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 September 30, 2019

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 every Interactive Data File required to be submitted 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 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	☐	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 ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Common Stock, Without Par Value	FITB	The NASDAQ Stock Market LLC
Depositary Shares Representing a 1/1000th Ownership Interest in a Share of 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I	FITBI	The NASDAQ Stock Market LLC
Depositary Shares Representing a 1/40th Ownership Interest in a Share of 6.00% Non-Cumulative Perpetual Class B Preferred Stock, Series A	FITBP	The NASDAQ Stock Market LLC
Depositary Shares Representing a 1/1000th Ownership Interest in a Share of 4.95% Non-Cumulative Perpetual Preferred Stock, Series K	FITBO	The NASDAQ Stock Market LLC

There were 709,667,397 shares of the Registrant’s common stock, without par value, outstanding as of October 31, 2019.

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	9
Recent Accounting Standards	11
Critical Accounting Policies	11
Statements of Income Analysis	12
Balance Sheet Analysis	22
Business Segment Review	29
Risk Management—Overview	36
Credit Risk Management	37
Market Risk Management	52
Liquidity Risk Management	57
Operational Risk Management	59
Compliance Risk Management	59
Capital Management	60
Off-Balance Sheet Arrangements	63
Quantitative and Qualitative Disclosures about Market Risk (Item 3)	64
Controls and Procedures (Item 4)	64
Condensed Consolidated Financial Statements and Notes (Item 1)
Balance Sheets (unaudited)	65
Statements of Income (unaudited)	66
Statements of Comprehensive Income (unaudited)	67
Statements of Changes in Equity (unaudited)	68
Statements of Cash Flows (unaudited)	70
Notes to Condensed Consolidated Financial Statements (unaudited)	71
Part II. Other Information
Legal Proceedings (Item 1)	134
Risk Factors (Item 1A)	134
Unregistered Sales of Equity Securities and Use of Proceeds (Item 2)	134
Exhibits (Item 6)	134
Signature	136

FORWARD-LOOKING STATEMENTS

This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to the risk factors set forth in our most recent Annual Report on Form 10-K as updated by our Quarterly Reports on Form 10-Q. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us. There 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) deposit insurance premiums; (22) assessments for the orderly liquidation fund; (23) replacement of LIBOR; (24) weakness in the national or local economies; (25) global political and economic uncertainty or negative actions; (26) changes in interest rates; (27) changes and trends in capital markets; (28) fluctuation of Fifth Third’s stock price; (29) volatility in mortgage banking revenue; (30) litigation, investigations and enforcement proceedings by governmental authorities; (31) breaches of contractual covenants, representations and warranties; (32) competition and changes in the financial services industry; (33) changing retail distribution strategies, customer preferences and behavior; (34) risks relating to Fifth Third’s ability to realize the anticipated benefits of the merger with MB Financial, Inc.; (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 investments or acquired entities; (39) changes in accounting standards or interpretation or declines in the value of Fifth Third’s goodwill or other intangible assets; (40) inaccuracies or other failures from the use of models; (41) effects of critical accounting policies and judgments or the use of inaccurate estimates; (42) weather-related events or other natural disasters; and (43) 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 CECL: Current Expected Credit Loss CET1: Common Equity Tier 1 CFPB: United States Consumer Financial Protection Bureau C&I: Commercial and Industrial DCF: Discounted Cash Flow DTCC: Depository Trust & Clearing Corporation DTI: Debt-to-Income Ratio 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 LIHTC: Low-Income Housing Tax Credit LLC: Limited Liability Company LTV: Loan-to-Value Ratio MD&A: Management’s Discussion and Analysis of Financial Condition and Results of Operations MSR: Mortgage Servicing Right N/A: Not Applicable NAV: Net Asset Value NII: Net Interest Income NM: Not Meaningful NPR: Notice of Proposed Rulemaking NSFR: Net Stable Funding Ratio OAS: Option-Adjusted Spread OCC: Office of the Comptroller of the Currency OCI: Other Comprehensive Income (Loss) OREO: Other Real Estate Owned OTTI: Other-Than-Temporary Impairment PCA: Prompt Corrective Action PCI: Purchased Credit Impaired RCC: Risk Compliance Committee ROU: Right-of-Use RSF: Required Stable Funding SAR: Stock Appreciation Right SBA: Small Business Administration SEC: United States Securities and Exchange Commission TBA: To Be Announced TDR: Troubled Debt Restructuring TILA: Truth in Lending Act 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					For the nine months
		ended September 30,			%		ended September 30,			%
($ in millions, except for per share data)		2019		2018	Change		2019		2018	Change
Income Statement Data
Net interest income (U.S. GAAP)	$	1,242		1,043	19	$	3,569		3,059	17
Net interest income (FTE)(a)(b)		1,246		1,047	19		3,582		3,071	17
Noninterest income		740		563	31		2,501		2,215	13
Total revenue(a)		1,986		1,610	23		6,083		5,286	15
Provision for credit losses(c)		134		84	60		310		111	179
Noninterest expense		1,159		972	19		3,499		2,984	17
Net income attributable to Bancorp		549		436	26		1,778		1,737	2
Net income available to common shareholders		530		421	26		1,718		1,685	2
Common Share Data
Earnings per share - basic	$	0.72		0.62	16	$	2.40		2.45	(2)
Earnings per share - diluted		0.71		0.61	16		2.37		2.41	(2)
Cash dividends declared per common share		0.24		0.18	33		0.70		0.52	35
Book value per share		27.32		21.70	26		27.32		21.70	26
Market value per share		27.38		27.92	(2)		27.38		27.92	(2)
Financial Ratios
Return on average assets		1.28	%	1.22	5		1.47	%	1.64	(10)
Return on average common equity		10.7		11.4	(6)		12.7		15.3	(17)
Return on average tangible common equity (including AOCI)(b)		14.2		13.8	3		16.5		18.5	(11)
Return on average tangible common equity (excluding AOCI)(b)		15.7		13.1	20		17.3		17.7	(2)
Dividend payout		33.3		29.0	15		29.2		21.2	38
Average total Bancorp shareholders' equity as a percent of average assets		12.43		11.29	10		11.99		11.33	6
Tangible common equity as a percent of tangible assets (excluding AOCI)(b)		8.21		9.02	(9)		8.21		9.02	(9)
Net interest margin(a)(b)		3.32		3.23	3		3.32		3.20	4
Net interest rate spread (a)(b)		2.93		2.87	2		2.92		2.87	2
Efficiency(a)(b)		58.4		60.4	(3)		57.5		56.4	2
Credit Quality
Net losses charged-off	$	99		72	38	$	256		247	4
Net losses charged-off as a percent of average portfolio loans and leases		0.36	%	0.30	20		0.32	%	0.36	(11)
ALLL as a percent of portfolio loans and leases		1.04		1.17	(11)		1.04		1.17	(11)
Allowance for credit losses as a percent of portfolio loans and leases(d)		1.19		1.31	(9)		1.19		1.31	(9)
Nonperforming portfolio assets as a percent of portfolio loans and leases
and OREO		0.47		0.48	(2)		0.47		0.48	(2)
Average Balances
Loans and leases, including held for sale	$	110,666		93,977	18	$	106,719		93,363	14
Securities and other short-term investments		38,188		34,822	10		37,369		34,813	7
Total assets		169,585		141,654	20		162,119		141,511	15
Transaction deposits(e)		114,541		97,315	18		109,396		97,303	12
Core deposits(f)		120,364		101,492	19		114,853		101,321	13
Wholesale funding(g)		22,492		20,613	9		22,772		20,546	11
Bancorp shareholders’ equity		21,087		15,994	32		19,430		16,030	21
Regulatory Capital and Liquidity Ratios
CET1 capital(h)		9.56	%	10.67	(10)		9.56	%	10.67	(10)
Tier I risk-based capital(h)		10.81		11.78	(8)		10.81		11.78	(8)
Total risk-based capital(h)		13.68		14.94	(8)		13.68		14.94	(8)
Tier I leverage		9.36		10.10	(7)		9.36		10.10	(7)
Modified LCR		116		119	(3)		116		119	(3)

(a)Amounts presented on an FTE basis. The FTE adjustments for both the three months ended September 30, 2019 and 2018 were $4 and for the nine months ended September 30, 2019 and 2018 were $13 and $12, respectively.

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

(c)The provision for credit losses is the sum of the provision for loan and lease losses and the provision for (benefit from) the reserve for unfunded commitments.

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

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

(f)Includes transaction deposits and other time deposits.

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

(h)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.

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 September 30, 2019, the Bancorp had $171.1 billion in assets and operated 1,143 full-service banking centers and 2,487 Fifth Third branded 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.

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, 2018. 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 September 30, 2019, net interest income on an FTE basis and noninterest income provided 63% and 37% of total revenue, respectively. For the nine months ended September 30, 2019, net interest income on an FTE basis and noninterest income provided 59% and 41% 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 both the three and nine months ended September 30, 2019. 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 corporate banking revenue, service charges on deposits, wealth and asset management revenue, card and processing revenue, mortgage banking net revenue, net securities gains or losses and other noninterest income. Noninterest expense includes personnel costs, technology and communication costs, net occupancy expense, card and processing expense, equipment expense and other noninterest expense.

Acquisition of MB Financial, Inc.

On March 22, 2019, Fifth Third Bancorp completed its acquisition of MB Financial, Inc. in a stock and cash transaction valued at approximately $3.6 billion. MB Financial, Inc. was headquartered in Chicago, Illinois with reported assets of approximately $20 billion and 86 branches (91 locations) as of December 31, 2018 and was the holding company of MB Financial Bank, N.A. The acquisition resulted in a combined company with a larger Chicago market presence and core deposit funding base while also building scale in a strategically important market.

Under the terms of the agreement, the Bancorp acquired 100% of the common stock of MB Financial, Inc. In exchange, common shareholders of MB Financial, Inc. received 1.45 shares of Fifth Third Bancorp common stock and $5.54 in cash for each share of MB Financial, Inc. common stock, for a total value per share of $42.49, based on the $25.48 closing price of Fifth Third Bancorp’s common stock on March 21, 2019. Upon closing of the transaction, MB Financial, Inc. became a subsidiary of the Bancorp. However, MB Financial, Inc.’s 6.00% non-cumulative Series C perpetual preferred stock with a fair value of $197 million remained outstanding and was recognized as a noncontrolling interest on the Condensed Consolidated Balance Sheets. Through its ownership of all of the common stock, the Bancorp controlled 95% of the voting equity interests in MB Financial, Inc. with the remainder attributable to the preferred shareholders’ noncontrolling interest.

On June 24, 2019, MB Financial, Inc. entered into an Agreement and Plan of Merger with the Bancorp to provide for the merger of MB Financial, Inc. with and into the Bancorp, with the Bancorp as the surviving corporation. A special meeting of MB Financial, Inc.’s

4

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

stockholders was held on August 23, 2019 at which the holders of MB Financial, Inc.’s common stock and preferred stock, voting together as a single class, approved the merger. In the merger, each outstanding share of MB Financial, Inc.’s preferred stock was converted into the right to receive one share of a newly created series of preferred stock of the Bancorp having substantially the same terms as MB Financial, Inc. preferred stock. See the Preferred Stock Offerings section for additional information.

The acquisition of MB Financial, Inc. constituted a business combination and was accounted for under the acquisition method of accounting. Accordingly, the assets acquired, liabilities assumed and noncontrolling interest recognized were recorded at their estimated fair values as of the acquisition date. These fair value estimates are considered preliminary as of September 30, 2019. Fair value estimates, including loans and leases, intangible assets, deposits and goodwill, are subject to change for up to one year after the acquisition date as additional information becomes available. For more information on the acquisition of MB Financial, Inc., refer to Note 3 of the Notes to Condensed Consolidated Financial Statements.

Bank Merger

On May 3, 2019, MB Financial Bank, N.A., merged with and into Fifth Third Bank, with Fifth Third Bank as the surviving entity. Fifth Third Bank is a subsidiary of Fifth Third Bancorp. For more information on the acquisition of MB Financial, Inc., refer to Note 3 of the Notes to Condensed Consolidated Financial Statements.

Holding Company Merger

On August 26, 2019, MB Financial, Inc. merged with and into Fifth Third Bancorp, with Fifth Third Bancorp as the surviving entity. For more information on the acquisition of MB Financial, Inc., refer to Note 3 of the Notes to Condensed Consolidated Financial Statements.

Worldpay Holding, LLC Transactions

On March 18, 2019, the Bancorp exchanged its remaining 10,252,826 Class B Units of Worldpay Holding, LLC for 10,252,826 shares of Class A common stock of Worldpay, Inc., and subsequently sold those shares. As a result of this transaction, the Bancorp recognized a gain of $562 million in other noninterest income during the first quarter of 2019. As a result of the sale, the Bancorp no longer beneficially owns any of Worldpay, Inc.’s equity securities.

Accelerated Share Repurchase Transactions

During the nine months ended September 30, 2019, the Bancorp entered into and 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. For more information on the accelerated share repurchase program, refer to Note 18 of the Notes to Condensed Consolidated Financial Statements. For a summary of the Bancorp’s accelerated share repurchase transactions that were entered into and settled during the nine months ended September 30, 2019, refer to Table 2.

TABLE 2: Summary of Accelerated Share Repurchase Transactions
Repurchase Dates		Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement		Total Shares Repurchased	Settlement Dates
March 27, 2019(a)	$	913	31,779,280	2,026,584		33,805,864		June 28, 2019
April 29, 2019(b)		200	6,015,570	1,217,805		7,233,375		May 23, 2019 - May 24, 2019
August 7, 2019		100	3,150,482		694,238	3,844,720		August 16, 2019
August 9, 2019(b)		200	6,405,426		1,475,487	7,880,913		August 28, 2019

(a)This accelerated share repurchase transaction consists of two supplemental confirmations each with a notional amount of $456.5 million.

(b)This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $100 million.

Open Market Share Repurchase Transactions

Between July 29, 2019 and July 30, 2019, the Bancorp entered into repurchase transactions of 1,667,735 shares, or $50 million, of its outstanding common stock through the open market, which settled between July 31, 2019 and August 1, 2019. For more information on the open market share repurchase program, refer to Note 18 of the Notes to Condensed Consolidated Financial Statements.

Preferred Stock Offerings

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative perpetual Class B preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative perpetual preferred stock, Series C, in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

On September 17, 2019, the Bancorp issued in a registered public offering 10,000,000 depositary shares, representing 10,000 shares of 4.95% non-cumulative perpetual preferred stock, Series K, for net proceeds of approximately $242 million. Each preferred share has a $25,000 liquidation preference. Subject to any required regulatory approval, the Bancorp may redeem the Series K preferred shares at its option (i) in whole or in part, on any dividend payment date on or after September 30, 2024 and (ii) in whole, but not in part, at any time following a

5

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

regulatory capital event. The Series K preferred shares are not convertible into Bancorp common shares or any other securities. For more information on the open market share repurchase program, refer to Note 18 of the Notes to Condensed Consolidated Financial Statements.

Senior Notes Offering

On January 25, 2019, the Bancorp issued and sold $1.5 billion of 3.65% senior fixed-rate notes, with a maturity of five years, due on January 25, 2024. 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 up to, but excluding, the redemption date.

On February 1, 2019, Fifth Third Bank issued and sold, under its bank notes program, $300 million of senior floating-rate notes, with a maturity of three years, due on February 1, 2022. Interest on the floating-rate notes is 3-month LIBOR plus 64 bps. These notes will be redeemable by Fifth Third Bank, 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 up to, but excluding, the redemption date.

Automobile Loan Securitization

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million of the asset-backed notes were retained by the Bancorp, resulting in approximately $1.3 billion of outstanding notes included in long-term debt in the Condensed Consolidated Balance Sheets. Additionally, the bankruptcy remote trust was deemed to be a VIE and the Bancorp, as the primary beneficiary, consolidated the VIE. The third-party holders of the asset-backed notes do not have recourse to the general assets of the Bancorp.

GS Holdings and GreenSky, Inc. Transactions

In May 2018, GreenSky, Inc. launched an IPO and issued 38 million shares of Class A common stock for a valuation of $23 per share. In connection with this IPO, the Bancorp’s investment in GreenSky, LLC, which was comprised of 252,550 membership units, was converted to 2,525,498 units of the newly formed GreenSky Holdings, LLC (“GS Holdings”), representing a 1.4% interest in GS Holdings. The Bancorp’s units in GS Holdings were exchangeable on a one-to-one basis for Class A common stock or cash.

During the first quarter of 2019, all of the Bancorp’s units in GS Holdings were converted for Class A common stock on a one-to-one basis and the Bancorp sold 85,000 shares for an immaterial gain that was recognized in the Condensed Consolidated Statements of Income. During the second quarter of 2019, the Bancorp sold its remaining shares of Class A common stock for a gain of approximately $1 million that was recognized in the Condensed Consolidated Statements of Income. As a result of the sale in the second quarter of 2019, the Bancorp no longer beneficially owns any of GreenSky, Inc.’s equity securities.

Approval to Convert to a National Bank Charter

On September 10, 2019, Fifth Third Bancorp announced that Fifth Third Bank had received approval from the OCC to convert from an Ohio state-chartered bank to a national bank. The conversion is intended to better align regulatory supervision with its expanding national business model by streamlining its operations under one uniform set of laws and regulations. The Bank expects to convert to a national bank charter on or about November 14, 2019.

LIBOR Transition

In July 2017, the Chief Executive of the United Kingdom Financial Conduct Authority (FCA), which regulates LIBOR, announced that FCA will stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021. Since then, central banks around the world, including the Federal Reserve, have commissioned working groups of market participants and official sector representatives with the goal of finding suitable replacements for LIBOR. The Bancorp has substantial exposure to LIBOR-based products within its commercial lending, commercial deposits, business banking, consumer mortgage, private banking, and capital markets lines of business. It is expected that a transition away from the widespread use of LIBOR to alternative reference rates will occur over the course of the next few years. Although the full impact of such reforms and actions remains unclear, the Bancorp is preparing to transition from LIBOR to these alternative reference rates.

The Bancorp’s transition plan includes a number of key work streams, including continued engagement with central bank and industry working groups and regulators, active client engagement, comprehensive review of legacy documentation, internal operational readiness, and risk management, among other things, to facilitate the transition to alternative reference rates.

The transition away from LIBOR is expected to be gradual and complicated. There remain a number of unknown factors regarding the transition from LIBOR that could impact the Bancorp’s business, including, for example, the pace of the transition to replacement rates, including industry coalescence around an alternative benchmark, our ability to identify exposures to LIBOR across our business lines, the specific terms and parameters for any potential alternative reference rates, the prices of and the liquidity of trading markets for products based on the alternative reference rates, our ability to transition to and develop appropriate systems and analytics for one or more alternative reference rates, our ability to maintain contractual continuity and our ability to identify and remediate any operational issues. For a further discussion of the various risks the Bancorp faces in connection with the expected replacement of LIBOR on its operations, see “Risk Factors—Market Risks—The replacement of LIBOR could adversely affect Fifth Third’s revenue or expenses and the value of those assets or obligations.” in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018.

Legislative and Regulatory Developments

6

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

On October 31, 2018, the Board of Governors of the FRB released a series of regulatory proposals to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Reform Act”). Among the proposals, the Board of Governors, joined by the Department of Treasury, OCC and the FDIC proposed to remove the application of the LCR regulations and the NSFR from certain BHCs that qualify under the proposal as “Category IV” institutions, primarily those BHCs with consolidated assets between $100 billion and $250 billion, including Fifth Third Bancorp. On October 10, 2019, the Board of Governors of the FRB announced it finalized the rules that tailor its regulations for banks to more closely match their risk profile. Fifth Third, as a Category IV institution, will no longer be subject to the LCR regulations and the NSFR regulations. The final rules are effective December 31, 2019.

Earnings Summary

The Bancorp’s net income available to common shareholders for the third quarter of 2019 was $530 million, or $0.71 per diluted share, which was net of $19 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the third quarter of 2018 was $421 million, or $0.61 per diluted share, which was net of $15 million in preferred stock dividends. The Bancorp’s net income available to common shareholders for the nine months ended September 30, 2019 was $1.7 billion, or $2.37 per diluted share, which was net of $60 million in preferred stock dividends. For the nine months ended September 30, 2018, the Bancorp’s net income available to common shareholders was $1.7 billion, or $2.41 per diluted share, which was net of $52 million in preferred stock dividends.

Net interest income on an FTE basis (non-GAAP) was $1.2 billion and $3.6 billion for the three and nine months ended September 30, 2019, respectively, an increase of $199 million and $511 million compared to the same periods in the prior year. Net interest income was positively impacted by increases in average commercial and industrial loans of $8.8 billion and $7.6 billion, respectively, and average commercial mortgage loans of $4.0 billion and $3.0 billion, respectively, for the three and nine months ended September 30, 2019 compared to the same periods in the prior year. Net interest income also benefited from increases in yields on average loans and leases of 34 bps and 50 bps for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Additionally, for the three and nine months ended September 30, 2019, net interest income was positively impacted by the September 2018 and December 2018 decisions of the FOMC to raise the target range of the federal funds rate partially offset by the negative impact of the August 2019 and September 2019 decisions of the FOMC to lower the target range of the federal funds rate. These positive impacts were partially offset by increases in both the rates paid on and balances of average interest-bearing core deposits and average long-term debt as well as increases in average certificates $100,000 and over for both the three and nine months ended September 30, 2019 compared to the same periods in the prior year. Net interest income for the three and nine months ended September 30, 2019 included $28 million and $47 million, respectively, of amortization and accretion of premiums and discounts on acquired loans and leases and assumed deposits and long-term debt from acquisitions. Net interest margin on an FTE basis (non-GAAP) was 3.32% for both the three and nine months ended September 30, 2019 compared to 3.23% and 3.20% for the three and nine months ended September 30, 2018, respectively.

Noninterest income increased $177 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases corporate banking revenue, mortgage banking net revenue and other noninterest income. Corporate banking revenue increased $68 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by increases in lease-related services revenue, lease remarketing fees, institutional sales revenue and business lending fees of $19 million, $19 million, $17 million and $8 million, respectively. The increase in lease-related services revenue was driven by the acquisition of MB Financial, Inc. Mortgage banking net revenue increased $46 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by a $39 million increase in origination fees and gains on loan sales due to the lower interest rate environment. Other noninterest income increased $25 million during the three months ended September 30, 2019 compared to the same period in the prior year primarily due to an increase in operating lease income and a decrease in the loss on the swap associated with the sale of Visa, Inc. Class B Shares. These impacts were partially offset by an increase in the net losses on disposition and impairment of bank premises and equipment.

Noninterest income increased $286 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in corporate banking revenue and mortgage banking net revenue. Corporate banking revenue increased $109 million for the nine months ended September 30, 2019 compared to the same periods in the prior year primarily driven by increases in lease-related services revenue, lease remarketing fees, institutional sales revenue and business lending fees of $39 million, $32 million, $21 million and $17 million, respectively. The increase in lease-related services revenue was driven by the acquisition of MB Financial, Inc. Mortgage banking net revenue increased $56 million for the nine months ended September 30, 2019 compared to the same periods in the prior year primarily driven by a $49 million increase in origination fees and gains on loan sales due to the lower interest rate environment.

Noninterest expense increased $187 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in personnel costs, technology and communications expense and other noninterest expense. The increase in noninterest expense included the recognition of $28 million of merger-related expenses related to the MB Financial, Inc. acquisition for the three months ended September 30, 2019 compared to $1 million in the same period in the prior year. Personnel costs increased $81 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by $14 million in merger-related expenses, the addition of personnel costs from the acquisition of MB Financial, Inc. and higher deferred compensation expense. Technology and communications expense increased $29 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by $8 million in merger-related expenses for the three months ended September 30, 2019 as well as increased investment in contemporizing information technology architecture, mitigating information security risks and growth initiatives. Other noninterest expense increased $59 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in operating lease expense, intangible amortization expense and loan and lease expense, partially offset by a decrease in FDIC insurance and other taxes.

7

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

Noninterest expense increased $515 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in personnel costs, technology and communications expense and other noninterest expense. The increase in noninterest expense included the recognition of $213 million of merger-related expenses related to the MB Financial, Inc. acquisition for the nine months ended September 30, 2019 compared to $3 million in the same period in the prior year. Personnel costs increased $234 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily driven by $88 million in merger-related expenses, the addition of personnel costs from the acquisition of MB Financial, Inc. and higher deferred compensation expense. Technology and communications expense increased $113 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily driven by $68 million in merger-related expenses as well as increased investment in contemporizing information technology architecture, mitigating information security risks and growth initiatives. Other noninterest expense increased $128 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to the recognition of $45 million of merger-related expenses related to the acquisition of MB Financial, Inc. as well as increases in operating lease expense, intangible amortization expense and loan and lease expense, partially offset by a decrease in FDIC insurance and other taxes.

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 credit losses was $134 million and $310 million for the three and nine months ended September 30, 2019, respectively, compared to $84 million and $111 million for the comparable periods in 2018. Net losses charged-off as a percent of average portfolio loans and leases were 0.36% and 0.30% for the three months ended September 30, 2019 and 2018, respectively, and 0.32% and 0.36% during the nine months ended September 30, 2019 and 2018, respectively. At September 30, 2019, nonperforming portfolio assets as a percent of portfolio loans and leases and OREO increased to 0.47% compared to 0.41% at December 31, 2018. 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 September 30, 2019, as calculated under the Basel III standardized approach, the CET1 capital ratio was 9.56%, the Tier I risk-based capital ratio was 10.81%, the Total risk-based capital ratio was 13.68% and the Tier I leverage ratio was 9.36%.

8

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			For the nine months ended
		September 30,			September 30,
($ in millions)		2019		2018	2019	2018
Net interest income (U.S. GAAP)	$	1,242		1,043	3,569	3,059
Add: FTE adjustment		4		4	13	12
Net interest income on an FTE basis (1)	$	1,246		1,047	3,582	3,071
Net interest income on an FTE basis (annualized) (2)		4,943		4,154	4,789	4,106
Interest income (U.S. GAAP)	$	1,625		1,315	4,694	3,790
Add: FTE adjustment		4		4	13	12
Interest income on an FTE basis	$	1,629		1,319	4,707	3,802
Interest income on an FTE basis (annualized) (3)		6,463		5,233	6,293	5,083
Interest expense (annualized) (4)	$	1,520		1,079	1,504	977
Noninterest income (5)		740		563	2,501	2,215
Noninterest expense (6)		1,159		972	3,499	2,984
Average interest-earning assets (7)		148,854		128,799	144,088	128,176
Average interest-bearing liabilities (8)		107,633		89,772	103,742	88,875
Ratios:
Net interest margin on an FTE basis (2) / (7)		3.32	%	3.23	3.32	3.20
Net interest rate spread on an FTE basis ((3) / (7)) - ((4) / (8))		2.93		2.87	2.92	2.87
Efficiency ratio on an FTE basis (6) / ((1) + (5))		58.4		60.4	57.5	56.4

The Bancorp believes return on average tangible common equity is an important measure for comparative purposes with other financial institutions, but is not defined under U.S. GAAP, and therefore is considered a non-GAAP financial measure. This measure is useful for evaluating the performance of a business as it calculates the return available to common shareholders without the impact of intangible assets and their related amortization. The Bancorp also measures average tangible common equity excluding AOCI. The Bancorp believes this is a useful return measure as it calculates the return available to common shareholders without the impact of intangible assets, their related amortization as well as the volatility primarily associated with fluctuations of unrealized gains and losses on the Bancorp’s available-for-sale debt and other securities and cash flow hedge derivatives.

The following table reconciles the non-GAAP financial measure of return on average tangible common equity to U.S. GAAP:
TABLE 4: Non-GAAP Financial Measures - Return on Average Tangible Common Equity
		For the three months ended			For the nine months ended
		September 30,			September 30,
($ in millions)		2019		2018	2019	2018
Net income available to common shareholders (U.S. GAAP)	$	530		421	1,718	1,685
Add: Intangible amortization, net of tax		11		1	24	3
Tangible net income available to common shareholders	$	541		422	1,742	1,688
Tangible net income available to common shareholders (annualized) (1)		2,146		1,674	2,329	2,257
Average Bancorp shareholders' equity (U.S. GAAP)	$	21,087		15,994	19,430	16,030
Less: Average preferred stock		(1,445)		(1,331)	(1,369)	(1,331)
Average goodwill		(4,286)		(2,462)	(3,762)	(2,460)
Average intangible assets		(208)		(29)	(161)	(28)
Average tangible common equity, including AOCI (2)	$	15,148		12,172	14,138	12,211
Less: Average AOCI		(1,444)		610	(693)	527
Average tangible common equity, excluding AOCI (3)	$	13,704		12,782	13,445	12,738
Return on average tangible common equity, including AOCI (1) / (2)		14.2	%	13.8	16.5	18.5
Return on average tangible common equity, excluding AOCI (1) / (3)		15.7		13.1	17.3	17.7

9

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

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 5: Non-GAAP Financial Measures - Capital Ratios
		September 30,		December 31,
As of ($ in millions)		2019		2018
Total Bancorp Shareholders’ Equity (U.S. GAAP)	$	21,404		16,250
Less: Preferred stock		(1,770)		(1,331)
Goodwill		(4,290)		(2,478)
Intangible assets		(201)		(40)
AOCI		(1,635)		112
Tangible common equity, excluding AOCI (1)		13,508		12,513
Add: Preferred stock		1,770		1,331
Tangible equity (2)	$	15,278		13,844
Total Assets (U.S. GAAP)	$	171,079		146,069
Less: Goodwill		(4,290)		(2,478)
Intangible assets		(201)		(40)
AOCI, before tax		(2,070)		142
Tangible assets, excluding AOCI (3)	$	164,518		143,693
Ratios:
Tangible equity as a percentage of tangible assets (2) / (3)		9.29	%	9.63
Tangible common equity as a percentage of tangible assets (1) / (3)		8.21		8.71

10

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

RECENT ACCOUNTING STANDARDS

Note 4 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, 2018. There have been no material changes to the valuation techniques or models during the nine months ended September 30, 2019.

11

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.

Tables 6 and 7 present the components of net interest income, net interest margin and net interest rate spread for the three and nine months ended September 30, 2019 and 2018, 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 $1.2 billion and $3.6 billion for the three and nine months ended September 30, 2019, respectively, an increase of $199 million and $511 million compared to the same periods in the prior year. Net interest income was positively impacted by increases in average commercial and industrial loans of $8.8 billion and $7.6 billion, respectively, and average commercial mortgage loans of $4.0 billion and $3.0 billion, respectively, for the three and nine months ended September 30, 2019 compared to the same periods in the prior year. Net interest income also benefited from increases in yields on average loans and leases of 34 bps and 50 bps for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Additionally, for the three and nine months ended September 30, 2019, net interest income was positively impacted by the September 2018 and December 2018 decisions of the FOMC to raise the target range of the federal funds rate partially offset by the negative impact of the August 2019 and September 2019 decisions of the FOMC to lower the target range of the federal funds rate. These positive impacts were partially offset by increases in both the rates paid on and balances of average interest-bearing core deposits and average long-term debt as well as increases in average certificates $100,000 and over for both the three and nine months ended September 30, 2019 compared to the same periods in the prior year. The rates paid on average interest-bearing core deposits increased 27 bps and 37 bps for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Average interest-bearing core deposits increased $16.0 billion and $12.6 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The rates paid on average long-term debt increased 17 bps and 31 bps for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Average long-term debt increased $1.2 billion and $940 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Average certificates $100,000 and over increased $2.2 billion and $2.3 billion for the three and nine months ended September 30, 2019 compared to the same periods in the prior year. Net interest income for the three and nine months ended September 30, 2019 included $28 million and $47 million, respectively, of amortization and accretion of premiums and discounts on acquired loans and leases and assumed deposits and long-term debt from acquisitions.

Net interest rate spread on an FTE basis (non-GAAP) was 2.93% and 2.92% during the three and nine months ended September 30, 2019, respectively, compared to 2.87% in the same periods in the prior year. Yields on average interest-earning assets increased 27 bps and 40 bps for the three and nine months ended September 30, 2019, respectively, partially offset by a 21 bps and 35 bps increase in rates paid on average interest-bearing liabilities for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year.

Net interest margin on an FTE basis (non-GAAP) was 3.32% for both the three and nine months ended September 30, 2019 compared to 3.23% and 3.20% for the three and nine months ended September 30, 2018, respectively. The increase for both periods was driven primarily by the previously mentioned increases in the net interest rate spread as well as increases in average free funding balances. The increases in average free funding balances were driven by increases in average shareholders’ equity of $5.2 billion and $3.5 billion, respectively, and average demand deposits of $2.9 billion and $891 million, respectively, for the three and nine months ended September 30, 2019 compared to the same periods in the prior year.

Interest income on an FTE basis (non-GAAP) from loans and leases increased $280 million and $826 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases were primarily due to the aforementioned increases in the balances of average commercial and industrial loans and average commercial mortgage loans as well as increases in yields on average loans and leases. 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 on an FTE basis (non-GAAP) from investment securities and other short-term investments increased $30 million and $79 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily as a result of increases in average taxable securities.

Interest expense on core deposits increased $87 million and $286 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases were primarily due to the previously mentioned increases in the cost of average interest-bearing core deposits and increases in the balances of average interest-bearing core deposits. The increases in both the cost and balances of average interest-bearing core deposits for both periods were primarily due to increases in the rates paid on and balances 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.

12

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

Interest expense on wholesale funding increased $24 million and $108 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to the aforementioned increases in the rates paid on and balances of average long-term debt and increases in average certificates $100,000 and over. These increases were partially offset by a decrease in average federal funds purchased of $1.2 billion for the three months ended September 30, 2019 and a decrease in average other short-term borrowings of $942 million for the nine months ended September 30, 2019. Refer to the Borrowings subsection of the Balance Sheet Analysis section of MD&A for additional information on the Bancorp’s borrowings. During the three and nine months ended September 30, 2019, average wholesale funding represented 21% and 22% of average interest-bearing liabilities, respectively, compared to 23% during both the three and nine months ended September 30, 2018. 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.

13

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

TABLE 6: Condensed Average Balance Sheets and Analysis of Net Interest Income on an FTE Basis
															Attribution of Change in
For the three months ended		September 30, 2019						September 30, 2018							Net Interest Income(a)
						Average						Average
			Average	Revenue/		Yield/		Average		Revenue/		Yield/
($ in millions)			Balance	Cost		Rate		Balance		Cost		Rate			Volume	Yield/Rate	Total
Assets:
Interest-earning assets:
Loans and leases:(b)
	Commercial and industrial loans	$	51,364		604	4.66	%	$	42,614		463	4.32	%	$	101	40	141
	Commercial mortgage loans		10,695		131	4.86			6,664		77	4.57			49	5	54
	Commercial construction loans		5,267		71	5.39			4,870		63	5.14			5	3	8
	Commercial leases		3,563		30	3.34			3,746		27	2.85			(1)	4	3
Total commercial loans and leases			70,889		836	4.68			57,894		630	4.32			154	52	206
	Residential mortgage loans		17,733		164	3.67			16,226		146	3.58			14	4	18
	Home equity		6,267		82	5.20			6,529		83	5.03			(4)	3	(1)
	Indirect secured consumer loans		10,707		114	4.22			8,969		78	3.47			17	19	36
	Credit card		2,448		77	12.57			2,299		71	12.17			4	2	6
	Other consumer loans		2,622		51	7.69			2,060		36	6.98			11	4	15
Total consumer loans			39,777		488	4.87			36,083		414	4.56			42	32	74
Total loans and leases		$	110,666		1,324	4.75	%	$	93,977		1,044	4.41	%	$	196	84	280
Securities:
	Taxable		35,653		291	3.24			33,301		268	3.20			19	4	23
	Exempt from income taxes(b)		38		-	3.18			69		1	4.35			(1)	-	(1)
Other short-term investments			2,497		14	2.18			1,452		6	1.74			6	2	8
Total interest-earning assets		$	148,854		1,629	4.34	%	$	128,799		1,319	4.07	%	$	220	90	310
	Cash and due from banks		2,769						2,193
	Other assets		19,077						11,739
	Allowance for loan and lease losses		(1,115)						(1,077)
Total assets		$	169,585					$	141,654
Liabilities and Equity:
Interest-bearing liabilities:
	Interest checking deposits	$	37,729		106	1.12	%	$	29,681		66	0.88	%	$	20	20	40
	Savings deposits		14,405		7	0.18			13,231		4	0.11			1	2	3
	Money market deposits		26,962		77	1.13			21,753		44	0.80			12	21	33
	Foreign office deposits		222		-	0.37			317		-	0.33			-	-	-
	Other time deposits		5,823		26	1.79			4,177		15	1.48			7	4	11
Total interest-bearing core deposits			85,141		216	1.01			69,159		129	0.74			40	47	87
	Certificates $100,000 and over		4,795		27	2.20			2,596		12	1.85			12	3	15
	Other deposits		47		-	1.97			578		3	1.95			(3)	-	(3)
	Federal funds purchased		739		4	2.06			1,987		10	1.96			(6)	-	(6)
	Other short-term borrowings		1,278		8	2.55			1,018		6	2.22			1	1	2
	Long-term debt		15,633		128	3.26			14,434		112	3.09			10	6	16
Total interest-bearing liabilities		$	107,633		383	1.41	%	$	89,772		272	1.20	%	$	54	57	111
Demand deposits			35,223						32,333
Other liabilities			5,522						3,535
Total liabilities		$	148,378					$	125,640
Total equity		$	21,207					$	16,014
Total liabilities and equity		$	169,585					$	141,654
Net interest income (FTE)(c)				$	1,246					$	1,047			$	166	33	199
Net interest margin (FTE)(c)						3.32	%					3.23	%
Net interest rate spread (FTE)(c)						2.93						2.87
Interest-bearing liabilities to interest-earning assets						72.31						69.70

(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 $4 for both the three months ended September 30, 2019 and 2018.

(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.

