	999						$	939				$12	48	60
Net interest margin (FTE)(c)						3.18	%						3.02	%
Net interest rate spread (FTE)(c)						2.88							2.78
Interest-bearing liabilities to interest-earning assets						68.69							67.39

(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 $3 and $6 for the three months ended March 31, 2018 and 2017, respectively.

(c) Net interest income (FTE), net interest margin (FTE) and net interest rate spread (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, 2017. 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 $23 million and $74 million for the three months ended March 31, 2018 and 2017, respectively. The decrease in provision expense for the three months ended March 31, 2018 compared to the same period in the prior year was primarily due to a decrease in the level of commercial criticized assets combined with overall improved credit quality. The ALLL decreased $58 million from December 31, 2017 to $1.1 billion at March 31, 2018. At March 31, 2018, the ALLL as a percent of portfolio loans and leases decreased to 1.24%, compared to 1.30% at December 31, 2017.

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 increased $386 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

The following table presents the components of noninterest income:    

TABLE 8: Components of Noninterest Income    

		For the three months ended March 31,
($ in millions)		2018		2017		% Change
Service charges on deposits	$		137		138		(1	)
Wealth and asset management revenue			113		108		5
Corporate banking revenue			88		74		19
Card and processing revenue			79		74		7
Mortgage banking net revenue			56		52		8
Other noninterest income			460		77		497
Securities losses, net			(11)		-		NM
Securities losses, net, non-qualifying hedges on MSRs			(13)		-		NM
Total noninterest income	$		909		523		74

Wealth and asset management revenue

Wealth and asset management revenue increased $5 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. The increase from the prior year was primarily due to an increase of $5 million in private client service fees driven by an increase in assets under management as a result of strong market performance and the impact of an acquisition in the second quarter of 2017. The Bancorp’s trust and registered investment advisory business had approximately $363 billion and $323 billion in total assets under care as of March 31, 2018 and 2017, respectively, and managed $37 billion and $33 billion in assets for individuals, corporations and not-for-profit organizations as of March 31, 2018 and 2017, respectively.

Corporate banking revenue

Corporate banking revenue increased $14 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017. The increase from the prior year was primarily driven by an increase in lease remarketing fees of $28 million 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. The increase was partially offset by a decrease in business lending fees, syndication fees and letter of credit fees of $6 million, $5 million and $2 million, respectively.

Card and processing revenue

Card and processing revenue increased $5 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily driven by an increase in the number of actively used cards and customer spend volume.

Mortgage banking net revenue

Mortgage banking net revenue increased $4 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

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)		2018			2017
Origination fees and gains on loan sales	$		24			29
Net mortgage servicing revenue:
Gross mortgage servicing fees			53			47
Net valuation adjustments on MSRs and free-standing derivatives purchased to economically hedge MSRs			(21	)		(24)
Net mortgage servicing revenue			32			23
Mortgage banking net revenue	$		56			52

Origination fees and gains on loan sales decreased $5 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 due to a decrease in originations and lower margins due to the interest rate environment. Residential mortgage loan originations decreased to $1.6 billion for the three months ended March 31, 2018 from $1.9 billion for the three months ended March 31, 2017.

11

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

Net mortgage servicing revenue increased $9 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to an increase in gross mortgage servicing fees of $6 million and a decrease in net negative valuation adjustments of $3 million. 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)		2018	2017
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio	$	(49)	(1)
Changes in fair value:
Due to changes in inputs or assumptions		57	4
Other changes in fair value		(29)	(27)
Net valuation adjustments on MSR and free-standing derivatives purchased to economically hedge MSRs	$	(21)	(24)

Mortgage rates increased during the three months ended March 31, 2018 which caused modeled prepayment speeds to slow. The fair value of the MSR increased $57 million due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $29 million due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs during the three months ended March 31, 2018. Mortgage rates also 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.

Further detail on the valuation of MSRs can be found in Note 10 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 of the MSR portfolio. Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements for more information on the free-standing derivatives used to economically hedge the MSR portfolio.

In addition to the derivative positions used to economically hedge the MSR portfolio, the Bancorp may acquire various securities as a component of its non-qualifying hedging strategy. The Bancorp recognized net losses of $13 million during the three months ended March 31, 2018, recorded in securities losses, net, non-qualifying hedges on MSRs in the Bancorp’s Condensed Consolidated Statements of Income. The Bancorp did not sell any securities related to the non-qualifying hedging strategy during the three months ended March 31, 2017.

The Bancorp’s total residential mortgage loans serviced as of March 31, 2018 and 2017 were $77.2 billion and $71.4 billion, respectively, with $61.0 billion and $55.4 billion, respectively, of residential mortgage loans serviced for others.

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)		2018	2017
Gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc.	$	414	-
Operating lease income		23	25
Private equity investment income		20	15
Cardholder fees		14	14
BOLI income		13	12
Insurance income		6	1
Consumer loan and lease fees		5	5
Banking center income		5	5
Loss on swap associated with the sale of Visa, Inc. Class B Shares		(39)	(13)
Net losses on disposition and impairment of bank premises and equipment		(8)	(1)
Net losses on loan sales		(1)	(2)
Equity method (loss) income from interest in Vantiv Holding, LLC		(1)	11
Other, net		9	5
Total other noninterest income	$	460	77

Other noninterest income increased $383 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to the gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc. and an increase in private equity investment income, partially offset by an increase in the loss on the swap associated with the sale of Visa, Inc. Class B Shares, a reduction in equity method income from the Bancorp’s interest in Vantiv Holding, LLC and an increase in the losses on disposition and impairment of bank premises and equipment.

12

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

The Bancorp recognized a $414 million gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc. during the three months ended March 31, 2018. For additional information, refer to Note 17 of the Notes to Condensed Consolidated Financial Statements. Private equity investment income increased $5 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to the recognition of positive net valuation adjustments on certain private equity investments in the first quarter of 2018. For additional information on the valuation of private equity investments, refer to Note 21 of the Notes to Condensed Consolidated Financial Statements.

The Bancorp recognized negative valuation adjustments of $39 million and $13 million related to the Visa total return swap for the three months ended March 31, 2018 and 2017, respectively. The increase from the prior year was primarily attributable to litigation developments during the quarter and an increase in Visa, Inc’s share price. For additional information on the valuation of the swap associated with the sale of Visa, Inc. Class B Shares, refer to Note 21 of the Notes to Condensed Consolidated Financial Statements. Equity method income from the Bancorp’s interest in Vantiv Holding, LLC decreased $12 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 due to a decrease in the Bancorp’s ownership interest in Vantiv Holding, LLC from approximately 17.8% as of March 31, 2017 to approximately 4.9% as of March 31, 2018 and the impact of Worldpay, Inc.’s acquisition and integration costs. Net losses on disposition and impairment of bank premises and equipment increased $7 million compared to the same period in the prior year. The increase was driven by the impact of impairment charges of $8 million during the three months ended March 31, 2018 compared to $3 million during the three months ended March 31, 2017.

Noninterest Expense

Noninterest expense increased $60 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to increases in personnel costs (salaries, wages and incentives plus employee benefits), technology and communications expense and other noninterest expense. The following table presents the components of noninterest expense:

TABLE 12: Components of Noninterest Expense

		For the three months ended March 31,
($ in millions)		2018			2017		% Change
Salaries, wages and incentives	$		447			411		9
Employee benefits			110			111		(1)
Net occupancy expense			75			78		(4)
Technology and communications			68			58		17
Equipment expense			31			28		11
Card and processing expense			29			30		(3)
Other noninterest expense			286			270		6
Total noninterest expense	$		1,046			986		6
Efficiency ratio on an FTE basis(a)			54.8	%		67.4

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

Personnel costs increased $35 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily driven by increases in base compensation, variable compensation and severance costs, partially offset by a decrease in medical expenses. The increase in base compensation was primarily due to personnel additions in information technology as well as an increase in the Bancorp’s minimum wage as a result of benefits received from the TCJA. Full-time equivalent employees totalled 18,344 at March 31, 2018 compared to 17,763 at March 31, 2017.

Technology and communications expense increased $10 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 driven primarily by increased investment in regulatory, compliance and growth initiatives.

13

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

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)		2018			2017
Impairment on affordable housing investments	$		48			39
FDIC insurance and other taxes			32			33
Marketing			32			19
Loan and lease			26			22
Operating lease			21			25
Losses and adjustments			17			15
Data processing			14			13
Professional service fees			13			22
Travel			13			11
Postal and courier			9			12
Recruitment and education			8			8
Supplies			3			3
Donations			3			2
Insurance			3			3
Benefit from the reserve for unfunded commitments			(10	)		(2	)
Other, net			54			45
Total other noninterest expense	$		286			270

Other noninterest expense increased $16 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to increases in marketing expense and impairment on affordable housing investments, partially offset by a decrease in professional service fees and an increase in the benefit from the reserve for unfunded commitments.

Marketing expense increased $13 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to an increase in advertising volume related to the brand campaign and promotional offers. Impairment on affordable housing investments increased $9 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily driven by the change in the federal statutory corporate tax rate pursuant to the TCJA. Professional service fees decreased $9 million for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 primarily due to a decrease in legal fees and consulting fees. The benefit from the reserve for unfunded commitments was $10 million for the three months ended March 31, 2018 compared to $2 million for the same period in the prior year as a result of a decrease in total unfunded commitments outstanding as of March 31, 2018 combined with overall improved credit quality.

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)		2018			2017
Income before income taxes	$		836			396
Applicable income tax expense			132			91
Effective tax rate			15.8	%		22.9

Applicable income tax expense for all periods includes the benefit from tax-exempt income, tax-advantaged investments 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.

The decrease in the effective tax rate for the three months ended March 31, 2018 compared to the same period in the prior year was primarily related to the reduction in the federal statutory corporate tax rate partially offset by changes to previously deductible items associated with the enactment of the TCJA.

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 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, 2018, the Bancorp estimates that it may be necessary to recognize $12 million of additional income tax benefit over the next twelve months related to the settlement of stock-based awards, primarily in the second quarter of 2018. 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.

14

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 based upon product or collateral. Table 15 summarizes end of period loans and leases, including loans and leases held for sale and Table 16 summarizes average total loans and leases, including loans and leases held for sale.

TABLE 15: Components of Total Loans and Leases (including loans and leases held for sale)

		March 31, 2018			December 31, 2017
As of ($ in millions)		Carrying Value		% of Total	Carrying Value		% of Total
Commercial loans and leases:
Commercial and industrial loans	$		41,678	45	$	41,170		45
Commercial mortgage loans			6,515	7		6,610		7
Commercial construction loans			4,766	5		4,553		5
Commercial leases			3,919	4		4,068		4
Total commercial loans and leases			56,878	61		56,401		61
Consumer loans:
Residential mortgage loans			16,231	18		16,077		17
Home equity			6,757	7		7,014		8
Automobile loans			9,018	10		9,112		10
Credit card			2,188	2		2,299		2
Other consumer loans			1,615	2		1,559		2
Total consumer loans			35,809	39		36,061		39
Total loans and leases	$		92,687	100	$	92,462		100
Total portfolio loans and leases (excluding loans and leases held for sale)	$		91,970		$	91,970

Loans and leases, including loans and leases held for sale, increased $225 million from December 31, 2017. The increase from December 31, 2017 was the result of a $477 million, or 1%, increase in commercial loans and leases, partially offset by a $252 million, or 1%, decrease in consumer loans.

Commercial loans and leases increased from December 31, 2017 primarily due to increases in commercial and industrial loans and commercial construction loans, partially offset by decreases in commercial leases and commercial mortgage loans. Commercial and industrial loans increased $508 million, or 1%, from December 31, 2017 primarily as a result of increased draw levels on existing commitments and a decrease in payoffs. Commercial construction loans increased $213 million, or 5%, from December 31, 2017 primarily due to increases in demand and draw levels on existing commitments. Commercial leases decreased $149 million, or 4%, from December 31, 2017 primarily as a result of a decrease in syndication and participation origination activity. Commercial mortgage loans decreased $95 million, or 1%, from December 31, 2017 primarily due to a decline in new loan origination activity driven by increased competition and an increase in paydowns.

Consumer loans decreased from December 31, 2017 primarily due to decreases in home equity, credit card and automobile loans, partially offset by increases in residential mortgage loans and other consumer loans. Home equity decreased $257 million, or 4%, from December 31, 2017 as payoffs exceeded new loan production. Credit card decreased $111 million, or 5%, from December 31, 2017 primarily due to seasonal trends from the paydown of year-end balances which were higher due to holiday spending. Automobile loans decreased $94 million, or 1%, from December 31, 2017 as payoffs exceeded new loan production due to a strategic shift focusing on improving risk-adjusted returns. Residential mortgage loans increased $154 million, or 1%, from December 31, 2017 primarily due to the continued retention of certain agency conforming ARMs and certain other fixed-rate loans originated during the three months ended March 31, 2018. Other consumer loans increased $56 million, or 4%, from December 31, 2017 primarily due to growth in point-of-sale loan originations.

TABLE 16: Components of Average Loans and Leases (including loans and leases held for sale)

		March 31, 2018				March 31, 2017
For the three months ended ($ in millions)		Carrying Value		% of Total		Carrying Value		% of Total
Commercial loans and leases:
Commercial and industrial loans	$		41,799	45	$		41,892		45
Commercial mortgage loans			6,588	7			6,946		7
Commercial construction loans			4,671	5			3,987		4
Commercial leases			3,960	4			3,904		4
Total commercial loans and leases			57,018	61			56,729		60
Consumer loans:
Residential mortgage loans			16,086	18			15,800		18
Home equity			6,889	7			7,581		8
Automobile loans			9,064	10			9,786		11
Credit card			2,224	2			2,141		2
Other consumer loans			1,588	2			754		1
Total consumer loans			35,851	39			36,062		40
Total average loans and leases	$		92,869	100	$		92,791		100
Total average portfolio loans and leases (excluding loans and leases held for sale)	$		92,334		$		92,146

15

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

Average loans and leases, including loans and leases held for sale, increased $78 million from March 31, 2017. The increase from March 31, 2017 was the result of a $289 million, or 1%, increase in average commercial loans and leases, partially offset by a $211 million, or 1%, decrease in average consumer loans.

Average commercial loans and leases increased from March 31, 2017 primarily due to an increase in average commercial construction loans, partially offset by a decrease in average commercial mortgage loans. Average commercial construction loans increased $684 million, or 17%, from March 31, 2017 primarily due to increases in demand and draw levels on existing commitments. Average commercial mortgage loans decreased $358 million, or 5%, primarily due to a decline in new loan origination activity driven by increased competition and an increase in paydowns.

Average consumer loans decreased from March 31, 2017 primarily due to decreases in average automobile loans and average home equity, partially offset by increases in average other consumer loans and average residential mortgage loans. Average automobile loans decreased $722 million, or 7%, from March 31, 2017 as payoffs exceeded new loan production due to a strategic shift focusing on improving risk-adjusted returns. Average home equity decreased $692 million, or 9%, from March 31, 2017 as payoffs exceeded new loan production. Average other consumer loans increased $834 million primarily due to growth in point-of-sale loan originations. Average residential mortgage loans increased $286 million, or 2%, from March 31, 2017 primarily driven by the continued retention of certain agency conforming ARMs and certain other fixed-rate loans.

Investment Securities

The Bancorp uses investment securities as a means of managing interest rate risk, providing both collateral for pledging purposes and liquidity for satisfying regulatory requirements. Total investment securities were $32.8 billion and $32.7 billion at March 31, 2018 and December 31, 2017, respectively. The taxable investment securities portfolio had an effective duration of 5.2 years at March 31, 2018 compared to 4.7 years at December 31, 2017.

Debt 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. Debt securities are classified as trading when bought and held principally for the purpose of selling them in the near term. At March 31, 2018, the Bancorp’s investment portfolio consisted primarily of AAA-rated available-for-sale debt securities. The Bancorp did not hold any securities classified as below investment grade at March 31, 2018 and an immaterial amount as of December 31, 2017. The Bancorp did not recognize OTTI on its available-for-sale debt and other securities, included in securities gains, net, in the Condensed Consolidated Statements of Income, during the three months ended March 31, 2018 and recognized $10 million during the three months ended March 31, 2017.

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

TABLE 17: Components of Investment Securities

As of ($ in millions)	March 31,           2018		December 31,       2017
Available-for-sale debt and other securities (amortized cost basis):
U.S. Treasury and federal agencies securities	$	98	98
Obligations of states and political subdivisions securities		43	43
Mortgage-backed securities:
Agency residential mortgage-backed securities(a)		15,456	15,281
Agency commercial mortgage-backed securities		10,612	10,113
Non-agency commercial mortgage-backed securities		3,219	3,247
Asset-backed securities and other debt securities		2,190	2,183
Other securities(b)		612	612
Total available-for-sale debt and other securities	$	32,230	31,577
Held-to-maturity securities (amortized cost basis):
Obligations of states and political subdivisions securities	$	21	22
Asset-backed securities and other debt securities		2	2
Total held-to-maturity securities	$	23	24
Trading debt securities (fair value):
U.S. Treasury and federal agencies securities	$	21	12
Obligations of states and political subdivisions securities		52	22
Agency residential mortgage-backed securities		364	395
Asset-backed securities and other debt securities		134	63
Total trading debt securities	$	571	492
Total equity securities	$	418	439

(a) Includes interest-only mortgage-backed securities of $34 as of December 31, 2017 recorded at fair value with fair value changes recorded in securities gains, net in the Condensed Consolidated Statements of Income.

(b) Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $362 and $2, respectively, at both March 31, 2018 and December 31, 2017, that are carried at cost.

On an amortized cost basis, available-for-sale debt and other securities increased $653 million from December 31, 2017 primarily due to increases in agency commercial mortgage-backed securities and agency residential mortgage-backed securities.

16

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

On an amortized cost basis, available-for-sale debt and other securities were 25% of total interest-earning assets at both March 31, 2018 and December 31, 2017. The estimated weighted-average life of the debt securities in the available-for-sale debt and other securities portfolio was 6.8 years at March 31, 2018 compared to 6.5 years at December 31, 2017. In addition, at March 31, 2018, the debt securities in the available-for-sale debt and other securities portfolio had a weighted-average yield of 3.15%, compared to 3.18% at December 31, 2017.

Trading debt securities increased $79 million from December 31, 2017 primarily due to an increase in asset-backed securities and other debt securities.

Information presented in Table 18 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 debt and other securities portfolio exclude other securities that have no stated yield or maturity. Total net unrealized losses on the available-for-sale debt and other securities portfolio were $411 million at March 31, 2018 compared to net unrealized gains of $174 million at December 31, 2017. 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 decreases when interest rates increase or when credit spreads expand.

TABLE 18: Characteristics of Available-for-Sale Debt and Other Securities    

As of March 31, 2018 ($ 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	$	-		-		-		3.40 %
Average life 1 – 5 years		98		96		4.8		2.16
Total	$	98		96		4.8		2.16 %
Obligations of states and political subdivisions securities:(a)
Average life of 1 year or less		14		14		0.3		1.70
Average life 1 – 5 years		27		28		1.1		5.01
Average life 5 – 10 years		2		2		6.4		-
Total	$	43		44		1.1		3.73 %
Agency residential mortgage-backed securities:
Average life of 1 year or less		1		1		0.2		4.48
Average life 1 – 5 years		5,774		5,693		3.8		3.34
Average life 5 – 10 years		8,160		8,037		7.4		3.11
Average life greater than 10 years		1,521		1,477		11.5		3.11
Total	$	15,456		15,208		6.5		3.20 %
Agency commercial mortgage-backed securities:
Average life of 1 year or less		208		200		1.0		2.44
Average life 1 – 5 years		2,437		2,414		3.6		3.07
Average life 5 – 10 years		5,783		5,715		7.8		3.05
Average life greater than 10 years		2,184		2,126		11.9		3.10
Total	$	10,612		10,455		7.6		3.05 %
Non-agency commercial mortgage-backed securities:
Average life of 1 year or less		-		-		0.5		4.04
Average life 1 – 5 years		134		135		4.1		3.44
Average life 5 – 10 years		3,085		3,055		6.7		3.28
Total	$	3,219		3,190		6.6		3.29 %
Asset-backed securities and other debt securities:
Average life of 1 year or less		31		31		0.6		4.23
Average life 1 – 5 years		833		830		3.4		3.53
Average life 5 – 10 years		1,117		1,141		7.1		3.29
Average life greater than 10 years		209		212		10.7		3.25
Total	$	2,190		2,214		5.9		3.39 %
Other securities		612		612
Total available-for-sale debt and other securities	$	32,230		31,819		6.8		3.15 %

(a) Taxable-equivalent yield adjustments included in the above table are 0.35%, 1.05%, 0.00% and 0.78% for securities with an average life of 1 year or less, 1-5 years, 5-10 years and in total, respectively.

17

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

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. Average core deposits represented 71% of the Bancorp’s average asset funding base at both March 31, 2018 and December 31, 2017.

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

TABLE 19: Components of Deposits

		March 31, 2018				December 31, 2017
As of ($ in millions)		Balance		% of Total		Balance		% of Total
Demand	$		34,066		33	$	35,276		34
Interest checking			29,627		28		27,703		27
Savings			13,751		13		13,425		13
Money market			21,540		20		20,097		19
Foreign office			374		-		484		1
Transaction deposits			99,358		94		96,985		94
Other time			3,945		4		3,775		4
Core deposits			103,303		98		100,760		98
Certificates $100,000 and over(a)			2,042		2		2,402		2
Other			116		-		-		-
Total deposits	$		105,461		100	$	103,162		100

(a) Includes $1.0 billion and $1.3 billion of institutional, retail and wholesale certificates $250,000 and over at March 31, 2018 and December 31, 2017, respectively.

Core deposits increased $2.5 billion, or 3%, from December 31, 2017 driven by an increase of $2.4 billion in transaction deposits. Transaction deposits increased from December 31, 2017 primarily due to increases in interest checking deposits, money market deposits and savings deposits, partially offset by a decrease in demand deposits. Interest checking deposits increased $1.9 billion, or 7%, from December 31, 2017 driven primarily by higher balances per account for commercial customers and balance migration from demand deposits accounts. Money market deposits increased $1.4 billion, or 7%, from December 31, 2017 driven primarily by promotional product offerings which drove consumer customer acquisition. Savings deposits increased $326 million, or 2%, from December 31, 2017 primarily due to consumer customer seasonality. Demand deposits decreased $1.2 billion, or 3%, from December 31, 2017 driven primarily by the aforementioned commercial customer balance migration into interest checking deposits, partially offset by higher balances per consumer customer account due to consumer customer seasonality.

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

TABLE 20: Components of Average Deposits

		March 31, 2018				March 31, 2017
($ in millions)		Balance		% of Total		Balance		% of Total
Demand	$		33,825		34	$	35,084		34
Interest checking			28,403		27		26,760		26
Savings			13,546		13		14,117		14
Money market			20,750		20		20,603		20
Foreign office			494		-		454		-
Transaction deposits			97,018		94		97,018		94
Other time			3,856		4		3,827		4
Core deposits			100,874		98		100,845		98
Certificates $100,000 and over(a)			2,284		2		2,579		2
Other			379		-		162		-
Total average deposits	$		103,537		100	$	103,586		100

(a) Includes $878 million and $1.3 billion of average institutional, retail and wholesale certificates $250,000 and over for the three months ended March 31, 2018 and 2017, respectively.

On an average basis, core deposits increased $29 million from March 31, 2017 driven by an increase in average other time deposits. Average other time deposits increased $29 million, or 1%, from March 31, 2017 as a result of promotional rate offers facilitated by the rising-rate environment. Average transaction deposits were flat from March 31, 2017. Average interest checking deposits increased $1.6 billion, or 6%, from March 31, 2017, primarily due to an increase in average balances per commercial customer account and balance migration from demand deposit accounts. Average demand deposits decreased $1.3 billion, or 4%, from March 31, 2017 primarily due to commercial customer balance migration into interest checking deposits and a decrease in average balances per commercial customer account.

Average other deposits increased $217 million from March 31, 2017 primarily due to an increase in average Eurodollar trade deposits. Average certificates $100,000 and over decreased $295 million from March 31, 2017 primarily due to the maturity and run-off of commercial certificates of deposit since March 31, 2017.

18

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

Contractual maturities

The contractual maturities of certificates $100,000 and over as of March 31, 2018 are summarized in the following table:

TABLE 21: Contractual Maturities of Certificates $100,000 and Over

($ in millions)
Next 3 months	$	302
3-6 months		289
6-12 months		384
After 12 months		1,067
Total certificates $100,000 and over	$	2,042

The contractual maturities of other time deposits and certificates $100,000 and over as of March 31, 2018 are summarized in the following table:

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

($ in millions)
Next 12 months	$	2,952
13-24 months		1,852
25-36 months		887
37-48 months		243
49-60 months		43
After 60 months		10
Total other time deposits and certificates $100,000 and over	$	5,987

Borrowings

The Bancorp accesses a variety of 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, 2018, average total borrowings as a percent of average interest-bearing liabilities were 20% compared to 21% at December 31, 2017.

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

TABLE 23: Components of Borrowings

As of ($ in millions)	March 31, 2018		December 31, 2017
Federal funds purchased	$	178		174
Other short-term borrowings		1,335		4,012
Long-term debt		14,800		14,904
Total borrowings	$	16,313		19,090

Total borrowings decreased $2.8 billion, or 15%, from December 31, 2017 primarily due to a decrease in other short-term borrowings. Other short-term borrowings decreased $2.7 billion from December 31, 2017 driven by a decrease in FHLB advances. 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 12 of the Notes to Condensed Consolidated Financial Statements. Long-term debt decreased $104 million from December 31, 2017 primarily driven by the maturity of $600 million of unsecured senior bank notes, $68 million of paydowns on long-term debt associated with automobile loan securitizations and $64 million of fair value adjustments on interest rate swaps related to long-term debt during the three months ended March 31, 2018. These decreases were partially offset by the issuance of $650 million of senior notes. For additional information regarding the senior notes debt issuance, refer to Note 13 of the Notes to Condensed Consolidated Financial Statements.

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

TABLE 24: Components of Average Borrowings

($ in millions)		March 31, 2018	March 31, 2017
Federal funds purchased	$	692	639
Other short-term borrowings		2,423	1,893
Long-term debt		14,780	13,856
Total average borrowings	$	17,895	16,388

Total average borrowings increased $1.5 billion, or 9%, compared to March 31, 2017, primarily due to increases in average long-term debt and average other short-term borrowings. Average long-term debt increased $924 million compared to March 31, 2017. The increase was primarily driven by the issuance of $700 million of senior notes and $1.1 billion of unsecured senior fixed-rate bank notes during the second and fourth quarters of 2017, respectively. Average other short-term borrowings increased $530 million compared to March 31, 2017, primarily driven by the increase in FHLB advances. 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.

19

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 22 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 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, 2018 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2017, thus net interest income for deposit-providing business segments was positively impacted during 2018. 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 2018.

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 is 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 results of operations and financial position for the three months ended March 31, 2017 were adjusted to reflect changes in internal expense allocation methodologies.

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

TABLE 25: Net Income (Loss) by Business Segment    

		For the three months ended       March  31,
($ in millions)		2018	2017
Income Statement Data
Commercial Banking	$	259	217
Branch Banking		134	103
Consumer Lending		(10)	(3)
Wealth and Asset Management		9	15
General Corporate and Other		312	(27)
Net income		704	305
Less: Net income attributable to noncontrolling interests		-	-
Net income attributable to Bancorp		704	305
Dividends on preferred stock		15	15
Net income available to common shareholders	$	689	290

20

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 26: Commercial Banking

		For the three months ended      March 31,
($ in millions)		2018			2017
Income Statement Data
Net interest income (FTE)(a)	$		422			431
(Benefit from) provision for loan and lease losses			(20	)		6
Noninterest income:
Corporate banking revenue			86			73
Service charges on deposits			71			73
Other noninterest income			62			56
Noninterest expense:
Personnel costs			88			85
Other noninterest expense			296			275
Income before income taxes (FTE)			277			267
Applicable income tax expense(a)(b)			18			50
Net income	$		259			217
Average Balance Sheet Data
Commercial loans and leases, including held for sale	$		53,953			53,733
Demand deposits			18,131			19,944
Interest checking deposits			10,273			9,245
Savings and money market deposits			4,443			6,363
Other time deposits and certificates $100,000 and over			611			966
Foreign office deposits			492			403

(a) Includes FTE adjustments of $3 and $6 for the three months ended March 31, 2018 and 2017, respectively.

(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 $259 million for the three months ended March 31, 2018 compared to $217 million for the same period in the prior year. The increase was primarily due to a decrease in the provision for loan and lease losses and an increase in noninterest income partially offset by an increase in noninterest expense and a decrease in net interest income.

Net interest income on an FTE basis decreased $9 million for the three months ended March 31, 2018 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 and an increase in FTP credits on interest checking deposits due to an increase in FTP credit rates.

Provision for loan and lease losses decreased $26 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to a decrease in net charge-offs on commercial and industrial loans and commercial mortgage loans as well as a decrease in criticized asset levels. Net charge-offs as a percent of average portfolio loans and leases decreased to 14 bps for the three months ended March 31, 2018 compared to 26 bps for the same period in the prior year.

Noninterest income increased $17 million for the three months ended March 31, 2018 compared to the same period in the prior year driven primarily by increases in corporate banking revenue and other noninterest income. Corporate banking revenue increased $13 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by an increase in lease remarketing fees of $28 million 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. The increase was partially offset by a decrease in business lending fees, syndication fees and letter of credit fees of $6 million, $5 million and $2 million, respectively. Other noninterest income increased $6 million for the three months ended March 31, 2018 compared to the same period in the prior year driven by an increase in private equity investment income.

Noninterest expense increased $24 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by an increase other noninterest. Other noninterest expense increased $21 million for the three months ended March 31, 2018 compared to the same period in the prior year due primarily due to increases in corporate overhead allocations, impairment on certain affordable housing investments and equipment expense partially offset by a decrease in operating lease expense.

Average commercial loans and leases increased $220 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in average commercial construction loans partially offset by decreases in average commercial mortgage loans and average commercial and industrial loans. Average commercial construction loans increased $697 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to increases in demand and draw levels on existing commitments.

21

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

Average commercial mortgage loans decreased $319 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to a decline in new loan origination activity driven by increased competition and an increase in paydowns. Average commercial and industrial loans decreased $215 million for the three months ended March 31, 2018 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 core deposits decreased $2.6 billion for the three months ended March 31, 2018 compared to the same period in the prior year. The decrease was primarily driven by decreases in average savings and money market deposits and average demand deposits which decreased $1.9 billion and $1.8 billion, respectively, for the three months ended March 31, 2018 compared to the same period in the prior year due to lower average balances per account. These decreases were partially offset by an increase in average interest checking deposits of $1.0 billion for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase of average balances per account.

Branch Banking

Branch Banking provides a full range of deposit and loan products to individuals and small businesses through 1,153 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 27: Branch Banking

		For the three months ended     March 31,
($ in millions)		2018		2017
Income Statement Data
Net interest income	$		466		430
Provision for loan and lease losses			44		42
Noninterest income:
Service charges on deposits			66		65
Card and processing revenue			64		59
Wealth and asset management revenue			37		36
Other noninterest income			17		24
Noninterest expense:
Personnel costs			136		131
Net occupancy and equipment expense			56		60
Card and processing expense			29		29
Other noninterest expense			216		193
Income before income taxes			169		159
Applicable income tax expense			35		56
Net income	$		134		103
Average Balance Sheet Data
Consumer loans	$		13,036		13,177
Commercial loans			1,873		1,852
Demand deposits			14,055		13,601
Interest checking deposits			10,315		10,157
Savings and money market deposits			28,427		27,156
Other time deposits and certificates $100,000 and over			5,031		5,039

Net income was $134 million for the three months ended March 31, 2018 compared to net income of $103 million for the same period in the prior year. The increase in net income was primarily due to an increase in net interest income partially offset by an increase in noninterest expense.

Net interest income increased $36 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in FTP credit rates on core deposits as well as an increase in interest income on other consumer loans driven by higher average balances. These benefits were partially offset by an increase in FTP charge rates on loans and leases, an increase in the rates paid on money market deposits and the impact of a $12 million benefit in the first quarter of 2017 related to a revised estimate of refunds to be offered to certain bankcard customers.

Provision for loan and lease losses increased $2 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in net charge-offs on credit card and other consumer loans as well as the impact of the benefit from lower criticized asset levels. Net charge-offs as a percent of average portfolio loans and leases increased to 121 bps for the three months ended March 31, 2018 compared to 109 bps for the same period in the prior year.

Noninterest income was flat for the three months ended March 31, 2018 compared to the same period in the prior year as a decrease in other noninterest income was partially offset by an increase in card and processing revenue. The decrease in other noninterest income was due to the impact of impairment charges on bank premises and equipment of $8 million for the three months ended March 31, 2018. The increase in card and processing revenue for the three months ended March 31, 2018 compared to the same period in the prior year was driven by an increase in the number of actively used cards and customer spend volume.

22

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

Noninterest expense increased $24 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in other noninterest expense driven by increases in corporate overhead allocations, marketing expense and loan and lease expense.

Average consumer loans decreased $141 million for the three months ended March 31, 2018 compared to the same period in the prior year. The decrease was primarily driven by decreases in average home equity loans, average residential mortgage loans and average automobile loans of $533 million, $318 million and $180, respectively, for the three months ended March 31, 2018 compared to the same period in the prior year as payoffs exceeded new loan production. These decreases were partially offset by an increase of $890 million in other consumer loans for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to growth in point-of-sale loan originations.

Average core deposits increased $1.9 billion for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by growth in average savings and money market deposits, average demand deposits and average interest checking deposits of $1.3 billion, $454 million and $158 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 28: Consumer Lending

		For the three months ended     March 31,
($ in millions)		2018			2017
Income Statement Data
Net interest income	$		59			61
Provision for loan and lease losses			12			15
Noninterest income:
Mortgage banking net revenue			55			51
Other noninterest income			(9	)		4
Noninterest expense:
Personnel costs			50			48
Other noninterest expense			56			58
Loss before income taxes			(13	)		(5)
Applicable income tax benefit			(3	)		(2)
Net loss	$		(10	)		(3)
Average Balance Sheet Data
Residential mortgage loans, including held for sale	$		11,678			11,161
Home equity			261			314
Automobile loans			8,702			9,241

Consumer Lending incurred a net loss of $10 million for the three months ended March 31, 2018 compared to a net loss of $3 million for the same period in the prior year driven by a decrease in noninterest income.

Provision for loan and lease losses decreased $3 million for the three months ended March 31, 2018 compared to the same period in the prior year. Net charge-offs as a percent of average portfolio loans and leases decreased to 24 bps for the three months ended March 31, 2018 compared to 31 bps for the same period in the prior year.

Noninterest income decreased $9 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to a decrease in other noninterest income partially offset by an increase in mortgage banking net revenue. Other noninterest income decreased $13 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in losses on securities related to non-qualifying hedges on MSRs resulting from increased mortgage rates. Mortgage banking net revenue increased $4 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase of $8 million in net mortgage servicing revenue, partially offset by a decrease of $4 million in mortgage origination fees and gains on loan sales. Refer to the Noninterest Income subsection of the Statements of Income Analysis section of the MD&A for additional information on the fluctuations in mortgage banking net revenue.

Average consumer loans and leases decreased $75 million for the three months ended March 31, 2018 compared to the same period in the prior year as a decrease in average automobile loans was partially offset by an increase in average residential mortgage loans. Average automobile loans decreased $539 million for the three months ended March 31, 2018 compared to the same period in the prior year as payoffs exceeded new loan production due to a strategic shift focusing on improving risk-adjusted returns. Average residential mortgage loans, including held for sale, increased $517 million for the three months ended March 31, 2018 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.

23

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

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 five main businesses: FTS; ClearArc Capital, Inc.; Fifth Third Insurance Agency, Inc.; 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 Insurance Agency, Inc. assists clients with their financial and risk management needs. 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 table contains selected financial data for the Wealth and Asset Management segment:

TABLE 29: Wealth and Asset Management

		For the three months ended     March 31,
($ in millions)		2018		2017
Income Statement Data
Net interest income	$		43		38
Provision for loan and lease losses			16		4
Noninterest income:
Wealth and asset management revenue			109		105
Other noninterest income			7		1
Noninterest expense:
Personnel costs			54		48
Other noninterest expense			77		69
Income before income taxes			12		23
Applicable income tax expense			3		8
Net income	$		9		15
Average Balance Sheet Data
Loans and leases, including held for sale	$		3,335		3,240
Core deposits			9,649		9,045

Net income was $9 million for the three months ended March 31, 2018 compared to net income of $15 million for the same period in the prior year. The decrease in net income was primarily due to increases in noninterest expense and the provision for loan and lease losses partially offset by increases in net interest income and noninterest income.

Net interest income increased $5 million for the three months ended March 31, 2018 compared to the same period in the prior year due to an increase in FTP credit rates on interest checking deposits as well as increases in yields on average loans and leases. These positive impacts were partially offset by increases in the rates paid on interest checking deposits as well as an increase in FTP charge rates on loans and leases.

Provision for loan and lease losses increased $12 million for the three months ended March 31, 2018 compared to the same period in the prior year driven by an increase in net charge-offs on commercial and industrial loans as well as an increase in criticized assets.

Noninterest income increased $10 million for the three months ended March 31, 2018 compared to the same period in the prior year driven by increases in other noninterest income and wealth and asset management revenue. Other noninterest income increased $6 million for the three months ended March 31, 2018 compared to the same period in the prior year driven by an increase in insurance income as a result of acquisitions in the first and fourth quarters of 2017. Wealth and asset management revenue increased $4 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to an increase in private client service fees driven by an increase in assets under management as a result of strong market performance and the impact of an acquisition in the second quarter 2017.

Noninterest expense increased $14 million for the three months ended March 31, 2018 compared to the same period in the prior year driven by increases in both other noninterest expense and personnel costs. Other noninterest expense increased $8 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by an increase in corporate overhead allocations as a result of the aforementioned acquisitions in 2017 as well as increased operational losses. Personnel costs increased $6 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by higher base and incentive compensation as a result of the aforementioned acquisitions in 2017.

Average loans and leases increased $95 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to increases in average residential mortgage loans and average other consumer 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 $604 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to increases in average interest checking deposits and average saving deposits.

24

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

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 $30 million for the three months ended March 31, 2018 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 increases in FTP credit rates on deposits allocated to the business segments and an increase in interest expense on long-term debt.

Provision for loan and lease losses decreased $36 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily due to a an increase in the benefit from the reduction in the ALLL.

Noninterest income increased $368 million for the three months ended March 31, 2018 compared to the same period in the prior year primarily driven by the recognition of a $414 million gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc. during the three months ended March 31, 2018. This benefit was partially offset by a $39 million negative valuation adjustment related to the Visa total return swap for the three months ended March 31, 2018 compared to a negative valuation adjustment of $13 million for the three months ended March 31, 2017. The increase in noninterest income was also offset by a $12 million decrease in equity method earnings from the Bancorp’s interest in Vantiv Holding, LLC for the three months ended March 31, 2018 compared to the same period primarily due to a decrease in the Bancorp’s ownership percentage in Vantiv Holding, LLC and the impact of Worldpay, Inc’s acquisition and integration costs.

Noninterest expense decreased $2 million for the three months ended March 31, 2018 compared to the same period in the prior year. The decrease was primarily due to increases in corporate overhead allocations from General Corporate and Other to the other business segments and an increase in the benefit from the reserve for unfunded commitments partially offset by increases in personnel and technology and communications expense.

25

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 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. 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.

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 Business Conduct & Ethics, which may be found on www.53.com, while carrying out their responsibilities. Fifth Third’s Corporate Responsibility and Reputation Committee provides oversight of business conduct policies, programs and strategies and monitors reporting of potential misconduct, trends or themes across the enterprise. 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.

● 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 is 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. 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.

26

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

● 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 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 30: Potential Problem Portfolio Loans and Leases
As of March 31, 2018 ($ in millions)		Carrying   Value		Unpaid   Principal   Balance		Exposure
Commercial and industrial loans	$		806		806		1,149
Commercial mortgage loans			97		97		97
Commercial leases			55		55		55
Total potential problem portfolio loans and leases	$		958		958		1,301
TABLE 31: Potential Problem Portfolio Loans and Leases
As of December 31, 2017 ($ in millions)		Carrying   Value		Unpaid   Principal   Balance		Exposure
Commercial and industrial loans	$		911		912		1,370
Commercial mortgage loans			138		138		138
Commercial leases			70		70		70
Total potential problem portfolio loans and leases	$		1,119		1,120		1,578

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 model and will evaluate the use of modified dual risk ratings for purposes of determining the Bancorp’s 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.

27

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

Overview

Inflationary expectations by market professionals have increased and average hourly earnings growth in the U.S. overall remained strong while the U.S. labor market appears to have continued to shrink, based on publicly-available information. In light of higher inflationary expectations and a strong employment outlook, the FOMC enacted a 25 bp increase in the target rate for Federal Funds target rate and indicated positive outlook on the economy. The Federal Reserve median forecast for change in real GDP was raised to 2.7%.

The TCJA was enacted at a point in the cycle where the economy appeared to be growing, the unemployment rate was low and market professionals believed that it was likely to continue falling and there was increasing confidence in the market that inflation may move to 2% over the medium term.

The Bancorp maintains a focus on commercial real estate exposure. Market data and vacancies remain positive; however credit markets in commercial real estate are becoming more selective around certain asset types and geographies. The Bancorp is also monitoring potential increased risks in the Retail sector as a result changes in distribution models with increasing levels of online purchasing and recent weakness in certain specialty retailers.

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 32: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of March 31, 2018 ($ in millions)		LTV > 100%	LTV 80-100%	LTV < 80%
Commercial mortgage owner-occupied loans	$	75	111	2,236
Commercial mortgage nonowner-occupied loans		13	152	2,187
Total	$	88	263	4,423
TABLE 33: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of December 31, 2017 ($ in millions)		LTV > 100%	LTV 80-100%	LTV < 80%
Commercial mortgage owner-occupied loans	$	79	110	2,222
Commercial mortgage nonowner-occupied loans		14	169	2,208
Total	$	93	279	4,430

28

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 34: Commercial Loan and Lease Portfolio (excluding loans and leases held for sale)
		March 31, 2018			December 31, 2017
($ in millions)		Outstanding	Exposure	Nonaccrual	Outstanding	Exposure	Nonaccrual
By Industry:
Manufacturing	$	10,080	19,224	84	10,044	18,948	74
Real estate		7,813	12,387	18	7,713	12,493	25
Financial services and insurance		5,725	11,911	1	5,792	11,933	1
Healthcare		4,523	6,322	32	4,712	6,486	35
Business services		4,102	6,636	34	4,147	6,512	42
Retail trade		3,419	7,147	3	3,617	7,950	3
Accommodation and food		3,413	5,407	23	3,268	5,321	4
Communication and information		3,367	5,538	6	3,322	5,308	-
Wholesale trade		3,295	5,413	4	3,017	5,363	6
Transportation and warehousing		3,012	4,530	29	3,012	4,621	29
Construction		2,447	4,449	3	2,374	4,449	2
Entertainment and recreation		1,661	2,909	2	1,624	2,911	7
Mining		1,635	3,098	70	1,454	3,001	56
Utilities		861	2,264	-	869	2,333	-
Other services		713	998	11	714	1,017	16
Public administration		420	578	-	370	474	-
Agribusiness		312	489	2	304	478	2
Individuals		31	63	-	27	57	-
Other		-	-	-	15	15	4
Total	$	56,829	99,363	322	56,395	99,670	306
By Loan Size:
Less than $200,000		1 %	1	4	1	1	5
$200,000 - $1 million		3	2	6	3	2	8
$1 million - $5 million		7	6	14	7	6	15
$5 million - $10 million		6	5	15	6	5	10
$10 million - $25 million		21	18	36	21	18	57
Greater than $25 million		62	68	25	62	68	5
Total		100 %	100	100	100	100	100
By State:
Ohio		14 %	15	7	14	15	7
Florida		8	7	11	8	8	6
Michigan		7	7	9	7	7	13
Illinois		7	6	7	7	6	9
Indiana		4	4	2	4	4	3
Georgia		4	5	-	4	5	2
North Carolina		3	3	1	3	3	1
Tennessee		3	3	-	3	3	8
Kentucky		3	3	-	3	3	1
Other		47	47	63	47	46	50
Total		100 %	100	100	100	100	100

The Bancorp’s 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.

29

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

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

TABLE 35: Nonowner-Occupied Commercial Real Estate (excluding loans held for sale)^(a)    

As of March 31, 2018 ($ in millions)					For the three months ended March 31, 2018
	Outstanding	Exposure	90 Days           Past Due	Nonaccrual	Net Charge-Offs
By State:
Ohio	$                1,609	2,058	-	1	-
Florida	1,011	1,512	-	-	-
Illinois	806	1,000	-	-	-
Michigan	573	740	-	-	-
Indiana	552	800	-	-	-
North Carolina	538	793	-	-	-
All other states	2,661	4,447	-	3	1
Total	$                7,750	11,350	-	4	1
(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 36: 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.

30

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 five categories of loans: residential mortgage loans, home equity loans, automobile loans, credit card and other consumer. The Bancorp has identified certain credit characteristics within these five 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, 2018, consumer real estate loans, consisting of residential mortgage loans and home equity loans, originated from 2005 through 2008 represent approximately 14% of the consumer real estate portfolio. These loans accounted for 53% of total consumer real estate secured losses for the three months ended March 31, 2018. 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 returns 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 $634 million of ARM loans will have rate resets during the next twelve months. Of these resets, 90% are expected to experience an increase in rate, with an average increase of approximately one 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 91% of the portfolio as of March 31, 2018 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 37: Residential Mortgage Portfolio Loans by LTV at Origination

		March 31, 2018					December 31, 2017
($ in millions)		Outstanding		Weighted- Average LTV			Outstanding		Weighted- Average LTV
LTV £ 80%	$		11,704		66.4 %	$		11,767		66.4	%
LTV > 80%, with mortgage insurance(a)			1,926		94.8			1,890		94.8
LTV > 80%, no mortgage insurance			1,933		94.7			1,934		94.7
Total	$		15,563		73.8 %	$		15,591		73.7	%

(a) Includes loans with both borrower and lender paid mortgage insurance.

31

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

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

As of March 31, 2018 ($ in millions)					For the three months ended March 31, 2018
		Outstanding	90 Days     Past Due	Nonaccrual	Net Charge-offs
By State:
Ohio	$	435	3	3	-
Illinois		384	1	3	-
Florida		285	4	4	-
Michigan		222	1	-	-
Indiana		140	1	1	-
North Carolina		87	-	1	-
Kentucky		77	1	-	-
All other states		303	2	1	-
Total	$	1,933	13	13	-
TABLE 39: 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

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 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. For additional information on these loans, refer to Table 41 and Table 42. Of the total $6.8 billion of outstanding home equity loans:

• 88% reside within the Bancorp’s Midwest footprint of Ohio, Michigan, Kentucky, Indiana and Illinois as of March 31, 2018;

• 37% are in senior lien positions and 63% are in junior lien positions at March 31, 2018;

• 82% of non-delinquent borrowers made at least one payment greater than the minimum payment during the three months ended March 31, 2018; and

• The portfolio had an average refreshed FICO score of 744 at March 31, 2018.

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.

32

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

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.