14

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
																Attribution of Change in
For the nine months ended			September 30, 2019						September 30, 2018							Net Interest Income(a)
							Average						Average
				Average	Revenue/		Yield/		Average		Revenue/		Yield/
($ in millions)				Balance	Cost		Rate		Balance		Cost		Rate			Volume	Yield/Rate	Total
Assets:
Interest-earning assets:
Loans and leases:(b)
	Commercial and industrial loans		$	49,895		1,757	4.71	%	$	42,249		1,321	4.18	%	$	257	179	436
	Commercial mortgage loans			9,593		354	4.94			6,591		217	4.40			108	29	137
	Commercial construction loans			5,119		213	5.55			4,762		175	4.90			14	24	38
	Commercial leases			3,643		90	3.31			3,850		81	2.82			(5)	14	9
Total commercial loans and leases				68,250		2,414	4.73			57,452		1,794	4.17			374	246	620
	Residential mortgage loans			17,163		474	3.69			16,176		433	3.58			27	14	41
	Home equity			6,333		250	5.28			6,695		242	4.83			(14)	22	8
	Indirect secured consumer loans			10,030		304	4.05			9,000		221	3.29			28	55	83
	Credit card			2,418		227	12.52			2,248		205	12.16			16	6	22
	Other consumer loans			2,525		143	7.59			1,792		91	6.79			40	12	52
Total consumer loans				38,469		1,398	4.86			35,911		1,192	4.44			97	109	206
Total loans and leases			$	106,719		3,812	4.78	%	$	93,363		2,986	4.28	%	$	471	355	826
Securities:
	Taxable			35,151		861	3.28			33,272		797	3.20			45	19	64
	Exempt from income taxes(b)			35		1	3.72			75		2	3.28			(1)	-	(1)
Other short-term investments				2,183		33	1.99			1,466		17	1.58			10	6	16
Total interest-earning assets			$	144,088		4,707	4.37	%	$	128,176		3,802	3.97	%	$	525	380	905
	Cash and due from banks			2,641						2,182
	Other assets			16,501						12,289
	Allowance for loan and lease losses			(1,111)						(1,136)
Total assets			$	162,119					$	141,511
Liabilities and Equity:
Interest-bearing liabilities:
	Interest checking deposits		$	35,995		310	1.15	%	$	28,938		165	0.76	%	$	46	99	145
	Savings deposits			13,963		17	0.17			13,463		9	0.09			-	8	8
	Money market deposits			25,357		210	1.11			21,517		110	0.68			22	78	100
	Foreign office deposits			198		1	0.49			393		1	0.28			-	-	-
	Other time deposits			5,457		74	1.81			4,018		41	1.36			17	16	33
Total interest-bearing core deposits				80,970		612	1.01			68,329		326	0.64			85	201	286
	Certificates $100,000 and over			4,650		75	2.14			2,346		28	1.58			35	12	47
	Other deposits			269		5	2.43			385		5	1.76			(2)	2	-
	Federal funds purchased			1,298		23	2.42			1,258		17	1.80			-	6	6
	Other short-term borrowings			1,017		23	2.97			1,959		25	1.70			(15)	13	(2)
	Long-term debt			15,538		387	3.33			14,598		330	3.02			22	35	57
Total interest-bearing liabilities			$	103,742		1,125	1.45	%	$	88,875		731	1.10	%	$	125	269	394
Demand deposits				33,883						32,992
Other liabilities				4,950						3,594
Total liabilities			$	142,575					$	125,461
Total equity			$	19,544					$	16,050
Total liabilities and equity			$	162,119					$	141,511
Net interest income (FTE)(c)					$	3,582					$	3,071			$	400	111	511
Net interest margin (FTE)(c)							3.32	%					3.20	%
Net interest rate spread (FTE)(c)							2.92						2.87
Interest-bearing liabilities to interest-earning assets							72.00						69.34
(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 $13 and $12 for the nine months ended September 30, 2019 and 2018, 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 Credit Losses

The Bancorp provides as an expense an amount for probable credit losses within the loan and lease portfolio and the portfolio of unfunded loan commitments and letters of credit 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, 2018. The provision is recorded to bring the ALLL and reserve for unfunded commitments to a level deemed appropriate by the Bancorp to cover losses inherent in the portfolios. 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 is referred to as a charge-off. Net charge-offs include current period charge-offs less recoveries on previously charged-off loans and leases.

15

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

The provision for credit losses was $134 million and $310 million for the three and nine months ended September 30, 2019, respectively, compared to $84 million and $111 million during the same periods in the prior year. The increases in provision expense for both the three and nine months ended September 30, 2019 were primarily due to an increase in the level of commercial criticized assets and increases in both outstanding loan balances and unfunded commitments in 2019, exclusive of loans and leases acquired in the MB Financial, Inc. acquisition.

The ALLL increased $40 million from December 31, 2018 to $1.1 billion at September 30, 2019. At September 30, 2019, the ALLL as a percent of portfolio loans and leases decreased to 1.04% compared to 1.16% at December 31, 2018. This decrease reflects the impact of the MB Financial, Inc. acquisition, which added approximately $13.4 billion in portfolio loans and leases at the acquisition date. Loans acquired by the Bancorp through a purchase business combination are recorded at fair value as of the acquisition date. The Bancorp does not carry over the acquired company’s ALLL, nor does the Bancorp add to its existing ALLL as part of purchase accounting. The reserve for unfunded commitments increased $23 million from December 31, 2018 to $154 million at September 30, 2019. This increase reflects the impact of the MB Financial, Inc. acquisition, which included approximately $8 million in reserves for unfunded commitments at the acquisition date.

Refer to the Credit Risk Management subsection of the Risk Management section of MD&A as well as Note 7 of the Notes to Condensed Consolidated Financial Statements for more detailed information on the provision for credit losses, including an analysis of loan and lease 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, ALLL, and reserve for unfunded commitments.

Noninterest Income

Noninterest income increased $177 million and $286 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year.

The following table presents the components of noninterest income:
TABLE 8: Components of Noninterest Income
		For the three months ended				For the nine months ended
		September 30,				September 30,
($ in millions)		2019	2018	% Change		2019	2018	% Change
Corporate banking revenue	$	168	100	68	$	417	308	35
Service charges on deposits		143	139	3		417	414	1
Wealth and asset management revenue		124	114	9		358	335	7
Card and processing revenue		94	82	15		266	245	9
Mortgage banking net revenue		95	49	94		214	158	35
Other noninterest income		111	86	29		794	794	-
Securities gains (losses), net		5	(6)	NM		30	(21)	NM
Securities gains (losses), net - non-qualifying hedges on MSRs		-	(1)	NM		5	(18)	NM
Total noninterest income	$	740	563	31	$	2,501	2,215	13

Corporate banking revenue

Corporate banking revenue increased $68 million and $109 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increase for the three months ended September 30, 2019 compared to the same period in the prior year was primarily driven by increases in lease-related services revenue, lease remarketing fees, institutional sales revenue and business lending fees of $19 million, $19 million, $17 million and $8 million, respectively. The increase for the nine months ended September 30, 2019 compared to the same period in the prior year was primarily driven by increases in lease-related services revenue, lease remarketing fees, institutional sales revenue and business lending fees of $39 million, $32 million, $21 million and $17 million, respectively. The increases in lease-related services revenue for both the three and nine months ended September 30, 2019 were driven by the acquisition of MB Financial, Inc.

Service charges on deposits

Service charges on deposits increased $4 million and $3 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for the three and nine months ended September 30, 2019 compared to the same periods in the prior year were primarily due to increases of $11 million and $16 million, respectively, in commercial deposit fees partially offset by decreases of $7 million and $13 million, respectively, in consumer deposit fees.

Wealth and asset management revenue

Wealth and asset management revenue increased $10 million and $23 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases of $9 million and $24 million, respectively, in private client service fees. These increases were driven by the benefit from acquisitions since September 30, 2018. The Bancorp’s trust and registered investment advisory businesses had approximately $397 billion and $376 billion in total assets under care at September 30, 2019 and 2018, respectively, and managed $46 billion and $38 billion in assets for individuals, corporations and not-for-profit organizations at September 30, 2019 and 2018, respectively.

16

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

Card and processing revenue

Card and processing revenue increased $12 million and $21 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in the number of actively used cards, customer spend volume and other interchange revenue.

Mortgage banking net revenue

Mortgage banking net revenue increased $46 million and $56 million for the three and nine months ended September 30, 2019, respectively compared to the same periods in the prior year.

The following table presents the components of mortgage banking net revenue:
TABLE 9: Components of Mortgage Banking Net Revenue
			For the three months ended		For the nine months ended
			September 30,		September 30,
($ in millions)			2019	2018	2019	2018
Origination fees and gains on loan sales		$	64	25	126	77
Net mortgage servicing revenue:
	Gross mortgage servicing fees		71	56	196	162
	Net valuation adjustments on MSRs and free-standing derivatives purchased to
	economically hedge MSRs		(40)	(32)	(108)	(81)
Net mortgage servicing revenue			31	24	88	81
Total mortgage banking net revenue		$	95	49	214	158

Origination fees and gains on loan sales increased $39 million and $49 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by an increase in originations due to the lower interest rate environment. Residential mortgage loan originations increased to $3.4 billion and $7.9 billion during the three and nine months ended September 30, 2019, respectively, compared to $1.9 billion and $5.5 billion during the same periods in the prior year.

Net mortgage servicing revenue increased $7 million for both the three and nine months ended September 30, 2019 compared to the same periods in the prior year. The increases for the three and nine months ended September 30, 2019 compared to the same periods in the prior year included increases in gross mortgage servicing fees of $15 million and $34 million, respectively, partially offset by increases in net negative valuation adjustments of $8 million and $27 million, respectively. Refer to Table 10 for the components of net valuation adjustments on the MSR portfolio and the impact of the non-qualifying hedging strategy.

TABLE 10: Components of Net Valuation Adjustments on MSRs
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Changes in fair value and settlement of free-standing derivatives purchased to
economically hedge the MSR portfolio	$	130	(24)	308	(89)
Changes in fair value:
Due to changes in inputs or assumptions		(120)	25	(294)	103
Other changes in fair value		(50)	(33)	(122)	(95)
Net valuation adjustments on MSRs and free-standing derivatives purchased to
economically hedge MSRs	$	(40)	(32)	(108)	(81)

Mortgage rates decreased during both the three and nine months ended September 30, 2019 which caused modeled prepayment speeds to rise. The fair value of the MSR portfolio decreased $120 million and $294 million, respectively, due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $50 million and $122 million, respectively, due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs for the three and nine months ended September 30, 2019.

Mortgage rates increased during both the three and nine months ended September 30, 2018 which caused modeled prepayment speeds to slow. The fair value of the MSR portfolio increased $25 million and $103 million, respectively, due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $33 million and $95 million, respectively, due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs for the three and nine months ended September 30, 2018.

Further detail on the valuation of MSRs can be found in Note 14 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 15 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 acquires various securities as a component of its non-qualifying hedging strategy. The Bancorp recognized net losses of an immaterial amount and net gains of $5 million during the

17

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

three and nine months ended September 30, 2019, respectively, and net losses of $1 million and $18 million during the three and nine months ended September 30, 2018, respectively, recorded in securities gains (losses), net - non-qualifying hedges on MSRs in the Bancorp’s Condensed Consolidated Statements of Income.

The Bancorp’s total residential mortgage loans serviced at September 30, 2019 and 2018 were $100.5 billion and $80.1 billion, respectively, with $82.7 billion and $64.0 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		For the nine months ended
		September 30,		September 30,
($ in millions)	2019		2018	2019	2018
Gain on sale of Worldpay, Inc. shares	$	-	-	562	205
Operating lease income		44	20	110	65
BOLI income		15	15	44	41
Cardholder fees		14	14	44	41
Private equity investment income		21	26	43	61
Consumer loan and lease fees		6	6	17	17
Banking center income		6	5	17	16
Insurance income		4	5	14	16
Equity method income from interest in Worldpay Holding, LLC		-	2	2	1
Net gains on loan sales		-	3	1	2
Loss on swap associated with the sale of Visa, Inc. Class B Shares		(11)	(17)	(63)	(66)
Net (losses) gains on disposition and impairment of bank premises and equipment		(3)	4	(24)	(37)
Loss on sale of business		-	-	(4)	-
Gain related to Vantiv, Inc.'s acquisition of Worldpay Group plc.		-	-	-	414
Other, net		15	3	31	18
Total other noninterest income	$	111	86	794	794

Other noninterest income increased $25 million during the three months ended September 30, 2019 compared to the same period in the prior year primarily due to an increase in operating lease income and a decrease in the loss on the swap associated with the sale of Visa, Inc. Class B Shares. These impacts were partially offset by an increase in the net losses on disposition and impairment of bank premises and equipment.

Operating lease income increased $24 million for the three months ended September 30, 2019 compared to the same period in the prior year driven by the acquisition of MB Financial, Inc. During the three months ended September 30, 2019, the Bancorp recognized negative valuation adjustments of $11 million related to the Visa total return swap compared to negative valuation adjustments of $17 million during the three months ended September 30, 2018. The Bancorp recognized net losses on disposition and impairment of bank premises and equipment of $3 million for the three months ended September 30, 2019 compared to net gains of $4 million during the same period in the prior year. The increase in losses was driven by the impact of impairment charges of $5 million during the three months ended September 30, 2019 compared to an immaterial amount during the three months ended September 30, 2018.

Other noninterest income remained flat for the nine months ended September 30, 2019 compared to the same period in the prior year. Other noninterest income for the nine months ended September 30, 2019 was positively impacted by the recognition of gains on the sale of Worldpay Inc. shares driven by the Bancorp’s sale of shares during the first quarter of 2019, an increase in operating lease income and a decrease in net losses on disposition and impairment of bank premises and equipment. These impacts were partially offset by the gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc. recognized during the first quarter of 2018.

The Bancorp recognized a $562 million gain on the sale of Worldpay, Inc. shares during the nine months ended September 30, 2019 compared to a $205 million gain on the sale of Worldpay, Inc. shares during the nine months ended September 30, 2018. For additional information, refer to Note 21 of the Notes to Condensed Consolidated Financial Statements. Operating lease income increased $45 million for the nine months ended September 30, 2019 compared to the same period in the prior year driven by the acquisition of MB Financial, Inc. Net losses on disposition and impairment of bank premises and equipment for the nine months ended September 30, 2018 included the impact of branch impairment charges of $33 million. The Bancorp recognized a $414 million gain related to Vantiv, Inc.’s acquisition of Worldpay Group plc. during the nine months ended September 30, 2018.

Noninterest Expense

Noninterest expense increased $187 million and $515 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in personnel costs (salaries, wages and incentives plus employee benefits), technology and communications expense and other noninterest expense.

18

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

The following table presents the components of noninterest expense:
TABLE 12: Components of Noninterest Expense
		For the three months ended					For the nine months ended
		September 30,					September 30,
($ in millions)		2019		2018	% Change		2019		2018	% Change
Salaries, wages and incentives	$	497		421	18	$	1,527		1,339	14
Employee benefits		87		82	6		316		270	17
Technology and communications		100		71	41		319		206	55
Net occupancy expense		84		70	20		248		219	13
Card and processing expense		33		31	6		98		91	8
Equipment expense		33		31	6		96		92	4
Other noninterest expense		325		266	22		895		767	17
Total noninterest expense	$	1,159		972	19	$	3,499		2,984	17
Efficiency ratio on an FTE basis(a)		58.4	%	60.4			57.5	%	56.4

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

The Bancorp recognized $28 million and $213 million of merger-related expenses related to the MB Financial, Inc. acquisition for the three and nine months ended September 30, 2019, respectively, compared to $1 million and $3 million in the same periods in the prior year. The following table provides a summary of merger-related expenses recorded in noninterest expense:

TABLE 13: Merger-Related Expenses
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Salaries, wages and incentives	$	14	-	85	-
Employee benefits		-	-	3	-
Technology and communications		8	-	68	-
Net occupancy expense		3	-	10	-
Card and processing expense		-	-	1	-
Equipment expense		-	-	1	-
Other noninterest expense		3	1	45	3
Total	$	28	1	213	3

Personnel costs increased $81 million and $234 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by $14 million and $88 million in merger-related expenses for the three and nine months ended September 30, 2019, respectively, the addition of personnel costs from the acquisition of MB Financial, Inc. and higher deferred compensation expense. Full-time equivalent employees totaled 19,478 at September 30, 2019 compared to 17,512 at September 30, 2018.

Technology and communications expense increased $29 million and $113 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by $8 million and $68 million in merger-related expenses for the three and nine months ended September 30, 2019, respectively, as well as increased investment in contemporizing information technology architecture, mitigating information security risks and growth initiatives.

19

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

The following table presents the components of other noninterest expense:
TABLE 14: Components of Other Noninterest Expense
		For the three months ended			For the nine months ended
		September 30,			September 30,
($ in millions)		2019	2018		2019	2018
Marketing	$	40	43	$	117	105
Loan and lease		40	29		101	84
Operating lease		37	19		92	59
Losses and adjustments		25	18		81	51
FDIC insurance and other taxes		22	33		60	99
Professional service fees		17	15		53	45
Data processing		19	14		53	42
Travel		18	13		51	39
Intangible amortization		14	2		31	4
Postal and courier		9	8		28	26
Recruitment and education		8	8		19	24
Supplies		4	3		11	10
Insurance		4	4		10	10
Donations		3	3		9	19
Loss (income) on partnership investments		1	1		2	(5)
Other, net		64	53		177	155
Total other noninterest expense	$	325	266	$	895	767

Other noninterest expense increased $59 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in operating lease expense, intangible amortization expense and loan and lease expense, partially offset by a decrease in FDIC insurance and other taxes.

Operating lease expense and intangible amortization expense increased $18 million and $12 million, respectively, for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by the acquisition of MB Financial, Inc. Loan and lease expense increased $11 million for the three months ended September 30, 2019 compared to the same period in the prior year as a result of an increase in loan closing costs due to an increase in residential mortgage loan originations. FDIC insurance and other taxes decreased $11 million for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the elimination of the FDIC surcharge in the fourth quarter of 2018.

Other noninterest expense increased $128 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to the recognition of $45 million of merger-related expenses related to the acquisition of MB Financial, Inc. as well as increases in operating lease expense, intangible amortization expense and loan and lease expense, partially offset by a decrease in FDIC insurance and other taxes.

Operating lease expenses and intangible amortization expense increased $33 million and $27 million, respectively, for the nine months ended September 30, 2019 compared to the same period in the prior year driven by the acquisition of MB Financial, Inc. Loan and lease expense increased $17 million for the nine months ended September 30, 2019 compared to the same period in the prior year as a result of an increase in loan closing costs due to an increase in residential mortgage loan originations. FDIC insurance and other taxes decreased $39 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to the elimination of the FDIC surcharge in the fourth quarter of 2018.

Applicable Income Taxes

The following table presents the Bancorp’s income before income taxes, applicable income tax expense and effective tax rate:
TABLE 15: Applicable Income Taxes
		For the three months ended			For the nine months ended
		September 30,			September 30,
($ in millions)		2019		2018	2019	2018
Income before income taxes	$	689		550	2,261	2,179
Applicable income tax expense		140		114	483	442
Effective tax rate		20.2	%	20.7	21.4	20.3

Applicable income tax expense for all periods includes the benefit from tax-exempt income, tax-advantaged investments and tax credits (and other related tax benefits), partially offset by the effect of proportional amortization of qualifying LIHTC investments and certain nondeductible expenses. The tax credits are primarily 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.

20

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

The increase in the effective tax rate for the nine months ended September 30, 2019 compared to the same period in the prior year was primarily related to an increase in state income tax expense, a decrease in excess tax benefits related to share-based compensation and a decrease in expected low-income housing tax credits and other tax benefits, partially offset by a decrease in proportional amortization of qualifying LIHTC investments as well as an increase in non-taxable income.

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 September 30, 2019, the Bancorp estimates that it may be necessary to recognize $5 million of additional income tax benefit over the next twelve months related to the settlement of stock-based awards, primarily in the first half of 2020. 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.

21

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 16 summarizes end of period loans and leases, including loans and leases held for sale, Table 17 summarizes loans acquired in the MB Financial, Inc. acquisition and Table 18 summarizes average total loans and leases, including average loans and leases held for sale.

TABLE 16: Components of Total Loans and Leases (including loans and leases held for sale)
			September 30, 2019				December 31, 2018
As of ($ in millions)			Carrying Value	% of Total			Carrying Value	% of Total
Commercial loans and leases:
	Commercial and industrial loans	$	50,854	46	%	$	44,407	46	%
	Commercial mortgage loans		10,822	10			6,977	7
	Commercial construction loans		5,281	5			4,657	5
	Commercial leases		3,495	3			3,600	4
Total commercial loans and leases			70,452	64			59,641	62
Consumer loans:
	Residential mortgage loans		17,812	16			16,041	17
	Home equity		6,218	6			6,402	7
	Indirect secured consumer loans(a)		11,026	10			8,976	9
	Credit card		2,467	2			2,470	3
	Other consumer loans		2,657	2			2,342	2
Total consumer loans			40,180	36			36,231	38
Total loans and leases		$	110,632	100	%	$	95,872	100	%
Total portfolio loans and leases (excluding loans and leases held for sale)		$	109,409			$	95,265
(a)	The Bancorp acquired indirect motorcycle, powersport, recreational vehicle and marine loans in the acquisition of MB Financial, Inc. These loans are included in addition to automobile loans in the line item “indirect secured consumer loans”.

Total loans and leases, including loans and leases held for sale, increased $14.8 billion from December 31, 2018. The increase in total loans and leases was primarily driven by the impact of the MB Financial, Inc. acquisition, which added $13.4 billion in total loans and leases upon acquisition. Table 17 summarizes the detail of loans and leases acquired from MB Financial, Inc. on March 22, 2019.

TABLE 17: Loans and Leases Acquired
($ in millions)
Commercial loans and leases:
	Commercial and industrial loans	$	6,546
	Commercial mortgage loans		3,586
	Commercial construction loans		495
	Commercial leases		444
Total commercial loans and leases			11,071
Consumer loans:
	Residential mortgage loans		1,318
	Home equity		169
	Indirect secured consumer loans		800
	Credit card		19
	Other consumer loans		44
Total consumer loans			2,350
Total loans and leases		$	13,421
Total portfolio loans and leases (excluding loans and leases held for sale)		$	13,409

The following discussion excludes the impact of loans and leases acquired in the MB Financial, Inc. acquisition. Commercial loans and leases decreased $260 million from December 31, 2018 primarily due to decreases in commercial leases, partially offset by increases in commercial mortgage loans and commercial construction loans. Commercial leases decreased $549 million, or 15%, from December 31, 2018 primarily as a result of a planned reduction in indirect non-relationship based lease originations. Commercial mortgage loans increased $259 million, or 4%, from December 31, 2018 primarily as a result of an increase in loan originations and increases in permanent financing from the Bancorp’s commercial construction loan portfolio. Commercial construction loans increased $129 million, or 3%, from December 31, 2018 primarily as a result of increases in draw levels on existing commitments due to seasonal trends.

The following discussion excludes the impact of loans and leases acquired in the MB Financial, Inc. acquisition. Consumer loans increased $1.6 billion from December 31, 2018 primarily due to increases in indirect secured consumer loans, residential mortgage loans, and other consumer loans, partially offset by a decrease in home equity. Indirect secured consumer loans increased $1.3 billion, or 14%, from December 31, 2018 primarily as a result of loan production exceeding payoffs. Residential mortgage loans increased $453 million, or 3%, from December 31, 2018 primarily due to the continued retention of certain agency conforming ARMs and certain other fixed-rate loans originated during the nine months ended September 30, 2019. Other consumer loans increased $271 million, or 12%, from December 31, 2018 primarily as a result of growth in point-of-sale loan originations. Home equity decreased $353 million, or 6%, from December 31, 2018 as payoffs exceeded loan production.

22

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

TABLE 18: Components of Average Loans and Leases (including average loans and leases held for sale)
				September 30, 2019				September 30, 2018
For the three months ended ($ in millions)				Carrying Value	% of Total			Carrying Value	% of Total
Commercial loans and leases:
	Commercial and industrial loans		$	51,364	46	%	$	42,614	46	%
	Commercial mortgage loans			10,695	10			6,664	7
	Commercial construction loans			5,267	5			4,870	5
	Commercial leases			3,563	3			3,746	4
Total commercial loans and leases				70,889	64			57,894	62
Consumer loans:
	Residential mortgage loans			17,733	16			16,226	17
	Home equity			6,267	6			6,529	7
	Indirect secured consumer loans(a)			10,707	10			8,969	10
	Credit card			2,448	2			2,299	2
	Other consumer loans			2,622	2			2,060	2
Total consumer loans				39,777	36			36,083	38
Total average loans and leases			$	110,666	100	%	$	93,977	100	%
Total average portfolio loans and leases (excluding loans and leases held for sale)			$	109,541			$	93,192
(a)		The Bancorp acquired indirect motorcycle, powersport, recreational vehicle and marine loans in the acquisition of MB Financial, Inc. These loans are included in addition to automobile loans in the line item “indirect secured consumer loans”.

Average loans and leases, including average loans and leases held for sale, increased $16.7 billion for the three months ended September 30, 2019 compared to the same period in the prior year as a result of a $13.0 billion, or 22%, increase in average commercial loans and leases as well as a $3.7 billion, or 10%, increase in average consumer loans.

Average commercial loans and leases increased for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in average commercial and industrial loans, average commercial mortgage loans and average commercial construction loans, partially offset by a decrease in commercial leases. Average commercial and industrial loans increased $8.8 billion, or 21%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the impact of the acquisition of MB Financial, Inc. and an increase in loan originations as well as a decrease in payoffs. Average commercial mortgage loans increased $4.0 billion, or 60%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the impact of the acquisition of MB Financial, Inc. and increases in loan originations and permanent financing from the Bancorp’s commercial construction loan portfolio. Average commercial construction loans increased $397 million, or 8%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily as a result of the acquisition of MB Financial, Inc. Average commercial leases decreased $183 million, or 5%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily as a result of a planned reduction in indirect non-relationship based lease originations, partially offset by commercial leases acquired in the MB Financial, Inc. acquisition.

Average consumer loans increased for the three months ended September 30, 2019 compared to the same period in the prior year due to increases in average indirect secured consumer loans, average residential mortgage loans, average other consumer loans and average credit card, partially offset by a decrease in average home equity. Average indirect secured consumer loans increased $1.7 billion, or 19%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the acquisition of MB Financial, Inc. and higher loan production exceeding payoffs. Average residential mortgage loans increased $1.5 billion, or 9%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily driven by the acquisition of MB Financial, Inc. Average other consumer loans increased $562 million, or 27%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to growth in point-of-sale loan originations. Average credit card increased $149 million, or 6%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to increases in balance-active customers and average balance per active customer. Average home equity decreased $262 million, or 4%, for the three months ended September 30, 2019 compared to the same period in the prior year as payoffs exceeded loan production, partially offset by home equity acquired in the MB Financial, Inc. acquisition.

Investment Securities

The Bancorp uses investment securities as a means of managing interest rate risk, providing collateral for pledging purposes and for liquidity to satisfy regulatory requirements. Total investment securities were $38.0 billion and $33.6 billion at September 30, 2019 and December 31, 2018, respectively. The taxable available-for-sale debt and other securities portfolio had an effective duration of 4.7 years at September 30, 2019 compared to 5.0 years at December 31, 2018.

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 September 30, 2019, the Bancorp’s investment portfolio consisted primarily of AAA-rated available-for-sale debt and other securities. The Bancorp held an immaterial amount in below-investment grade available-for-sale debt and other securities at both September 30, 2019 and December 31, 2018. During the three and nine months ended September 30, 2019, the Bancorp recognized zero and $1 million, respectively, of OTTI on its available-for-sale debt and other securities, included in securities gains (losses), net, in the Condensed

23

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

Consolidated Statements of Income. During both the three and nine months ended September 30, 2018, the Bancorp did not recognize OTTI on any of its available-for-sale debt and other securities.

The following table summarizes the end of period components of investment securities:
TABLE 19: Components of Investment Securities
				September 30,	December 31,
As of ($ in millions)				2019	2018
Available-for-sale debt and other securities (amortized cost basis):
	U.S. Treasury and federal agency securities		$	74	98
	Obligations of states and political subdivisions securities			2	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,185	16,403
		Agency commercial mortgage-backed securities		14,451	10,770
		Non-agency commercial mortgage-backed securities		3,246	3,305
	Asset-backed securities and other debt securities			2,129	1,998
	Other securities(a)			575	552
Total available-for-sale debt and other securities			$	35,662	33,128
Held-to-maturity securities (amortized cost basis):
	Obligations of states and political subdivisions securities		$	16	16
	Asset-backed securities and other debt securities			2	2
Total held-to-maturity securities			$	18	18
Trading debt securities (fair value):
	U.S. Treasury and federal agency securities		$	3	16
	Obligations of states and political subdivisions securities			29	35
	Agency residential mortgage-backed securities			69	68
	Asset-backed securities and other debt securities			196	168
Total trading debt securities			$	297	287
Total equity securities (fair value)			$	459	452

(a)Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $96, $477 and $2, respectively, at September 30, 2019 and $184, $366 and $2, respectively, at December 31, 2018, that are carried at cost.

On an amortized cost basis, available-for-sale debt and other securities increased $2.5 billion from December 31, 2018 primarily due to an increase in agency commercial mortgage-backed securities, partially offset by a decrease in agency residential mortgage-backed securities.

On an amortized cost basis, available-for-sale debt and other securities were 24% and 25% of total interest-earning assets at September 30, 2019 and December 31, 2018, respectively. The estimated weighted-average life of the debt securities in the available-for-sale debt and other securities portfolio was 6.2 years at September 30, 2019 compared to 6.5 years at December 31, 2018. In addition, at September 30, 2019, the debt securities in the available-for-sale debt and other securities portfolio had a weighted-average yield of 3.28% compared to 3.25% at December 31, 2018.

Information presented in Table 20 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 gains on the available-for-sale debt and other securities portfolio were $1.5 billion at September 30, 2019 compared to net unrealized losses of $298 million at December 31, 2018. The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. The fair value of investment securities generally increases when interest rates decrease or when credit spreads contract.

24

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

TABLE 20: Characteristics of Available-for-Sale Debt and Other Securities
					Weighted-Average	Weighted-Average
As of September 30, 2019 ($ in millions)		Amortized Cost		Fair Value	Life (in years)	Yield
U.S. Treasury and federal agency securities:
	Average life 1 – 5 years	$	74	75	3.3	2.12	%
Total		$	74	75	3.3	2.12	%
Obligations of states and political subdivisions securities:(a)
	Average life of 1 year or less		-	-	0.3	7.47
	Average life 1 – 5 years		2	2	4.7	0.30
Total		$	2	2	4.6	0.45	%
Agency residential mortgage-backed securities:
	Average life 1 – 5 years		8,095	8,292	3.5	3.38
	Average life 5 – 10 years		6,429	6,704	6.8	3.16
	Average life greater than 10 years		661	698	13.9	3.20
Total		$	15,185	15,694	5.3	3.28	%
Agency commercial mortgage-backed securities:
	Average life of 1 year or less		196	206	0.4	2.65
	Average life 1 – 5 years		3,771	3,943	3.4	3.17
	Average life 5 – 10 years		7,718	8,152	7.6	3.13
	Average life greater than 10 years		2,766	2,975	13.3	3.32
Total		$	14,451	15,276	7.5	3.17	%
Non-agency commercial mortgage-backed securities:
	Average life of 1 year or less		1	1	0.5	3.83
	Average life 1 – 5 years		1,160	1,208	4.0	3.58
	Average life 5 – 10 years		2,085	2,191	5.9	3.24
Total		$	3,246	3,400	5.2	3.36	%
Asset-backed securities and other debt securities:
	Average life of 1 year or less		13	13	0.6	3.55
	Average life 1 – 5 years		1,207	1,234	3.0	3.96
	Average life 5 – 10 years		884	883	7.1	3.70
	Average life greater than 10 years		25	26	10.6	4.09
Total		$	2,129	2,156	4.8	3.85	%
Other securities			575	575
Total available-for-sale debt and other securities		$	35,662	37,178	6.2	3.28	%

(a)Taxable-equivalent yield adjustments included in the above table are 1.57%, 0.00% and 0.03% for securities with an average life of 1 year or less, 1-5 years, and in total, respectively.

Deposits

The Bancorp’s deposit balances represent an important source of funding and revenue growth opportunity. The Bancorp continues to focus on core deposit growth in its retail and commercial franchises by improving customer satisfaction, building full relationships and offering competitive rates. Average core deposits represented 71% and 72% of the Bancorp’s average asset funding base at September 30, 2019 and December 31, 2018, respectively.

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

TABLE 21: Components of Deposits
		September 30, 2019				December 31, 2018
As of ($ in millions)		Balance	% of Total			Balance	% of Total
Demand	$	35,893	29	%	$	32,116	30	%
Interest checking		36,965	30			34,058	31
Savings		14,354	11			12,907	12
Money market		27,370	22			22,597	21
Foreign office		226	-			240	-
Total transaction deposits		114,808	92			101,918	94
Other time		5,662	5			4,490	4
Total core deposits		120,470	97			106,408	98
Certificates $100,000 and over(a)		4,377	3			2,427	2
Other deposits		500	-			-	-
Total deposits	$	125,347	100	%	$	108,835	100	%

(a)Includes $2.4 billion and $1.2 billion of institutional, retail and wholesale certificates $250,000 and over at September 30, 2019 and December 31, 2018, respectively.

Total deposits increased $16.5 billion, or 15%, from December 31, 2018 driven by the MB Financial, Inc. acquisition as the Bancorp assumed commercial and consumer deposit balances of $14.5 billion at acquisition. Table 22 summarizes the detail of deposits assumed as a result of the MB Financial, Inc. acquisition on March 22, 2019.

25

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

TABLE 22: Deposits Assumed
($ in millions)
Demand	$	6,010
Interest checking		2,408
Savings		1,175
Money market		2,571
Total transaction deposits		12,164
Other time		546
Total core deposits		12,710
Certificates $100,000 and over		1,779
Total deposits	$	14,489

The following discussion excludes the impact of deposits assumed in the MB Financial, Inc. acquisition. Core deposits increased $1.4 billion, or 1%, from December 31, 2018 primarily as a result of increases in transaction deposits and other time deposits. Transaction deposits increased $726 million, or 1%, from December 31, 2018 primarily due to increases in money market deposits and interest checking deposits, partially offset by a decrease in demand deposits. Money market deposits increased $2.2 billion, or 10%, from December 31, 2018 primarily as a result of promotional product offerings, which drove consumer customer acquisition. Interest checking deposits increased $499 million, or 1%, from December 31, 2018 primarily as a result of higher balances per commercial customer account and balance migration from demand deposit accounts. Demand deposits decreased $2.2 billion, or 7%, from December 31, 2018 primarily as a result of balance migration into interest checking deposits and lower balances per commercial customer account. Other time deposits increased $626 million, or 14%, from December 31, 2018 primarily due to promotional rate offers.

Certificates $100,000 and over increased $171 million, or 7%, from December 31, 2018 primarily due to an increase in retail brokered certificates of deposit issued since December 31, 2018. Other deposits increased $500 million from December 31, 2018 primarily due to an increase in Eurodollar trade deposits.

The following table presents the components of average deposits for the three months ended:
TABLE 23: Components of Average Deposits
			September 30, 2019				September 30, 2018
($ in millions)			Balance	% of Total			Balance	% of Total
Demand		$	35,223	28	%	$	32,333	31	%
Interest checking			37,729	30			29,681	28
Savings			14,405	12			13,231	13
Money market			26,962	22			21,753	21
Foreign office			222	-			317	-
Total transaction deposits			114,541	92			97,315	93
Other time			5,823	4			4,177	4
Total core deposits			120,364	96			101,492	97
Certificates $100,000 and over(a)			4,795	4			2,596	2
Other deposits			47	-			578	1
Total average deposits		$	125,206	100	%	$	104,666	100	%
(a)	Includes $2.6 billion and $1.4 billion of average institutional, retail and wholesale certificates $250,000 and over for the three months ended September 30, 2019 and 2018, respectively.

On an average basis, core deposits increased $18.9 billion, or 19%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to an increase of $17.2 billion in average transaction deposits. The increase in average transaction deposits was driven primarily by increases in average interest checking deposits, average money market deposits, average demand deposits and average savings deposits. Average interest checking deposits increased $8.0 billion, or 27%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the MB Financial, Inc. acquisition as well as balance migration from demand deposit accounts and an increase in average balances per commercial customer account. Average money market deposits increased $5.2 billion, or 24%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the MB Financial, Inc. acquisition as well as promotional product offerings, which drove consumer customer acquisition. Average demand deposits increased $2.9 billion, or 9%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the MB Financial, Inc. acquisition, partially offset by balance migration into interest checking deposits. Average savings deposits increased $1.2 billion, or 9%, for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the MB Financial, Inc. acquisition.

Average certificates $100,000 and over increased $2.2 billion for the three months ended September 30, 2019 compared to the same period in the prior year primarily due to the MB Financial, Inc. acquisition as well as an increase in retail brokered certificates of deposit issued since September 30, 2018. Average other deposits decreased $531 million primarily due to a decrease in average Eurodollar trade deposits.

26

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 September 30, 2019 are summarized in the following table:
TABLE 24: Contractual Maturities of Certificates $100,000 and Over
($ in millions)
Next 3 months	$	995
3-6 months		1,449
6-12 months		1,267
After 12 months		666
Total certificates $100,000 and over	$	4,377

The contractual maturities of other time deposits and certificates $100,000 and over as of September 30, 2019 are summarized in the following table:
TABLE 25: Contractual Maturities of Other Time Deposits and Certificates $100,000 and Over
($ in millions)
Next 12 months	$	8,288
13-24 months		1,376
25-36 months		249
37-48 months		70
49-60 months		48
After 60 months		8
Total other time deposits and certificates $100,000 and over	$	10,039

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. Average total borrowings as a percent of average interest-bearing liabilities were 16% and 20% at September 30, 2019 and December 31, 2018, respectively.