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

TABLE 40: Home Equity Portfolio Loans Outstanding by Refreshed FICO Score    

			March 31, 2018				December 31, 2017
($ in millions)			Outstanding	% of Total			Outstanding	% of Total
Senior Liens:
FICO £ 659	$		235	4	%	$	246	4	%
FICO 660-719			344	5			358	5
FICO ³ 720			1,901	28			1,976	28
Total senior liens			2,480	37			2,580	37
Junior Liens:
FICO £ 659			528	8			541	8
FICO 660-719			826	12			853	12
FICO ³ 720			2,923	43			3,040	43
Total junior liens			4,277	63			4,434	63
Total		$	6,757	100	%	$	7,014	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 41: Home Equity Portfolio Loans Outstanding by LTV at Origination
			March 31, 2018				December 31, 2017
($ in millions)			Outstanding	Weighted- Average LTV			Outstanding	Weighted- Average LTV
Senior Liens:
LTV £ 80%		$	2,173	54.8	%	$	2,266	54.9	%
LTV > 80%			307	88.9			314	88.9
Total senior liens			2,480	59.3			2,580	59.3
Junior Liens:
LTV £ 80%			2,500	67.4			2,603	67.5
LTV > 80%			1,777	90.4			1,831	90.4
Total junior liens			4,277	78.3			4,434	78.3
Total		$	6,757	70.9	%	$	7,014	70.9	%

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

TABLE 42: Home Equity Portfolio Loans Outstanding with a LTV Greater than 80%

As of March 31, 2018 ($ in millions)						For the three months ended March 31, 2018
		Outstanding	Exposure	90 Days     Past Due	Nonaccrual	Net Charge-offs
By State:
Ohio	$	1,034	1,968	-	8	1
Michigan		339	550	-	5	1
Illinois		219	349	-	4	1
Indiana		148	256	-	3	-
Kentucky		136	250	-	2	-
Florida		66	95	-	2	-
All other states		142	210	-	3	-
Total	$	2,084	3,678	-	27	3

33

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

TABLE 43: 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

Automobile portfolio

The Bancorp’s automobile portfolio balances have declined since December 31, 2017 as payoffs exceeded new loan production due to a strategic shift focusing on improving risk-adjusted returns. Additionally, the concentration of lower FICO (<690) origination balances remained within targeted credit risk tolerance during the three months ended March 31, 2018. 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 44: Automobile Portfolio Loans Outstanding by FICO Score at Origination    

		March 31, 2018				December 31, 2017
($ in millions)		Outstanding	% of Total			Outstanding	% of Total
FICO £ 690	$	1,569	17	%	$	1,563	17	%
FICO > 690		7,449	83			7,549	83
Total	$	9,018	100	%	$	9,112	100	%
The automobile portfolio is characterized by direct and indirect lending products to consumers. As of March 31, 2018, 44% 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 negative equity trade-in, maintenance/warranty products, 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 45: Automobile Portfolio Loans Outstanding by LTV at Origination
		March 31, 2018				December 31, 2017
($ in millions)		Outstanding	Weighted- Average LTV			Outstanding	Weighted- Average LTV
LTV £ 100%	$	5,702	82.3	%	$	5,814	82.1	%
LTV > 100%		3,316	112.6			3,298	112.4
Total	$	9,018	93.8	%	$	9,112	93.5	%

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

TABLE 46: 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, 2018	$	3,316	5	1	8
March 31, 2017		3,266	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, 2018 and December 31, 2017. At March 31, 2018 and December 31, 2017, 75% and 76%, respectively, of the outstanding balances were originated through branch-based relationships with the remainder coming from direct mail campaigns and online acquisitions.

34

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

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

TABLE 47: Credit Card Portfolio Loans Outstanding by FICO Score at Origination    

		March 31, 2018					December 31, 2017
($ in millions)		Outstanding		% of Total			Outstanding		% of Total
FICO £ 659	$		60		3  %	$		61		3  %
FICO 660-719			574		26			581		25
FICO ³ 720			1,554		71			1,657		72
Total	$		2,188		100  %	$		2,299		100  %

Other consumer loans portfolio

The other consumer loans portfolio is comprised of secured and unsecured loans originated through the Bancorp’s branch network as well as point-of-sale loans originated in connection with third-party financial technology companies. Outstanding balances for other consumer loans increased approximately $56 million, or 4%, from December 31, 2017 primarily due to an increase in originations in connection with third-party financial technology companies. Additionally, the Bancorp has approximately $224 million in unfunded commitments associated with loans originated in connection with third-party financial technology companies as of March 31, 2018. Fifth Third closely monitors the credit performance of these point-of-sale loans which is impacted by the credit loss protection coverage provided by the third-party financial technology companies.

The following table provides an analysis of other consumer portfolio loans outstanding by product type at origination as of:

TABLE 48: Other Consumer Portfolio Loans Outstanding by Product Type at Origination    

		March 31, 2018					December 31, 2017
($ in millions)		Outstanding		% of Total			Outstanding		% of Total
Unsecured	$		434		27  %	$		461		30  %
Other secured			475		29			482		31
Point-of-sale			706		44			616		39
Total	$		1,615		100  %	$		1,559		100  %

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 49. 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, 2017.

Nonperforming assets were $528 million at March 31, 2018 compared to $495 million at December 31, 2017. At March 31, 2018, $24 million of nonaccrual loans were held for sale, compared to $6 million at December 31, 2017.

Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO were 0.55% as of March 31, 2018 compared to 0.53% as of December 31, 2017. Nonaccrual loans and leases secured by real estate were 26% of nonaccrual loans and leases as of March 31, 2018 compared to 33% as of December 31, 2017.

Commercial portfolio nonaccrual loans and leases were $322 million at March 31, 2018, an increase of $16 million from December 31, 2017. Consumer portfolio nonaccrual loans and leases were $130 million at March 31, 2018, a decrease of $1 million from December 31, 2017. Refer to Table 50 for a rollforward of the nonaccrual loans and leases.

OREO and other repossessed property was $52 million at both March 31, 2018 and December 31, 2017. The Bancorp recognized $3 million and $4 million in losses on the sale or write-down of OREO properties for the three months ended March 31, 2018 and 2017, respectively.

For the three months ended March 31, 2018 and 2017, approximately $8 million and $9 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.

35

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

TABLE 49: Summary of Nonperforming Assets and Delinquent Loans    

As of ($ in millions)		March 31, 2018		December 31, 2017
Nonaccrual portfolio loans and leases:
Commercial and industrial loans	$		155		144
Commercial mortgage loans			9		12
Commercial leases			4		-
Residential mortgage loans			16		17
Home equity			55		56
Other consumer loans			1		-
Nonaccrual portfolio restructured loans and leases:
Commercial and industrial loans			144		132
Commercial mortgage loans			6		14
Commercial leases			4		4
Residential mortgage loans			12		13
Home equity			19		18
Automobile loans			1		1
Credit card			26		26
Total nonaccrual portfolio loans and leases(b)			452		437
OREO and other repossessed property			52		52
Total nonperforming portfolio assets			504		489
Nonaccrual loans held for sale			5		5
Nonaccrual restructured loans held for sale			19		1
Total nonperforming assets	$		528		495
Loans and leases 90 days past due and still accruing
Commercial and industrial loans	$		7		3
Commercial mortgage loans			1		-
Residential mortgage loans(a)			62		57
Automobile loans			9		10
Credit card			28		27
Total loans and leases 90 days past due and still accruing	$		107		97
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO			0.55   %		0.53
ALLL as a percent of nonperforming portfolio assets			226		245

(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 $317 as of March 31, 2018 and $290 as of December 31, 2017. The Bancorp recognized losses of $2 for both the three months ended March 31, 2018 and 2017.

(b) Includes $5 and $3 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at March 31, 2018 and December 31, 2017, respectively, of which $2 and $3 were restructured nonaccrual government insured commercial loans at March 31, 2018 and December 31, 2017, respectively.

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

TABLE 50: Rollforward of Portfolio Nonaccrual Loans and Leases    

For the three months ended March 31, 2018 ($ in millions)		Commercial			Residential  Mortgage			Consumer			Total
Balance, beginning of period	$		306			30			101			437
Transfers to nonaccrual status			100			10			33			143
Transfers to accrual status			-			(7	)		(14	)		(21	)
Transfers to held for sale			(24	)		-			-			(24	)
Loan paydowns/payoffs			(45	)		(1	)		(8	)		(54	)
Transfers to OREO			(2	)		(4	)		(1	)		(7	)
Charge-offs			(35	)		-			(9	)		(44	)
Draws/other extensions of credit			22			-			-			22
Balance, end of period	$		322			28			102			452
TABLE 51: Rollforward of Portfolio Nonaccrual Loans and Leases
For the three months ended March 31, 2017 ($ in millions)		Commercial			Residential  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	)
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

36

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 $916 million and $927 million at March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, 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 25%, 11% and 34%, respectively.

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

TABLE 52: Accruing and Nonaccruing Portfolio TDRs    

		Accruing
				30-89 Days		90 Days or
As of March 31, 2018 ($ in millions)		Current		Past Due		More Past Due		Nonaccruing		Total
Commercial loans(b)	$		249		-		-		154	403
Residential mortgage loans(a)			500		37		117		12	666
Home equity			227		10		-		19	256
Automobile loans			7		-		-		1	8
Credit card			15		3		-		26	44
Total	$		998		50		117		212	1,377
(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, 2018, these advances represented $302 of current loans, $30 of 30-89 days past due loans and $102 of 90 days or more past due loans. (b)   Excludes restructured nonaccrual loans held for sale. TABLE 53: Accruing and Nonaccruing Portfolio TDRs
		Accruing
				30-89 Days		90 Days or
As of December 31, 2017 ($ in millions)		Current		Past Due		More Past Due		Nonaccruing		Total
Commercial loans(b)	$		249		-		-		150	399
Residential mortgage loans(a)			478		52		122		13	665
Home equity			236		12		-		18	266
Automobile loans			8		-		-		1	9
Credit card			16		3		-		26	45
Total	$		987		67		122		208	1,384

(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, 2017, these advances represented $282 of current loans, $40 of 30-89 days past due loans and $108 of 90 days or more past due loans.

(b) Excludes restructured nonaccrual loans held for sale.

Analysis of Net Loan Charge-offs

Net charge-offs were 36 bps and 40 bps of average portfolio loans and leases for the three months ended March 31, 2018 and 2017, respectively. Table 54 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 as a percent of average commercial portfolio loans and leases decreased to 21 bps during the three months ended March 31, 2018 compared to 29 bps during the three months ended March 31, 2017. The decrease was primarily due to an $8 million decrease in net charge-offs on commercial and industrial loans and a $4 million decrease in net charge-offs on commercial mortgage loans.

The ratio of consumer loan net charge-offs as a percent of average consumer portfolio loans and leases increased to 60 bps during the three months ended March 31, 2018 compared to 56 bps during the three months ended March 31, 2017. The increase was primarily due to increases in net charge-offs on other consumer loans and credit card of $5 million and $3 million, respectively, for the three months ended March 31, 2018 compared to the same period from the prior year primarily as a result of growth in unsecured loans. This increase was partially offset by a decrease of $2 million of net charge-offs on residential mortgage loans, which typically involve partial charge-offs based upon appraised values of underlying collateral, for the three months ended March 31, 2018 compared to the same period from the prior year.

37

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

TABLE 54: Summary of Credit Loss Experience    

		For the three months ended
		March 31,
($ in millions)		2018			2017
Losses charged-off:
Commercial and industrial loans	$		(33	)		(39	)
Commercial mortgage loans			(2	)		(6	)
Commercial construction loans			-			-
Commercial leases			-			(1	)
Residential mortgage loans			(4	)		(6	)
Home equity			(7	)		(9	)
Automobile loans			(17	)		(17	)
Credit card			(28	)		(24	)
Other consumer loans			(12	)		(5	)
Total losses charged-off	$		(103	)		(107	)
Recoveries of losses previously charged-off:
Commercial and industrial loans	$		5			3
Commercial mortgage loans			1			1
Commercial construction loans			-			-
Commercial leases			-			-
Residential mortgage loans			1			1
Home equity			2			3
Automobile loans			6			6
Credit card			3			2
Other consumer loans			4			2
Total recoveries of losses previously charged-off	$		22			18
Net losses charged-off:
Commercial and industrial loans	$		(28	)		(36	)
Commercial mortgage loans			(1	)		(5	)
Commercial construction loans			-			-
Commercial leases			-			(1	)
Residential mortgage loans			(3	)		(5	)
Home equity			(5	)		(6	)
Automobile loans			(11	)		(11	)
Credit card			(25	)		(22	)
Other consumer loans			(8	)		(3	)
Total net losses charged-off	$		(81	)		(89	)
Net losses charged-off as a percent of average portfolio loans and leases:
Commercial and industrial loans			0.27	%		0.34
Commercial mortgage loans			0.06			0.29
Commercial construction loans			-			-
Commercial leases			-			0.08
Total commercial loans and leases			0.21	%		0.29
Residential mortgage loans			0.06			0.13
Home equity			0.26			0.33
Automobile loans			0.50			0.48
Credit card			4.65			4.03
Other consumer loans			2.16			2.89
Total consumer loans			0.60	%		0.56
Total net losses charged-off as a percent of average portfolio loans and leases			0.36	%		0.40

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, 2017.

During the three months ended March 31, 2018, 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.

38

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

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 $157 million at March 31, 2018. 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 $31 million at March 31, 2018. 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.

During the third quarter of 2017, the United States incurred two major hurricanes impacting the states of Texas and Florida. The Bancorp provided assistance to customers that were negatively impacted. There is no expectation of any material net charge-offs as a result of the hurricanes.

TABLE 55: Changes in Allowance for Credit Losses    

		For the three months ended
		March 31,
($ in millions)		2018			2017
ALLL:
Balance, beginning of period	$		1,196			1,253
Losses charged-off			(103	)		(107)
Recoveries of losses previously charged-off			22			18
Provision for loan and lease losses			23			74
Balance, end of period	$		1,138			1,238
Reserve for unfunded commitments:
Balance, beginning of period	$		161			161
Benefit from unfunded commitments			(10	)		(2)
Balance, end of period	$		151			159

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% and 0.13% at March 31, 2018 and December 31, 2017, respectively. The unallocated allowance was 10% of the total allowance at both March 31, 2018 and December 31, 2017.

As shown in Table 56, the ALLL as a percent of portfolio loans and leases was 1.24% and 1.30% at March 31, 2018 and December 31, 2017, respectively. The ALLL was $1.1 billion and $1.2 billion at March 31, 2018 and December 31, 2017, respectively.

39

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

TABLE 56: Attribution of Allowance for Loan and Lease Losses to Portfolio Loans and Leases

As of ($ in millions)		March 31, 2018			December 31, 2017
Attributed ALLL:
Commercial and industrial loans	$		612			651
Commercial mortgage loans			63			65
Commercial construction loans			23			23
Commercial leases			15			14
Residential mortgage loans			89			89
Home equity			44			46
Automobile loans			39			38
Credit card			116			117
Other consumer loans			23			33
Unallocated			114			120
Total ALLL	$		1,138			1,196
Portfolio loans and leases:
Commercial and industrial loans	$		41,635			41,170
Commercial mortgage loans			6,509			6,604
Commercial construction loans			4,766			4,553
Commercial leases			3,919			4,068
Residential mortgage loans			15,563			15,591
Home equity			6,757			7,014
Automobile loans			9,018			9,112
Credit card			2,188			2,299
Other consumer loans			1,615			1,559
Total portfolio loans and leases	$		91,970			91,970
Attributed ALLL as a percent of respective portfolio loans and leases:
Commercial and industrial loans			1.47	%		1.58
Commercial mortgage loans			0.97			0.98
Commercial construction loans			0.48			0.51
Commercial leases			0.38			0.34
Residential mortgage loans			0.57			0.57
Home equity			0.65			0.66
Automobile loans			0.43			0.42
Credit card			5.30			5.09
Other consumer loans			1.42			2.12
Unallocated (as a percent of total portfolio loans and leases)			0.12			0.13
Attributed ALLL as a percent of total portfolio loans and leases			1.24	%		1.30

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. 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.

40

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

As of March 31, 2018, 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 75 bps parallel ramped decrease in interest rates. The analysis would typically include a 200 bps parallel ramped decrease in interest rates; however, this analysis is currently omitted due to the current levels of certain interest rates.

In order to recognize the risk of noninterest-bearing demand deposit balance run-off in a rising interest rate environment, the Bancorp’s NII sensitivity modeling assumes that approximately $1 billion of 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. Similarly, the Bancorp’s NII sensitivity modeling incorporates approximately $1 billion of growth in noninterest-bearing deposit balances over 24 months above senior management’s baseline projections for each 100 bps decrease in short-term market interest rates. The balance run-off and growth are modeled to flow into and out of funding products that reprice in conjunction with market rate changes.

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 70% at March 31, 2018, which is approximately 20 percentage points higher than the average 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 57: Estimated NII Sensitivity Profile and ALCO Policy Limits

	March 31, 2018							March 31, 2017
	% 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	2.43 %		7.62		(4.00)		(6.00)		2.05		6.98		(4.00	)		(6.00)
+ 100 Ramp over 12 months	1.44		4.33		-		-		1.20		4.37		-			-
- 75 Ramp over 10 months	(4.74)		(9.23)		(8.00)		(12.00)		N/A		N/A		N/A			N/A

At March 31, 2018, 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 75 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. As the Federal Reserve has increased its target range for the federal funds rate, the sensitivity to declining rates has increased, which is a reflection of the balance sheet mix described above. Reductions in the yield of the commercial loan portfolio would be expected to be only partially offset by a decline in the cost of interest-bearing deposits in this scenario. The changes in the estimated NII sensitivity profile as of March 31, 2018 compared to March 31, 2017 were primarily attributable to updates made to indeterminate maturity deposit cash flow assumptions to reflect demonstrated greater balance stability when market interest rates change, implementation of new mortgage security prepayment models that increased near-term prepayment speeds, and higher fixed-rate debt balances. These items were partially offset by a core deposit balance mix shift to products with higher rate repricing sensitivities and larger outstanding taxable securities balances.

Tables 58 and 59 provide the Bancorp’s estimated NII profile at March 31, 2018 with changes to certain deposit balances and deposit repricing sensitivity (betas) assumptions.

41

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, 2018 with an immediate $1 billion decrease and an immediate $1 billion increase in demand deposit balances:

TABLE 58: Estimated NII Sensitivity Profile at March 31, 2018 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		2.19	%		7.14			2.66			8.10
+ 100 Ramp over 12 months		1.32			4.09			1.56			4.57
- 75 Ramp over 10 months		(5.04	)		(9.46	)		(4.44	)		(9.00	)

The following table includes the Bancorp’s estimated NII sensitivity profile at March 31, 2018 with a 25% increase and a 25% decrease to the rising rate deposit beta assumptions as of March 31, 2018. The resulting weighted-average interest-bearing deposit betas included in this analysis are approximately 87% and 52%, respectively, as of March 31, 2018:

TABLE 59: Estimated NII Sensitivity Profile at March 31, 2018 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		(0.36	)%		2.05		5.21		13.19
+ 100 Ramp over 12 months		0.05			1.54		2.84		7.12

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 60: Estimated EVE Sensitivity Profile

	March 31, 2018						March 31, 2017
Change in Interest Rates (bps)	% Change in EVE			ALCO Policy Limit			% Change in EVE		ALCO     Policy Limit
+ 200 Shock		(4.47)	%		(12.00	)		(5.45)		(12.00	)
+ 100 Shock		(1.89)			-			(2.21)		-
+ 25 Shock		N/A			-			(0.40)		-
- 100 Shock		(1.27)			-			(0.19)		-

The EVE sensitivity to the +200 bps rising rate scenario is moderately negative at March 31, 2018 and slightly negative to a 100 bps decline in market rates. The changes in the estimated EVE sensitivity profile from March 31, 2017 are primarily related to updates made to indeterminate maturity deposit cash flow assumptions that recognized larger amounts of long-term stable balances, and also from lower outstanding fixed-rate commercial lease and fixed-rate home equity loan balances. These items were partially offset by the implementation of new mortgage security prepayment models that increased cash flow sensitivities to interest rate changes and from higher residential mortgage loan and taxable 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.

42

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

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.

As part of its overall risk management strategy relative to its residential 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 residential 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 11 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, 2018:

TABLE 61: Portfolio Loans and Leases Expected Cash Flows

($ in millions)	Less than 1 year		1-5 years		Over 5 years		Total
Commercial and industrial loans	$	23,472		17,125		1,038		41,635
Commercial mortgage loans		2,819		3,220		470		6,509
Commercial construction loans		2,077		2,620		69		4,766
Commercial leases		838		1,897		1,184		3,919
Total commercial loans and leases		29,206		24,862		2,761		56,829
Residential mortgage loans		2,427		6,382		6,754		15,563
Home equity		1,724		3,429		1,604		6,757
Automobile loans		3,825		4,835		358		9,018
Credit card		438		1,750		-		2,188
Other consumer loans		1,119		450		46		1,615
Total consumer loans		9,533		16,846		8,762		35,141
Total portfolio loans and leases	$	38,739		41,708		11,523		91,970

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, 2018:

TABLE 62: Portfolio Loans and Leases Expected Cash Flows Occurring After 1 Year

		Interest Rate
($ in millions)		Fixed		Floating or Adjustable
Commercial and industrial loans	$		2,333		15,830
Commercial mortgage loans			829		2,861
Commercial construction loans			59		2,630
Commercial leases			3,081		-
Total commercial loans and leases			6,302		21,321
Residential mortgage loans			9,942		3,194
Home equity			444		4,589
Automobile loans			5,157		36
Credit card			510		1,240
Other consumer loans			267		229
Total consumer loans			16,320		9,288
Total portfolio loans and leases	$		22,622		30,609

Residential Mortgage Servicing Rights and Interest Rate Risk

The fair value of the residential MSR portfolio was $926 million and $858 million at March 31, 2018 and December 31, 2017, respectively. 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. 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.

43

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

Mortgage rates increased during the three months ended March 31, 2018 which caused modeled prepayment speeds to slow. The fair value of the MSR increased $57 million due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $29 million due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs during the three months ended March 31, 2018. Mortgage rates also 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.

The Bancorp recognized net losses of $62 million and $1 million, respectively, on its non-qualifying hedging strategy for the three months ended March 31, 2018 and March 31, 2017. These amounts include net losses on securities related to the Bancorp’s non-qualifying hedging strategy which were $13 million and zero, respectively, during the three months ended March 31, 2018 and March 31, 2017. 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 10 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, 2018 and December 31, 2017 was $964 million and $939 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 15 of the Notes to Condensed Consolidated Financial Statements.

The Bancorp’s Treasury department manages funding and liquidity based on point-in-time metrics as well as forward-looking projections, which incorporate different sources and uses of funds under base and stress scenarios. Liquidity risk is monitored and managed by the Treasury department, and a series of Policy Limits and Key Risk Indicators are established to ensure risks are managed within the Bancorp’s risk tolerance. The Bancorp maintains a contingency funding plan that provides for liquidity stress testing, which assesses the liquidity needs under varying market conditions, time horizons, asset growth rates and other events. 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. The contingency plan also outlines the Bancorp’s response to various levels of liquidity stress and actions that should be taken during various scenarios.

Liquidity Risk Management Oversight

The Bancorp’s ALCO, which includes senior management representatives and is accountable to the ERMC, monitors and manages liquidity and funding 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 liquidity risk management.

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 61 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 $31.8 billion of securities in the Bancorp’s available-for-sale debt and other securities portfolio at March 31, 2018, $4.2 billion in principal and interest is expected to be received in the next 12 months and an additional $3.1 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.

44

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

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. For the three months ended March 31, 2018 and 2017, the Bancorp sold or securitized loans totaling $1.0 billion and $1.6 billion, respectively. For further information on the transfer of financial assets, refer to Note 10 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 83% and 84%, respectively, of its average total assets for the three months ended March 31, 2018 and 2017. 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, 2018, $7.6 billion of debt or other securities were available for issuance under the then-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. During the three months ended March 31, 2018, the Bancorp issued and sold $650 million of 3.95% senior fixed-rate notes.

At March 31, 2018, the Bancorp has approximately $43.1 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 $17.3 billion is available for issuance as of March 31, 2018.

Liquidity Coverage Ratio and Net Stable Funding Ratio

The Bancorp is subject to the Modified LCR requirement, which stipulates that BHCs with $50 billion or more in total consolidated assets that are not internationally active, such as the Bancorp, maintain HQLA equal to their calculated net cash outflows over a 30 calendar-day stress period multiplied by a factor of 0.7. The Bancorp’s Modified LCR was 113% at March 31, 2018.

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 comment period for this proposal ended on August 5, 2016. The Bancorp is currently awaiting the final rule from the US banking agencies.

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 63. 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.

45

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

TABLE 63: Agency Ratings
As of May 4, 2018	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	BBB+		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+	BBB+		AL
Rating Agency Outlook for Fifth Third Bancorp and Fifth Third Bank:	Stable	Stable	Stable		Positive

46

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

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, cyber security risk management and review of 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.

The Bancorp also maintains a robust information security program to support the management of cyber security risk within the organization with a focus on prevention, detection and recovery processes. Fifth Third utilizes a wide array of techniques to secure its operations and proprietary information such as Board-approved policies and programs, network monitoring and testing, access controls and dedicated security personnel. Fifth Third has adopted the National Institute of Standards and Technology Cyber Security Framework for the management and deployment of cyber security controls and is an active participant in the financial sector information sharing organization structure, known as the Financial Services Information Sharing and Analysis Center. To ensure resiliency of key Bancorp functions, Fifth Third also employs redundancy protocols that include a robust business continuity function that works to mitigate any potential impacts to Fifth Third customers and its systems.

Fifth Third also focuses on the reporting and escalation of operational control issues to senior management and the Board of Directors. The Operational Risk Committee is the key committee that oversees and supports Fifth Third in the management of operational risk across the enterprise. The Operational Risk Committee reports to the ERMC, which reports to the Risk and Compliance Committee of the Board of Directors.

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.

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, the Chief Compliance Officer is responsible for establishing and overseeing the Compliance Risk Management program which implements key compliance 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 Community and Economic Development 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, which is chaired by the Chief Compliance Officer, 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 sets minimum regulatory capital ratios as well as defines the measure of “well-capitalized”.

TABLE 64: 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, 1.25% in 2017 and is 1.875% in 2018. The Bancorp exceeded these “well-capitalized” and “capital conservation buffer” ratios for all periods presented.

In April 2018, the federal banking regulators proposed transitional arrangements to permit banking organizations to phase in the day-one impact of the adoption of ASU 2016-03, referred to as the current expected credit loss model, on regulatory capital over a period of three years. For additional information on ASU 2016-03, refer to Note 3 of the Notes to Condensed Consolidated Financial Statements. The Bancorp is evaluating the impact of this proposal.

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

TABLE 65: Capital Ratios

($ in millions)		March 31, 2018	December 31, 2017
Quarterly average total Bancorp shareholders’ equity as a percent of average assets		11.52 %	11.69
Tangible equity as a percent of tangible assets(a)		10.09	9.90
Tangible common equity as a percentage of tangible assets(a)		9.14	8.94
		Basel III(b)
CET1 capital	$	12,772	12,517
Tier I capital		14,103	13,848
Total regulatory capital		17,999	17,887
Risk-weighted assets		118,001	117,997
Regulatory capital ratios:
CET1 capital		10.82 %	10.61
Tier I risk-based capital		11.95	11.74
Total risk-based capital		15.25	15.16
Tier I leverage		10.11	10.01

(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. Under the banking agencies’ Final Rule published in November 2017 pertaining to certain regulatory items for banks subject to the standardized approach, the Bancorp is no longer subject to certain transition provisions and phase-outs beyond 2017.

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 2018 stress testing program and CCAR on February 1, 2018, with submissions of stress test results and capital plans to the FRB due on April 5, 2018, which the Bancorp submitted as required.

The FRB expects to release summary results of its DFAST and CCAR stress tests by June 30, 2018. 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 2018.

48

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

In April 2018, the FRB proposed to introduce stress buffer requirements. Under the proposal, a SCB would replace the 2.5% capital conservation buffer. The SCB would reflect stressed losses in the supervisory severely adverse scenario of the FRB’s CCAR stress tests plus four quarters of planned common stock dividends, subject to a floor of 2.5%. The proposal would also introduce a SLB requirement, analogous to the SCB, that would apply to the Tier I leverage ratio. In addition, the proposal would require BHCs to reduce their planned capital distributions if those distributions would not be consistent with the applicable capital buffer constraints based on the BHCs’ own baseline scenario projections. The proposal is applicable for BHCs with $50 billion or more in total consolidated assets, including the Bancorp. Under the proposal, a BHC’s first SCB and SLB requirements would become effective on October 1, 2019. The Bancorp is evaluating the impact of this proposal.

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 $0.16 and $0.14 for the three months ended March 31, 2018 and 2017, respectively. As contemplated by the 2017 CCAR, the Bancorp entered into or settled a number of accelerated share repurchase transactions during the three months ended March 31, 2018. Refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for additional information on the accelerated share repurchases.

The following table summarizes the monthly share repurchase activity for the three months ended March 31, 2018:

TABLE 66: 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, 2018 - January 31, 2018		238,718	$		31.38		-	23,147,891
February 1, 2018 - February 28, 2018		9,355,091			31.80		8,691,318	14,456,573
March 1, 2018 - March 31, 2018		1,957,292			32.41		1,840,098	100,000,000
Total		11,551,101	$		31.89		10,531,416	100,000,000

(a) Includes 1,019,685 shares repurchased during the first quarter of 2018 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) During the first quarter of 2018, 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. All shares settled during the first quarter of 2018 were included under the previous 100 million share repurchase program.

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, purchase obligations, capital commitments for private equity investments, capital expenditures and capital lease obligations. Refer to Note 15 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 15 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 9 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.

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,       2018	December 31, 2017
Assets
Cash and due from banks	$	2,038		2,514
Other short-term investments(a)		1,747		2,753
Available-for-sale debt and other securities(b)		31,819		31,751
Held-to-maturity securities(c)		23		24
Trading debt securities		571		492
Equity securities		418		439
Loans and leases held for sale(d)		717		492
Portfolio loans and leases(a)(e)		91,970		91,970
Allowance for loan and lease losses(a)		(1,138)		(1,196	)
Portfolio loans and leases, net		90,832		90,774
Bank premises and equipment(f)		1,966		2,003
Operating lease equipment		625		646
Goodwill		2,462		2,445
Intangible assets		30		27
Servicing rights		926		858
Other assets(a)		7,326		6,975
Total Assets	$	141,500		142,193
Liabilities
Deposits:
Noninterest-bearing deposits	$	34,066		35,276
Interest-bearing deposits		71,395		67,886
Total deposits		105,461		103,162
Federal funds purchased		178		174
Other short-term borrowings		1,335		4,012
Accrued taxes, interest and expenses		1,104		1,412
Other liabilities(a)		2,418		2,144
Long-term debt(a)		14,800		14,904
Total Liabilities	$	125,296		125,808
Equity
Common stock(g)	$	2,051		2,051
Preferred stock(h)		1,331		1,331
Capital surplus		2,828		2,790
Retained earnings		15,707		15,122
Accumulated other comprehensive (loss) income		(389)		73
Treasury stock(g)		(5,344)		(5,002	)
Total Bancorp shareholders’ equity	$	16,184		16,365
Noncontrolling interests		20		20
Total Equity		16,204		16,385
Total Liabilities and Equity	$	141,500		142,193

(a) Includes $66 and $62 of other short-term investments, $1,135 and $1,297 of portfolio loans and leases, $(6) and $(6) of ALLL, $6 and $7 of other assets, $2 and $2 of other liabilities, and $1,031 and $1,190 of long-term debt from consolidated VIEs that are included in their respective captions above at March 31, 2018 and December 31, 2017, respectively. For further information refer to Note 9.

(b) Amortized cost of $32,230 and $31,577 at March 31, 2018 and December 31, 2017, respectively.

(c) Fair value of $23 and $24 at March 31, 2018 and December 31, 2017, respectively.

(d) Includes $650 and $399 of residential mortgage loans held for sale measured at fair value and $16 and $0 of commercial loans held for sale measured at fair value at March 31, 2018 and December 31, 2017, respectively.

(e) Includes $136 and $137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017, respectively.

(f) Includes $20 and $27 of bank premises and equipment held for sale at March 31, 2018 and December 31, 2017, respectively. For further information refer to Note 7.

(g) Common shares: Stated value $2.22 per share; authorized 2,000,000,000; outstanding at March 31, 2018 – 684,941,986 (excludes 238,950,595 treasury shares), December 31, 2017 – 693,804,893 (excludes 230,087,688 treasury shares).

(h) 446,000 shares of undesignated no par value preferred stock are authorized and unissued at March 31, 2018 and December 31, 2017; 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, 2018 and December 31, 2017; 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, 2018 and December 31, 2017; 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, 2018 and December 31, 2017.

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)			2018		2017
Interest Income
Interest and fees on loans and leases	$		938		839
Interest on securities			263		245
Interest on other short-term investments			5		2
Total interest income			1,206		1,086
Interest Expense
Interest on deposits			95		59
Interest on federal funds purchased			2		1
Interest on other short-term borrowings			8		3
Interest on long-term debt			105		90
Total interest expense			210		153
Net Interest Income			996		933
Provision for loan and lease losses			23		74
Net Interest Income After Provision for Loan and Lease Losses			973		859
Noninterest Income
Service charges on deposits			137		138
Wealth and asset management revenue			113		108
Corporate banking revenue			88		74
Card and processing revenue			79		74
Mortgage banking net revenue			56		52
Other noninterest income			460		77
Securities losses, net			(11	)	-
Securities losses, net - non-qualifying hedges on mortgage servicing rights			(13	)	-
Total noninterest income			909		523
Noninterest Expense
Salaries, wages and incentives			447		411
Employee benefits			110		111
Net occupancy expense			75		78
Technology and communications			68		58
Equipment expense			31		28
Card and processing expense			29		30
Other noninterest expense			286		270
Total noninterest expense			1,046		986
Income Before Income Taxes			836		396
Applicable income tax expense			132		91
Net Income			704		305
Less: Net income attributable to noncontrolling interests			-		-
Net Income Attributable to Bancorp			704		305
Dividends on preferred stock			15		15
Net Income Available to Common Shareholders	$		689		290
Earnings per share - basic	$		0.99		0.38
Earnings per share - diluted	$		0.97		0.38
Average common shares outstanding - basic			689,820,295		747,667,521
Average common shares outstanding - diluted			704,100,936		760,809,239
Cash dividends declared per common share	$		0.16		0.14

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)			2018		2017
Net Income	$		704		305
Other Comprehensive (Loss) Income, Net of Tax:
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains arising during period			(460	)	15
Reclassification adjustment for net losses included in net income			7		1
Unrealized (losses) gains on cash flow hedge derivatives:
Unrealized holding losses arising during period			(7	)	(3	)
Reclassification adjustment for net gains included in net income			(1	)	(5	)
Defined benefit pension plans, net:
Reclassification of amounts to net periodic benefit costs			1		1
Other comprehensive (loss) income, net of tax			(460	)	9
Comprehensive Income			244		314
Less: Comprehensive income attributable to noncontrolling interests			-		-
Comprehensive Income Attributable to Bancorp	$		244		314

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			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Treasury Stock			Total Bancorp Shareholders’ Equity			Non- Controlling Interests		Total Equity
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
Balance at December 31, 2017	$	2,051		1,331		2,790			15,122			73			(5,002	)		16,365			20		16,385
Impact of cumulative effect of change in accounting principles(b)									6			(2	)					4					4
Balance at January 1, 2018	$	2,051		1,331		2,790			15,128			71			(5,002	)		16,369			20		16,389
Net income									704									704					704
Other comprehensive loss, net of tax												(460	)					(460	)				(460	)
Cash dividends declared:
Common stock at $0.16 per share									(110	)								(110	)				(110	)
Preferred stock(a)									(15	)								(15	)				(15	)
Shares acquired for treasury						41									(359	)		(318	)				(318	)
Impact of stock transactions under stock compensation plans, net						(3	)								17			14					14
Balance at March 31, 2018	$	2,051		1,331		2,828			15,707			(389	)		(5,344	)		16,184			20		16,204

(a) For both the three months ended March 31, 2018 and 2017, dividends were $414.06 per preferred share for Perpetual Preferred Stock, Series I and $612.50 per preferred share for Perpetual Preferred Stock, Series J.

(b) Related to the adoption as of January 1, 2018 of ASU 2016-01, ASU 2017-12 and ASU 2018-02. Refer to Note 3 for additional information.

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)		2018			2017
Operating Activities
Net income	$		704			305
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses			23			74
Depreciation, amortization and accretion			93			89
Stock-based compensation expense			45			45
Provision for (benefit from) deferred income taxes			24			(11	)
Securities losses (gains), net			12			(1	)
Securities losses, net - non-qualifying hedges on mortgage servicing rights			13			-
MSR fair value adjustment			(28	)		23
Net gains on sales of loans and fair value adjustments on loans held for sale			(16	)		(34	)
Net losses on disposition and impairment of bank premises and equipment			8			1
Net losses on disposition and impairment of operating lease equipment			2			20
Gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc.			(414	)		-
Proceeds from sales of loans held for sale			1,055			1,627
Loans originated for sale, net of repayments			(1,293	)		(1,483	)
Dividends representing return on equity method investments			3			9
Net change in:
Trading and equity securities			(74	)		(277	)
Other assets			244			109
Accrued taxes, interest and expenses			(195	)		(142	)
Other liabilities			59			176
Net Cash Provided by Operating Activities			265			530
Investing Activities
Proceeds from sales:
Available-for-sale debt and other securities			7,345			2,191
Loans			57			21
Bank premises and equipment			18			6
Proceeds from repayments / maturities:
Available-for-sale debt and other securities			543			604
Purchases:
Available-for-sale debt and other securities			(8,605	)		(2,975	)
Bank premises and equipment			(48	)		(52	)
MSRs			(24	)		(29	)
Proceeds from settlement of BOLI			3			6
Proceeds from sales and dividends representing return of equity method investments			11			69
Net cash paid on acquisitions			(20	)		-
Net change in:
Other short-term investments			1,006			1,110
Loans and leases			(122	)		368
Operating lease equipment			(1	)		(6	)
Net Cash Provided by Investing Activities			163			1,313
Financing Activities
Net change in:
Deposits			2,299			335
Federal funds purchased			4			23
Other short-term borrowings			(2,677	)		(1,520	)
Dividends paid on common stock			(112	)		(106	)
Dividends paid on preferred stock			(23	)		(38	)
Proceeds from issuance of long-term debt			645			-
Repayment of long-term debt			(686	)		(714	)
Repurchase of treasury stock and related forward contract			(318	)		-
Other			(36	)		(10	)
Net Cash Used in Financing Activities			(904	)		(2,030	)
Decrease in Cash and Due from Banks			(476	)		(187	)
Cash and Due from Banks at Beginning of Period			2,514			2,392
Cash and Due from Banks at End of Period		$	2,038			2,205

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 accounted for utilizing the measurement alternative to fair value which permits carrying the investment at its cost basis, as adjusted for impairments and observable price changes. 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, 2018 and 2017 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2017 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)	2018		2017
Cash Payments:
Interest	$	247		208
Income taxes		19		18
Transfers:
Portfolio loans to loans held for sale		64		5
Loans held for sale to portfolio loans		34		3
Portfolio loans to OREO		12		12

3. Accounting and Reporting Developments

Standards Adopted in 2018

The Bancorp adopted the following new accounting standards effective January 1, 2018:

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 follow the same effective date and transition requirements. The Bancorp adopted the amended guidance on January 1, 2018, using a modified retrospective approach. 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 adoption of this amended guidance did not have a material impact on the Bancorp’s Condensed Consolidated Financial Statements. However, the Bancorp is subject to expanded disclosure requirements and has updated its revenue recognition policies and procedures. While the Bancorp has concluded the following changes are not material to its Condensed Consolidated Financial Statements, upon adoption the Bancorp changed its presentation of certain underwriting expenses incurred by its broker-dealer subsidiary from net to gross presentation and also changed its presentation of certain credit card rewards program expenses from gross to net presentation. Neither change impacts income before income taxes or net income.

In conjunction with adoption of ASU 2014-09, the Bancorp is providing the following additional disclosures about its significant accounting and reporting policies related to revenue recognition.

Revenue Recognition

The Bancorp generally measures revenue based on the amount of consideration the Bancorp expects to be entitled for the transfer of goods or services to a customer, then recognizes this revenue when or as the Bancorp satisfies its performance obligations under the contract, except in transactions where U.S. GAAP provides other applicable guidance. When the amount of consideration is variable, the Bancorp will only recognize revenue to the extent that it is probable that the cumulative amount recognized will not be subject to a significant reversal in the future.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Substantially all of the Bancorp’s contracts with customers have expected durations of one year or less and payments are typically due when or as the services are rendered or shortly thereafter. When third parties are involved in providing goods or services to customers, the Bancorp recognizes revenue on a gross basis when it has control over those goods or services prior to transfer to the customer; otherwise, revenue is recognized for the net amount of any fee or commission. The Bancorp excludes sales taxes from the recognition of revenue and recognizes the incremental costs of obtaining contracts as an expense if the period of amortization for those costs would be one year or less.

The Bancorp’s interest income is derived from loans and leases, securities and other short-term investments. The Bancorp recognizes interest income in accordance with the applicable guidance in U.S. GAAP for these assets. Refer to the Portfolio Loans and Leases and Securities sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information. The following provides additional information about the components of noninterest income:

● Service charges on deposits consist primarily of treasury management fees for commercial clients, monthly service charges on consumer deposit accounts, transaction-based fees (such as overdraft fees and wire transfer fees), and other deposit account-related charges. The Bancorp’s performance obligations for treasury management fees and consumer deposit account service charges are typically satisfied over time, while performance obligations for transaction-based fees are typically satisfied at a point in time. Revenues are recognized on an accrual basis when or as the services are provided to the customer, net of applicable discounts, waivers and reversals. Payments are typically collected from customers directly from the related deposit account at the time the transaction is processed and/or at the end of the customer’s statement cycle (typically monthly).

● Wealth and asset management revenue consists primarily of service fees for investment management, custody, and trust administration services provided to commercial and consumer clients. The Bancorp’s performance obligations for these services are generally satisfied over time and revenues are recognized monthly based on the fee structure outlined in individual contracts. Transaction prices are most commonly based on the market value of assets under management or care and/or a fee per transaction processed. The Bancorp offers certain services, like tax return preparation, for which the performance obligations are satisfied and revenue is recognized at a point in time, when the services are performed. Wealth and asset management revenue also includes trailing commissions received from investments and annuities held in customer accounts, which are recognized in revenue when the Bancorp determines it is probable that the commission will be received.

● Corporate banking revenue consists primarily of service fees and other income related to loans and leases to commercial clients, underwriting revenue recognized by the Bancorp’s broker-dealer subsidiary and fees for other services provided to commercial clients. Revenue related to loans and leases is recognized in accordance with the Bancorp’s policies for portfolio loans and leases. Underwriting revenue is generally recognized on the trade date, which is when the Bancorp’s performance obligations are satisfied.

● Card and processing revenue consists primarily of ATM fees and interchange fees earned when the Bancorp’s credit and debit cards are processed through card association networks. The Bancorp’s performance obligations are generally complete when the transactions generating the fees are processed. Revenue is recognized on an accrual basis as such services are performed, net of certain costs not controlled by the Bancorp (primarily interchange fees charged by credit card associations and expenses of certain transaction-based rewards programs offered to customers). These costs reduced card and processing revenue by approximately $29 million for the three months ended March 31, 2018.

● Mortgage banking net revenue consists primarily of origination fees and gains on loan sales, mortgage servicing fees and the impact of MSRs. Refer to the Loans and Leases Held for Sale and Loan Sales and Securitizations sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.

● Other noninterest income includes income from operating leases, certain fees derived from loans and leases, BOLI income, gains and losses on other assets, and other miscellaneous revenues and gains.

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 OCI 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. In February 2018, the FASB also issued ASU 2018-03 which makes technical corrections and improvements to the amendments in ASU 2016-01. The Bancorp adopted the amended guidance on January 1, 2018. As permitted, the Bancorp elected to early adopt ASU 2018-03 on January 1, 2018, concurrent with the adoption of ASU 2016-01. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. However, equity securities affected by the amended guidance which were previously classified as trading or available-for-sale have been reclassified in the Condensed Consolidated Balance Sheets as equity securities. For certain equity securities without a readily determinable fair value that are not accounted for using the equity method, the Bancorp has elected to use the permitted measurement alternative, which is to adjust the cost basis of the investment upon either the occurrence of an observable price change or the identification of an impairment. For these securities, the amended guidance was applied prospectively to investments that existed on or after January 1, 2018. The other portions of the amended guidance were applied on a modified retrospective basis.

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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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

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

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 Bancorp adopted the amended guidance retrospectively on January 1, 2018. The adoption did not have a material impact on the 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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the 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 Bancorp adopted the amended guidance prospectively on January 1, 2018 and will apply this amended guidance to future transactions to determine if they should be accounted for as acquisitions (or disposals) of assets or businesses.

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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2017-09 Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting

In May 2017, the FASB issued ASU 2017-09 which provides guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting in Topic 718. The amendments specify that an entity should account for the effects of such changes as a modification unless the fair value, vesting conditions and classification (as an equity or liability) of the awards are all unaffected by the change. The Bancorp adopted the amended guidance prospectively on January 1, 2018. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU 2017-12 which makes several amendments to existing guidance for hedge accounting. As permitted, the Bancorp elected to early adopt the amended guidance on January 1, 2018. For certain fair value hedges of interest rate risk, the Bancorp elected to modify the measurement methodology for the hedged item to be the benchmark rate component of the contractual coupon cash flows and also elected to de-designate a portion of the existing hedging relationship, as permitted. Upon adoption, changes in the fair value of cash flow hedges are recorded in AOCI and then subsequently reclassified into earnings when the hedged item affects earnings. Also, for both fair value hedges and cash flow hedges, changes in the fair value of the derivative instrument are recorded in the same income statement line item as the effects of the hedged item, eliminating the separate measurement of hedge ineffectiveness. The Bancorp recorded a cumulative-effect adjustment to retained earnings for the impact of these elections as well as the elimination of the separate measurement of ineffectiveness from AOCI for cash flow hedges existing at January 1, 2018, the amount of which was not material. The amended presentation and disclosure guidance was applied prospectively.

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Notes to Condensed Consolidated Financial Statements (unaudited)

ASU 2018-02 Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02 which allows for reclassification from AOCI to retained earnings of stranded tax effects resulting from the TCJA. Stranded tax effects result from the reduction in the top federal statutory income tax rate from 35 percent to 21 percent as deferred tax assets and liabilities are adjusted for the impact of a change in tax rate through income tax expense, even in situations when the related items giving rise to the deferred taxes are components of AOCI, which are carried net of tax. As permitted, the Bancorp elected to early adopt this amended guidance and recorded a reclassification adjustment from AOCI to retained earnings as of January 1, 2018, the amount of which was not material.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of March 31, 2018:

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. In January 2018, the FASB issued ASU 2018-01 which provides a practical expedient for transition related to land easements. The FASB has also proposed additional amendments to the new guidance which, among other things, include an option to recognize a cumulative effect adjustment to retained earnings in the period of adoption instead of applying the guidance to prior comparative periods, but these additional amendments are not yet final. The Bancorp will adopt the amended guidance on the required effective date of January 1, 2019, and expects to elect the transition relief provisions. From a lessee perspective, the Bancorp is currently finalizing its inventory of all leases, accumulating the lease data necessary to apply the amended guidance, and evaluating the business process and technology requirements which will be necessary after adoption. 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, but does not expect a material impact to expense recognition. From a lessor perspective, given the limited changes, the Bancorp does not expect adoption of the amended guidance to have a material impact based on its preliminary analysis. However, the Bancorp is continuing to evaluate the impact of the amended guidance, particularly related to the deferral of costs incurred in originating leases. The Bancorp also expects to record a cumulative-effect adjustment to retained earnings upon adoption to recognize any remaining deferred gains on sale-leaseback transactions that occurred prior to the date of initial application. The Bancorp had approximately $13 million of such deferred gains recorded as of March 31, 2018. These expectations may change as the implementation process continues.

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. This model applies to 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. Early adoption is permitted as soon as January 1, 2019, but the Bancorp currently expects to adopt on the mandatory effective date. 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.

60

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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, with early adoption permitted, and is to be applied prospectively to all goodwill impairment tests performed after the adoption date.

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 plans to adopt the amended guidance on its required effective date of January 1, 2019 and is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements. However, the Bancorp does not currently expect the impact of adoption to be material.

61

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 debt and other securities and held-to-maturity investment securities portfolios as of:

March 31, 2018 ($ in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	98		-		(2	)		96
Obligations of states and political subdivisions securities		43		1		-			44
Mortgage-backed securities:
Agency residential mortgage-backed securities		15,456		37		(285	)		15,208
Agency commercial mortgage-backed securities		10,612		13		(170	)		10,455
Non-agency commercial mortgage-backed securities		3,219		16		(45	)		3,190
Asset-backed securities and other debt securities		2,190		38		(14	)		2,214
Other securities(a)		612		-		-			612
Total available-for-sale debt and other securities	$	32,230		105		(516	)		31,819
Held-to-maturity securities:
Obligations of states and political subdivisions securities	$	21		-		-			21
Asset-backed securities and other debt securities		2		-		-			2
Total held-to-maturity securities	$	23		-		-			23

(a) Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $362 and $2, respectively, at March 31, 2018, that are carried at cost.

December 31, 2017 ($ in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	98		-		-			98
Obligations of states and political subdivisions securities		43		1		-			44
Mortgage-backed securities:
Agency residential mortgage-backed securities(a)		15,281		118		(80	)		15,319
Agency commercial mortgage-backed securities		10,113		92		(38	)		10,167
Non-agency commercial mortgage-backed securities		3,247		51		(5	)		3,293
Asset-backed securities and other debt securities		2,183		46		(11	)		2,218
Other securities(b)		612		-		-			612
Total available-for-sale debt and other securities	$	31,577		308		(134	)		31,751
Held-to-maturity securities:
Obligations of states and political subdivisions securities	$	22		-		-			22
Asset-backed securities and other debt securities		2		-		-			2
Total held-to-maturity securities	$	24		-		-			24

(a) Includes interest-only mortgage-backed securities of $34 as of December 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

(b) Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $362 and $2, respectively, at December 31, 2017, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:

		March 31,	December 31,
($ in millions)		2018	2017
Trading debt securities	$	571	492
Equity securities		418	439

62

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents net realized gains and losses that were recognized in income from available-for-sale debt and other securities as well as total (losses) gains that were recognized in income from trading debt securities and equity securities:

		For the three months ended March 31,
($ in millions)		2018			2017
Available-for-sale debt and other securities:
Realized gains	$		34			9
Realized losses			(43	)		(1	)
OTTI(a)			-			(10	)
Net realized losses on available-for sale debt and other securities(b)	$		(9	)		(2	)
Total trading debt securities (losses) gains(c)	$		(14	)		1
Total equity securities (losses) gains(d)(e)	$		(3	)		1
Total gains and losses recognized in income from available-for-sale debt and other securities, trading debt securities, and equity securities	$		(26	)		-

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

(b) Excludes net gains of $1 on interest-only mortgage-backed securities for both the three months ended March 31, 2018 and 2017.

(c) Includes a net loss of $1 and a net gain of $1 for the three months ended March 31, 2018 and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

(d) Includes an immaterial net loss and an immaterial net gain for the three months ended March 31, 2018 and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.

(e) Includes a net unrealized loss of $2 and a net unrealized gain of $1 for the three months ended March 31, 2018 and 2017, respectively.

At March 31, 2018 and December 31, 2017, investment securities with a fair value of $7.1 billion and $7.8 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 debt and other securities and held-to-maturity investment securities as of March 31, 2018 are shown in the following table:

		Available-for-Sale Debt and Other		Held-to-Maturity
($ in millions)		Amortized Cost	Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
Less than 1 year	$	234	225	5	5
1-5 years		8,664	8,562	15	15
5-10 years		17,352	17,135	1	1
Over 10 years		5,368	5,285	2	2
Other securities		612	612	-	-
Total	$	32,230	31,819	23	23

(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 debt 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, 2018
U.S. Treasury and federal agencies	$		96		(2	)		-		-			96		(2	)
Agency residential mortgage-backed securities			11,958		(256	)		458		(29	)		12,416		(285	)
Agency commercial mortgage-backed securities			8,115		(144	)		512		(26	)		8,627		(170	)
Non-agency commercial mortgage-backed securities			2,188		(38	)		141		(7	)		2,329		(45	)
Asset-backed securities and other debt securities			312		(3	)		377		(11	)		689		(14	)
Total	$		22,669		(443	)		1,488		(73	)		24,157		(516	)
December 31, 2017
U.S. Treasury and federal agencies	$		98		-			-		-			98		-
Agency residential mortgage-backed securities			7,337		(59	)		479		(21	)		7,816		(80	)
Agency commercial mortgage-backed securities			2,900		(22	)		526		(16	)		3,426		(38	)
Non-agency commercial mortgage-backed securities			449		(2	)		145		(3	)		594		(5	)
Asset-backed securities and other debt securities			317		(2	)		386		(9	)		703		(11	)
Total	$		11,101		(85	)		1,536		(49	)		12,637		(134	)

At both March 31, 2018 and December 31, 2017, an immaterial amount of unrealized losses in the available-for-sale debt and other securities portfolio were represented by non-rated securities.

63

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 and lease 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 classified based upon product or collateral as of:

($ in millions)	March 31,         2018		December 31,     2017
Loans and leases held for sale:
Commercial and industrial loans	$	43		-
Commercial mortgage loans		6		6
Residential mortgage loans		668		486
Total loans and leases held for sale	$	717		492
Portfolio loans and leases:
Commercial and industrial loans	$	41,635		41,170
Commercial mortgage loans		6,509		6,604
Commercial construction loans		4,766		4,553
Commercial leases		3,919		4,068
Total commercial loans and leases	$	56,829		56,395
Residential mortgage loans	$	15,563		15,591
Home equity		6,757		7,014
Automobile loans		9,018		9,112
Credit card		2,188		2,299
Other consumer loans		1,615		1,559
Total consumer loans	$	35,141		35,575
Total portfolio loans and leases	$	91,970		91,970

Total portfolio loans and leases are recorded net of unearned income, which totaled $507 million as of March 31, 2018 and $523 million as of December 31, 2017. 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 $289 million and $282 million as of March 31, 2018 and December 31, 2017, respectively.

The Bancorp’s FHLB and FRB advances are generally secured by loans. The Bancorp had loans of $13.2 billion and $13.0 billion at March 31, 2018 and December 31, 2017, respectively, pledged at the FHLB, and loans of $40.7 billion and $39.8 billion at March 31, 2018 and December 31, 2017, respectively, pledged at the FRB.

64

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,         2018	December 31, 2017		March 31, 2018		December 31,     2017
Commercial and industrial loans	$	41,678		41,170		7		3
Commercial mortgage loans		6,515		6,610		1		-
Commercial construction loans		4,766		4,553		-		-
Commercial leases		3,919		4,068		-		-
Residential mortgage loans		16,231		16,077		62		57
Home equity		6,757		7,014		-		-
Automobile loans		9,018		9,112		9		10
Credit card		2,188		2,299		28		27
Other consumer loans		1,615		1,559		-		-
Total loans and leases	$	92,687		92,462		107		97
Less: Loans and leases held for sale	$	717		492
Total portfolio loans and leases	$	91,970		91,970
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)					2018		2017
Commercial and industrial loans					$	28		36
Commercial mortgage loans						1		5
Commercial leases						-		1
Residential mortgage loans						3		5
Home equity						5		6
Automobile loans						11		11
Credit card						25		22
Other consumer loans						8		3
Total net charge-offs					$	81		89

65

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, 2018 ($ in millions)	Commercial	Residential       Mortgage	Consumer	Unallocated	Total
Balance, beginning of period	$              753	89	234	120	1,196
Losses charged-off	(35)	(4)	(64)	-	(103)
Recoveries of losses previously charged-off	6	1	15	-	22
Provision for (benefit from) loan and lease losses	(11)	3	37	(6)	23
Balance, end of period	$              713	89	222	114	1,138
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
The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
As of March 31, 2018 ($ in millions)	Commercial	Residential       Mortgage	Consumer	Unallocated	Total
ALLL:(a)
Individually evaluated for impairment	$              113	64	40	-	217
Collectively evaluated for impairment	600	25	182	-	807
Unallocated	-	-	-	114	114
Total ALLL	$              713	89	222	114	1,138
Portfolio loans and leases:(b)
Individually evaluated for impairment	$              573	666	308	-	1,547
Collectively evaluated for impairment	56,256	14,759	19,270	-	90,285
Loans acquired with deteriorated credit quality	-	2	-	-	2
Total portfolio loans and leases	$          56,829	15,427	19,578	-	91,834
(a)   Includes $1 related to leveraged leases at March 31, 2018. (b)   Excludes $136 of residential mortgage loans measured at fair value and includes $670 of leveraged leases, net of unearned income at March 31, 2018.
As of December 31, 2017 ($ in millions)	Commercial	Residential       Mortgage	Consumer	Unallocated	Total
ALLL:(a)
Individually evaluated for impairment	$                 94	64	42	-	200
Collectively evaluated for impairment	659	25	192	-	876
Unallocated	-	-	-	120	120
Total ALLL	$               753	89	234	120	1,196
Portfolio loans and leases:(b)
Individually evaluated for impairment	$               560	665	320	-	1,545
Collectively evaluated for impairment	55,835	14,787	19,664	-	90,286
Loans acquired with deteriorated credit quality	-	2	-	-	2
Total portfolio loans and leases	$          56,395	15,454	19,984	-	91,833

(a) Includes $1 related to leveraged leases at December 31, 2017.

(b) Excludes $137 of residential mortgage loans measured at fair value and includes $674 of leveraged leases, net of unearned income at December 31, 2017.

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.

66

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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, 2018 ($ in millions)	Pass			Special Mention		Substandard		Doubtful	Total
Commercial and industrial loans		$	39,385		1,074		1,173	3		41,635
Commercial mortgage owner-occupied loans			3,150		81		99	-		3,330
Commercial mortgage nonowner-occupied loans			3,079		8		92	-		3,179
Commercial construction loans			4,692		74		-	-		4,766
Commercial leases			3,776		79		64	-		3,919
Total commercial loans and leases		$	54,082		1,316		1,428	3		56,829
As of December 31, 2017 ($ in millions)	Pass			Special Mention		Substandard		Doubtful	Total
Commercial and industrial loans		$	38,813		1,115		1,235	7		41,170
Commercial mortgage owner-occupied loans			3,207		75		80	-		3,362
Commercial mortgage nonowner-occupied loans			3,117		28		97	-		3,242
Commercial construction loans			4,553		-		-	-		4,553
Commercial leases			3,922		72		74	-		4,068
Total commercial loans and leases		$	53,612		1,290		1,486	7		56,395

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. 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for additional delinquency and nonperforming information.

67

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, 2018		December 31, 2017
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,399	28	15,424	30
Home equity		6,683	74	6,940	74
Automobile loans		9,017	1	9,111	1
Credit card		2,162	26	2,273	26
Other consumer loans		1,614	1	1,559	-
Total residential mortgage and consumer loans	$	34,875	130	35,307	131

(a) Excludes $136 and $137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017, 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, 2018 ($ in millions)	Leases(b)(c)		Days(c)		or More(c)		Past Due		and Leases		Accruing
Commercial loans and leases:
Commercial and industrial loans	$	41,502		46		87		133		41,635		7
Commercial mortgage owner-occupied loans		3,316		6		8		14		3,330		1
Commercial mortgage nonowner-occupied loans		3,109		67		3		70		3,179		-
Commercial construction loans		4,766		-		-		-		4,766		-
Commercial leases		3,914		-		5		5		3,919		-
Residential mortgage loans(a)		15,304		32		91		123		15,427		62
Consumer loans:
Home equity		6,636		66		55		121		6,757		-
Automobile loans		8,927		81		10		91		9,018		9
Credit card		2,115		39		34		73		2,188		28
Other consumer loans		1,605		9		1		10		1,615		-
Total portfolio loans and leases	$	91,194		346		294		640		91,834		107

(a) Excludes $136 of residential mortgage loans measured at fair value at March 31, 2018.

(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, 2018, $79 of these loans were 30-89 days past due and $317 were 90 days or more past due. The Bancorp recognized $2 of losses during the three months ended March 31, 2018 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
	Loans and		30-89		90 Days		Total		Total Loans		Due and Still
As of December 31, 2017 ($ in millions)	Leases(b)(c)		Days(c)		or More(c)		Past Due		and Leases		Accruing
Commercial loans and leases:
Commercial and industrial loans	$	41,027		42		101		143		41,170		3
Commercial mortgage owner-occupied loans		3,351		3		8		11		3,362		-
Commercial mortgage nonowner-occupied loans		3,235		-		7		7		3,242		-
Commercial construction loans		4,552		1		-		1		4,553		-
Commercial leases		4,065		3		-		3		4,068		-
Residential mortgage loans(a)		15,301		66		87		153		15,454		57
Consumer loans:
Home equity		6,888		70		56		126		7,014		-
Automobile loans		8,992		107		13		120		9,112		10
Credit card		2,230		36		33		69		2,299		27
Other consumer loans		1,554		5		-		5		1,559		-
Total portfolio loans and leases	$	91,195		333		305		638		91,833		97

(a) Excludes $137 of residential mortgage loans measured at fair value at December 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 December 31, 2017, $95 of these loans were 30-89 days past due and $290 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.

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.

68

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, 2018 ($ in millions)	Unpaid Principal Balance			Recorded Investment			ALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans		$	414		358			109
Commercial mortgage owner-occupied loans			4		3			1
Commercial mortgage nonowner-occupied loans			2		2			-
Commercial leases			8		8			3
Restructured residential mortgage loans			460		457			64
Restructured consumer loans:
Home equity			129		130			25
Automobile loans			6		5			1
Credit card			49		44			14
Total impaired portfolio loans and leases with a related ALLL		$	1,072		1,007			217
With no related ALLL:
Commercial loans:
Commercial and industrial loans		$	188		161			-
Commercial mortgage owner-occupied loans			17		13			-
Commercial mortgage nonowner-occupied loans			28		28			-
Restructured residential mortgage loans			228		209			-
Restructured consumer loans:
Home equity			129		126			-
Automobile loans			3		3			-
Total impaired portfolio loans with no related ALLL		$	593		540			-
Total impaired portfolio loans and leases		$	1,665		1,547	(a)		217

(a) Includes $249, $654 and $262, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $154, $12 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018.

69

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

As of December 31, 2017 ($ in millions)	Unpaid Principal Balance			Recorded Investment			ALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans		$	433		358			87
Commercial mortgage owner-occupied loans			16		14			7
Commercial mortgage nonowner-occupied loans			4		3			-
Commercial leases			4		4			-
Restructured residential mortgage loans			469		465			64
Restructured consumer loans:
Home equity			172		172			27
Automobile loans			8		7			1
Credit card			52		45			14
Total impaired portfolio loans and leases with a related ALLL		$	1,158		1,068			200
With no related ALLL:
Commercial loans:
Commercial and industrial loans		$	151		131			-
Commercial mortgage owner-occupied loans			18		15			-
Commercial mortgage nonowner-occupied loans			35		35			-
Restructured residential mortgage loans			218		200			-
Restructured consumer loans:
Home equity			97		94			-
Automobile loans			2		2			-
Total impaired portfolio loans with no related ALLL		$	521		477			-
Total impaired portfolio loans and leases		$	1,679		1,545	(a)		200

(a) Includes $249, $652 and $275, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $150, $13 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017.

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, 2018				For the three months ended March 31, 2017
($ in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial loans and leases:
Commercial and industrial loans	$	497		5		683		1
Commercial mortgage owner-occupied loans(a)		22		-		43		-
Commercial mortgage nonowner-occupied loans		34		-		89		1
Commercial leases		6		-		3		-
Restructured residential mortgage loans		665		6		654		6
Restructured consumer loans:
Home equity		258		3		298		3
Automobile loans		9		-		14		-
Credit card		48		1		51		1
Total average impaired portfolio loans and leases	$	1,539		15		1,835		12

(a) Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $26 for the three months ended March 31, 2017. An immaterial amount of interest income was recognized during the three months ended March 31, 2017. Refer to Note 9 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

70

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, 2018		December 31, 2017
Commercial loans and leases:
Commercial and industrial loans	$	299		276
Commercial mortgage owner-occupied loans		11		19
Commercial mortgage nonowner-occupied loans		4		7
Commercial leases		8		4
Total nonaccrual portfolio commercial loans and leases		322		306
Residential mortgage loans		28		30
Consumer loans:
Home equity		74		74
Automobile loans		1		1
Credit card		26		26
Other consumer loans		1		-
Total nonaccrual portfolio consumer loans		102		101
Total nonaccrual portfolio loans and leases(a)(b)	$	452		437
OREO and other repossessed property		52		52
Total nonperforming portfolio assets(a)(b)	$	504		489

(a) Excludes $24 and $6 of nonaccrual loans held for sale at March 31, 2018 and December 31, 2017, respectively.

(b) Includes $5 and $3 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at March 31, 2018 and December 31, 2017, respectively, of which $2 and $3 are restructured nonaccrual government insured commercial loans at both March 31, 2018 and December 31, 2017, 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 $213 million and $235 million as of March 31, 2018 and December 31, 2017, 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 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.

The Bancorp had commitments to lend additional funds to borrowers whose terms have been modified in a TDR, consisting of line of credit and letter of credit commitments of $33 million and $79 million, respectively, as of March 31, 2018 compared with $53 million and $78 million, respectively, as of December 31, 2017.

71

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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

March 31, 2018 ($ 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		12		$        72		13	-
Commercial mortgage owner-occupied loans		2		-		-	-
Residential mortgage loans		247		33		1	-
Consumer loans:
Home equity		25		2		-	-
Automobile loans		20		-		-	-
Credit card		1,965		10		2	-
Total portfolio loans		2,271		$        117		16	-
(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, 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.

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 an 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, 2018 and 2017 and were within twelve months of the restructuring date:

March 31, 2018 ($ in millions)(a)	Number of Contracts		Recorded   Investment
Commercial loans:
Commercial and industrial loans		1	$	1
Commercial mortgage owner-occupied loans		2		-
Residential mortgage loans		48		7
Consumer loans:
Home equity		2		-
Credit card		242		1
Total portfolio loans		295		$              9

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

72

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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.

73

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

7. Bank Premises and Equipment

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

($ in millions)		March 31, 2018	December 31, 2017
Land and improvements(a)	$	636	644
Buildings(a)		1,661	1,679
Equipment		1,921	1,876
Leasehold improvements		399	399
Construction in progress(a)		76	93
Bank premises and equipment held for sale:
Land and improvements		12	17
Buildings		8	9
Equipment		-	1
Accumulated depreciation and amortization		(2,747)	(2,715)
Total bank premises and equipment	$	1,966	2,003

(a) At March 31, 2018 and December 31, 2017, land and improvements, buildings and construction in progress included $89 and $91, respectively, 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.

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 $8 million and $3 million for the three months ended March 31, 2018 and 2017, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

8. Intangible Assets

Intangible assets consist of core deposit intangibles, customer relationships, non-compete agreements, trade names and rent intangibles. Intangible assets are amortized on either a straight-line or an accelerated basis over their estimated useful lives. The increase in gross carrying amount of intangible assets from the year ended December 31, 2017 reflects acquisition activity during the first quarter of 2018.

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, 2018
Core deposit intangibles		$	34		(29	)		5
Customer relationships			19		(1	)		18
Non-compete agreements			14		(11	)		3
Other			6		(2	)		4
Total intangible assets		$	73		(43	)		30
As of December 31, 2017
Core deposit intangibles		$	34		(29	)		5
Customer relationships			16		-			16
Non-compete agreements			13		(10	)		3
Other			6		(3	)		3
Total intangible assets		$	69		(42	)		27

As of March 31, 2018, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was $1 million and immaterial for the three months ended March 31, 2018 and 2017, respectively. The Bancorp’s projections of amortization expense shown in the following table is based on existing balances as of March 31, 2018. Future amortization expense may vary from these projections.

Estimated amortization expense for the remainder of 2018 through 2022 is as follows:

($ in millions)	Total
Remainder of 2018	$	4
2019		5
2020		3
2021		2
2022		2

74

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

9. 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, 2018 ($ in millions)	Securitizations			Investments		Total
Assets:
Other short-term investments		$	66		-	66
Commercial mortgage loans			-		20	20
Automobile loans			1,115		-	1,115
ALLL			(6)		-	(6)
Other assets			6		-	6
Total assets		$	1,181		20	1,201
Liabilities:
Other liabilities		$	2		-	2
Long-term debt			1,031		-	1,031
Total liabilities		$	1,033		-	1,033
Noncontrolling interests		$	-		20	20
	Automobile Loan			CDC
December 31, 2017 ($ in millions)	Securitizations			Investments		Total
Assets:
Other short-term investments		$	62		-	62
Commercial mortgage loans			-		20	20
Automobile loans			1,277		-	1,277
ALLL			(6)		-	(6)
Other assets			7		-	7
Total assets		$	1,340		20	1,360
Liabilities
Other liabilities		$	2		-	2
Long-term debt			1,190		-	1,190
Total liabilities		$	1,192		-	1,192
Noncontrolling interests		$	-		20	20

Automobile loan securitizations

In a securitization transaction that occurred in the third quarter of 2017, the Bancorp transferred an aggregate amount of $1.1 billion in consumer automobile loans to a bankruptcy remote trust which was deemed to be a VIE. This trust then subsequently issued approximately $1.0 billion of asset-backed notes, of which approximately $261 million were retained by the Bancorp. Additionally, in prior years the Bancorp completed securitization transactions in which the Bancorp transferred certain consumer automobile loans to bankruptcy remote trusts which were also 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 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.

75

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 hold 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.

During the third quarter of 2017, the Bancorp’s indemnification guarantee for one of the CDC investments for which a Bancorp subsidiary served as the managing member expired and the Bancorp transferred its remaining ownership interest in the VIE to the investor member thus removing the Bancorp from future operations of the VIE. As a result, the Bancorp deconsolidated the VIE during the third quarter of 2017 resulting in a decrease of $27 million in commercial mortgage loans, a decrease of $20 million in ALLL associated with the commercial mortgage loans and a decrease of $18 million in indemnification guarantee exposure. The Bancorp’s maximum exposure related to the remaining indemnifications at March 31, 2018 and December 31, 2017 was $18 million and $17 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, 2018 ($ in millions)	Assets			Liabilities		Exposure
CDC investments		$	1,316		338		1,316
Private equity investments			95		-		140
Loans provided to VIEs			1,937		-		3,043
	Total			Total		Maximum
December 31, 2017 ($ in millions)	Assets			Liabilities		Exposure
CDC investments		$	1,376		355		1,376
Private equity investments			102		-		150
Loans provided to VIEs			1,845		-		2,910

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, 2018 and December 31, 2017, 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 $336 million and $355 million at March 31, 2018 and December 31, 2017, respectively. The unfunded commitments as of March 31, 2018 are expected to be funded from 2018 to 2034.

76

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		For the three months ended       March 31,
($ in millions)	Statements of Income Caption		2018			2017
Pre-tax investment and impairment losses(a)	Other noninterest expense	$		45			36
Tax credits and other benefits	Applicable income tax expense			(52	)		(56)

(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, 2018 and 2017.

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, 2018 and December 31, 2017, the unfunded commitment amounts to the funds were $45 million and $48 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $3 million and $6 million during the three months ended March 31, 2018 and 2017, respectively. The Bancorp recognized $4 million and zero OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three months ended March 31, 2018 and 2017, respectively. Refer to Note 21 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 both March 31, 2018 and December 31, 2017, the Bancorp’s unfunded commitments to these entities were $1.1 billion. 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.

77

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

10. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during both the three months ended March 31, 2018 and 2017. 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)			2018	2017
Residential mortgage loan sales(a)	$		1,000	1,629
Origination fees and gains on loan sales			24	29
Gross mortgage servicing fees			53	47

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

Servicing Rights

The Bancorp measures all of its servicing rights at fair value with changes in fair value reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

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

($ in millions)		2018		2017
Balance, beginning of period	$	858		744
Servicing rights originated - residential mortgage loans		16		26
Servicing rights acquired - residential mortgage loans		24		29
Changes in fair value:
Due to changes in inputs or assumptions(a)		57		4
Other changes in fair value(b)		(29	)	(27	)
Balance, end of period	$	926		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.

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 may include 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 presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy:

		For the three months ended   March 31,
($ in millions)		2018		2017
Securities losses, net - non-qualifying hedges on MSRs	$	(13	)	-
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio(a)		(49	)	(1	)
MSR fair value adjustment(a)		28		(23	)

(a) Included in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

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, securitization or purchase resulting from transactions completed during the three months ended March 31, 2018 and 2017 were as follows:

				March 31, 2018							March 31, 2017
	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		7.0		9.1	%		549		6.7		9.9	%		485
Servicing rights		Adjustable		2.6		30.0			637		2.3		34.9			700

78

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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, 2018 and December 31, 2017, the Bancorp serviced $61.0 billion and $60.0 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, 2018, 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 OAS spread are as follows:

						Prepayment Speed Assumption									OAS Spread Assumption
		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	$	910		6.4		10.0	%	$	(35)		(68)		(156)		548	$	(19)		(36	)
Servicing rights	Adjustable		16		3.3		24.6			(1)		(2)		(4)		797		-		(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.

79

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

11. 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. TBA securities 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 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 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, 2018 and December 31, 2017, the balance of collateral held by the Bancorp for derivative assets was $375 million and $409 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 $85 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, 2018. The credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts as of March 31, 2018 and December 31, 2017 was $2 million and $3 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, 2018 and December 31, 2017, the balance of collateral posted by the Bancorp for derivative liabilities was $322 million and $365 million, respectively, and $100 million of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities as of March 31, 2018 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, 2018 and December 31, 2017, 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.

80

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, 2018 ($ 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	$		3,705			248	4
Total fair value hedges						248	4
Cash flow hedges:
Interest rate swaps related to C&I loans			4,150			-	18
Total cash flow hedges						-	18
Total derivatives designated as qualifying hedging instruments						248	22
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio			12,135			53	20
Forward contracts related to residential mortgage loans held for sale			1,153			2	2
Swap associated with the sale of Visa, Inc. Class B Shares			1,993			-	165
Foreign exchange contracts			138			-	-
Total free-standing derivatives - risk management and other business purposes						55	187
Free-standing derivatives - customer accommodation:
Interest rate contracts			44,973			220	241
Interest rate lock commitments			667			11	-
Commodity contracts			4,843			199	195
TBA securities			46			-	-
Foreign exchange contracts			11,723			132	129
Total free-standing derivatives - customer accommodation						562	565
Total derivatives not designated as qualifying hedging instruments						617	752
Total				$		865	774
					Fair Value
December 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	$		3,705			297	5
Total fair value hedges						297	5
Cash flow hedges:
Interest rate swaps related to C&I loans			4,475			-	12
Total cash flow hedges						-	12
Total derivatives designated as qualifying hedging instruments						297	17
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio			11,035			54	15
Forward contracts related to residential mortgage loans held for sale			1,284			1	1
Stock warrant			20			20	-
Swap associated with the sale of Visa, Inc. Class B Shares			1,900			-	137
Foreign exchange contracts			112			-	1
Total free-standing derivatives - risk management and other business purposes						75	154
Free-standing derivatives - customer accommodation:
Interest rate contracts			42,216			154	145
Interest rate lock commitments			446			8	-
Commodity contracts			4,125			165	167
TBA securities			26			-	-
Foreign exchange contracts			12,654			124	119
Total free-standing derivatives - customer accommodation						451	431
Total derivatives not designated as qualifying hedging instruments						526	585
Total				$		823	602

81

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 designated fair value hedges of interest rate risk as of March 31, 2018, the Bancorp performed an assessment of hedge effectiveness using regression analysis (quantitative approach) with changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk recorded in the same income statement line in current period net 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			2018			2017
Change in fair value of interest rate swaps hedging long-term debt		Interest on long-term debt	$		(63	)		(21	)
Change in fair value of hedged long-term debt attributable to the risk being hedged		Interest on long-term debt			64			21

The following amounts were recorded in the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of:

	Condensed Consolidated
($ in millions)	Balance Sheets Caption		March 31, 2018
Carrying amount of the hedged item	Long-term debt	$	4,219
Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items	Long-term debt		(231	)

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 for the variability in cash flows attributable to the contractually specified interest rate. 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, 2018, all hedges designated as cash flow hedges were assessed for effectiveness using regression analysis. The entire change in the fair value of the interest rate swap included in the assessment of hedge effectiveness is recorded in AOCI and reclassified from AOCI to current period earnings when the hedged item affects earnings. As of March 31, 2018, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 59 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, 2018 and December 31, 2017, $19 million and $9 million, respectively, of net deferred losses, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of March 31, 2018, $2 million in net unrealized 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, 2018.

During both the three months ended March 31, 2018 and 2017, 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 (losses) gains 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)		2018	2017(a)
Amount of pretax net losses recognized in OCI	$	(9)	(5)
Amount of pretax net gains reclassified from OCI into net interest income		1	8

(a) For the three months ended March 31, 2017, the amount of pretax net losses recognized in OCI represented the effective portion of the cumulative gains or losses on cash flow hedges and ineffectiveness was reported within noninterest income. Upon the adoption of ASU 2017-12, the Bancorp recorded a cumulative effect adjustment to retained earnings effective January 1, 2018 related to the elimination of the separate measurement of ineffectiveness. Refer to Note 3 for additional information.

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, TBA securities 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.

82

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 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 21 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	For the three months ended March 31,
($ in millions)	Income Caption	2018		2017
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale	Mortgage banking net revenue	$	-		(21	)
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		(49)		(1	)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2		(1	)
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(39)		(13	)

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 either corporate banking revenue or other noninterest income 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, 2018 and December 31, 2017, the total notional amount of the risk participation agreements was $3.4 billion and $2.8 billion, respectively, and the fair value was a liability of $6 million and $5 million at March 31, 2018 and December 31, 2017, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of March 31, 2018, the risk participation agreements had a weighted-average remaining life of 4.2 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, 2018		December 31, 2017
Pass	$	3,263		2,748
Special mention		77		66
Substandard		30		24
Total	$	3,370		2,838

83

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The net gains 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	For the three months ended March 31,
($ in millions)	Statements of Income Caption	2018			2017
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	7			5
Interest rate lock commitments	Mortgage banking net revenue		13			22
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		2			1
Commodity contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		-			1
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)	Corporate banking revenue		14			13
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		(2	)		-
Foreign exchange contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1			1

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 do not include variation margin payments for derivative contracts with legal rights of setoff for both periods shown.

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

	Gross Amount Recognized in the		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
As of March 31, 2018 ($ in millions)	Condensed Consolidated Balance Sheets(a)		Derivatives			Collateral(b)			Net Amount
Assets:
Derivatives	$	854		(229	)		(341	)		284
Total assets		854		(229	)		(341	)		284
Liabilities:
Derivatives		774		(229	)		(209	)		336
Total liabilities	$	774		(229	)		(209	)		336

(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		Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
As of December 31, 2017 ($ in millions)	Condensed Consolidated Balance Sheets(a)		Derivatives			Collateral(b)			Net Amount
Assets:
Derivatives	$	815		(213	)		(362	)		240
Total assets		815		(213	)		(362	)		240
Liabilities:
Derivatives		602		(213	)		(155	)		234
Total liabilities	$	602		(213	)		(155	)		234

(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.

84

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

12. 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, 2018		December 31,         2017
Securities sold under repurchase agreements		$                    662		546
FHLB advances		400		3,125
Derivative collateral		273		341
Total other short-term borrowings		$                 1,335		4,012

The Bancorp’s securities sold under repurchase agreements are accounted for as secured borrowings and are collateralized by securities included in available-for-sale debt 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. As of both March 31, 2018 and December 31, 2017, all securities sold under repurchase agreements were secured by agency residential mortgage-backed securities with an overnight remaining contractual maturity.

13. Long-Term Debt

On March 14, 2018, the Bancorp issued and sold $650 million of 3.95% senior fixed-rate notes, with a maturity of ten years, due on March 14, 2028. These notes will be redeemable by the Bancorp, in whole or in part, on or after the date that is 30 days prior to the maturity date at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.

14. Capital Actions

Accelerated Share Repurchase Transactions

During the three months ended March 31, 2018, the Bancorp entered into or settled accelerated share repurchase transactions. As part of these transactions, the Bancorp entered into forward contracts in which the final number of shares delivered at settlement was based generally on a discount to the average daily volume weighted-average price of the Bancorp’s common stock during the term of these repurchase agreements. The accelerated share repurchases were treated as two separate transactions, (i) the acquisition of treasury shares on the repurchase date and (ii) a forward contract indexed to the Bancorp’s common stock.

The following table presents a summary of the Bancorp’s accelerated share repurchase transactions that were entered into or settled during the three months ended March 31, 2018:

Repurchase Date	Amount ($ in millions)		Shares Repurchased on Repurchase Date		Shares Received from Forward Contract Settlement		Total Shares     Repurchased		Settlement Date
December 19, 2017		$                        273		7,727,273		824,367		8,551,640		March 19, 2018
February 12, 2018		318		8,691,318		1,015,731		9,707,049		March 26, 2018

85

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

15. 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, 2018		December 31, 2017
Commitments to extend credit	$	68,089		68,106
Letters of credit		2,164		2,185
Forward contracts related to residential mortgage loans held for sale		1,153		1,284
Noncancelable operating lease obligations		559		568
Purchase obligations		132		144
Capital commitments for private equity investments		45		48
Capital expenditures		27		37
Capital lease obligations		24		26

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, 2018 and December 31, 2017, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $151 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:

($ in millions)	March 31, 2018		December 31,     2017
Pass	$	67,323		67,254
Special mention		354		330
Substandard		412		522
Total commitments to extend credit	$	68,089		68,106

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, 2018:

($ in millions)
Less than 1 year(a)	$	1,174
1 - 5 years(a)		981
Over 5 years		9
Total letters of credit	$	2,164

(a) Includes $6 and $1 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 approximately 99% of total letters of credit at both March 31, 2018 and December 31, 2017, and are considered guarantees in accordance with U.S. GAAP. Approximately 62% and 61% of the total standby letters of credit were collateralized as of March 31, 2018 and December 31, 2017, respectively. 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 $15 million and $6 million at March 31, 2018 and December 31, 2017, 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.

86

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, 2018		December 31, 2017
Pass	$	1,822		1,830
Special mention		60		67
Substandard		198		218
Doubtful		84		70
Total letters of credit	$	2,164		2,185

At March 31, 2018 and December 31, 2017, 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, 2018 and December 31, 2017, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $646 million and $602 million, respectively, of which FTS acted as the remarketing agent to issuers on $562 million and $508 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 $320 million and $331 million of the VRDNs remarketed by FTS, in addition to $84 million and $94 million in VRDNs remarketed by third parties at March 31, 2018 and December 31, 2017, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held zero and $1 million of these VRDNs in its portfolio and classified them as trading securities at March 31, 2018 and December 31, 2017, 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 16 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017.

As of March 31, 2018 and December 31, 2017, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $8 million and $9 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, 2018 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 $9 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.

87

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

For both the three months ended March 31, 2018 and 2017, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $2 million in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended March 31, 2018 and 2017 were $5 million and $3 million, respectively. Total outstanding repurchase demand inventory was $2 million and $1 million at March 31, 2018 and December 31, 2017, respectively.

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

	For the three months ended March 31,
($ in millions)	2018			2017
Balance, beginning of period	$	9			13
Net reductions to the reserve		(1	)		(1	)
Balance, end of period	$	8			12

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

	GSE						Private Label
March 31, 2018 ($ in millions)	Units			Dollars			Units		Dollars
Balance, beginning of period		6		$	1			1	$	-
New demands		30			5			-		-
Resolved demands		(22	)		(4	)		-		-
Balance, end of period		14		$	2			1	$	-
	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			-	$	-

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 $301 million and $312 million at March 31, 2018 and December 31, 2017, respectively, and the delinquency rates were 2.7% and 3.0% at March 31, 2018 and December 31, 2017, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $5 million at both March 31, 2018 and December 31, 2017 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 balances held by the brokerage clearing agent were $16 million and $15 million at March 31, 2018 and December 31, 2017, 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, 2018 and December 31, 2017.

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.

88

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 21 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, 2018, 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 $165 million at March 31, 2018 and $137 million at December 31, 2017. Refer to Note 11 and Note 21 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:

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

89

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

16. 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 (In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation). 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 15 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. 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 overturned settlement agreement, approximately 25% of the funds paid into the class settlement escrow account were already returned to the control of the defendants. The remaining approximately 75% of the settlement funds paid by the Bancorp are maintained in the escrow account. More than 500 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 individual federal lawsuits were transferred to the United States District Court for the Eastern District of New York. While the Bancorp is only named as a defendant in one of the individual federal lawsuits, it may have obligations pursuant to indemnification arrangements and/or the judgment or loss sharing agreements noted above. Refer to Note 15 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. On January 10, 2018, plaintiffs filed a motion to hear the immediate appeal of the dismissal of their breach of contract claim. On March 28, 2018, the court granted plaintiffs’ motion and stayed the TILA claim pending that appeal. On April 26, 2018, plaintiffs filed their notice of appeal for the breach of contract claim with the U.S. Court of Appeals for the Sixth Circuit.

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 for the plaintiffs’ benefit. The lawsuit seeks over $800 million in alleged damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. Fifth Third denies all liability. On April 20, 2018, the Court denied plaintiffs’ motion for summary judgment and granted summary judgment to Fifth Third, dismissing the case in its entirety.

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

On February 12, 2016, 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 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 totaling almost $40 million. Fifth Third denies all liability in this matter. On March 3, 2016, Fifth Third removed the case to the United States District Court for the District of Minnesota. No trial date has been scheduled.

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.

90

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Governmental Investigations and Proceedings

The Bancorp and/or its affiliates are or may become 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 FRB, CFPB, SEC, FINRA, U.S. Department of Justice, etc., as well as state and other governmental authorities and 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 or reputational harm 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. Additionally, in some cases, regulatory authorities may take supervisory actions that are considered to be confidential supervisory information which may not be publicly disclosed.

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 $22 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.

17. Related Party Transactions

On January 16, 2018, Vantiv, Inc. completed its previously announced acquisition of Worldpay Group plc. with the resulting combined company named Worldpay, Inc. As a result of this transaction, the Bancorp recognized a gain of $414 million in other noninterest income during the first quarter of 2018 associated with the dilution in its ownership interest in Vantiv Holding, LLC from approximately 8.6% to approximately 4.9%. The Bancorp’s remaining interest in Vantiv Holding, LLC of $632 million continues to be accounted for as an equity method investment given the nature of Vantiv Holding, LLC’s structure as a limited liability company and contractual arrangements between Vantiv Holding, LLC and the Bancorp.

18. Income Taxes

The applicable income tax expense was $132 million and $91 million for the three months ended March 31, 2018 and 2017, respectively. The effective tax rates for the three months ended March 31, 2018 and 2017 were 15.8% and 22.9%, respectively. The decrease in the effective tax rate for the three months ended March 31, 2018 compared to the same period in the prior year was primarily related to the reduction in the federal statutory corporate tax rate partially offset by changes to previously deductible items associated with the enactment of the TCJA.

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)

19. Accumulated Other Comprehensive Income

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

		Total OCI									Total AOCI
March 31, 2018 ($ in millions)		Pretax Activity			Tax Effect			Net     Activity			Beginning Balance(a)			Net Activity			Ending   Balance
Unrealized holding losses on available-for-sale debt securities arising during period	$		(594	)		134			(460	)
Reclassification adjustment for net losses on available-for-sale debt securities included in net income			9			(2	)		7
Net unrealized losses on available-for-sale debt securities			(585	)		132			(453	)		135			(453	)		(318	)
Unrealized holding losses on cash flow hedge derivatives arising during period			(9)			2			(7	)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income			(1	)		-			(1	)
Net unrealized losses on cash flow hedge derivatives			(10	)		2			(8	)		(11	)		(8	)		(19	)
Reclassification of amounts to net periodic benefit costs			1			-			1
Defined benefit pension plans, net			1			-			1			(53	)		1			(52	)
Total	$		(594	)		134			(460	)		71			(460	)		(389	)
(a)   The Bancorp’s AOCI balance was adjusted as of January 1, 2018 to reflect the adoption of new accounting standards. Refer to Note 3 for additional information.
		Total OCI									Total AOCI
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

92

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The table below presents reclassifications out of AOCI:

	Consolidated Statements of             Income Caption		For the three months ended   March 31,
Components of AOCI: ($ in millions)			2018			2017
Net unrealized gains on available-for-sale securities:(b)
Net losses included in net income	Securities losses, net	$		(9	)		(2	)
	Income before income taxes			(9	)		(2	)
	Applicable income tax expense			2			1
	Net income			(7	)		(1	)
Net unrealized gains on cash flow hedge derivatives:(b)
Interest rate contracts related to C&I loans	Interest and fees on loans and leases			1			8
	Income before income taxes			1			8
	Applicable income tax expense			-			(3	)
	Net income			1			5
Net periodic benefit costs:(b)
Amortization of net actuarial loss	Employee benefits expense(a)			(1	)		(2	)
	Income before income taxes			(1	)		(2	)
	Applicable income tax expense			-			1
	Net income			(1	)		(1	)
Total reclassifications for the period	Net income	$		(7	)		3

(a) This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 22 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.

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

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

20. 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:

		2018					2017
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	$	689						290
Less: Income allocated to participating securities		8						4
Net income allocated to common shareholders	$	681		690		0.99		286		748		0.38
Earnings Per Diluted Share:
Net income available to common shareholders	$	689						290
Effect of dilutive securities:
Stock-based awards		-		14				-		13
Net income available to common shareholders plus assumed conversions		689						290
Less: Income allocated to participating securities		8						4
Net income allocated to common shareholders plus assumed conversions	$	681		704		0.97		286		761		0.38

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, 2018 and March 31, 2017 excludes 2 million and 6 million, respectively, of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

94

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

21. 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017.

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, 2018 ($ in millions)	Level 1(c)		Level 2(c)		Level 3		Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	96		-		-		96
Obligations of states and political subdivisions securities		-		44		-		44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		15,208		-		15,208
Agency commercial mortgage-backed securities		-		10,455		-		10,455
Non-agency commercial mortgage-backed securities		-		3,190		-		3,190
Asset-backed securities and other debt securities		-		2,214		-		2,214
Available-for-sale debt and other securities(a)		96		31,111		-		31,207
Trading debt securities:
U.S. Treasury and federal agencies securities		-		21		-		21
Obligations of states and political subdivisions securities		-		52		-		52
Agency residential mortgage-backed securities		-		364		-		364
Asset-backed securities and other debt securities		-		134		-		134
Trading debt securities		-		571		-		571
Equity securities		417		1		-		418
Residential mortgage loans held for sale		-		650		-		650
Residential mortgage loans(b)		-		-		136		136
Commercial loans held for sale		-		16		-		16
MSRs		-		-		926		926
Derivative assets:
Interest rate contracts		2		521		11		534
Foreign exchange contracts		-		132		-		132
Commodity contracts		34		165		-		199
Derivative assets(d)		36		818		11		865
Total assets	$	549		33,167		1,073		34,789
Liabilities:
Derivative liabilities:
Interest rate contracts	$	2		276		7		285
Foreign exchange contracts		-		129		-		129
Equity contracts		-		-		165		165
Commodity contracts		56		139		-		195
Derivative liabilities(e)		58		544		172		774
Short positions(e)		93		33		-		126
Total liabilities	$	151		577		172		900

(a) Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at March 31, 2018.

(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, 2018, 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.

95

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

	Fair Value  Measurements Using
December 31, 2017 ($ in millions)	Level 1(c)		Level 2(c)		Level 3		Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	98		-		-		98
Obligations of states and political subdivisions securities		-		44		-		44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-		15,319		-		15,319
Agency commercial mortgage-backed securities		-		10,167		-		10,167
Non-agency commercial mortgage-backed securities		-		3,293		-		3,293
Asset-backed securities and other debt securities		-		2,218		-		2,218
Available-for-sale debt and other securities(a)		98		31,041		-		31,139
Trading debt securities:
U.S. Treasury and federal agencies securities		1		11		-		12
Obligations of states and political subdivisions securities		-		22		-		22
Residential mortgage-backed securities		-		395		-		395
Asset-backed securities and other debt securities		-		63		-		63
Trading debt securities		1		491		-		492
Equity securities		438		1				439
Residential mortgage loans held for sale		-		399		-		399
Residential mortgage loans(b)		-		-		137		137
MSRs		-		-		858		858
Derivative assets:
Interest rate contracts		1		505		8		514
Foreign exchange contracts		-		124		-		124
Equity contracts		-		20		-		20
Commodity contracts		39		126		-		165
Derivative assets(d)		40		775		8		823
Total assets	$	577		32,707		1,003		34,287
Liabilities:
Derivative liabilities:
Interest rate contracts	$	1		172		5		178
Foreign exchange contracts		-		120		-		120
Equity contracts		-		-		137		137
Commodity contracts		38		129		-		167
Derivative liabilities(e)		39		421		142		602
Short positions(e)		25		6		-		31
Total liabilities	$	64		427		142		633

(a) Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at December 31, 2017.

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

(c) During the year ended December 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.

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 debt and other securities, trading debt securities and equity 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 may include federal agencies securities, obligations of states and political subdivisions securities, agency and non-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.

96

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Commercial loans held for sale

For commercial loans held for sale for which the fair value election has been made, fair value is estimated based upon quoted prices of identical or similar assets in an active market, which are reviewed and approved by the Market Risk department, which reports to the Bancorp’s Chief Risk Officer. These loans are generally valued using a market approach based on observable prices and are classified within Level 2 of the valuation hierarchy.

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 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

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 10 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 quarterly 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, 2018 and December 31, 2017, 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.

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 the fair value of the derivative liability; conversely, a decrease in the loss estimate or an acceleration of the resolution of the Covered Litigation would result in a decrease in the fair value of the derivative liability. The Accounting and Treasury departments, both of which report to the Bancorp’s Chief Financial Officer, 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 asset fair value of the IRLCs at March 31, 2018 was $11 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 $5 million and $9 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 $6 million and $13 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 $1 million and $2 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 $1 million and $2 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.

97

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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.

Short positions

Where quoted prices are available in an active market, short positions are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics or DCFs and therefore are classified within Level 2 of the valuation hierarchy.

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, 2018 ($ in millions)	Residential Mortgage Loans		MSRs		Interest Rate Derivatives, Net(a)		Equity Derivatives			Total Fair Value
Balance, beginning of period	$	137		858		3		(137)			861
Total gains (losses) (realized/unrealized):
Included in earnings		(2)		28		14		(39)			1
Purchases/originations		-		40		(2)		-			38
Settlements		(135)		-		(11)		11			(135)
Transfers into Level 3(b)		136		-		-		-			136
Balance, end of period	$	136		926		4		(165)			901
The amount of total (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments still held at March 31, 2018(c)	$	(2)		28		11		(39)			(2)
(a)   Net interest rate derivatives include derivative assets and liabilities of $11 and $7, respectively, as of March 31, 2018. (b)   Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment. (c)   Includes interest income and expense.
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
For the three months ended March 31, 2017 ($ in millions)	Residential Mortgage Loans		MSRs		Interest Rate Derivatives, Net(a)		Equity Derivatives, Net(a)			Total Fair Value
Balance, beginning of period	$	143		744		8		(91)			804
Total (losses) gains (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 (losses) gains for the period included in earnings attributable to the change in unrealized gains or losses relating to instruments 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.

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)		2018	2017
Mortgage banking net revenue	$	39	-
Corporate banking revenue		1	-
Other noninterest income		(39)	(13)
Total gains (losses)	$	1	(13)

98

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The total losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2018 and 2017 were recorded in the Condensed Consolidated Statements of Income as follows:

		For the three months ended
		March 31,
($ in millions)		2018			2017
Mortgage banking net revenue	$		36			(7	)
Corporate banking revenue			1			-
Other noninterest income			(39	)		(13	)
Total losses	$		(2	)		(20	)

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	136	Loss rate model	Interest rate risk factor	(12.6) - 14.1%	1.3%
				Credit risk factor	0 - 46.2%	1.5%
MSRs		926	Discounted cash flow	Prepayment speed	0.5-98.1%	(Fixed) 10.0% (Adjustable) 24.6%
				OAS spread (bps)	446-1,515	(Fixed) 548 (Adjustable) 797
IRLCs, net		11	Discounted cash flow	Loan closing rates	9.5 - 102.7%	76.6%
Swap associated with the sale of Visa, Inc. Class B Shares		(165)	Discounted cash flow	Timing of the resolution     of the Covered Litigation	2/28/2021 -  12/31/2023	9/8/2021
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 Credit risk factor	(10.6) - 15.4% 0 - 46.2%	2.3% 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	8/24/2020

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, 2018 and 2017, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2018 and 2017, 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) Gains
As of March 31, 2018 ($ in millions)		Level 1		Level 2		Level 3		Total		For the three months ended March 31, 2018
Commercial loans held for sale	$		-		-		5		5		(1)
Commercial and industrial loans			-		-		277		277		(44)
Commercial mortgage loans			-		-		4		4		6
Commercial leases			-		-		2		2		(2)
OREO			-		-		17		17		(3)
Bank premises and equipment			-		-		4		4		(8)
Operating lease equipment			-		-		12		12		(2)
Private equity investments			-		50		33		83		19
Total	$		-		50		354		404		(35)

99

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		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)

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ 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		277	Appraised value	Collateral value		NM	NM
Commercial mortgage loans		4	Appraised value	Collateral value		NM	NM
Commercial leases		2	Appraised value	Collateral value		NM	NM
OREO		17	Appraised value	Appraised value		NM	NM
Bank premises and equipment		4	Appraised value	Appraised value		NM	NM
Operating lease equipment		12	Appraised value	Appraised value		NM	NM
Private equity investments		29	Liquidity discount applied to fund’s net asset value	Liquidity discount		0-43.0%	10.5%
		4	Comparable company analysis	Market comparable transactions		NM	NM
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
				Costs to sell		NM	10.0%
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

Commercial loans held for sale

During the three months ended March 31, 2018 and 2017 the Bancorp transferred $1 million and $18 million, respectively, of commercial loans from the portfolio to loans held for sale that upon transfer were measured at lower of cost or fair value. These loans had fair value adjustments during the three months ended March 31, 2018 and 2017 totaling an immaterial amount and $17 million, respectively, and were generally based on appraisals of the underlying collateral and were, therefore, classified within Level 3 of the valuation hierarchy. Additionally, there was $1 million and an immaterial amount of fair value adjustments on existing commercial loans held for sale for the three months ended March 31, 2018 and 2017, respectively. The fair value adjustments were also based on appraisals of the underlying collateral. The Bancorp did not recognize any gains or losses on the sale of commercial loans held for sale during the three months ended March 31, 2018. During the three months ended March 31, 2017, 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.