The following table summarizes the end of period components of borrowings:
TABLE 26: Components of Borrowings
As of ($ in millions)		September 30, 2019	December 31, 2018
Federal funds purchased	$	876	1,925
Other short-term borrowings		4,046	573
Long-term debt		14,474	14,426
Total borrowings	$	19,396	16,924

Total borrowings increased $2.5 billion, or 15%, from December 31, 2018 due to increases in other short-term borrowings and long-term debt, partially offset by a decrease in federal funds purchased. Other short-term borrowings increased $3.5 billion from December 31, 2018 primarily driven by an increase 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. Long-term debt increased $48 million from December 31, 2018 primarily driven by the issuance of $1.5 billion of unsecured senior fixed-rate notes, $300 million of unsecured senior floating-rate bank notes, the issuance of asset-backed securities of $1.3 billion related to an automobile loan securitization and $213 million of fair value adjustments associated with interest rate swaps hedging long-term debt during the nine months ended September 30, 2019. These increases were partially offset by the maturities of $2.6 billion of unsecured senior bank notes and $500 million of unsecured senior notes and $513 million of paydowns on long-term debt associated with automobile loan securitizations. For additional information regarding the automobile loan securitization and long-term debt issuances, refer to Note 13 and Note 17, respectively, of the Notes to Condensed Consolidated Financial Statements. Federal funds purchased decreased $1.0 billion from December 31, 2018 due to a shift in the composition of short-term funding. For further information on the components of other short-term borrowings, refer to Note 16 of the Notes to Condensed Consolidated Financial Statements. For further information on a subsequent event related to long-term debt, refer to Note 27 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes components of average borrowings for the three months ended:
TABLE 27: Components of Average Borrowings
($ in millions)		September 30, 2019	September 30, 2018
Federal funds purchased	$	739	1,987
Other short-term borrowings		1,278	1,018
Long-term debt		15,633	14,434
Total average borrowings	$	17,650	17,439

Total average borrowings increased $211 million, or 1%, compared to September 30, 2018, due to an increase in average long-term debt and average other short-term borrowings partially offset by a decrease in average federal funds purchased. Average long-term debt increased $1.2 billion compared to September 30, 2018. The increase was primarily driven by the issuances of $1.5 billion of unsecured senior fixed-rate

27

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

notes and $300 million of unsecured senior floating-rate bank notes in the first quarter of 2019 and the issuance of asset-backed securities of $1.3 billion related to an automobile loan securitization in the second quarter of 2019, partially offset by the maturities of $2.6 billion in unsecured senior bank notes, $500 million in unsecured senior notes and $613 million of paydowns on long-term debt associated with automobile loan securitizations since September 30, 2018. Approximately $1.0 billion of the unsecured senior bank note maturities noted above occurred in September of 2019. The increase in average long-term debt since September 30, 2018 included the impact of long-term debt assumed in the MB Financial, Inc. acquisition. Average other short-term borrowings increased $260 million compared to September 30, 2018, primarily as a result of an increase in securities sold under repurchase agreements driven by an increase in commercial customer activity. Average federal funds purchased decreased $1.2 billion compared to September 30, 2018 primarily due to a shift in the composition of short-term funding. 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.

28

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 26 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 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, 2019 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2018, thus net interest income for deposit-providing business segments was positively impacted during 2019. 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 2019.

The Bancorp’s methodology for allocating provision for credit 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 credit 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 funding operations by accessing the capital markets as a collective unit.

The following table summarizes net income (loss) by business segment:
TABLE 28: Net Income (Loss) by Business Segment
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Income Statement Data
Commercial Banking	$	393	301	1,082	862
Branch Banking		217	207	674	490
Consumer Lending		44	-	70	(13)
Wealth and Asset Management		32	25	81	70
General Corporate and Other		(137)	(97)	(129)	328
Net income	$	549	436	1,778	1,737

29

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 29: Commercial Banking
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Income Statement Data
Net interest income (FTE)(a)	$	627	431	1,774	1,285
Provision for (benefit from) credit losses		54	(11)	100	(41)
Noninterest income:
Corporate banking revenue		167	100	413	304
Service charges on deposits		79	68	227	207
Other noninterest income		89	67	221	170
Noninterest expense:
Personnel costs		118	79	346	250
Other noninterest expense		307	228	852	699
Income before income taxes (FTE)		483	370	1,337	1,058
Applicable income tax expense(a)(b)		90	69	255	196
Net income	$	393	301	1,082	862
Average Balance Sheet Data
Commercial loans and leases, including held for sale	$	67,490	54,685	64,911	54,305
Demand deposits		16,737	16,198	16,243	16,967
Interest checking deposits		19,225	12,511	17,845	11,303
Savings and money market deposits		5,541	3,691	4,728	4,263
Other time deposits and certificates $100,000 and over		362	268	352	401
Foreign office deposits		221	316	197	392

(a)Includes FTE adjustments of $4 for both the three months ended September 30, 2019 and 2018 and $13 and $12 for the nine months ended September 30, 2019 and 2018, respectively.

(b)Applicable income tax expense for all periods includes the tax benefit from tax-exempt income, tax-advantaged investments and 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 $393 million for the three months ended September 30, 2019 compared to net income of $301 million for the three months ended September 30, 2018. Net income was $1.1 billion for the nine months ended September 30, 2019 compared to net income of $862 million for the nine months ended September 30, 2018. The increases for both periods were driven by increases in net interest income on an FTE basis and noninterest income partially offset by increases in noninterest expense and provision for credit losses.

Net interest income on an FTE basis increased $196 million and $489 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in both average balances and yields on commercial loans and leases, increases in FTP credits on interest checking deposits and increases in FTP credit rates on demand deposits. These increases were partially offset by increases in FTP charges on loans and leases and increases in both average balances and rates paid on interest checking deposits.

Provision for credit losses increased $65 million and $141 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increase for the three months ended September 30, 2019 was driven by the impact of an increase in criticized asset levels as well as increases in net charge-offs on commercial and industrial loans and commercial leases. The increase for the nine months ended September 30, 2019 was driven by the impact of an increase in criticized asset levels and an increase in net charge-offs on commercial leases partially offset by a decrease in net charge-offs on commercial and industrial loans. Net charge-offs as a percent of average portfolio loans and leases were 16 bps and 12 bps for the three and nine months ended September 30, 2019, respectively, compared to 12 bps and 20 bps for the same periods in the prior year.

Noninterest income increased $100 million and $180 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by increases in corporate banking revenue, other noninterest income and service charges on deposits. Corporate banking revenue increased $67 million and $109 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in lease-related services revenue, lease remarketing fees, institutional sales and business lending fees. Other noninterest income increased $22 million and $51 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in operating lease income and card and processing revenue partially offset by decreases in private equity investment income. Service charges on deposits increased $11 million and $20 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in commercial deposit fees.

30

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

Noninterest expense increased $118 million and $249 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by increases in other noninterest expense and personnel costs. Other noninterest expense increased $79 million and $153 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in corporate overhead allocations, operating lease expense, intangible asset amortization and losses and adjustments. Personnel costs increased $39 million and $96 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increased base compensation and incentive compensation primarily as a result of the acquisition of MB Financial, Inc.

Average commercial loans and leases increased $12.8 billion and $10.6 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in average commercial and industrial loans and average commercial mortgage loans. Average commercial and industrial loans increased $8.6 billion and $7.5 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily as a result of the acquisition of MB Financial, Inc. as well as an increase in loan originations and a decrease in payoffs. Average commercial mortgage loans increased $4.0 billion and $2.9 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily as a result of the acquisition of MB Financial, Inc. as well as an increase in loan origination activity.

Average core deposits increased $9.0 billion and $6.1 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for the three and nine months ended September 30, 2019 were primarily driven by increases in average interest checking deposits of $6.7 billion and $6.5 billion, respectively, compared to the same periods in the prior year primarily due to balance migration from demand deposit accounts and an increase in average balances per commercial customer account as well as the acquisition of MB Financial, Inc. The increase for the three months ended September 30, 2019 also included an increase in average savings and money market deposits of $1.9 billion compared to the same period in the prior year primarily due to the acquisition of MB Financial, Inc. and an increase in average balances per commercial customer account. The increase for the nine months ended September 30, 2019 was partially offset by a decrease in average demand deposits of $724 million compared to the same period in the prior year primarily due to balance migration into interest checking deposits partially offset by the acquisition of MB Financial, Inc.

Branch Banking

Branch Banking provides a full range of deposit and loan products to individuals and small businesses through 1,143 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 30: Branch Banking
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Income Statement Data
Net interest income	$	598	525	1,802	1,490
Provision for credit losses		58	34	164	124
Noninterest income:
Card and processing revenue		74	67	212	199
Service charges on deposits		65	71	191	205
Wealth and asset management revenue		41	38	117	113
Other noninterest income		24	28	70	41
Noninterest expense:
Personnel costs		148	131	444	404
Net occupancy and equipment expense		56	56	165	168
Card and processing expense		32	30	92	89
Other noninterest expense		233	216	674	642
Income before income taxes		275	262	853	621
Applicable income tax expense		58	55	179	131
Net income	$	217	207	674	490
Average Balance Sheet Data
Consumer loans	$	13,203	13,069	13,203	12,992
Commercial loans		2,216	1,972	2,144	1,919
Demand deposits		16,038	14,403	15,646	14,310
Interest checking deposits		10,875	10,065	10,561	10,232
Savings and money market deposits		33,843	29,786	32,832	29,260
Other time deposits and certificates $100,000 and over		8,110	5,443	7,514	5,238

Net income was $217 million for the three months ended September 30, 2019 compared to net income of $207 million for the three months ended September 30, 2018. Net income was $674 million for the nine months ended September 30, 2019 compared to $490 million for the nine months ended September 30, 2018. The increases for both periods were driven by increases in net interest income partially offset by

31

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

increases in noninterest expense and provision for credit losses. The increase for the nine months ended September 30, 2019 also included an increase in noninterest income.

Net interest income increased $73 million and $312 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases in net interest income for both periods were primarily due to increases in FTP credits on core deposits as well as increases in average balances of credit card and other consumer loans. These benefits were partially offset by increases in both the rates paid on and average balances of savings and money market deposits and other time deposits and certificates $100,000 and over as well as increases in FTP charge rates on loans and leases.

Provision for credit losses increased $24 million and $40 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in net charge-offs on credit card and other consumer loans. The increase for the three months ended September 30, 2019 also included the impact of the benefit of lower criticized assets for the three months ended September 30, 2018. Net charge-offs as a percent of average portfolio loans and leases increased to 149 bps and 143 bps for the three and nine months ended September 30, 2019, respectively, compared to 99 bps and 111 bps for the three and nine months ended September 30, 2018, respectively.

Noninterest income remained flat and increased $32 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. Noninterest income for the three months ended September 30, 2019 was positively impacted by an increase in card and processing revenue partially offset by a decrease in service charges on deposits. The increase for the nine months ended September 30, 2019 was primarily driven by increases in other noninterest income and card and processing revenue partially offset by a decrease in service charges on deposits. Card and processing revenue increased $7 million and $13 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in the number of actively used cards and customer spend volume. Other noninterest income increased $29 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to the impact of impairment on bank premises and equipment recognized during the second quarter of 2018. Service charges on deposits decreased $6 million and $14 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by decreases in consumer deposit fees.

Noninterest expense increased $36 million and $72 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in personnel costs and other noninterest expense. Personnel costs increased $17 million and $40 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to higher base compensation primarily as a result of the acquisition of MB Financial, Inc. as well as higher incentive compensation. Other noninterest expense increased $17 million and $32 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in corporate overhead allocations and intangible amortization expense partially offset by decreases in FDIC insurance and other taxes.

Average consumer loans increased $134 million and $211 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for both the three and nine months ended September 30, 2019 compared to the same periods in the prior year were impacted by increases in average other consumer loans of $699 million and $893 million, respectively, primarily due to growth in point-of-sale loan originations partially offset by decreases in both average home equity of $221 million and $314 million, respectively, and average residential mortgage loans of $275 million and $280 million, respectively, as payoffs exceeded new loan production. Average commercial loans increased $244 million and $225 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in average commercial and industrial loans primarily due to core relationship growth and the acquisition of MB Financial, Inc.

Average core deposits increased $8.1 billion and $6.7 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for both periods were primarily driven by growth in average savings and money market deposits of $4.1 billion and $3.6 billion and growth in average demand deposits of $1.6 billion and $1.3 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. These increases were primarily due to the acquisition of MB Financial, Inc. as well as promotional product offerings, which drove consumer customer acquisition and growth in balances from existing customers. The increases in average core deposits also included increases in interest checking deposits of $810 million and $329 million for the three and nine months ended September 30, 2019, respectively, primarily due to the acquisition of MB Financial, Inc. Average other time deposits and certificates $100,000 and over increased $2.7 billion and $2.3 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily as a result of the acquisition of MB Financial, Inc. as well as promotional product offerings, which drove increased production.

Consumer Lending

Consumer Lending includes the Bancorp’s residential mortgage, automobile and other indirect lending activities. Residential mortgage activities within Consumer Lending include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans, pools of loans and all associated hedging activities. Residential mortgages are primarily originated through a dedicated sales force and through third-party correspondent lenders. Automobile and other indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers.

32

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

The following table contains selected financial data for the Consumer Lending segment:
TABLE 31: Consumer Lending
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Income Statement Data
Net interest income	$	88	60	234	178
Provision for credit losses		14	10	34	30
Noninterest income:
Mortgage banking net revenue		92	48	209	153
Other noninterest income		4	2	15	(7)
Noninterest expense:
Personnel costs		48	46	146	148
Other noninterest expense		66	54	189	162
Income (loss) before income taxes		56	-	89	(16)
Applicable income tax expense (benefit)		12	-	19	(3)
Net income (loss)	$	44	-	70	(13)
Average Balance Sheet Data
Residential mortgage loans, including held for sale	$	13,447	11,896	12,863	11,805
Home equity		206	237	224	249
Indirect secured consumer loans		10,476	8,668	9,788	8,669

Net income was $44 million and $70 million for the three and nine months ended September 30, 2019, respectively, compared to net income of an immaterial amount and a net loss of $13 million for the three and nine months ended September 30, 2018, respectively. The increases for both the three and nine months ended September 30, 2019 were driven by increases in noninterest income and net interest income partially offset by increases in noninterest expense and provision for credit losses.

Net interest income increased $28 million and $56 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in both yields on and average balances of indirect secured consumer loans and residential mortgage loans as well as increases in FTP credits on demand deposits. These benefits were partially offset by increases in FTP charges on loans and leases.

Provision for credit losses increased $4 million for both the three and nine months ended September 30, 2019 compared to the same periods in the prior year driven by increases in net charge-offs on indirect secured consumer loans. The increase for the nine months ended September 30, 2019 was partially offset by a decrease in net charge-offs on residential mortgage loans. Net charge-offs as a percent of average portfolio loans and leases increased to 24 bps and 21 bps for the three and nine months ended September 30, 2019, respectively, compared to 20 bps for both the three and nine months ended September 30, 2018.

Noninterest income increased $46 million and $78 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven primarily by increases in mortgage banking net revenue. The increase for the nine months ended September 30, 2019 also included an increase in other noninterest income. Mortgage banking net revenue increased $44 million and $56 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in origination fees and gains on loan sales as well as net mortgage servicing revenue. 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. Other noninterest income increased $22 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to the recognition of $5 million of gains on securities related to non-qualifying hedges on MSRs during the nine months ended September 30, 2019 compared to the recognition of $18 million of losses during the nine months ended September 30, 2018.

Noninterest expense increased $14 million and $25 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in prior year primarily driven by increases in other noninterest expense. Other noninterest expense increased $12 million and $27 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in corporate overhead allocations and loan and lease expense.

Average consumer loans increased $3.3 billion and $2.2 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in average indirect secured consumer loans and average residential mortgage loans. Average indirect secured consumer loans increased $1.8 billion and $1.1 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by the acquisition of MB Financial, Inc. and higher loan production exceeding payoffs. Average residential mortgage loans increased $1.6 billion and $1.1 billion for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by the acquisition of MB Financial, Inc.

33

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 four main businesses: FTS; Fifth Third Insurance Agency; 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. Fifth Third Insurance Agency assists clients with their financial and risk management needs. Fifth Third Private Bank offers wealth management strategies to high net worth and ultra-high net worth clients through wealth planning, investment management, banking, insurance, trust and estate services. Fifth Third Institutional Services provides advisory services for institutional clients including middle market businesses, non-profits, states and municipalities.

The following table contains selected financial data for the Wealth and Asset Management segment:
TABLE 32: Wealth and Asset Management
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Income Statement Data
Net interest income	$	44	46	141	134
Provision for credit losses		-	3	-	8
Noninterest income:
Wealth and asset management revenue		119	110	345	324
Other noninterest income		6	5	14	20
Noninterest expense:
Personnel costs		51	50	165	154
Other noninterest expense		78	76	232	227
Income before income taxes		40	32	103	89
Applicable income tax expense		8	7	22	19
Net income	$	32	25	81	70
Average Balance Sheet Data
Loans and leases, including held for sale	$	3,636	3,449	3,566	3,410
Core deposits		9,679	9,029	9,548	9,266

Net income was $32 million for the three months ended September 30, 2019 compared to net income of $25 million for the three months ended September 30, 2018. Net income was $81 million for the nine months ended September 30, 2019 compared to $70 million for the nine months ended September 30, 2018. The increases for both the three and nine months ended September 30, 2019 were driven by increases in noninterest income as well as decreases in provision for credit losses partially offset by increases in noninterest expense. The increase for the nine months ended September 30, 2019 also included an increase in net interest income.

Net interest income decreased $2 million and increased $7 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The decrease for the three months ended September 30, 2019 was primarily due to an increase in the rates paid on and average balances of interest checking deposits as well as an increase in FTP charges on loans and leases. These negative impacts were partially offset by increases in both the yields on and average balances of loans and leases and FTP credits on interest checking deposits due to increased average balances. The increase for the nine months ended September 30, 2019 was primarily due to increases in FTP credit rates on interest checking deposits and savings and money market deposits as well as an increase in yields on average loans and leases. These positive impacts were partially offset by an increase in the rates paid on average interest checking deposits as well as an increase in FTP charge rates on loans and leases.

Provision for credit losses decreased $3 million and $8 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by decreases in net charge-offs on commercial and industrial loans. These decreases were partially offset by the impact of the benefit of lower criticized assets for the three and nine months ended September 30, 2018.

Noninterest income increased $10 million and $15 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in wealth and asset management revenue. The increase for the nine months ended September 30, 2019 was partially offset by a decrease in other noninterest income. Wealth and asset management revenue increased $9 million and $21 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily due to increases in private client service fees driven by the benefit from acquisitions since September 30, 2018. Other noninterest income decreased $6 million for the nine months ended September 30, 2019 compared to the same period in the prior year primarily due to a loss on sale of a business recognized in the second quarter of 2019.

Noninterest expense increased $3 million and $16 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increase for the nine months ended September 30, 2019 was primarily driven by an increase in personnel costs of $11 million primarily due to increased base compensation driven by acquisitions since September 30, 2018.

Average loans and leases increased $187 million and $156 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year primarily driven by increases in average residential mortgage loans driven by the acquisition of MB Financial, Inc. partially offset by decreases in average commercial and industrial loans as payoffs exceeded new loan production.

34

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

Average core deposits increased $650 million and $282 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for the three and nine months ended September 30, 2019 compared to the same periods in the prior year were due to increases in average interest checking deposits primarily as a result of the acquisition of MB Financial, Inc. as well as increases in average savings and money market deposits.

General Corporate and Other

General Corporate and Other includes the unallocated portion of the investment securities portfolio, securities gains and losses, certain non-core deposit funding, unassigned equity, unallocated provision for credit 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 decreased $96 million and $353 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year driven by increases in FTP credits on deposits allocated to the business segments and increases in interest expense on long-term debt. These negative impacts were partially offset by increases in the benefit related to FTP charges on loans and leases and increases in interest income on taxable securities.

Provision for credit losses was $8 million for the three months ended September 30, 2019 compared to $48 million for the three months ended September 30, 2018. The provision for credit losses was $12 million for the nine months ended September 30, 2019 compared to a benefit from credit losses of $10 million for the nine months ended September 30, 2018. The decrease for the three months ended September 30, 2019 compared to the same period in the prior year was primarily driven by an increase in the allocation of provision expense to the business segments in the current year resulting from an increase in commercial criticized asset levels. This was partially offset by increases in both outstanding loan balances and unfunded commitments in 2019, exclusive of loans and leases acquired in the MB Financial, Inc. acquisition. The increase for the nine months ended September 30, 2019 compared to the same period in the prior year was primarily due to the aforementioned increases in both outstanding loan balances and unfunded commitments in 2019, exclusive of loans and leases acquired in the MB Financial, Inc. acquisition. This was partially offset by an increase in the allocation of provision expense to the business segments driven by an increase in commercial criticized asset levels.

Noninterest income increased $23 million and decreased $17 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increase for the three months ended September 30, 2019 was primarily driven by the recognition of $5 million of gains on securities during the three months ended September 30, 2019 compared to the recognition of $6 million of losses during the three months ended September 30, 2018 as well as a decrease in the loss on the swap associated with the sale of Visa, Inc. Class B shares for the three months ended September 30, 2019 compared to the same period in the prior year. The decrease for the nine months ended September 30, 2019 was primarily driven by the recognition of a $205 million gain on the sale of Worldpay, Inc. shares during the second quarter of 2018 in addition to a $414 million gain recognized in the first quarter of 2018 related to Vantiv Inc.’s acquisition of Worldpay Group plc. compared to a $562 million gain related to the sale of Worldpay, Inc. shares in the first quarter of 2019. The decrease for the nine months ended September 30, 2019 also included the impact of an increase in net losses on disposition and impairment of bank premises and equipment. These impacts were partially offset by the recognition of $30 million of gains on securities during the nine months ended September 30, 2019 compared to the recognition of $21 million of losses during the nine months ended September 30, 2018.

Noninterest expense increased $18 million and $155 million for the three and nine months ended September 30, 2019, respectively, compared to the same periods in the prior year. The increases for both periods were primarily due to increases in technology and communications expense, personnel costs and net occupancy expense driven by merger-related expenses as a result of the acquisition of MB Financial, Inc. partially offset by increases in corporate overhead allocations from General Corporate and Other to the other business segments. Refer to the Noninterest Expense subsection of the Statements of Income Analysis section of MD&A for additional information on merger-related expenses.

35

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 the Bancorp’s 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 or monitored.

Act with integrity in all activities.

Focus on providing operational excellence by providing reliable, accurate and efficient services to meet customers’ 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 independent governance reporting of risk.

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 using quantitative measurements and qualitative factors on an ongoing

36

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

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 business and operational functions across the enterprise are able to monitor and manage risks at a more granular level, while ensuring that aggregate risks across the enterprise do not exceed the overall risk appetite.

The Bancorp’s risk governance structure includes management committees operating under delegation from, and providing information directly or indirectly to, the Board. The Bancorp Board delegates certain responsibilities to Board sub-committees, including the RCC as outlined in each respective Committee Charter, which may be found on 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.

Fifth Third’s risk management framework and programs are being utilized in the ongoing integration of MB Financial, Inc. to ensure appropriate identification, assessment, management, monitoring and reporting 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 7 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 33: Potential Problem Portfolio Loans and Leases
				Unpaid
			Carrying	Principal
As of September 30, 2019 ($ in millions)			Value	Balance	Exposure
Commercial and industrial loans		$	1,210	1,243	1,687
Commercial mortgage loans			362	412	365
Commercial construction loans			47	53	64
Commercial leases			59	59	59
Total potential problem portfolio loans and leases(a)		$	1,678	1,767	2,175
(a)	Includes $364 million of PCI and $326 million of non-PCI loans and leases as of September 30, 2019 acquired in the MB Financial, Inc. acquisition.

TABLE 34: Potential Problem Portfolio Loans and Leases
			Unpaid
		Carrying	Principal
As of December 31, 2018 ($ in millions)		Value	Balance	Exposure
Commercial and industrial loans	$	646	647	854
Commercial mortgage loans		152	152	152
Commercial leases		31	31	31
Total potential problem portfolio loans and leases	$	829	830	1,037

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

37

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

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 has also developed U.S. GAAP compliant CECL models 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. These CECL models are currently in the validation process and use separate probabilities of default and loss given default ratings to estimate credit losses. 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.

Overview

U.S. economic conditions remained generally stable in the third quarter, but there are an increasing number of leading indicators which may portend a softening economy. For instance, the Institute for Supply Management’s manufacturing index contracted during the third quarter of 2019 with a rating of 47.8 in September, the lowest since June 2009. While manufacturing is only one component of the overall U.S. economy, it remains a key driver for GDP and the Bancorp’s loan and lease portfolio. Deceleration in the manufacturing sector is not a problem by itself, but it can impact credit risk if not addressed by the Bancorp’s clients. Additionally, the world economy, including China, has continued to slow with the International Monetary Fund predicting a 3.2% growth rate, the slowest since the financial crisis. The personal savings rate and disposable income both rose while inflation, as measured by the broader personal consumption expenditures price gauge, continued to trend below the Federal Reserve’s 2% core inflation target.

The impact of tariffs has still yet to be fully realized. Given existing tariffs, many U.S. importers are likely going to be compelled to transmit higher costs to buyers, which could impact consumer spending. This could lead to margin compression in many sectors. In addition, major freight companies are reporting lower volumes and/or profit outlooks, with railroad volume down for most of the year. Another factor that could affect the economy is the political uncertainty surrounding the U.S. presidential impeachment inquiry.

Unemployment remains very low at 3.5% and consumer confidence still remains high. New residential construction has increased in the last couple of months and now is slightly higher for the nine months ended September 30, 2019 compared to the same period in the prior year. U.S. real GDP has slowed to below 3% and other general indicators are showing negative trends for the nine months ended September 30, 2019 compared to the same period in the prior year.

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 acquired commercial and industrial portfolio is comprised primarily of small business and middle market commercial loans but also includes specialty lending products, including lease banking, small business leasing and asset-based lending. These products serve distinct client needs and broaden Fifth Third’s lending capabilities. The portfolios have been evaluated for credit quality and will be managed within Fifth Third’s credit risk framework to ensure adherence to risk appetite.

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

The following table provides detail on commercial loans and leases by industry classification (as defined by the North American Industry Classification System), by loan size and by state, illustrating the diversity and granularity of the Bancorp’s commercial loans and leases as of:
TABLE 35: Commercial Loan and Lease Portfolio (excluding loans and leases held for sale)
			September 30, 2019				December 31, 2018
($ in millions)			Outstanding		Exposure	Nonaccrual	Outstanding	Exposure	Nonaccrual
By Industry:
	Manufacturing	$	12,129		22,567	120	10,387	19,290	48
	Real estate		11,401		17,037	9	8,327	13,055	10
	Financial services and insurance		7,222		16,212	-	6,805	13,192	1
	Business services		5,200		8,738	27	4,426	7,161	17
	Healthcare		5,103		7,235	44	4,343	6,198	36
	Wholesale trade		4,562		7,875	25	3,127	5,481	14
	Retail trade		4,105		8,335	7	3,726	7,496	6
	Accommodation and food		3,812		6,526	25	3,435	5,626	28
	Transportation and warehousing		2,892		4,987	17	2,807	4,729	19
	Mining		2,884		4,753	50	2,427	4,363	38
	Communication and information		2,873		5,298	2	2,923	5,111	-
	Construction		2,779		5,288	4	2,498	4,718	4
	Entertainment and recreation		1,916		3,366	6	1,798	3,354	1
	Other services		1,227		1,676	2	855	1,104	4
	Utilities		964		2,736	-	835	2,531	-
	Public administration		814		1,067	-	465	669	-
	Agribusiness		263		549	9	323	511	2
	Individuals		57		127	-	64	130	-
	Other		163		165	2	-	-	-
Total		$	70,366		124,537	349	59,571	104,719	228
By Size:
	Less than $200,000		1	%	1	4	1	1	5
	$200,000 - $1 million		3		3	8	2	2	9
	$1 million - $5 million		9		7	18	6	6	18
	$5 million - $10 million		7		6	18	6	5	19
	$10 million - $25 million		20		17	43	19	16	38
	Greater than $25 million		60		66	9	66	70	11
Total			100	%	100	100	100	100	100
By State:
	Illinois		15	%	13	24	6	5	8
	Ohio		11		11	13	13	14	10
	Florida		7		7	10	8	8	21
	Michigan		6		6	9	7	6	10
	Indiana		4		4	3	4	4	8
	Georgia		3		4	8	5	5	11
	North Carolina		3		3	-	3	3	-
	Tennessee		2		3	-	3	3	-
	Kentucky		2		2	1	2	3	2
	Other		47		47	32	49	49	30
Total			100	%	100	100	100	100	100

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), 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.

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

TABLE 36: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of September 30, 2019 ($ in millions)		LTV > 100%	LTV 80-100%	LTV < 80%
Commercial mortgage owner-occupied loans	$	374	307	2,734
Commercial mortgage nonowner-occupied loans		177	260	4,498
Total	$	551	567	7,232

TABLE 37: Commercial Mortgage Loans Outstanding by LTV, Loans Greater Than $1 Million
As of December 31, 2018 ($ in millions)		LTV > 100%	LTV 80-100%	LTV < 80%
Commercial mortgage owner-occupied loans	$	126	172	2,119
Commercial mortgage nonowner-occupied loans		40	29	2,731
Total	$	166	201	4,850

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.

The following tables provide an analysis of nonowner-occupied commercial real estate loans by state (excluding loans held for sale):
TABLE 38: Nonowner-Occupied Commercial Real Estate (excluding loans held for sale)(a)
As of September 30, 2019 ($ in millions)							Net Charge-offs for
							September 30, 2019
		Outstanding		Exposure	90 Days Past Due	Nonaccrual	Three Months Ended	Nine Months Ended
By State:
	Illinois	$	3,492	4,143	13	-	2	2
	Ohio		1,452	1,865	3	1	-	-
	Florida		1,003	1,584	-	-	-	-
	Michigan		726	883	-	1	-	-
	North Carolina		608	1,030	-	-	-	-
	Indiana		577	875	-	-	-	-
	All other states		3,211	5,254	-	-	-	-
Total		$	11,069	15,634	16	2	2	2
(a)	Included in commercial mortgage loans and commercial construction loans in the Loans and Leases subsection of the Balance Sheet Analysis section of MD&A.

TABLE 39: Nonowner-Occupied Commercial Real Estate (excluding loans held for sale)(a)
As of September 30, 2018 ($ in millions)								Net Charge-offs (Recoveries) for
								September 30, 2018
				Outstanding	Exposure	90 Days Past Due	Nonaccrual	Three Months Ended	Nine Months Ended
By State:
	Illinois		$	677	920	-	-	-	-
	Ohio			1,641	2,079	-	1	-	-
	Florida			1,000	1,578	-	-	-	-
	Michigan			604	725	-	-	(1)	-
	North Carolina			739	985	-	-	-	-
	Indiana			528	822	-	-	-	-
	All other states			2,849	4,664	-	2	-	1
Total			$	8,038	11,773	-	3	(1)	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.

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, indirect secured consumer loans, credit card and other consumer loans. 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 September 30, 2019, consumer real estate loans, consisting of residential mortgage loans and home equity loans, originated from 2005 through 2008 represent approximately 10% of the consumer real estate portfolio. These loans accounted for 49% of total consumer real estate secured net charge-offs for the nine months ended September 30, 2019. Current loss rates in the residential

40

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

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 indirect secured consumer portfolio performance, which includes automobile loans. The automobile market has exhibited industry-wide gradual loosening of credit standards such as lower FICOs, longer terms and higher LTVs. The Bancorp has adjusted credit standards focused on improving risk-adjusted returns while maintaining credit risk tolerance. The Bancorp actively manages the automobile portfolio through concentration limits, which mitigate 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 LTVs 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 residential 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 $700 million of ARM loans will have rate resets during the next twelve months. Of these resets, 32% are expected to experience an increase in rate, with an average increase of approximately 1%. Underlying characteristics of these borrowers are relatively strong with a weighted average origination DTI of 33% and weighted average origination LTV of 74%.

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 LTVs, multiple loans secured by the same collateral that when combined result in an LTV greater than 80% and interest-only loans. The Bancorp has deemed residential mortgage loans with greater than 80% LTVs and no mortgage insurance as loans that represent a higher level of risk.

Portfolio residential mortgage loans from 2010 and later vintages represented 93% of the portfolio as of September 30, 2019 and had a weighted-average LTV of 73% and a weighted-average origination FICO of 759.

The following table provides an analysis of the residential mortgage portfolio loans outstanding by LTV at origination as of:
TABLE 40: Residential Mortgage Portfolio Loans by LTV at Origination
			September 30, 2019				December 31, 2018
($ in millions)			Outstanding	Weighted-Average LTV			Outstanding	Weighted-Average LTV
LTV ≤ 80%		$	12,165	66.4	%	$	11,540	66.7	%
LTV > 80%, with mortgage insurance(a)			2,474	95.2			2,010	95.1
LTV > 80%, no mortgage insurance			2,036	93.4			1,954	94.2
Total		$	16,675	74.3	%	$	15,504	74.3	%
(a)	Includes loans with both borrower and lender paid mortgage insurance.

The following tables provide an analysis of the residential mortgage portfolio loans outstanding by state with a greater than 80% LTV ratio and no mortgage insurance:
TABLE 41: Residential Mortgage Portfolio Loans, LTV Greater than 80%, No Mortgage Insurance
As of September 30, 2019 ($ in millions)						Net Charge-offs (Recoveries) for September 30, 2019
				90 Days		Three Months	Nine Months
			Outstanding	Past Due	Nonaccrual	Ended	Ended
By State:
	Illinois	$	447	3	1	-	1
	Ohio		446	2	2	-	1
	Florida		277	2	1	-	(1)
	Michigan		207	1	1	-	-
	Indiana		156	1	1	-	-
	North Carolina		97	-	1	-	-
	Kentucky		85	1	-	-	-
	All other states		321	3	2	-	-
Total		$	2,036	13	9	-	1

41

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

TABLE 42: Residential Mortgage Portfolio Loans, LTV Greater than 80%, No Mortgage Insurance
As of September 30, 2018 ($ in millions)						Net Charge-offs for September 30, 2018
				90 Days		Three Months	Nine Months
			Outstanding	Past Due	Nonaccrual	Ended	Ended
By State:
	Illinois	$	395	-	2	-	-
	Ohio		439	2	3	-	-
	Florida		286	1	2	-	-
	Michigan		219	1	1	-	-
	Indiana		145	1	-	-	-
	North Carolina		91	-	1	-	-
	Kentucky		80	-	-	-	-
	All other states		302	2	1	-	1
Total		$	1,957	7	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 25% 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 determined 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 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 in its footprint and the volatility of collateral valuation 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 an LTV of 80% or less based upon appraisals at origination. For additional information on these loans, refer to Table 44 and Table 45. Of the total $6.2 billion of outstanding home equity loans:

90% reside within the Bancorp’s Midwest footprint of Ohio, Michigan, Kentucky, Indiana and Illinois as of September 30, 2019;

37% are in senior lien positions and 63% are in junior lien positions at September 30, 2019;

80% of non-delinquent borrowers made at least one payment greater than the minimum payment during the three months ended September 30, 2019; and

The portfolio had a weighted average refreshed FICO score of 745 at September 30, 2019.

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

42

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

The following table provides an analysis of home equity portfolio loans outstanding disaggregated based upon refreshed FICO score as of:
TABLE 43: Home Equity Portfolio Loans Outstanding by Refreshed FICO Score
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	% of Total			Outstanding	% of Total
Senior Liens:
FICO ≤ 659	$	223	4	%	$	218	4	%
FICO 660-719		326	5			318	5
FICO ≥ 720		1,762	28			1,791	28
Total senior liens		2,311	37			2,327	37
Junior Liens:
FICO ≤ 659		453	7			469	7
FICO 660-719		740	12			769	12
FICO ≥ 720		2,714	44			2,837	44
Total junior liens		3,907	63			4,075	63
Total	$	6,218	100	%	$	6,402	100	%

The Bancorp believes that home equity portfolio 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 portfolio loans outstanding in a senior and junior lien position by LTV at origination as of:
TABLE 44: Home Equity Portfolio Loans Outstanding by LTV at Origination
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	Weighted-Average LTV			Outstanding	Weighted-Average LTV
Senior Liens:
LTV ≤ 80%	$	1,996	53.9	%	$	2,022	54.5	%
LTV > 80%		315	88.8			305	88.8
Total senior liens		2,311	59.0			2,327	59.2
Junior Liens:
LTV ≤ 80%		2,280	66.9			2,367	67.2
LTV > 80%		1,627	89.8			1,708	90.1
Total junior liens		3,907	77.6			4,075	78.0
Total	$	6,218	70.4	%	$	6,402	70.9	%

The following tables provide an analysis of home equity portfolio loans by state with a combined LTV greater than 80%:
TABLE 45: Home Equity Portfolio Loans Outstanding with an LTV Greater than 80%
As of September 30, 2019 ($ in millions)							Net Charge-offs for September 30, 2019
					90 Days		Three Months	Nine Months
			Outstanding	Exposure	Past Due	Nonaccrual	Ended	Ended
By State:
	Ohio	$	1,138	2,390	-	8	-	2
	Michigan		255	439	-	4	-	-
	Illinois		176	291	-	5	-	1
	Indiana		111	203	-	3	-	-
	Kentucky		101	200	-	1	-	-
	Florida		53	81	-	2	-	-
	All other states		108	169	-	3	1	1
Total		$	1,942	3,773	-	26	1	4

TABLE 46: Home Equity Portfolio Loans Outstanding with an LTV Greater than 80%
As of September 30, 2018 ($ in millions)							Net Charge-offs for September 30, 2018
					90 Days		Three Months	Nine Months
			Outstanding	Exposure	Past Due	Nonaccrual	Ended	Ended
By State:
	Ohio	$	1,052	2,050	-	9	-	2
	Michigan		311	511	-	5	-	1
	Illinois		207	331	-	4	1	2
	Indiana		138	239	-	3	-	-
	Kentucky		123	233	-	2	-	-
	Florida		62	90	-	2	-	-
	All other states		130	196	-	3	-	-
Total		$	2,023	3,650	-	28	1	5

43

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

Indirect secured consumer portfolio

The indirect secured consumer portfolio is comprised of $10.1 billion of automobile loans and $882 million of indirect motorcycle, powersport, recreational vehicle and marine loans. The Bancorp’s indirect secured consumer portfolio balances have increased since December 31, 2018 due to the acquisition of MB Financial, Inc. and an increase in loan origination activity. Additionally, the concentration of lower FICO (≤690) origination balances remained within targeted credit risk tolerance during the nine months ended September 30, 2019. 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 indirect secured consumer portfolio loans outstanding disaggregated based upon FICO score at origination as of:
TABLE 47: Indirect Secured Consumer Portfolio Loans Outstanding by FICO Score at Origination
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	% of Total			Outstanding	% of Total
FICO ≤ 690	$	1,590	14	%	$	1,604	18	%
FICO > 690		9,436	86			7,372	82
Total	$	11,026	100	%	$	8,976	100	%

As of September 30, 2019, 95% of the indirect secured consumer loan portfolio is comprised of automobile loans, powersport loans and motorcycle loans. It is a common industry practice to advance on these types of loans an amount in excess of the collateral 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 remainder of the indirect secured consumer loan portfolio is comprised of marine and recreational vehicle loans. Credit policy limits the maximum advance rate on these to 100% of collateral value.