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, 2018 and 2017, the Bancorp recorded nonrecurring impairment adjustments to certain commercial and industrial loans, commercial mortgage 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.

OREO

During both the three months ended March 31, 2018 and 2017, 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 the three months ended March 31, 2018 and 2017, these losses include $1 million and $2 million, respectively, recorded as charge-offs on new OREO properties transferred from loans during the respective periods and $2 million recorded as negative fair value adjustments on OREO in other noninterest expense in the 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 refer to Note 7.

Operating lease equipment

During both the three months ended March 31, 2018 and 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, 2018 and 2017, the Bancorp recorded net losses of $2 million and $20 million, respectively, 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.

Private equity investments

As a result of adopting ASU 2016-01, effective January 1, 2018, the Bancorp accounts for its private equity investments using the measurement alternative to fair value, except for those accounted for under the equity method of accounting. Under the measurement alternative, the Bancorp carries each investment at its cost basis minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The carrying value of the Bancorp’s private equity investments as of March 31, 2018 include a cumulative $35 million of positive adjustments as a result of such observable price changes. Because these adjustments are based on observable transactions in inactive markets, they are classified in Level 2 of the fair value hierarchy.

101

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

For private equity investments which are accounted for using the measurement alternative to fair value, the Bancorp qualitatively evaluates each investment quarterly to determine if impairment may exist. If necessary, the Bancorp then measures impairment by estimating the value of its investment and comparing that to the investment’s carrying value, whether or not the Bancorp considers the impairment to be temporary. These valuations are typically developed using a discounted cash flow method, but other methods may be used if more appropriate for the circumstances. These valuations are based on unobservable inputs and therefore are classified in Level 3 of the fair value hierarchy. The carrying value of the Bancorp’s private equity investments as of March 31, 2018 includes a cumulative $10 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018.

The Bancorp recognized $6 million of OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three months ended March 31, 2018. The Bancorp performed nonrecurring fair value measurements on a fund by fund basis to determine whether OTTI existed. The Bancorp estimated the fair value of the funds by applying an estimated market discount to the reported net asset value of the fund or through a discounted cash flow analysis. Because the length of time until the investment will become redeemable is generally not certain, these funds were classified within Level 3 of the valuation hierarchy. An adverse change in the reported net asset values or estimated market discounts, where applicable, would result in a decrease in the fair value estimate. In cases where the carrying value exceeds the fair value, an impairment loss is recognized. The Bancorp’s Private Equity department, which reports to the Head of Payments, Strategy and Digital Solutions, in conjunction with Accounting, is responsible for preparing and reviewing the fair value estimates.

Fair Value Option

The Bancorp elected to measure certain residential mortgage and commercial 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. Electing to measure certain commercial loans held for sale at fair value reduces certain timing differences and better reflects changes in fair value of these assets that are expected to the sold in the short term. Management’s intent to sell residential mortgage or commercial 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 residential mortgage loans held at March 31, 2018 and 2017 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $12 million and $22 million, respectively. These gains are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income. Fair value changes recognized in earnings for commercial loans held at March 31, 2018 for which the fair value option was elected included gains of an immaterial amount for the three months ended March 31, 2018. The Bancorp did not hold any commercial loans held for sale during the three months ended March 31, 2017. These gains are reported in corporate banking 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, 2018 and December 31, 2017. Valuation adjustments related to instrument-specific credit risk for commercial loans measured at fair value had an immaterial impact on the fair value of those loans at March 31, 2018. The Bancorp did not hold any commercial loans held for sale at December 31, 2017. Interest on 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 and commercial loans measured at fair value as of:

March 31, 2018 ($ in millions)	Aggregate         Fair Value		Aggregate Unpaid       Principal Balance		Difference
Residential mortgage loans measured at fair value	$	786		774		12
Past due loans of 90 days or more		4		4		-
Nonaccrual loans		1		1		-
Commercial loans measured at fair value		16		16		-
December 31, 2017
Residential mortgage loans measured at fair value	$	536		522		14
Past due loans of 90 days or more		5		5		-
Nonaccrual loans		1		1		-

102

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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, 2018 ($ in millions)		Amount			Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and due from banks	$		2,038			2,038		-		-		2,038
Other short-term investments			1,747			1,747		-		-		1,747
Other securities			612			-		612		-		612
Held-to-maturity securities			23			-		-		23		23
Loans and leases held for sale			51			-		-		51		51
Portfolio loans and leases:
Commercial and industrial loans			41,023			-		-		42,143		42,143
Commercial mortgage loans			6,446			-		-		6,395		6,395
Commercial construction loans			4,743			-		-		4,775		4,775
Commercial leases			3,904			-		-		3,520		3,520
Residential mortgage loans			15,338			-		-		15,716		15,716
Home equity			6,713			-		-		7,103		7,103
Automobile loans			8,979			-		-		8,708		8,708
Credit card			2,072			-		-		2,440		2,440
Other consumer loans			1,592			-		-		1,669		1,669
Unallocated ALLL			(114	)		-		-		-		-
Total portfolio loans and leases, net	$		90,696			-		-		92,469		92,469
Financial liabilities:
Deposits	$		105,461			-		105,407		-		105,407
Federal funds purchased			178			178		-		-		178
Other short-term borrowings			1,335			-		1,335		-		1,335
Long-term debt			14,800			14,752		464		-		15,216
		Net Carrying			Fair Value Measurements Using						Total
As of December 31, 2017 ($ in millions)		Amount			Level 1		Level 2		Level 3		Fair Value
Financial assets:
Cash and due from banks	$		2,514			2,514		-		-		2,514
Other short-term investments			2,753			2,753		-		-		2,753
Other securities			612			-		612		-		612
Held-to-maturity securities			24			-		-		24		24
Loans and leases held for sale			93			-		-		93		93
Portfolio loans and leases:
Commercial and industrial loans			40,519			-		-		41,718		41,718
Commercial mortgage loans			6,539			-		-		6,490		6,490
Commercial construction loans			4,530			-		-		4,560		4,560
Commercial leases			4,054			-		-		3,705		3,705
Residential mortgage loans			15,365			-		-		15,996		15,996
Home equity			6,968			-		-		7,410		7,410
Automobile loans			9,074			-		-		8,832		8,832
Credit card			2,182			-		-		2,616		2,616
Other consumer loans			1,526			-		-		1,621		1,621
Unallocated ALLL			(120	)		-		-		-		-
Total portfolio loans and leases, net	$		90,637			-		-		92,948		92,948
Financial liabilities:
Deposits	$		103,162			-		103,123		-		103,123
Federal funds purchased			174			174		-		-		174
Other short-term borrowings			4,012			-		4,012		-		4,012
Long-term debt			14,904			15,045		529		-		15,574

103

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

22. 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, 2018 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2017, thus net interest income for deposit-providing business segments was positively impacted during 2018. 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 2018.

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 is 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 results of operations and financial position for the three months ended March 31, 2017 were adjusted to reflect changes in internal expense allocation methodologies.

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 1,153 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 five main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; ClearArc Capital, Inc., an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Insurance Agency, 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 Insurance Agency, Inc. assists clients with their financial and risk management needs. 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:

											Wealth		General
		Commercial			Branch			Consumer			and Asset		Corporate
March 31, 2018 ($ in millions)		Banking			Banking			Lending			Management		and Other			Eliminations		Total
Net interest income	$		419			466			59			43		9			-		996
Provision for (benefit from) loan and lease losses			(20	)		44			12			16		(29	)		-		23
Net interest income after provision for loan and lease losses			439			422			47			27		38			-		973
Noninterest income:
Service charges on deposits			71			66			-			-		-			-		137
Wealth and asset management revenue			1			37			-			109		-			(34)(a)		113
Corporate banking revenue			86	(c)		1			-			1		-			-		88
Card and processing revenue			14			64			-			1		-			-		79
Mortgage banking net revenue			-			1			55			-		-			-		56
Other noninterest income			49			15	(b)		4			5		387			-		460
Securities losses, net			(2	)		-			-			-		(9	)		-		(11	)
Securities losses, net - non-qualifying hedges on MSRs			-			-			(13	)		-		-			-		(13	)
Total noninterest income			219			184			46			116		378			(34)		909
Noninterest expense:
Salaries, wages and incentives			70			110			39			44		184			-		447
Employee benefits			18			26			11			10		45			-		110
Net occupancy expense			7			43			3			3		19			-		75
Technology and communications			2			1			1			-		64			-		68
Equipment expense			5			13			-			-		13			-		31
Card and processing expense			1			29			-			-		(1	)		-		29
Other noninterest expense			281			215			52			74		(302	)		(34)		286
Total noninterest expense			384			437			106			131		22			(34)		1,046
Income (loss) before income taxes			274			169			(13	)		12		394			-		836
Applicable income tax expense (benefit)			15			35			(3	)		3		82			-		132
Net income (loss)			259			134			(10	)		9		312			-		704
Total goodwill	$		630			1,655			-			177		-			-		2,462
Total assets	$		58,829			60,197			22,384			10,611		(10,521)(d)			-		141,500

(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 $8 for branches and land. For more information refer to Note 7 and Note 21.

(c) Includes impairment charges of $2 for operating lease equipment. For more information refer to Note 21.

(d) Includes bank premises and equipment of $20 classified as held for sale. For more information refer to Note 7.

											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
Noninterest income:
Service charges on deposits			73			65			-			-		-			-		138
Wealth and asset management revenue			1			36			-			105		-			(34)(a)		108
Corporate banking revenue			73	(c)		1			-			-		-			-		74
Card and processing revenue			14			59			-			1		-			-		74
Mortgage banking net revenue			-			1			51			-		-			-		52
Other noninterest income			41			22	(b)		4			-		10			-		77
Total noninterest income			202			184			55			106		10			(34)		523
Noninterest expense:
Salaries, wages and incentives			67			104			37			39		164			-		411
Employee benefits			18			27			11			9		46			-		111
Net occupancy expense			7			47			3			2		19			-		78
Technology and communications			3			1			1			-		53			-		58
Equipment expense			4			13			-			-		11			-		28
Card and processing expense			1			29			-			-		-			-		30
Other noninterest expense			260			192			54			67		(269	)		(34)		270
Total noninterest expense			360			413			106			117		24			(34)		986
Income (loss) before income taxes			261			159			(5	)		23		(42	)		-		396
Applicable income tax expense (benefit)			44			56			(2	)		8		(15	)		-		91
Net income (loss)			217			103			(3	)		15		(27	)		-		305
Total goodwill	$		613			1,655			-			151		-			-		2,419
Total assets	$		57,672			57,883			21,994			9,644		(6,993)(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 21.

(c) Includes impairment charges of $31 for operating lease equipment. For more information refer to Note 21.

(d) Includes bank premises and equipment of $51 classified as held for sale. For more information refer to Note 7.

105

PART II. OTHER INFORMATION

Legal Proceedings (Item 1)

Refer to Note 16 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 2018 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 2018.

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.
4.1	Sixth Supplemental Indenture dated as of March 14, 2018 between Fifth Third Bancorp and Wilmington Trust Company, as Trustee, to the Indenture for Senior Debt Securities dated as of April 30, 2008 between Fifth Third Bancorp and the Trustee. Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 14, 2018.
4.2	Form of 3.950% Senior Notes due 2028. Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 14, 2018.
10.1	Fifth Amendment to Fifth Third Bancorp 401(k) Savings Plan, as Amended and Restated effective January 1, 2015.*
10.2	Fourth Amendment to Fifth Third Bancorp Non-qualified Deferred Compensation Plan, as Amended and Restated effective January 1, 2013.*
10.3	2018 Restricted Stock Unit Grant Agreement (for Directors)
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.

**An application for confidential treatment for selected portions of this exhibit has been filed with the Securities and Exchange Commission.

106

Signature

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 4, 2018
	/s/ Tayfun Tuzun
	Tayfun Tuzun
	Executive Vice President and
	Chief Financial Officer
	(Duly Authorized Officer & Principal Financial Officer)

107

EX-10.1

Exhibit 10.1

FIFTH AMENDMENT

TO THE

FIFTH THIRD BANCORP 401(k) SAVINGS PLAN

(January 1, 2015 Restatement)

WHEREAS, Fifth Third Bank (“Fifth Third”) sponsors and maintains the Fifth Third Bancorp 401(k) Savings Plan, as amended and restated effective January 1, 2015 (“Plan”);

WHEREAS, Fifth Third desires to amend the Plan to (i) provide for the elimination of Fifth Third Stock Fund effective as of September 20, 2019 and (ii) to make minor changes to the plan’s provisions related to loans and qualified domestic relations orders;

WHEREAS, pursuant to Plan section 12.1(a), Fifth Third reserved the right to amend the Plan at any time; and

WHEREAS, pursuant to Plan section 12.1(b), Fifth Third delegated authority to the Fifth Third Bank Pension, 401(k) and Medical Plans Committee and its Chairman to amend the Plan.

NOW, THEREFORE, effective as of the date of this Fifth Amendment, the Plan is hereby amended in the following respects:

1. Section 7.3(a) of the Plan is amended to add the following paragraph at the end:

“Notwithstanding the foregoing, the Fifth Third Stock Fund shall continue to be offered as a separate fund until September 20, 2019 at which time the stock fund shall cease to be offered as a separate fund. The Administrator or, to the extent the Administrator has engaged an independent fiduciary or ERISA section 3(38) investment manager to manage or control the Fifth Third Stock Fund, such independent fiduciary or ERISA section 3(38) investment manager shall have the authority and is directed to take any and all actions as are necessary to effect the provisions of this paragraph.”

2. Section 7.5(b)(6) of the Plan is amended to read as follows:

“(6)     Loans shall bear a reasonable rate of interest commensurate with current interest rates charged for loans made under similar circumstances by entities in the business of lending money.”

3. Section 14.2(b)(2) of the Plan is amended to read as follows:

“(2)     Immediate Distribution Available. Distribution of the Alternate Payee’s benefit may be made or may commence as soon as administratively feasible after the Plan Administrator’s receipt of the order, determination of its qualified status, and determination of the amount payable thereunder.”

4. Except as otherwise amended herein, the Plan shall continue in full force and effect.

IN WITNESS WHEREOF, Fifth Third has caused this amendment to be executed by its duly authorized representative this 12^th day of April, 2018.

FIFTH THIRD BANK
By:	/s/ Robert P. Shaffer
	Chairperson for the Fifth Third Bank Pension, 401(k) and Medical Plan Committee

EX-10.2

Exhibit 10.2

FOURTH AMENDMENT

TO THE

FIFTH THIRD BANCORP NONQUALIFIED DEFERRED COMPENSATION PLAN

(January 1, 2013 Restatement)

WHEREAS, Fifth Third Bank (“Fifth Third”) sponsors and maintains the Fifth Third Bancorp Nonqualified Deferred Compensation Plan, as amended and restated effective January 1, 2013 (“Plan”);

WHEREAS, Fifth Third desires to amend the Plan to provide for the elimination of an investment benchmark that is based upon the performance of Fifth Third common stock effective as of September 20, 2019; and

WHEREAS, pursuant to Plan section 15.1, Fifth Third reserved the right to amend the Plan at any time, and delegated authority to the Fifth Third Bank Pension, 401(k) and Medical Plans Committee and its Chairman to amend the Plan.

NOW, THEREFORE, effective as of the execution date of this Fourth Amendment, the Plan is hereby amended in the following respects:

1. Section 8.2 of the Plan is amended to add the following paragraph at the end:

“Notwithstanding the foregoing, as of September 20, 2019, the Fifth Third Stock Fund shall cease to be used as an investment benchmark. The Committee shall have the authority and is directed to take any and all actions as are necessary to effect the provisions of this paragraph.”

2. Except as otherwise amended herein, the Plan shall continue in full force and effect.

IN WITNESS WHEREOF, Fifth Third has caused this amendment to be executed by its duly authorized representative this 12^th day of April, 2018.

FIFTH THIRD BANK
By:	/s/ Robert P. Shaffer
	Chairperson for the Fifth Third Bank Pension, 401(k) and Medical Plan Committee

EX-10.3

Exhibit 10.3

Restricted Stock Unit Grant Agreement

[Participant Name]

It is my pleasure to inform you that you are hereby granted an award of Restricted Stock Units (“Grant”) subject to the terms and conditions contained in this Grant Agreement and the terms of the Fifth Third Bancorp 2017 Incentive Compensation Plan (the “Plan”) (collectively, the Grant Agreement and Plan shall be referred to herein as the “Grant Terms”).

Grant Date of Restricted Stock Units                    [Grant Date]

Total Number of Restricted Units Granted            [Number of shares granted]

This Restricted Stock Unit (“RSU”) Grant will 100% cliff vest on either the date your service as a non-employee Director of Fifth Third Bancorp ends or the distribution date you selected pursuant to the deferral election process subject to the terms and conditions of the Plan. On the vesting/distribution date, the granted RSUs will convert to Fifth Third Bancorp common stock and shares will be issued and registered in your name by the Bancorp.

You do not have voting rights on your unvested RSUs and are not eligible to receive actual dividend payments; however, you will receive dividend equivalent payments each time a dividend is declared (typically quarterly). Dividend equivalents will be distributed in accordance with the election made on the Restricted Stock Unit Deferral Election Payout form, or, in the absence of an election, paid in cash.

Articles 12.2, 12.3 or 12.4 of the Plan govern treatment of this Grant upon a separation of service. “Retirement” shall mean separation from service for any reason (other than death, disability or under circumstances determined by Fifth Third to constitute cause).

Any bonus, commission, compensation, or awards granted to you under the Plan is subject to recovery, or “clawback” by the Company in such amount and with respect to such time period as the Committee shall determine to be required by policy, applicable law, rules, or regulations if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, or as otherwise required by law. In addition, all executive compensation plans and awards are automatically amended as necessary to comply with the requirements and/or limitations under any other laws, rules, regulations, or regulatory agreements up to and including a revocation of this Grant.

Acceptance of this Grant confirms your agreement to the Grant Terms, copies of which were delivered with this Agreement. In the event of any conflict between the terms of this Grant Agreement and the Plan, the terms of the Plan shall control. In addition, you confirm that you have received, or have access to, the 2017 Incentive Compensation Plan Prospectus.

This Award will expire by its own terms unless accepted within 60 days.

For Fifth Third Bancorp:
	[Grant Date]
Greg D. Carmichael	Date
Chairman, President & Chief Executive Officer

[Acceptance Date]

[Participant Name]

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933, as amended.

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, 2018
Excluding Interest on Deposits:
Fixed Charges:
Interest Expense (Excluding Interest On Deposits)		$115
One-Third of Rents, Net of Income from Subleases		7
Total Fixed Charges		$122
Earnings:
Income Before Income Taxes		$836
Fixed Charges		122
Total Earnings		$958
Ratio of Earnings to Fixed Charges, Excluding Interest on Deposits		7.85x
Including Interest on Deposits:
Fixed Charges:
Interest Expense		$210
One-Third of Rents, Net of Income from Subleases		7
Total Fixed Charges		$217
Earnings:
Income Before Income Taxes		$836
Fixed Charges		217
Total Earnings		$1,053
Ratio of Earnings to Fixed Charges, Including Interest on Deposits		4.85x

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, 2018
Excluding Interest on Deposits:
Fixed Charges:
Interest Expense (Excluding Interest On Deposits)		$115
One-Third of Rents, Net of Income from Subleases		7
Preferred Stock Dividends		15
Total Fixed Charges		$137
Earnings:
Income Before Income Taxes		$836
Fixed Charges, Excluding Preferred Stock Dividends		122
Total Earnings		$958
Ratio of Earnings to Fixed Charges, Excluding Interest on Deposits		6.99x
Including Interest on Deposits:
Fixed Charges:
Interest Expense		$210
One-Third of Rents, Net of Income from Subleases		7
Preferred Stock Dividends		15
Total Fixed Charges		$232
Earnings:
Income Before Income Taxes		$836
Fixed Charges, Excluding Preferred Stock Dividends		217
Total Earnings		$1,053
Ratio of Earnings to Fixed Charges, Including Interest on Deposits		4.54x

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

Chairman, President and Chief Executive Officer

May 4, 2018

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 4, 2018

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, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Greg D. Carmichael, Chairman, 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

Chairman, President and Chief Executive Officer

May 4, 2018

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, 2018 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 4, 2018

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
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		685,495,676
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes

XML

CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited - USD ($) $ in Millions		Mar. 31, 2018		Dec. 31, 2017
Assets
Cash and due from banks		$ 2,038		$ 2,514
Other short-term investments	[1]	1,747		2,753
Available-for-sale debt and other securities	[2]	31,819		31,751
Held-to-matury securities	[3]	23		24
Trading debt securities		571		492
Equity securities		418		439
Loans and leases held for sale	[4]	717		492
Portfolio loans and leases	[1],[5]	91,970		91,970
ALLL	[1]	(1,138)	[6]	(1,196)	[7]
Portfolio loans and leases, net		90,832		90,774
Bank premises and equipment	[8]	1,966		2,003
Operating lease equipment		625		646
Goodwill		2,462		2,445
Intangible assets		30		27
Servicing rights		926		858
Other assets	[1]	7,326		6,975
Total Assets		141,500		142,193
Deposits
Noninterest-bearing deposits		34,066		35,276
Interest-bearing deposits		71,395		67,886
Total deposits		105,461		103,162
Federal funds purchased		178		174
Other short-term borrowings		1,335		4,012
Accrued taxes, interest and expenses		1,104		1,412
Other liabilities	[1]	2,418		2,144
Long-term debt	[1]	14,800		14,904
Total liabilities		125,296		125,808
Equity
Common stock	[9]	2,051		2,051
Preferred stock	[10]	1,331		1,331
Capital surplus		2,828		2,790
Retained earnings		15,707		15,122
Accumulated other comprehensive income		(389)		73
Treasury stock	[9]	(5,344)		(5,002)
Total Bancorp Shareholders' Equity		16,184		16,365
Noncontrolling interests		20		20
Total Equity		16,204		16,385
Total Liabilities and Equity		$ 141,500		$ 142,193

[1] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[2] Amortized cost of $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

[3] Fair value of $ 23 and $ 24 at March 31, 2018 and December 31, 2017 , respectively.

[4] Includes $ 650 and $ 399 of residential mortgage loans held for sale measured at fair value and $ 16 and $ 0 of commercial loans held for sale measured at fair value at March 31, 2018 and December 31, 2017 , respectively.

[5] Includes $ 136 and $ 137 of residential mortgage loans measur ed at fair value at March 31, 2018 and December 31, 2017 , respectively.

[6] Includes $ 1 related to leveraged leases at March 31, 2018 .

[7] Includes $ 1 related to leveraged leases at December 31, 2017 .

[8] Includes $ 20 and $ 27 of bank premises and equipment held for sale at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 7 .

[9] Common shares: Stated value $2.22 per share; authorized 2,000,000,000 ; outstanding at March 31, 2018 – 684,941,986 (excludes 238,950,595 treasury shares), Decemb er 31, 2017 – 693,804,893 (excludes 230,087,688 treasury shares).

[10] 446,000 shares of undesignated no par value preferred stock are authorized and unissued at March 31, 2018 and December 31, 2017 ; fixed-to-floating rate non-cumulative Series H perpetual preferred stock with a $25,000 liquidat ion preference: 24,000 authorized shares, issued and outstanding at March 31, 2018 and December 31, 2017 ; 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, 2018 and December 31, 2017 ; 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, 2018 and December 31, 2017 .

XML

CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (Parenthetical) - USD ($) $ in Millions		Mar. 31, 2018		Dec. 31, 2017
Other short-term investments	[1]	$ 1,747		$ 2,753
Portfolio loans and leases	[1],[2]	91,970		91,970
ALLL	[1]	(1,138)	[3]	(1,196)	[4]
Other assets	[1]	7,326		6,975
Other liabilities	[1]	2,418		2,144
Long-term debt	[1]	14,800		14,904
Available-for-sale debt securities, amortized cost		32,230		31,577
Held-to-maturity securities, fair value		23		24
Commercial loans held for sale measured at FV		650		399
Bank premises and equipment held for sale		$ 20		$ 27
Common stock, stated value		$ 2.22		$ 2.22
Common stock, authorized		2,000,000,000		2,000,000,000
Common stock, outstanding		684,941,986		693,804,893
Common stock, treasury shares		238,950,595		230,087,688
Residential Mortgage
Loans measured at FV		$ 136		$ 137
Commercial
Portfolio loans and leases		56,829		56,395
ALLL		(713)	[3]	(753)	[4]
Commercial loans held for sale measured at FV		16		0
Variable Interest Entities
Other short-term investments		66		62
Portfolio loans and leases		1,135		1,297
ALLL		(6)		(6)
Other assets		6		7
Other liabilities		2		2
Long-term debt		$ 1,031		$ 1,190
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 $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[2] Includes $ 136 and $ 137 of residential mortgage loans measur ed at fair value at March 31, 2018 and December 31, 2017 , respectively.

[3] Includes $ 1 related to leveraged leases at March 31, 2018 .

[4] Includes $ 1 related to leveraged leases at December 31, 2017 .

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest Income
Interest and fees on loans and leases	$ 938	$ 839
Interest on securities	263	245
Interest on other short-term investments	5	2
Total interest income	1,206	1,086
Interest Expense
Interest on deposits	95	59
Interest on federal funds purchased	2	1
Interest on other short-term borrowings	8	3
Interest on long-term debt	105	90
Total interest expense	210	153
Net Interest Income	996	933
Provision for loan and lease losses	23	74
Net Interest Income After Provision for Loan and Lease Losses	973	859
Noninterest Income
Service charges on deposits	137	138
Wealth and asset management revenue	113	108
Corporate banking revenue	88	74
Card and processing revenue	79	74
Mortgage banking net revenue	56	52
Other noninterest income	460	77
Securities gains (losses), net	(11)	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	(13)	0
Total noninterest income	909	523
Noninterest Expense
Salaries, wages and incentives	447	411
Employee benefits	110	111
Net occupancy expense	75	78
Technology and communications	68	58
Equipment expense	31	28
Card and processing expense	29	30
Other noninterest expense	286	270
Total noninterest expense	1,046	986
Income (Loss) Before Income Taxes	836	396
Applicable income tax expense	132	91
Net Income (loss)	704	305
Less: Net income attributable to noncontrolling interests	0	0
Net income attributable to Bancorp	704	305
Dividends on preferred stock	15	15
Net income (loss) available to common shareholders	$ 689	$ 290
Earnings per share - basic	$ 0.99	$ 0.38
Earnings per share - diluted	$ 0.97	$ 0.38
Average common shares outstanding- basic	689,820,295	747,667,521
Average common shares oustanding - diluted	704,100,936	760,809,239
Common stock dividends declared per share	$ 0.16	$ 0.14

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement Of Income And Comprehensive Income
Net income (loss)	$ 704	$ 305
Other Comprehensive Income (Loss), Net of Tax
Unrealized holding gains (losses) on available-for-sale securities arising during period	(460)	15
Reclassification adjustment for net (gains) losses included in net income	7	1
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(7)	(3)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(1)	(5)
Reclassification of amounts to net periodic benefit costs	1	1
Other comprehensive income (loss), Net of Tax	(460)	9
Comprehensive income	244	314
Comprehensive income attributable to noncontrolling interests	0	0
Comprehensive income attributable to Bancorp	$ 244	$ 314

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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, 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 $0.16 in 2018 and $0.14 in 2017 per share		106				106					(106)
Preferred stock	[1]	(15)				(15)					(15)
Shares acquired for treasury		0			23					(23)	0
Impact of stock transactions under stock compensation plans, net		32			24					8	32
Other		0
Ending Balance at Mar. 31, 2017		16,457	2,051	1,331	2,803	13,625		68		(3,448)	16,430		27
Beginning Balance at Dec. 31, 2017		16,385	2,051	1,331	2,790	15,122		73		(5,002)	16,365		20
Net income (loss)		704
Other comprehensive income (loss), Net of Tax		(460)
Ending Balance at Mar. 31, 2018		16,204	2,051	1,331	2,828	15,707		(389)		(5,344)	16,184		20
Impact of cumulative effect of change in accounting principles		4				6	[2]	(2)	[2]		4	[2]
Beginning Balance at Jan. 01, 2018		16,389	2,051	1,331	2,790	15,128		71		(5,002)	16,369		20
Net income (loss)		704				704					704
Other comprehensive income (loss), Net of Tax		(460)						(460)			(460)
Cash dividends declared:
Common stock at $0.16 in 2018 and $0.14 in 2017 per share		110				110					110
Preferred stock	[1]	(15)				(15)					(15)
Shares acquired for treasury		(318)			(41)					(359)	(318)
Impact of stock transactions under stock compensation plans, net		14			(3)					17	14
Ending Balance at Mar. 31, 2018		$ 16,204	$ 2,051	$ 1,331	$ 2,828	$ 15,707		$ (389)		$ (5,344)	$ 16,184		$ 20

[1] For both the three months ended March 31, 2018 and 2017 , dividends were $ 414.06 per preferred share for Perpetual Preferred Stock, Series I and $ 612.5 0 per preferred share for Perpetual Preferred Stock, Series J.

[2] Related to the adopt ion as of January 1, 2018 of ASU 2016-01, ASU 2017-12 and ASU 2018-02 . Refer to Note 3 for additional information.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Unaudited (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Common stock, per share	$ 0.16	$ 0.14
Preferred stock Series I
Preferred stock, per share	414.06	414.06
Preferred stock Series J
Preferred stock, per share	$ 612.5	$ 612.5

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Operating Activities
Net income		$ 704	$ 305
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (benefit from) loan and lease losses		23	74
Depreciation, amortization and accretion		93	89
Stock-based compensation expense		45	45
Provision for (benefit from) deferred income taxes		24	(11)
Securities gains (losses), net		12	(1)
Securities gains (losses), net - non-qualifying hedges on mortgage servicing rights		13	0
MSR Fair Value Adjustment	[1]	(28)	23
Net gains on sales of loans and fair value adjustments on loans held for sale		(16)	(34)
Net losses (gains) on disposition and impairment of bank premises and equipment		(8)	(1)
Net losses on disposition and impairment of operating lease equipment		(2)	(20)
Gain on Vantiv and Worldpay transaction		(414)	0
Proceeds from sales of loans held for sale		1,055	1,627
Loans originated for sale, net of repayments		(1,293)	(1,483)
Dividends representing return on equity method investments		3	9
Net change in:
Trading securities		(74)	(277)
Other assets		244	109
Accrued taxes, interest and expenses		(195)	(142)
Other liabilities		59	176
Net Cash Provided by (Used in) Operating Activities		265	530
Proceeds from sales:
Available-for-sale securities		7,345	2,191
Loans		57	21
Bank premises and equipment		18	6
Proceeds from repayments / maturities:
Available-for-sale securities		543	604
Purchases:
Available-for-sale securities		(8,605)	(2,975)
Bank premises and equipment		(48)	(52)
MSRs		(24)	(29)
Proceeds from sale and dividends representing return of equity method investments		11	69
Proceeds from settlement of BOLI		3	6
Net cash paid on acquisitions		(20)	0
Net change in:
Other short-term investments		1,006	1,110
Loans and leases		(122)	368
Operating lease equipment		(1)	(6)
Net Cash Provided by (Used in) Investing Activities		163	1,313
Net change in:
Deposits		2,299	335
Federal funds purchased		4	23
Other short-term borrowings		(2,677)	(1,520)
Dividends paid on common stock		(112)	(106)
Dividends paid on preferred stock		(23)	(38)
Proceeds from issuance of long-term debt		645	0
Repayment of long-term debt		(686)	(714)
Repurchase of treasury stock and related forward contract		318	0
Other		(36)	(10)
Net Cash Provided by (Used in) Financing Activities		(904)	(2,030)
Increase (Decrease) in Cash and Due from Banks		(476)	(187)
Cash and Due from Banks at Beginning of Period		2,514	2,392	[2]
Cash and Due from Banks at End of Period		$ 2,038	$ 2,205

[1] (a) Included in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

[2] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

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Basis of Presentation

3 Months Ended

Mar. 31, 2018

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 accounted for utilizing the measurement alternative to fair value which permits carrying the investment at its cost basis, as adjusted for impairments and observable price changes. 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, 2018 and 2017 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2017 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, 2018

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)		2018	2017
Cash Payments:
Interest	$	200	208
Income taxes		19	18
Transfers:
Portfolio loans to loans held for sale		64	5
Loans held for sale to portfolio loans		34	3
Portfolio loans to OREO		12	12

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Accounting and Reporting Developments

3 Months Ended

Mar. 31, 2018

Accounting and Reporting Developments

Accounting and Reporting Developments

3. Accounting and Reporting Developments

Standards Adopted in 2018

The Bancorp adopted the following new accounting standards effective January 1, 2018:

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 follow the same effective date and transition requirements. The Bancorp adopted the amended guidance on January 1, 2018, using a modified retrospective approach. 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 adoption of this amended guidance did not have a material impact on the Bancorp’s Condensed Consolidated Financial Statements. However, the Bancorp is subject to expanded disclosure requirements and has updated its revenue recognition policies and procedures. While the Bancorp has concluded the following changes are not material to its Condensed Consolidated Financial Statements, upon adoption the Bancorp changed its presentation of certain underwriting expenses incurred by its broker-dealer subsidiary from net to gross presentation and also changed its presentation of certain credit card rewards program expenses from gross to net presentation. Neither change impacts income before income taxes or net income.

In conjunction with adoption of ASU 2014-09, the Bancorp is providing the following additional disclosures about its significant accounting and reporting policies related to revenue recognition.

Revenue Recognition

The Bancorp generally measures revenue based on the amount of consideration the Bancorp expects to be entitled for the transfer of goods or services to a customer, then recognizes this revenue when or as the Bancorp satisfies its performance obligations under the contract, except in transactions where U.S. GAAP provides other applicable guidance. When the amount of consideration is variable, the Bancorp will only recognize revenue to the extent that it is probable that the cumulative amount recognized will not be subject to a significant reversal in the future. Substantially all of the Bancorp’s contracts with customers have expected durations of one year or less and payments are typically due when or as the services are rendered or shortly thereafter. When third parties are involved in providing goods or services to customers, the Bancorp recognizes revenue on a gross basis when it has control over those goods or services prior to transfer to the customer; otherwise, revenue is recognized for the net amount of any fee or commission. The Bancorp excludes sales taxes from the recognition of revenue and recognizes the incremental costs of obtaining contracts as an expense if the period of amortization for those costs would be one year or less.

The Bancorp’s interest income is derived from loans and leases, securities and other short-term investments. The Bancorp recognizes interest income in accordance with the applicable guidance in U.S. GAAP for these assets. Refer to the Portfolio Loans and Leases and Securities sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information. The following provides additional information about the components of noninterest income:

• Service charges on deposits consist primarily of treasury management fees for commercial clients, monthly service charges on consumer deposit accounts, transaction-based fees (such as overdraft fees and wire transfer fees), and other deposit account-related charges. The Bancorp’s performance obligations for treasury management fees and consumer deposit account service charges are typically satisfied over time, while performance obligations for transaction-based fees are typically satisfied at a point in time. Revenues are recognized on an accrual basis when or as the services are provided to the customer, net of applicable discounts, waivers and reversals. Payments are typically collected from customers directly from the related deposit account at the time the transaction is processed and/or at the end of the customer’s statement cycle (typically monthly).
• Wealth and asset management revenue consists primarily of service fees for investment management, custody, and trust administration services provided to commercial and consumer clients. The Bancorp’s performance obligations for these services are generally satisfied over time and revenues are recognized monthly based on the fee structure outlined in individual contracts. Transaction prices are most commonly based on the market value of assets under management or care and/or a fee per transaction processed. The Bancorp offers certain services, like tax return preparation, for which the performance obligations are satisfied and revenue is recognized at a point in time, when the services are performed. Wealth and asset management revenue also includes trailing commissions received from investments and annuities held in customer accounts, which are recognized in revenue when the Bancorp determines it is probable that the commission will be received.
• Corporate banking revenue consists primarily of service fees and other income related to loans and leases to commercial clients, underwriting revenue recognized by the Bancorp’s broker-dealer subsidiary and fees for other services provided to commercial clients. Revenue related to loans and leases is recognized in accordance with the Bancorp’s policies for portfolio loans and leases. Underwriting revenue is generally recognized on the trade date, which is when the Bancorp’s performance obligations are satisfied.
• Card and processing revenue consists primarily of ATM fees and interchange fees earned when the Bancorp’s credit and debit cards are processed through card association networks. The Bancorp’s performance obligations are generally complete when the transactions generating the fees are processed. Revenue is recognized on an accrual basis as such services are performed, net of certain costs not controlled by the Bancorp (primarily interchange fees charged by credit card associations and expenses of certain transaction-based rewards programs offered to customers). These costs reduced card and processing revenue by approximately $29 million for the three months ended March 31, 2018.
• Mortgage banking net revenue consists primarily of origination fees and gains on loan sales, mortgage servicing fees and the impact of MSRs. Refer to the Loans and Leases Held for Sale and Loan Sales and Securitizations sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.
• Other noninterest income includes income from operating leases, certain fees derived from loans and leases, BOLI income, gains and losses on other assets, and other miscellaneous revenues and gains.

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 OCI 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. In February 2018, the FASB also issued ASU 2018-03 which makes technical corrections and improvements to the amendments in ASU 2016-01. The Bancorp adopted the amended guidance on January 1, 2018. As permitted, the Bancorp elected to early adopt ASU 2018-03 on January 1, 2018, concurrent with the adoption of ASU 2016-01. The adoption did not have a material impact on the Condensed Consolidated Financial Statements. However, equity securities affected by the amended guidance which were previously classified as trading or available-for-sale have been reclassified in the Condensed Consolidated Balance Sheets as equity securities. For certain equity securities without a readily determinable fair value that are not accounted for using the equity method, the Bancorp has elected to use the permitted measurement alternative, which is to adjust the cost basis of the investment upon either the occurrence of an observable price change or the identification of an impairment. For these securities, the amended guidance was applied prospectively to investments that existed on or after January 1, 2018. The other portions of the amended guidance were applied on a modified retrospective basis.

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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

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

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 Bancorp adopted the amended guidance retrospectively on January 1, 2018. The adoption did not have a material impact on the 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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the 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 Bancorp adopted the amended guidance prospectively on January 1, 2018 and will apply this amended guidance to future transactions to determine if they should be accounted for as acquisitions (or disposals) of assets or businesses.

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 Bancorp adopted the amended guidance on January 1, 2018 using a modified retrospective approach. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2017-09 Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting

In May 2017, the FASB issued ASU 2017-09 which provides guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting in Topic 718. The amendments specify that an entity should account for the effects of such changes as a modification unless the fair value, vesting conditions and classification (as an equity or liability) of the awards are all unaffected by the change. The Bancorp adopted the amended guidance prospectively on January 1, 2018. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued ASU 2017-12 which makes several amendments to existing guidance for hedge accounting. As permitted, the Bancorp elected to early adopt the amended guidance on January 1, 2018. For certain fair value hedges of interest rate risk, the Bancorp elected to modify the measurement methodology for the hedged item to be the benchmark rate component of the contractual coupon cash flows and also elected to de-designate a portion of the existing hedging relationship, as permitted. Upon adoption, changes in the fair value of cash flow hedges are recorded in AOCI and then subsequently reclassified into earnings when the hedged item affects earnings. Also, for both fair value hedges and cash flow hedges, changes in the fair value of the derivative instrument are recorded in the same income statement line item as the effects of the hedged item, eliminating the separate measurement of hedge ineffectiveness. The Bancorp recorded a cumulative-effect adjustment to retained earnings for the impact of these elections as well as the elimination of the separate measurement of ineffectiveness from AOCI for cash flow hedges existing at January 1, 2018, the amount of which was not material. The amended presentation and disclosure guidance was applied prospectively.

ASU 2018-02 Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02 which allows for reclassification from AOCI to retained earnings of stranded tax effects resulting from the TCJA. Stranded tax effects result from the reduction in the top federal statutory income tax rate from 35 percent to 21 percent as deferred tax assets and liabilities are adjusted for the impact of a change in tax rate through income tax expense, even in situations when the related items giving rise to the deferred taxes are components of AOCI, which are carried net of tax. As permitted, the Bancorp elected to early adopt this amended guidance and recorded a reclassification adjustment from AOCI to retained earnings as of January 1, 2018, the amount of which was not material.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of March 31, 2018:

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. In January 2018, the FASB issued ASU 2018-01 which provides a practical expedient for transition related to land easements. The FASB has also proposed additional amendments to the new guidance which, among other things, include an option to recognize a cumulative effect adjustment to retained earnings in the period of adoption instead of applying the guidance to prior comparative periods, but these additional amendments are not yet final. The Bancorp will adopt the amended guidance on the required effective date of January 1, 2019, and expects to elect the transition relief provisions. From a lessee perspective, the Bancorp is currently finalizing its inventory of all leases, accumulating the lease data necessary to apply the amended guidance, and evaluating the business process and technology requirements which will be necessary after adoption. 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, but does not expect a material impact to expense recognition. From a lessor perspective, given the limited changes, the Bancorp does not expect adoption of the amended guidance to have a material impact based on its preliminary analysis. However, the Bancorp is continuing to evaluate the impact of the amended guidance, particularly related to the deferral of costs incurred in originating leases. The Bancorp also expects to record a cumulative-effect adjustment to retained earnings upon adoption to recognize any remaining deferred gains on sale-leaseback transactions that occurred prior to the date of initial application. The Bancorp had approximately $13 million of such deferred gains recorded as of March 31, 2018. These expectations may change as the implementation process continues.

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. This model applies to 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. Early adoption is permitted as soon as January 1, 2019, but the Bancorp currently expects to adopt on the mandatory effective date. 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 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, with early adoption permitted, and is to be applied prospectively to all goodwill impairment tests performed after the adoption date.

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 plans to adopt the amended guidance on its required effective date of January 1, 2019 and is currently in the process of evaluating the impact of the amended guidance on its Condensed Consolidated Financial Statements. However, the Bancorp does not currently expect the impact of adoption to be material.

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Investment Securities

3 Months Ended

Mar. 31, 2018

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 debt and other securities and held-to-maturity investment securities portfolios as of:
				Amortized	Unrealized	Unrealized	Fair
March 31, 2018 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agencies securities		$	98	-	(2)	96
	Obligations of states and political subdivisions securities			43	1	-	44
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,456	37	(285)	15,208
		Agency commercial mortgage-backed securities		10,612	13	(170)	10,455
		Non-agency commercial mortgage-backed securities		3,219	16	(45)	3,190
	Asset-backed securities and other debt securities			2,190	38	(14)	2,214
	Other securities(a)			612	-	-	612
Total available-for-sale debt and other securities			$	32,230	105	(516)	31,819
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	21	-	-	21
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	23	-	-	23

Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $362 and $2, respectively, at March 31, 2018, that are carried at cost.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2017 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agencies securities		$	98	-	-	98
	Obligations of states and political subdivisions securities			43	1	-	44
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		15,281	118	(80)	15,319
		Agency commercial mortgage-backed securities		10,113	92	(38)	10,167
		Non-agency commercial mortgage-backed securities		3,247	51	(5)	3,293
	Asset-backed securities and other debt securities			2,183	46	(11)	2,218
	Other securities(b)			612	-	-	612
Total available-for-sale debt and other securities			$	31,577	308	(134)	31,751
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	22	-	-	22
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	24	-	-	24

• Includes interest-only mortgage-backed securities of $34 as of December 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.
• Other securities consist of FHLB, FRB and DTCC restricted stock holdings of$248, $362 and $2, respectively, at December 31, 2017, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:
		March 31,	December 31,
($ in millions)		2018	2017
Trading debt securities	$	571	492
Equity securities		418	439

The following table presents net realized gains and losses that were recognized in income from available-for-sale debt and other securities as well as total (losses) gains that were recognized in income from trading debt securities and equity securities:
			For the three months ended
			March 31,
($ in millions)			2018	2017
Available-for-sale debt and other securities:
	Realized gains	$	34	9
	Realized losses		(43)	(1)
	OTTI(a)		-	(10)
Net realized losses on available-for sale debt and other securities(b)		$	(9)	(2)
Total trading debt securities (losses) gains(c)		$	(14)	1
Total equity securities (losses) gains(d)(e)		$	(3)	1
Total gains and losses recognized in income from available-for-sale debt and other securities,
	trading debt securities, and equity securities	$	(26)	-

• Included in securities losses, net in the Condensed Consolidated Statements of Income.
• Excludesnet gainsof $1on interest-only mortgage-backed securities for both the three months ended March 31, 2018 and 2017.
• Includes a net loss of $1and a net gain of $1 for the three months ended March 31, 2018and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes an immaterial net loss and an immaterial net gain for the three months ended March 31, 2018and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes a net unrealized loss of $2 and a net unrealized gain of $1 for the three months ended March 31, 2018 and 2017, respectively.

At March 31, 2018 and December 31, 2017, investment securities with a fair value of $7.1billion and $7.8 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 debt and other securities and held-to-maturity investment securities as of March 31, 2018 are shown in the following table:
			Available-for-Sale Debt and Other		Held-to-Maturity
($ in millions)			Amortized Cost	Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
	Less than 1 year	$	234	225	5	5
	1-5 years		8,664	8,562	15	15
	5-10 years		17,352	17,135	1	1
	Over 10 years		5,368	5,285	2	2
Other securities			612	612	-	-
Total		$	32,230	31,819	23	23

(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 debt 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, 2018
U.S. Treasury and federal agencies	$	96	(2)	-	-	96	(2)
Agency residential mortgage-backed securities		11,958	(256)	458	(29)	12,416	(285)
Agency commercial mortgage-backed securities		8,115	(144)	512	(26)	8,627	(170)
Non-agency commercial mortgage-backed securities		2,188	(38)	141	(7)	2,329	(45)
Asset-backed securities and other debt securities		312	(3)	377	(11)	689	(14)
Total	$	22,669	(443)	1,488	(73)	24,157	(516)
December 31, 2017
U.S. Treasury and federal agencies	$	98	-	-	-	98	-
Agency residential mortgage-backed securities		7,337	(59)	479	(21)	7,816	(80)
Agency commercial mortgage-backed securities		2,900	(22)	526	(16)	3,426	(38)
Non-agency commercial mortgage-backed securities		449	(2)	145	(3)	594	(5)
Asset-backed securities and other debt securities		317	(2)	386	(9)	703	(11)
Total	$	11,101	(85)	1,536	(49)	12,637	(134)

At both March 31, 2018 and December 31, 2017, an immaterial amount of unrealized losses in the available-for-sale debtand other securities portfolio were represented by non-rated securities.

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Loans and Leases

3 Months Ended

Mar. 31, 2018

Loans and Leases Receivable

Loans and Leases

6. 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 and lease 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 Note7.

The following table provides a summary of commercial loans and leases classified by primary purpose and consumer loans classified based upon product or collateral as of:
			March 31,	December 31,
($ in millions)			2018	2017
Loans and leases held for sale:
	Commercial and industrial loans	$	43	-
	Commercial mortgage loans		6	6
	Residential mortgage loans		668	486
Total loans and leases held for sale		$	717	492
Portfolio loans and leases:
	Commercial and industrial loans	$	41,635	41,170
	Commercial mortgage loans		6,509	6,604
	Commercial construction loans		4,766	4,553
	Commercial leases		3,919	4,068
Total commercial loans and leases		$	56,829	56,395
	Residential mortgage loans	$	15,563	15,591
	Home equity		6,757	7,014
	Automobile loans		9,018	9,112
	Credit card		2,188	2,299
	Other consumer loans		1,615	1,559
Total consumer loans		$	35,141	35,575
Total portfolio loans and leases		$	91,970	91,970

Total portfolio loans and leases are recorded net of unearned income, which totaled $507 million as of March 31, 2018 and $523 million as of December 31, 2017. 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 $289 million and $282 million as of March 31, 2018 and December 31, 2017, respectively.

The Bancorp’s FHLB and FRB advances are generally secured by loans. The Bancorp had loans of $13.2 billion and $13.0billion at March 31, 2018 and December 31, 2017, respectively, pledged at the FHLB, and loans of $40.7 billion and $39.8 billion at March 31, 2018 and December 31, 2017, 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)		2018	2017		2018	2017
Commercial and industrial loans	$	41,678	41,170		7	3
Commercial mortgage loans		6,515	6,610		1	-
Commercial construction loans		4,766	4,553		-	-
Commercial leases		3,919	4,068		-	-
Residential mortgage loans		16,231	16,077		62	57
Home equity		6,757	7,014		-	-
Automobile loans		9,018	9,112		9	10
Credit card		2,188	2,299		28	27
Other consumer loans		1,615	1,559		-	-
Total loans and leases	$	92,687	92,462		107	97
Less: Loans and leases held for sale	$	717	492
Total portfolio loans and leases	$	91,970	91,970
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)					2018	2017
Commercial and industrial loans				$	28	36
Commercial mortgage loans					1	5
Commercial leases					-	1
Residential mortgage loans					3	5
Home equity					5	6
Automobile loans					11	11
Credit card					25	22
Other consumer loans					8	3
Total net charge-offs				$	81	89

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Credit Quality and the Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off		(35)	(4)	(64)	-	(103)
	Recoveries of losses previously charged-off		6	1	15	-	22
	Provision for (benefit from) loan and lease losses		(11)	3	37	(6)	23
Balance, end of period		$	713	89	222	114	1,138
				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

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
				Residential
As of March 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	113	64	40	-	217
	Collectively evaluated for impairment		600	25	182	-	807
	Unallocated		-	-	-	114	114
Total ALLL		$	713	89	222	114	1,138
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	573	666	308	-	1,547
	Collectively evaluated for impairment		56,256	14,759	19,270	-	90,285
	Loans acquired with deteriorated credit quality		-	2	-	-	2
Total portfolio loans and leases		$	56,829	15,427	19,578	-	91,834

• Includes $1 related to leveraged leases at March 31, 2018.
• Excludes $136of residential mortgage loans measured at fair value and includes $670of leveraged leases, net of unearned income at March 31, 2018.

				Residential
As of December 31, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	94	64	42	-	200
	Collectively evaluated for impairment		659	25	192	-	876
	Unallocated		-	-	-	120	120
Total ALLL		$	753	89	234	120	1,196
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	560	665	320	-	1,545
	Collectively evaluated for impairment		55,835	14,787	19,664	-	90,286
	Loans acquired with deteriorated credit quality		-	2	-	-	2
Total portfolio loans and leases		$	56,395	15,454	19,984	-	91,833

• Includes $1 related to leveraged leases at December 31, 2017.
• Excludes $137 of residential mortgage loans measured at fair value and includes $674 of leveraged leases, net of unearned income at December 31, 2017.

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, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,385	1,074	1,173	3	41,635
Commercial mortgage owner-occupied loans		3,150	81	99	-	3,330
Commercial mortgage nonowner-occupied loans		3,079	8	92	-	3,179
Commercial construction loans		4,692	74	-	-	4,766
Commercial leases		3,776	79	64	-	3,919
Total commercial loans and leases	$	54,082	1,316	1,428	3	56,829

			Special
As of December 31, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,813	1,115	1,235	7	41,170
Commercial mortgage owner-occupied loans		3,207	75	80	-	3,362
Commercial mortgage nonowner-occupied loans		3,117	28	97	-	3,242
Commercial construction loans		4,553	-	-	-	4,553
Commercial leases		3,922	72	74	-	4,068
Total commercial loans and leases	$	53,612	1,290	1,486	7	56,395

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. 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 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, 2018		December 31, 2017
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,399	28	15,424	30
Home equity		6,683	74	6,940	74
Automobile loans		9,017	1	9,111	1
Credit card		2,162	26	2,273	26
Other consumer loans		1,614	1	1,559	-
Total residential mortgage and consumer loans	$	34,875	130	35,307	131

(a) Excludes $136and $137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017, 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, 2018 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,502	46	87	133	41,635	7
	Commercial mortgage owner-occupied loans		3,316	6	8	14	3,330	1
	Commercial mortgage nonowner-occupied loans		3,109	67	3	70	3,179	-
	Commercial construction loans		4,766	-	-	-	4,766	-
	Commercial leases		3,914	-	5	5	3,919	-
Residential mortgage loans(a)			15,304	32	91	123	15,427	62
Consumer loans:
	Home equity		6,636	66	55	121	6,757	-
	Automobile loans		8,927	81	10	91	9,018	9
	Credit card		2,115	39	34	73	2,188	28
	Other consumer loans		1,605	9	1	10	1,615	-
Total portfolio loans and leases		$	91,194	346	294	640	91,834	107

• Excludes $136 of residential mortgage loans measured at fair value at March 31, 2018.
• 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, 2018, $79of these loans were 30-89 days past due and $317 were 90 days or more past due. The Bancorp recognized $2of lossesduring the three months ended March 31, 2018due 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, 2017 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,027	42	101	143	41,170	3
	Commercial mortgage owner-occupied loans		3,351	3	8	11	3,362	-
	Commercial mortgage nonowner-occupied loans		3,235	-	7	7	3,242	-
	Commercial construction loans		4,552	1	-	1	4,553	-
	Commercial leases		4,065	3	-	3	4,068	-
Residential mortgage loans(a)			15,301	66	87	153	15,454	57
Consumer loans:
	Home equity		6,888	70	56	126	7,014	-
	Automobile loans		8,992	107	13	120	9,112	10
	Credit card		2,230	36	33	69	2,299	27
	Other consumer loans		1,554	5	-	5	1,559	-
Total portfolio loans and leases		$	91,195	333	305	638	91,833	97

• Excludes $137 of residential mortgage loans measured at fair value at December 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 December 31, 2017, $95of these loans were 30-89 days past due and $290 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.
• 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, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	414	358		109
	Commercial mortgage owner-occupied loans		4	3		1
	Commercial mortgage nonowner-occupied loans		2	2		-
	Commercial leases		8	8		3
Restructured residential mortgage loans			460	457		64
Restructured consumer loans:
	Home equity		129	130		25
	Automobile loans		6	5		1
	Credit card		49	44		14
Total impaired portfolio loans and leases with a related ALLL		$	1,072	1,007		217
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	188	161		-
	Commercial mortgage owner-occupied loans		17	13		-
	Commercial mortgage nonowner-occupied loans		28	28		-
Restructured residential mortgage loans			228	209		-
Restructured consumer loans:
	Home equity		129	126		-
	Automobile loans		3	3		-
Total impaired portfolio loans with no related ALLL		$	593	540		-
Total impaired portfolio loans and leases		$	1,665	1,547	(a)	217

Includes $249, $654 and $262, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $154, $12 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018.

			Unpaid
			Principal	Recorded
As of December 31, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	433	358		87
	Commercial mortgage owner-occupied loans		16	14		7
	Commercial mortgage nonowner-occupied loans		4	3		-
	Commercial leases		4	4		-
Restructured residential mortgage loans			469	465		64
Restructured consumer loans:
	Home equity		172	172		27
	Automobile loans		8	7		1
	Credit card		52	45		14
Total impaired portfolio loans and leases with a related ALLL		$	1,158	1,068		200
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	151	131		-
	Commercial mortgage owner-occupied loans		18	15		-
	Commercial mortgage nonowner-occupied loans		35	35		-
Restructured residential mortgage loans			218	200		-
Restructured consumer loans:
	Home equity		97	94		-
	Automobile loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	521	477		-
Total impaired portfolio loans and leases		$	1,679	1,545	a(a)	200

Includes $249, $652 and $275, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $150, $13 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017.

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, 2018		March 31, 2017
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	497	5	683	1
	Commercial mortgage owner-occupied loans(a)		22	-	43	-
	Commercial mortgage nonowner-occupied loans		34	-	89	1
	Commercial leases		6	-	3	-
Restructured residential mortgage loans			665	6	654	6
Restructured consumer loans:
	Home equity		258	3	298	3
	Automobile loans		9	-	14	-
	Credit card		48	1	51	1
Total average impaired portfolio loans and leases		$	1,539	15	1,835	12

Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $26for the three months ended March 31, 2017. An immaterial amount of interest income was recognized during the three months ended March 31, 2017. Refer to Note 9 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

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)			2018	2017
Commercial loans and leases:
	Commercial and industrial loans	$	299	276
	Commercial mortgage owner-occupied loans		11	19
	Commercial mortgage nonowner-occupied loans		4	7
	Commercial leases		8	4
Total nonaccrual portfolio commercial loans and leases			322	306
Residential mortgage loans			28	30
Consumer loans:
	Home equity		74	74
	Automobile loans		1	1
	Credit card		26	26
	Other consumer loans		1	-
Total nonaccrual portfolio consumer loans			102	101
Total nonaccrual portfolio loans and leases(a)(b)		$	452	437
OREO and other repossessed property			52	52
Total nonperforming portfolio assets(a)(b)		$	504	489

• Excludes $24and $6 of nonaccrual loans held for sale at March 31, 2018 and December 31, 2017, respectively.
• Includes $5and $3of nonaccrual government insured commercial loans whose repayments are insured by the SBA at March 31, 2018 and December 31, 2017, respectively, of which $2 and $3are restructured nonaccrual government insured commercial loans at both March 31, 2018and December 31, 2017, 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 $213 million and $235 million as of March 31, 2018 and December 31, 2017, 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 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.

The Bancorp had commitments to lend additional funds to borrowers whose terms have been modified in a TDR, consisting of line of credit and letter of credit commitments of $33 million and $79million, respectively, as of March 31, 2018 compared with $53 million and $78million, respectively, as of December 31, 2017.

The following tables provide a summary of loans and leases, 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, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	12	$	72	13	-
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		247		33	1	-
Consumer loans:
	Home equity	25		2	-	-
	Automobile loans	20		-	-	-
	Credit card	1,965		10	2	-
Total portfolio loans		2,271	$	117	16	-

• Excludes all loans and leasesheld 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
		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.

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 an 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, 2018 and 2017 and were within twelve months of the restructuring date:
		Number of		Recorded
March 31, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	1
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		48		7
Consumer loans:
	Home equity	2		-
	Credit card	242		1
Total portfolio loans		295	$	9

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

		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.

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Bank Premises and Equipment

3 Months Ended

Mar. 31, 2018

Bank Premises and Equipment

Bank Premises and Equipment

8. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:
($ in millions)		March 31, 2018	December 31, 2017
Land and improvements(a)	$	636	644
Buildings(a)		1,661	1,679
Equipment		1,921	1,876
Leasehold improvements		399	399
Construction in progress(a)		76	93
Bank premises and equipment held for sale:
Land and improvements		12	17
Buildings		8	9
Equipment		-	1
Accumulated depreciation and amortization		(2,747)	(2,715)
Total bank premises and equipment	$	1,966	2,003

(a) At March 31, 2018 and December 31, 2017, land and improvements, buildings and construction in progress included $89 and $91, respectively, 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.

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 $8 million and $3 million for the threemonths ended March 31, 2018 and 2017, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

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Intangible Assets

3 Months Ended

Mar. 31, 2018

Intangible Assets

Intangible Assets

8. Intangible Assets

Intangible assets consist of core deposit intangibles, customer relationships, non-compete agreements, trade namesand rent intangibles. Intangible assetsare amortized on either a straight-line or an accelerated basis over their estimated useful lives. The increase in gross carrying amount of intangible assets from the year ended December 31, 2017 reflects acquisition activity during the first quarter of 2018.

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, 2018
Core deposit intangibles	$	34	(29)	5
Customer relationships		19	(1)	18
Non-compete agreements		14	(11)	3
Other		6	(2)	4
Total intangible assets	$	73	(43)	30
As of December 31, 2017
Core deposit intangibles	$	34	(29)	5
Customer relationships		16	-	16
Non-compete agreements		13	(10)	3
Other		6	(3)	3
Total intangible assets	$	69	(42)	27

As of March 31, 2018, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was $1 million and immaterial for the three months ended March 31, 2018and2017, respectively. The Bancorp’s projections of amortization expense shown in the following table is based on existing balances as of March 31, 2018. Future amortization expense may vary from these projections.

Estimated amortization expense for the remainder of 2018 through 2022 is as follows:
($ in millions)		Total
Remainder of 2018	$	4
2019		5
2020		3
2021		2
2022		2

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VIE

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)			Securitizations	Investments	Total
Assets:
	Other short-term investments	$	66	-	66
	Commercial mortgage loans		-	20	20
	Automobile loans		1,115	-	1,115
	ALLL		(6)	-	(6)
	Other assets		6	-	6
Total assets		$	1,181	20	1,201
Liabilities:
	Other liabilities	$	2	-	2
	Long-term debt		1,031	-	1,031
Total liabilities		$	1,033	-	1,033
Noncontrolling interests		$	-	20	20

			Automobile Loan	CDC
December 31, 2017 ($ in millions)			Securitizations	Investments	Total
Assets:
	Other short-term investments	$	62	-	62
	Commercial mortgage loans		-	20	20
	Automobile loans		1,277	-	1,277
	ALLL		(6)	-	(6)
	Other assets		7	-	7
Total assets		$	1,340	20	1,360
Liabilities
	Other liabilities	$	2	-	2
	Long-term debt		1,190	-	1,190
Total liabilities		$	1,192	-	1,192
Noncontrolling interests		$	-	20	20

Automobile loan securitizations

In a securitization transaction that occurred in the third quarter of 2017, the Bancorp transferred an aggregate amount of $1.1 billion in consumer automobile loans to a bankruptcy remote trust which was deemed to be a VIE. This trust then subsequently issued approximately $1.0 billion of asset-backed notes, of which approximately $261 million were retained by the Bancorp. Additionally, in prior years the Bancorp completedsecuritization transactionsin which the Bancorp transferred certain consumer automobile loans to bankruptcy remote trusts which were also 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 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 hold 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.

During the third quarter of 2017, the Bancorp’s indemnification guarantee for one of the CDC investments for which a Bancorp subsidiary served as the managing member expired and the Bancorp transferred its remaining ownership interest in the VIE to the investor member thus removing the Bancorp from future operations of the VIE. As a result, the Bancorp deconsolidated the VIE during the third quarter of 2017 resulting in a decrease of $27 million in commercial mortgage loans, a decrease of $20 million in ALLL associated with the commercial mortgage loans and a decrease of $18 million in indemnification guarantee exposure. The Bancorp’s maximum exposure related to the remaining indemnifications at March 31, 2018 and December 31, 2017 was $18million and $17 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, 2018 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,316	338	1,316
Private equity investments		95	-	140
Loans provided to VIEs		1,937	-	3,043

		Total	Total	Maximum
December 31, 2017 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,376	355	1,376
Private equity investments		102	-	150
Loans provided to VIEs		1,845	-	2,910

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, 2018 and December 31, 2017, 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 $336 million and $355 million atMarch 31, 2018 and December 31, 2017, respectively. The unfunded commitments as of March 31, 2018 are expected to be funded from 2018 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		2018	2017
Pre-tax investment and impairment losses(a)	Other noninterest expense	$	45	36
Tax credits and other benefits	Applicable income tax expense		(52)	(56)

(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, 2018 and 2017.

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, 2018 and December 31, 2017, the unfunded commitment amounts to the funds were $45 million and $48 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $3 million and $6 million during the three months ended March 31, 2018 and 2017, respectively.The Bancorp recognized $4 million and zero OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three months ended March 31, 2018 and 2017, respectively. Refer to Note 21 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 both March 31, 2018 and December 31, 2017, the Bancorp’s unfunded commitments to these entities were $1.1billion. 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, 2018

Sales of Receivables and Servicing Rights

Sales of Receivables and Servicing Rights

10. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during both thethree months ended March 31, 2018 and 2017. 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)		2018		2017
Residential mortgage loan sales(a)	$	1,000	a	1,629
Origination fees and gains on loan sales		24		29
Gross mortgage servicing fees		53		47

Represents the unpaid principal balance at the time of the sale.

Servicing Rights

The Bancorp measures all of its servicing rights at fair value with changes in fair value reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

The following tables present changes in the servicing rights related to residential mortgage loans for the three months ended March 31:
($ in millions)		2018	2017
Balance, beginning of period	$	858	744
Servicing rights originated - residential mortgage loans		16	26
Servicing rights acquired - residential mortgage loans		24	29
Changes in fair value:
Due to changes in inputs or assumptions(a)		57	4
Other changes in fair value(b)		(29)	(27)
Balance, end of period	$	926	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.

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 may include 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 presents activity related to valuations of the MSR portfolio and the impact of the non-qualifying hedging strategy:
		For the three months ended
		March 31,
($ in millions)		2018	2017
Securities losses, net - non-qualifying hedges on MSRs	$	(13)	-
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio(a)		(49)	(1)
MSR fair value adjustment(a)		28	(23)

(a) Included in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

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, securitization or purchase resulting from transactions completed during the three months ended March 31, 2018 and 2017 were as follows:
		March 31, 2018				March 31, 2017
	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	7.0	9.1	%	549	6.7	9.9	%	485
Servicing rights	Adjustable	2.6	30.0		637	2.3	34.9		700

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, 2018 and December 31, 2017, the Bancorp serviced $61.0 billion and $60.0 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, 2018, 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 OAS spread are as follows:
					Prepayment						OAS
					Speed Assumption						Spread Assumption
											OAS Spread		Impact of
				Weighted-				Impact of Adverse Change					Adverse Change
			Fair	Average Life				on Fair Value					on Fair Value
($ in millions)(a)	Rate		Value	(in years)	Rate			10%	20%	50%	(bps)		10%	20%
Residential mortgage loans:
Servicing rights	Fixed	$	910	6.4	10.0	%	$	(35)	(68)	(156)	548	$	(19)	(36)
Servicing rights	Adjustable		16	3.3	24.6			(1)	(2)	(4)	797		-	(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, 2018

Derivative Financial Instruments

Derivative Financial Instruments

11. 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. TBA securities 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 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 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, 2018 and December 31, 2017, the balance of collateral held by the Bancorp for derivative assets was $375 million and $409 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 $85 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, 2018. The credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts as ofMarch 31, 2018 and December 31, 2017was $2 million and $3 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, 2018 and December 31, 2017, the balance of collateral posted by the Bancorp for derivative liabilities was $322 million and $365 million, respectively, and $100 million of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities as of March 31, 2018 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, 2018 and December 31, 2017, 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 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, 2018 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,705		248	4
Total fair value hedges				248	4
Cash flow hedges:
Interest rate swaps related to C&I loans		4,150		-	18
Total cash flow hedges				-	18
Total derivatives designated as qualifying hedging instruments				248	22
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		12,135		53	20
Forward contracts related to residential mortgage loans held for sale		1,153		2	2
Swap associated with the sale of Visa, Inc. Class B Shares		1,993		-	165
Foreign exchange contracts		138		-	-
Total free-standing derivatives - risk management and other business purposes				55	187
Free-standing derivatives - customer accommodation:
Interest rate contracts		44,973		220	241
Interest rate lock commitments		667		11	-
Commodity contracts		4,843		199	195
TBA securities		46		-	-
Foreign exchange contracts		11,723		132	129
Total free-standing derivatives - customer accommodation				562	565
Total derivatives not designated as qualifying hedging instruments				617	752
Total			$	865	774

				Fair Value
		Notional		Derivative	Derivative
December 31, 2017 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,705		297	5
Total fair value hedges				297	5
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		-	12
Total cash flow hedges				-	12
Total derivatives designated as qualifying hedging instruments				297	17
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		11,035		54	15
Forward contracts related to residential mortgage loans held for sale		1,284		1	1
Stock warrant		20		20	-
Swap associated with the sale of Visa, Inc. Class B Shares		1,900		-	137
Foreign exchange contracts		112		-	1
Total free-standing derivatives - risk management and other business purposes				75	154
Free-standing derivatives - customer accommodation:
Interest rate contracts		42,216		154	145
Interest rate lock commitments		446		8	-
Commodity contracts		4,125		165	167
TBA securities		26		-	-
Foreign exchange contracts		12,654		124	119
Total free-standing derivatives - customer accommodation				451	431
Total derivatives not designated as qualifying hedging instruments				526	585
Total			$	823	602

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 designated fair value hedges of interest rate risk as of March 31, 2018, the Bancorp performed an assessment of hedge effectiveness using regression analysis (quantitative approach) with changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk recorded in the same income statement line in current period net 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		2018	2017
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	(63)	(21)
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		64	21

The following amounts were recorded in the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of:
	Condensed Consolidated
($ in millions)	Balance Sheets Caption		March 31, 2018
Carrying amount of the hedged item	Long-term debt	$	4,219
Cumulative amount of fair value hedging adjustments included in the carrying
amount of the hedged items	Long-term debt		(231)

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 transactionsfor the variability in cash flows attributable to the contractually specified interest rate. 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, 2018, all hedges designated as cash flow hedges were assessed for effectiveness using regression analysis.The entire change in the fair value of the interest rate swap included in the assessment of hedge effectiveness is recorded in AOCI and reclassified from AOCI to current period earnings when the hedged item affects earnings. As of March 31, 2018, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 59 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, 2018 and December 31, 2017, $19 million and $9 million, respectively, of net deferred losses, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of March 31, 2018, $2 million in net unrealized 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, 2018.

During boththe threemonths ended March 31, 2018 and 2017, 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 (losses) gains 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)		2018	2017(a)
Amount of pretax net losses recognized in OCI	$	(9)	(5)
Amount of pretax net gains reclassified from OCI into net interest income		1	8

For the three months ended March 31, 2017, the amount of pretax net losses recognized in OCI represented the effective portion of the cumulative gains or losses on cash flow hedges and ineffectiveness was reported within noninterest income. Upon the adoption of ASU 2017-12, the Bancorp recorded a cumulative effect adjustment to retained earnings effective January 1, 2018 related to the elimination of the separate measurement of ineffectiveness. Refer to Note 3 for additional information.

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, TBA securities 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 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 AShares. This total return swap is accounted for as a free-standing derivative. Refer to Note 21 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		2018	2017
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale	Mortgage banking net revenue	$	-	(21)
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		(49)	(1)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2	(1)
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(39)	(13)

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 acomponent of either corporate banking revenue or other noninterest income 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, 2018 and December 31, 2017, the total notional amount of the risk participation agreements was $3.4 billion and $2.8 billion, respectively, and the fair value was a liability of $6 million and $5 million at March 31, 2018 andDecember 31, 2017, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of March 31, 2018, the risk participation agreements had a weighted-average remaining life of 4.2 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)		2018	2017
Pass	$	3,263	2,748
Special mention		77	66
Substandard		30	24
Total	$	3,370	2,838

The net gains 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		2018	2017
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	7	5
Interest rate lock commitments	Mortgage banking net revenue		13	22
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		2	1
Commodity contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		-	1
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)	Corporate banking revenue		14	13
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		(2)	-
Foreign exchange contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	1

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 do not include variation margin payments for derivative contracts with legal rights of setoff for both periods shown.

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, 2018 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	854	(229)	(341)		284
Total assets		854	(229)	(341)		284
Liabilities:
Derivatives		774	(229)	(209)		336
Total liabilities	$	774	(229)	(209)		336

• 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, 2017 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	815	(213)	(362)		240
Total assets		815	(213)	(362)		240
Liabilities:
Derivatives		602	(213)	(155)		234
Total liabilities	$	602	(213)	(155)		234

• 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.

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Other Short Term Borrowings

3 Months Ended

Mar. 31, 2018

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)		2018	2017
Securities sold under repurchase agreements	$	662	546
FHLB advances		400	3,125
Derivative collateral		273	341
Total other short-term borrowings	$	1,335	4,012

The Bancorp’s securities sold under repurchase agreements are accounted for as secured borrowings and are collateralized by securities included in available-for-sale debt 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. As of both March 31, 2018 and December 31, 2017, all securities sold under repurchase agreements were secured by agency residential mortgage-backed securities with an overnight remaining contractual maturity.

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Long-Term Debt

3 Months Ended

Mar. 31, 2018

Long-Term Debt

Long-Term Debt

13.Long-Term Debt

On March 14, 2018, the Bancorp issued and sold $650 million of 3.95% senior fixed-rate notes, with a maturity of ten years, due on March 14, 2028. These notes will be redeemable by the Bancorp, in whole or in part, on or after the date that is 30 days prior to the maturity date at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.

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Capital Actions

3 Months Ended

Mar. 31, 2018

Capital Actions

Capital Actions

14. Capital Actions

Accelerated Share Repurchase Transactions

During the three months ended March 31, 2018, the Bancorp entered into or settled accelerated share repurchase transactions. As part of these transactions, the Bancorp entered into forward contracts in which the final number of shares delivered at settlementwas based generally on a discount to the average daily volume weighted-average price of the Bancorp’s common stock during the term of these repurchase agreements. The accelerated share repurchaseswere treated as two separate transactions, (i) the acquisition of treasury shares on the repurchase date and (ii) a forward contract indexed to the Bancorp's common stock.

The following table presents a summary of the Bancorp's accelerated share repurchase transactions that were entered into or settled during the three months ended March 31, 2018:
Repurchase Date		Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement	Total Shares Repurchased	Settlement Date
December 19, 2017	$	273	7,727,273	824,367	8,551,640	March 19, 2018
February 12, 2018		318	8,691,318	1,015,731	9,707,049	March 26, 2018

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Commitments, Contingent Liabilities and Guarantees

3 Months Ended

Mar. 31, 2018

Commitments, Contingent Liabilities and Guarantees

Commitments, Contingent Liabilities and Guarantees

16. 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)		2018	2017
Commitments to extend credit	$	68,089	68,106
Letters of credit		2,164	2,185
Forward contracts related to residential mortgage loans held for sale		1,153	1,284
Noncancelable operating lease obligations		559	568
Purchase obligations		132	144
Capital commitments for private equity investments		45	48
Capital expenditures		27	37
Capital lease obligations		24	26

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, 2018 and December 31, 2017, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $151 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)		2018	2017
Pass	$	67,323	67,254
Special mention		354	330
Substandard		412	522
Total commitments to extend credit	$	68,089	68,106

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, 2018:
($ in millions)
Less than 1 year(a)	$	1,174
1 - 5 years(a)		981
Over 5 years		9
Total letters of credit	$	2,164

(a) Includes $6 and $1 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 approximately 99% of total letters of credit at both March 31, 2018 and December 31, 2017, and are considered guarantees in accordance with U.S. GAAP. Approximately62% and 61% of the total standby letters of credit were collateralized as of March 31, 2018 and December 31, 2017, respectively. 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 $15 million and$6 million at March 31, 2018 and December 31, 2017, 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)		2018	2017
Pass	$	1,822	1,830
Special mention		60	67
Substandard		198	218
Doubtful		84	70
Total letters of credit	$	2,164	2,185

At March 31, 2018 and December 31, 2017, 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, 2018 and December 31, 2017, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $646 million and $602 million, respectively, of which FTS acted as the remarketing agent to issuers on $562 million and $508 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 $320 million and $331 million of the VRDNs remarketed by FTS, in addition to $84 million and $94million in VRDNs remarketed by third parties at March 31, 2018 and December 31, 2017, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held zero and $1 million of these VRDNs in its portfolio and classified them as trading securities at March 31, 2018 and December 31, 2017, 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 16 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017.

As of March 31, 2018 and December 31, 2017, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $8 million and $9 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, 2018 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 $9 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, 2018 and 2017, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $2 million in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended March 31, 2018 and 2017were $5 million and $3 million, respectively. Total outstanding repurchase demand inventory was$2million and $1million at March 31, 2018 and December 31, 2017, respectively.

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended March 31,
($ in millions)		2018	2017
Balance, beginning of period	$	9	13
Net reductions to the reserve		(1)	(1)
Balance, end of period	$	8	12

The following tables provide a rollforward of unresolved claims by claimant type for the three months ended:
	GSE			Private Label
March 31, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	30		5	-		-
Resolved demands	(22)		(4)	-		-
Balance, end of period	14	$	2	1	$	-

	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	-	$	-

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 $301 million and $312 million at March 31, 2018 and December 31, 2017, respectively, and the delinquency rates were 2.7% and3.0% at March 31, 2018 and December 31, 2017, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $5 millionat both March 31, 2018 and December 31, 2017recorded 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 balances held by the brokerage clearing agent were$16 million and $15million atMarch 31, 2018and December 31, 2017, 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, 2018 and December 31, 2017.

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 21 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, 2018, 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 $165million at March 31, 2018 and $137 million at December 31, 2017. Refer to Note 11 and Note 21 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, 2018

Legal And Regulatory Proceedings

Legal and Regulatory Proceedings

16. 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(In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation). 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 15and 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. 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 Bancorppreviously 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 overturned settlement agreement, approximately 25% of the funds paid into the class settlement escrow account were already returned to the control of the defendants. The remaining approximately 75% of the settlement funds paid by the Bancorp are maintained in the escrow account. More than 500 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 individual federal lawsuits were transferred to the United States District Court for the Eastern District of New York. While the Bancorp is only named as a defendant in one of the individual federal lawsuits, it may have obligations pursuant to indemnification arrangements and/or the judgment or loss sharing agreements noted above. Refer to Note 15 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. On January 10, 2018, plaintiffs filed a motion to hear the immediate appeal of the dismissal of their breach of contract claim. On March 28, 2018, the court granted plaintiffs’ motion and stayed the TILA claim pending that appeal. On April 26, 2018, plaintiffs filed their notice of appeal for the breach of contract claim with the U.S. Court of Appeals for the Sixth Circuit.

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 for the plaintiffs’ benefit. The lawsuit seeks over $800 million in alleged damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. Fifth Third denies all liability. On April 20, 2018, the Court denied plaintiffs’ motion for summary judgment and granted summary judgment to Fifth Third, dismissing the case in its entirety.

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

On February 12, 2016, 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 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 totaling almost $40 million. Fifth Third denies all liability in this matter.On March 3, 2016, Fifth Third removed the case to the United States District Court for the District of Minnesota. No trial date has been scheduled.

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 or may become 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 FRB, CFPB, SEC, FINRA, U.S. Department of Justice, etc., as well as state and other governmental authorities and 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 or reputational harm 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. Additionally, in some cases, regulatory authorities may take supervisory actions that are considered to be confidential supervisory information which may not be publicly disclosed.

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 $22 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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Related Party Transactions

3 Months Ended

Mar. 31, 2018

Related Party Transactions Abstract

Related Party Transactions

17. Related Party Transactions

On January 16, 2018, Vantiv, Inc. completed its previously announced acquisition of Worldpay Group plc. with the resulting combined company named Worldpay, Inc. As a result of this transaction, the Bancorp recognized a gain of $414 million in other noninterest income during the first quarter of 2018 associated with the dilution in its ownership interest in Vantiv Holding, LLC from approximately 8.6% to approximately 4.9%. The Bancorp’s remaining interest in Vantiv Holding, LLC of $632 million continues to be accounted for as an equity method investment given the nature of Vantiv Holding, LLC’s structure as a limited liability company and contractual arrangements between Vantiv Holding, LLC and the Bancorp.

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Taxes

Income Taxes

18. Income Taxes

The applicable income tax expense was $132 million and $91 million for the three months ended March 31, 2018 and 2017, respectively. The effective tax rates for the three months ended March 31, 2018 and 2017were15.8% and 22.9%, respectively. The decrease in the effective tax rate for the three months ended March 31, 2018 compared to the same period in the prior year was primarily related to the reduction in the federal statutory corporate tax rate partially offset by changes to previously deductible items associated with the enactment of the TCJA.

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, 2018

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

20. Accumulated Other Comprehensive Income

The tables below present the activity of the components of OCI and AOCI for the three months ended:
			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2018 ($ in millions)			Activity	Effect	Activity	Balance(a)	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(594)	134	(460)
Reclassification adjustment for net losses on available-for-sale
	debt securities included in net income		9	(2)	7
Net unrealized losses on available-for-sale debt securities			(585)	132	(453)	135	(453)	(318)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(9)	2	(7)
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(1)	-	(1)
Net unrealized losses on cash flow hedge derivatives			(10)	2	(8)	(11)	(8)	(19)
Reclassification of amounts to net periodic benefit costs			1	-	1
Defined benefit pension plans, net			1	-	1	(53)	1	(52)
Total		$	(594)	134	(460)	71	(460)	(389)

The Bancorp’s AOCI balance was adjusted as of January 1, 2018 to reflect the adoption of new accounting standards. Refer to Note 3 for additional information.

			Total OCI			Total AOCI
			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

The table below presents reclassifications out of AOCI:
				For the three months ended March 31,
		Consolidated Statements of
Components of AOCI: ($ in millions)		Income Caption		2018	2017
Net unrealized gains on available-for-sale securities:(b)
	Net losses included in net income	Securities losses, net	$	(9)	(2)
		Income before income taxes		(9)	(2)
		Applicable income tax expense		2	1
		Net income		(7)	(1)
Net unrealized gains on cash flow hedge derivatives:(b)
	Interest rate contracts related to C&I loans	Interest and fees on loans and leases		1	8
		Income before income taxes		1	8
		Applicable income tax expense		-	(3)
		Net income		1	5
Net periodic benefit costs:(b)
	Amortization of net actuarial loss	Employee benefits expense(a)		(1)	(2)
		Income before income taxes		(1)	(2)
		Applicable income tax expense		-	1
		Net income		(1)	(1)
Total reclassifications for the period		Net income	$	(7)	3

• This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 22of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.
• Amounts in parentheses indicate reductions to net income.

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Earnings Per Share

3 Months Ended

Mar. 31, 2018

Earnings Per Share

Earnings Per Share

21. 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:
		2018				2017
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	$	689			290
Less: Income allocated to participating securities		8			4
Net income allocated to common shareholders	$	681	690	0.99	286	748	0.38
Earnings Per Diluted Share:
Net income available to common shareholders	$	689			290
Effect of dilutive securities:
Stock-based awards		-	14		-	13
Net income available to common shareholders		689			290
plus assumed conversions
Less: Income allocated to participating securities		8			4
Net income allocated to common shareholders
plus assumed conversions	$	681	704	0.97	286	761	0.38

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, 2018 and March 31, 2017excludes 2million and 6 million, respectively, of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Measurements

Fair Value Measurements

21. 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 Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017.

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, 2018 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	96	-	-	96
Obligations of states and political subdivisions securities		-	44	-	44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,208	-	15,208
Agency commercial mortgage-backed securities		-	10,455	-	10,455
Non-agency commercial mortgage-backed securities		-	3,190	-	3,190
Asset-backed securities and other debt securities		-	2,214	-	2,214
Available-for-sale debt and other securities(a)		96	31,111	-	31,207
Trading debt securities:
U.S. Treasury and federal agencies securities		-	21	-	21
Obligations of states and political subdivisions securities		-	52	-	52
Agency residential mortgage-backed securities		-	364	-	364
Asset-backed securities and other debt securities		-	134	-	134
Trading debt securities		-	571	-	571
Equity securities		417	1	-	418
Residential mortgage loans held for sale		-	650	-	650
Residential mortgage loans(b)		-	-	136	136
Commercial loans held for sale		-	16	-	16
MSRs		-	-	926	926
Derivative assets:
Interest rate contracts		2	521	11	534
Foreign exchange contracts		-	132	-	132
Commodity contracts		34	165	-	199
Derivative assets(d)		36	818	11	865
Total assets	$	549	33,167	1,073	34,789
Liabilities:
Derivative liabilities:
Interest rate contracts	$	2	276	7	285
Foreign exchange contracts		-	129	-	129
Equity contracts		-	-	165	165
Commodity contracts		56	139	-	195
Derivative liabilities(e)		58	544	172	774
Short positions(e)		93	33	-	126
Total liabilities	$	151	577	172	900

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at March 31, 2018.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the threemonths endedMarch 31, 2018, 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.

	Fair Value Measurements Using
December 31, 2017 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	98	-	-	98
Obligations of states and political subdivisions securities		-	44	-	44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,319	-	15,319
Agency commercial mortgage-backed securities		-	10,167	-	10,167
Non-agency commercial mortgage-backed securities		-	3,293	-	3,293
Asset-backed securities and other debt securities		-	2,218	-	2,218
Available-for-sale debt and other securities(a)		98	31,041	-	31,139
Trading debt securities:
U.S. Treasury and federal agencies securities		1	11	-	12
Obligations of states and political subdivisions securities		-	22	-	22
Residential mortgage-backed securities		-	395	-	395
Asset-backed securities and other debt securities		-	63	-	63
Trading debt securities		1	491	-	492
Equity securities		438	1		439
Residential mortgage loans held for sale		-	399	-	399
Residential mortgage loans(b)		-	-	137	137
MSRs		-	-	858	858
Derivative assets:
Interest rate contracts		1	505	8	514
Foreign exchange contracts		-	124	-	124
Equity contracts		-	20	-	20
Commodity contracts		39	126	-	165
Derivative assets(d)		40	775	8	823
Total assets	$	577	32,707	1,003	34,287
Liabilities:
Derivative liabilities:
Interest rate contracts	$	1	172	5	178
Foreign exchange contracts		-	120	-	120
Equity contracts		-	-	137	137
Commodity contracts		38	129	-	167
Derivative liabilities(e)		39	421	142	602
Short positions(e)		25	6	-	31
Total liabilities	$	64	427	142	633

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at December 31, 2017.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the year ended December 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.

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 debt and other securities, trading debt securities and equity 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 may include federalagencies securities, obligations of states and political subdivisions securities, agency and non-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.

Commercial loans held for sale

For commercial loans held for sale for which the fair value election has been made, fair value is estimated based upon quoted prices of identical or similar assets in an active market, which are reviewed and approved by the Market Risk department, which reports to the Bancorp’s Chief Risk Officer. These loans are generally valued using a market approach based on observable prices and are classified within Level 2 of the valuation hierarchy.

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

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 10 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 quarterly 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, 2018 and December 31, 2017, 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.

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 the fair value of the derivative liability; conversely, a decrease in the loss estimate or an acceleration of the resolution of the Covered Litigation would result in a decrease in the fair value of the derivative liability. The Accounting and Treasury departments, both of which report to the Bancorp’s Chief Financial Officer, 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 asset fair value of the IRLCs at March 31, 2018 was $11million. 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 $5 million and $9 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 $6 million and $13 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 $1 million and $2 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 $1 million and $2 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.

Short positions

Where quoted prices are available in an active market, short positions areclassified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similarcharacteristics or DCFs and therefore are classified within Level 2 of the valuation hierarchy.

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
		Mortgage		Derivatives,	Equity	Total
For the three months ended March 31, 2018 ($ in millions)		Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period	$	137	858	3	(137)		861
Total gains (losses) (realized/unrealized):
Included in earnings		(2)	28	14	(39)		1
Purchases/originations		-	40	(2)	-		38
Settlements		(135)	-	(11)	11		(135)
Transfers into Level 3(b)		136	-	-	-		136
Balance, end of period	$	136	926	4	(165)		901
The amount of total (losses) gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to instruments still held at March 31, 2018(c)	$	(2)	28	11	(39)		(2)

• Net interest rate derivatives include derivative assets and liabilities of $11and $7, respectively, as of March 31, 2018.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.

	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	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	143	744	8	(91)		804
Total (losses) gains (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 (losses) gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to instruments still held at March 31, 2017(c)	$	-	(23)	16	(13)		(20)

• 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 $0and $97, respectively, as ofMarch 31, 2017.
• 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)		2018	2017
Mortgage banking net revenue	$	39	-
Corporate banking revenue		1	-
Other noninterest income		(39)	(13)
Total gains (losses)	$	1	(13)

The total losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2018 and 2017 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2018	2017
Mortgage banking net revenue	$	36	(7)
Corporate banking revenue		1	-
Other noninterest income		(39)	(13)
Total losses	$	(2)	(20)

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	136	Loss rate model	Interest rate risk factor	(12.6) - 14.1%	1.3%
				Credit risk factor	0 - 46.2%	1.5%
MSRs		926	Discounted cash flow	Prepayment speed	0.5-98.1%	(Fixed) 10.0%(Adjustable) 24.6%
				OAS spread (bps)	446-1,515	(Fixed) 548(Adjustable) 797
IRLCs, net		11	Discounted cash flow	Loan closing rates	9.5 - 102.7%	76.6%
Swap associated with the sale of Visa, Inc.		(165)	Discounted cash flow	Timing of the resolution	2/28/2021 -	9/8/2021
Class B Shares				of the Covered Litigation	12/31/2023

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 -	8/24/2020
Class B Shares				of the Covered Litigation	12/31/2022

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, 2018 and 2017, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2018 and 2017, 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) Gains
						For the three months
As of March 31, 2018 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2018
Commercial loans held for sale	$	-	-	5	5	(1)
Commercial and industrial loans		-	-	277	277	(44)
Commercial mortgage loans		-	-	4	4	6
Commercial leases		-	-	2	2	(2)
OREO		-	-	17	17	(3)
Bank premises and equipment		-	-	4	4	(8)
Operating lease equipment		-	-	12	12	(2)
Private equity investments		-	50	33	83	19
Total	$	-	50	354	404	(35)

		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)

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ 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		277	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		4	Appraised value	Collateral value	NM	NM
Commercial leases		2	Appraised value	Collateral value	NM	NM
OREO		17	Appraised value	Appraised value	NM	NM
Bank premises and equipment		4	Appraised value	Appraised value	NM	NM
Operating lease equipment		12	Appraised value	Appraised value	NM	NM
Private equity investments		29	Liquidity discount applied	Liquidity discount	0-43.0%	10.5%
			to fund's net asset value
		4	Comparable company analysis	Market comparable transactions	NM	NM

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
				Costs to sell	NM	10.0%
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

Commercial loans held for sale

During the three months ended March 31, 2018 and 2017 the Bancorp transferred $1 million and $18 million, respectively, of commercial loans from the portfolio to loans held for sale that upon transfer were measured at lower of cost or fair value. These loans had fair value adjustments during the three months ended March 31, 2018 and 2017 totalingan immaterial amount and $17 million, respectively,and were generally based on appraisals of the underlying collateral and were, therefore, classified within Level 3 of the valuation hierarchy. Additionally, there was $1 million and an immaterial amount of fair value adjustments on existing commercial loans held for sale for the three months ended March 31, 2018 and 2017, respectively. The fair value adjustments were also based on appraisals of the underlying collateral. The Bancorp did not recognize any gains or losses on the sale of commercial loans held for sale during the three months ended March 31, 2018. During the three months ended March 31, 2017, 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.

Commercial loans held for investment

During the three months ended March 31, 2018 and 2017, the Bancorp recorded nonrecurring impairment adjustments to certain commercial and industrial loans, commercial mortgage 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.

OREO

During both the three months ended March 31, 2018 and 2017, 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 the three months ended March 31, 2018 and 2017, these losses include $1 million and $2 million, respectively, recorded as charge-offs on new OREO properties transferred from loans during the respective periods and $2 million recorded as negative fair value adjustments on OREO in other noninterest expense in the 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 refer to Note 7.

Operating lease equipment

During both the three months ended March 31, 2018 and 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, 2018 and 2017, the Bancorp recorded net losses of $2 million and $20 million, respectively, 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.

Private equity investments

As a result of adopting ASU 2016-01, effective January 1, 2018, the Bancorp accounts for its private equity investments using the measurement alternative to fair value, except for those accounted for under the equity method of accounting. Under the measurement alternative, the Bancorp carries each investment at its cost basis minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The carrying value of the Bancorp’s private equity investments as of March 31, 2018 include a cumulative $35 million of positive adjustments as a result of such observable price changes. Because these adjustments are based on observable transactions in inactive markets, they are classified in Level 2 of the fair value hierarchy.

For private equity investments which are accounted for using the measurement alternative to fair value, the Bancorp qualitatively evaluates each investment quarterly to determine if impairment may exist. If necessary, the Bancorp then measures impairment by estimating the value of its investment and comparing that to the investment’s carrying value, whether or not the Bancorp considers the impairment to be temporary. These valuations are typically developed using a discounted cash flow method, but other methods may be used if more appropriate for the circumstances. These valuations are based on unobservable inputs and therefore are classified in Level 3 of the fair value hierarchy. The carrying value of the Bancorp’s private equity investments as of March 31, 2018 includes a cumulative $10 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018.

The Bancorp recognized $6 million of OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three months ended March 31, 2018. The Bancorp performed nonrecurring fair value measurements on a fund by fund basis to determine whether OTTI existed. The Bancorp estimated the fair value of the funds by applying an estimated market discount to the reported net asset value of the fund or through a discounted cash flow analysis. Because the length of time until the investment will become redeemable is generally not certain, these funds were classified within Level 3 of the valuation hierarchy. An adverse change in the reported net asset values or estimated market discounts, where applicable, would result in a decrease in the fair value estimate. In cases where the carrying value exceeds the fair value, an impairment loss is recognized. The Bancorp’s Private Equity department, which reports to the Head of Payments, Strategy and Digital Solutions, in conjunction with Accounting, is responsible for preparing and reviewing the fair value estimates.

Fair Value Option

The Bancorp elected to measure certain residential mortgage and commercial 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. Electing to measure certain commercial loans held for sale at fair value reduces certain timing differences and better reflects changes in fair value of these assets that are expected to the sold in the short term. Management’s intent to sell residential mortgage or commercial 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 residential mortgage loans held at March 31, 2018 and 2017 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $12 million and $22 million, respectively. These gains are reported in mortgage banking net revenue in the Condensed Consolidated Statements of Income. Fair value changes recognized in earnings for commercial loans held at March 31, 2018 for which the fair value option was elected included gains of an immaterial amount for the three months ended March 31, 2018. The Bancorp did not hold any commercial loans held for sale during the three months ended March 31, 2017. These gains are reported in corporate banking 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, 2018 and December 31, 2017. Valuation adjustments related to instrument-specific credit risk for commercial loans measured at fair value had an immaterial impact on the fair value of those loans at March 31, 2018. The Bancorp did not hold any commercial loans held for sale at December 31, 2017. Interest on 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 and commercial loans measured at fair value as of:
		Aggregate	Aggregate Unpaid
March 31, 2018 ($ in millions)		Fair Value	Principal Balance	Difference
Residential mortgage loans measured at fair value	$	786	774	12
Past due loans of 90 days or more		4	4	-
Nonaccrual loans		1	1	-
Commercial loans measured at fair value		16	16	-
December 31, 2017
Residential mortgage loans measured at fair value	$	536	522	14
Past due loans of 90 days or more		5	5	-
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, 2018 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,038	2,038	-	-	2,038
Other short-term investments		1,747	1,747	-	-	1,747
Other securities		612	-	612	-	612
Held-to-maturity securities		23	-	-	23	23
Loans and leases held for sale		51	-	-	51	51
Portfolio loans and leases:
Commercial and industrial loans		41,023	-	-	42,143	42,143
Commercial mortgage loans		6,446	-	-	6,395	6,395
Commercial construction loans		4,743	-	-	4,775	4,775
Commercial leases		3,904	-	-	3,520	3,520
Residential mortgage loans		15,338	-	-	15,716	15,716
Home equity		6,713	-	-	7,103	7,103
Automobile loans		8,979	-	-	8,708	8,708
Credit card		2,072	-	-	2,440	2,440
Other consumer loans		1,592	-	-	1,669	1,669
Unallocated ALLL		(114)	-	-	-	-
Total portfolio loans and leases, net	$	90,696	-	-	92,469	92,469
Financial liabilities:
Deposits	$	105,461	-	105,407	-	105,407
Federal funds purchased		178	178	-	-	178
Other short-term borrowings		1,335	-	1,335	-	1,335
Long-term debt		14,800	14,752	464	-	15,216

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2017 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,514	2,514	-	-	2,514
Other short-term investments		2,753	2,753	-	-	2,753
Other securities		612	-	612	-	612
Held-to-maturity securities		24	-	-	24	24
Loans and leases held for sale		93	-	-	93	93
Portfolio loans and leases:
Commercial and industrial loans		40,519	-	-	41,718	41,718
Commercial mortgage loans		6,539	-	-	6,490	6,490
Commercial construction loans		4,530	-	-	4,560	4,560
Commercial leases		4,054	-	-	3,705	3,705
Residential mortgage loans		15,365	-	-	15,996	15,996
Home equity		6,968	-	-	7,410	7,410
Automobile loans		9,074	-	-	8,832	8,832
Credit card		2,182	-	-	2,616	2,616
Other consumer loans		1,526	-	-	1,621	1,621
Unallocated ALLL		(120)	-	-	-	-
Total portfolio loans and leases, net	$	90,637	-	-	92,948	92,948
Financial liabilities:
Deposits	$	103,162	-	103,123	-	103,123
Federal funds purchased		174	174	-	-	174
Other short-term borrowings		4,012	-	4,012	-	4,012
Long-term debt		14,904	15,045	529	-	15,574

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Business Segments

3 Months Ended

Mar. 31, 2018

Segment Reporting

Business Segments

22.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 1,2018 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2017, thus net interest income for deposit-providing business segments was positively impacted during 2018. 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 2018.