The following table provides an analysis of indirect secured consumer portfolio loans outstanding by LTV at origination as of:
TABLE 48: Indirect Secured Consumer Portfolio Loans Outstanding by LTV at Origination
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	Weighted-Average LTV			Outstanding	Weighted-Average LTV
LTV ≤ 100%	$	7,031	81.4	%	$	5,591	82.3	%
LTV > 100%		3,995	113.4			3,385	112.9
Total	$	11,026	93.3	%	$	8,976	94.2	%

The following table provides an analysis of the Bancorp’s indirect secured consumer portfolio loans with an LTV at origination greater than 100%:
TABLE 49: Indirect Secured Consumer Portfolio Loans Outstanding with an LTV Greater than 100%
As of ($ in millions)					Net Charge-offs for the
		Outstanding	90 Days Past Due and Accruing	Nonaccrual	Three Months Ended	Nine Months Ended
September 30, 2019	$	3,995	7	2	10	26
September 30, 2018		3,389	6	1	6	19

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 September 30, 2019 and December 31, 2018. At September 30, 2019 and December 31, 2018, 68% and 71%, respectively, of the outstanding balances were originated through branch-based relationships with the remainder coming from direct mail campaigns and online acquisitions.

The following table provides an analysis of credit card portfolio loans outstanding disaggregated based upon FICO score as of:
TABLE 50: Credit Card Portfolio Loans Outstanding by FICO Score at Origination
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	% of Total			Outstanding	% of Total
FICO ≤ 659	$	97	4	%	$	82	3	%
FICO 660-719		797	32			711	29
FICO ≥ 720		1,573	64			1,677	68
Total	$	2,467	100	%	$	2,470	100	%

44

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

Other consumer portfolio loans

The other consumer portfolio loans are 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. The Bancorp had $287 million in unfunded commitments associated with loans originated in connection with third-party financial technology companies as of September 30, 2019. The Bancorp closely monitors the credit performance of point-of-sale loans which, for the Bancorp, 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 51: Other Consumer Portfolio Loans Outstanding by Product Type at Origination
		September 30, 2019				December 31, 2018
($ in millions)		Outstanding	% of Total			Outstanding	% of Total
Unsecured	$	723	27	%	$	610	26	%
Other secured		547	21			510	22
Point-of-sale		1,387	52			1,222	52
Total	$	2,657	100	%	$	2,342	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 52. For further information on the Bancorp’s policies related to accounting for delinquent and nonperforming loans and leases, refer to the Nonaccrual Loans and Leases section of Note 1 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018.

Nonperforming assets were $532 million at September 30, 2019 compared to $411 million at December 31, 2018. At September 30, 2019, $13 million of nonaccrual loans were held for sale, compared to $16 million at December 31, 2018.

Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO were 0.47% as of September 30, 2019 compared to 0.41% as of December 31, 2018. Nonaccrual loans and leases secured by real estate were 27% of nonaccrual loans and leases as of September 30, 2019 compared to 34% as of December 31, 2018.

Portfolio commercial nonaccrual loans and leases were $349 million at September 30, 2019, an increase of $121 million from December 31, 2018. Portfolio consumer nonaccrual loans and leases were $133 million at September 30, 2019, an increase of $13 million from December 31, 2018. Refer to Tables 53 and 54 for rollforwards of the portfolio nonaccrual loans and leases.

OREO and other repossessed property was $37 million at September 30, 2019, compared to $47 million at December 31, 2018. The Bancorp recognized $2 million in losses on the transfer, sale or write-down of OREO properties for both the three months ended September 30, 2019 and 2018 and $5 million and $6 million in losses on the transfer, sale or write-down of OREO properties for the nine months ended September 30, 2019 and 2018, respectively.

For the three and nine months ended September 30, 2019, approximately $9 million and $26 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. For the three and nine months ended September 30, 2018 approximately $9 million and $24 million, respectively, of interest income would have been recognized. 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.

45

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

TABLE 52: Summary of Nonperforming Assets and Delinquent Loans
As of ($ in millions)			September 30, 2019		December 31, 2018
Nonaccrual portfolio loans and leases:
	Commercial and industrial loans	$	70		54
	Commercial mortgage loans		17		9
	Commercial leases		27		18
	Residential mortgage loans(a)		12		10
	Home equity		63		56
	Indirect secured consumer loans		1		-
	Other consumer loans		2		1
Nonaccrual portfolio restructured loans and leases:
	Commercial and industrial loans		223		139
	Commercial mortgage loans		9		4
	Commercial leases		3		4
	Residential mortgage loans(a)		10		12
	Home equity		17		13
	Indirect secured consumer loans		1		1
	Credit card		27		27
Total nonaccrual portfolio loans and leases(b)			482		348
OREO and other repossessed property			37		47
Total nonperforming portfolio assets			519		395
Nonaccrual restructured loans held for sale			13		16
Total nonperforming assets		$	532		411
Total portfolio loans and leases 90 days past due and still accruing
	Commercial and industrial loans	$	15		4
	Commercial mortgage loans		18		2
	Commercial construction loans		1		-
	Commercial leases		1		-
	Residential mortgage loans(a)		48		38
	Indirect secured consumer loans		10		12
	Credit card		38		37
	Other consumer loans		1		-
Total portfolio loans and leases 90 days past due and still accruing		$	132		93
Nonperforming portfolio assets as a percent of portfolio loans and leases and OREO			0.47	%	0.41
ALLL as a percent of nonperforming portfolio assets			221		279

(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 $274 as of September 30, 2019 and $195 as of December 31, 2018. The Bancorp recognized losses of $1 for both the three months ended September 30, 2019 and 2018 and $1 and $4 for the nine months ended September 30, 2019 and 2018, respectively, due to claim denials and curtailments associated with these insured or guaranteed loans.

(b)Includes $15 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at September 30, 2019 and December 31, 2018, respectively, of which $10 and $2 were restructured nonaccrual government insured commercial loans at September 30, 2019 and December 31, 2018, respectively.

The following tables provide a rollforward of portfolio nonaccrual loans and leases, by portfolio segment:
TABLE 53: Rollforward of Portfolio Nonaccrual Loans and Leases
				Residential
For the nine months ended September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Total
Balance, beginning of period		$	228	22	98	348
	Transfers to nonaccrual status		291	29	119	439
	Acquired nonaccrual loans		8	-	-	8
	Transfers to accrual status		-	(17)	(52)	(69)
	Loan paydowns/payoffs		(105)	(6)	(23)	(134)
	Transfers to OREO		(4)	(5)	(3)	(12)
	Charge-offs		(87)	(1)	(28)	(116)
	Draws/other extensions of credit		18	-	-	18
Balance, end of period		$	349	22	111	482

46

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

TABLE 54: Rollforward of Portfolio Nonaccrual Loans and Leases
				Residential
For the nine months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Total
Balance, beginning of period		$	306	30	101	437
	Transfers to nonaccrual status		230	27	106	363
	Transfers to accrual status		(3)	(18)	(49)	(70)
	Transfers to held for sale		(25)	-	-	(25)
	Loan paydowns/payoffs		(135)	(6)	(24)	(165)
	Transfers to OREO		(2)	(8)	(5)	(15)
	Charge-offs		(125)	(2)	(27)	(154)
	Draws/other extensions of credit		32	-	-	32
Balance, end of period		$	278	23	102	403

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 $958 million and $961 million at September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019, the percent of restructured residential mortgage loans, home equity loans and credit card loans that were past due 30 days or more from their modified terms were 27%, 13% and 39%, respectively.

The following tables summarize portfolio TDRs by loan type and delinquency status:
TABLE 55: Accruing and Nonaccruing Portfolio TDRs
Accruing
			30-89 Days	90 Days or
As of September 30, 2019 ($ in millions)		Current	Past Due	More Past Due	Nonaccruing	Total
Commercial loans(b)	$	34	-	-	235	269
Residential mortgage loans(a)		553	58	137	10	758
Home equity		180	9	-	17	206
Indirect secured consumer loans		4	-	-	1	5
Credit card		14	3	-	27	44
Total(c)	$	785	70	137	290	1,282

(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 September 30, 2019, these advances represented $326 of current loans, $46 of 30-89 days past due loans and $114 of 90 days or more past due loans.

(b)Excludes restructured nonaccrual loans held for sale.

(c)Upon completion of Fifth Third Bank’s conversion to a national charter, the Bancorp intends to change its accounting policy to conform to OCC guidance with regard to non-reaffirmed loans included in Chapter 7 bankruptcy filings to be accounted for as TDRs and collateral dependent loans regardless of payment history and capacity to pay in the future. As of September 30, 2019, the impact of the change in this accounting policy would have resulted in an increase to TDRs of approximately $124.

TABLE 56: Accruing and Nonaccruing Portfolio TDRs
Accruing
				30-89 Days	90 Days or
As of December 31, 2018 ($ in millions)			Current	Past Due	More Past Due	Nonaccruing	Total
Commercial loans(b)		$	60	-	-	147	207
Residential mortgage loans(a)			552	52	120	12	736
Home equity			203	12	-	13	228
Indirect secured consumer loans			5	-	-	1	6
Credit card			14	3	-	27	44
Total		$	834	67	120	200	1,221
(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, 2018, these advances represented $321 of current loans, $42 of 30-89 days past due loans and $101 of 90 days or more past due loans.
(b)	Excludes restructured nonaccrual loans held for sale.

47

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

Analysis of Net Loan Charge-offs

Net charge-offs were 36 bps and 30 bps of average portfolio loans and leases for the three months ended September 30, 2019 and 2018, respectively, and were 32 bps and 36 bps of average portfolio loans and leases for the nine months ended September 30, 2019 and 2018, respectively. Table 57 provides a summary of credit loss experience and net charge-offs as a percent of average portfolio loans and leases outstanding by loan category.

The ratio of commercial loan and lease net charge-offs to average portfolio commercial loans and leases was 18 bps and 14 bps during the three and nine months ended September 30, 2019, respectively, compared to 19 bps and 24 bps during the three and nine months ended September 30, 2018, respectively. The decrease for the three months ended September 30, 2019 was primarily due to an increase in average commercial loans as a result of the MB Financial, Inc. acquisition. The decrease for the nine months ended September 30, 2019 was primarily due to an increase in average commercial loans as a result of the MB Financial, Inc. acquisition as well as a decrease in net charge-offs on commercial and industrial loans of $35 million.

The ratio of consumer loan net charge-offs to average portfolio consumer loans was 68 bps and 65 bps during the three and nine months ended September 30, 2019, respectively, compared to 50 bps and 54 bps for the three and nine months ended September 30, 2018, respectively. The increases for both the three and nine months ended September 30, 2019 were primarily due to increases in net charge-offs on credit card of $12 million and $29 million, respectively, and increases in net charge-offs on other consumer loans of $7 million and $12 million.

48

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

TABLE 57: Summary of Credit Loss Experience
				For the three months ended			For the nine months ended
				September 30,			September 30,
($ in millions)				2019		2018	2019	2018
Losses charged-off:
	Commercial and industrial loans		$	(30)		(36)	(80)	(119)
	Commercial mortgage loans			-		-	-	(5)
	Commercial leases			(4)		-	(7)	-
	Residential mortgage loans			(2)		(3)	(5)	(10)
	Home equity			(5)		(6)	(16)	(17)
	Indirect secured consumer loans			(21)		(15)	(57)	(45)
	Credit card			(38)		(33)	(116)	(91)
	Other consumer loans(a)			(30)		(19)	(77)	(47)
Total losses charged-off			$	(130)		(112)	(358)	(334)
Recoveries of losses previously charged-off:
	Commercial and industrial loans		$	1		8	13	17
	Commercial mortgage loans			-		1	1	2
	Residential mortgage loans			1		1	4	4
	Home equity			3		3	8	8
	Indirect secured consumer loans			8		6	23	17
	Credit card			5		12	15	19
	Other consumer loans(a)			13		9	38	20
Total recoveries of losses previously charged-off			$	31		40	102	87
Net losses charged-off:
	Commercial and industrial loans		$	(29)		(28)	(67)	(102)
	Commercial mortgage loans			-		1	1	(3)
	Commercial leases			(4)		-	(7)	-
	Residential mortgage loans			(1)		(2)	(1)	(6)
	Home equity			(2)		(3)	(8)	(9)
	Indirect secured consumer loans			(13)		(9)	(34)	(28)
	Credit card			(33)		(21)	(101)	(72)
	Other consumer loans			(17)		(10)	(39)	(27)
Total net losses charged-off			$	(99)		(72)	(256)	(247)
Net losses charged-off as a percent of average portfolio loans and leases:
	Commercial and industrial loans			0.22	%	0.26	0.18	0.32
	Commercial mortgage loans			(0.01)		(0.03)	(0.02)	0.05
	Commercial leases			0.41		-	0.25	-
Total commercial loans and leases				0.18	%	0.19	0.14	0.24
	Residential mortgage loans			0.03		0.04	0.01	0.05
	Home equity			0.16		0.16	0.18	0.18
	Indirect secured consumer loans			0.50		0.41	0.45	0.41
	Credit card			5.41		3.53	5.59	4.29
	Other consumer loans			2.47		1.94	2.03	1.98
Total consumer loans				0.68	%	0.50	0.65	0.54
Total net losses charged-off as a percent of average portfolio loans and leases				0.36	%	0.30	0.32	0.36
(a)		For the three and nine months ended September 30, 2019, the Bancorp recorded $12 and $35, respectively, in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements. For the three and nine months ended September 30, 2018, the Bancorp recorded $8 and $18, respectively, in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

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, 2018.

During the three months ended September 30, 2019, 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 the provision for credit losses in the Condensed Consolidated Statements of Income.

49

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 portfolios that has not been restructured in a TDR is calculated 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 and leases is sensitive to the risk grades it assigns to these loans and leases. In the event that 10% of commercial loans and leases in each risk category would experience a downgrade of one risk category, the allowance for commercial loans and leases would increase by approximately $173 million at September 30, 2019. 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 $36 million at September 30, 2019. As several qualitative and quantitative factors are considered in determining the ALLL, these sensitivity analyses do not necessarily reflect the nature and extent of future changes in the ALLL. They are intended to provide insights into the impact of adverse changes to risk grades and estimated loss rates and do not imply any expectation of future deterioration in the risk ratings or loss rates. Given current processes employed by the Bancorp, management believes the risk grades and estimated loss rates currently assigned are appropriate.

TABLE 58: Changes in Allowance for Credit Losses
				For the three months ended		For the nine months ended
				September 30,		September 30,
($ in millions)				2019	2018	2019	2018
ALLL:
Balance, beginning of period			$	1,115	1,077	1,103	1,196
	Losses charged-off(a)			(130)	(112)	(358)	(334)
	Recoveries of losses previously charged-off(a)			31	40	102	87
	Provision for loan and lease losses			127	86	296	142
Balance, end of period			$	1,143	1,091	1,143	1,091
Reserve for unfunded commitments:
Balance, beginning of period			$	147	131	131	161
	Reserve for acquired unfunded commitments			-	-	8	-
	Provision for (benefit from) the reserve for unfunded commitments			7	(2)	15	(32)
Balance, end of period			$	154	129	154	129
(a)		For the three and nine months ended September 30, 2019, the Bancorp recorded $12 and $35, respectively, in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements. For the three and nine months ended September 30, 2018, the Bancorp recorded $8 and $18, respectively, in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

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 the 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 0.10% and 0.12% at September 30, 2019 and December 31, 2018, respectively. The unallocated allowance was 10% of the total allowance at both September 30, 2019 and December 31, 2018.

As shown in Table 59, the ALLL as a percent of portfolio loans and leases was 1.04% and 1.16% at September 30, 2019 and December 31, 2018, respectively. This decrease reflects the impact of the MB Financial, Inc. acquisition, which added approximately $13.4 billion in portfolio loans and leases at the acquisition date. Loans acquired by the Bancorp through a purchase business combination are recorded at fair value as of the acquisition date. The Bancorp does not carry over the acquired company’s ALLL, nor does the Bancorp add to its existing ALLL as part of purchase accounting. The ALLL was $1.1 billion at both September 30, 2019 and December 31, 2018.

50

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

TABLE 59: Attribution of Allowance for Loan and Lease Losses to Portfolio Loans and Leases
As of ($ in millions)			September 30, 2019		December 31, 2018
Attributed ALLL:
	Commercial and industrial loans	$	529		515
	Commercial mortgage loans		82		80
	Commercial construction loans		40		32
	Commercial leases		20		18
	Residential mortgage loans		75		81
	Home equity		40		36
	Indirect secured consumer loans		50		42
	Credit card		156		156
	Other consumer loans		37		33
	Unallocated		114		110
Total ALLL		$	1,143		1,103
Portfolio loans and leases:
	Commercial and industrial loans	$	50,768		44,340
	Commercial mortgage loans		10,822		6,974
	Commercial construction loans		5,281		4,657
	Commercial leases		3,495		3,600
	Residential mortgage loans		16,675		15,504
	Home equity		6,218		6,402
	Indirect secured consumer loans		11,026		8,976
	Credit card		2,467		2,470
	Other consumer loans		2,657		2,342
Total portfolio loans and leases		$	109,409		95,265
Attributed ALLL as a percent of respective portfolio loans and leases:
	Commercial and industrial loans		1.04	%	1.16
	Commercial mortgage loans		0.76		1.15
	Commercial construction loans		0.76		0.69
	Commercial leases		0.57		0.50
	Residential mortgage loans		0.45		0.52
	Home equity		0.64		0.56
	Indirect secured consumer loans		0.45		0.47
	Credit card		6.32		6.32
	Other consumer loans		1.39		1.41
	Unallocated (as a percent of total portfolio loans and leases)		0.10		0.12
Total ALLL as a percent of total portfolio loans and leases			1.04	%	1.16

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. The ASU is effective for the Bancorp on January 1, 2020.

Based on portfolio characteristics and economic conditions and expectations as of June 30, 2019, the Bancorp expects that the adoption of the ASU could result in an increase to the ALLL of 40% to 55% as compared to the ALLL as of June 30, 2019. The estimated increase is based on economic forecasts that the Bancorp considers reasonable and supportable for a period of three years followed by a reversion to long-term historical loss rates for the remaining contractual life (adjusted for expected prepayments) phased in over a period of two years. The estimated increase in the ALLL is primarily attributable to longer duration consumer loans.

The estimated increase includes the differences between the purchase accounting treatment of loans acquired in the MB Financial, Inc. acquisition and the treatment under the ASU. In the legacy portfolio, excluding the MB Financial, Inc. loans, the Bancorp expects the impact of the amended guidance to result in a 30% to 40% increase to ALLL.

The actual impact upon adoption may vary significantly from this estimate as it will be based on economic conditions, economic forecasts and the composition and credit quality of the Bancorp’s loan and lease portfolio as of the adoption date. As the Bancorp continues its implementation process and completes additional parallel runs throughout the remainder of 2019, refinements and updates to models and assumptions may also affect the estimated impact. Adoption will also have an impact on the provision for credit losses in periods after adoption, which could differ materially from historical trends. For additional information on ASU 2016-13, refer to Note 4 of the Notes to Condensed Consolidated Financial Statements.

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

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 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 manage 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.

For more information on the LIBOR transition, refer to the Overview section of MD&A.

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 estimated 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 from changes in market conditions and management strategies.

As of September 30, 2019, the Bancorp’s interest rate risk exposure is governed by a risk framework that utilizes the change in NII over 12-month and 24-month horizons assuming a 200 bps parallel ramped increase and a 100 bps parallel ramped decrease in interest rates. Additionally, the Bancorp routinely analyzes various potential and extreme scenarios including ramps, shocks and twists to assess where risks to net interest income persist or develop as changes in the balance sheet and market rates evolve.

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 $750 million of additional demand deposit balances run-off over 24 months above what is included in senior management’s baseline projections for each 100 bps increase in short-term market interest rates. Similarly, the Bancorp’s NII sensitivity modeling incorporates approximately $750 million of incremental 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 incremental 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 September 30, 2019, which is approximately 10 to 20 percentage points higher than the average beta that the Bancorp experienced in the most recent FRB tightening cycles from June 2004 to June 2006 and from December 2015 to December 2018. The Bancorp’s NII sensitivity modeling assumes a weighted-average falling rate interest-bearing deposit beta of 41% at September 30, 2019. In addition, the modeling assumes there is no lag between the timing of changes in market rates and the timing of deposit repricing despite such timing lags having occurred in prior rate cycles.

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.

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

The following table shows the Bancorp’s estimated NII sensitivity profile and ALCO policy limits as of:
TABLE 60: Estimated NII Sensitivity Profile and ALCO Policy Limits
		September 30, 2019					September 30, 2018
		% Change in NII (FTE)			ALCO Policy Limits		% Change in NII (FTE)		ALCO Policy Limits
		12		13-24	12	13-24	12	13-24	12	13-24
Change in Interest Rates (bps)		Months		Months	Months	Months	Months	Months	Months	Months
+	200 Ramp over 12 months	0.66	%	5.05	(4.00)	(6.00)	(0.15)	3.45	(4.00)	(6.00)
+	100 Ramp over 12 months	0.40		2.96	N/A	N/A	0.02	1.95	N/A	N/A
-	100 Ramp over 12 months	(3.11)		(8.74)	(8.00)	(12.00)	N/A	N/A	N/A	N/A
-	125 Ramp over 12 months	N/A		N/A	N/A	N/A	(3.72)	(9.82)	(8.00)	(12.00)
-	62.5 Ramp over 7 months	N/A		N/A	N/A	N/A	(2.64)	(4.92)	N/A	N/A

At September 30, 2019, the Bancorp’s NII sensitivity is near neutral in year one and would benefit in year two under the parallel rate ramp increases. The Bancorp’s NII would decline in both year one and year two under the parallel 100 bps ramp decrease in interest rates. The asymmetric 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 and managed-rate deposits. 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. However, proactive management of the securities and derivatives portfolios has reduced the residual risk to declining market rates. The changes in the estimated NII sensitivity profile as of September 30, 2019 compared to September 30, 2018 were primarily attributable to the acquisition of asset sensitive MB Financial, Inc., migration from high to low down beta interest-bearing deposits, and increased mix-shift into noninterest-bearing deposits. These items were partially offset by increased and repositioned outstanding taxable securities balances to enhance declining rate protection, a net increase in outstanding receive-fixed swaps against floating-rate commercial loans and the addition of forward starting floors against one-month LIBOR.

Tables 61 and 62 provide the Bancorp’s estimated NII profile at September 30, 2019 with changes to certain deposit balances and deposit repricing sensitivity (betas) assumptions.

The following table includes the Bancorp’s estimated NII sensitivity profile at September 30, 2019 with an immediate $1 billion decrease and an immediate $1 billion increase in demand deposit balances:
TABLE 61: Estimated NII Sensitivity Profile at September 30, 2019 with a $1 Billion Change in Demand Deposit Assumption
		% Change in NII (FTE)
		Immediate $1 Billion Balance Decrease			Immediate $1 Billion Balance Increase
		12		13-24	12	13-24
Change in Interest Rates (bps)		Months		Months	Months	Months
+	200 Ramp over 12 months	0.46	%	4.65	0.86	5.45
+	100 Ramp over 12 months	0.30		2.76	0.50	3.16
-	100 Ramp over 12 months	(3.21)		(8.94)	(3.01)	(8.54)
The following table includes the Bancorp’s estimated NII sensitivity profile at September 30, 2019 with a 25% increase and a 25% decrease to the corresponding deposit beta assumptions as of September 30, 2019. For example, the resulting weighted-average interest-bearing rising rate deposit betas included in this analysis were approximately 88% and 53%, respectively, as of September 30, 2019:
TABLE 62: Estimated NII Sensitivity Profile at September 30, 2019 with Deposit Beta Assumptions Changes
		% Change in NII (FTE)
		Betas 25% Higher			Betas 25% Lower
		12		13-24	12	13-24
Change in Interest Rates (bps)		Months		Months	Months	Months
+	200 Ramp over 12 months	(2.52)	%	(0.98)	3.83	11.09
+	100 Ramp over 12 months	(1.19)		(0.04)	1.98	5.95
-	100 Ramp over 12 months	(2.19)		(7.02)	(4.03)	(10.46)

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

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

simulation model, assumptions about the timing and variability of existing balance sheet cash flows are critical in the EVE analysis. Particularly important are assumptions driving loan and security prepayments and the expected balance attrition and pricing of transaction deposits.

The following table shows the Bancorp’s estimated EVE sensitivity profile as of:
TABLE 63: Estimated EVE Sensitivity Profile
		September 30, 2019			September 30, 2018
				ALCO		ALCO
Change in Interest Rates (bps)		% Change in EVE		Policy Limit	% Change in EVE	Policy Limit
+	200 Shock	(3.18)	%	(12.00)	(6.00)	(12.00)
+	100 Shock	(0.10)		N/A	(2.75)	N/A
-	100 Shock	(3.57)		N/A	0.54	N/A
-	175 Shock	(7.78)		(12.00)	N/A	N/A

The EVE sensitivity to the +200 bps rising-rate scenario is moderately negative at September 30, 2019 and moderately negative to a 100 bps decline in market rates. The changes in the estimated EVE sensitivity profile from September 30, 2018 were primarily related to the acquisition of MB Financial, Inc., the addition of receive-fixed swaps against floating-rate commercial loans and a decrease in long-term market interest rates. To a lesser degree, the impacts of the increases in outstanding taxable securities balances and migration from noninterest-bearing deposits to interest-bearing deposits with higher attrition assumptions were partially offset by overall deposit growth. The sensitivity to a -175 bps shock is primarily due to the current market rates limiting deposit repricing and the corresponding convexity profiles of mortgage based assets.

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 impacts on NII on an FTE basis and EVE of extreme changes in interest rates are modeled, wherein the Bancorp employs the use of yield curve shocks and environment-specific scenarios.

Use of Derivatives to Manage Interest Rate Risk

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

Tables 64 and 65 show all swap and floor positions that are utilized for purposes of managing the Bancorp’s exposures to the variability of interest rates. These positions are used to convert the contractual interest rate index of agreed-upon amounts of assets and liabilities (i.e., notional amounts) to another interest rate index or to hedge forecasted transactions for the variability in cash flows attributable to the contractually specified interest rate. The volume, maturity and mix of portfolio swaps change frequently as the Bancorp adjusts its broader interest rate risk management objectives and the balance sheet positions to be hedged. For further information including the notional amount and fair values of these derivatives, refer to Note 15 of the Notes to Condensed Consolidated Financial Statements.

The following tables present additional information about the interest rate swaps and floors used in Fifth Third’s asset and liability management activities:
TABLE 64: Weighted Average Maturity, Receive Rate and Pay Rate on Qualifying Hedging Instruments
			Notional	Fair	Maturity	Receive		LIBOR Index /
As of September 30, 2019 ($ in millions)			Amount	Value	(years)	Rate		Strike
Interest rate swaps – cash flow – receive-fixed		$	7,000	(71)	4.1	3.0	%	1 ML
Interest rate swaps – cash flow – receive-fixed – forward starting(a)			1,000	(1)	5.3	3.2		1 ML
Interest rate swaps – fair value – receive-fixed			2,705	456	7.1	3.3		1 ML / 3ML
	Total interest rate swaps	$	10,705	384
Interest rate floors – cash flow – forward starting(b)		$	3,000	156	5.2	N/A		1 ML / 2.25	%

(a)Forward starting swaps will become effective January 2, 2020.

(b)Forward starting floors will become effective December 16, 2019.

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

TABLE 65: Weighted Average Maturity, Receive Rate and Pay Rate on Qualifying Hedging Instruments
			Notional	Fair	Maturity	Receive		LIBOR Index /
As of December 31, 2018 ($ in millions)			Amount	Value	(years)	Rate		Strike
Interest rate swaps – cash flow – receive-fixed		$	5,000	(13)	4.6	3.0	%	1 ML
Interest rate swaps – cash flow – receive-fixed – forward starting(a)			3,000	1	5.7	3.1		1 ML
Interest rate swaps – fair value – receive-fixed			3,455	260	6.3	3.8		1 ML / 3ML
	Total interest rate swaps	$	11,455	248
Interest rate floors – cash flow – forward starting(b)		$	3,000	69	6.0	N/A		1 ML / 2.25	%

(a)Forward starting swaps will become effective January 2, 2020.

(b)Forward starting floors will become effective December 16, 2019.

Additionally, 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 derivative 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. 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 interest rate volatility and credit equivalent exposure on these contracts and counterparty credit approvals performed by independent risk management. For further information including the notional amount and fair values of these derivatives, refer to Note 15 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 September 30, 2019:

TABLE 66: Portfolio Loans and Leases Expected Cash Flows
($ in millions)		Less than 1 year	1-5 years	Over 5 years	Total
Commercial and industrial loans	$	30,055	20,030	683	50,768
Commercial mortgage loans		4,205	5,875	742	10,822
Commercial construction loans		2,732	2,421	128	5,281
Commercial leases		940	1,656	899	3,495
Total commercial loans and leases		37,932	29,982	2,452	70,366
Residential mortgage loans		3,514	7,574	5,587	16,675
Home equity		1,684	3,344	1,190	6,218
Indirect secured consumer loans		4,234	6,151	641	11,026
Credit card		493	1,974	-	2,467
Other consumer loans		1,338	1,144	175	2,657
Total consumer loans		11,263	20,187	7,593	39,043
Total portfolio loans and leases	$	49,195	50,169	10,045	109,409

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

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 September 30, 2019:

TABLE 67: Portfolio Loans and Leases Expected Cash Flows Occurring After 1 Year
		Interest Rate
($ in millions)		Fixed	Floating or Adjustable
Commercial and industrial loans	$	3,132	17,581
Commercial mortgage loans		1,520	5,097
Commercial construction loans		32	2,517
Commercial leases		2,555	-
Total commercial loans and leases		7,239	25,195
Residential mortgage loans		9,552	3,609
Home equity		492	4,042
Indirect secured consumer loans		6,771	21
Credit card		474	1,500
Other consumer loans		1,036	283
Total consumer loans		18,325	9,455
Total portfolio loans and leases	$	25,564	34,650

Residential Mortgage Servicing Rights and Interest Rate Risk

The fair value of the residential MSR portfolio was $910 million and $938 million at September 30, 2019 and December 31, 2018, respectively. The portfolio of servicing rights included $263 million of servicing rights acquired in the acquisition of MB Financial, Inc. on March 22, 2019. 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.

Mortgage rates decreased during both the three and nine months ended September 30, 2019 which caused modeled prepayment speeds to rise. The fair value of the MSR portfolio decreased $120 million and $294 million, respectively, due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $50 million and $122 million, respectively, due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs for the three and nine months ended September 30, 2019.

Mortgage rates increased during both the three and nine months ended September 30, 2018 which caused modeled prepayment speeds to slow. The fair value of the MSR portfolio increased $25 million and $103 million, respectively, due to changes to inputs to the valuation model including prepayment speeds and OAS spread assumptions and decreased $33 million and $95 million, respectively, due to the passage of time, including the impact of regularly scheduled repayments, paydowns and payoffs for the three and nine months ended September 30, 2018.

The Bancorp recognized net gains of $130 million and $313 million, respectively, on its non-qualifying hedging strategy for the three and nine months ended September 30, 2019 compared to net losses of $25 million and $107 million, respectively, during the three and nine months ended September 30, 2018. These amounts include net gains on securities related to the Bancorp’s non-qualifying hedging strategy which were zero and $5 million, respectively, during the three and nine months ended September 30, 2019 and net losses of $1 million and $18 million, respectively, during the three and nine months ended September 30, 2018. 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 14 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 September 30, 2019 and December 31, 2018 was $857 million and $948 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 independent risk management.

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

56

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

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 independent risk management.

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 19 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 is monitored and managed for both Fifth Third Bancorp and its subsidiaries. The Bancorp receives substantially all of its liquidity from dividends from its subsidiaries, primarily Fifth Third Bank. Subsidiary dividends are supplemented with term debt to enable the Bancorp to maintain sufficient liquidity to meet its cash obligations, including debt service and scheduled maturities, common and preferred dividends, unfunded commitments to subsidiaries and other planned capital actions in the form of share repurchases. Liquidity resources are more limited at the Bancorp, making its liquidity position more susceptible to market disruptions. Bancorp liquidity is assessed using a cash coverage horizon, ensuring the entity maintains sufficient liquidity to withstand a period of sustained market disruption while meeting its anticipated obligations over an extended stressed horizon.

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 66 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 $37.2 billion of securities in the Bancorp’s available-for-sale debt and other securities portfolio at September 30, 2019, $4.4 billion in principal and interest is expected to be received in the next 12 months and an additional $3.8 billion is expected to be received in the next 13 to 24 months. For further information on the Bancorp’s securities portfolio, refer to the Investment Securities subsection of the Balance Sheet Analysis section of MD&A.

Asset-driven liquidity is provided by the Bancorp’s ability to sell or securitize loans and leases. In order to reduce the exposure to interest rate fluctuations and to manage liquidity, the Bancorp has developed securitization and sale procedures for several types of interest-sensitive assets. A majority of the long-term, fixed-rate single-family residential mortgage loans underwritten according to FHLMC or FNMA guidelines are sold for cash upon origination. Additional assets such as certain other residential mortgage loans, certain commercial loans, home equity loans, automobile loans and other consumer loans are also capable of being securitized or sold. The Bancorp sold or securitized loans and leases totaling $2.6 billion and $7.0 billion during the three and nine months ended September 30, 2019, respectively, compared to $1.7 billion and $4.3 billion during the three and nine months ended September 30, 2018, respectively. For further information on the transfer of financial assets, refer to Note 14 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% of its average total assets for both the three and nine months ended September 30, 2019 and 2018. 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 certain 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 September 30, 2019, $5.6 billion of debt or other securities were available for issuance under the current Bancorp’s Board of Directors’ authorizations and the Bancorp is authorized to file any necessary registration statements with the SEC to permit ready access to the public securities markets; however, access to these markets may depend on market conditions. During the nine months ended September 30, 2019, the Bancorp issued and sold $1.5 billion of 3.65% senior fixed-rate notes. For further information on a subsequent event related to long-term

57

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

debt, refer to Note 27 of the Notes to Condensed Consolidated Financial Statements. Additionally, during the nine months ended September 30, 2019, the Bancorp issued in a registered public offering 10,000,000 depositary shares, representing 10,000 shares of 4.95% non-cumulative Series K perpetual preferred stock, for net proceeds of approximately $242 million.

As of September 30, 2019, the Bank’s global bank note program had a borrowing capacity of $25.0 billion, of which $19.3 billion was available for issuance. During the nine months ended September 30, 2019, the Bank issued and sold $300 million of senior floating-rate bank notes. Additionally, at September 30, 2019, the Bank had approximately $46.1 billion of borrowing capacity available through secured borrowing sources including the FHLB and FRB.

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million of the asset-backed notes were retained by the Bancorp, resulting in approximately $1.3 billion of outstanding notes included in long-term debt in the Condensed Consolidated Balance Sheets. The bankruptcy remote trust was deemed to be a VIE and the Bancorp, as the primary beneficiary, consolidated the VIE. The third-party holders of the asset-backed notes do not have recourse to the general assets of the Bancorp. Refer to Note 17 of the Notes to Condensed Consolidated Financial Statements for additional information.

Liquidity Coverage Ratio and Net Stable Funding Ratio

The Bancorp is subject to the Modified LCR requirement, which stipulates that BHCs with at least $50 billion but less than $250 billion 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 116% at September 30, 2019.

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.

On October 31, 2018, the Board of Governors of the FRB released a series of regulatory proposals to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Reform Act”). Among the proposals, the Board of Governors, joined by the Department of Treasury, OCC and the FDIC proposed to remove the application of the LCR regulations and the NSFR from certain BHCs that qualify under the proposal as “Category IV” institutions, primarily those BHCs with consolidated assets between $100 billion and $250 billion, including Fifth Third Bancorp. On October 10, 2019, the Board of Governors of the FRB announced it finalized the rules that tailor its regulations for banks to more closely match their risk profile. Fifth Third, as a Category IV institution, will no longer be subject to the LCR regulations and the NSFR regulations. The final rules are effective December 31, 2019.

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 68. 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.

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

TABLE 68: Agency Ratings
As of November 8, 2019	Moody's	Standard and Poor's	Fitch	DBRS
Fifth Third Bancorp:
Short-term borrowings	No rating	A-2	F1	R-1L
Senior debt	Baa1	BBB+	A-	A
Subordinated debt	Baa1	BBB	BBB+	AL
Fifth Third Bank:
Short-term borrowings	P-2	A-2	F1	R-1M
Short-term deposit	P-1	No rating	F1	No rating
Long-term deposit	Aa3	No rating	A	AH
Senior debt	A3	A-	A-	AH
Subordinated debt	Baa1	BBB+	BBB+	A
Rating Agency Outlook for Fifth Third Bancorp and Fifth Third Bank:	Stable	Stable	Stable	Stable

OPERATIONAL RISK MANAGEMENT

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

To control, monitor and govern operational risk, the Bancorp maintains an overall Risk Management Framework which comprises governance oversight, risk assessment, capital measurement, monitoring and reporting as well as a formal three lines of defense approach. ERM is responsible for prescribing the framework to the lines of business and corporate functions and providing 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 Joint Committee of the Board of Directors of Fifth Third Bancorp and Fifth Third Bank.

Fifth Third’s operational risk management and information security programs have been actively engaged to evaluate and oversee MB Financial, Inc.’s products and processes in the ongoing integration to ensure risks are understood, well managed and in alignment with the Bancorp’s risk appetite.

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

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

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, executive- and board-level governance and reporting routines, compliance-related policies, risk assessments, key risk indicators, issues tracking, regulatory compliance testing and monitoring and privacy. The Chief Compliance Officer also partners with the Financial Crimes Division to oversee anti-money laundering processes and partners with the Community and Economic Development team to oversee 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, regulatory concerns and other leading indicators of compliance risk. The Management Compliance Committee reports to the ERMC, which reports to the Risk and Compliance Joint Committee of the Board of Directors of Fifth Third Bancorp and Fifth Third Bank.

Fifth Third’s compliance risk management and anti-money laundering programs have been actively engaged to evaluate and oversee MB Financial, Inc.’s products and processes in the ongoing integration to ensure risks are understood, well managed and in alignment with the Bancorp’s risk appetite.

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 69: 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

The Bancorp is subject to a capital conservation buffer of 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 phased-in over a three-year period beginning on January 1, 2016 at 0.625%, increasing by an additional 0.625% each year, culminating on January 1, 2019 at the fully phased-in rate of 2.5%. 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 2016-13, referred to as the current expected credit loss model, on regulatory capital over a period of three years. The proposed rule was adopted as final effective April 1, 2019. The phase-in provisions of the final rule are optional for a banking organization that experiences a reduction in retained earnings due to CECL adoption as of the beginning of the fiscal year in which the banking organization adopts CECL. A banking organization that elects the phase-in provisions of the final rule for regulatory capital purposes must phase in 25% of the transitional amounts impacting regulatory capital in the first year of adoption of CECL, 50% in the second year, 75% in the third year, with full impact beginning in the fourth year. For additional information on ASU 2016-13, refer to Note 4 of the Notes to Condensed Consolidated Financial Statements.

On October 27, 2017 the federal banking regulators published a NPR, Regulatory Capital Simplification, for certain regulatory capital elements with the goal of reducing regulatory compliance burden. On July 22, 2019, the federal banking regulators published the Regulatory Capital Simplification final rule in the Federal Register. Under the final rule, non-advanced approach banks, such as the Bancorp, will be subject to simpler regulatory capital requirements for mortgage servicing assets, certain deferred tax assets arising from temporary differences and investments in the capital of unconsolidated financial institutions than those currently applied. The final rule increases the deduction threshold for mortgage servicing assets, certain deferred tax assets arising from temporary differences and investments in the

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

capital of unconsolidated financial institutions from 10% to 25% of CET1, but increases the risk-weighted assets percentage for the non-deducted elements from 100% to 250%. The final rule pertaining to these regulatory capital elements is effective on April 1, 2020.

The following table summarizes the Bancorp's capital ratios as of:
TABLE 70: Capital Ratios
($ in millions)			September 30, 2019		December 31, 2018
Quarterly average total Bancorp shareholders' equity as a percent of average assets			12.43	%	10.95
Tangible equity as a percent of tangible assets(a)(c)			9.29		9.63
Tangible common equity as a percent of tangible assets(a)(c)			8.21		8.71
Regulatory capital:
CET1 capital		$	13,568		12,534
Tier I capital			15,337		13,864
Total regulatory capital			19,413		17,723
Risk-weighted assets(b)			141,880		122,432
Regulatory capital ratios:
CET1 capital			9.56	%	10.24
Tier I risk-based capital			10.81		11.32
Total risk-based capital			13.68		14.48
Tier I leverage			9.36		9.72
(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 values are added together resulting in the Bancorp’s total risk-weighted assets.
(c)	Excludes AOCI.

Capital Planning

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. Furthermore, each BHC must 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 conditions.

During the first quarter of 2019, the FRB provided relief from certain regulatory requirements related to supervisory stress testing and company-run stress testing for the 2019 stress test cycle, including disclosure requirements. As a result, the Bancorp is not required to submit a capital plan or participate in CCAR 2019. The requirement for the Bancorp to submit an annual capital plan to the FRB has been extended until April 5, 2020. However, the Bancorp remains subject to the requirement to develop and maintain a capital plan, and the Board of Directors of the Bancorp must review and approve the capital plan. The FRB further clarified that relief from the 2019 stress test cycle should not be construed as relief from any regulatory capital requirements and that the Bancorp will be subject to the full CCAR 2020 stress test requirements.

In June of 2019, the Bancorp announced its capital distribution capacity of approximately $2 billion for the period of July 1, 2019 through June 30, 2020. This includes the ability to execute share repurchases up to $1.24 billion as well as increase quarterly common stock dividends up to $0.03 per share. These distributions will be governed under the FRB’s 2019 extended stress test process for BHCs with less than $250 billion of total consolidated assets.

Preferred Stock Offerings

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative perpetual Class B preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative perpetual preferred stock, Series C, in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

On September 17, 2019, the Bancorp issued in a registered public offering 10,000,000 depositary shares, representing 10,000 shares of 4.95% non-cumulative perpetual preferred stock, Series K, for net proceeds of approximately $242 million. Each preferred share has a $25,000 liquidation preference. Subject to any required regulatory approval, the Bancorp may redeem the Series K preferred shares at its option (i) in whole or in part, on any dividend payment date on or after September 30, 2024 and (ii) in whole, but not in part, at any time following a regulatory capital event. The Series K preferred shares are not convertible into Bancorp common shares or any other securities.

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

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

well as meet regulatory requirements and expectations. The Bancorp declared dividends per common share of $0.24 and $0.18 for the three months ended September 30, 2019 and 2018, respectively, and $0.70 and $0.52 for the nine months ended September 30, 2019 and 2018, respectively. Pursuant to the Bancorp’s Board-approved 2019 capital plan, during the third quarter of 2019, the Bancorp entered into and settled two accelerated share repurchase transactions in the amount of $100 million and $200 million as well as open market share repurchase transactions in the amount of $50 million. Refer to Note 18 of the Notes to Condensed Consolidated Financial Statements for additional information on share repurchase activity.

The following table summarizes the monthly share repurchase activity for the three months ended September 30, 2019:
TABLE 71: 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)
July 1, 2019 - July 31, 2019	1,498,911	$	29.92	1,316,015	98,683,985
August 1, 2019 - August 31, 2019	12,155,678		25.72	12,077,353	86,606,632
September 1, 2019 - September 30, 2019	26,212		27.72	-	86,606,632
Total	13,680,801	$	26.18	13,393,368	86,606,632

(a)Includes 287,433 shares repurchased during the third quarter of 2019 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 second quarter of 2019, 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.

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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, purchase obligations, capital commitments for private equity investments and capital expenditures. Refer to Note 19 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 19 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 13 of the Notes to Condensed Consolidated Financial Statements for additional information on non-consolidated VIEs.

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Quantitative and Qualitative Disclosures 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.

Effective March 22, 2019, a wholly-owned subsidiary of the Bancorp merged with and into MB Financial, Inc. with MB Financial, Inc. surviving the merger as a subsidiary of the Bancorp. MB Financial, Inc. subsequently merged with and into the Bancorp. The Bancorp is in the process of integrating the acquired operations into its overall financial reporting process and has extended its oversight and monitoring processes that support internal control over financial reporting to include the acquired operations. 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, other than as noted above, there has been no such change during the period covered by this report.

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Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Financial Statements and Notes (Item 1)

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
		As of
		September 30,	December 31,
($ in millions, except share data)		2019	2018
Assets
Cash and due from banks	$	3,261	2,681
Other short-term investments(a)		3,235	1,825
Available-for-sale debt and other securities(b)		37,178	32,830
Held-to-maturity securities(c)		18	18
Trading debt securities		297	287
Equity securities		459	452
Loans and leases held for sale(d)		1,223	607
Portfolio loans and leases(a)(e)		109,409	95,265
Allowance for loan and lease losses(a)		(1,143)	(1,103)
Portfolio loans and leases, net		108,266	94,162
Bank premises and equipment(f)		2,053	1,861
Operating lease equipment		869	518
Goodwill		4,290	2,478
Intangible assets		201	40
Servicing rights		910	938
Other assets(a)		8,819	7,372
Total Assets	$	171,079	146,069
Liabilities
Deposits:
Noninterest-bearing deposits	$	35,893	32,116
Interest-bearing deposits		89,454	76,719
Total deposits		125,347	108,835
Federal funds purchased		876	1,925
Other short-term borrowings		4,046	573
Accrued taxes, interest and expenses		2,507	1,562
Other liabilities(a)		2,425	2,498
Long-term debt(a)		14,474	14,426
Total Liabilities	$	149,675	129,819
Equity
Common stock(g)	$	2,051	2,051
Preferred stock(h)		1,770	1,331
Capital surplus		3,589	2,873
Retained earnings		17,786	16,578
Accumulated other comprehensive income (loss)		1,635	(112)
Treasury stock(g)		(5,427)	(6,471)
Total Bancorp shareholders’ equity	$	21,404	16,250
Noncontrolling interests		-	-
Total Equity		21,404	16,250
Total Liabilities and Equity	$	171,079	146,069

(a)Includes $76 and $40 of other short-term investments, $1,543 and $668 of indirect secured consumer loans, $(9) and $(4) of ALLL, $11 and $5 of other assets, $3 and $1 of other liabilities, and $1,438 and $606 of long-term debt from consolidated VIEs that are included in their respective captions above at September 30, 2019 and December 31, 2018, respectively. For further information refer to Note 13.

(b)Amortized cost of $35,662 and $33,128 at September 30, 2019 and December 31, 2018, respectively.

(c)Fair value of $18 and $18 at September 30, 2019 and December 31, 2018, respectively.

(d)Includes $1,136 and $537 of residential mortgage loans held for sale measured at fair value and $1 and $7 of commercial loans held for sale measured at fair value at September 30, 2019 and December 31, 2018, respectively.

(e)Includes $184 and $179 of residential mortgage loans measured at fair value at September 30, 2019 and December 31, 2018, respectively.

(f)Includes $87 and $42 of bank premises and equipment held for sale at September 30, 2019 and December 31, 2018, respectively.

(g)Common shares: Stated value $2.22 per share; authorized 2,000,000,000; outstanding at September 30, 2019 – 718,583,491 (excludes 205,309,090 treasury shares), December 31, 2018 – 646,630,857 (excludes 277,261,724 treasury shares).

(h)500,000 shares of no par value preferred stock were authorized at both September 30, 2019 and December 31, 2018. There were 436,000 and 446,000 unissued shares of undesignated no par value preferred stock at September 30, 2019 and December 31, 2018, respectively. Each issued share of no par value preferred stock has a liquidation preference of $25,000. 500,000 shares of no par value Class B preferred stock were authorized at September 30, 2019. There were 300,000 unissued shares of undesignated no par value Class B preferred stock at September 30, 2019. Each issued share of no par value Class B preferred stock has a liquidation preference of $1,000.

Refer to the Notes to Condensed Consolidated Financial Statements.

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Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions, except share data)		2019	2018	2019	2018
Interest Income
Interest and fees on loans and leases	$	1,320	1,040	3,799	2,975
Interest on securities		291	269	862	798
Interest on other short-term investments		14	6	33	17
Total interest income		1,625	1,315	4,694	3,790
Interest Expense
Interest on deposits		243	144	692	359
Interest on federal funds purchased		4	10	23	17
Interest on other short-term borrowings		8	6	23	25
Interest on long-term debt		128	112	387	330
Total interest expense		383	272	1,125	731
Net Interest Income		1,242	1,043	3,569	3,059
Provision for credit losses		134	84	310	111
Net Interest Income After Provision for Credit Losses		1,108	959	3,259	2,948
Noninterest Income
Corporate banking revenue		168	100	417	308
Service charges on deposits		143	139	417	414
Wealth and asset management revenue		124	114	358	335
Card and processing revenue		94	82	266	245
Mortgage banking net revenue		95	49	214	158
Other noninterest income		111	86	794	794
Securities gains (losses), net		5	(6)	30	(21)
Securities gains (losses), net - non-qualifying hedges on mortgage
servicing rights		-	(1)	5	(18)
Total noninterest income		740	563	2,501	2,215
Noninterest Expense
Salaries, wages and incentives		497	421	1,527	1,339
Employee benefits		87	82	316	270
Technology and communications		100	71	319	206
Net occupancy expense		84	70	248	219
Card and processing expense		33	31	98	91
Equipment expense		33	31	96	92
Other noninterest expense		325	266	895	767
Total noninterest expense		1,159	972	3,499	2,984
Income Before Income Taxes		689	550	2,261	2,179
Applicable income tax expense		140	114	483	442
Net Income		549	436	1,778	1,737
Less: Net income attributable to noncontrolling interests		-	-	-	-
Net Income Attributable to Bancorp		549	436	1,778	1,737
Dividends on preferred stock		19	15	60	52
Net Income Available to Common Shareholders	$	530	421	1,718	1,685
Earnings per share - basic	$	0.72	0.62	2.40	2.45
Earnings per share - diluted	$	0.71	0.61	2.37	2.41
Average common shares outstanding - basic		726,715,542	667,624,132	708,848,535	680,181,785
Average common shares outstanding - diluted		736,086,399	679,198,715	718,413,237	693,078,647

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		For the nine months ended
				September 30,		September 30,
($ in millions)				2019	2018	2019	2018
Net Income			$	549	436	1,778	1,737
Other Comprehensive Income (Loss), Net of Tax:
	Unrealized gains (losses) on available-for-sale debt securities:
		Unrealized holding gains (losses) arising during period		379	(207)	1,387	(834)
		Reclassification adjustment for net (gains) losses included in net income		(2)	-	(2)	7
	Unrealized gains (losses) on cash flow hedge derivatives:
		Unrealized holding gains (losses) arising during period		83	(19)	361	(24)
		Reclassification adjustment for net (gains) losses included in net income		(4)	2	(2)	2
	Defined benefit pension plans, net:
		Net actuarial loss arising during period		-	(2)	-	(2)
		Reclassification of amounts to net periodic benefit costs		1	3	3	5
Other comprehensive income (loss), net of tax				457	(223)	1,747	(846)
Comprehensive Income				1,006	213	3,525	891
	Less: Comprehensive income attributable to noncontrolling interests			-	-	-	-
Comprehensive Income Attributable to Bancorp			$	1,006	213	3,525	891

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
						Accumulated		Total
						Other		Bancorp	Non-
		Common	Preferred	Capital	Retained	Comprehensive	Treasury	Shareholders’	Controlling	Total
($ in millions, except per share data)		Stock	Stock	Surplus	Earnings	Income (Loss)	Stock	Equity	Interests	Equity
Balance at June 30, 2018	$	2,051	1,331	2,833	15,991	(552)	(5,574)	16,080	20	16,100
Net income					436			436		436
Other comprehensive loss, net of tax						(223)		(223)		(223)
Cash dividends declared:
Common stock(a)					(121)			(121)		(121)
Preferred stock(b)					(15)			(15)		(15)
Shares acquired for treasury							(500)	(500)		(500)
Impact of stock transactions under
stock compensation plans, net				23			1	24		24
Balance at September 30, 2018	$	2,051	1,331	2,856	16,291	(775)	(6,073)	15,681	20	15,701
Balance at June 30, 2019	$	2,051	1,331	3,572	17,431	1,178	(5,089)	20,474	197	20,671
Net income					549			549		549
Other comprehensive income, net of tax						457		457		457
Cash dividends declared:
Common stock(a)					(175)			(175)		(175)
Preferred stock(b)					(19)			(19)		(19)
Shares acquired for treasury							(350)	(350)		(350)
Issuance of preferred stock			242					242		242
Conversion of outstanding preferred
stock issued by a Bancorp subsidiary			197					197	(197)	-
Impact of stock transactions under
stock compensation plans, net				17			7	24		24
Other							5	5		5
Balance at September 30, 2019	$	2,051	1,770	3,589	17,786	1,635	(5,427)	21,404	-	21,404

(a)Dividends declared per common share were $0.24 and $0.18 for the three months ended September 30, 2019 and 2018, respectively.

(b)For both the three months ended September 30, 2019 and 2018, 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. For the three months ended September 30, 2019, dividends were $5.83 per preferred share for Perpetual Class B Preferred Stock, Series A and $15.00 per preferred share for Perpetual Preferred Stock, Series C, of MB Financial, Inc., previously a subsidiary of the Bancorp.

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
							Accumulated		Total
							Other		Bancorp	Non-
			Common	Preferred	Capital	Retained	Comprehensive	Treasury	Shareholders’	Controlling	Total
($ in millions, except per share data)			Stock	Stock	Surplus	Earnings	Income (Loss)	Stock	Equity	Interests	Equity
Balance at December 31, 2017		$	2,051	1,331	2,790	14,957	73	(5,002)	16,200	20	16,220
Impact of cumulative effect of change
in accounting principles						6	(2)		4		4
Balance at January 1, 2018		$	2,051	1,331	2,790	14,963	71	(5,002)	16,204	20	16,224
Net income						1,737			1,737		1,737
Other comprehensive loss, net of tax							(846)		(846)		(846)
Cash dividends declared:
Common stock(a)						(355)			(355)		(355)
Preferred stock(b)						(52)			(52)		(52)
Shares acquired for treasury					41			(1,094)	(1,053)		(1,053)
Impact of stock transactions under
stock compensation plans, net					25			21	46		46
Other						(2)		2	-		-
Balance at September 30, 2018		$	2,051	1,331	2,856	16,291	(775)	(6,073)	15,681	20	15,701
Balance at December 31, 2018		$	2,051	1,331	2,873	16,578	(112)	(6,471)	16,250	-	16,250
Impact of cumulative effect of change
in accounting principles(c)						10			10		10
Balance at January 1, 2019		$	2,051	1,331	2,873	16,588	(112)	(6,471)	16,260	-	16,260
Net income						1,778			1,778		1,778
Other comprehensive income, net of tax							1,747		1,747		1,747
Cash dividends declared:
Common stock(a)						(518)			(518)		(518)
Preferred stock(b)						(60)			(60)		(60)
Shares acquired for treasury								(1,463)	(1,463)		(1,463)
Issuance of preferred stock				242					242		242
Conversion of outstanding preferred
stock issued by a Bancorp subsidiary				197					197	(197)	-
Impact of MB Financial, Inc. acquisition					712			2,447	3,159	197	3,356
Impact of stock transactions under
stock compensation plans, net					5	1		53	59		59
Other					(1)	(3)		7	3		3
Balance at September 30, 2019		$	2,051	1,770	3,589	17,786	1,635	(5,427)	21,404	-	21,404
(a)	Dividends declared per common share were $0.70 and $0.52 for the nine months ended September 30, 2019 and 2018, respectively.
(b)	For both the nine months ended September 30, 2019 and 2018, dividends were $637.50 per preferred share for Perpetual Preferred Stock, Series H, $1,242.18 per preferred share for Perpetual Preferred Stock, Series I and $1,225.00 per preferred share for Perpetual Preferred Stock, Series J. For the nine months ended September 30, 2019, dividends were $5.83 per preferred share for Perpetual Class B Preferred Stock, Series A and $30.00 per preferred share for Perpetual Preferred Stock, Series C, of MB Financial, Inc., previously a subsidiary of the Bancorp.
(c)	Related to the adoption of ASU 2016-02 as of January 1, 2019. Refer to Note 4 for additional information.
Refer to the Notes to Condensed Consolidated Financial Statements.

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Fifth Third Bancorp and Subsidiaries

Condensed Consolidated Financial Statements and Notes (continued)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
			For the nine months ended September 30,
($ in millions)			2019	2018
Operating Activities
Net income		$	1,778	1,737
Adjustments to reconcile net income to net cash provided by operating activities:
	Provision for credit losses		310	111
	Depreciation, amortization and accretion		289	275
	Stock-based compensation expense		109	106
	Benefit from deferred income taxes		(197)	(15)
	Securities (gains) losses, net		(30)	23
	Securities (gains) losses, net - non-qualifying hedges on mortgage servicing rights		(5)	18
	MSR fair value adjustment		416	(8)
	Net gains on sales of loans and fair value adjustments on loans held for sale		(96)	(52)
	Net losses on disposition and impairment of bank premises and equipment		24	37
	Net (gains) losses on disposition and impairment of operating lease equipment		(2)	1
	Gain related to Vantiv, Inc.'s acquisition of Worldpay Group plc.		-	(414)
	Gain on sale of Worldpay, Inc. shares		(562)	(205)
Proceeds from sales of loans held for sale			5,457	4,017
Cash received under operating leases			111	-
Loans originated or purchased for sale, net of repayments			(6,032)	(4,222)
Dividends representing return on equity investments			40	9
Net change in:
	Trading debt and equity securities		66	131
	Other assets		(825)	355
	Accrued taxes, interest and expenses		(130)	3
	Other liabilities		(276)	20
Net Cash Provided by Operating Activities			445	1,927
Investing Activities
Proceeds from sales:
	Available-for-sale debt and other securities		8,424	10,867
	Loans and leases		221	211
	Bank premises and equipment		35	40
Proceeds from repayments / maturities:
	Available-for-sale debt and other securities		1,620	1,450
	Held-to-maturity securities		3	6
Purchases:
	Available-for-sale debt and other securities		(11,204)	(13,322)
	Bank premises and equipment		(180)	(145)
	MSRs		(26)	(82)
Proceeds from settlement of BOLI			21	11
Proceeds from sales and dividends representing return of equity investments			1,028	601
Net cash received (paid) on acquisitions			1,210	(20)
Net change in:
	Federal funds sold		35	-
	Other short-term investments		(1,357)	1,324
	Loans and leases		(1,132)	(1,882)
	Operating lease equipment		(25)	40
Net Cash Used in Investing Activities			(1,327)	(901)
Financing Activities
Net change in:
	Deposits		2,027	1,180
	Federal funds purchased		(1,049)	2,142
	Other short-term borrowings		3,206	(2,898)
Dividends paid on common stock			(486)	(347)
Dividends paid on preferred stock			(60)	(60)
Proceeds from issuance of long-term debt			3,103	2,438
Repayment of long-term debt			(4,012)	(2,774)
Repurchase of treasury stock and related forward contract			(1,463)	(1,053)
Issuance of preferred stock			242	-
Other			(46)	(68)
Net Cash Provided by (Used in) Financing Activities			1,462	(1,440)
Increase (Decrease) in Cash and Due from Banks			580	(414)
Cash and Due from Banks at Beginning of Period			2,681	2,514
Cash and Due from Banks at End of Period		$	3,261	2,100

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. The investments in those entities in which the Bancorp does not have the ability to exercise significant influence are generally carried at fair value unless the investment does not have a readily determinable fair value. The Bancorp accounts for equity investments without a readily determinable fair value using the measurement alternative to fair value, representing the cost of the investment minus impairment recorded, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. 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 and changes in equity for the three and nine months ended September 30, 2019 and 2018 and the cash flows for the nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2018 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. Certain prior period data has been reclassified to conform to current period presentation. Specifically, Fifth Third reclassified the provision for the reserve for unfunded commitments from other noninterest expense to the provision for credit losses.

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 nine months ended September 30:
($ in millions)		2019	2018
Cash Payments:
Interest	$	1,166	760
Income taxes		524	297
Transfers:
Portfolio loans to loans held for sale		191	212
Loans held for sale to portfolio loans		30	83
Portfolio loans to OREO		23	28
Supplemental Disclosures:
Conversion of outstanding preferred stock issued by a Bancorp subsidiary		197	-
Additions to right-of-use assets under operating leases		43	-
Additions to right-of-use assets under finance leases		13	-
Right-of-use assets recognized at adoption of ASU 2016-02		509	-

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Notes to Condensed Consolidated Financial Statements (unaudited)

3. Business Combination

On March 22, 2019, Fifth Third Bancorp completed its acquisition of MB Financial, Inc. in a stock and cash transaction valued at approximately $3.6 billion. MB Financial, Inc. was headquartered in Chicago, Illinois with reported assets of approximately $20 billion and 86 branches (91 locations) as of December 31, 2018 and was the holding company of MB Financial Bank, N.A. The acquisition resulted in a combined company with a larger Chicago market presence and core deposit funding base while also building scale in a strategically important market.

Under the terms of the agreement, the Bancorp acquired 100% of the common stock of MB Financial, Inc. In exchange, common shareholders of MB Financial, Inc. received 1.45 shares of Fifth Third Bancorp common stock and $5.54 in cash for each share of MB Financial, Inc. common stock, for a total value per share of $42.49, based on the $25.48 closing price of Fifth Third Bancorp’s common stock on March 21, 2019. Upon closing of the transaction, MB Financial, Inc. became a subsidiary of the Bancorp. However, MB Financial, Inc.’s 6.00% non-cumulative Series C perpetual preferred stock with a fair value of $197 million remained outstanding and was recognized as a noncontrolling interest on the Condensed Consolidated Balance Sheets. Through its ownership of all of the common stock, the Bancorp controlled 95% of the voting equity interests in MB Financial, Inc. with the remainder attributable to the preferred shareholders’ noncontrolling interest.

On June 24, 2019, MB Financial, Inc. entered into an Agreement and Plan of Merger with the Bancorp to provide for the merger of MB Financial, Inc. with and into the Bancorp, with the Bancorp as the surviving corporation. A special meeting of MB Financial, Inc.’s stockholders was held on August 23, 2019 at which the holders of MB Financial, Inc.’s common stock and preferred stock, voting together as a single class, approved the merger. In the merger, each outstanding share of MB Financial, Inc.’s preferred stock was converted into the right to receive one share of a newly created series of preferred stock of the Bancorp having substantially the same terms as the MB Financial, Inc. preferred stock.

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative Class B perpetual preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative Series C perpetual preferred stock in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

The acquisition of MB Financial, Inc. constituted a business combination and was accounted for under the acquisition method of accounting. Accordingly, the assets acquired, liabilities assumed and noncontrolling interest recognized were recorded at their estimated fair values as of the acquisition date. These fair value estimates are considered preliminary as of September 30, 2019. Fair value estimates, including loans and leases, intangible assets, deposits and goodwill, are subject to change for up to one year after the acquisition date as additional information becomes available.

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Notes to Condensed Consolidated Financial Statements (unaudited)

The following table reflects consideration paid and the noncontrolling interest recognized for MB Financial, Inc.’s net assets and the amounts of acquired identifiable assets and liabilities assumed at their estimated fair value as of the acquisition date:
($ in millions)
Consideration paid
Cash payments					$	469
Fair value of common stock issued						3,121
Stock-based awards						38
Dividend receivable from MB Financial, Inc.						(20)
Total consideration paid					$	3,608
Fair value of noncontrolling interest in acquiree					$	197
Net Identifiable Assets Acquired, at Fair Value:
Assets
Cash and due from banks		$	1,679
Federal funds sold			35
Other short-term investments			53
Available-for-sale debt and other securities			832
Held-to-maturity securities			4
Equity securities			51
Loans and leases held for sale			12
Portfolio loans and leases			13,409	(a)
Bank premises and equipment			250	(a)
Operating lease equipment			416	(a)
Intangible assets			195	(a)
Servicing rights			263
Other assets			723	(a)
Total assets acquired		$	17,922
Liabilities
Deposits		$	14,489
Other short-term borrowings			267	(a)
Accrued taxes, interest and expenses			260	(a)
Other liabilities			196	(a)
Long-term debt			720	(a)
Total liabilities assumed		$	15,932
Net identifiable assets acquired						1,990
Goodwill					$	1,815
(a)	Fair values have been updated from the estimates reported in the March 31, 2019 Form 10-Q.

In connection with the acquisition, the Bancorp recognized approximately $1.8 billion of goodwill, of which $15 million relates to 15-year tax deductible goodwill from MB Financial, Inc.’s prior acquisitions. See Note 11 for further information on goodwill recognized and Note 12 for further information on intangible assets acquired in the acquisition of MB Financial, Inc.

The following is a description of the methods used to determine the estimated fair values of significant assets and liabilities presented above.

Cash and due from banks and other short-term investments

For financial instruments with a short-term or no stated maturity, prevailing market rates and limited credit risk, carrying amounts approximate fair value.

Available-for-sale debt and other securities, held-to-maturity securities and equity securities

Fair values for securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or DCF methodologies.

Loans and leases held for sale and portfolio loans and leases

Fair values for loans were based on a DCF methodology that considered factors including the type of loan and related collateral, fixed or variable interest rate, remaining term, credit quality ratings or scores, amortization status and current discount rates. Loans with similar characteristics were pooled together when applying various valuation techniques. The discount rates used for loans were based on an evaluation of current market rates for new originations of comparable loans and a market participant’s required rate of return to purchase similar assets, including adjustments for liquidity and credit quality when necessary. For PCI loans, the DCF methodology was based on the Bancorp’s estimate of contractual cash flows expected to be collected.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Bank premises and equipment

Fair values for bank premises and equipment were generally based on appraisals of the property values.

Operating lease equipment

Fair values for operating lease equipment were generally developed using the cost approach. The seller’s historical cost was adjusted by cost trend indices relevant to the asset type and vintage to arrive at a current reproduction cost. This reproduction cost was then adjusted for deterioration based on the age and typical life of each class of assets. Residual values were estimated based on analysis of the seller’s historical trends of residual value realization by asset class.

Intangible assets

The core deposit intangible asset represents the value of relationships with deposit customers. The fair value was estimated based on a DCF methodology that considered expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds and the interest costs associated with customer deposits. The core deposit intangible is being amortized on an accelerated basis over its estimated useful life.

Servicing rights

Fair values for servicing rights were estimated using internal option-adjusted spread models with certain unobservable inputs, primarily prepayment speed assumptions, option-adjusted spread and weighted-average lives.

Other assets

Fair values for ROU assets associated with real estate operating leases were based on current market rental rates for similar properties in the same area, discounted at the Bancorp’s incremental borrowing rates as of the acquisition date. Estimates of current market rental rates were generally based on third-party market rent studies performed for each significant property.

Deposits

The fair values for time deposits were estimated using a DCF methodology whereby the contractual remaining cash flows were discounted using market rates currently being offered for time deposits of similar maturities. For transactional deposits, carrying amounts approximate fair value.

Long-term debt

The fair values of long-term debt instruments were estimated based on quoted market prices for identical or similar instruments if available, or by using DCF analyses based on current incremental borrowing rates for similar types of instruments.

Merger-Related Expenses

Direct merger-related expenses related to the acquisition of MB Financial, Inc. were expensed as incurred by the Bancorp and amounted to $28 million and $213 million for the three and nine months ended September 30, 2019, respectively.

The following table provides a summary of merger-related expenses recorded in noninterest expense:

		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Salaries, wages and incentives	$	14	-	85	-
Employee benefits		-	-	3	-
Technology and communications		8	-	68	-
Net occupancy expense		3	-	10	-
Card and processing expense		-	-	1	-
Equipment expense		-	-	1	-
Other noninterest expense		3	1	45	3
Total	$	28	1	213	3

Pro Forma Information

The following table presents unaudited pro forma information as if the acquisition of MB Financial, Inc. had occurred on January 1, 2018. This pro forma information combines the historical condensed consolidated results of operations of Fifth Third Bancorp and MB Financial, Inc. after giving effect to certain adjustments, including purchase accounting fair value adjustments, amortization of intangibles, stock-based compensation expense and acquisition costs, as well as the related income tax effects of those adjustments. The pro forma results also reflect reclassification adjustments to noninterest income and noninterest expense to conform MB Financial, Inc.’s presentation of operating lease income and the related depreciation expense with the Bancorp's presentation. Direct costs associated with the acquisition are included in pro forma earnings as of January 1, 2018.

The pro forma information does not necessarily reflect the results of operations that would have occurred had Fifth Third Bancorp acquired MB Financial, Inc. on January 1, 2018. Furthermore, cost savings and other business synergies related to the acquisition are not reflected in the unaudited pro forma amounts.

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Notes to Condensed Consolidated Financial Statements (unaudited)

		Unaudited Pro Forma Information		Unaudited Pro Forma Information
		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)		2019	2018	2019	2018
Net interest income	$	1,222	1,214	3,692	3,583
Noninterest income		738	661	2,600	2,514
Net income attributable to common shareholders		513	469	1,824	1,743

Acquired Loans and Leases

Purchased loans are evaluated for evidence of credit deterioration at acquisition and recorded at their initial fair value. Generally, the fair value discount or premium on acquired loans and leases is amortized over the contractual life of the loan as an adjustment to yield. For loans acquired with evidence of credit impairment (PCI loans), the Bancorp determined at the acquisition date the excess of the loan’s contractually required payments over all cash flows expected to be collected as an amount that should not be accreted into interest income (nonaccretable difference). The remaining amount representing the difference in the expected cash flows of acquired loans and the initial investment in the acquired loans is accreted into interest income over the remaining life of the loan or pool of loans (accretable yield). This method of accounting for loans acquired with credit impairment does not apply to loans carried at fair value, residential mortgage loans held for sale and loans under revolving credit agreements. 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, 2018 for additional information on the accounting for PCI loans. The Bancorp has elected to account for loans acquired from MB Financial, Inc., which were not considered impaired but exhibited evidence of credit deterioration since origination, in the same manner as PCI loans.

The following table reflects the contractually required payments receivable, cash flows expected to be collected and estimated fair value of loans identified as PCI loans on the acquisition date of MB Financial, Inc. These fair value estimates are considered preliminary as of September 30, 2019.

($ in millions)		March 22, 2019
Contractually required payments including interest	$	1,139
Less: Nonaccretable difference		81
Cash flows expected to be collected		1,058
Less: Accretable yield		202
Fair value of loans acquired	$	856

A summary of activity related to accretable yield is as follows:
($ in millions)		Accretable Yield
Balance as of December 31, 2018	$	-
Additions		202
Accretion		(30)
Reclassifications (to) from nonaccretable difference		(2)
Balance as of September 30, 2019	$	170

As of September 30, 2019, contractual balances on the purchased PCI loans and leases totaled $872 million with a corresponding carry value of $637 million.

At the MB Financial, Inc. acquisition date, contractual balances on the purchased non-PCI loans and leases totaled $12.7 billion with a corresponding fair value of $12.5 billion.

Bank Merger

On May 3, 2019 MB Financial Bank, N.A. merged with and into Fifth Third Bank, with Fifth Third Bank as the surviving entity. Fifth Third Bank is a subsidiary of Fifth Third Bancorp.

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Notes to Condensed Consolidated Financial Statements (unaudited)

4. Accounting and Reporting Developments

Standards Adopted in 2019

The Bancorp adopted the following new accounting standards effective January 1, 2019:

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 12 months. Leases are 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. Subsequent to the issuance of ASU 2016-02, the FASB has issued additional guidance to clarify certain implementation issues and provide transition relief in certain circumstances including ASUs 2018-01 (Land Easement Practical Expedient, issued in January 2018), 2018-10 (Codification Improvements, issued in July 2018), 2018-11 (Targeted Improvements, also issued in July 2018), 2018-20 (Narrow-Scope Improvements for Lessors, issued in December 2018) and 2019-01 (Codification Improvements, issued in March 2019). These subsequent amendments do not change the core principles in the original ASU, but do provide an additional optional transition method which is to initially apply the amended guidance at the adoption date and record a cumulative-effect adjustment to opening retained earnings without retrospective application to prior comparative periods. Entities not electing to use this optional transition method must apply the amended guidance on a modified retrospective basis to all periods presented.

The Bancorp adopted the amended guidance on January 1, 2019, using the optional transition method. The Bancorp initially applied the new standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date without restating the prior comparative periods. As part of the adoption, the Bancorp has elected certain accounting policies as allowed under the ASU. The Bancorp elected the practical expedients package provided within the new standard, which among other things, permitted the Bancorp not to reassess the lease classification of existing leases. The Bancorp also elected not to use hindsight in evaluating the lease term. Additionally, the Bancorp elected to not recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets and elected a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and instead, to account for them as a single lease component. Upon adoption on January 1, 2019, the Bancorp recognized additional ROU assets and lease liabilities of $509 million related to its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption and also recorded a cumulative-effect adjustment to retained earnings of $10 million for the remaining deferred gains on sale-leaseback transactions that occurred prior to January 1, 2019. From a lessor perspective, adoption of the amended guidance did not have a material impact on the Bancorp’s Condensed Consolidated Financial Statements at transition. The required disclosures are included in Note 6, Note 9 and Note 10.

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 Bancorp adopted the amended guidance on January 1, 2019 on a modified retrospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of September 30, 2019:

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, but the Bancorp will adopt on the mandatory effective date. The amended

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Notes to Condensed Consolidated Financial Statements (unaudited)

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.