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 is 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 results of operations and financial position for the three months ended March 31, 2017 were adjusted to reflect changes in internal expense allocation methodologies.

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 1,153 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 five main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; ClearArc Capital, Inc., an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Insurance Agency, 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 Insurance Agency, Inc. assists clients with their financial and risk management needs. 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, 2018 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	419	466	59	43	9	-	996
Provision for (benefit from) loan and lease losses		(20)	44	12	16	(29)	-	23
Net interest income after provision for loan and lease losses		439	422	47	27	38	-	973
Noninterest income:
Service charges on deposits		71	66	-	-	-	-	137
Wealth and asset management revenue		1	37	-	109	-	(34)(a)	113
Corporate banking revenue		86 (c)	1	-	1	-	-	88
Card and processing revenue		14	64	-	1	-	-	79
Mortgage banking net revenue		-	1	55	-	-	-	56
Other noninterest income		49	15 (b)	4	5	387	-	460
Securities losses, net		(2)	-	-	-	(9)	-	(11)
Securities losses, net - non-qualifying hedges on MSRs		-	-	(13)	-	-	-	(13)
Total noninterest income		219	184	46	116	378	(34)	909
Noninterest expense:
Salaries, wages and incentives		70	110	39	44	184	-	447
Employee benefits		18	26	11	10	45	-	110
Net occupancy expense		7	43	3	3	19	-	75
Technology and communications		2	1	1	-	64	-	68
Equipment expense		5	13	-	-	13	-	31
Card and processing expense		1	29	-	-	(1)	-	29
Other noninterest expense		281	215	52	74	(302)	(34)	286
Total noninterest expense		384	437	106	131	22	(34)	1,046
Income (loss) before income taxes		274	169	(13)	12	394	-	836
Applicable income tax expense (benefit)		15	35	(3)	3	82	-	132
Net income (loss)		259	134	(10)	9	312	-	704
Total goodwill	$	630	1,655	-	177	-	-	2,462
Total assets	$	58,829	60,197	22,384	10,611	(10,521)(d)	-	141,500

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $8for branches and land. For more information refer to Note 7 and Note 21.

Includes bank premises and equipment of $20 classified as held for sale. For more information refer to Note 7.

					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
Noninterest income:
Service charges on deposits		73	65	-	-	-	-	138
Wealth and asset management revenue		1	36	-	105	-	(34)(a)	108
Corporate banking revenue		73 (c)	1	-	-	-	-	74
Card and processing revenue		14	59	-	1	-	-	74
Mortgage banking net revenue		-	1	51	-	-	-	52
Other noninterest income		41	22 (b)	4	-	10	-	77
Total noninterest income		202	184	55	106	10	(34)	523
Noninterest expense:
Salaries, wages and incentives		67	104	37	39	164	-	411
Employee benefits		18	27	11	9	46	-	111
Net occupancy expense		7	47	3	2	19	-	78
Technology and communications		3	1	1	-	53	-	58
Equipment expense		4	13	-	-	11	-	28
Card and processing expense		1	29	-	-	-	-	30
Other noninterest expense		260	192	54	67	(269)	(34)	270
Total noninterest expense		360	413	106	117	24	(34)	986
Income (loss) before income taxes		261	159	(5)	23	(42)	-	396
Applicable income tax expense (benefit)		44	56	(2)	8	(15)	-	91
Net income (loss)		217	103	(3)	15	(27)	-	305
Total goodwill	$	613	1,655	-	151	-	-	2,419
Total assets	$	57,672	57,883	21,994	9,644	(6,993)(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 21.
• Includes impairment chargesof $31for operating lease equipment. For more information refer toNote 21.
• Includes bank premises and equipment of $51 classified as held for sale. For more information refer to Note 7.

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Accounting and Reporting Developments (Policies)

3 Months Ended

Mar. 31, 2018

Policy Text Block [Abstract]

Revenue Recognition

In conjunction with adoption of ASU 2014-09, the Bancorp is providing the following additional disclosures about its significant accounting and reporting policies related to revenue recognition.

Revenue Recognition

The Bancorp generally measures revenue based on the amount of consideration the Bancorp expects to be entitled for the transfer of goods or services to a customer, then recognizes this revenue when or as the Bancorp satisfies its performance obligations under the contract, except in transactions where U.S. GAAP provides other applicable guidance. When the amount of consideration is variable, the Bancorp will only recognize revenue to the extent that it is probable that the cumulative amount recognized will not be subject to a significant reversal in the future. Substantially all of the Bancorp’s contracts with customers have expected durations of one year or less and payments are typically due when or as the services are rendered or shortly thereafter. When third parties are involved in providing goods or services to customers, the Bancorp recognizes revenue on a gross basis when it has control over those goods or services prior to transfer to the customer; otherwise, revenue is recognized for the net amount of any fee or commission. The Bancorp excludes sales taxes from the recognition of revenue and recognizes the incremental costs of obtaining contracts as an expense if the period of amortization for those costs would be one year or less.

The Bancorp’s interest income is derived from loans and leases, securities and other short-term investments. The Bancorp recognizes interest income in accordance with the applicable guidance in U.S. GAAP for these assets. Refer to the Portfolio Loans and Leases and Securities sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information. The following provides additional information about the components of noninterest income:

• Service charges on deposits consist primarily of treasury management fees for commercial clients, monthly service charges on consumer deposit accounts, transaction-based fees (such as overdraft fees and wire transfer fees), and other deposit account-related charges. The Bancorp’s performance obligations for treasury management fees and consumer deposit account service charges are typically satisfied over time, while performance obligations for transaction-based fees are typically satisfied at a point in time. Revenues are recognized on an accrual basis when or as the services are provided to the customer, net of applicable discounts, waivers and reversals. Payments are typically collected from customers directly from the related deposit account at the time the transaction is processed and/or at the end of the customer’s statement cycle (typically monthly).
• Wealth and asset management revenue consists primarily of service fees for investment management, custody, and trust administration services provided to commercial and consumer clients. The Bancorp’s performance obligations for these services are generally satisfied over time and revenues are recognized monthly based on the fee structure outlined in individual contracts. Transaction prices are most commonly based on the market value of assets under management or care and/or a fee per transaction processed. The Bancorp offers certain services, like tax return preparation, for which the performance obligations are satisfied and revenue is recognized at a point in time, when the services are performed. Wealth and asset management revenue also includes trailing commissions received from investments and annuities held in customer accounts, which are recognized in revenue when the Bancorp determines it is probable that the commission will be received.
• Corporate banking revenue consists primarily of service fees and other income related to loans and leases to commercial clients, underwriting revenue recognized by the Bancorp’s broker-dealer subsidiary and fees for other services provided to commercial clients. Revenue related to loans and leases is recognized in accordance with the Bancorp’s policies for portfolio loans and leases. Underwriting revenue is generally recognized on the trade date, which is when the Bancorp’s performance obligations are satisfied.
• Card and processing revenue consists primarily of ATM fees and interchange fees earned when the Bancorp’s credit and debit cards are processed through card association networks. The Bancorp’s performance obligations are generally complete when the transactions generating the fees are processed. Revenue is recognized on an accrual basis as such services are performed, net of certain costs not controlled by the Bancorp (primarily interchange fees charged by credit card associations and expenses of certain transaction-based rewards programs offered to customers). These costs reduced card and processing revenue by approximately $29 million for the three months ended March 31, 2018.
• Mortgage banking net revenue consists primarily of origination fees and gains on loan sales, mortgage servicing fees and the impact of MSRs. Refer to the Loans and Leases Held for Sale and Loan Sales and Securitizations sections in Note 1 of the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.
• Other noninterest income includes income from operating leases, certain fees derived from loans and leases, BOLI income, gains and losses on other assets, and other miscellaneous revenues and gains.

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2018

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)		2018	2017
Cash Payments:
Interest	$	200	208
Income taxes		19	18
Transfers:
Portfolio loans to loans held for sale		64	5
Loans held for sale to portfolio loans		34	3
Portfolio loans to OREO		12	12

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2018

Investments, Debt and Equity Securities [Abstract]

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 debt and other securities and held-to-maturity investment securities portfolios as of:
				Amortized	Unrealized	Unrealized	Fair
March 31, 2018 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agencies securities		$	98	-	(2)	96
	Obligations of states and political subdivisions securities			43	1	-	44
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,456	37	(285)	15,208
		Agency commercial mortgage-backed securities		10,612	13	(170)	10,455
		Non-agency commercial mortgage-backed securities		3,219	16	(45)	3,190
	Asset-backed securities and other debt securities			2,190	38	(14)	2,214
	Other securities(a)			612	-	-	612
Total available-for-sale debt and other securities			$	32,230	105	(516)	31,819
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	21	-	-	21
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	23	-	-	23

Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $248, $362 and $2, respectively, at March 31, 2018, that are carried at cost.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2017 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agencies securities		$	98	-	-	98
	Obligations of states and political subdivisions securities			43	1	-	44
	Mortgage-backed securities:
		Agency residential mortgage-backed securities(a)		15,281	118	(80)	15,319
		Agency commercial mortgage-backed securities		10,113	92	(38)	10,167
		Non-agency commercial mortgage-backed securities		3,247	51	(5)	3,293
	Asset-backed securities and other debt securities			2,183	46	(11)	2,218
	Other securities(b)			612	-	-	612
Total available-for-sale debt and other securities			$	31,577	308	(134)	31,751
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	22	-	-	22
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	24	-	-	24

• Includes interest-only mortgage-backed securities of $34 as of December 31, 2017, recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.
• Other securities consist of FHLB, FRB and DTCC restricted stock holdings of$248, $362 and $2, respectively, at December 31, 2017, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:
		March 31,	December 31,
($ in millions)		2018	2017
Trading debt securities	$	571	492
Equity securities		418	439

Realized Gains and Losses Recognized in Income from Investment Securities

The following table presents net realized gains and losses that were recognized in income from available-for-sale debt and other securities as well as total (losses) gains that were recognized in income from trading debt securities and equity securities:
			For the three months ended
			March 31,
($ in millions)			2018	2017
Available-for-sale debt and other securities:
	Realized gains	$	34	9
	Realized losses		(43)	(1)
	OTTI(a)		-	(10)
Net realized losses on available-for sale debt and other securities(b)		$	(9)	(2)
Total trading debt securities (losses) gains(c)		$	(14)	1
Total equity securities (losses) gains(d)(e)		$	(3)	1
Total gains and losses recognized in income from available-for-sale debt and other securities,
	trading debt securities, and equity securities	$	(26)	-

• Included in securities losses, net in the Condensed Consolidated Statements of Income.
• Excludesnet gainsof $1on interest-only mortgage-backed securities for both the three months ended March 31, 2018 and 2017.
• Includes a net loss of $1and a net gain of $1 for the three months ended March 31, 2018and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes an immaterial net loss and an immaterial net gain for the three months ended March 31, 2018and 2017, respectively, recorded in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income.
• Includes a net unrealized loss of $2 and a net unrealized gain of $1 for the three months ended March 31, 2018 and 2017, respectively.

Amortized Cost and Fair Value of Available-for-Sale Debt 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 debt and other securities and held-to-maturity investment securities as of March 31, 2018 are shown in the following table:
			Available-for-Sale Debt and Other		Held-to-Maturity
($ in millions)			Amortized Cost	Fair Value	Amortized Cost	Fair Value
Debt securities:(a)
	Less than 1 year	$	234	225	5	5
	1-5 years		8,664	8,562	15	15
	5-10 years		17,352	17,135	1	1
	Over 10 years		5,368	5,285	2	2
Other securities			612	612	-	-
Total		$	32,230	31,819	23	23

(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 debt 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, 2018
U.S. Treasury and federal agencies	$	96	(2)	-	-	96	(2)
Agency residential mortgage-backed securities		11,958	(256)	458	(29)	12,416	(285)
Agency commercial mortgage-backed securities		8,115	(144)	512	(26)	8,627	(170)
Non-agency commercial mortgage-backed securities		2,188	(38)	141	(7)	2,329	(45)
Asset-backed securities and other debt securities		312	(3)	377	(11)	689	(14)
Total	$	22,669	(443)	1,488	(73)	24,157	(516)
December 31, 2017
U.S. Treasury and federal agencies	$	98	-	-	-	98	-
Agency residential mortgage-backed securities		7,337	(59)	479	(21)	7,816	(80)
Agency commercial mortgage-backed securities		2,900	(22)	526	(16)	3,426	(38)
Non-agency commercial mortgage-backed securities		449	(2)	145	(3)	594	(5)
Asset-backed securities and other debt securities		317	(2)	386	(9)	703	(11)
Total	$	11,101	(85)	1,536	(49)	12,637	(134)

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Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2018

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 classified based upon product or collateral as of:
			March 31,	December 31,
($ in millions)			2018	2017
Loans and leases held for sale:
	Commercial and industrial loans	$	43	-
	Commercial mortgage loans		6	6
	Residential mortgage loans		668	486
Total loans and leases held for sale		$	717	492
Portfolio loans and leases:
	Commercial and industrial loans	$	41,635	41,170
	Commercial mortgage loans		6,509	6,604
	Commercial construction loans		4,766	4,553
	Commercial leases		3,919	4,068
Total commercial loans and leases		$	56,829	56,395
	Residential mortgage loans	$	15,563	15,591
	Home equity		6,757	7,014
	Automobile loans		9,018	9,112
	Credit card		2,188	2,299
	Other consumer loans		1,615	1,559
Total consumer loans		$	35,141	35,575
Total portfolio loans and leases		$	91,970	91,970

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)		2018	2017		2018	2017
Commercial and industrial loans	$	41,678	41,170		7	3
Commercial mortgage loans		6,515	6,610		1	-
Commercial construction loans		4,766	4,553		-	-
Commercial leases		3,919	4,068		-	-
Residential mortgage loans		16,231	16,077		62	57
Home equity		6,757	7,014		-	-
Automobile loans		9,018	9,112		9	10
Credit card		2,188	2,299		28	27
Other consumer loans		1,615	1,559		-	-
Total loans and leases	$	92,687	92,462		107	97
Less: Loans and leases held for sale	$	717	492
Total portfolio loans and leases	$	91,970	91,970
The following table presents a summary of net charge-offs for the three months ended March 31:
($ in millions)					2018	2017
Commercial and industrial loans				$	28	36
Commercial mortgage loans					1	5
Commercial leases					-	1
Residential mortgage loans					3	5
Home equity					5	6
Automobile loans					11	11
Credit card					25	22
Other consumer loans					8	3
Total net charge-offs				$	81	89

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Credit Quality and the Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off		(35)	(4)	(64)	-	(103)
	Recoveries of losses previously charged-off		6	1	15	-	22
	Provision for (benefit from) loan and lease losses		(11)	3	37	(6)	23
Balance, end of period		$	713	89	222	114	1,138
				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

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, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	113	64	40	-	217
	Collectively evaluated for impairment		600	25	182	-	807
	Unallocated		-	-	-	114	114
Total ALLL		$	713	89	222	114	1,138
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	573	666	308	-	1,547
	Collectively evaluated for impairment		56,256	14,759	19,270	-	90,285
	Loans acquired with deteriorated credit quality		-	2	-	-	2
Total portfolio loans and leases		$	56,829	15,427	19,578	-	91,834

• Includes $1 related to leveraged leases at March 31, 2018.
• Excludes $136of residential mortgage loans measured at fair value and includes $670of leveraged leases, net of unearned income at March 31, 2018.

				Residential
As of December 31, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	94	64	42	-	200
	Collectively evaluated for impairment		659	25	192	-	876
	Unallocated		-	-	-	120	120
Total ALLL		$	753	89	234	120	1,196
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	560	665	320	-	1,545
	Collectively evaluated for impairment		55,835	14,787	19,664	-	90,286
	Loans acquired with deteriorated credit quality		-	2	-	-	2
Total portfolio loans and leases		$	56,395	15,454	19,984	-	91,833

• Includes $1 related to leveraged leases at December 31, 2017.
• Excludes $137 of residential mortgage loans measured at fair value and includes $674 of leveraged leases, net of unearned income at December 31, 2017.

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, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,385	1,074	1,173	3	41,635
Commercial mortgage owner-occupied loans		3,150	81	99	-	3,330
Commercial mortgage nonowner-occupied loans		3,079	8	92	-	3,179
Commercial construction loans		4,692	74	-	-	4,766
Commercial leases		3,776	79	64	-	3,919
Total commercial loans and leases	$	54,082	1,316	1,428	3	56,829

			Special
As of December 31, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,813	1,115	1,235	7	41,170
Commercial mortgage owner-occupied loans		3,207	75	80	-	3,362
Commercial mortgage nonowner-occupied loans		3,117	28	97	-	3,242
Commercial construction loans		4,553	-	-	-	4,553
Commercial leases		3,922	72	74	-	4,068
Total commercial loans and leases	$	53,612	1,290	1,486	7	56,395

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, 2018		December 31, 2017
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,399	28	15,424	30
Home equity		6,683	74	6,940	74
Automobile loans		9,017	1	9,111	1
Credit card		2,162	26	2,273	26
Other consumer loans		1,614	1	1,559	-
Total residential mortgage and consumer loans	$	34,875	130	35,307	131

(a) Excludes $136and $137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017, 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, 2018 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,502	46	87	133	41,635	7
	Commercial mortgage owner-occupied loans		3,316	6	8	14	3,330	1
	Commercial mortgage nonowner-occupied loans		3,109	67	3	70	3,179	-
	Commercial construction loans		4,766	-	-	-	4,766	-
	Commercial leases		3,914	-	5	5	3,919	-
Residential mortgage loans(a)			15,304	32	91	123	15,427	62
Consumer loans:
	Home equity		6,636	66	55	121	6,757	-
	Automobile loans		8,927	81	10	91	9,018	9
	Credit card		2,115	39	34	73	2,188	28
	Other consumer loans		1,605	9	1	10	1,615	-
Total portfolio loans and leases		$	91,194	346	294	640	91,834	107

• Excludes $136 of residential mortgage loans measured at fair value at March 31, 2018.
• 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, 2018, $79of these loans were 30-89 days past due and $317 were 90 days or more past due. The Bancorp recognized $2of lossesduring the three months ended March 31, 2018due 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, 2017 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,027	42	101	143	41,170	3
	Commercial mortgage owner-occupied loans		3,351	3	8	11	3,362	-
	Commercial mortgage nonowner-occupied loans		3,235	-	7	7	3,242	-
	Commercial construction loans		4,552	1	-	1	4,553	-
	Commercial leases		4,065	3	-	3	4,068	-
Residential mortgage loans(a)			15,301	66	87	153	15,454	57
Consumer loans:
	Home equity		6,888	70	56	126	7,014	-
	Automobile loans		8,992	107	13	120	9,112	10
	Credit card		2,230	36	33	69	2,299	27
	Other consumer loans		1,554	5	-	5	1,559	-
Total portfolio loans and leases		$	91,195	333	305	638	91,833	97

• Excludes $137 of residential mortgage loans measured at fair value at December 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 December 31, 2017, $95of these loans were 30-89 days past due and $290 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.
• 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, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	414	358		109
	Commercial mortgage owner-occupied loans		4	3		1
	Commercial mortgage nonowner-occupied loans		2	2		-
	Commercial leases		8	8		3
Restructured residential mortgage loans			460	457		64
Restructured consumer loans:
	Home equity		129	130		25
	Automobile loans		6	5		1
	Credit card		49	44		14
Total impaired portfolio loans and leases with a related ALLL		$	1,072	1,007		217
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	188	161		-
	Commercial mortgage owner-occupied loans		17	13		-
	Commercial mortgage nonowner-occupied loans		28	28		-
Restructured residential mortgage loans			228	209		-
Restructured consumer loans:
	Home equity		129	126		-
	Automobile loans		3	3		-
Total impaired portfolio loans with no related ALLL		$	593	540		-
Total impaired portfolio loans and leases		$	1,665	1,547	(a)	217

Includes $249, $654 and $262, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $154, $12 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018.

			Unpaid
			Principal	Recorded
As of December 31, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	433	358		87
	Commercial mortgage owner-occupied loans		16	14		7
	Commercial mortgage nonowner-occupied loans		4	3		-
	Commercial leases		4	4		-
Restructured residential mortgage loans			469	465		64
Restructured consumer loans:
	Home equity		172	172		27
	Automobile loans		8	7		1
	Credit card		52	45		14
Total impaired portfolio loans and leases with a related ALLL		$	1,158	1,068		200
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	151	131		-
	Commercial mortgage owner-occupied loans		18	15		-
	Commercial mortgage nonowner-occupied loans		35	35		-
Restructured residential mortgage loans			218	200		-
Restructured consumer loans:
	Home equity		97	94		-
	Automobile loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	521	477		-
Total impaired portfolio loans and leases		$	1,679	1,545	a(a)	200

Includes $249, $652 and $275, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $150, $13 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017.

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, 2018		March 31, 2017
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	497	5	683	1
	Commercial mortgage owner-occupied loans(a)		22	-	43	-
	Commercial mortgage nonowner-occupied loans		34	-	89	1
	Commercial leases		6	-	3	-
Restructured residential mortgage loans			665	6	654	6
Restructured consumer loans:
	Home equity		258	3	298	3
	Automobile loans		9	-	14	-
	Credit card		48	1	51	1
Total average impaired portfolio loans and leases		$	1,539	15	1,835	12

Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $26for the three months ended March 31, 2017. An immaterial amount of interest income was recognized during the three months ended March 31, 2017. Refer to Note 9 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

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)			2018	2017
Commercial loans and leases:
	Commercial and industrial loans	$	299	276
	Commercial mortgage owner-occupied loans		11	19
	Commercial mortgage nonowner-occupied loans		4	7
	Commercial leases		8	4
Total nonaccrual portfolio commercial loans and leases			322	306
Residential mortgage loans			28	30
Consumer loans:
	Home equity		74	74
	Automobile loans		1	1
	Credit card		26	26
	Other consumer loans		1	-
Total nonaccrual portfolio consumer loans			102	101
Total nonaccrual portfolio loans and leases(a)(b)		$	452	437
OREO and other repossessed property			52	52
Total nonperforming portfolio assets(a)(b)		$	504	489

• Excludes $24and $6 of nonaccrual loans held for sale at March 31, 2018 and December 31, 2017, respectively.
• Includes $5and $3of nonaccrual government insured commercial loans whose repayments are insured by the SBA at March 31, 2018 and December 31, 2017, respectively, of which $2 and $3are restructured nonaccrual government insured commercial loans at both March 31, 2018and December 31, 2017, respectively.

Summary of Loans Modified in a TDR

The following tables provide a summary of loans and leases, 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, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	12	$	72	13	-
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		247		33	1	-
Consumer loans:
	Home equity	25		2	-	-
	Automobile loans	20		-	-	-
	Credit card	1,965		10	2	-
Total portfolio loans		2,271	$	117	16	-

• Excludes all loans and leasesheld 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
		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.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended March 31, 2018 and 2017 and were within twelve months of the restructuring date:
		Number of		Recorded
March 31, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	1
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		48		7
Consumer loans:
	Home equity	2		-
	Credit card	242		1
Total portfolio loans		295	$	9

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

		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.

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Bank Premises and Equipment (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018	December 31, 2017
Land and improvements(a)	$	636	644
Buildings(a)		1,661	1,679
Equipment		1,921	1,876
Leasehold improvements		399	399
Construction in progress(a)		76	93
Bank premises and equipment held for sale:
Land and improvements		12	17
Buildings		8	9
Equipment		-	1
Accumulated depreciation and amortization		(2,747)	(2,715)
Total bank premises and equipment	$	1,966	2,003

(a) At March 31, 2018 and December 31, 2017, land and improvements, buildings and construction in progress included $89 and $91, respectively, associated with parcels of undeveloped land intended for future branch expansion.

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018
Core deposit intangibles	$	34	(29)	5
Customer relationships		19	(1)	18
Non-compete agreements		14	(11)	3
Other		6	(2)	4
Total intangible assets	$	73	(43)	30
As of December 31, 2017
Core deposit intangibles	$	34	(29)	5
Customer relationships		16	-	16
Non-compete agreements		13	(10)	3
Other		6	(3)	3
Total intangible assets	$	69	(42)	27

Estimated Amortization Expense

Estimated amortization expense for the remainder of 2018 through 2022 is as follows:
($ in millions)		Total
Remainder of 2018	$	4
2019		5
2020		3
2021		2
2022		2

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)			Securitizations	Investments	Total
Assets:
	Other short-term investments	$	66	-	66
	Commercial mortgage loans		-	20	20
	Automobile loans		1,115	-	1,115
	ALLL		(6)	-	(6)
	Other assets		6	-	6
Total assets		$	1,181	20	1,201
Liabilities:
	Other liabilities	$	2	-	2
	Long-term debt		1,031	-	1,031
Total liabilities		$	1,033	-	1,033
Noncontrolling interests		$	-	20	20

			Automobile Loan	CDC
December 31, 2017 ($ in millions)			Securitizations	Investments	Total
Assets:
	Other short-term investments	$	62	-	62
	Commercial mortgage loans		-	20	20
	Automobile loans		1,277	-	1,277
	ALLL		(6)	-	(6)
	Other assets		7	-	7
Total assets		$	1,340	20	1,360
Liabilities
	Other liabilities	$	2	-	2
	Long-term debt		1,190	-	1,190
Total liabilities		$	1,192	-	1,192
Noncontrolling interests		$	-	20	20

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, 2018 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,316	338	1,316
Private equity investments		95	-	140
Loans provided to VIEs		1,937	-	3,043

		Total	Total	Maximum
December 31, 2017 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,376	355	1,376
Private equity investments		102	-	150
Loans provided to VIEs		1,845	-	2,910

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		2018	2017
Pre-tax investment and impairment losses(a)	Other noninterest expense	$	45	36
Tax credits and other benefits	Applicable income tax expense		(52)	(56)

(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, 2018 and 2017.

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Sales of Receivables and Servicing Rights (Tables)

3 Months Ended

Mar. 31, 2018

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)		2018		2017
Residential mortgage loan sales(a)	$	1,000	a	1,629
Origination fees and gains on loan sales		24		29
Gross mortgage servicing fees		53		47

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 loans for the three months ended March 31:
($ in millions)		2018	2017
Balance, beginning of period	$	858	744
Servicing rights originated - residential mortgage loans		16	26
Servicing rights acquired - residential mortgage loans		24	29
Changes in fair value:
Due to changes in inputs or assumptions(a)		57	4
Other changes in fair value(b)		(29)	(27)
Balance, end of period	$	926	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.

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:
		For the three months ended
		March 31,
($ in millions)		2018	2017
Securities losses, net - non-qualifying hedges on MSRs	$	(13)	-
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio(a)		(49)	(1)
MSR fair value adjustment(a)		28	(23)

(a) Included in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

Servicing Assets and Residual Interests Economic Assumptions

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, securitization or purchase resulting from transactions completed during the three months ended March 31, 2018 and 2017 were as follows:
		March 31, 2018				March 31, 2017
	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	7.0	9.1	%	549	6.7	9.9	%	485
Servicing rights	Adjustable	2.6	30.0		637	2.3	34.9		700

Sensitivity of the Current Fair Value of Residual Cash Flows to Immediate 10%, 20% and 50% Adverse Changes in Assumptions

At March 31, 2018, 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 OAS spread are as follows:
					Prepayment						OAS
					Speed Assumption						Spread Assumption
											OAS Spread		Impact of
				Weighted-				Impact of Adverse Change					Adverse Change
			Fair	Average Life				on Fair Value					on Fair Value
($ in millions)(a)	Rate		Value	(in years)	Rate			10%	20%	50%	(bps)		10%	20%
Residential mortgage loans:
Servicing rights	Fixed	$	910	6.4	10.0	%	$	(35)	(68)	(156)	548	$	(19)	(36)
Servicing rights	Adjustable		16	3.3	24.6			(1)	(2)	(4)	797		-	(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, 2018

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, 2018 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,705		248	4
Total fair value hedges				248	4
Cash flow hedges:
Interest rate swaps related to C&I loans		4,150		-	18
Total cash flow hedges				-	18
Total derivatives designated as qualifying hedging instruments				248	22
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		12,135		53	20
Forward contracts related to residential mortgage loans held for sale		1,153		2	2
Swap associated with the sale of Visa, Inc. Class B Shares		1,993		-	165
Foreign exchange contracts		138		-	-
Total free-standing derivatives - risk management and other business purposes				55	187
Free-standing derivatives - customer accommodation:
Interest rate contracts		44,973		220	241
Interest rate lock commitments		667		11	-
Commodity contracts		4,843		199	195
TBA securities		46		-	-
Foreign exchange contracts		11,723		132	129
Total free-standing derivatives - customer accommodation				562	565
Total derivatives not designated as qualifying hedging instruments				617	752
Total			$	865	774

				Fair Value
		Notional		Derivative	Derivative
December 31, 2017 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,705		297	5
Total fair value hedges				297	5
Cash flow hedges:
Interest rate swaps related to C&I loans		4,475		-	12
Total cash flow hedges				-	12
Total derivatives designated as qualifying hedging instruments				297	17
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		11,035		54	15
Forward contracts related to residential mortgage loans held for sale		1,284		1	1
Stock warrant		20		20	-
Swap associated with the sale of Visa, Inc. Class B Shares		1,900		-	137
Foreign exchange contracts		112		-	1
Total free-standing derivatives - risk management and other business purposes				75	154
Free-standing derivatives - customer accommodation:
Interest rate contracts		42,216		154	145
Interest rate lock commitments		446		8	-
Commodity contracts		4,125		165	167
TBA securities		26		-	-
Foreign exchange contracts		12,654		124	119
Total free-standing derivatives - customer accommodation				451	431
Total derivatives not designated as qualifying hedging instruments				526	585
Total			$	823	602

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		2018	2017
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	(63)	(21)
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		64	21

The following amounts were recorded in the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of:
	Condensed Consolidated
($ in millions)	Balance Sheets Caption		March 31, 2018
Carrying amount of the hedged item	Long-term debt	$	4,219
Cumulative amount of fair value hedging adjustments included in the carrying
amount of the hedged items	Long-term debt		(231)

Net Gains (Losses) Relating to Derivative Instruments Designated as Cash Flow Hedges

The following table presents the pretax net (losses) gains 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)		2018	2017(a)
Amount of pretax net losses recognized in OCI	$	(9)	(5)
Amount of pretax net gains reclassified from OCI into net interest income		1	8

For the three months ended March 31, 2017, the amount of pretax net losses recognized in OCI represented the effective portion of the cumulative gains or losses on cash flow hedges and ineffectiveness was reported within noninterest income. Upon the adoption of ASU 2017-12, the Bancorp recorded a cumulative effect adjustment to retained earnings effective January 1, 2018 related to the elimination of the separate measurement of ineffectiveness. Refer to Note 3 for additional information.

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		2018	2017
Interest rate contracts:
Forward contracts related to residential mortgage loans held for sale	Mortgage banking net revenue	$	-	(21)
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		(49)	(1)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2	(1)
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(39)	(13)

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)		2018	2017
Pass	$	3,263	2,748
Special mention		77	66
Substandard		30	24
Total	$	3,370	2,838

Net Gains (Losses) Recognized in the Income Statement Related to Free-Standing Derivative Instruments Used For Customer Accomodation

The net gains 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		2018	2017
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	7	5
Interest rate lock commitments	Mortgage banking net revenue		13	22
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		2	1
Commodity contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		-	1
Foreign exchange contracts:
Foreign exchange contracts for customers (contract revenue)	Corporate banking revenue		14	13
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		(2)	-
Foreign exchange contracts for customers (credit portion of fair value adjustment)	Other noninterest expense		1	1

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, 2018 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	854	(229)	(341)		284
Total assets		854	(229)	(341)		284
Liabilities:
Derivatives		774	(229)	(209)		336
Total liabilities	$	774	(229)	(209)		336

• 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, 2017 ($ in millions)	Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives	$	815	(213)	(362)		240
Total assets		815	(213)	(362)		240
Liabilities:
Derivatives		602	(213)	(155)		234
Total liabilities	$	602	(213)	(155)		234

• 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.

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Other Short Term Borrowings (Tables)

3 Months Ended

Mar. 31, 2018

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)		2018	2017
Securities sold under repurchase agreements	$	662	546
FHLB advances		400	3,125
Derivative collateral		273	341
Total other short-term borrowings	$	1,335	4,012

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Capital Actions (Tables)

3 Months Ended

Mar. 31, 2018

Capital Actions

Summary of the Bancorp's Accelerated Share Repurchase Transactions

The following table presents a summary of the Bancorp's accelerated share repurchase transactions that were entered into or settled during the three months ended March 31, 2018:
Repurchase Date		Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement	Total Shares Repurchased	Settlement Date
December 19, 2017	$	273	7,727,273	824,367	8,551,640	March 19, 2018
February 12, 2018		318	8,691,318	1,015,731	9,707,049	March 26, 2018

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Commitments, Contingent Liabilities and Guarantees (Tables)

3 Months Ended

Mar. 31, 2018

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)		2018	2017
Commitments to extend credit	$	68,089	68,106
Letters of credit		2,164	2,185
Forward contracts related to residential mortgage loans held for sale		1,153	1,284
Noncancelable operating lease obligations		559	568
Purchase obligations		132	144
Capital commitments for private equity investments		45	48
Capital expenditures		27	37
Capital lease obligations		24	26

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)		2018	2017
Pass	$	67,323	67,254
Special mention		354	330
Substandard		412	522
Total commitments to extend credit	$	68,089	68,106

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, 2018:
($ in millions)
Less than 1 year(a)	$	1,174
1 - 5 years(a)		981
Over 5 years		9
Total letters of credit	$	2,164

(a) Includes $6 and $1 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)		2018	2017
Pass	$	1,822	1,830
Special mention		60	67
Substandard		198	218
Doubtful		84	70
Total letters of credit	$	2,164	2,185

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)		2018	2017
Balance, beginning of period	$	9	13
Net reductions to the reserve		(1)	(1)
Balance, end of period	$	8	12

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, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	30		5	-		-
Resolved demands	(22)		(4)	-		-
Balance, end of period	14	$	2	1	$	-

	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	-	$	-

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, 2018

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 OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
March 31, 2018 ($ in millions)			Activity	Effect	Activity	Balance(a)	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(594)	134	(460)
Reclassification adjustment for net losses on available-for-sale
	debt securities included in net income		9	(2)	7
Net unrealized losses on available-for-sale debt securities			(585)	132	(453)	135	(453)	(318)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(9)	2	(7)
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(1)	-	(1)
Net unrealized losses on cash flow hedge derivatives			(10)	2	(8)	(11)	(8)	(19)
Reclassification of amounts to net periodic benefit costs			1	-	1
Defined benefit pension plans, net			1	-	1	(53)	1	(52)
Total		$	(594)	134	(460)	71	(460)	(389)

The Bancorp’s AOCI balance was adjusted as of January 1, 2018 to reflect the adoption of new accounting standards. Refer to Note 3 for additional information.

			Total OCI			Total AOCI
			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

Reclassification Out of Accumulated Other Comprehensive Income to Net Income

The table below presents reclassifications out of AOCI:
				For the three months ended March 31,
		Consolidated Statements of
Components of AOCI: ($ in millions)		Income Caption		2018	2017
Net unrealized gains on available-for-sale securities:(b)
	Net losses included in net income	Securities losses, net	$	(9)	(2)
		Income before income taxes		(9)	(2)
		Applicable income tax expense		2	1
		Net income		(7)	(1)
Net unrealized gains on cash flow hedge derivatives:(b)
	Interest rate contracts related to C&I loans	Interest and fees on loans and leases		1	8
		Income before income taxes		1	8
		Applicable income tax expense		-	(3)
		Net income		1	5
Net periodic benefit costs:(b)
	Amortization of net actuarial loss	Employee benefits expense(a)		(1)	(2)
		Income before income taxes		(1)	(2)
		Applicable income tax expense		-	1
		Net income		(1)	(1)
Total reclassifications for the period		Net income	$	(7)	3

• This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 22of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.
• Amounts in parentheses indicate reductions to net income.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2018

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:
		2018				2017
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	$	689			290
Less: Income allocated to participating securities		8			4
Net income allocated to common shareholders	$	681	690	0.99	286	748	0.38
Earnings Per Diluted Share:
Net income available to common shareholders	$	689			290
Effect of dilutive securities:
Stock-based awards		-	14		-	13
Net income available to common shareholders		689			290
plus assumed conversions
Less: Income allocated to participating securities		8			4
Net income allocated to common shareholders
plus assumed conversions	$	681	704	0.97	286	761	0.38

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	96	-	-	96
Obligations of states and political subdivisions securities		-	44	-	44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,208	-	15,208
Agency commercial mortgage-backed securities		-	10,455	-	10,455
Non-agency commercial mortgage-backed securities		-	3,190	-	3,190
Asset-backed securities and other debt securities		-	2,214	-	2,214
Available-for-sale debt and other securities(a)		96	31,111	-	31,207
Trading debt securities:
U.S. Treasury and federal agencies securities		-	21	-	21
Obligations of states and political subdivisions securities		-	52	-	52
Agency residential mortgage-backed securities		-	364	-	364
Asset-backed securities and other debt securities		-	134	-	134
Trading debt securities		-	571	-	571
Equity securities		417	1	-	418
Residential mortgage loans held for sale		-	650	-	650
Residential mortgage loans(b)		-	-	136	136
Commercial loans held for sale		-	16	-	16
MSRs		-	-	926	926
Derivative assets:
Interest rate contracts		2	521	11	534
Foreign exchange contracts		-	132	-	132
Commodity contracts		34	165	-	199
Derivative assets(d)		36	818	11	865
Total assets	$	549	33,167	1,073	34,789
Liabilities:
Derivative liabilities:
Interest rate contracts	$	2	276	7	285
Foreign exchange contracts		-	129	-	129
Equity contracts		-	-	165	165
Commodity contracts		56	139	-	195
Derivative liabilities(e)		58	544	172	774
Short positions(e)		93	33	-	126
Total liabilities	$	151	577	172	900

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at March 31, 2018.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the threemonths endedMarch 31, 2018, 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.

	Fair Value Measurements Using
December 31, 2017 ($ in millions)		Level 1(c)	Level 2(c)	Level 3	Total Fair Value
Assets:
Available-for-sale debt and other securities:
U.S. Treasury and federal agencies securities	$	98	-	-	98
Obligations of states and political subdivisions securities		-	44	-	44
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,319	-	15,319
Agency commercial mortgage-backed securities		-	10,167	-	10,167
Non-agency commercial mortgage-backed securities		-	3,293	-	3,293
Asset-backed securities and other debt securities		-	2,218	-	2,218
Available-for-sale debt and other securities(a)		98	31,041	-	31,139
Trading debt securities:
U.S. Treasury and federal agencies securities		1	11	-	12
Obligations of states and political subdivisions securities		-	22	-	22
Residential mortgage-backed securities		-	395	-	395
Asset-backed securities and other debt securities		-	63	-	63
Trading debt securities		1	491	-	492
Equity securities		438	1		439
Residential mortgage loans held for sale		-	399	-	399
Residential mortgage loans(b)		-	-	137	137
MSRs		-	-	858	858
Derivative assets:
Interest rate contracts		1	505	8	514
Foreign exchange contracts		-	124	-	124
Equity contracts		-	20	-	20
Commodity contracts		39	126	-	165
Derivative assets(d)		40	775	8	823
Total assets	$	577	32,707	1,003	34,287
Liabilities:
Derivative liabilities:
Interest rate contracts	$	1	172	5	178
Foreign exchange contracts		-	120	-	120
Equity contracts		-	-	137	137
Commodity contracts		38	129	-	167
Derivative liabilities(e)		39	421	142	602
Short positions(e)		25	6	-	31
Total liabilities	$	64	427	142	633

• Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $2, respectively, at December 31, 2017.
• Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
• During the year ended December 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.

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
		Mortgage		Derivatives,	Equity	Total
For the three months ended March 31, 2018 ($ in millions)		Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period	$	137	858	3	(137)		861
Total gains (losses) (realized/unrealized):
Included in earnings		(2)	28	14	(39)		1
Purchases/originations		-	40	(2)	-		38
Settlements		(135)	-	(11)	11		(135)
Transfers into Level 3(b)		136	-	-	-		136
Balance, end of period	$	136	926	4	(165)		901
The amount of total (losses) gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to instruments still held at March 31, 2018(c)	$	(2)	28	11	(39)		(2)

• Net interest rate derivatives include derivative assets and liabilities of $11and $7, respectively, as of March 31, 2018.
• Includes certain residential mortgage loans originated as held for sale that were transferred to held for investment.
• Includes interest income and expense.

	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	Net(a)	Net(a)	Fair Value
Balance, beginning of period	$	143	744	8	(91)		804
Total (losses) gains (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 (losses) gains for the period
included in earnings attributable to the change in unrealized
gains or losses relating to instruments still held at March 31, 2017(c)	$	-	(23)	16	(13)		(20)

• 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 $0and $97, respectively, as ofMarch 31, 2017.
• 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)		2018	2017
Mortgage banking net revenue	$	39	-
Corporate banking revenue		1	-
Other noninterest income		(39)	(13)
Total gains (losses)	$	1	(13)

The total losses included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at March 31, 2018 and 2017 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended
		March 31,
($ in millions)		2018	2017
Mortgage banking net revenue	$	36	(7)
Corporate banking revenue		1	-
Other noninterest income		(39)	(13)
Total losses	$	(2)	(20)

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, 2018 and 2017, and for which a nonrecurring fair value adjustment was recorded during the three months ended March 31, 2018 and 2017, 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) Gains
						For the three months
As of March 31, 2018 ($ in millions)		Level 1	Level 2	Level 3	Total	ended March 31, 2018
Commercial loans held for sale	$	-	-	5	5	(1)
Commercial and industrial loans		-	-	277	277	(44)
Commercial mortgage loans		-	-	4	4	6
Commercial leases		-	-	2	2	(2)
OREO		-	-	17	17	(3)
Bank premises and equipment		-	-	4	4	(8)
Operating lease equipment		-	-	12	12	(2)
Private equity investments		-	50	33	83	19
Total	$	-	50	354	404	(35)

		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)

Quantitative Information About Significant Unobservable Level 3 Fair Value Measurement Inputs

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Residential mortgage loans	$	136	Loss rate model	Interest rate risk factor	(12.6) - 14.1%	1.3%
				Credit risk factor	0 - 46.2%	1.5%
MSRs		926	Discounted cash flow	Prepayment speed	0.5-98.1%	(Fixed) 10.0%(Adjustable) 24.6%
				OAS spread (bps)	446-1,515	(Fixed) 548(Adjustable) 797
IRLCs, net		11	Discounted cash flow	Loan closing rates	9.5 - 102.7%	76.6%
Swap associated with the sale of Visa, Inc.		(165)	Discounted cash flow	Timing of the resolution	2/28/2021 -	9/8/2021
Class B Shares				of the Covered Litigation	12/31/2023

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 -	8/24/2020
Class B Shares				of the Covered Litigation	12/31/2022

The following tables present information as of March 31, 2018 and 2017 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, 2018 ($ 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		277	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		4	Appraised value	Collateral value	NM	NM
Commercial leases		2	Appraised value	Collateral value	NM	NM
OREO		17	Appraised value	Appraised value	NM	NM
Bank premises and equipment		4	Appraised value	Appraised value	NM	NM
Operating lease equipment		12	Appraised value	Appraised value	NM	NM
Private equity investments		29	Liquidity discount applied	Liquidity discount	0-43.0%	10.5%
			to fund's net asset value
		4	Comparable company analysis	Market comparable transactions	NM	NM

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
				Costs to sell	NM	10.0%
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

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 and commercial loans measured at fair value as of:
		Aggregate	Aggregate Unpaid
March 31, 2018 ($ in millions)		Fair Value	Principal Balance	Difference
Residential mortgage loans measured at fair value	$	786	774	12
Past due loans of 90 days or more		4	4	-
Nonaccrual loans		1	1	-
Commercial loans measured at fair value		16	16	-
December 31, 2017
Residential mortgage loans measured at fair value	$	536	522	14
Past due loans of 90 days or more		5	5	-
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, 2018 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,038	2,038	-	-	2,038
Other short-term investments		1,747	1,747	-	-	1,747
Other securities		612	-	612	-	612
Held-to-maturity securities		23	-	-	23	23
Loans and leases held for sale		51	-	-	51	51
Portfolio loans and leases:
Commercial and industrial loans		41,023	-	-	42,143	42,143
Commercial mortgage loans		6,446	-	-	6,395	6,395
Commercial construction loans		4,743	-	-	4,775	4,775
Commercial leases		3,904	-	-	3,520	3,520
Residential mortgage loans		15,338	-	-	15,716	15,716
Home equity		6,713	-	-	7,103	7,103
Automobile loans		8,979	-	-	8,708	8,708
Credit card		2,072	-	-	2,440	2,440
Other consumer loans		1,592	-	-	1,669	1,669
Unallocated ALLL		(114)	-	-	-	-
Total portfolio loans and leases, net	$	90,696	-	-	92,469	92,469
Financial liabilities:
Deposits	$	105,461	-	105,407	-	105,407
Federal funds purchased		178	178	-	-	178
Other short-term borrowings		1,335	-	1,335	-	1,335
Long-term debt		14,800	14,752	464	-	15,216

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2017 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,514	2,514	-	-	2,514
Other short-term investments		2,753	2,753	-	-	2,753
Other securities		612	-	612	-	612
Held-to-maturity securities		24	-	-	24	24
Loans and leases held for sale		93	-	-	93	93
Portfolio loans and leases:
Commercial and industrial loans		40,519	-	-	41,718	41,718
Commercial mortgage loans		6,539	-	-	6,490	6,490
Commercial construction loans		4,530	-	-	4,560	4,560
Commercial leases		4,054	-	-	3,705	3,705
Residential mortgage loans		15,365	-	-	15,996	15,996
Home equity		6,968	-	-	7,410	7,410
Automobile loans		9,074	-	-	8,832	8,832
Credit card		2,182	-	-	2,616	2,616
Other consumer loans		1,526	-	-	1,621	1,621
Unallocated ALLL		(120)	-	-	-	-
Total portfolio loans and leases, net	$	90,637	-	-	92,948	92,948
Financial liabilities:
Deposits	$	103,162	-	103,123	-	103,123
Federal funds purchased		174	174	-	-	174
Other short-term borrowings		4,012	-	4,012	-	4,012
Long-term debt		14,904	15,045	529	-	15,574

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	419	466	59	43	9	-	996
Provision for (benefit from) loan and lease losses		(20)	44	12	16	(29)	-	23
Net interest income after provision for loan and lease losses		439	422	47	27	38	-	973
Noninterest income:
Service charges on deposits		71	66	-	-	-	-	137
Wealth and asset management revenue		1	37	-	109	-	(34)(a)	113
Corporate banking revenue		86 (c)	1	-	1	-	-	88
Card and processing revenue		14	64	-	1	-	-	79
Mortgage banking net revenue		-	1	55	-	-	-	56
Other noninterest income		49	15 (b)	4	5	387	-	460
Securities losses, net		(2)	-	-	-	(9)	-	(11)
Securities losses, net - non-qualifying hedges on MSRs		-	-	(13)	-	-	-	(13)
Total noninterest income		219	184	46	116	378	(34)	909
Noninterest expense:
Salaries, wages and incentives		70	110	39	44	184	-	447
Employee benefits		18	26	11	10	45	-	110
Net occupancy expense		7	43	3	3	19	-	75
Technology and communications		2	1	1	-	64	-	68
Equipment expense		5	13	-	-	13	-	31
Card and processing expense		1	29	-	-	(1)	-	29
Other noninterest expense		281	215	52	74	(302)	(34)	286
Total noninterest expense		384	437	106	131	22	(34)	1,046
Income (loss) before income taxes		274	169	(13)	12	394	-	836
Applicable income tax expense (benefit)		15	35	(3)	3	82	-	132
Net income (loss)		259	134	(10)	9	312	-	704
Total goodwill	$	630	1,655	-	177	-	-	2,462
Total assets	$	58,829	60,197	22,384	10,611	(10,521)(d)	-	141,500

• Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
• Includes impairment charges of $8for branches and land. For more information refer to Note 7 and Note 21.