The FASB has established a Transition Resource Group for Credit Losses to evaluate implementation issues arising from the amended guidance and make recommendations to the FASB on which issues may warrant the issuance of additional clarifying guidance. The Bancorp continues to monitor the issues discussed by the Transition Resource Group and the recommended amendments proposed to the FASB as part of its implementation analysis. As a result of continued deliberation and recommendations from the Transition Resource Group, the FASB has issued additional ASUs containing clarifying guidance, transition relief provisions and minor updates to the original ASU. These include ASU 2018-19 (issued in November 2018), ASU 2019-04 (issued in April 2019) and ASU 2019-05 (issued in May 2019). The Bancorp has considered the guidance in these ASUs as part of its ongoing implementation analysis.

The Bancorp’s implementation process includes data sourcing and validation, loss model development, development of governance processes over economic forecasting, development of a qualitative framework, evaluation of technical accounting topics, updates to allowance policies and methodology documentation, development of reporting processes and related internal controls and overall operational readiness for adoption of the amended guidance, which will continue throughout 2019, including parallel runs for the expected credit loss accounting model alongside the Bancorp’s current ALLL process. The Bancorp is in the process of validating and implementing models used to estimate credit losses under the amended guidance and expects to complete the validation process for its loan models during 2019.

Based on the composition and credit quality of its investment securities portfolio as of September 30, 2019, the Bancorp does not currently expect adoption of the amendments related to investment securities to have a material impact on the Condensed Consolidated Financial Statements.

The Bancorp provides updates to senior leadership, the Audit Committee and the Risk and Compliance Committee of the Board of Directors. These communications provide an update on the status of the implementation project plan and any identified risks.

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 2018-13 – Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13 which modifies the disclosure requirements for fair value measurements. The amendments remove the requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation processes for Level 3 fair value measurements. The amendments also add new disclosure requirements regarding unrealized gains and losses from recurring Level 3 fair value measurements and the significant unobservable inputs used to develop Level 3 fair value measurements. The amended guidance is effective for the Bancorp on January 1, 2020 with early adoption permitted. Certain of the amendments are to be applied prospectively while others are to be applied retrospectively. Also, early adoption of the removed and modified disclosure requirements is permitted before adoption of the newly added requirements. The Bancorp plans to adopt the amended guidance effective January 1, 2020 and will conform to the amended disclosure requirements in the Bancorp’s first quarter of 2020 Form 10-Q.

ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued ASU 2018-15 which provides guidance on the accounting for implementation, setup, and other upfront costs incurred by customers in cloud computing arrangements that are accounted for as service contracts. The amendments require that implementation costs be evaluated for capitalization using the framework applicable to costs incurred to develop or obtain internal-use software. Those capitalized costs are to be expensed over the term of the cloud computing arrangement and presented in the same financial statement line items as the service contract and its associated fees. The amended guidance is effective for the Bancorp on January 1, 2020, with early adoption permitted, and may be applied either retrospectively or prospectively. The Bancorp plans to adopt the amended guidance on January 1, 2020 and to apply the amendments prospectively.

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Notes to Condensed Consolidated Financial Statements (unaudited)

5. 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
September 30, 2019 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	74	1	-	75
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,185	510	(1)	15,694
		Agency commercial mortgage-backed securities		14,451	826	(1)	15,276
		Non-agency commercial mortgage-backed securities		3,246	154	-	3,400
	Asset-backed securities and other debt securities			2,129	37	(10)	2,156
	Other securities(a)			575	-	-	575
Total available-for-sale debt and other securities			$	35,662	1,528	(12)	37,178
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18

(a)Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $96, $477 and $2, respectively, at September 30, 2019, that are carried at cost.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2018 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	98	-	(1)	97
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		16,403	86	(242)	16,247
		Agency commercial mortgage-backed securities		10,770	44	(164)	10,650
		Non-agency commercial mortgage-backed securities		3,305	9	(47)	3,267
	Asset-backed securities and other debt securities			1,998	27	(10)	2,015
	Other securities(a)			552	-	-	552
Total available-for-sale debt and other securities			$	33,128	166	(464)	32,830
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18
(a)	Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $184, $366 and $2, respectively, at December 31, 2018, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:
		September 30,	December 31,
($ in millions)		2019	2018
Trading debt securities	$	297	287
Equity securities		459	452

The Bancorp uses investment securities as a means of managing interest rate risk, providing collateral for pledging purposes and for liquidity to satisfy regulatory requirements. As part of managing interest rate risk, the Bancorp acquires securities as a component of its MSR non-qualifying hedging strategy, with net gains or losses recorded in securities gains (losses), net – non-qualifying hedges on MSRs in the Condensed Consolidated Statements of Income.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents securities gains (losses) recognized in the Condensed Consolidated Statements of Income:
			For the three months ended		For the nine months ended
			September 30,		September 30,
($ in millions)			2019	2018	2019	2018
Available-for-sale debt and other securities:
	Realized gains	$	3	4	51	61
	Realized losses		-	(4)	(47)	(69)
	OTTI		-	-	(1)	-
Net realized gains (losses) on available-for sale debt and other securities		$	3	-	3	(8)
Total trading debt securities gains (losses)		$	-	(1)	5	(18)
Total equity securities gains (losses)(a)		$	2	(6)	27	(13)
Total gains (losses) recognized in income from available-for-sale debt and other
	securities, trading debt securities and equity securities(b)	$	5	(7)	35	(39)

(a)Includes an immaterial net unrealized gain and a net unrealized gain of $23 for the three and nine months ended September 30, 2019, respectively, and net unrealized losses of $6 and $12 for the three and nine months ended September 30, 2018, respectively.

(b)Excludes an insignificant amount of securities gains (losses) included in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income related to securities held by FTS to facilitate the timely execution of customer transactions.

At September 30, 2019 and December 31, 2018, investment securities with a fair value of $7.4 billion and $7.0 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 September 30, 2019 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	$	197	207	2	2
	1-5 years		13,391	13,817	14	14
	5-10 years		16,568	17,390	-	-
	Over 10 years		4,931	5,189	2	2
Other securities			575	575	-	-
Total		$	35,662	37,178	18	18

(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
September 30, 2019
Agency residential mortgage-backed securities	$	121	(1)	4	-	125	(1)
Agency commercial mortgage-backed securities		134	(1)	-	-	134	(1)
Asset-backed securities and other debt securities		453	(6)	196	(4)	649	(10)
Total	$	708	(8)	200	(4)	908	(12)
December 31, 2018
U.S. Treasury and federal agency securities	$	-	-	97	(1)	97	(1)
Agency residential mortgage-backed securities		3,235	(21)	7,892	(221)	11,127	(242)
Agency commercial mortgage-backed securities		2,022	(37)	5,260	(127)	7,282	(164)
Non-agency commercial mortgage-backed securities		884	(6)	1,621	(41)	2,505	(47)
Asset-backed securities and other debt securities		314	(6)	241	(4)	555	(10)
Total	$	6,455	(70)	15,111	(394)	21,566	(464)

At both September 30, 2019 and December 31, 2018, an immaterial amount of unrealized losses in the available-for-sale debt and other securities portfolio were represented by non-rated securities.

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Notes to Condensed Consolidated Financial Statements (unaudited)

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. 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 acquired indirect motorcycle, powersport, recreational vehicle and marine loans in the acquisition of MB Financial, Inc. These loans are included in addition to automobile loans in the line item “indirect secured consumer loans”. 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 7.

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:
			September 30,	December 31,
($ in millions)			2019	2018
Loans and leases held for sale:
	Commercial and industrial loans	$	86	67
	Commercial mortgage loans		-	3
	Residential mortgage loans		1,137	537
Total loans and leases held for sale		$	1,223	607
Portfolio loans and leases:
	Commercial and industrial loans	$	50,768	44,340
	Commercial mortgage loans		10,822	6,974
	Commercial construction loans		5,281	4,657
	Commercial leases		3,495	3,600
Total commercial loans and leases		$	70,366	59,571
	Residential mortgage loans	$	16,675	15,504
	Home equity		6,218	6,402
	Indirect secured consumer loans		11,026	8,976
	Credit card		2,467	2,470
	Other consumer loans		2,657	2,342
Total consumer loans		$	39,043	35,694
Total portfolio loans and leases		$	109,409	95,265

Portfolio loans and leases are recorded net of unearned income, which totaled $404 million as of September 30, 2019 and $479 million as of December 31, 2018. Additionally, portfolio loans and leases, excluding PCI loans, 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 $202 million and $296 million as of September 30, 2019 and December 31, 2018, respectively.

The Bancorp’s FHLB and FRB borrowings are generally secured by loans. The Bancorp had loans of $16.6 billion and $13.1 billion at September 30, 2019 and December 31, 2018, respectively, pledged at the FHLB, and loans of $48.1 billion and $42.6 billion at September 30, 2019 and December 31, 2018, respectively, pledged at the FRB.

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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:
				90 Days Past Due
		Carrying Value		and Still Accruing
		September 30,	December 31,	September 30,	December 31,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	50,854	44,407	15	4
Commercial mortgage loans		10,822	6,977	18	2
Commercial construction loans		5,281	4,657	1	-
Commercial leases		3,495	3,600	1	-
Residential mortgage loans		17,812	16,041	48	38
Home equity		6,218	6,402	-	-
Indirect secured consumer loans		11,026	8,976	10	12
Credit card		2,467	2,470	38	37
Other consumer loans		2,657	2,342	1	-
Total loans and leases	$	110,632	95,872	132	93
Less: Loans and leases held for sale		1,223	607
Total portfolio loans and leases	$	109,409	95,265
The following table presents a summary of net charge-offs (recoveries):
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	29	28	67	102
Commercial mortgage loans		-	(1)	(1)	3
Commercial construction loans		-	-	-	-
Commercial leases		4	-	7	-
Residential mortgage loans		1	2	1	6
Home equity		2	3	8	9
Indirect secured consumer loans		13	9	34	28
Credit card		33	21	101	72
Other consumer loans		17	10	39	27
Total net charge-offs	$	99	72	256	247

The Bancorp engages in commercial lease products primarily related to the financing of commercial equipment. Leases are classified as sales-type if the Bancorp transfers control of the underlying asset to the lessee. The Bancorp classifies leases that do not meet any of the criteria for a sales-type lease as a direct financing lease if the present value of the sum of the lease payments and any residual value guaranteed by the lessee and/or any other third party equals or exceeds substantially all of the fair value of the underlying asset and the collection of the lease payments and residual value guarantee is probable.

The following table presents the components of the net investment in leases as of:
($ in millions)			September 30, 2019(a)
Net investment in direct financing leases:
	Lease payment receivable (present value)	$	2,415
	Unguaranteed residual assets (present value)		226
	Net discount on acquired leases		(6)
	Deferred selling profits		-
Net investment in sales-type leases:
	Lease payment receivable (present value)		357
	Unguaranteed residual assets (present value)		11
	Net discount on acquired leases		-

(a) Excludes $492 of leveraged leases at September 30, 2019.

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Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents the components of the commercial lease financing portfolio as of:
($ in millions)		December 31, 2018
Rentals receivable, net of principal and interest on nonrecourse debt	$	3,256
Estimated residual value of leased assets		804
Initial direct cost, net of amortization		19
Gross investment in commercial lease financing		4,079
Unearned income		(479)
Net investment in commercial lease financing	$	3,600

Interest income recognized in the Condensed Consolidated Statements of Income for the three months and nine months ended September 30, 2019 was $22 million and $70 million, respectively, for direct financing leases and $4 million and $7 million, respectively, for sale-type leases.

The following table presents undiscounted cash flows for both direct financing and sales-type leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease receivables as follows:
		Direct Financing Leases	Sales-Type Leases
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	220	19
2020		693	81
2021		514	91
2022		433	73
2023		262	43
2024		184	33
Thereafter		274	63
Total undiscounted cash flows	$	2,580	403
Less: Difference between undiscounted cash flows and discounted cash flows		165	46
Present value of lease payments (recognized as lease receivables)	$	2,415	357

The lease residual value represents the present value of the estimated fair value of the leased equipment at the end of the lease. The Bancorp performs quarterly reviews of residual values associated with its leasing portfolio considering factors such as the subject equipment, structure of the transaction, industry, prior experience with the lessee and other factors that impact the residual value to assess for impairment. At September 30, 2019, the Bancorp maintained an allowance of $20 million to cover the inherent losses, including the potential losses related to the residual value, in the net investment in leases. Refer to Note 7 for additional information on credit quality and the ALLL.

At December 31, 2018, the Bancorp maintained an allowance of $18 million to cover the losses related to the minimum lease payments. Any declines in residual value that were deemed to be other-than-temporary were recognized as a loss and included as a component of corporate banking revenue in the Condensed Consolidated Statements of Income.

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Notes to Condensed Consolidated Financial Statements (unaudited)

7. 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 September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	651	76	276	112	1,115
	Losses charged-off(a)		(34)	(2)	(94)	-	(130)
	Recoveries of losses previously charged-off(a)		1	1	29	-	31
	Provision for loan and lease losses		53	-	72	2	127
Balance, end of period		$	671	75	283	114	1,143
(a)	For the three months ended September 30, 2019, the Bancorp recorded $12 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the three months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	654	86	229	108	1,077
	Losses charged-off(a)		(36)	(3)	(73)	-	(112)
	Recoveries of losses previously charged-off(a)		9	1	30	-	40
	Provision for (benefit from) loan and lease losses		29	(1)	57	1	86
Balance, end of period		$	656	83	243	109	1,091
(a)	For the three months ended September 30, 2018, the Bancorp recorded $8 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	645	81	267	110	1,103
	Losses charged-off(a)		(87)	(5)	(266)	-	(358)
	Recoveries of losses previously charged-off(a)		14	4	84	-	102
	Provision for (benefit from) loan and lease losses		99	(5)	198	4	296
Balance, end of period		$	671	75	283	114	1,143
(a)	For the nine months ended September 30, 2019, the Bancorp recorded $35 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off(a)		(124)	(10)	(200)	-	(334)
	Recoveries of losses previously charged-off(a)		19	4	64	-	87
	Provision for (benefit from) loan and lease losses		8	-	145	(11)	142
Balance, end of period		$	656	83	243	109	1,091
(a)	For the nine months ended September 30, 2018, the Bancorp recorded $18 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
				Residential
As of September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	53	58	36	-	147
	Collectively evaluated for impairment		618	17	247	-	882
	Unallocated		-	-	-	114	114
Total ALLL		$	671	75	283	114	1,143
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	358	758	255	-	1,371
	Collectively evaluated for impairment		69,427	15,695	22,095	-	107,217
	Purchased credit impaired		581	38	18	-	637
Total portfolio loans and leases		$	70,366	16,491	22,368	-	109,225
(a)	Includes $1 related to leveraged leases at September 30, 2019.
(b)	Excludes $184 of residential mortgage loans measured at fair value and includes $492 of leveraged leases, net of unearned income at September 30, 2019.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

				Residential
As of December 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	42	61	38	-	141
	Collectively evaluated for impairment		603	20	229	-	852
	Unallocated		-	-	-	110	110
Total ALLL		$	645	81	267	110	1,103
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	277	736	278	-	1,291
	Collectively evaluated for impairment		59,294	14,589	19,912	-	93,795
Total portfolio loans and leases		$	59,571	15,325	20,190	-	95,086
(a)	Includes $1 related to leveraged leases at December 31, 2018.
(b)	Excludes $179 of residential mortgage loans measured at fair value and includes $624 of leveraged leases, net of unearned income at December 31, 2018.

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 September 30, 2019 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	47,944	1,300	1,513	11	50,768
Commercial mortgage owner-occupied loans		4,419	152	197	-	4,768
Commercial mortgage nonowner-occupied loans		5,786	76	192	-	6,054
Commercial construction loans		5,192	42	47	-	5,281
Commercial leases		3,364	42	89	-	3,495
Total commercial loans and leases	$	66,705	1,612	2,038	11	70,366

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

			Special
As of December 31, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	42,695	779	853	13	44,340
Commercial mortgage owner-occupied loans		3,122	23	139	-	3,284
Commercial mortgage nonowner-occupied loans		3,632	27	31	-	3,690
Commercial construction loans		4,657	-	-	-	4,657
Commercial leases		3,475	72	53	-	3,600
Total commercial loans and leases	$	57,581	901	1,076	13	59,571

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, indirect secured consumer 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, 2018 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:
		September 30, 2019		December 31, 2018
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	16,469	22	15,303	22
Home equity		6,138	80	6,332	70
Indirect secured consumer loans		11,024	2	8,975	1
Credit card		2,440	27	2,444	26
Other consumer loans		2,655	2	2,341	1
Total residential mortgage and consumer loans(a)	$	38,726	133	35,395	120

(a) Excludes $184 and $179 of residential mortgage loans measured at fair value at September 30, 2019 and December 31, 2018, 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 September 30, 2019 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	50,504	131	133	264	50,768	15
	Commercial mortgage owner-occupied loans		4,742	9	17	26	4,768	3
	Commercial mortgage nonowner-occupied loans		6,025	13	16	29	6,054	15
	Commercial construction loans		5,280	-	1	1	5,281	1
	Commercial leases		3,479	2	14	16	3,495	1
Residential mortgage loans(a)			16,390	32	69	101	16,491	48
Consumer loans:
	Home equity		6,097	63	58	121	6,218	-
	Indirect secured consumer loans		10,892	120	14	134	11,026	10
	Credit card		2,375	49	43	92	2,467	38
	Other consumer loans		2,633	21	3	24	2,657	1
Total portfolio loans and leases(a)		$	108,417	440	368	808	109,225	132
(a)	Excludes $184 of residential mortgage loans measured at fair value at September 30, 2019.
(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 September 30, 2019, $96 of these loans were 30-89 days past due and $274 were 90 days or more past due. The Bancorp recognized $1 of losses during both the three and nine months ended September 30, 2019 due to claim denials and curtailments associated with these insured or guaranteed loans.
(c)	Includes accrual and nonaccrual loans and leases.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 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	$	44,213	32	95	127	44,340	4
	Commercial mortgage owner-occupied loans		3,277	1	6	7	3,284	2
	Commercial mortgage nonowner-occupied loans		3,688	1	1	2	3,690	-
	Commercial construction loans		4,657	-	-	-	4,657	-
	Commercial leases		3,597	1	2	3	3,600	-
Residential mortgage loans(a)			15,227	37	61	98	15,325	38
Consumer loans:
	Home equity		6,280	71	51	122	6,402	-
	Indirect secured consumer loans		8,844	119	13	132	8,976	12
	Credit card		2,381	47	42	89	2,470	37
	Other consumer loans		2,323	17	2	19	2,342	-
Total portfolio loans and leases(a)		$	94,487	326	273	599	95,086	93
(a)	Excludes $179 of residential mortgage loans measured at fair value at December 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 December 31, 2018, $90 of these loans were 30-89 days past due and $195 were 90 days or more past due. The Bancorp recognized $1 and $4 of losses during the three and nine months ended September 30, 2018, respectively, 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.

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 September 30, 2019 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	257	178		44
	Commercial mortgage owner-occupied loans		5	5		-
	Commercial mortgage nonowner-occupied loans		1	1		-
	Commercial leases		31	27		9
Restructured residential mortgage loans			451	448		58
Restructured consumer loans:
	Home equity		134	134		22
	Indirect secured consumer loans		4	4		1
	Credit card		46	44		13
Total impaired portfolio loans and leases with a related ALLL		$	929	841		147
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	129	121		-
	Commercial mortgage owner-occupied loans		21	20		-
	Commercial mortgage nonowner-occupied loans		3	3		-
	Commercial leases		3	3		-
Restructured residential mortgage loans			328	310		-
Restructured consumer loans:
	Home equity		73	72		-
	Indirect secured consumer loans		1	1		-
Total impaired portfolio loans with no related ALLL		$	558	530		-
Total impaired portfolio loans and leases		$	1,487	1,371	(a)	147

(a)Includes $34, $748 and $210, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $235, $10 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at September 30, 2019.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

			Unpaid
			Principal	Recorded
As of December 31, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	156	107		34
	Commercial mortgage owner-occupied loans		2	2		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		23	22		7
Restructured residential mortgage loans			465	462		61
Restructured consumer loans:
	Home equity		146	145		22
	Indirect secured consumer loans		5	4		1
	Credit card		47	44		15
Total impaired portfolio loans and leases with a related ALLL		$	846	787		141
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	137	125		-
	Commercial mortgage owner-occupied loans		9	9		-
	Commercial mortgage nonowner-occupied loans		11	11		-
Restructured residential mortgage loans			292	274		-
Restructured consumer loans:
	Home equity		85	83		-
	Indirect secured consumer loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	536	504		-
Total impaired portfolio loans and leases		$	1,382	1,291	a(a)	141
(a)	Includes $60, $724 and $237, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $147, $12 and $41, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2018.

The following table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:
			For the three months ended		For the nine months ended
			September 30, 2019		September 30, 2019
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	329	2	294	6
	Commercial mortgage owner-occupied loans		26	-	22	-
	Commercial mortgage nonowner-occupied loans		5	-	9	-
	Commercial leases		33	-	28	1
Restructured residential mortgage loans			751	7	742	22
Restructured consumer loans:
	Home equity		209	3	217	9
	Indirect secured consumer loans		5	-	6	-
	Credit card		43	1	43	3
Total average impaired portfolio loans and leases		$	1,401	13	1,361	41

87

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

			For the three months ended		For the nine months ended
			September 30, 2018		September 30, 2018
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	313	3	408	13
	Commercial mortgage owner-occupied loans		11	-	17	-
	Commercial mortgage nonowner-occupied loans		21	-	27	-
	Commercial leases		28	-	17	-
Restructured residential mortgage loans			767	7	744	21
Restructured consumer loans:
	Home equity		239	3	248	9
	Indirect secured consumer loans		7	-	8	-
	Credit card		44	1	44	3
Total average impaired loans and leases		$	1,430	14	1,513	46

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:
			September 30,	December 31,
($ in millions)			2019	2018
Commercial loans and leases:
	Commercial and industrial loans	$	293	193
	Commercial mortgage owner-occupied loans		24	11
	Commercial mortgage nonowner-occupied loans		2	2
	Commercial leases		30	22
Total nonaccrual portfolio commercial loans and leases			349	228
Residential mortgage loans			22	22
Consumer loans:
	Home equity		80	69
	Indirect secured consumer loans		2	1
	Credit card		27	27
	Other consumer loans		2	1
Total nonaccrual portfolio consumer loans			111	98
Total nonaccrual portfolio loans and leases(a)(b)		$	482	348
OREO and other repossessed property			37	47
Total nonperforming portfolio assets(a)(b)		$	519	395
(a)	Excludes $13 and $16 of nonaccrual loans held for sale at September 30, 2019 and December 31, 2018, respectively.
(b)	Includes $15 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at September 30, 2019 and December 31, 2018, respectively, of which $10 and $2 are restructured nonaccrual government insured commercial loans at September 30, 2019 and December 31, 2018, 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 $200 million and $153 million as of September 30, 2019 and December 31, 2018, 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, 2018 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

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 $46 million and $59 million, respectively, as of September 30, 2019 compared with $24 million and $67 million, respectively, as of December 31, 2018.

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		Increase
		Number of Loans	in Loans Modified		(Decrease)	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	27	$	72	(1)	-
	Commercial mortgage owner-occupied loans	4		1	-	-
Residential mortgage loans		256		39	1	-
Consumer loans:
	Home equity	21		1	-	-
	Indirect secured consumer loans	27		-	-	-
	Credit card	1,467		8	2	1
Total portfolio loans		1,802	$	121	2	1
(a)	Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
(b)	Represents number of loans post-modification and excludes loans previously modified in a TDR.

			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	16	$	52	(7)	7
Residential mortgage loans		185		24	1	-
Consumer loans:
	Home equity	30		2	-	-
	Indirect secured consumer loans	25		-	-	-
	Credit card	1,547		8	2	-
Total portfolio loans		1,803	$	86	(4)	7
(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 following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the nine months ended:
			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	65	$	168	(15)	5
	Commercial mortgage owner-occupied loans	13		10	-	-
Residential mortgage loans		531		74	1	-
Consumer loans:
	Home equity	58		3	-	-
	Indirect secured consumer loans	65		-	-	-
	Credit card	4,250		24	6	3
Total portfolio loans		4,982	$	279	(8)	8
(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.

89

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

			Recorded Investment
		Number of Loans	in Loans and Leases		Increase	Charge-offs
		Modified in a TDR	Modified in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans and leases:
	Commercial and industrial loans	41	$	187	2	7
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		969		148	4	-
Consumer loans:
	Home equity	84		6	-	-
	Indirect secured consumer loans	64		-	-	-
	Credit card	5,187		27	6	1
Total portfolio loans		6,347	$	368	12	8
(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, indirect secured consumer loan 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 September 30, 2019 and 2018 and were within 12 months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	3
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		67		10
Consumer loans:
	Home equity	7		-
	Credit card	69		-
Total portfolio loans		146	$	13

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	5	$	32
Residential mortgage loans		28		4
Consumer loans:
	Home equity	4		-
	Credit card	146		1
Total portfolio loans		183	$	37

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

90

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables provide a summary of TDRs that subsequently defaulted during the nine months ended September 30, 2019 and 2018 and were within twelve months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	20
	Commercial mortgage owner-occupied loans	4		1
Residential mortgage loans		196		30
Consumer loans:
	Home equity	12		-
	Credit card	605		3
Total portfolio loans		825	$	54

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	61
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		138		24
Consumer loans:
	Home equity	6		-
	Credit card	525		3
Total portfolio loans		679	$	88

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

91

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

8. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:
($ in millions)		September 30, 2019	December 31, 2018
Land and improvements(a)	$	640	586
Buildings(a)		1,552	1,547
Equipment		2,095	1,987
Leasehold improvements		415	403
Construction in progress(a)		98	81
Bank premises and equipment held for sale:
Land and improvements		50	25
Buildings		32	14
Equipment		5	3
Accumulated depreciation and amortization		(2,834)	(2,785)
Total bank premises and equipment	$	2,053	1,861

(a) At September 30, 2019 and December 31, 2018, land and improvements, buildings and construction in progress included $60 and $55, 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.

During the second quarter of 2018, the Bancorp adopted a plan to close approximately 100 to 125 branches over the next three years (the “2018 Branch Optimization Plan”). As of September 30, 2019, the Bancorp expects the total number of branch closures under the 2018 Branch Optimization Plan to be approximately 125 branches of which 65 branches have already been closed and an additional 4 branches are expected to close in the fourth quarter of 2019, 30 branches have been identified for closure in 2020 and the Bancorp expects to identify the remaining branches to be closed under the 2018 Branch Optimization Plan in 2020 with expected closure dates in 2021. 

As a result of the MB Financial, Inc. acquisition, the Bancorp identified 46 branches in the Chicago market that it planned to close. Of these locations, 45 were closed in the third quarter of 2019 and the 46^th location is expected to close in the first quarter of 2020. These 46 branches are not part of the aforementioned 2018 Branch Optimization Plan and are in addition to the branch in the Chicago market that the Bancorp closed in November 2018. In addition, the Bancorp has identified 11 other non-branch locations with a fair value, less cost to sell, of $10 million that were acquired from MB Financial, Inc. and are classified as held for sale by the Bancorp.

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 $5 million and immaterial for the three months ended September 30, 2019 and 2018, respectively. Impairment losses associated with such assessments and lower of cost or market adjustments were $27 million and $41 million for the nine months ended September 30, 2019 and 2018, respectively. For the nine months ended September 30, 2019, impairment charges included $14 million associated with Fifth Third branches in the Chicago market that have been assessed for impairment as a result of the MB Financial, Inc. acquisition. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

92

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

9. Operating Lease Equipment

Operating lease equipment was $869 million and $518 million at September 30, 2019 and December 31, 2018, respectively. Lease income relating to lease payments for operating leases was $44 million and $20 million for the three months ended September 30, 2019 and 2018, respectively and $110 million and $65 million for the nine months ended September 30, 2019 and 2018, respectively.

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. As a result of these recoverability assessments, the Bancorp did not recognize impairment losses associated with operating lease assets for both the three months and nine months ended September 30, 2019 and recognized $2 million and $4 million of impairment losses for the three and nine months ended September 30, 2018, respectively. The recognized impairment losses were recorded in corporate banking revenue in the Condensed Consolidated Statements of Income.

The following table presents undiscounted future lease payments for operating leases for the remainder of 2019 through 2024 and thereafter:
		Undiscounted Cash Flows
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	41
2020		143
2021		114
2022		85
2023		61
2024		36
Thereafter		62
Total operating lease payments	$	542

10. Lease Obligations - Lessee

The Bancorp leases certain banking centers, ATM sites, land for owned buildings and equipment. Substantially all of the Bancorp’s leases include options to renew and the exercise of lease renewal options is at the Bancorp’s discretion. At the lease commencement date, the Bancorp assesses whether it is reasonably certain to exercise the renewal option by considering all economic factors relevant to the contract. If the Bancorp is reasonably certain to exercise the option, the renewal period is included in the lease term in measuring the right-of-use asset and lease liability at the commencement of the lease.

The Bancorp’s lease agreements typically do not contain any residual value guarantees or any material restrictive covenants. The Bancorp has elected not to recognize leases with an initial term of 12 months or less (“short-term leases”) on the Condensed Consolidated Balance Sheets.

The Bancorp recognizes lease costs associated with operating leases in the Condensed Consolidated Statements of Income on a straight-line basis over the remaining lease term unless there is another systematic and rational basis that better reflects how the benefits of the underlying asset are consumed over the lease term. Variable lease payments associated with operating leases are recognized in the period in which the obligation for those payments is incurred.

After the commencement of a finance lease, the Bancorp measures its lease liability by using the effective interest method such that the liability is increased for interest based on the discount rate that is implicit in the lease, or the Bancorp’s incremental borrowing rate if the implicit rate cannot be readily determined, offset by a decrease in the liability resulting from the periodic lease payments. The right-of-use asset associated with a finance lease is amortized on a straight-line basis unless there is another systematic and rational basis that better reflects how the benefits of the underlying asset are consumed over the lease term. The period over which the right-of-use asset is amortized is generally the lesser of the remaining lease term or the remaining useful life of the leased asset. Variable lease payments associated with finance leases are recognized in the period in which the obligation for those payments is incurred.

The following table provides a summary of lease assets and lease liabilities as of:
($ in millions)	Condensed Consolidated Balance Sheets Caption		September 30, 2019
Assets
Operating lease right-of-use assets	Other assets	$	462
Finance lease right-of-use assets	Bank premises and equipment		25
Total right-of-use assets(a)		$	487
Liabilities
Operating lease liabilities	Accrued taxes, interest and expenses	$	543
Finance lease liabilities	Long-term debt		26
Total lease liabilities		$	569

(a) Operating and finance lease right-of-use assets are recorded net of accumulated amortization of $57 and $25 as of September 30, 2019, respectively.

93

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents the components of lease costs:
				For the three months ended September 30, 2019	For the nine months ended September 30, 2019
($ in millions)		Condensed Consolidated Statements of Income Caption
Lease costs:
	Amortization of right-of-use assets	Net occupancy and equipment expense	$	2	5
	Interest on lease liabilities	Interest on long-term debt		-	-
Total finance lease costs			$	2	5
	Operating lease cost	Net occupancy expense	$	25	72
	Short-term lease cost	Net occupancy expense		-	-
	Variable lease cost	Net occupancy expense		7	23
	Sublease income	Net occupancy expense		(1)	(3)
Total operating lease costs			$	31	92
Total lease costs			$	33	97

The Bancorp performs impairment assessments for ROU assets when events or changes in circumstances indicate that their carrying values may not be recoverable. In addition to the lease costs disclosed in the table above, the Bancorp recognized $5 million and $12 million of impairment losses and termination charges for the ROU assets related to certain operating leases for the three and nine months ended September 30, 2019, respectively. The recognized impairment losses were recorded in net occupancy expense in the Condensed Consolidated Statements of Income.

The following table presents undiscounted cash flows for both operating leases and finance leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease liabilities as follows:
		Operating Leases	Finance Leases
As of September 30, 2019 ($ in millions)				Total
Remainder of 2019	$	25	2	27
2020		88	6	94
2021		77	5	82
2022		72	4	76
2023		63	1	64
2024		55	1	56
Thereafter		258	14	272
Total undiscounted cash flows	$	638	33	671
Less: Difference between undiscounted cash flows and discounted cash flows		95	7	102
Present value of lease liabilities	$	543	26	569

The following table presents the weighted-average remaining lease term and weighted-average discount rate as of:
		September 30, 2019
Weighted-average remaining lease term (years):
	Operating leases	9.35
	Finance leases	11.35
Weighted-average discount rate:
	Operating leases	3.24	%
	Finance leases	4.78

The following table presents information related to lease transactions for the nine months ended:
($ in millions)			September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:(a)
	Operating cash flows from operating leases	$	72
	Operating cash flows from finance leases		1
	Financing cash flows from finance leases		3
Gains on sale and leaseback transactions			5
(a)	The cash flows related to the short-term and variable lease payments are not included in the amounts in the table as they were not included in the measurement of lease liabilities.

94

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

11. Goodwill

Business combinations entered into by the Bancorp typically result in the recognition of goodwill. Acquisition activity includes acquisitions in the respective period in addition to purchase accounting adjustments related to previous acquisitions. On March 22, 2019 the Bancorp completed its acquisition of MB Financial, Inc. In connection with the acquisition, the Bancorp recorded $1.8 billion of goodwill. The estimated fair value of assets acquired, liabilities assumed and noncontrolling interest recognized are considered preliminary as of September 30, 2019 and are subject to change for up to one year after the acquisition date as additional information becomes available. The amount of goodwill recognized and the allocation to the Bancorp’s reporting units are also considered preliminary and subject to change for up to one year from the acquisition date.

The Bancorp completed its annual goodwill impairment test as of September 30, 2019 and the estimated fair values of the Commercial Banking, Branch Banking and Wealth and Asset Management reporting units exceeded their carrying values, including goodwill.

Changes in the net carrying amount of goodwill, by reporting unit, for the nine months ended September 30, 2019 and the year ended December 31, 2018 were as follows:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
($ in millions)		Banking	Banking	Lending	Management	and Other	Total
Goodwill	$	1,363	1,655	215	177	-	3,410
Accumulated impairment losses		(750)	-	(215)	-	-	(965)
Net carrying value as of December 31, 2017	$	613	1,655	-	177	-	2,445
Acquisition activity		17	-	-	16	-	33
Net carrying value as of December 31, 2018	$	630	1,655	-	193	-	2,478
Acquisition activity		1,352	399	-	64	-	1,815
Sale of business		-	-	-	(3)	-	(3)
Net carrying value as of September 30, 2019	$	1,982	2,054	-	254	-	4,290

12. Intangible Assets

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

On March 22, 2019, the Bancorp completed its acquisition of MB Financial, Inc. In connection with the acquisition, the Bancorp recorded a $195 million core deposit intangible asset with a weighted-average amortization period of 7.2 years. The fair value of the core deposit intangible is subject to change as additional information becomes available.

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 September 30, 2019
Core deposit intangibles	$	229	(57)	172
Customer relationships		29	(5)	24
Non-compete agreements		13	(11)	2
Other		4	(1)	3
Total intangible assets	$	275	(74)	201
As of December 31, 2018
Core deposit intangibles	$	34	(30)	4
Customer relationships		32	(3)	29
Non-compete agreements		14	(11)	3
Other		7	(3)	4
Total intangible assets	$	87	(47)	40

As of September 30, 2019, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was $14 million and $2 million for the three months ended September 30, 2019 and 2018, respectively, and $31 million and $4 million for the nine months ended September 30, 2019 and 2018, respectively. The Bancorp's projection of amortization expense shown in the following table is based on existing balances as of September 30, 2019. Future amortization expense may vary from these projections.

95

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Estimated amortization expense for the remainder of 2019 through 2023 is as follows:
($ in millions)		Total
Remainder of 2019	$	14
2020		48
2021		40
2022		32
2023		24

96

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

13. 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 for automobile loan securitizations as of:
($ in millions)		September 30, 2019		December 31, 2018
Assets:
	Other short-term investments	$	76	40
	Indirect secured consumer loans		1,543	668
	ALLL		(9)	(4)
	Other assets		11	5
Total assets		$	1,621	709
Liabilities:
	Other liabilities	$	3	1
	Long-term debt		1,438	606
Total liabilities		$	1,441	607

Automobile loan securitizations

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which was deemed to be a VIE. This trust then subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million were retained by the Bancorp. Refer to Note 17 for further information. The Bancorp also has previously completed securitization transactions in which the Bancorp transferred certain consumer automobile loans to bankruptcy remote trusts which were deemed to be VIEs. In each of these securitization transactions, 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. The third-party holders of the asset-backed 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.

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
September 30, 2019 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,424	440	1,424
Private equity investments		84	-	161
Loans provided to VIEs		2,628	-	3,979
Lease pool entities		66	-	66

		Total	Total	Maximum
December 31, 2018 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,198	376	1,198
Private equity investments		41	-	73
Loans provided to VIEs		2,331	-	3,617

97

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. As a limited partner/investor member, the Bancorp has no substantive kick-out or substantive participating rights over the managing member. 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 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. For information regarding the Bancorp’s accounting for these investments, 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, 2018.

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 September 30, 2019 and December 31, 2018, the Bancorp’s CDC investments included $1.1 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 $440 million and $374 million at September 30, 2019 and December 31, 2018, respectively. The unfunded commitments as of September 30, 2019 are expected to be funded from 2019 to 2035.

The Bancorp has accounted for all of its qualifying LIHTC investments using the proportional amortization method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income related to these investments:
	Condensed Consolidated		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)	Statements of Income Caption(a)		2019	2018	2019	2018
Proportional amortization	Applicable income tax expense	$	31	35	105	118
Tax credits and other benefits	Applicable income tax expense		(35)	(44)	(122)	(146)

(a) The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three and nine months ended September 30, 2019 and 2018.

Private equity investments

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 September 30, 2019 and December 31, 2018, the unfunded commitment amounts to the funds were $77 million and $32 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $2 million and $1 million during the three months ended September 30, 2019 and 2018, respectively, and $9 million and $6 million during the nine months ended September 30, 2019 and 2018, respectively. The Bancorp did not recognize OTTI associated with certain nonconforming investments affected by the Volcker Rule during both the three months ended September 30, 2019 and 2018, respectively, and recognized zero and $8 million during the nine months ended September 30, 2019 and 2018, respectively. Refer to Note 25 for further information.

98

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 6. As of September 30, 2019 and December 31, 2018, the Bancorp’s unfunded commitments to these entities were $1.4 billion and $1.3 billion, respectively. The loans and unfunded commitments to these VIEs are included in the Bancorp’s overall analysis of the ALLL and reserve for unfunded commitments, respectively. The Bancorp does not provide any implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.

Lease pool entities

As a result of the acquisition of MB Financial, Inc., the Bancorp co-invested with other unrelated leasing companies in three LLCs designed for the purpose of purchasing pools of residual interests in leases which have been originated or purchased by the other investing member. For each LLC, the leasing company is the managing member and has full authority over the day-to-day operations of the entity. While the Bancorp holds more than 50% of the equity interests in each LLC, the operating agreements require both members to consent to significant corporate actions, such as liquidating the entity or removing the manager. In addition, the Bancorp has a preference with regards to distributions such that all of the Bancorp’s equity contribution for each pool must be distributed, plus a pre-defined rate of return, before the other member may receive distributions. The leasing company is also entitled to the return of its investment plus a pre-defined rate of return before any residual profits are distributed to the members.

The lease pool entities are primarily subject to risk of losses on the lease residuals purchased. The Bancorp has determined that it is not the primary beneficiary of these VIEs because it does not have the power to direct the activities that most significantly impact the economic performance of the entities. This power is held by the leasing company, who as managing member controls the servicing of the leases and collection of the proceeds on the residual interests.

99

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

14. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during both the three and nine months ended September 30, 2019 and 2018. 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 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Residential mortgage loan sales(a)	$	2,397	1,446	5,212	3,919
Origination fees and gains on loan sales		64	25	126	77
Gross mortgage servicing fees		71	56	196	162

(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 table presents changes in the servicing rights related to residential mortgage loans for the nine months ended September 30:
($ in millions)		2019	2018
Balance, beginning of period	$	938	858
Servicing rights originated - residential mortgage loans		99	62
Servicing rights acquired - residential mortgage loans		26	82
Servicing rights obtained in acquisition - residential mortgage loans		263	-
Changes in fair value:
Due to changes in inputs or assumptions(a)		(294)	103
Other changes in fair value(b)		(122)	(95)
Balance, end of period	$	910	1,010

(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 debt and trading debt 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Securities gains (losses), net - non-qualifying hedges on MSRs	$	-	(1)	5	(18)
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio(a)		130	(24)	308	(89)
MSR fair value adjustment due to changes in inputs or assumptions(a)		(120)	25	(294)	103

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

100

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 September 30, 2019 and 2018 were as follows:
		September 30, 2019				September 30, 2018
	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	5.5	13.7	%	543	6.5	11.1	%	517
Servicing rights	Adjustable	-	-		-	3.3	23.7		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 September 30, 2019 and December 31, 2018, the Bancorp serviced $82.7 billion and $63.2 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 September 30, 2019, 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	$	899	4.7	15.4	%	$	(32)	(62)	(143)	619	$	(18)	(36)
Servicing rights	Adjustable		11	3.4	23.4			(1)	(1)	(3)	914		-	-

(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.

101

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

15. 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, swaptions and TBA securities. 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, TBA securities 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 September 30, 2019 and December 31, 2018, the balance of collateral held by the Bancorp for derivative assets was $1.1 billion and $481 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 $748 million and $249 million were applied to reduce the respective derivative contracts and were also not included in the total amount of collateral held as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019 and December 31, 2018, the credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts was $21 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 September 30, 2019 and December 31, 2018, the balance of collateral posted by the Bancorp for derivative liabilities was $241 million and $551 million, respectively. Additionally, as of September 30, 2019 and December 31, 2018, $528 million and $23 million, respectively, of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities 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 September 30, 2019 and December 31, 2018, 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 Bancorp’s 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 Bancorp’s Condensed Consolidated Financial Statements.

102

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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
September 30, 2019 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	2,705		459	3
Total fair value hedges				459	3
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		156	-
Interest rate swaps related to C&I loans		8,000		-	72
Total cash flow hedges				156	72
Total derivatives designated as qualifying hedging instruments				615	75
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		6,420		178	12
Forward contracts related to residential mortgage loans held for sale		2,693		3	5
Swap associated with the sale of Visa, Inc. Class B Shares		2,834		-	146
Total free-standing derivatives - risk management and other business purposes				181	163
Free-standing derivatives - customer accommodation:
Interest rate contracts(a)		71,511		727	169
Interest rate lock commitments		1,096		24	-
Commodity contracts		8,144		368	353
TBA securities		28		-	-
Foreign exchange contracts		13,924		182	151
Total free-standing derivatives - customer accommodation				1,301	673
Total derivatives not designated as qualifying hedging instruments				1,482	836
Total			$	2,097	911

(a)Derivative assets and liabilities are presented net of variation margin of $36 and $621, respectively.

				Fair Value
		Notional		Derivative	Derivative
December 31, 2018 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,455		262	2
Total fair value hedges				262	2
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		69	-
Interest rate swaps related to C&I loans		8,000		15	27
Total cash flow hedges				84	27
Total derivatives designated as qualifying hedging instruments				346	29
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,045		40	14
Forward contracts related to residential mortgage loans held for sale		926		-	8
Swap associated with the sale of Visa, Inc. Class B Shares		2,174		-	125
Foreign exchange contracts		133		4	-
Total free-standing derivatives - risk management and other business purposes				44	147
Free-standing derivatives - customer accommodation:
Interest rate contracts		55,012		262	278
Interest rate lock commitments		407		7	-
Commodity contracts		6,511		307	278
TBA securities		18		-	-
Foreign exchange contracts		13,205		148	142
Total free-standing derivatives - customer accommodation				724	698
Total derivatives not designated as qualifying hedging instruments				768	845
Total			$	1,114	874

103

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. As of September 30, 2019, certain interest rate swaps met the criteria required to qualify for the shortcut method of accounting that permits the assumption of perfect offset. For all designated fair value hedges of interest rate risk as of September 30, 2019, that were not accounted for under the shortcut method of accounting, the Bancorp performed an assessment of hedge effectiveness using regression analysis 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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	75	(29)	219	(110)
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		(74)	31	(214)	113

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		September 30, 2019
Carrying amount of the hedged items	Long-term debt	$	3,455
Cumulative amount of fair value hedging adjustments included in the carrying
amount of the hedged items	Long-term debt		(467)

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 September 30, 2019, all hedges designated as cash flow hedges were assessed for effectiveness using either regression analysis (quantitative approach) or a qualitative approach. 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 September 30, 2019, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 63 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 September 30, 2019 and December 31, 2018, $519 million and $160 million, respectively, of net deferred gains, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of September 30, 2019, $10 million in net unrealized gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next 12 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 September 30, 2019.

During the three and nine months ended September 30, 2019 and 2018, there were no gains or losses reclassified from AOCI into earnings associated with the discontinuance of cash flow hedges because it was probable that the original forecasted transaction would no longer occur by the end of the originally specified time period or within the additional period of time as defined by U.S. GAAP.

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Amount of pretax net gains (losses) recognized in OCI	$	105	(25)	456	(31)
Amount of pretax net gains (losses) reclassified from OCI into net income		5	(2)	2	(2)

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

104

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 A Shares. This total return swap is accounted for as a free-standing derivative. Refer to Note 25 for further discussion of significant inputs and assumptions used in the valuation of this instrument.

The net gains (losses) 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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Forward contracts related to residential mortgage loans
held for sale	Mortgage banking net revenue	$	11	7	6	4
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		130	(24)	308	(89)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2	(1)	(3)	3
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(11)	(17)	(63)	(66)

Free-Standing Derivative Instruments – Customer Accommodation

The majority of the free-standing derivative instruments the Bancorp enters into are for the benefit of its commercial customers. These derivative contracts are not designated against specific assets or liabilities on the Condensed Consolidated Balance Sheets or to forecasted transactions and, therefore, do not qualify for hedge accounting. These instruments include foreign exchange derivative contracts entered into for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations and commodity contracts to hedge such items as natural gas and various other derivative contracts. The Bancorp may economically hedge significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. The Bancorp hedges its interest rate exposure on commercial customer transactions by executing offsetting swap agreements with primary dealers. Revaluation gains and losses on interest rate, foreign exchange, commodity and other commercial customer derivative contracts are recorded as a component of corporate banking revenue 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 September 30, 2019 and December 31, 2018, the total notional amount of the risk participation agreements was $4.3 billion and $4.0 billion, respectively, and the fair value was a liability of $9 million and $8 million at September 30, 2019 and December 31, 2018, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of September 30, 2019, the risk participation agreements had a weighted-average remaining life of 3.5 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:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	4,188	3,919
Special mention		144	79
Substandard		13	4
Total	$	4,345	4,002

105

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	12	7	30	23
Interest rate contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		(5)	-	(18)	-
Interest rate lock commitments	Mortgage banking net revenue		50	17	108	52
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		3	3	6	7
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		12	16	36	43
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		7	3	15	8
Foreign exchange contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		-	-	-	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 September 30, 2019 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	2,073	(550)	(630)		893
Total assets			2,073	(550)	(630)		893
Liabilities:
Derivatives			911	(550)	(18)		343
Total liabilities		$	911	(550)	(18)		343
(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		Gross Amounts Not Offset in the
		Recognized in the		Condensed Consolidated Balance Sheets
		Condensed Consolidated
As of December 31, 2018 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	1,107	(410)	(348)		349
Total assets			1,107	(410)	(348)		349
Liabilities:
Derivatives			874	(410)	(123)		341
Total liabilities		$	874	(410)	(123)		341
(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.

106

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

16. 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:
		September 30,	December 31,
($ in millions)		2019	2018
FHLB advances	$	2,850	-
Derivative collateral		602	271
Securities sold under repurchase agreements		594	302
Total other short-term borrowings	$	4,046	573

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 September 30, 2019 and December 31, 2018, all securities sold under repurchase agreements were secured by agency residential mortgage-backed securities and the repurchase agreements have an overnight remaining contractual maturity.

17. Long-Term Debt

On January 25, 2019, the Bancorp issued and sold $1.5 billion of 3.65% senior fixed-rate notes, with a maturity of five years, due on January 25, 2024. 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 up to, but excluding, the redemption date.

On February 1, 2019, Fifth Third Bank issued and sold, under its bank notes program, $300 million of senior floating-rate notes, with a maturity of three years, due on February 1, 2022. Interest on the floating-rate notes is 3-month LIBOR plus 64 bps. These notes will be redeemable by Fifth Third Bank, 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 up to, but excluding, the redemption date.

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million of the asset-backed notes were retained by the Bancorp, resulting in approximately $1.3 billion of outstanding notes included in long-term debt in the Condensed Consolidated Balance Sheets. Additionally, as previously discussed in Note 13, the bankruptcy remote trust was deemed to be a VIE and the Bancorp, as the primary beneficiary, consolidated the VIE. The third-party holders of the asset-backed notes do not have recourse to the general assets of the Bancorp.

For further information on a subsequent event related to long-term debt, refer to Note 27.

18. Capital Actions

Accelerated Share Repurchase Transactions

During the nine months ended September 30, 2019, the Bancorp entered into and 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 which were entered into and settled during the nine months ended September 30, 2019:
Repurchase Dates			Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement	Total Shares Repurchased	Settlement Dates
March 27, 2019(a)		$	913	31,779,280	2,026,584	33,805,864			June 28, 2019
April 29, 2019(b)			200	6,015,570	1,217,805	7,233,375	May 23, 2019	-	May 24, 2019
August 7, 2019			100	3,150,482	694,238	3,844,720			August 16, 2019
August 9, 2019(b)			200	6,405,426	1,475,487	7,880,913			August 28, 2019
(a)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $456.5 million.
(b)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $100 million.

Open Market Share Repurchase Transactions

Between July 29, 2019 and July 30, 2019, the Bancorp entered into repurchase transactions of 1,667,735 shares, or $50 million, of its outstanding common stock through the open market, which settled between July 31, 2019 and August 1, 2019.

107

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Preferred Stock Offerings

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative perpetual Class B preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative perpetual preferred stock, Series C, in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

On September 17, 2019, the Bancorp issued in a registered public offering 10,000,000 depositary shares, representing ,10000 shares of 4.95% non-cumulative perpetual preferred stock, Series K, for net proceeds of approximately $242 million. Each preferred share has a $25,000 liquidation preference. Subject to any required regulatory approval, the Bancorp may redeem the Series K preferred shares at its option (i) in whole or in part, on any dividend payment date on or after September 30, 2024 and (ii) in whole, but not in part, at any time following a regulatory capital event. The Series K preferred shares are not convertible into Bancorp common shares or any other securities.

For further information on a subsequent event related to capital actions, refer to Note 27.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

19. 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:
		September 30,	December 31,
($ in millions)		2019	2018
Commitments to extend credit	$	79,076	70,415
Letters of credit		2,219	2,041
Forward contracts related to residential mortgage loans held for sale		2,693	926
Purchase obligations		114	126
Capital commitments for private equity investments		77	32
Capital expenditures		85	45

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 September 30, 2019 and December 31, 2018, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $154 million and $131 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 standard regulatory risk rating system utilized for its loan and lease portfolio.

Risk ratings of outstanding commitments to extend credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	78,124	69,928
Special mention		474	271
Substandard		477	216
Doubtful		1	-
Total commitments to extend credit	$	79,076	70,415

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 September 30, 2019:
($ in millions)
Less than 1 year(a)	$	1,124
1 - 5 years(a)		1,056
Over 5 years		39
Total letters of credit	$	2,219

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

Standby letters of credit accounted for approximately 99% of total letters of credit at both September 30, 2019 and December 31, 2018, and are considered guarantees in accordance with U.S. GAAP. Approximately 63% and 60% of the total standby letters of credit were collateralized as of September 30, 2019 and December 31, 2018, 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 $28 million and $17 million at September 30, 2019 and December 31, 2018, respectively. The Bancorp monitors the credit risk associated with letters of credit using the same standard regulatory risk rating system utilized for its loan and lease portfolio.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

Risk ratings of outstanding letters of credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	2,075	1,905
Special mention		11	10
Substandard		132	126
Doubtful		1	-
Total letters of credit	$	2,219	2,041

At September 30, 2019 and December 31, 2018, 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 September 30, 2019 and December 31, 2018, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $408 million and $487 million, respectively, of which FTS acted as the remarketing agent to issuers on $405 million and $481 million, respectively. As remarketing agent, FTS is responsible for actively remarketing VRDNs to other investors when they have been tendered. If another investor is not identified, FTS may choose to purchase the VRDNs into inventory at its discretion while it continues to remarket them. If FTS purchases the VRDNs into inventory, it can subsequently tender back the VRDNs to the issuer’s trustee with proper advance notice. The Bancorp issued letters of credit, as a credit enhancement, to $215 million and $256 million of the VRDNs remarketed by FTS, in addition to $3 million and $6 million in VRDNs remarketed by third parties at September 30, 2019 and December 31, 2018, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held zero and $9 million of these VRDNs in its portfolio and classified them as trading securities at September 30, 2019 and December 31, 2018, 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.

Other commitments

The Bancorp has 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 20 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, 2018.

As of September 30, 2019 and December 31, 2018, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $7 million and $6 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 September 30, 2019 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 $11 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.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

For both the three months ended September 30, 2019 and 2018, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $7 million and $4 million, respectively, in outstanding principal of loans to satisfy investor demands. For both the nine months ended September 30, 2019 and 2018, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $20 million and $11 million, respectively, in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended September 30, 2019 and 2018 were $10 million and $6 million, respectively. Total repurchase demand requests during the nine months ended September 30, 2019 and 2018 were $38 million and $17 million, respectively. Total outstanding repurchase demand inventory was $5 million and $1 million at September 30, 2019 and December 31, 2018, respectively.

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Balance, beginning of period	$	7	7	6	9
Net additions (reductions) to the reserve		-	(1)	1	(3)
Balance, end of period	$	7	6	7	6

The following tables provide a rollforward of unresolved claims by claimant type for the nine months ended:
	GSE			Private Label
September 30, 2019 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	9	$	1	1	$	-
New demands	213		38	7		-
Loan paydowns/payoffs	(3)		-	-		-
Resolved demands	(194)		(34)	(3)		-
Balance, end of period	25	$	5	5	$	-

	GSE			Private Label
September 30, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	104		17	-		-
Resolved demands	(85)		(13)	-		-
Balance, end of period	25	$	5	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 $239 million and $272 million at September 30, 2019 and December 31, 2018, respectively, and the delinquency rates were 2.0% and 2.2% at September 30, 2019 and December 31, 2018, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $4 million and $5 million at September 30, 2019 and December 31, 2018, respectively, recorded in other liabilities in the Condensed Consolidated Balance Sheets. To determine the credit loss reserve, the Bancorp used an approach that is consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio.

Margin accounts

FTS, an indirect wholly-owned subsidiary of the Bancorp, guarantees the collection of all margin account balances held by its brokerage clearing agent for the benefit of its customers. FTS is responsible for payment to its brokerage clearing agent for any loss, liability, damage, cost or expense incurred as a result of customers failing to comply with margin or margin maintenance calls on all margin accounts. The margin account balances held by the brokerage clearing agent were $13 million at both September 30, 2019 and December 31, 2018. 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 $85 million and $62 million at September 30, 2019 and December 31, 2018, respectively.

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

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 25 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 September 30, 2019, 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 $146 million at September 30, 2019 and $125 million at December 31, 2018. Refer to Note 15 and Note 25 for further information.

After the Bancorp’s sale of the Class B Shares, Visa 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
Q2 2018		600	26	i
Q3 2019		300	(a)

(a) The Bancorp made a cash payment of $12 million to the swap counterparty on October 8, 2019 as a result of the Visa escrow funding in the third quarter of 2019.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

20. 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, Case No. 05-MD-1720). 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 currently also subject to a possible indemnification obligation of Visa as discussed in Note 19 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 had previously paid $46 million into a class settlement escrow account. 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 had been already returned to the control of the defendants. The remaining approximately 75% of the settlement funds paid by the Bancorp are currently 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. On June 5, 2018, the defendants in the consolidated class action reached an agreement to settle in principle with the proposed plaintiffs’ class seeking monetary damages (the “Plaintiff Damages Class”). On September 17, 2018, those parties signed a settlement agreement (the “Amended Settlement Agreement”) superseding the original settlement agreement entered into in October 2012. The Amended Settlement Agreement included, among other terms, a release from participating class members for liability for claims that accrue no later than five years after the Amended Settlement Agreement becomes final. The Amended Settlement Agreement provided for a total payment by all defendants of approximately $6.24 billion, composed of approximately $5.34 billion held in escrow plus an additional $900 million in new funds. However, the Settlement Agreement also provided that if between 15% and 25% of class members (by payment volume) opted out of the class, up to $700 million of the additional settlement funds would be returned to the defendants. It has now been determined that more than 25% of the class members have elected to opt out of the Amended Settlement Agreement, and, therefore, $700 million of the additional $900 million will be returned to the defendants. In either event, the Bancorp’s allocated share of the putative settlement is within existing reserves. The Court issued an order preliminarily approving the settlement on January 24, 2019 and scheduled a hearing on final approval of the settlement for November 7, 2019. The putative settlement does not resolve the claims of the separate proposed plaintiffs’ class seeking injunctive relief or the claims of merchants who have opted out of the proposed class settlement and are pursuing, or may in the future decide to pursue, private lawsuits. The ultimate outcome in this matter, including the timing of resolution, therefore remains uncertain. Refer to Note 19 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 (Case No. 1:12-CV-00851). On behalf of a putative class, the plaintiffs sought 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. On May 28, 2019, the Sixth Circuit Court of Appeals reversed the dismissal of plaintiffs’ breach of contract claim and remanded for further proceedings. The plaintiffs’ claimed damages for the alleged breach of contract claim exceed $280 million. Under the Court’s scheduling order, the plaintiffs’ motion for class certification is currently due February 28, 2020. No trial date has been set.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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, Case No. 2015003814). The plaintiffs alleged 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 sought over $800 million in alleged damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. Fifth Third denied 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. The plaintiffs filed a notice of appeal on May 5, 2018. The appeal is pending.

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, 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 asserted claims for breach of contract and the implied covenant of good faith and fair dealing and for alleged failure to comply with Article 4A-202 of the Uniform Commercial Code (the “UCC claim”), with losses allegedly totaling almost $40 million, plus interest. Fifth Third denied 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 (Upsher-Smith Laboratories Inc. v. Fifth Third Bank, Case No. 16-cv-00556). On March 22, 2019, the Court granted summary judgment to Fifth Third on Upsher-Smith’s claims for breach of contract and the implied covenant of good faith and fair dealing, but denied summary judgment on the UCC claim. On June 27, 2019, the parties entered into a confidential settlement of this matter for an amount that was immaterial to the Bancorp’s Condensed Consolidated Financial Statements.

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, OCC, 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 $27 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.

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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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.

21. Related Party Transactions

On March 18, 2019, the Bancorp exchanged its remaining 10,252,826 Class B Units of Worldpay Holding, LLC for 10,252,826 shares of Class A common stock of Worldpay, Inc., and subsequently sold those shares. As a result of this transaction, the Bancorp recognized a gain of $562 million in other noninterest income during the first quarter of 2019. As a result of the sale, the Bancorp no longer beneficially owns any of Worldpay, Inc.’s equity securities.

22. Income Taxes

The applicable income tax expense was $140 million and $114 million for the three months ended September 30, 2019 and 2018, respectively, and $483 million and $442 million for the nine months ended September 30, 2019 and 2018, respectively. The effective tax rates for the three months ended September 30, 2019 and 2018 were 20.2% and 20.7%, respectively, and 21.4% and 20.3% for the nine months ended September 30, 2019 and 2018, respectively. The increase in the effective tax rate for the nine months ended September 30, 2019 compared to the same period in the prior year was primarily related to an increase in state income tax expense, a decrease in excess tax benefits related to share-based compensation and a decrease in expected low-income housing tax credits and other tax benefits, partially offset by a decrease in proportional amortization of qualifying LIHTC investments as well as an increase in non-taxable income.

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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Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

23. 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
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities
	arising during period	$	497	(118)	379
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			494	(117)	377	781	377	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		105	(22)	83
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(5)	1	(4)
Net unrealized gains on cash flow hedge derivatives			100	(21)	79	440	79	519
Reclassification of amounts to net periodic benefit costs			1	-	1
Defined benefit pension plans, net			1	-	1	(43)	1	(42)
Total		$	595	(138)	457	1,178	457	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(271)	64	(207)
Reclassification adjustment for net losses on available-for-sale
	debt securities included in net income		-	-	-
Net unrealized losses on available-for-sale debt securities			(271)	64	(207)	(485)	(207)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(25)	6	(19)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(23)	6	(17)	(16)	(17)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			3	-	3
Defined benefit pension plans, net			1	-	1	(51)	1	(50)
Total		$	(293)	70	(223)	(552)	(223)	(775)

116

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The tables below present the activity of the components of OCI and AOCI for the nine months ended:
			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities arising
	during period	$	1,817	(430)	1,387
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			1,814	(429)	1,385	(227)	1,385	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		456	(95)	361
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(2)	-	(2)
Net unrealized gains on cash flow hedge derivatives			454	(95)	359	160	359	519
Reclassification of amounts to net periodic benefit costs			4	(1)	3
Defined benefit pension plans, net			4	(1)	3	(45)	3	(42)
Total		$	2,272	(525)	1,747	(112)	1,747	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(1,082)	248	(834)
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			(1,073)	246	(827)	135	(827)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(31)	7	(24)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(29)	7	(22)	(11)	(22)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			7	(2)	5
Defined benefit pension plans, net			5	(2)	3	(53)	3	(50)
Total		$	(1,097)	251	(846)	71	(846)	(775)

117

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The table below presents reclassifications out of AOCI:
			For the three months ended September 30,		For the nine months ended September 30,
	Condensed Consolidated
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Net unrealized gains (losses) on available-for-sale debt securities:(b)
Net gains (losses) included in net income	Securities gains (losses), net	$	3	-	3	(9)
	Income before income taxes		3	-	3	(9)
	Applicable income tax expense		(1)	-	(1)	2
	Net income		2	-	2	(7)
Net unrealized gains (losses) on cash flow hedge derivatives:(b)
Interest rate contracts related to C&I loans	Interest and fees on loans and leases		5	(2)	2	(2)
	Income before income taxes		5	(2)	2	(2)
	Applicable income tax expense		(1)	-	-	-
	Net income		4	(2)	2	(2)
Net periodic benefit costs:(b)
Amortization of net actuarial loss	Employee benefits(a)		(1)	(1)	(4)	(5)
Settlements	Employee benefits(a)		-	(2)	-	(2)
	Income before income taxes		(1)	(3)	(4)	(7)
	Applicable income tax expense		-	-	1	2
	Net income		(1)	(3)	(3)	(5)
Total reclassifications for the period	Net income	$	5	(5)	1	(14)

(a)This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 20 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018 for further information.

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

118

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

24. Earnings Per Share

The following tables provide the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:
		2019				2018
For the three months ended September 30,			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	$	530			421
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders	$	526	727	0.72	417	668	0.62
Earnings Per Diluted Share:
Net income available to common shareholders	$	530			421
Effect of dilutive securities:
Stock-based awards		-	9		-	11
Net income available to common shareholders		530			421
plus assumed conversions
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders
plus assumed conversions	$	526	736	0.71	417	679	0.61

		2019				2018
For the nine months ended September 30,			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	$	1,718			1,685
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders	$	1,702	709	2.40	1,667	680	2.45
Earnings Per Diluted Share:
Net income available to common shareholders	$	1,718			1,685
Effect of dilutive securities:
Stock-based awards		-	9		-	13
Net income available to common shareholders		1,718			1,685
plus assumed conversions
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders
plus assumed conversions	$	1,702	718	2.37	1,667	693	2.41

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 both the three and nine months ended September 30, 2019 excludes 2 million of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive. The diluted earnings per share computation for both the three and nine months ended September 30, 2018 excludes 2 million of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

119

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

25. 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, 2018.

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
September 30, 2019 ($ 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 agency securities	$	75	-	-	75
Obligations of states and political subdivisions securities		-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,694	-	15,694
Agency commercial mortgage-backed securities		-	15,276	-	15,276
Non-agency commercial mortgage-backed securities		-	3,400	-	3,400
Asset-backed securities and other debt securities		-	2,156	-	2,156
Available-for-sale debt and other securities(a)		75	36,528	-	36,603
Trading debt securities:
U.S. Treasury and federal agency securities		2	1	-	3
Obligations of states and political subdivisions securities		-	29	-	29
Agency residential mortgage-backed securities		-	69	-	69
Asset-backed securities and other debt securities		-	196	-	196
Trading debt securities		2	295	-	297
Equity securities		449	10	-	459
Residential mortgage loans held for sale		-	1,136	-	1,136
Residential mortgage loans(b)		-	-	184	184
Commercial loans held for sale		-	1	-	1
MSRs		-	-	910	910
Derivative assets:
Interest rate contracts		3	1,520	24	1,547
Foreign exchange contracts		-	182	-	182
Commodity contracts		89	279	-	368
Derivative assets(d)		92	1,981	24	2,097
Total assets	$	618	39,951	1,118	41,687
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	247	9	261
Foreign exchange contracts		-	151	-	151
Equity contracts		-	-	146	146
Commodity contracts		9	344	-	353
Derivative liabilities(e)		14	742	155	911
Short positions(e)		68	44	-	112
Total liabilities	$	82	786	155	1,023

(a)Excludes FHLB, FRB and DTCC restricted stock holdings totaling $96, $477 and $2, respectively, at September 30, 2019.

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

(c)During the nine months ended September 30, 2019, 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.

120

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		Fair Value Measurements Using
December 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 agency securities		$	97	-	-	97
Obligations of states and political subdivisions securities			-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities			-	16,247	-	16,247
Agency commercial mortgage-backed securities			-	10,650	-	10,650
Non-agency commercial mortgage-backed securities			-	3,267	-	3,267
Asset-backed securities and other debt securities			-	2,015	-	2,015
Available-for-sale debt and other securities(a)			97	32,181	-	32,278
Trading debt securities:
U.S. Treasury and federal agency securities			-	16	-	16
Obligations of states and political subdivisions securities			-	35	-	35
Agency residential mortgage-backed securities			-	68	-	68
Asset-backed securities and other debt securities			-	168	-	168
Trading debt securities			-	287	-	287
Equity securities			452	-	-	452
Residential mortgage loans held for sale			-	537	-	537
Residential mortgage loans(b)			-	-	179	179
Commercial loans held for sale			-	7	-	7
MSRs			-	-	938	938
Derivative assets:
Interest rate contracts			-	648	7	655
Foreign exchange contracts			-	152	-	152
Commodity contracts			93	214	-	307
Derivative assets(d)			93	1,014	7	1,114
Total assets		$	642	34,026	1,124	35,792
Liabilities:
Derivative liabilities:
Interest rate contracts		$	8	313	8	329
Foreign exchange contracts			-	142	-	142
Equity contracts			-	-	125	125
Commodity contracts			19	259	-	278
Derivative liabilities(e)			27	714	133	874
Short positions(e)			110	28	-	138
Total liabilities		$	137	742	133	1,012
(a)	Excludes FHLB, FRB, and DTCC restricted stock holdings totaling $184, $366 and $2, respectively, at December 31, 2018.
(b)	Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
(c)	During the year ended December 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.

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 equity securities. 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 agency securities, obligations of states and political subdivisions securities, agency residential mortgage-backed securities, agency and non-agency commercial mortgage-backed securities, asset-backed securities and other debt securities and equity securities. These securities are generally valued using a market approach based on observable prices of securities with similar characteristics.

Residential mortgage loans held for sale

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

121

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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.

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.

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 14 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 September 30, 2019 and December 31, 2018, 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 September 30, 2019 was $24 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 $10 million and $17 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 $11 million and $23 million, respectively. The decrease in fair value of IRLCs due to immediate 10% and 20% adverse changes in the assumed loan closing rates would be approximately $2 million and $5 million, respectively, and the increase in fair value due to immediate 10% and 20% favorable changes in the assumed loan closing rates would be approximately $2 million and $5 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.

122

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)
		Residential		Interest Rate
		Mortgage		Derivatives,	Equity	Total
For the three months ended September 30, 2019 ($ in millions)		Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period	$	192	1,039	5	(151)		1,085
Total (losses) gains (realized/unrealized):
Included in earnings		-	(171)	51	(11)		(131)
Purchases/originations		-	42	(1)	-		41
Settlements		(11)	-	(40)	16		(35)
Transfers into Level 3(b)		3	-	-	-		3
Balance, end of period	$	184	910	15	(146)		963
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 September 30, 2019(c)	$	-	(131)	24	(11)		(118)

(a)Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.

(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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the three months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	162	959	4	(164)		961
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(8)	18	(17)		(8)
Purchases/originations			-	59	(1)	-		58
Settlements			(4)	-	(22)	37		11
Transfers into Level 3(b)			15	-	-	-		15
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(1)	(8)	7	(17)		(19)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8 respectively, as of September 30, 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.

123

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2019 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	179	938	(1)	(125)		991
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(416)	110	(63)		(370)
Purchases/originations/acquisitions			-	388	(3)	-		385
Settlements			(22)	-	(91)	42		(71)
Transfers into Level 3(b)			28	-	-	-		28
Balance, end of period		$	184	910	15	(146)		963
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 September 30, 2019(c)		$	(1)	(329)	25	(63)		(368)
(a)	Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.
(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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	137	858	3	(137)		861
Total (losses) gains (realized/unrealized):
Included in earnings			(5)	8	54	(66)		(9)
Purchases/originations			-	144	(5)	-		139
Settlements			(12)	-	(53)	59		(6)
Transfers into Level 3(b)			52	-	-	-		52
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(5)	8	9	(66)		(54)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8, respectively, as of September 30, 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.

The total losses and gains 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(121)	9	(309)	56
Corporate banking revenue		1	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(131)	(8)	(370)	(9)

The total losses and gains included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at September 30, 2019 and 2018 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(109)	(2)	(307)	11
Corporate banking revenue		2	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(118)	(19)	(368)	(54)

124

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	184	Loss rate model	Interest rate risk factor	(6.8)		-	6.9	%		(0.2)	%
				Credit risk factor		0	-	31.8	%		0.5	%
										(Fixed)	15.4	%
MSRs		910	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.4	%
										(Fixed)	619
				OAS spread (bps)		484	-	1,513		(Adjustable)	914
IRLCs, net		24	DCF	Loan closing rates		5.7	-	96.7	%		76.9	%
Swap associated with the sale of Visa, Inc.		(146)	DCF	Timing of the resolution		6/30/2021			-	2/7/2022
Class B Shares				of the Covered Litigation		12/31/2023

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	172	Loss rate model	Interest rate risk factor	(12.7)		-	11.0	%		(0.6)	%
				Credit risk factor		0	-	40.3	%		0.7	%
										(Fixed)	9.1	%
MSRs		1,010	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.2	%
										(Fixed)	533
				OAS spread (bps)		449	-	1,513		(Adjustable)	842
IRLCs, net		7	DCF	Loan closing rates		6.2	-	96.7	%		76.6	%
Swap associated with the sale of Visa, Inc.		(144)	DCF	Timing of the resolution		1/31/2021			-	9/6/2021
Class B Shares				of the Covered Litigation		11/30/2023

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 September 30, 2019 and 2018 and for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2019 and 2018, 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	Total (Losses) Gains
						For the three months ended September 30, 2019	For the nine months ended September 30, 2019
As of September 30, 2019 ($ in millions)		Level 1	Level 2	Level 3	Total
Commercial and industrial loans	$	-	-	116	116	(11)	(45)
Commercial mortgage loans		-	-	12	12	-	-
Commercial leases		-	-	18	18	2	(9)
OREO		-	-	16	16	(2)	(5)
Bank premises and equipment		-	-	23	23	(4)	(26)
Private equity investments		-	6	2	8	-	6
Total	$	-	6	187	193	(15)	(79)

		Fair Value Measurements Using				Total (Losses) Gains	Total (Losses) Gains
						For the three months	For the nine months
As of September 30, 2018 ($ in millions)		Level 1	Level 2	Level 3	Total	ended September 30, 2018	ended September 30, 2018
Commercial loans held for sale	$	-	-	3	3	(1)	(2)
Commercial and industrial loans		-	-	156	156	(16)	(46)
Commercial mortgage loans		-	-	2	2	-	6
Commercial leases		-	-	14	14	1	(9)
OREO		-	-	21	21	(2)	(6)
Bank premises and equipment		-	-	36	36	-	(41)
Operating lease equipment		-	-	10	10	(1)	(4)
Private equity investments		-	69	3	72	14	44
Total	$	-	69	245	314	(5)	(58)

125

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial and industrial loans	$	116	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		12	Appraised value	Collateral value	NM	NM
Commercial leases		18	Appraised value	Collateral value	NM	NM
OREO		16	Appraised value	Appraised value	NM	NM
Bank premises and equipment		23	Appraised value	Appraised value	NM	NM
Private equity investments		2	Comparable company analysis	Market comparable transactions	NM	NM

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs				Weighted-Average
Commercial loans held for sale	$	3	Appraised value	Appraised value			NM		NM
				Costs to sell			NM		10.0	%
Commercial and industrial loans		156	Appraised value	Collateral value			NM		NM
Commercial mortgage loans		2	Appraised value	Collateral value			NM		NM
Commercial leases		14	Appraised value	Collateral value			NM		NM
OREO		21	Appraised value	Appraised value			NM		NM
Bank premises and equipment		36	Appraised value	Appraised value			NM		NM
Operating lease equipment		10	Appraised value	Appraised value			NM		NM
Private equity investments		-	Liquidity discount applied	Liquidity discount	0	-	43.0	%	12.9	%
			to fund's NAV
		3	Comparable company analysis	Market comparable transactions			NM		NM

Portfolio commercial loans and leases

During the three and nine months ended September 30, 2019 and 2018, 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 the three and nine months ended September 30, 2019 and 2018, 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. These losses included $1 million and $2 million of charge-offs on new OREO properties transferred from loans during the three and nine months ended September 30, 2019, respectively, and $1 million and $3 million for the three and nine months ended September 30, 2018, respectively. These losses also included $1 million and $3 million in losses for the three and nine months ended September 30, 2019, respectively, and $1 million and $3 million in losses for the three and nine months ended September 30, 2018, respectively, 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 appraisals 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.

126

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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. Enterprise Workplace Services, which reports to the Bancorp’s Chief Human Resources 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 8.

Operating lease equipment

During the three and nine months ended September 30, 2018, 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. 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

The Bancorp accounts for its private equity investments, except for those accounted for under the equity method of accounting, at each investment’s 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 Bancorp recognized gains resulting from observable price changes of zero and $11 million during the three and nine months ended September 30, 2019, respectively, and $13 million and $64 million during the three and nine months ended September 30, 2018, respectively. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2019 includes a cumulative $53 million of positive adjustments as a result of observable price changes since January 1, 2018. 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 DCF 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 Bancorp recognized impairment of zero and $5 million during the three and nine months ended September 30, 2019, respectively, and an immaterial amount and $11 million during the three and nine months ended September 30, 2018, respectively. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2019 includes a cumulative $17 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018.

The Bancorp did not recognize any OTTI during the three and nine months ended September 30, 2019 and recognized an immaterial amount and $10 million of OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three and nine months ended September 30, 2018, respectively. 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 NAV of the fund or through a DCF 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 NAVs 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 Consumer Banking, Payments and Strategy, 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 be 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 September 30, 2019 and 2018 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $35 million and $12 million for the nine months ended September 30, 2019 and 2018, 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 September 30, 2019 and 2018 for which the fair value option was elected included gains of an immaterial amount for both the nine months ended September 30, 2019 and 2018. These gains are reported in corporate banking revenue in the Condensed Consolidated Statements of Income.