• Includes impairment charges of $2for operating lease equipment. For more information refer to Note 21.
• Includes bank premises and equipment of $20 classified as held for sale. For more information refer to Note 7.

					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
Noninterest income:
Service charges on deposits		73	65	-	-	-	-	138
Wealth and asset management revenue		1	36	-	105	-	(34)(a)	108
Corporate banking revenue		73 (c)	1	-	-	-	-	74
Card and processing revenue		14	59	-	1	-	-	74
Mortgage banking net revenue		-	1	51	-	-	-	52
Other noninterest income		41	22 (b)	4	-	10	-	77
Total noninterest income		202	184	55	106	10	(34)	523
Noninterest expense:
Salaries, wages and incentives		67	104	37	39	164	-	411
Employee benefits		18	27	11	9	46	-	111
Net occupancy expense		7	47	3	2	19	-	78
Technology and communications		3	1	1	-	53	-	58
Equipment expense		4	13	-	-	11	-	28
Card and processing expense		1	29	-	-	-	-	30
Other noninterest expense		260	192	54	67	(269)	(34)	270
Total noninterest expense		360	413	106	117	24	(34)	986
Income (loss) before income taxes		261	159	(5)	23	(42)	-	396
Applicable income tax expense (benefit)		44	56	(2)	8	(15)	-	91
Net income (loss)		217	103	(3)	15	(27)	-	305
Total goodwill	$	613	1,655	-	151	-	-	2,419
Total assets	$	57,672	57,883	21,994	9,644	(6,993)(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 21.
• Includes impairment chargesof $31for operating lease equipment. For more information refer toNote 21.
• Includes bank premises and equipment of $51 classified as held for sale. For more information refer to Note 7.

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Supplemental Cash Flow (Noncash Investing and Financing Activities) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest paid
Interest	$ 200	$ 208
Income taxes paid, net
Income taxes	19	18
Transfers:
Portfolio loans to loans held for sale	64	5
Loans held for sale to portfolio loans	34	3
Portfolio loans to OREO	$ 12	$ 12

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Accounting and Reporting Developments (Additional Information) (Detail) $ in Millions	Mar. 31, 2018 USD ($)
Accounting Policies [Abstract]
Deferred gains on sale-leaseback transactions	$ 13
Reduction to card and processing revenue	$ 29

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Securities (Investment Securities) (Detail) - USD ($) $ in Millions		Mar. 31, 2018	Dec. 31, 2017
Investment Holdings
Available-for-sale debt securities, fair value	[1]	$ 31,819	$ 31,751
Available-for-sale debt securities, unrealized losses		(516)	(134)
Available-for-sale debt securities, unrealized gains		105	308
Available-for-sale debt securities, amortized cost		32,230	31,577
Held-to-maturity securities, fair value		23	24
Held-to-maturity, unrealized losses		0	0
Held-to-maturity, unrealized gains		0	0
Held-to-maturity securities, amortized cost	[2]	23	24
Trading debt securities, fair value		571	492
Equity securities, fair value		418	439
U.S. Treasury and federal agencies
Investment Holdings
Available-for-sale debt securities, fair value		96	98
Available-for-sale debt securities, unrealized losses		(2)	0
Available-for-sale debt securities, unrealized gains		0	0
Available-for-sale debt securities, amortized cost		98	98
Obligations of states and political subdivisions
Investment Holdings
Available-for-sale debt securities, fair value		44	44
Available-for-sale debt securities, unrealized losses		0	0
Available-for-sale debt securities, unrealized gains		1	1
Available-for-sale debt securities, amortized cost		43	43
Held-to-maturity securities, fair value		21	22
Held-to-maturity, unrealized losses		0	0
Held-to-maturity, unrealized gains		0	0
Held-to-maturity securities, amortized cost		21	22
Agency mortgage-backed securities | Residential mortgage backed securities
Investment Holdings
Available-for-sale debt securities, fair value		15,208	15,319	[3]
Available-for-sale debt securities, unrealized losses		(285)	(80)	[3]
Available-for-sale debt securities, unrealized gains		37	118
Available-for-sale debt securities, amortized cost		15,456	15,281
Agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings
Available-for-sale debt securities, fair value		10,455	10,167
Available-for-sale debt securities, unrealized losses		(170)	(38)
Available-for-sale debt securities, unrealized gains		13	92
Available-for-sale debt securities, amortized cost		10,612	10,113
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings
Available-for-sale debt securities, fair value		3,190	3,293
Available-for-sale debt securities, unrealized losses		(45)	(5)
Available-for-sale debt securities, unrealized gains		16	51
Available-for-sale debt securities, amortized cost		3,219	3,247
Asset-backed securities and other debt securities
Investment Holdings
Available-for-sale debt securities, fair value		2,214	2,218
Available-for-sale debt securities, unrealized losses		(14)	(11)
Available-for-sale debt securities, unrealized gains		38	46
Available-for-sale debt securities, amortized cost		2,190	2,183
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
Other securities
Investment Holdings
Available-for-sale debt securities, fair value		612	612
Available-for-sale debt securities, unrealized losses		0	0
Available-for-sale debt securities, unrealized gains		0	0
Available-for-sale debt securities, amortized cost		$ 612	$ 612

[1] Amortized cost of $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

[2] Fair value of $ 23 and $ 24 at March 31, 2018 and December 31, 2017 , respectively.

[3] Includes interest-only mortgage-backed securities of $ 34 as of December 31, 2017 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

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Securities (Investment Securities) (Parenthetical) (Detail) - USD ($) $ in Millions		Mar. 31, 2018	Dec. 31, 2017
Investment Holdings
FHLB, restricted stock holdings		$ 248	$ 248
FRB, restricted stock holdings		362	362
Available-for-sale debt and other securities	[1]	31,819	31,751
DTCC, restricted stock holdings		$ 2	2
Interest-Only Mortgage-Backed Securities
Investment Holdings
Available-for-sale debt and other securities			$ 34

[1] Amortized cost of $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

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Securities (Gains and Losses Recognized in Income from Available-for-Sale and Trading Securities) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Securities
Available-for-sale debt and other securities, realized gains	$ 34	$ 9
Available-for-sale debt and other securities, realized losses	(43)	(1)
Net realized gains (losses) on available-for-sale debt and other securities	(9)	(2)
Total trading debt securities gains (losses)	(14)	1
Total equity securities gains (losses)	(3)	1
Total available for sale debt and other, trading debt and equity securities gains (losses) recognized in income	(26)	0
Securities gains or losses, net
Securities
OTTI	$ 0	$ 10

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Securities (Gains and Losses Recognized in Income from Available-for-Sale and Trading Securities) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Investment Holdings
Total trading debt securities gains (losses)	$ (14)	$ 1
Total equity securities gains (losses)	(3)	1
Equity securities unrealized gains (losses)	(2)	1
Corporate Banking Revenue and Wealth and Asset Management Revenue
Investment Holdings
Total trading debt securities gains (losses)	(1)	1
Interest-Only Mortgage-Backed Securities
Investment Holdings
Net gains/losses on interest-only mortgage-backed securities	$ 1	$ 1

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Securities (Securities - Additional Information) (Detail) - USD ($) $ in Billions	Mar. 31, 2018	Dec. 31, 2017
Investment Holdings
Securities with a fair value, pledged as collateral	$ 7.1	$ 7.8

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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, 2018	Dec. 31, 2017
Debt securities:
Less than 1 year	[1]	$ 234
1-5 years	[1]	8,664
5-10 years	[1]	17,352
Over 10 years	[1]	5,368
Other securities		612
Available-for-sale debt securities, amortized cost		32,230	$ 31,577
Debt securities:
Less than 1 year	[1]	225
1-5 years	[1]	8,562
5-10 years	[1]	17,135
Over 10 years	[1]	5,285
Other securities		612
Available-for-sale debt and other securities, fair value	[2]	31,819	31,751
Debt securities:
Less than 1 year	[1]	5
1-5 years	[1]	15
5-10 years	[1]	1
Over 10 years	[1]	2
Other securities		0
Held-to-maturity securities, amortized cost	[3]	23	24
Debt securities:
Under 1 year	[1]	5
1-5 years	[1]	15
5-10 years	[1]	1
Over 10 years	[1]	2
Other securities		0
Held-to-maturity securities, fair value		$ 23	$ 24

[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 $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

[3] Fair value of $ 23 and $ 24 at March 31, 2018 and December 31, 2017 , respectively.

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Securities (Fair Value and Gross Unrealized Losses on Available-for-Sale Securities) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Investments, Unrealized Loss Position
Less than 12 months Fair Value	$ 22,669	$ 11,101
Less than 12 months Unrealized Losses	(443)	(85)
12 months or more Fair Value	1,488	1,536
12 months or more Unrealized Losses	(73)	(49)
Total Fair Value	24,157	12,637
Total Unrealized Losses	(516)	(134)
U.S. Treasury and federal agencies
Investments, Unrealized Loss Position
Less than 12 months Fair Value	96	98
Less than 12 months Unrealized Losses	(2)	0
12 months or more Fair Value	0	0
12 months or more Unrealized Losses	0	0
Total Fair Value	96	98
Total Unrealized Losses	(2)	0
Agency mortgage-backed securities | Residential mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	11,958	7,337
Less than 12 months Unrealized Losses	(256)	(59)
12 months or more Fair Value	458	479
12 months or more Unrealized Losses	(29)	(21)
Total Fair Value	12,416	7,816
Total Unrealized Losses	(285)	(80)	[1]
Agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	8,115	2,900
Less than 12 months Unrealized Losses	(144)	(22)
12 months or more Fair Value	512	526
12 months or more Unrealized Losses	(26)	(16)
Total Fair Value	8,627	3,426
Total Unrealized Losses	(170)	(38)
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	2,188	449
Less than 12 months Unrealized Losses	(38)	(2)
12 months or more Fair Value	141	145
12 months or more Unrealized Losses	(7)	(3)
Total Fair Value	2,329	594
Total Unrealized Losses	(45)	(5)
Asset-backed securities and other debt securities
Investments, Unrealized Loss Position
Less than 12 months Fair Value	312	317
Less than 12 months Unrealized Losses	(3)	(2)
12 months or more Fair Value	377	386
12 months or more Unrealized Losses	(11)	(9)
Total Fair Value	689	703
Total Unrealized Losses	$ (14)	$ (11)

[1] Includes interest-only mortgage-backed securities of $ 34 as of December 31, 2017 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

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Loans & Leases (Loans and Leases Classified by Primary Purpose) (Detail) - USD ($) $ in Millions		Mar. 31, 2018	Dec. 31, 2017
Loans held for sale:
Loans and leases held for sale	[1]	$ 717	$ 492
Portfolio loans and leases:
Commercial and industrial loans		41,635	41,170
Commercial mortgage loans		6,509	6,604
Commercial construction loans		4,766	4,553
Commercial leases		3,919	4,068
Residential mortgage loans		15,563	15,591
Home equity		6,757	7,014
Automobile loans		9,018	9,112
Credit card		2,188	2,299
Other consumer loans and leases		1,615	1,559
Portfolio loans and leases	[2],[3]	91,970	91,970
Commercial Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases		56,829	56,395
Commercial Portfolio Segment | Commercial and industrial loans
Loans held for sale:
Loans and leases held for sale		43	0
Commercial Portfolio Segment | Commercial mortgage loans
Loans held for sale:
Loans and leases held for sale		6	6
Residential Mortgage Loans | Residential mortgage loans
Loans held for sale:
Loans and leases held for sale		668	486
Consumer Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases		$ 35,141	$ 35,575

[1] Includes $ 650 and $ 399 of residential mortgage loans held for sale measured at fair value and $ 16 and $ 0 of commercial loans held for sale measured at fair value at March 31, 2018 and December 31, 2017 , respectively.

[2] Includes $ 136 and $ 137 of residential mortgage loans measur ed at fair value at March 31, 2018 and December 31, 2017 , respectively.

[3] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

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Loans & Leases (Loans and Leases - Additional Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable
Unamortized premiums and discounts, deferred direct loan origination fees and costs, and fair value adjustments	$ 289	$ 282
Unearned Income	507	523
Loans pledged at the FHLB	13,200	13,000
Loans pledged at the FRB	$ 40,700	$ 39,800

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Loans & Leases (Total Loans And Leases Managed By The Bancorp) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	$ 91,970		$ 91,970
Net Charge-Offs	81	$ 89
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	41,678		41,170
Balance of Loans 90 days or More Past Due	7		3
Net Charge-Offs	28	36
Commercial Mortgage Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	6,515		6,610
Balance of Loans 90 days or More Past Due	1		0
Net Charge-Offs	1	5
Commercial Construction Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	4,766		4,553
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	3,919		4,068
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	0	1
Residential Mortgage
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	16,231		16,077
Balance of Loans 90 days or More Past Due	62		57
Net Charge-Offs	3	5
Home Equity
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	6,757		7,014
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	5	6
Automobile Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	9,018		9,112
Balance of Loans 90 days or More Past Due	9		10
Net Charge-Offs	11	11
Credit Card
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	2,188		2,299
Balance of Loans 90 days or More Past Due	28		27
Net Charge-Offs	25	22
Other Consumer Loans
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together
Balance	1,615		1,559
Balance of Loans 90 days or More Past Due	0		0
Net Charge-Offs	8	$ 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	717		492
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	92,687		92,462
Balance of Loans 90 days or More Past Due	$ 107		$ 97

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Credit Quality (Summary of Transactions in the ALLL by Portfolio segment) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2017
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	[1],[2]	$ 1,196		$ 1,253
Losses charged-off		(103)		(107)
Recoveries of losses previously charged- off		22		18
Provision for (benefit from) loan and lease losses		23		74
Balance, end of period		1,138	[2],[3]	1,238
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	[1]	753		831
Losses charged-off		(35)		(46)
Recoveries of losses previously charged- off		6		4
Provision for (benefit from) loan and lease losses		(11)		37
Balance, end of period		713	[3]	826
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	[1]	89		96
Losses charged-off		(4)		(6)
Recoveries of losses previously charged- off		1		1
Provision for (benefit from) loan and lease losses		3		5
Balance, end of period		89	[3]	96
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	[1]	234		214
Losses charged-off		(64)		(55)
Recoveries of losses previously charged- off		15		13
Provision for (benefit from) loan and lease losses		37		32
Balance, end of period		222	[3]	204
Unallocated
Financing Receivable, Allowance for Credit Losses
Balance, beginning of period	[1]	120		112
Losses charged-off		0		0
Recoveries of losses previously charged- off		0		0
Provision for (benefit from) loan and lease losses		(6)		0
Balance, end of period		$ 114	[3]	$ 112

[1] Includes $ 1 related to leveraged leases at December 31, 2017 .

[2] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[3] Includes $ 1 related to leveraged leases at March 31, 2018 .

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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, 2018		Dec. 31, 2017		Mar. 31, 2017	Dec. 31, 2016	[2]
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	$ 217	[1]	$ 200	[2]
Collectively evaluated for impairment	807	[1]	876	[2]
Unallocated	114	[1]	120	[2]
Total allowance for loan and lease losses	1,138	[1],[3]	1,196	[2],[3]	$ 1,238	$ 1,253	[3]
Individually evaluated for impairment	1,547	[4]	1,545	[5]
Collectively evaluated for impairment	90,285	[4]	90,286	[5]
Loans acquired with deteriorated credit quality	2	[4]	2	[5]
Total portfolio loans and leases	91,834	[4],[6]	91,833	[5],[7]
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	113	[1]	94	[2]
Collectively evaluated for impairment	600	[1]	659	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	713	[1]	753	[2]	826	831
Individually evaluated for impairment	573	[4]	560	[5]
Collectively evaluated for impairment	56,256	[4]	55,835	[5]
Loans acquired with deteriorated credit quality	0	[4]	0	[5]
Total portfolio loans and leases	56,829	[4]	56,395	[5]
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	64	[1]	64	[2]
Collectively evaluated for impairment	25	[1]	25	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	89	[1]	89	[2]	96	96
Individually evaluated for impairment	666	[4]	665	[5]
Collectively evaluated for impairment	14,759	[4]	14,787	[5]
Loans acquired with deteriorated credit quality	2	[4]	2	[5]
Total portfolio loans and leases	15,427	[4]	15,454	[5]
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses
Individually evaluated for impairment	40	[1]	42	[2]
Collectively evaluated for impairment	182	[1]	192	[2]
Unallocated	0	[1]	0	[2]
Total allowance for loan and lease losses	222	[1]	234	[2]	204	214
Individually evaluated for impairment	308	[4]	320	[5]
Collectively evaluated for impairment	19,270	[4]	19,664	[5]
Loans acquired with deteriorated credit quality	0	[4]	0	[5]
Total portfolio loans and leases	19,578	[4]	19,984	[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	114	[1]	120	[2]
Total allowance for loan and lease losses	114	[1]	120	[2]	$ 112	$ 112
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 $ 1 related to leveraged leases at March 31, 2018 .

[2] Includes $ 1 related to leveraged leases at December 31, 2017 .

[3] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[4] Excludes $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[5] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[6] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[7] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

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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, 2018 USD ($)		Mar. 31, 2017 USD ($)		Dec. 31, 2017 USD ($)		Dec. 31, 2016 USD ($)	[2],[3]
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	$ 1,138	[1],[2]	$ 1,238		$ 1,196	[2],[3]	$ 1,253
Portfolio loans and leases	$ 91,834	[4],[5]			91,833	[6],[7]
Number of contracts	2,271	[8],[9]	2,059	[10],[11]
Recorded investment	$ 1,547	[12]			1,545	[13]
Variable Interest Entity, Primary Beneficiary
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	6				$ 6
Commercial | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Allowance for Credit Losses
Number of contracts					5
Leveraged Leases
Financing Receivable, Allowance for Credit Losses
Allowance for loan and lease losses	1				$ 1
Portfolio loans and leases	670				674
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses
Portfolio loans and leases at fair value	$ 136				$ 137

[1] Includes $ 1 related to leveraged leases at March 31, 2018 .

[2] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[3] Includes $ 1 related to leveraged leases at December 31, 2017 .

[4] Excludes $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[5] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[6] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[7] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

[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 $ 249 , $ 654 and $ 262 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 154 , $ 12 an d $ 46 , respectively, of commercial, re sidential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018 .

[13] Includes $ 249 , $ 652 and $ 275 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 150 , $ 13 and $ 45 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017 .

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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, 2018		Dec. 31, 2017
Financing Receivable, Modifications
Total loans and leases	$ 91,834	[1],[2]	$ 91,833	[3],[4]
Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	56,829		56,395
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	41,635		41,170
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	3,330		3,362
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	3,179		3,242
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	4,766		4,553
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	3,919		4,068
Pass | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	54,082		53,612
Pass | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	39,385		38,813
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	3,150		3,207
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	3,079		3,117
Pass | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	4,692		4,553
Pass | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	3,776		3,922
Special Mention | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	1,316		1,290
Special Mention | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	1,074		1,115
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	81		75
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	8		28
Special Mention | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications
Total loans and leases	74		0
Special Mention | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Total loans and leases	79		72
Substandard | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	1,428		1,486
Substandard | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	1,173		1,235
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	99		80
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Total loans and leases	92		97
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	64		74
Doubtful | Commercial Portfolio Segment
Financing Receivable, Modifications
Total loans and leases	3		7
Doubtful | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Total loans and leases	3		7
Doubtful | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Total loans and leases	0		0
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 $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[2] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[3] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[4] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

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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, 2018		Dec. 31, 2017
Total loans and leases		$ 91,834	[1],[2]	$ 91,833	[3],[4]
Home Equity | Consumer Portfolio Segment
Total loans and leases		6,757		7,014
Automobile Loans | Consumer Portfolio Segment
Total loans and leases		9,018		9,112
Credit Card | Consumer Portfolio Segment
Total loans and leases		2,188		2,299
Other consumer loans | Consumer Portfolio Segment
Total loans and leases		1,615		1,559
Performing Financing Receivable
Total loans and leases	[5]	34,875		35,307
Performing Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	[5]	15,399		15,424
Performing Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases		6,683		6,940
Performing Financing Receivable | Automobile Loans | Consumer Portfolio Segment
Total loans and leases		9,017		9,111
Performing Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases		2,162		2,273
Performing Financing Receivable | Other consumer loans | Consumer Portfolio Segment
Total loans and leases		1,614		1,559
Nonperforming Financing Receivable
Total loans and leases	[5]	130		131
Nonperforming Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	[5]	28		30
Nonperforming Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases		74		74
Nonperforming Financing Receivable | Automobile Loans | Consumer Portfolio Segment
Total loans and leases		1		1
Nonperforming Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases		26		26
Nonperforming Financing Receivable | Other consumer loans | Consumer Portfolio Segment
Total loans and leases		$ 1		$ 0

[1] Excludes $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[2] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[3] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[4] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

[5] (a) Excludes $ 136 and $ 137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017 , 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, 2018	Dec. 31, 2017
Residential Mortgage Loans
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Portfolio loans and leases at fair value	$ 136	$ 137

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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, 2018		Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	$ 91,194	[1],[2]	$ 91,195	[3],[4]
Total Past Due	640	[2]	638	[4]
Total portfolio loans and leases	91,834	[2],[5]	91,833	[4],[6]
90-Days past Due and Still Accruing	107	[2]	97	[4]
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	346	[1],[2]	333	[3],[4]
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	294	[1],[2]	305	[3],[4]
Commercial Portfolio Segment
Financing Receivable, Recorded Investment, Past Due
Total portfolio loans and leases	56,829		56,395
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	41,502	[1]	41,027	[3]
Total Past Due	133		143
Total portfolio loans and leases	41,635		41,170
90-Days past Due and Still Accruing	7		3
Commercial Portfolio Segment | Commercial and Industrial Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	46	[1]	42	[3]
Commercial Portfolio Segment | Commercial and Industrial Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	87	[1]	101	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	3,316	[1]	3,351	[3]
Total Past Due	14		11
Total portfolio loans and leases	3,330		3,362
90-Days past Due and Still Accruing	1		0
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	6	[1]	3	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	8	[1]	8	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	3,109	[1]	3,235	[3]
Total Past Due	70		7
Total portfolio loans and leases	3,179		3,242
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	67	[1]	0	[3]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	3	[1]	7	[3]
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	4,766	[1]	4,552	[3]
Total Past Due	0		1
Total portfolio loans and leases	4,766		4,553
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	3,914	[1]	4,065	[3]
Total Past Due	5		3
Total portfolio loans and leases	3,919		4,068
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]	3	[3]
Commercial Portfolio Segment | Commercial Leases | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	5	[1]	0	[3]
Residential Mortgage
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	15,304	[1],[2],[7]	15,301	[3],[4],[8]
Total Past Due	123	[2],[7]	153	[4],[8]
Total portfolio loans and leases	15,427	[2],[7]	15,454	[4],[8]
90-Days past Due and Still Accruing	62	[2],[7]	57	[4],[8]
Residential Mortgage | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	32	[1],[2],[7]	66	[3],[4],[8]
Residential Mortgage | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	91	[1],[2],[7]	87	[3],[4],[8]
Consumer Portfolio Segment | Home Equity
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	6,636	[1]	6,888	[3]
Total Past Due	121		126
Total portfolio loans and leases	6,757		7,014
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	66	[1]	70	[3]
Consumer Portfolio Segment | Home Equity | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	55	[1]	56	[3]
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	8,927	[1]	8,992	[3]
Total Past Due	91		120
Total portfolio loans and leases	9,018		9,112
90-Days past Due and Still Accruing	9		10
Consumer Portfolio Segment | Automobile Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	81	[1]	107	[3]
Consumer Portfolio Segment | Automobile Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	10	[1]	13	[3]
Consumer Portfolio Segment | Credit Card
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	2,115	[1]	2,230	[3]
Total Past Due	73		69
Total portfolio loans and leases	2,188		2,299
90-Days past Due and Still Accruing	28		27
Consumer Portfolio Segment | Credit Card | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	39	[1]	36	[3]
Consumer Portfolio Segment | Credit Card | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	34	[1]	33	[3]
Consumer Portfolio Segment | Other Consumer Loans
Financing Receivable, Recorded Investment, Past Due
Current Loans and Leases	1,605	[1]	1,554	[3]
Total Past Due	10		5
Total portfolio loans and leases	1,615		1,559
90-Days past Due and Still Accruing	0		0
Consumer Portfolio Segment | Other Consumer Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	9	[1]	5	[3]
Consumer Portfolio Segment | Other Consumer Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 1	[1]	$ 0	[3]

[1] Includes accrual and nonaccrual loans and leases.

[2] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[3] Includes accrual and nonaccrual loans and leases.

[4] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

[5] Excludes $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[6] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[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. A s of March 31, 2018 , $ 7 9 of these loans were 30-89 days past due and $ 317 were 90 days or more past due. The Bancorp recognized $ 2 of losses during the three months ended March 31, 2018 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, 2017 , $ 95 of these loa ns were 30-89 days past due and $ 290 were 90 days or more p ast due. The Bancorp recognized $ 2 of losses during the three months ended March 31, 2017 due to claim denials and cu rtailments asso ciated 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, 2018		Mar. 31, 2017	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 640	[1]		$ 638	[2]
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	346	[1],[3]		333	[2],[4]
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	294	[1],[3]		305	[2],[4]
Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due
Portfolio loans and leases at fair value	136			137
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	79			95
Residential Mortgage Loans | Federal Housing Administration Loan | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due
Total Past Due	$ 317			$ 290

[1] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[2] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

[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, 2018		Dec. 31, 2017
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	$ 1,072		$ 1,158
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	593		521
Unpaid Principal Balance	1,665		1,679
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	1,007		1,068
Impaired Financing Receivable With No Related Allowance Recorded Investment	540		477
Recorded investment	1,547	[1]	1,545	[2]
Allowance	217		200
Commercial Portfolio Segment | Commercial and Industrial Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	414		433
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	188		151
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	358		358
Impaired Financing Receivable With No Related Allowance Recorded Investment	161		131
Allowance	109		87
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	4		16
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	17		18
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	3		14
Impaired Financing Receivable With No Related Allowance Recorded Investment	13		15
Allowance	1		7
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	2		4
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	28		35
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	2		3
Impaired Financing Receivable With No Related Allowance Recorded Investment	28		35
Allowance	0		0
Commercial Portfolio Segment | Commercial Leases
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	8		4
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	8		4
Allowance	3		0
Residential Mortgage Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	460		469
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	228		218
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	457		465
Impaired Financing Receivable With No Related Allowance Recorded Investment	209		200
Allowance	64		64
Consumer Portfolio Segment | Home Equity
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	129		172
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	129		97
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	130		172
Impaired Financing Receivable With No Related Allowance Recorded Investment	126		94
Allowance	25		27
Consumer Portfolio Segment | Automobile Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	6		8
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	3		2
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	5		7
Impaired Financing Receivable With No Related Allowance Recorded Investment	3		2
Allowance	1		1
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	44		45
Allowance	$ 14		$ 14

[1] Includes $ 249 , $ 654 and $ 262 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 154 , $ 12 an d $ 46 , respectively, of commercial, re sidential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018 .

[2] Includes $ 249 , $ 652 and $ 275 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 150 , $ 13 and $ 45 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017 .

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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, 2018 USD ($)		Mar. 31, 2017		Dec. 31, 2017 USD ($)
Financing Receivable, Impaired
Unpaid principal balance	$ 1,665				$ 1,679
Recorded investment	1,547	[1]			1,545	[2]
Allowance	$ 217				200
Number of contracts	2,271	[3],[4]	2,059	[5],[6]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Allowance	$ 1				$ 7
Number of contracts	2	[3],[4]	5	[5],[6]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Impaired
Number of contracts			5		5
Commercial Portfolio Segment | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	$ 249				$ 249
Commercial Portfolio Segment | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	154				150
Residential Mortgage Loans
Financing Receivable, Impaired
Allowance	$ 64				64
Number of contracts	247	[3],[4]	203	[5],[6]
Residential Mortgage Loans | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	$ 654				652
Residential Mortgage Loans | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	12				13
Consumer Portfolio Segment | Troubled Debt Restructuring On Accrual Status
Financing Receivable, Impaired
Recorded investment	262				275
Consumer Portfolio Segment | Troubled Debt Restructuring On Nonaccrual Status
Financing Receivable, Impaired
Recorded investment	$ 46				$ 45

[1] Includes $ 249 , $ 654 and $ 262 , respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $ 154 , $ 12 an d $ 46 , respectively, of commercial, re sidential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2018 .

[2] Includes $ 249 , $ 652 and $ 275 , respectively, of commercial, residential mortgage and consumer portfolio TDR s on accrual status and $ 150 , $ 13 and $ 45 , respectively , of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017 .

[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 .

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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, 2018	Mar. 31, 2017
Financing Receivable, Impaired
Average Recorded Investment	$ 1,539	$ 1,835
Interest Income Recognized	15	12
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Impaired
Average Recorded Investment	497	683
Interest Income Recognized	5	1
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Average Recorded Investment	22	43	[1]
Interest Income Recognized	0	0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Impaired
Average Recorded Investment	34	89
Interest Income Recognized	0	1
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Impaired
Average Recorded Investment	6	3
Interest Income Recognized	0	0
Residential Mortgage Loans
Financing Receivable, Impaired
Average Recorded Investment	665	654
Interest Income Recognized	6	6
Consumer Portfolio Segment | Home Equity
Financing Receivable, Impaired
Average Recorded Investment	258	298
Interest Income Recognized	3	3
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Impaired
Average Recorded Investment	9	14
Interest Income Recognized	0	0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Impaired
Average Recorded Investment	48	51
Interest Income Recognized	$ 1	$ 1

[1] Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $ 26 for the three months ended March 31, 2017. An immaterial amount of interest income was recognized during the three months ended March 31, 2017. Refer to Note 9 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

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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, 2018 USD ($)		Mar. 31, 2017 USD ($)		Dec. 31, 2017
Financing Receivable, Impaired
Average Recorded Investment	$ 1,539		$ 1,835
Number of contracts	2,271	[1],[2]	2,059	[3],[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired
Average Recorded Investment	$ 22		$ 43	[5]
Number of contracts	2	[1],[2]	5	[3],[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied | Variable Interest Entity, Primary Beneficiary
Financing Receivable, Impaired
Average Recorded Investment			$ 26
Number of contracts			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] Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $ 26 for the three months ended March 31, 2017. An immaterial amount of interest income was recognized during the three months ended March 31, 2017. Refer to Note 9 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

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Credit Quality (Summary of the Bancorp's Nonperforming Loans and Leases by Class) (Detail) - USD ($) $ in Millions		Mar. 31, 2018	Dec. 31, 2017
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases	[1],[2]	$ 452	$ 437
OREO and other repossessed property		52	52
Nonperforming portfolio assets	[1],[2]	504	489
Commercial Portfolio Segment
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		322	306
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		299	276
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		11	19
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		4	7
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		8	4
Residential Mortgage Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		28	30
Consumer Portfolio Segment
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		102	101
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		74	74
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		1	1
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Nonaccrual portfolio loans and leases		26	26
Consumer Portfolio Segment | Other Consumer Loans
Financing Receivable, Modifications
Nonperforming portfolio assets		$ 1	$ 0

[1] Excludes $ 24 a nd $ 6 of nonaccrual loans held for sale at March 31, 2018 and December 31, 2017 , respectively.

[2] Includes $ 5 and $ 3 of nonaccrual government insured commercial loans whose repayments are insured by the SBA a t March 31, 2018 and Dec ember 31, 2017 , respectively, of which $ 2 and $ 3 are restructured nonaccrual government insured commercial loans at both March 31, 2018 and December 31, 2017 , respectively .

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Credit Quality (Summary of the Bancorp's Nonperforming Loans and Leases by Class) (Parenthetical) (Detail) - USD ($) $ in Millions		Mar. 31, 2018		Dec. 31, 2017
Financing Receivable, Modifications
Loans and leases held for sale	[1]	$ 717		$ 492
OREO and other repossessed property		52		52
Portfolio loans and leases		91,834	[2],[3]	91,833	[4],[5]
Commercial Portfolio Segment
Financing Receivable, Modifications
Portfolio loans and leases		56,829		56,395
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Portfolio loans and leases		3,330		3,362
Nonperforming Financing Receivable
Financing Receivable, Modifications
Loans and leases held for sale		24		6
Portfolio loans and leases	[6]	130		131
Nonperforming Financing Receivable | Government Insured | Commercial Portfolio Segment | Small Business Administration
Financing Receivable, Modifications
Portfolio loans and leases		5		3
Restructured nonaccrual loans and leases		$ 2		$ 3

[1] Includes $ 650 and $ 399 of residential mortgage loans held for sale measured at fair value and $ 16 and $ 0 of commercial loans held for sale measured at fair value at March 31, 2018 and December 31, 2017 , respectively.

[2] Excludes $ 136 of residential mortgage loans measured at fair value and includes $ 670 of leveraged leases, net of unearned income at March 31, 2018 .

[3] Excludes $ 136 of residential mortgage loans measured at fair value at March 31, 2018 .

[4] Excludes $ 137 of residential mortga ge loans measured at fair value and includes $ 674 of leveraged leases, net of unearned income at December 31, 2017 .

[5] Excludes $ 137 of residential mortgage loans measured at fair value at December 31, 2017 .

[6] (a) Excludes $ 136 and $ 137 of residential mortgage loans measured at fair value at March 31, 2018 and December 31, 2017 , respectively.

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Credit Quality (Credit Quality Additional Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Troubled Debt Restructuring
Line of credit commitments for modified troubled debt restructurings	$ 33	$ 53
Letter of credit commitments for modified troubled debt restructurings	79	78
Mortgage loans in process of foreclosure amount	213	$ 235
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, 2018 USD ($)	[2]	Mar. 31, 2017 USD ($)
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	2,271	[1]	2,059	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 117		$ 137	[4]
Increase (Decrease) to ALLL Upon Modification	16		4	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 2	[4]
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	12	[1]	33	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 72		$ 97	[4]
Increase (Decrease) to ALLL Upon Modification	13		1	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 2	[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	2	[1]	5	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 0		$ 2	[4]
Increase (Decrease) to ALLL Upon Modification	0		0	[4]
Charge-offs Recognized Upon Modification	0		$ 0	[4]
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period			1
Recorded Investment in Loans Modified in a TDR During the Period			$ 0
Increase (Decrease) to ALLL Upon Modification			0
Charge-offs Recognized Upon Modification	$ 0		$ 0
Residential Mortgage Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	247	[1]	203	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 33		$ 29	[4]
Increase (Decrease) to ALLL Upon Modification	1		2	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 0	[4]
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	25	[1]	31	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 2		$ 2	[4]
Increase (Decrease) to ALLL Upon Modification	0		0	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 0	[4]
Consumer Portfolio Segment | Automobile Loans
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	20	[1]	30	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 0		$ 0	[4]
Increase (Decrease) to ALLL Upon Modification	0		0	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 0	[4]
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Number of Loans Modified in a TDR During the Period	1,965	[1]	1,756	[3],[4]
Recorded Investment in Loans Modified in a TDR During the Period	$ 10		$ 7	[4]
Increase (Decrease) to ALLL Upon Modification	2		1	[4]
Charge-offs Recognized Upon Modification	$ 0		$ 0	[4]

[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, 2018 USD ($)	Mar. 31, 2017 USD ($)
Financing Receivable, Modifications
Number of contracts	[1]	295	514
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 9	$ 13
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications
Number of contracts	[1]	1	2
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 1	$ 1
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications
Number of contracts	[1]	2
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 0
Residential Mortgage Loans
Financing Receivable, Modifications
Number of contracts	[1]	48	57
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 7	$ 9
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications
Number of contracts	[1]	2	5
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 0	$ 1
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications
Number of contracts	[1]	242	450
Recorded Investment in Loans Modified in a TDR During the Period	[1]	$ 1	$ 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, 2018	Dec. 31, 2017
Bank Premises and Equipment
Land and improvements	[1]	$ 636	$ 644
Buildings	[1]	1,661	1,679
Equipment		1,921	1,876
Leasehold improvements		399	399
Construction in progress	[1]	76	93
Land and improvements held for sale		12	17
Buildings held for sale		8	9
Equipment held for sale		0	1
Accumulated depreciation and amortization		(2,747)	(2,715)
Total bank premises and equipment	[2]	$ 1,966	$ 2,003

[1] (a ) At March 31, 2018 and December 31, 2017 , land and improvements , buildings and construction in progress included $ 89 and $ 9 1 , respectively, associated w ith parcels of undeveloped land intended for future branch ex pansion.

[2] Includes $ 20 and $ 27 of bank premises and equipment held for sale at March 31, 2018 and December 31, 2017 , 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, 2018	Dec. 31, 2017
Bank Premises and Equipment
Land and improvements	[1]	$ 636	$ 644
Branches and undeveloped parcels of land
Bank Premises and Equipment
Land and improvements		$ 89	$ 91

[1] (a ) At March 31, 2018 and December 31, 2017 , land and improvements , buildings and construction in progress included $ 89 and $ 9 1 , respectively, associated w ith parcels of undeveloped land intended for future branch ex pansion.

XML

Bank Premises & Equipment (Bank Premises and Equipment - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Branch Banking
Bank Premises and Equipment
Bank premises impairment	$ 8	$ 3

XML

Operating Lease Equipment (Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Lease Equipment
Other Asset Impairment Charges	$ (2)	$ (20)

XML

Intangible Assets (Intangible Assets - Additional Information) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Intangible Assets by Major Class [Abstract]
Amortization of Intangible Assets	$ 1

XML

Intangible Assets (Intangible Assets) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 73	$ 69
Accumulated Amortization	(43)	(42)
Net Carrying Amount	30	27
Core Deposits
Finite-Lived Intangible Assets
Gross Carrying Amount	34	34
Accumulated Amortization	(29)	(29)
Net Carrying Amount	5	5
Other Intangible Assets
Finite-Lived Intangible Assets
Gross Carrying Amount	6	6
Accumulated Amortization	(2)	(3)
Net Carrying Amount	4	3
Noncompete Agreements
Finite-Lived Intangible Assets
Gross Carrying Amount	14	13
Accumulated Amortization	(11)	(10)
Net Carrying Amount	3	3
Customer Relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	19	16
Accumulated Amortization	(1)	0
Net Carrying Amount	$ 18	$ 16

XML

Intangible Assets (Estimated Amortization Expense Other Intangible Assets) (Detail) - Other Intangible Assets $ in Millions	Mar. 31, 2018 USD ($)
Finite-Lived Intangible Assets
Remainder of 2018	$ 4
2019	5
2020	3
2021	2
2022	$ 2

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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, 2018		Dec. 31, 2017		Mar. 31, 2017	Dec. 31, 2016	[1]
Assets
Cash and due from banks		$ 2,038		$ 2,514		$ 2,205	$ 2,392
Other short-term investments	[1]	1,747		2,753
Commercial mortgage loans		6,509		6,604
Automobile loans		9,018		9,112
ALLL		(1,138)	[1],[2]	(1,196)	[1],[3]	$ (1,238)	$ (1,253)	[3]
Other assets	[1]	7,326		6,975
Liabilities
Other liabilities	[1]	2,418		2,144
Long-term debt	[1]	14,800		14,904
Noncontrolling interests		20		20
Variable Interest Entity, Primary Beneficiary
Assets
Other short-term investments		66		62
Commercial mortgage loans		20		20
Automobile loans		1,115		1,277
ALLL		(6)		(6)
Other assets		6		7
Total Assets		1,201		1,360
Liabilities
Other liabilities		2		2
Long-term debt		1,031		1,190
Total liabilities		1,033		1,192
Noncontrolling interests		20		20
Variable Interest Entity, Primary Beneficiary | Automobile Loans
Assets
Other short-term investments		66		62
Commercial mortgage loans		0		0
Automobile loans		1,115		1,277
ALLL		(6)		(6)
Other assets		6		7
Total Assets		1,181		1,340
Liabilities
Other liabilities		2		2
Long-term debt		1,031		1,190
Total liabilities		1,033		1,192
Noncontrolling interests		0		0
Variable Interest Entity, Primary Beneficiary | Fifth Third Community Development Corporation Investments
Assets
Other short-term investments		0		0
Commercial mortgage loans		20		20
Automobile loans		0		0
ALLL		0		0
Other assets		0		0
Total Assets		20		20
Liabilities
Other liabilities		0		0
Long-term debt		0		0
Total liabilities		0		0
Noncontrolling interests		$ 20		$ 20

[1] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[2] Includes $ 1 related to leveraged leases at March 31, 2018 .

[3] Includes $ 1 related to leveraged leases at December 31, 2017 .

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VIE (Variable Interest Entities - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018		Mar. 31, 2017	Dec. 31, 2017		Sep. 30, 2017	Dec. 31, 2016	[2],[3]
Variable Interest Entity
Face amount of notes issued or redeemed	$ 650.0
Allowance for loan and lease losses	1,138.0	[1],[2]	$ 1,238.0	$ 1,196.0	[2],[3]		$ 1,253.0
Commercial mortgage loans	6,509.0			6,604.0
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity
Allowance for loan and lease losses	6.0			6.0
Commercial mortgage loans	20.0			20.0
Variable Interest Entity, Primary Beneficiary | Automobile Loans
Variable Interest Entity
Carry value of automobile loans securitized	1,100.0
Face amount of notes issued or redeemed	1,000.0
Long-term debt retained	261.0
Allowance for loan and lease losses	6.0			6.0
Commercial mortgage loans	0.0			0.0
Variable Interest Entity, Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity
Maximum Exposure	18.0			17.0
Allowance for loan and lease losses	0.0			0.0
Commercial mortgage loans	20.0			20.0
Variable Interest Entity, Not Primary Beneficiary | Loans Provided to VIEs
Variable Interest Entity
Unfunded commitment amounts	1,100.0			1,100.0
Variable Interest Entity, Not Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity
Maximum Exposure	1,316.0			1,376.0
Bancorp's Investment in Affordable Housing Tax Credits	1,316.0			1,376.0
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	1,300.0			1,300.0
Unfunded commitments	$ 336.0			355.0
Unfunded commitments expected funding date	2034
Variable Interest Entity, Not Primary Beneficiary | Private Equity Investments
Variable Interest Entity
Maximum Exposure	$ 140.0			150.0
Bancorp's Investment in Affordable Housing Tax Credits	95.0			102.0
Unfunded commitment amounts	45.0			$ 48.0
Capital Contribution To Private Equity Investments	3.0		6.0
OTTI	$ 4.0		$ 0.0
Deconsolidated Variable Interest Entity, Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity
Maximum Exposure						$ 18.0
Allowance for loan and lease losses						20.0
Commercial mortgage loans						$ 27.0

[1] Includes $ 1 related to leveraged leases at March 31, 2018 .

[2] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[3] Includes $ 1 related to leveraged leases at December 31, 2017 .

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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, 2018	Dec. 31, 2017
Fifth Third Community Development Corporation Investments
Variable Interest Entity
Total Assets	$ 1,316	$ 1,376
Total Liabilities	338	355
Maximum Exposure	1,316	1,376
Private Equity Investments
Variable Interest Entity
Total Assets	95	102
Total Liabilities	0	0
Maximum Exposure	140	150
Loans Provided to VIEs
Variable Interest Entity
Total Assets	1,937	1,845
Total Liabilities	0	0
Maximum Exposure	$ 3,043	$ 2,910

XML

VIE (Investments in Qualified Affordable Housing Tax Credits) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Other noninterest expense
Schedule of Equity Method Investments
Pre-tax investment and impairment losses	[1]	$ 45	$ 36
Applicable income tax expense
Schedule of Equity Method Investments
Tax credits and other benefits		$ (52)	$ (56)

[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, 2018 and 2017 .

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MSR (Activity Related to Mortgage Banking Net Revenue) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale
Residential mortgage loan sales	[1]	$ 1,000	$ 1,629
Origination fees and gains on loan sales		24	29
Gross Mortgage Servicing Fees		$ 53	$ 47

[1] Represents the unpaid principal balance at the time of the sale.

XML

MSR (Changes in the Servicing Assets) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Servicing Assets at Fair Value
Fair value at beginning of period	$ 858	$ 744
Servicing rights originated	16	26
Servicing rights acquired	24	29
Changes in fair value due to changes in inputs or assumptions	57	4	[1]
Changes in fair value due to other changes in fair value	(29)	(27)	[2]
Fair value at end of period	$ 926	$ 776

[1] Primarily reflects changes in prepayment speed and OAS spread assumptions which are updated based on market interest rates

[2] Pr imarily reflects changes due to collection of contractual cash flows and the passage of time

XML

MSR (Activity Related to the MSR Portfolio) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Servicing Assets at Fair Value
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		$ (13)	$ 0
MSR Fair Value Adjustment	[1]	(28)	23
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]	$ (49)	$ (1)

[1] (a) Included in mortgage banking net revenue in the Condensed Consolidated Statements of Income.

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MSR (Servicing Assets and Residual Interests Economic Assumptions) (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fixed Rate Residential Mortgage Loans
Servicing Assets at Amortized Value
Weighted- Average Life (in years)	7 years	6 years 8 months 12 days
Prepayment Speed (annual)	9.10%	9.90%
OAS spread (bps)	5.49%	4.85%
Adjustable Rate Residential Mortgage Loans
Servicing Assets at Amortized Value
Weighted- Average Life (in years)	2 years 7 months 6 days	2 years 3 months 18 days
Prepayment Speed (annual)	30.00%	34.90%
OAS spread (bps)	6.37%	7.00%

XML

MSR (Sales of Receivables and Servicing Rights - Additional Information) (Detail) - USD ($) $ in Billions	Mar. 31, 2018	Dec. 31, 2017
Disclosure - Activity Related to Mortgage Banking Net Revenue [Abstract]
Sevicing of residential mortgage loans for other investors	$ 61.0	$ 60.0

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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, 2018 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	$ 910
Weighted- Average Life (in years)	6 years 4 months 24 days
Prepayment Speed (annual)	10.00%
Impact of Adverse Change on Fair Value 10%	$ (35)
Impact of Adverse Change on Fair Value 20%	(68)
Impact of Adverse Change on Fair Value 50%	$ (156)
OAS spread (bps)	5.48%
Impact of Adverse Change on Fair Value 10%	$ (19)
Impact of Adverse Change on Fair Value 20%	(36)
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	$ 16
Weighted- Average Life (in years)	3 years 3 months 18 days
Prepayment Speed (annual)	24.60%
Impact of Adverse Change on Fair Value 10%	$ (1)
Impact of Adverse Change on Fair Value 20%	(2)
Impact of Adverse Change on Fair Value 50%	$ (4)
OAS spread (bps)	7.97%
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 .

XML

Derivatives (Derivative Financial Instruments - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Derivative
Valuation adjustments related to the credit risk associated with counterparties of customer accomodation derivative contracts	$ 2	$ 3
Notional amount of the risk participation agreements	$ 3,370	2,838
Interest Rate Contract | Credit Risk
Derivative
Credit Risk Derivatives Average Remaining Life	4 years 2 months 12 days
Fair value of risk participation agreements	$ 6	5
Interest Rate Contract | Cash Flow Hedging
Derivative
Maximum length of time hedged in cash flow hedge	4 years 11 months
Deferred gains or losses, net of tax, on cash flow hedges were recorded in accumulated other comprehensive income	$ 19	9
Net deferred gains or losses, net of tax, recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months	2
Total collateral
Derivative
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	375	409
Derivative Liability, Fair Value, Amount Offset Against Collateral	322	$ 365
Amount of variation margin payment applied to derivative asset contracts	85
Amount of variation margin payment applied to derivative liability contracts	$ 100

XML

Derivatives (Notional Amounts and Fair Values for All Derivative Instruments Included in the Consolidated Balance Sheets) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value
Fair value - Derivative Assets	$ 865	$ 823
Fair value - Derivative Liabilities	774	602
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges
Derivatives, Fair Value
Fair value - Derivative Assets	248	297
Fair value - Derivative Liabilities	22	17
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging
Derivatives, Fair Value
Fair value - Derivative Assets	248	297
Fair value - Derivative Liabilities	4	5
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging | Interest Rate Swap | Long-Term Debt
Derivatives, Fair Value
Notional amount	3,705	3,705
Fair value - Derivative Assets	248	297
Fair value - Derivative Liabilities	4	5
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging
Derivatives, Fair Value
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	18	12
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging | Interest Rate Swap | Commercial and Industrial Loans
Derivatives, Fair Value
Notional amount	4,150	4,475
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	18	12
Nondesignated
Derivatives, Fair Value
Fair value - Derivative Assets	617	526
Fair value - Derivative Liabilities	752	585
Nondesignated | Risk Management and Other Business Purposes
Derivatives, Fair Value
Fair value - Derivative Assets	55	75
Fair value - Derivative Liabilities	187	154
Nondesignated | Risk Management and Other Business Purposes | Interest Rate Contract | Servicing Rights
Derivatives, Fair Value
Notional amount	12,135	11,035
Fair value - Derivative Assets	53	54
Fair value - Derivative Liabilities	20	15
Nondesignated | Risk Management and Other Business Purposes | Forward Contracts | Assets Held For Sale
Derivatives, Fair Value
Notional amount	1,153	1,284
Fair value - Derivative Assets	2	1
Fair value - Derivative Liabilities	2	1
Nondesignated | Risk Management and Other Business Purposes | Warrant
Derivatives, Fair Value
Notional amount		20
Fair value - Derivative Assets		20
Fair value - Derivative Liabilities		0
Nondesignated | Risk Management and Other Business Purposes | Swap
Derivatives, Fair Value
Notional amount	1,993	1,900
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	165	137
Nondesignated | Risk Management and Other Business Purposes | Foreign Exchange Contract
Derivatives, Fair Value
Notional amount	138	112
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	0	1
Nondesignated | Customer Accommodation
Derivatives, Fair Value
Fair value - Derivative Assets	562	451
Fair value - Derivative Liabilities	565	431
Nondesignated | Customer Accommodation | Interest Rate Contract
Derivatives, Fair Value
Notional amount	44,973	42,216
Fair value - Derivative Assets	220	154
Fair value - Derivative Liabilities	241	145
Nondesignated | Customer Accommodation | Interest Rate Lock Commitments
Derivatives, Fair Value
Notional amount	667	446
Fair value - Derivative Assets	11	8
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation | Commodity Contract
Derivatives, Fair Value
Notional amount	4,843	4,125
Fair value - Derivative Assets	199	165
Fair value - Derivative Liabilities	195	167
Nondesignated | Customer Accommodation | TBAs
Derivatives, Fair Value
Notional amount	46	26
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation | Foreign Exchange Contract
Derivatives, Fair Value
Notional amount	11,723	12,654
Fair value - Derivative Assets	132	124
Fair value - Derivative Liabilities	$ 129	$ 119

XML

Derivatives (Change in the Fair Value for Interest Rate Contracts and the Related Hedged Items) (Detail) - Fair Value Hedging - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Long-Term Debt
Derivatives, Fair Value
Carrying amount of hedged item	$ 4,219
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items	(231)
Interest Rate Contract | Interest Expense, Long-Term Debt
Derivatives, Fair Value
Change in fair value of interest rate swaps hedging long-term debt	(63)	$ (21)
Change in fair value of hedged long-term debt	$ 64	$ 21

XML

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, 2018	Mar. 31, 2017
Derivative Instruments, Gain (Loss)
Amount of pretax net (losses) gains recognized in OCI	$ (9)	$ (5)
Interest Income (Expense) Net
Derivative Instruments, Gain (Loss)
Amount of pretax net gains reclassified from OCI into net income	$ 1	$ 8

XML

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, 2018	Mar. 31, 2017
Interest Rate Contract | Forward Contracts | Loans Held For Sale | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ 0	$ (21)
Interest Rate Contract | Servicing Rights | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	(49)	(1)
Foreign Exchange Contract | Forward Contracts | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	2	(1)
Equity Contract | Swap | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ (39)	$ (13)

XML

Derivatives (Risk Ratings of the Notional Amount of Risk Participation Agreements) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value
Notional amount of the risk participation agreements	$ 3,370	$ 2,838
Pass
Derivatives, Fair Value
Notional amount of the risk participation agreements	3,263	2,748
Risk Level, Special Mention
Derivatives, Fair Value
Notional amount of the risk participation agreements	77	66
Risk Level, Substandard
Derivatives, Fair Value
Notional amount of the risk participation agreements	$ 30	$ 24

XML

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, 2018	Mar. 31, 2017
Interest Rate Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	$ 7	$ 5
Interest Rate Contract | Interest Rate Lock Commitments | Mortgage Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	13	22
Commodity Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	2	1
Commodity Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	0	1
Foreign Exchange Contract | Customer Contracts | Corporate Banking Revenue
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	14	13
Foreign Exchange Contract | Customer Contracts | Other Noninterest Income
Derivative Instruments, Gain (Loss)
Net gains (losses) recorded in earnings	(2)	0
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	$ 1

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Derivatives (Offsetting Derivative Financial Instruments) (Detail) - USD ($) $ in Millions	Mar. 31, 2018		Dec. 31, 2017
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	$ 865		$ 823
Derivative, Collateral, Obligation to Return Cash	(273)		(341)
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	774		602
Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	854	[1]	815	[2]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(229)		(213)
Derivative, Collateral, Obligation to Return Cash	(341)	[3]	(362)	[4]
Derivative, Fair Value, Amount Offset Against Collateral, Net	284		240
Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	774	[1]	602	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(229)		(213)
Derivative, Collateral, Right to Reclaim Cash	(209)	[3]	(155)	[4]
Derivative Fair Value Amount Offset Against Collateral Net	336		234
Derivative | Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	854	[1]	815	[2]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(229)		(213)
Derivative, Collateral, Obligation to Return Cash	(341)	[3]	(362)	[4]
Derivative, Fair Value, Amount Offset Against Collateral, Net	284		240
Derivative | Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	774	[1]	602	[2]
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(229)		(213)
Derivative, Collateral, Right to Reclaim Cash	(209)	[3]	(155)	[4]
Derivative Fair Value Amount Offset Against Collateral Net	$ 336		$ 234

[1] Amount does not includ e IRLCs because these instruments are not subject to master netting or similar arrangements .

[2] Amount does not include 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, 2018	Dec. 31, 2017
Short Term Debt
FHLB advances	$ 400	$ 3,125
Securities sold under repurchase agreements	662	546
Derivative collateral	273	341
Total other short-term borrowings	$ 1,335	$ 4,012

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Other Short-Term Borrowings (Other Short-Term Borrowings - Additioanl Information) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Short Term Debt
Securities sold under repurchase agreements	$ 662	$ 546

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Capital Actions (Capital Actions ASRs) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2018	Mar. 31, 2017
Capital Actions
Shares acquired for treasury		$ 318	$ 0
February 8, 2018 ASR | March 2016 Repurchase Program
Capital Actions
Redemption Date	Feb. 12, 2018
Shares acquired for treasury	$ 318
Shares repurchased on repurchase date	8,691,318
Shares received from forward contract settlement	1,015,731
Total shares repurchased	9,707,049
Settlement date	Mar. 26, 2018
December 15, 2017 ASR | March 2016 Repurchase Program
Capital Actions
Redemption Date	Dec. 19, 2017
Shares acquired for treasury	$ 273
Shares repurchased on repurchase date	7,727,273
Shares received from forward contract settlement	824,367
Total shares repurchased	8,551,640
Settlement date	Mar. 19, 2018

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Long-Term Debt (Long-Term Debt - Additional Information) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Debt Instrument
Face amount of notes issued or redeemed	$ 650
Maturity date(s) Start	Mar. 14, 2018
Maturity date(s) End	Mar. 14, 2028

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Commitments (Summary of Significant Commitments) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Commitments to extend credit
Long-term Purchase Commitment
Commitments	$ 68,089	$ 68,106
Letters of credit
Long-term Purchase Commitment
Commitments	2,164	2,185
Forward contracts related to residential mortgage loans held for sale
Long-term Purchase Commitment
Commitments	1,153	1,284
Noncancelable operating lease obligations
Long-term Purchase Commitment
Commitments	559	568
Purchase obligations
Long-term Purchase Commitment
Commitments	132	144
Capital commitments for private equity investments
Long-term Purchase Commitment
Commitments	45	48
Capital expenditures
Long-term Purchase Commitment
Commitments	27	37
Capital lease obligations
Long-term Purchase Commitment
Commitments	$ 24	$ 26

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Commitments (Risk Rating Under the Risk Rating System) (Detail) - Commitments to Extend Credit - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Line of Credit Facility
Commitments	$ 68,089	$ 68,106
Pass
Line of Credit Facility
Commitments	67,323	67,254
Special Mention
Line of Credit Facility
Commitments	354	330
Substandard
Line of Credit Facility
Commitments	412	522
Doubtful
Line of Credit Facility
Commitments	$ 0	$ 0

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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, 2018		Mar. 31, 2017	Dec. 31, 2017		Dec. 31, 2016		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	$ 2,164			$ 2,185
Margin account balance held by the brokerage clearing agent	16			15
Amount in excess of amounts reserved	22
Credit loss reserve	1,138	[1],[2]	$ 1,238	1,196	[2],[3]	$ 1,253	[2],[3]
Residential Mortgage
Loss Contingencies
Amount in excess of amounts reserved	9
Outstanding balances on residential mortgage loans sold with representation and warranty provisions	8		12	9		$ 13
Outstanding balances on residential mortgage loans sold with credit recourse	$ 301			$ 312
Delinquency Rates	2.70%			3.00%
Credit loss reserve	$ 5			$ 5
Repurchased Outstanding Principal	2		2
Repurchase Demand Request	5		$ 3
Outstanding Repurchase Demand Inventory	2			1
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	$ 15			$ 6
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%			61.00%
Variable Rate Demand Note
Loss Contingencies
Fifth Third Securities, Inc. (FTS) acted as the remarketing agent to issuers of VRDNs	$ 562			$ 508
Letters of credit	84			94
Total Variable Rate Demand Notes	646			602
Letters of credit issued by the Bancorp related to variable rate demand notes	320			331
Variable Rate Demand Note | Trading Securities
Loss Contingencies
Total Variable Rate Demand Notes	0			1
Other Liabilities
Loss Contingencies
Reserve for unfunded commitments	151			161
Other Liabilities | Residential Mortgage
Loss Contingencies
Outstanding balances on residential mortgage loans sold with representation and warranty provisions	8			9
Visa
Loss Contingencies
Recorded share of litigation formally settled by Visa and for probable future litigation settlements	$ 165			$ 137
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	$ 3,000

[1] Includes $ 1 related to leveraged leases at March 31, 2018 .

[2] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[3] Includes $ 1 related to leveraged leases at December 31, 2017 .

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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, 2018 USD ($)
Line of Credit Facility
Commitments	$ 2,164
Less Than One Year From The Balance Sheet Date
Line of Credit Facility
Commitments	1,174	[1]
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	981	[1]
More than Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	$ 9

[1] ( a) Includes $ 6 and $ 1 i ssued 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.

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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, 2018 USD ($)
Line of Credit Facility
Commitments	$ 2,164
Less Than One Year From The Balance Sheet Date
Line of Credit Facility
Commitments	1,174	[1]
Less Than One Year From The Balance Sheet Date | Commercial
Line of Credit Facility
Commitments	6
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	981	[1]
More than One and within Five Years from Balance Sheet Date | Commercial
Line of Credit Facility
Commitments	1
More than Five Years from Balance Sheet Date
Line of Credit Facility
Commitments	$ 9

[1] ( a) Includes $ 6 and $ 1 i ssued 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.

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Commitments (Letters of Credit) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	$ 2,164	$ 2,185
Pass
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	1,822	1,830
Special Mention
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	60	67
Substandard
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	198	218
Doubtful
Fair Value, Off-balance Sheet Risks, Disclosure Information
Letters of credit	$ 84	$ 70

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Commitments (Activity in Reserve for Representation and Warranty Provisions) (Detail) - Residential Mortgage - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Valuation And Qualifying Accounts Disclosure
Balance, beginning of period	$ 9	$ 13
Net (reductions) additions to the reserve	(1)	(1)
Balance, end of period	$ 8	$ 12

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Commitments (Unresolved Claims by Claimant) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)
GSE
Loss Contingencies Dollars
Balance, beginning of period	$ 1	$ 2
New demands	5	3
Loan paydowns/payoffs	0	0
Resolved demands	(4)	(4)
Balance, end of period	$ 2	$ 1
Loss Contingencies Units
Balance, beginning of period	6	13
New demands	30	23
Loan paydowns/payoffs	0	(1)
Resolved demands	(22)	(24)
Balance, end of period	14	11
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	1	0
New demands	0	0
Loan paydowns/payoffs	0	0
Resolved demands	0	0
Balance, end of period	1	0

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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	Dec. 31, 2009
Visa Funding
Loss Contingencies
Escrow Deposit	$ 450	$ 150	$ 1,565	$ 400	$ 800	$ 500	$ 3,000
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, 2013 USD ($)	Dec. 31, 2013	Mar. 31, 2018 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2012	Mar. 31, 2012 USD ($)
Loss Contingencies
Amount in excess of amounts reserved			$ 22
APR Percentage Allegedly Misleading					120.00%
Number Of Putative Class Actions Filed		4
Damages Claimed By Plaintiff				$ 800		$ 40
Federal Lawsuits
Loss Contingencies
Number of merchants requesting exclusion	500
Class Action Settlement
Loss Contingencies
Number of merchants requesting exclusion	8,000
Percentage of escrow funds returned to defendants	25.00%
Escrow Deposit	$ 46

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Related Party Transactions (Related Party Transactions - Additional Information) (Detail) - Vantiv Holding, LLC - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Related Party Transactions
Equity Method Investment, Ownership Percentage	4.90%	8.60%
Gain in noninterest income as a result of Worldpay Transaction	$ 414
Equity investments, carrying value	$ 632

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Income Taxes (Income Taxes - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Taxes
Applicable income tax expense	$ 132	$ 91
Effective tax rate	15.80%	22.90%

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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, 2018	Mar. 31, 2018	Mar. 31, 2017
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	$ (460)		$ 15
Reclassification adjustment for net (gains) losses included in net income	7		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	(7)		(3)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(1)		(5)
Net activity for defined benefit plans, net
Reclassification of amounts to net periodic benefit costs	(1)		(1)
Total Other Comprehensive Activity
Pre-tax activity total	(594)		13
Total, Tax	134		(4)
Other comprehensive income (loss)	(460)	$ (460)	9
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	73		59
Other comprehensive income (loss), Net of Tax	(460)	(460)	9
Total Accumulated Other Comprehensive Income - Ending Balance	(389)	(389)	68
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	(594)		22
Reclassification adjustment for net losses (gains) included in net income	9		2
Net unrealized gains on available-for-sale securities	(585)		24
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	134		(7)
Reclassification adjustment for net losses (gains) included in net income	(2)		(1)
Net unrealized gains on available-for-sale securities	132		(8)
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	(460)		15
Reclassification adjustment for net (gains) losses included in net income	7		1
Net unrealized gains on available-for-sale securities	(453)		16
Total Other Comprehensive Activity
Other comprehensive income (loss)	(453)		16
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	135		101
Other comprehensive income (loss), Net of Tax	(453)		16
Total Accumulated Other Comprehensive Income - Ending Balance	(318)	(318)	117
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	(9)		(5)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(1)		(8)
Net unrealized gains on cash flow hedge derivatives	(10)		(13)
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		2
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	0		3
Net unrealized gains on cash flow hedge derivatives	2		5
Net activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(7)		(3)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(1)		(5)
Net unrealized gains on cash flow hedge derivatives	(8)		(8)
Total Other Comprehensive Activity
Other comprehensive income (loss)	(8)		(8)
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	(11)		10
Other comprehensive income (loss), Net of Tax	(8)		(8)
Total Accumulated Other Comprehensive Income - Ending Balance	(19)	(19)	2
Accumulated Defined Benefit Plans Adjustment
Pre-tax activity for defined benefit plans, net
Net actuarial loss	0
Reclassification of amounts to net periodic benefit costs	1		2
Defined benefit plans, net	1		2
Tax effect for defined benefit plans, net
Net actuarial loss	0
Reclassification of amounts to net periodic benefit costs	0		(1)
Defined benefit plans, net	0		(1)
Net activity for defined benefit plans, net
Net actuarial gain (loss) arising during the period	0
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	(53)		(52)
Other comprehensive income (loss), Net of Tax	(1)		(1)
Total Accumulated Other Comprehensive Income - Ending Balance	$ (52)	$ (52)	$ (51)

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AOCI (Reclassifications Out of Accumulated Other Comprehensive Income) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Reclassifications Out Of Accumulated Other Comprehensive Income
Income Before Income Taxes		$ 836	$ 396
Applicable income tax expense		132	91
Net income		704	305
Total Reclassifications For The Period
Reclassifications Out Of Accumulated Other Comprehensive Income
Net income		(7)	3
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		(9)	(2)
Net Unrealized Gains On Available For Sale Securities | Net (Losses) Gains Included In Net Income
Reclassifications Out Of Accumulated Other Comprehensive Income
Reclassification adjustment for net losses (gains) included in net income	[1]	(9)	(2)
Income Before Income Taxes	[1]	(9)	(2)
Applicable income tax expense	[1]	2	1
Net income	[1]	(7)	(1)
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		1	8
Income Before Income Taxes	[1]	1	8
Applicable income tax expense	[1]	0	(3)
Net income	[1]	1	5
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	[1]	1	8
Amortization Of Defined Benefit Pension Items | Net Actuarial Loss
Reclassifications Out Of Accumulated Other Comprehensive Income
Net periodic pension cost	[1],[2]	(1)	(2)
Income Before Income Taxes	[1]	(1)	(2)
Applicable income tax expense	[1]	0	1
Net income	[1]	$ (1)	$ (1)

[1] Amounts in parentheses indicate reductions to net income

[2] This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 22 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2017 for further information.

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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, 2018	Mar. 31, 2017
Earnings per share:
Net income (loss) available to common shareholders	$ 689	$ 290
Less: Income allocated to participating securities	8	4
Earnings per share - basic	681	286
Earnings per diluted share:
Net income available to common shareholders	689	290
Stock-based awards	0	0
Net income available to common shareholders plus assumed conversions	689	290
Less: Income allocated to participating securities	8	4
Net income allocated to common shareholders	$ 681	$ 286
Earnings per share:
Net income allocated to common shareholders	689,820,295	747,667,521
Effect of dilutive securities:
Stock-based awards	14,000,000	13,000,000
Net income allocated to common shareholders	704,100,936	760,809,239
Earnings per share:
Earnings per share - basic	$ 0.99	$ 0.38
Earnings per diluted share:
Earnings per share - diluted	$ 0.97	$ 0.38

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EPS (Earnings Per Share - Additional Information) (Detail) - shares shares in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock Appreciation Rights
Earnings Per Share Disclosure
Anti-dilutive securities	2	6

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Detail) - USD ($) $ in Millions		Mar. 31, 2018		Dec. 31, 2017
Assets:
Available-for-sale debt securities, fair value	[1]	$ 31,819		$ 31,751
Trading debt securities		571		492
Equity securities		418		439
Commercial loans held for sale measured at FV		650		399
Commercial
Assets:
Commercial loans held for sale measured at FV		16		0
Residential mortgage loans
Assets:
Loans measured at FV		136		137
Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		31,207	[2]	31,139	[3]
Trading debt securities		571		492
Equity securities		418		439
Residential mortgage loans held for sale		650		399
Loans measured at FV	[4]	136	[5]	137
Commercial loans held for sale measured at FV		16
Mortgage servicing rights		926	[2],[6]	858
Derivative assets	[7]	865		823
Total assets		34,789		34,287
Liabilities:
Derivative liabilities	[8]	774		602
Short positions	[8]	126		31
Total liabilities		900		633
Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		534		514
Liabilities:
Derivative liabilities		285		178
Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets		132		124
Liabilities:
Derivative liabilities		129		120
Equity Contract | Fair value, recurring
Assets:
Equity securities				20
Liabilities:
Derivative liabilities		165		137
Commodity Contract | Fair value, recurring
Assets:
Derivative assets		199		165
Liabilities:
Derivative liabilities		195		167
U.S. Treasury and federal agencies
Assets:
Available-for-sale debt securities, fair value		96		98
U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		96		98
Trading debt securities		21		12
Obligations of states and political subdivisions
Assets:
Available-for-sale debt securities, fair value		44		44
Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		44		44
Trading debt securities		52		22
Agency mortgage-backed securities | Residential mortgage backed securities
Assets:
Available-for-sale debt securities, fair value		15,208		15,319	[9]
Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		15,208		15,319
Trading debt securities		364		395
Agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale debt securities, fair value		10,455		10,167
Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		10,455		10,167
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale debt securities, fair value		3,190		3,293
Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		3,190		3,293
Asset-backed securities and other debt securities
Assets:
Available-for-sale debt securities, fair value		2,214		2,218
Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		2,214		2,218
Trading debt securities		134		63
Fair Value, Inputs, Level 1 | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		96	[2],[10]	98	[3],[11]
Trading debt securities		0	[10]	1	[11]
Equity securities		417		438
Derivative assets	[7]	36	[10]	40	[11]
Total assets		549	[10]	577	[11]
Liabilities:
Derivative liabilities	[8]	58	[10]	39	[11]
Short positions	[8]	93	[10]	25	[11]
Total liabilities		151	[10]	64	[11]
Fair Value, Inputs, Level 1 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		2	[10]	1	[11]
Liabilities:
Derivative liabilities		2	[10]	1	[11]
Fair Value, Inputs, Level 1 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets		34	[10]	39	[11]
Liabilities:
Derivative liabilities		56	[10]	38	[11]
Fair Value, Inputs, Level 1 | U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		96	[10]	98	[11]
Trading debt securities		0	[10]	1
Fair Value, Inputs, Level 2 | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		31,111	[2],[10]	31,041	[3],[11]
Trading debt securities		571	[10]	491	[11]
Equity securities		1		1
Residential mortgage loans held for sale		650	[10]	399	[11]
Commercial loans held for sale measured at FV	[10]	16
Derivative assets	[7]	818	[10]	775	[11]
Total assets		33,167	[10]	32,707	[11]
Liabilities:
Derivative liabilities	[8]	544	[10]	421	[11]
Short positions	[8]	33	[10]	6	[11]
Total liabilities		577	[10]	427	[11]
Fair Value, Inputs, Level 2 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		521	[10]	505	[11]
Liabilities:
Derivative liabilities		276	[10]	172	[11]
Fair Value, Inputs, Level 2 | Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets		132	[10]	124	[11]
Liabilities:
Derivative liabilities		129	[10]	120	[11]
Fair Value, Inputs, Level 2 | Equity Contract | Fair value, recurring
Assets:
Equity securities				20
Fair Value, Inputs, Level 2 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets		165	[10]	126	[11]
Liabilities:
Derivative liabilities		139	[10]	129	[11]
Fair Value, Inputs, Level 2 | U.S. Treasury and federal agencies | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		0	[10]	0	[11]
Trading debt securities		21	[10]	11	[11]
Fair Value, Inputs, Level 2 | Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		44	[10]	44	[11]
Trading debt securities		52	[10]	22	[11]
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		15,208	[10]	15,319	[11]
Trading debt securities		364	[10]	395	[11]
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		10,455	[10]	10,167	[11]
Fair Value, Inputs, Level 2 | Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		3,190	[10]	3,293	[11]
Fair Value, Inputs, Level 2 | Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value		2,214	[10]	2,218	[11]
Trading debt securities		134	[10]	63	[11]
Fair Value, Inputs, Level 3 | Fair value, recurring
Assets:
Loans measured at FV	[4]	136	[5]	137
Mortgage servicing rights		926		858
Derivative assets	[7]	11		8
Total assets		1,073		1,003
Liabilities:
Derivative liabilities	[8]	172		142
Total liabilities		172		142
Fair Value, Inputs, Level 3 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets		11		8
Liabilities:
Derivative liabilities		7		5
Fair Value, Inputs, Level 3 | Equity Contract | Fair value, recurring
Liabilities:
Derivative liabilities		$ 165		$ 137

[1] Amortized cost of $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

[2] Excludes FHLB, FRB and DTCC restricted stock holdings totaling $ 248 , $ 362 and $ 2 , respectively, at March 31, 2018 .

[3] Excludes FHLB, FRB and DTCC restricted stock holdings totaling $248, $362 and $ 2 , respectively, at December 31, 2017 .

[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] For both the three months ended March 31, 2018 and 2017 , dividends were $ 414.06 per preferred share for Perpetual Preferred Stock, Series I and $ 612.5 0 per preferred share for Perpetual Preferred Stock, Series J.

[7] Included in other assets in the Condensed Consolidated Balance S heets.

[8] Included in other liabilities in the Condensed Consolidated Balance Sheets.

[9] Includes interest-only mortgage-backed securities of $ 34 as of December 31, 2017 , recorded at fair value with fair value changes recorded in securities gains, net, in the Condensed Consolidated Statements of Income.

[10] During the three months ended March 31, 2018 , no assets or liabilities were transferred between Level 1 and Level 2.

[11] During the year ended December 31, 2017 , no assets or liabilities were transferred between Level 1 and Level 2.

XML

Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Parenthetical) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Federal Home Loan Bank Stock	$ 248	$ 248
Federal Reserve Bank Stock	362	362
DTCC Stock	$ 2	$ 2

XML

Fair Value Measurements (Fair Value Measurements - Additional Information) (Detail) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Net fair value of the interest rate lock commitments	$ 11
Change in the fair value of the interest rate lock commitments, due to decrease in current interest rates of 25 bp	5
Change in the fair value of the interest rate lock commitments, due to decrease in current interest rates of 50 bp	9
Change in the fair value of the interest rate lock commitments, due to increase in current interest rates of 25 bp	6
Change in the fair value of the interest rate lock commitments, due to increase in current interest rates of 50 bp	13
Change in fair value of interest rate lock commitments, due to 10% adverse changes in the assumed loan closing rates	1
Change in fair value of interest rate lock commitments, due to 20% adverse changes in the assumed loan closing rates	2
Change in fair value of interest rate lock commitments, due to 10% favorable changes in the assumed loan closing rates	1
Change in fair value of interest rate lock commitments, due to 20% favorable changes in the assumed loan closing rates	2
Portfolio loans to loans held for sale	64	$ 5
Existing loans held for sale, further adjusted	650		$ 399
Fair value changes included in earnings for instruments for which the fair value option was elected	12	22
Net Losses On Operating Lease Equipment	2	20
Larger commercial loans, subject to impairment review	1
Commercial Loans Held For Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Portfolio loans to loans held for sale	1	18
Existing loans held for sale, further adjusted	1
Gain Loss On Sales Of Loans Net		2
Fair value adjustment		17
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Net impact related to fair value adjustments	2	2
Nonrecurring Losses Included As Charge-Offs	1	$ 2
Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value of loans	2		$ 2
Fair value measurements nonrecurring | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
OTTI	6
Positive fair value adjustment, observable price changes | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value adjustment	35
Fair value adjustment, impairment | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair value adjustment	$ 10

XML

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, 2018		Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		$ 861		$ 804
Included in earnings		1		(13)
Purchases/originations		38		54
Settlements		(135)		(17)
Transfers Into Level 3	[1]	136		3
Ending Balance		901		831
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]	(2)		(20)
Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		137		143
Included in earnings		(2)		0
Purchases/originations		0		0
Settlements		(135)		(5)
Transfers Into Level 3	[1]	136		3
Ending Balance		136		141
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]	(2)		0
Mortgage servicing rights
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		858		744
Included in earnings		28		(23)
Purchases/originations		40		55
Settlements		0		0
Transfers Into Level 3		0	[1]	0
Ending Balance		926		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		28	[2]	(23)
Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	[3]	3		8	[4]
Included in earnings		14	[3]	23	[4]
Purchases/originations		(2)	[3]	(1)	[4]
Settlements		(11)	[3]	(19)	[4]
Transfers Into Level 3	[1]	0	[3]	0	[4]
Ending Balance		4	[3]	11	[4]
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]	11	[3]	16	[4]
Equity Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance		(137)		(91)	[4]
Included in earnings		(39)		(13)	[4]
Purchases/originations		0		0	[4]
Settlements		11		7	[4]
Transfers Into Level 3	[1]	0		0	[4]
Ending Balance		(165)		(97)	[4]
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]	$ (39)		$ (13)	[4]

[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] Net interest rate derivatives include derivative assets and liabilities of $ 11 and $ 7 , respectively , as of March 31, 2018 .

[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 .

XML

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, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets	$ 901	$ 861	$ 831	$ 804
Interest Rates
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets	11		16
Derivative liabilities	$ 7		5
Equity Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Derivative assets			0
Derivative liabilities			$ 97

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, 2018	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	$ 1	$ (13)
Mortgage Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	39	0
Corporate Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	1	0
Other Noninterest Income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gains and losses included in earnings	$ (39)	$ (13)

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, 2018	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gain and losses included in earnings	$ (2)	$ (20)
Mortgage Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gain and losses included in earnings	36	(7)
Corporate Banking Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gain and losses included in earnings	1	0
Other Noninterest Income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Gain and losses included in earnings	$ (39)	$ (13)

XML

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, 2018	Mar. 31, 2017	Dec. 31, 2017
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments	$ 865		$ 823
Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Loans measured at FV	136	$ 141
Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Mortgage servicing rights	926	776
IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments	11	16
Swap associated with the sale of Visa, Inc. Class B shares
Quantitative Information About Level 3 Fair Value Measurements
Derivative instruments	$ (165)	$ (97)
Minimum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	(12.60%)	(10.60%)
Credit risk factor	0.00%	0.00%
Minimum | Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	0.50%	0.70%
OAS spread (bps)	44600.00%	43000.00%
Minimum | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates	9.50%	12.30%
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	Feb. 28, 2021	Dec. 31, 2018
Maximum | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	14.10%	15.40%
Credit risk factor	46.20%	46.20%
Maximum | Mortgage servicing rights
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	98.10%	100.00%
OAS spread (bps)	151500.00%	151500.00%
Maximum | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates	102.70%	97.90%
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, 2023	Dec. 31, 2022
Weighted average | Residential mortgage loans
Quantitative Information About Level 3 Fair Value Measurements
Interest rate risk factor	1.30%	2.30%
Credit risk factor	1.50%	1.20%
Weighted average | Mortgage servicing rights | Fixed
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	10.00%	11.20%
OAS spread (bps)	54800.00%	52800.00%
Weighted average | Mortgage servicing rights | Adjustable
Quantitative Information About Level 3 Fair Value Measurements
Prepayment speed	24.60%	25.20%
OAS spread (bps)	79700.00%	75700.00%
Weighted average | IRLCs, net
Quantitative Information About Level 3 Fair Value Measurements
Loan closing rates	76.60%	72.20%
Weighted average | 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	Sep. 08, 2021	Aug. 24, 2020

XML

Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	$ 404	$ 435
Fair Value Measured On Nonrecurring Basis Gains Losses	(35)	(75)
Commercial Loans Held-for-Sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	5	1
Fair Value Measured On Nonrecurring Basis Gains Losses	(1)	(19)
Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	277	318
Fair Value Measured On Nonrecurring Basis Gains Losses	(44)	(26)
Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	4	25
Fair Value Measured On Nonrecurring Basis Gains Losses	6	(2)
Commercial Leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	2	2
Fair Value Measured On Nonrecurring Basis Gains Losses	(2)	(1)
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	17	19
Fair Value Measured On Nonrecurring Basis Gains Losses	(3)	(4)
Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	4	15
Fair Value Measured On Nonrecurring Basis Gains Losses	(8)	(3)
Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	12	55
Fair Value Measured On Nonrecurring Basis Gains Losses	(2)	20
Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	83
Fair Value Measured On Nonrecurring Basis Gains Losses	(19)
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	354	435
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	5	1
Fair Value, Inputs, Level 3 | Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	277	318
Fair Value, Inputs, Level 3 | Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	4	25
Fair Value, Inputs, Level 3 | Commercial Leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	2	2
Fair Value, Inputs, Level 3 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	17	19
Fair Value, Inputs, Level 3 | Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	4	15
Fair Value, Inputs, Level 3 | Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	12	$ 55
Fair Value, Inputs, Level 3 | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	33
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	50
Fair Value, Inputs, Level 2 | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value Measurements	$ 50

XML

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, 2018	Mar. 31, 2017
Commercial Loans Held For Sale | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	$ 5	$ 1
Commercial and Industrial Loans | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	277	318
Commercial Mortgage Loans | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	4	25
Commercial Leases | Commercial
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	2	2
OREO Property
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	17	19
Bank premises and equipment
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	4	15
Operating lease equipment
Quantitative Information About Level 3 Fair Value Measurements
Fair value measurements nonrecurring assets	12	$ 55
Private Equity Investments
Quantitative Information About Level 3 Fair Value Measurements
Comparable company analysis, fair value	4
Liquidity discount, fair value	$ 29
Minimum | Private Equity Investments
Quantitative Information About Level 3 Fair Value Measurements
Liquidity discount	0.00%
Maximum | Private Equity Investments
Quantitative Information About Level 3 Fair Value Measurements
Liquidity discount	43.00%
Weighted average | Commercial Loans Held For Sale
Quantitative Information About Level 3 Fair Value Measurements
Cost to sell	10.00%	10.00%
Weighted average | Private Equity Investments
Quantitative Information About Level 3 Fair Value Measurements
Liquidity discount	10.50%

XML

Fair Value Measurements (Difference Between the Aggregate Fair Value and the Aggregate Unpaid Principal Balance for Residential Mortgage Loans Measured at Fair Value) (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Residential mortgage loans
Aggregate fair value
Loans measured at fair value	$ 786	$ 536
Past due loans of 90 days or more	4	5
Nonaccrual loans	1	1
Aggregate unpaid principal balance
Loans measured at fair value	774	522
Past due loans of 90 days or more	4	5
Nonaccrual loans	1	1
Difference
Loans measured at fair value	12	14
Past due loans of 90 days or more	0	0
Nonaccrual loans	0	$ 0
Commercial loans
Aggregate fair value
Loans measured at fair value	16
Aggregate unpaid principal balance
Loans measured at fair value	16
Difference
Loans measured at fair value	$ 0

XML

Fair Value Measurements (Carrying Amounts and Estimated Fair Values for Certain Financial Instruments) (Detail) - USD ($) $ in Millions		Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016	[1]
Financial assets:
Cash and due from banks		$ 2,038	$ 2,514	$ 2,205	$ 2,392
Held-to-maturity securities, amortized cost	[2]	23	24
Other short-term investments	[1]	1,747	2,753
Loans and leases held for sale	[3]	717	492
Portfolio loans and leases, net		90,832	90,774
Other securities, fair value	[4]	31,819	31,751
Held-to-maturity securities, fair value		23	24
Loans held for sale		650	399
Financial liabilities:
Deposits		105,461	103,162
Federal funds purchased		178	174
Other short-term borrowings		1,335	4,012
Long-term debt	[1]	14,800	14,904
Commercial
Financial assets:
Loans held for sale		16	0
Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		136		$ 141
Carrying (Reported) Amount, Fair Value Disclosure
Financial assets:
Cash and due from banks		2,038	2,514
Held-to-maturity securities, amortized cost		23	24
Other short-term investments		1,747	2,753
Loans and leases held for sale		51	93
Portfolio loans and leases, net		90,696	90,637
Unallocated Allowance For Loan And Lease Losses		(114)	(120)
Financial liabilities:
Deposits		105,461	103,162
Federal funds purchased		178	174
Other short-term borrowings		1,335	4,012
Long-term debt		14,800	14,904
Carrying (Reported) Amount, Fair Value Disclosure | FHLB, FRB and DTCC restricted stock holdings
Financial assets:
Other securities		612	612
Carrying (Reported) Amount, Fair Value Disclosure | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases, net		41,023	40,519
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases, net		6,446	6,539
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases, net		4,743	4,530
Carrying (Reported) Amount, Fair Value Disclosure | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases, net		3,904	4,054
Carrying (Reported) Amount, Fair Value Disclosure | Residential Mortgage
Financial assets:
Portfolio loans and leases, net		15,338	15,365
Carrying (Reported) Amount, Fair Value Disclosure | Home Equity
Financial assets:
Portfolio loans and leases, net		6,713	6,968
Carrying (Reported) Amount, Fair Value Disclosure | Automobile Loans
Financial assets:
Portfolio loans and leases, net		8,979	9,074
Carrying (Reported) Amount, Fair Value Disclosure | Credit Card
Financial assets:
Portfolio loans and leases, net		2,072	2,182
Carrying (Reported) Amount, Fair Value Disclosure | Other Consumer Loans
Financial assets:
Portfolio loans and leases, net		1,592	1,526
Total Fair Value
Financial assets:
Cash and due from banks, fair value		2,038	2,514
Held-to-maturity securities, fair value		23	24
Other short term investments, fair value		1,747	2,753
Portfolio loans and leases at fair value		92,469	92,948
Financial liabilities:
Deposits, fair value		105,407	103,123
Federal funds purchased, fair value		178	174
Other short-term borrowings, fair value		1,335	4,012
Long term debt, fair value		15,216	15,574
Total Fair Value | Non Fair Value Option HFS Loans
Financial assets:
Loans held for sale		51	93
Total Fair Value | FHLB, FRB and DTCC restricted stock holdings
Financial assets:
Other securities, fair value		612	612
Total Fair Value | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		42,143	41,718
Total Fair Value | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		6,395	6,490
Total Fair Value | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		4,775	4,560
Total Fair Value | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases at fair value		3,520	3,705
Total Fair Value | Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		15,716	15,996
Total Fair Value | Home Equity
Financial assets:
Portfolio loans and leases at fair value		7,103	7,410
Total Fair Value | Automobile Loans
Financial assets:
Portfolio loans and leases at fair value		8,708	8,832
Total Fair Value | Credit Card
Financial assets:
Portfolio loans and leases at fair value		2,440	2,616
Total Fair Value | Other Consumer Loans
Financial assets:
Portfolio loans and leases at fair value		1,669	1,621
Total Fair Value | Fair Value, Inputs, Level 1
Financial assets:
Cash and due from banks, fair value		2,038	2,514
Other short term investments, fair value		1,747	2,753
Financial liabilities:
Federal funds purchased, fair value		178	174
Long term debt, fair value		14,752	15,045
Total Fair Value | Fair Value, Inputs, Level 2
Financial liabilities:
Deposits, fair value		105,407	103,123
Other short-term borrowings, fair value		1,335	4,012
Long term debt, fair value		464	529
Total Fair Value | Fair Value, Inputs, Level 2 | FHLB, FRB and DTCC restricted stock holdings
Financial assets:
Other securities, fair value		612	612
Total Fair Value | Fair Value, Inputs, Level 3
Financial assets:
Held-to-maturity securities, fair value		23	24
Portfolio loans and leases at fair value		92,469	92,948
Total Fair Value | Fair Value, Inputs, Level 3 | Non Fair Value Option HFS Loans
Financial assets:
Loans held for sale		51	93
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial and Industrial Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		42,143	41,718
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Mortgage Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		6,395	6,490
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Construction Loans | Commercial
Financial assets:
Portfolio loans and leases at fair value		4,775	4,560
Total Fair Value | Fair Value, Inputs, Level 3 | Commercial Leases | Commercial
Financial assets:
Portfolio loans and leases at fair value		3,520	3,705
Total Fair Value | Fair Value, Inputs, Level 3 | Residential Mortgage
Financial assets:
Portfolio loans and leases at fair value		15,716	15,996
Total Fair Value | Fair Value, Inputs, Level 3 | Home Equity
Financial assets:
Portfolio loans and leases at fair value		7,103	7,410
Total Fair Value | Fair Value, Inputs, Level 3 | Automobile Loans
Financial assets:
Portfolio loans and leases at fair value		8,708	8,832
Total Fair Value | Fair Value, Inputs, Level 3 | Credit Card
Financial assets:
Portfolio loans and leases at fair value		2,440	2,616
Total Fair Value | Fair Value, Inputs, Level 3 | Other Consumer Loans
Financial assets:
Portfolio loans and leases at fair value		$ 1,669	$ 1,621

[1] Includes $ 66 and $ 62 of other short-term investments , $ 1,135 and $ 1,297 of portfolio loans and leases, $ (6) and $ (6) of ALLL, $ 6 and $ 7 of other assets, $ 2 and $ 2 of other liabilities, and $ 1,031 and $ 1,190 of long-term debt from consolidated VIEs that are included in their respe ctive captions above at March 31, 2018 and December 31, 2017 , respectively. For further information refer to Note 9 .

[2] Fair value of $ 23 and $ 24 at March 31, 2018 and December 31, 2017 , respectively.

[3] Includes $ 650 and $ 399 of residential mortgage loans held for sale measured at fair value and $ 16 and $ 0 of commercial loans held for sale measured at fair value at March 31, 2018 and December 31, 2017 , respectively.

[4] Amortized cost of $ 32,230 and $ 31,577 at March 31, 2018 and December 31, 2017 , respectively.

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Segments (Results of Operations and Average Assets by Segment - Additional Information) (Detail)	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements
Full-service Banking Centers	1,153

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Segments (Results of Operations and Average Assets by Segment) (Detail) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2018		Mar. 31, 2018	Mar. 31, 2017		Dec. 31, 2017
Segment Reporting Information
Total Assets		$ 141,500		$ 141,500	$ 140,200		$ 142,193
Net interest income		996			933
Provision for (benefit from) loan and lease losses		23			74
Net interest income after provision for loan and lease losses		973			859
Service charges on deposits		137			138
Wealth and asset management revenue		113			108
Corporate banking revenue		88			74
Card and processing revenue		79			74
Mortgage banking net revenue		56			52
Other noninterest income		460			77
Securities gains (losses), net		(11)			0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		(13)			0
Total noninterest income		909			523
Salaries, wages and incentives		447			411
Net occupancy expense		75			78
Card and processing expense		29			30
Other noninterest expense		286			270
Employee benefits		110			111
Equipment expense		31			28
Technology and communications		68			58
Total noninterest expense		1,046			986
Income (Loss) Before Income Taxes		836			396
Net income (loss)		704		704	305
Applicable income tax expense (benefit)		132			91
Total goodwill		2,462		2,462	2,419		$ 2,445
Intersegment Elimination
Segment Reporting Information
Wealth and asset management revenue	[1]	(34)			(34)
Total noninterest income	[1]	(34)			(34)
Other noninterest expense		(34)			(34)	[1]
Total noninterest expense		(34)			(34)
Commercial Banking
Segment Reporting Information
Total Assets		58,829		58,829	57,672
Net interest income		419			425
Provision for (benefit from) loan and lease losses		(20)			6
Net interest income after provision for loan and lease losses		439			419
Service charges on deposits		71			73
Wealth and asset management revenue		1			1
Corporate banking revenue		86			73
Card and processing revenue		14			14
Mortgage banking net revenue		0			0
Other noninterest income		49			41
Securities gains (losses), net		(2)
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		0
Total noninterest income	[2]	219			202
Salaries, wages and incentives		70			67
Net occupancy expense		7			7
Card and processing expense		1			1
Other noninterest expense		281			260
Employee benefits		18			18
Equipment expense		5			4
Technology and communications		2			3
Total noninterest expense		384			360
Income (Loss) Before Income Taxes		274			261
Net income (loss)		259			217
Applicable income tax expense (benefit)		15			44
Total goodwill		630		630	613
Branch Banking
Segment Reporting Information
Total Assets		60,197		60,197	57,883
Net interest income		466			430
Provision for (benefit from) loan and lease losses		44			42
Net interest income after provision for loan and lease losses		422			388
Service charges on deposits		66			65
Wealth and asset management revenue		37			36
Corporate banking revenue		1			1
Card and processing revenue		64			59
Mortgage banking net revenue		1			1
Other noninterest income		15			22
Securities gains (losses), net		0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		0
Total noninterest income		184	[3]		184	[4]
Salaries, wages and incentives		110			104
Net occupancy expense		43			47
Card and processing expense		29			29
Other noninterest expense		215			192
Employee benefits		26			27
Equipment expense		13			13
Technology and communications		1			1
Total noninterest expense		437			413
Income (Loss) Before Income Taxes		169			159
Net income (loss)		134			103
Applicable income tax expense (benefit)		35			56
Total goodwill		1,655		1,655	1,655
Consumer Lending
Segment Reporting Information
Total Assets		22,384		22,384	21,994
Net interest income		59			61
Provision for (benefit from) loan and lease losses		12			15
Net interest income after provision for loan and lease losses		47			46
Service charges on deposits		0			0
Wealth and asset management revenue		0			0
Corporate banking revenue		0			0
Card and processing revenue		0			0
Mortgage banking net revenue		55			51
Other noninterest income		4			4
Securities gains (losses), net		0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		(13)
Total noninterest income		46			55
Salaries, wages and incentives		39			37
Net occupancy expense		3			3
Card and processing expense		0			0
Other noninterest expense		52			54
Employee benefits		11			11
Equipment expense		0			0
Technology and communications		1			1
Total noninterest expense		106			106
Income (Loss) Before Income Taxes		(13)			(5)
Net income (loss)		(10)			(3)
Applicable income tax expense (benefit)		(3)			(2)
Total goodwill		0		0	0
Wealth and Asset Management
Segment Reporting Information
Total Assets		10,611		10,611	9,644
Net interest income		43			38
Provision for (benefit from) loan and lease losses		16			4
Net interest income after provision for loan and lease losses		27			34
Service charges on deposits		0			0
Wealth and asset management revenue		109			105
Corporate banking revenue		1			0
Card and processing revenue		1			1
Mortgage banking net revenue		0			0
Other noninterest income		5			0
Securities gains (losses), net		0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		0
Total noninterest income		116			106
Salaries, wages and incentives		44			39
Net occupancy expense		3			2
Card and processing expense		0			0
Other noninterest expense		74			67
Employee benefits		10			9
Equipment expense		0			0
Technology and communications		0			0
Total noninterest expense		131			117
Income (Loss) Before Income Taxes		12			23
Net income (loss)		9			15
Applicable income tax expense (benefit)		3			8
Total goodwill		177		177	151
General Corporate and Other
Segment Reporting Information
Total Assets		(10,521)		(10,521)	(6,993)	[2]
Net interest income		9			(21)
Provision for (benefit from) loan and lease losses		(29)			7
Net interest income after provision for loan and lease losses		38			(28)
Service charges on deposits		0			0
Wealth and asset management revenue		0			0
Corporate banking revenue		0			0
Card and processing revenue		0			0
Mortgage banking net revenue		0			0
Other noninterest income		387			10
Securities gains (losses), net		(9)
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights		0
Total noninterest income		378			10
Salaries, wages and incentives		184			164
Net occupancy expense		19			19
Card and processing expense		(1)			0
Other noninterest expense		(302)			(269)
Employee benefits		45			46
Equipment expense		13			11
Technology and communications		64			53
Total noninterest expense		22			24
Income (Loss) Before Income Taxes		394			(42)
Net income (loss)		312			(27)
Applicable income tax expense (benefit)		82			(15)
Total goodwill		$ 0		$ 0	$ 0

[1] Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.

[2] Includes impairment charges of $ 31 for operating lease equipment. For more information refer to Note 21 .

[3] Includes impairment charges of $ 8 for branches and land. For more information refer to Note 7 and Note 21 .

[4] Includes impairment charges of $ 3 for branches and land. For more information refer to Note 7 and Note 21 .

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Segments (Results of Operations and Average Assets by Segment) (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Segment Reporting Information
Other Asset Impairment Charges	$ (2)	$ (20)
Bank premises and equipment held for sale	20		$ 27
Branch Banking
Segment Reporting Information
Impairment of Branches and Land	8	3
Commercial Banking | Operating lease equipment
Segment Reporting Information
Other Asset Impairment Charges		31
General Corporate and Other
Segment Reporting Information
Bank premises and equipment held for sale	$ 20	$ 51