127

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

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 $1 million at both September 30, 2019 and December 31, 2018. 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 both September 30, 2019 and December 31, 2018. 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
September 30, 2019 ($ in millions)		Fair Value	Principal Balance	Difference
Residential mortgage loans measured at fair value	$	1,320	1,285	35
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-
Commercial loans measured at fair value		1	1	-
December 31, 2018
Residential mortgage loans measured at fair value	$	716	696	20
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		2	2	-
Commercial loans measured at fair value		7	7	-

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 September 30, 2019 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	3,261	3,261	-	-	3,261
Other short-term investments		3,235	3,235	-	-	3,235
Other securities		575	-	575	-	575
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		86	-	-	86	86
Portfolio loans and leases:
Commercial and industrial loans		50,239	-	-	50,721	50,721
Commercial mortgage loans		10,740	-	-	10,626	10,626
Commercial construction loans		5,241	-	-	5,305	5,305
Commercial leases		3,475	-	-	3,243	3,243
Residential mortgage loans		16,416	-	-	17,472	17,472
Home equity		6,178	-	-	6,452	6,452
Indirect secured consumer loans		10,976	-	-	10,889	10,889
Credit card		2,311	-	-	2,532	2,532
Other consumer loans		2,620	-	-	2,777	2,777
Unallocated ALLL		(114)	-	-	-	-
Total portfolio loans and leases, net	$	108,082	-	-	110,017	110,017
Financial liabilities:
Deposits	$	125,347	-	125,342	-	125,342
Federal funds purchased		876	876	-	-	876
Other short-term borrowings		4,046	-	4,046	-	4,046
Long-term debt		14,474	14,644	779	-	15,423

128

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2018 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,681	2,681	-	-	2,681
Other short-term investments		1,825	1,825	-	-	1,825
Other securities		552	-	552	-	552
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		63	-	-	63	63
Portfolio loans and leases:
Commercial and industrial loans		43,825	-	-	44,668	44,668
Commercial mortgage loans		6,894	-	-	6,851	6,851
Commercial construction loans		4,625	-	-	4,688	4,688
Commercial leases		3,582	-	-	3,180	3,180
Residential mortgage loans		15,244	-	-	15,688	15,688
Home equity		6,366	-	-	6,719	6,719
Indirect secured consumer loans		8,934	-	-	8,717	8,717
Credit card		2,314	-	-	2,759	2,759
Other consumer loans		2,309	-	-	2,428	2,428
Unallocated ALLL		(110)	-	-	-	-
Total portfolio loans and leases, net	$	93,983	-	-	95,698	95,698
Financial liabilities:
Deposits	$	108,835	-	108,782	-	108,782
Federal funds purchased		1,925	1,925	-	-	1,925
Other short-term borrowings		573	-	573	-	573
Long-term debt		14,426	14,287	445	-	14,732

129

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

26. 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 and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of the 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, 2019 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2018, thus net interest income for deposit-providing business segments was positively impacted during 2019. 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 2019.

The Bancorp’s methodology for allocating provision for credit 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 credit 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 funding operations by accessing the capital markets as a collective unit.

The following is a description of each of the Bancorp’s business segments and the products and services they provide to their respective client bases.

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

Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through 1,143 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, automobile and other indirect lending activities. Residential mortgage activities within Consumer Lending include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans, pools of loans and all associated hedging activities. Residential mortgages are primarily originated through a dedicated sales force and through third-party correspondent lenders. Automobile and other indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers.

Wealth and Asset Management provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of four main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Insurance Agency; 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. Fifth Third Insurance Agency assists clients with their financial and risk management needs. Fifth Third Private Bank offers wealth management strategies to high net worth and ultra-high net worth clients through wealth planning, investment management, banking, insurance, trust and estate services. Fifth Third Institutional Services provides advisory services for institutional clients including middle market businesses, non-profits, states and municipalities.

130

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
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	623	598	88	44	(111)	-	1,242
Provision for credit losses		54	58	14	-	8	-	134
Net interest income after provision for credit losses		569	540	74	44	(119)	-	1,108
Noninterest income:
Corporate banking revenue		167	1	-	-	-	-	168
Service charges on deposits		79	65	-	-	(1)	-	143
Wealth and asset management revenue		1	41	-	119	-	(37)(a)	124
Card and processing revenue		16	74	-	1	3	-	94
Mortgage banking net revenue		-	2	92	1	-	-	95
Other noninterest income(b)		72	21	4	4	10	-	111
Securities gains, net		-	-	-	-	5	-	5
Securities gains, net - non-qualifying hedges on MSRs		-	-	-	-	-	-	-
Total noninterest income		335	204	96	125	17	(37)	740
Noninterest expense:
Salaries, wages and incentives		107	122	39	45	184	-	497
Employee benefits		11	26	9	6	35	-	87
Technology and communications		3	1	2	-	94	-	100
Net occupancy expense		7	44	3	3	27	-	84
Card and processing expense		2	32	-	-	(1)	-	33
Equipment expense		7	12	-	-	14	-	33
Other noninterest expense		288	232	61	75	(294)	(37)	325
Total noninterest expense		425	469	114	129	59	(37)	1,159
Income (loss) before income taxes		479	275	56	40	(161)	-	689
Applicable income tax expense (benefit)		86	58	12	8	(24)	-	140
Net income (loss)		393	217	44	32	(137)	-	549
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

(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 $5 for branches and land. For more information refer to Note 8 and Note 25.

(c)Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	427	525	60	46	(15)	-	1,043
Provision for (benefit from) credit losses			(11)	34	10	3	48	-	84
Net interest income after provision for credit losses			438	491	50	43	(63)	-	959
Noninterest income:
Corporate banking revenue			100 (c)	1	-	-	(1)	-	100
Service charges on deposits			68	71	-	-	-	-	139
Wealth and asset management revenue			1	38	-	110	-	(35)(a)	114
Card and processing revenue			14	67	-	1	-	-	82
Mortgage banking net revenue			-	1	48	-	-	-	49
Other noninterest income			52	26	3	4	1	-	86
Securities losses, net			-	-	-	-	(6)	-	(6)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(1)	-	-	-	(1)
Total noninterest income			235	204	50	115	(6)	(35)	563
Noninterest expense:
Salaries, wages and incentives			71	109	38	44	159	-	421
Employee benefits			8	22	8	6	38	-	82
Technology and communications			2	1	2	-	66	-	71
Net occupancy expense			6	44	3	3	14	-	70
Card and processing expense			2	30	-	-	(1)	-	31
Equipment expense			6	12	-	-	13	-	31
Other noninterest expense			212	215	49	73	(248)	(35)	266
Total noninterest expense			307	433	100	126	41	(35)	972
Income (loss) before income taxes			366	262	-	32	(110)	-	550
Applicable income tax expense (benefit)			65	55	-	7	(13)	-	114
Net income (loss)			301	207	-	25	(97)	-	436
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(b)	-	141,590
(a)	Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
(b)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.
(c)	Includes impairment charges of $2 for operating lease equipment. For more information refer to Note 25.

131

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 nine months ended:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	1,761	1,802	234	141	(369)	-	3,569
Provision for credit losses		100	164	34	-	12	-	310
Net interest income after provision for credit losses		1,661	1,638	200	141	(381)	-	3,259
Noninterest income:
Corporate banking revenue		413	3	-	1	-	-	417
Service charges on deposits		227	191	-	1	(2)	-	417
Wealth and asset management revenue		2	117	-	345	-	(106)(a)	358
Card and processing revenue		49	212	-	2	3	-	266
Mortgage banking net revenue		-	4	209	1	-	-	214
Other noninterest income(b)		170	63	10	9	542	-	794
Securities gains, net		-	-	-	-	30	-	30
Securities gains, net - non-qualifying hedges on MSRs		-	-	5	-	-	-	5
Total noninterest income		861	590	224	359	573	(106)	2,501
Noninterest expense:
Salaries, wages and incentives		299	360	117	140	611	-	1,527
Employee benefits		47	84	29	25	131	-	316
Technology and communications		8	3	6	1	301	-	319
Net occupancy expense		21	130	8	10	79	-	248
Card and processing expense		6	92	-	1	(1)	-	98
Equipment expense		18	35	-	1	42	-	96
Other noninterest expense		799	671	175	219	(863)	(106)	895
Total noninterest expense		1,198	1,375	335	397	300	(106)	3,499
Income (loss) before income taxes		1,324	853	89	103	(108)	-	2,261
Applicable income tax expense		242	179	19	22	21	-	483
Net income (loss)		1,082	674	70	81	(129)	-	1,778
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

(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 $27 for branches and land. For more information refer to Note 8 and Note 25.

(c)Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

132

Fifth Third Bancorp and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	1,273	1,490	178	134	(16)	-	3,059
Provision for (benefit from) credit losses			(41)	124	30	8	(10)	-	111
Net interest income after provision for credit losses			1,314	1,366	148	126	(6)	-	2,948
Total noninterest income
Corporate banking revenue			304 (c)	4	-	1	(1)	-	308
Service charges on deposits			207	205	-	1	1	-	414
Wealth and asset management revenue			3	113	-	324	(1)	(104)(a)	335
Card and processing revenue			42	199	-	4	-	-	245
Mortgage banking net revenue			-	4	153	1	-	-	158
Other noninterest income(b)			125	33	11	13	612	-	794
Securities losses, net			-	-	-	-	(21)	-	(21)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(18)	-	-	-	(18)
Total noninterest income			681	558	146	344	590	(104)	2,215
Noninterest expense
Salaries, wages and incentives			214	329	120	131	545	-	1,339
Employee benefits			36	75	28	23	108	-	270
Technology and communications			6	4	3	1	192	-	206
Net occupancy expense			20	131	8	9	51	-	219
Card and processing expense			3	89	-	-	(1)	-	91
Equipment expense			18	37	-	-	37	-	92
Other noninterest expense			652	638	151	217	(787)	(104)	767
Total noninterest expense			949	1,303	310	381	145	(104)	2,984
Income (loss) before income taxes			1,046	621	(16)	89	439	-	2,179
Applicable income tax expense (benefit)			184	131	(3)	19	111	-	442
Net income (loss)			862	490	(13)	70	328	-	1,737
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(d)	-	141,590
(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 $41 for branches and land. For more information refer to Note 8 and Note 25.
(c)	Includes impairment charges of $4 for operating lease equipment. For more information refer to Note 25.
(d)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.

27. Subsequent Events

On October 23, 2019, the Bancorp entered into an accelerated share repurchase transaction with a counterparty pursuant to which the Bancorp paid $300 million on October 25, 2019 to repurchase shares of its outstanding common stock. The Bancorp is repurchasing the shares of its common stock as part of its Board-approved 100 million share repurchase program previously announced on June 18, 2019. The Bancorp expects the settlement of the transaction to occur on or before December 17, 2019.

On October 28, 2019, the Bancorp issued and sold $750 million of 2.375% senior fixed-rate notes, which will mature on January 28, 2025. These notes will be redeemable at the Bancorp’s option, in whole or in part, at any time or from time to time, on or after April 25, 2020, and prior to December 29, 2024, in each case at a redemption price, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date, equal to the greater of (i) 100% of the aggregate principal amount of the notes being redeemed on that redemption date; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed that would be due if the notes to be redeemed matured on December 29, 2024 discounted to the redemption date on a semi-annual basis at the applicable treasury rate plus 15 bps. Additionally, 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.

133

PART II. OTHER INFORMATION

Legal Proceedings (Item 1)

Refer to Note 20 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 third quarter of 2019 to any of the risk factors as previously disclosed in the Bancorp’s annual and quarterly reports 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 third quarter of 2019.

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. Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 20, 2019.
3.2	Amendment to the Amended Articles of Incorporation of Fifth Third Bancorp. Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on August 26, 2019.
3.3	Amendment to the Amended Articles of Incorporation of Fifth Third Bancorp, as Amended (included as Attachment to Exhibit 3.3). Incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed on September 17, 2019.
3.4	Code of Regulations of Fifth Third Bancorp as Amended as of August 26, 2019. Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on August 26, 2019.
4.1	Second Amended and Restated Deposit Agreement, dated as of August 26, 2019, among Fifth Third Bancorp, as issuer, and American Stock Transfer & Trust Company, LLC, as depositary, transfer agent and registrar, and the holders from time to time of the depositary receipts issued. Incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-A filed on August 26, 2019.
4.2	Form of depositary receipt representing the Depositary Shares (included as Exhibit A to Exhibit 4.1). Incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-A filed on August 26, 2019.
4.3	Deposit Agreement dated September 17, 2019, between Fifth Third Bancorp as issuer, American Stock Transfer & Trust Company, LLC, as depositary, transfer agent and registrar, relating to receipts, Depositary Shares and related 4.95% Non-Cumulative Perpetual Preferred Stock, Series K. Incorporated by reference to Exhibit 4.3 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2019.
4.4	Form of Certificate Representing the 4.95% Non-Cumulative Perpetual Preferred Stock, Series K, of Fifth Third Bancorp. Incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2019.
4.5	Form of Depositary Receipt for the 4.95% Non-Cumulative Perpetual Preferred Stock, Series K, of Fifth Third Bancorp. Incorporated by reference to Exhibit 4.4 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2019.
10.1	Employment Agreement between Fifth Third Bancorp, Fifth Third Bank, and Teresa Tanner dated July 1, 2019. Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A filed on July 3, 2019.
10.2	Master Confirmation dated as of August 5, 2019, as supplemented by a Supplemental Confirmation dated August 5, 2019, for accelerated share repurchase transaction between Fifth Third Bancorp and Citibank, N.A.*
10.3	Supplemental Confirmations dated August 7, 2019, to Master Confirmation dated as of August 5, 2019, for accelerated share repurchase transaction between Fifth Third Bancorp and Citibank, N.A.*
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.INS	Inline XBRL Instance Document (filed herewith).

134

101.SCH	Inline XBRL Taxonomy Extension Schema (filed herewith).
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith).
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase (filed herewith).
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith).
101.DEF	Inline XBRL Taxonomy Definition Linkbase (filed herewith).
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Selected portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K.

135

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: November 8, 2019

/s/ Tayfun Tuzun

Tayfun Tuzun

Executive Vice President and

Chief Financial Officer

(Duly Authorized Officer & Principal Financial Officer)

136

EX-10.2

Exhibit 10.2

Opening Transaction

To:	Fifth Third Bancorp 38 Fountain Square Plaza Cincinnati, Ohio 45263
From:	Citibank, N.A. Strategic Equity Solutions 388 Greenwich Street, 8th Floor New York, NY 10013
Re:	Accelerated Stock Buyback
Ref. No:	As provided in the Supplemental Confirmation
Date:	August 5, 2019

This master confirmation (this “Master Confirmation”), dated as of August 5, 2019 is intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Citibank, N.A. (“Bank”) and Fifth Third Bancorp (“Counterparty”). This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction. The additional terms of any particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation. This Master Confirmation and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation. This Master Confirmation and each Supplemental Confirmation evidence a complete binding agreement between Counterparty and Bank as to the subject matter and terms of each Transaction to which this Master Confirmation and such Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and are subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Bank and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i) the election of New York law (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to the Transactions and (iii) the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to Counterparty and Bank, with a ““Threshold Amount” means, with respect to Bank, an amount (including its equivalent in another currency) equal to 3% of the Shareholders Equity of Citigroup Inc., and with respect to Counterparty, an amount (including its equivalent in another currency) equal to 3% of the Shareholders Equity of Counterparty; provided that the words “, or becoming capable at such time of being declared,” shall be deleted from such Section 5(a)(vi)). “Shareholders Equity” means, with respect of an entity, an amount equal to such entity’s total assets minus such entity’s total liabilities, as reflected on the entity’s most recent audited financial statements.

The Transactions shall be the sole Transactions under the Agreement. If there exists any ISDA Master Agreement between Bank and Counterparty or any confirmation or other agreement between Bank and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Bank and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Bank and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in the related Supplemental Confirmation.

If, in relation to any Transaction to which this Master Confirmation and a Supplemental Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation, any Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.

1. Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions. Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern such Transaction.

General Terms:

Trade Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Buyer:	Counterparty
Seller:	Bank
Shares:	Common stock, without par value, of Counterparty (Ticker: FITB)
Exchange:	NASDAQ Global Select Market
Related Exchange(s):	All Exchanges.
Prepayment\Variable Obligation:	Applicable
Prepayment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
Prepayment Date:	For each Transaction, as set forth in the related Supplemental Confirmation.

Valuation:

VWAP Price: For any Exchange Business Day, as determined by the Calculation Agent based on the NASDAQ 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof, provided the Exchange publicly announced such extension prior to the end of the regular trading session on the prior Exchange Business Day) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “FITB.Q <Equity> AQR_SEC” (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s reasonable discretion, erroneous, such VWAP Price shall be as reasonably determined in good faith and in a commercially reasonable manner by the Calculation Agent. For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible transactions”).

2

Forward Price:	The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below.
Forward Price Adjustment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
Calculation Period:	The period from and including the Calculation Period Start Date to and including the Termination Date.
Calculation Period Start Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Termination Date:	The Scheduled Termination Date; provided that Bank shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “Accelerated Termination Date”) by delivering notice to Counterparty of any such designation prior to 11:59 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date.
Scheduled Termination Date:	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below.
First Acceleration Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation Disruption:	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof. Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, extend the Settlement Valuation Period, in both cases by no more than one Exchange Business Day for each such Disrupted Day. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking

3

into account the nature and duration of the relevant Market Disruption Event, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in good faith and in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. Any Exchange Business Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be an Exchange Business Day; if a closure of the Exchange prior to its normal close of trading on any Exchange Business Day is scheduled following the date hereof, then such Exchange Business Day shall be deemed to be a Disrupted Day in full.

If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and determine the VWAP Price for such ninth Scheduled Trading Day using its good faith estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate.

Settlement Terms:

Settlement Procedures:	If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that Bank does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by Bank to Counterparty under any Transaction as a result of the fact that Counterparty is the Issuer of the Shares. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply.
Number of Shares to be
Delivered:	A number of Shares equal to (x)(a) the Prepayment Amount divided by (b) the Divisor Amount, minus (y) the number of Initial Shares.
Divisor Amount:	The greater of (i) the Forward Price minus the Forward Price Adjustment Amount and (ii) USD 1.00.
Excess Dividend Amount:	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.
Settlement Date:	If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the earlier of (a) the Scheduled Termination Date and (b) any date on which Dealer delivers the notice of Accelerated Termination Date.
Settlement Currency:	USD
Initial Share Delivery:	Bank shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.

4

Initial Share Delivery Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Initial Shares:	For each Transaction, as set forth in the related Supplemental Confirmation; provided that Bank does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by Bank to Counterparty under any Transaction as a result of the fact that Counterparty is the Issuer of the Shares.
Share Adjustments:
Potential Adjustment
Event:	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event. It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent may, in good faith and in its commercially reasonable discretion, adjust any relevant terms of any such Transaction as appropriate to account for the economic effect on such Transaction of such postponement.
Extraordinary Dividend:
	For any calendar quarter, any dividend or distribution on the Shares with an ex- dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “Dividend”) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.
Ordinary Dividend Amount:	For each Transaction, as set forth in the related Supplemental Confirmation
Method of Adjustment:	Calculation Agent Adjustment

Extraordinary Events:

Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment
(b) Share-for-Other:	Cancellation and Payment
(c) Share-for-Combined:	Component Adjustment

5

Tender Offer: Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date.”

Consequences of Tender Offers:
(a)   Share-for-Share:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of Bank
(b)   Share-for-Other:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of Bank
(c)   Share-for-Combined:	Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of Bank
Nationalization, Insolvency or Delisting:	Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re- listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
Additional Disruption Events:
(a)   Change in Law:	Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of the interpretation”, (ii) by replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

6

	(b)   Failure to Deliver:	Applicable
	(c)   Insolvency Filing:	Applicable
	(d)   Loss of Stock Borrow:	Applicable
	Maximum Stock Loan Rate:	200 basis points per annum
	Hedging Party:	Bank
	(e)   Increased Cost of Stock Borrow:	Applicable
	Initial Stock Loan Rate:	25 basis points per annum
	Hedging Party:	Bank
	Determining Party:	Bank; provided that, following the occurrence of an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect to which Bank is the Defaulting Party, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Determining Party. Upon receipt of written request from Counterparty, the Determining Party shall promptly (but in no event later than within five (5) Exchange Business Days from the receipt of such request) provide Counterparty with a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Bank’s proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information). All calculations and determinations by the Determining Party shall be made in good faith and in a commercially reasonable manner.
Additional Termination Event(s):		Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s). The (i) declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, or (ii) occurrence of an ex-dividend date for any Dividend that is not an Extraordinary Dividend during any calendar quarter occurring

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	(in whole or in part) during the Relevant Dividend Period (as defined below) and is prior to the Scheduled Ex-Dividend Date for such calendar quarter will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions.
Relevant Dividend Period:	The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.
Relevant Dividend Period End Date:	If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.
Scheduled Ex-Dividend Dates:	For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation.
Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional Acknowledgements:	Applicable
Transfer:	Notwithstanding anything to the contrary in the Agreement, Bank may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of Bank under any Transaction, in whole or in part, to an affiliate of Bank whose obligations are guaranteed by Bank, without the consent of Counterparty.
Bank Payment Instructions:	To be advised under separate cover
Counterparty’s Contact Details for Purpose of Giving Notice:	To be provided by Counterparty
Bank’s Contact Details for Purpose of Giving Notice:	Citibank, N.A. Corporate Equity Derivatives 390 Greenwich Street, 3rd Floor New York, NY 10013 Attn: Dustin Sheppard
Method of Delivery:	Whenever delivery of funds or other assets, including without limitation any Shares, is required hereunder by or to Counterparty, such delivery shall be effected through any of Bank’s affiliates, as designated by Bank. In addition, any such designee shall perform Bank’s obligations in respect of any Transaction hereunder and may assume such obligations without the written consent of Counterparty. Bank shall be discharged of its obligations to Counterparty solely to the extent of any such performance.

2. Calculation Agent. Bank; provided that, following the occurrence of an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect to which Bank is the Defaulting Party, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Calculation Agent. Upon receipt of written request from Counterparty, the Calculation Agent shall promptly (but in no event later than within five

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(5) Exchange Business Days from the receipt of such request) provide Counterparty with a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Bank’s proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information). All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.

3. Additional Mutual Representations, Warranties and Covenants of Each Party. In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party that:

(a) Eligible Contract Participant. It is an “eligible contract participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b) Accredited Investor. Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof. Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.

4. Additional Representations, Warranties and Covenants of Counterparty. In addition to the representations, warranties and covenants in the Agreement, Counterparty represents, warrants and covenants to Bank that:

(a) The purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(b) It is not entering into any Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares, (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).

(c) Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of derivatives to effect the Share buy-back program.

(d) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Bank nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of any Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity.

(e) As of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder, Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f) Counterparty shall report each Transaction as required under the Exchange Act and the rules and regulations thereunder.

(g) The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to Bank of such restricted period not later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”;

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Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, (i) the Relevant Period (as defined below) and (ii) the Settlement Valuation Period, if any, for such Transaction. “Relevant Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as specified in the related Supplemental Confirmation) for such Transaction, or such earlier day as elected by Bank and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Acquisition Transaction Announcements” below).

(h) As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the Settlement Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

(i) Counterparty is not and, after giving effect to any Transaction, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(j) Counterparty has not and will not enter into agreements similar to the Transactions described herein where any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if applicable, any Settlement Valuation Period under this Master Confirmation. In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Master Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap.

(k) Counterparty has total assets of at least USD 50,000,000 as of the date of each Transaction.

(l) Counterparty understands that no obligations of Bank to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Bank or any governmental agency.

5. Regulatory Disruption. In the event that Bank concludes, in good faith and based on the advice of counsel, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures generally applicable to the relevant line of business (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Bank), for it to refrain from or decrease any market activity on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, Bank may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days.

6. 10b5-1 Plan. Counterparty represents, warrants and covenants to Bank that:

(a) Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act (“Rule 10b-5”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares. Counterparty acknowledges that it is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c).

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(b) Counterparty will not seek to control or influence Bank’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, Bank’s decision to enter into any hedging transactions. Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1.

(c) Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or the relevant Supplemental Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

7. Counterparty Purchases. Counterparty (or any “affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall not, without the prior written consent of Bank, directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period, except through Bank. However, the foregoing shall not limit Counterparty’s ability (or the ability of any “agent independent of the issuer” (as defined in Rule 10b-18)), pursuant to any plan (as defined in Rule 10b-18) of Counterparty, to re-acquire Shares in connection with any equity transaction related to such plan or to limit Counterparty’s ability to withhold Shares to cover tax liabilities associated with such equity transactions or otherwise restrict Counterparty’s ability to repurchase Shares under privately negotiated or off-market transactions (including, without limitation, an agreement relating to Counterparty’s 401(k) Plan or transactions with any of Counterparty’s employees, officers, directors or affiliates), so long as any re-acquisition, withholding or repurchase does not constitute a “Rule 10b-18 purchase” (as defined in Rule 10b-18).

8. Special Provisions for Merger Transactions. Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a) Counterparty agrees that it:

(i) will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make, or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction (a “Public Announcement”) unless such Public Announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;

(ii) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify Bank following any such Public Announcement that such Public Announcement has been made; and

(iii) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Bank with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through Bank or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date of such Public Announcement. Such written notice shall be deemed to be a certification by Counterparty to Bank that such information is true and correct. In addition, Counterparty shall promptly notify Bank of the earlier to occur of the completion of the relevant Merger Transaction and the completion of the vote by target shareholders.

(b) Counterparty acknowledges that a Public Announcement may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that in making any Public Announcement, it must comply with the standards set forth in Section 6 above.

(c) Upon the occurrence of any Public Announcement (whether made by Counterparty or a third party), Bank may in its sole discretion (i) make adjustments in good faith and in a commercially reasonable manner to the terms of any Transaction, including, without limitation, the Scheduled Termination Date or the Forward Price Adjustment Amount, and/or suspend the Calculation Period and/or any Settlement Valuation Period or (ii) treat the occurrence

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of such Public Announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

9. Special Provisions for Acquisition Transaction Announcements. (a) If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Number of Shares to be Delivered for such Transaction shall be determined as if the Divisor Amount were equal to “The greater of (i) the Forward Price and (ii) USD 1.00.” If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction Announcement.

(b) “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent could reasonably be expected to result in an Acquisition Transaction or (v) any announcement of any change or amendment to any previous Acquisition Transaction Announcement (including any announcement of the abandonment of any such previously announced Acquisition Transaction, agreement, letter of intent, understanding or intention). For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer or a third party.

(c) “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “15%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 15% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

10. Acknowledgments. (a) The parties hereto intend for:

(i) each Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

(ii) the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;

(iii) a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code);

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(iv) all payments for, under or in connection with each Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code); and

(v) the Agreement (including this Master Confirmation and each Transaction hereunder) constitutes a “qualified financial contract” as such term is defined in Section 11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)); and

(vi) a Non-defaulting Party’s rights under Sections 5 and 6 of the Agreement constitute rights of the kind referred to in 12 U.S.C. Section 1821(e)(8)(A) and 12 U.S.C. Section 5390(c)(8)(A)..

(b) Counterparty acknowledges that:

(i) during the term of any Transaction, Bank and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;

(ii) Bank and its affiliates may also be active in the market for the Shares and derivatives linked to the Shares other than in connection with hedging activities in relation to any Transaction, including acting as agent or as principal and for its own account or on behalf of customers;

(iii) Bank shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;

(iv) any market activities of Bank and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and the VWAP Price, each in a manner that may be adverse to Counterparty; and

(v) each Transaction is a derivatives transaction in which it has granted Bank an option; Bank may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction.

11. Credit Support Documents. The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement.

12. Set-off. (a) The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f) Upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation). Y will give notice to the other party of any set-off effected under this Section 6(f).

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this Section 6(f) shall be effective to create a charge or other security interest. This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

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(b) Notwithstanding anything to the contrary in the foregoing, Bank agrees not to set off or net amounts due from Counterparty with respect to any Transaction against amounts due from Bank to Counterparty with respect to contracts or instruments that are not Equity Contracts. “Equity Contract” means any transaction or instrument that does not convey to Bank rights, or the ability to assert claims, that are senior to the rights and claims of common stockholders in the event of Counterparty’s bankruptcy.

13. Delivery of Shares. Notwithstanding anything to the contrary herein, Bank may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

14. Early Termination. In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for Bank to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share would receive in such Merger Event (each such unit, an “Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is made by Bank, the prices at which Bank purchases Shares or Alternative Delivery Property to fulfill its delivery obligations under this Section 14); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash; and provided further that Counterparty may make such election only if Counterparty represents and warrants to Bank in writing on the date it notifies Bank of such election that, as of such date, Counterparty is not aware of any material non-public information concerning the Shares and is making such election in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

15. Calculations and Payment Date upon Early Termination. The parties acknowledge and agree that in calculating Close-out Amount pursuant to Section 6 of the Agreement Bank may (but need not) determine losses without reference to actual losses incurred but based on expected losses assuming a commercially reasonable (including without limitation with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss to avoid awaiting the delay associated with closing out any hedge or related trading position in a commercially reasonable manner prior to or sooner following the designation of an Early Termination Date. Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery Property in accordance with Section 14, such Shares or Alternative Delivery Property shall be delivered on a date selected by Bank as promptly as practicable.

16. [Reserved.]

17. Automatic Termination Provisions. Notwithstanding anything to the contrary in Section 6 of the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to which such Supplemental Confirmation relates as the Affected Transaction will automatically occur without any notice or action by Bank or Counterparty if the price of the Shares on the Exchange at any time falls below such Termination Price, and the Exchange Business Day that the price of the Shares on the Exchange at any time falls below the Termination Price will be the “Early Termination Date” for purposes of the Agreement.

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18. Delivery of Cash. For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity by ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, as in effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions).

19. Claim in Bankruptcy. Bank acknowledges and agrees that this Master Confirmation is not intended to convey to it rights with respect to the Transactions that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.

20. [Reserved.]

21. Governing Law. The Agreement, this Master Confirmation, each Supplemental Confirmation and all matters arising in connection with the Agreement, this Master Confirmation and each Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).

22. Offices.

The Office of Counterparty for each Transaction is: Fifth Third Bancorp, Fifth Third Center Cincinnati, Ohio 45263.

The Office of Bank for each Transaction is: New York.

23. Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to any Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into any Transaction hereunder by, among other things, the mutual waivers and certifications provided herein.

24. Submission to Jurisdiction. Section 13(b) of the Agreement is deleted in its entirety and replaced by the following:

“Each party hereby irrevocably and unconditionally submits for itself and its property in any suit, legal action or proceeding relating to this Agreement and/or any Transaction, or for recognition and enforcement of any judgment in respect thereof, (each, “Proceedings”) to the exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof. Nothing in the Master Confirmation, any Supplemental Confirmation or this Agreement precludes either party from bringing Proceedings in any other jurisdiction if (A) the courts of the State of New York or the United States of America for the Southern District of New York lack jurisdiction over the parties or the subject matter of the Proceedings or declines to accept the Proceedings on the grounds of lacking such jurisdiction; (B) the Proceedings are commenced by a party for the purpose of enforcing against the other party’s property, assets or estate any decision or judgment rendered by any court in which Proceedings may be brought as provided hereunder; (C) the Proceedings are commenced to appeal any such court’s decision or judgment to any higher court with competent appellate jurisdiction over that court’s decisions or judgments if that higher court is located outside the State of New York or Borough of Manhattan, such as a federal court of appeals or the U.S. Supreme Court; or (D) any suit, action or proceeding has been commenced in another jurisdiction by or against the other party or against its property, assets or estate and, in order to exercise or protect its rights, interests or remedies under this Agreement, the Master Confirmation or any Supplemental Confirmation, the party (1) joins, files a claim, or takes any other action, in any such suit, action or proceeding, or (2) otherwise commences any Proceeding in that other jurisdiction as the result of that other suit, action or proceeding having commenced in that other jurisdiction.”

15

25. Counterparts. This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

26. U.S. QFC Mandatory Contractual Requirements. The parties agree that the definitions and provisions contained in the ISDA 2018 U.S. Stay Protocol and Attachment thereto as published by ISDA on July 31, 2018 (the “U.S. Stay Protocol”) are hereby incorporated into and apply to the Agreement as if set forth in full herein. For these purposes, the following terms as used in the U.S. Stay Protocol shall have the following meanings: “Regulated Entity” shall mean Dealer and Counterparty and “Protocol Covered Agreement” or “Covered Agreement”, as applicable, shall mean the Agreement.

[Remainder of Page Intentionally Blank]

16

Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Bank.

Yours faithfully,
CITIBANK, N.A.
By:	/s/ JAMES HEATHCOTE
Name:	James Heathcote
Title:	Authorized Signatory

Agreed and Accepted By:
FIFTH THIRD BANCORP
By:	/s/ JAMES C. LEONARD
Name:	James C. Leonard
Title:	Treasurer

SCHEDULE A

SUPPLEMENTAL CONFIRMATION

To:	Fifth Third Bancorp 38 Fountain Square Plaza Cincinnati, Ohio 45263
From:	Citibank, N.A. Corporate Equity Derivatives 388 Greenwich Street, 8th Floor New York, NY 10013
Subject:	Accelerated Stock Buyback
Date:	[            ]

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Citibank, N.A. (“Bank”) and Fifth Third Bancorp (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Bank and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of August     , 2019 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2. The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	[            ]
Forward Price Adjustment Amount:	[            ]
Calculation Period Start Date:	[            ]
Scheduled Termination Date:	[            ]
First Acceleration Date:	[            ]
Prepayment Amount:	[            ]
Prepayment Date:	[            ]
Initial Shares:	[                ] Shares; provided that if, in connection with the Transaction, Bank is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Bank is able to so borrow or otherwise acquire, and Bank shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the “Initial Shares” for purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	[            ]
Ordinary Dividend Amount:	USD [            ]

A - 1

Scheduled Ex-Dividend Dates:	[            ]
Termination Price:	USD [            ]
Additional Relevant Days:	The 5 Exchange Business Days immediately following the Calculation Period.
Reserved Shares:	[                ] Shares.

3. Counterparty represents and warrants to Bank that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4. This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

[Remainder of Page Intentionally Blank]

A - 2

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to any particular Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Bank.

Yours faithfully,

CITIBANK, N.A.

By:

Name:

Authorized Representative

         Agreed and Accepted By:

         FIFTH THIRD BANCORP

         By:

         Name:

         Title:

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1. The following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation:

Settlement Currency:	USD
Settlement Method Election:	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Bank in writing on the date it notifies Bank of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
Electing Party:	Counterparty
Settlement Method Election Date:	The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be.
Default Settlement Method:	Cash Settlement
Forward Cash Settlement Amount:	The Number of Shares to be Delivered multiplied by the Settlement Price.
Settlement Price:	The average of the VWAP Prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation.
Settlement Valuation Period:	A number of Scheduled Trading Days selected by Bank in good faith and in a commercially reasonable manner, such number to be approximately equal to the Number of Shares to be Delivered divided by 10% of the ADTV (as defined in Rule 10b-18, and expressed as a number of Shares) for the Shares at the time of determination, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date.
Cash Settlement:	If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

A – 1

Cash Settlement Payment Date:	The date one Settlement Cycle following the last day of the Settlement Valuation Period.
Net Share Settlement Procedures:	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to Bank (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent.

3. Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a) a registration statement covering public resale of the Registered Settlement Shares by Bank (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to Bank, in such quantities as Bank shall reasonably have requested, on or prior to the date of delivery;

(b) the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to Bank;

(c) as of or prior to the date of delivery, Bank shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to Bank, in its discretion; and

(d) as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with Bank in connection with the public resale of the Registered Settlement Shares by Bank substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance satisfactory to Bank, which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Bank and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4. If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a) all Unregistered Settlement Shares shall be delivered to Bank (or any affiliate of Bank designated by Bank) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof;

(b) as of or prior to the date of delivery, Bank and any potential purchaser of any such shares from Bank (or any affiliate of Bank designated by Bank) identified by Bank shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

(c) as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with Bank (or any affiliate of Bank designated by Bank) in connection with the private placement of such shares by Counterparty to Bank (or any such affiliate) and the private resale of such shares by Bank (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Bank, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, Bank and its affiliates and the provision of customary opinions, accountants’

A – 2

comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all fees and expenses in connection with such resale, including all fees and expenses of counsel for Bank, and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d) in connection with the private placement of such shares by Counterparty to Bank (or any such affiliate) and the private resale of such shares by Bank (or any such affiliate), Counterparty shall, if so requested by Bank, prepare, in cooperation with Bank, a private placement memorandum in form and substance reasonably satisfactory to Bank.

5. Bank, itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to Bank pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by Bank, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”). If the proceeds of any sale(s) made by Bank, the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, Bank will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, Bank shall return to Counterparty on that date such unsold Shares.

6. If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Exchange Business Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to Bank, through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares. If Counterparty elects to deliver to Bank additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall. Such Makewhole Shares shall be sold by Bank in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to Bank further Makewhole Shares until such Shortfall has been reduced to zero.

7. Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”). Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

Where: A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number;

A – 3

and

B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” for each Transaction shall be set forth in the related Supplemental Confirmation.

A – 4

*CERTAIN INFORMATION IDENTIFIED WITH A MARK

OF [**] HAS BEEN EXCLUDED FROM THIS EXHIBIT

BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD

BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

SUPPLEMENTAL CONFIRMATION

To:	Fifth Third Bancorp 38 Fountain Square Plaza Cincinnati, Ohio 45263
From:	Citibank, N.A. Strategic Equity Solutions 388 Greenwich Street, 8th Floor New York, NY 10013
Subject:	Accelerated Stock Buyback
Date:	August 5, 2019

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Citibank, N.A. (“Bank”) and Fifth Third Bancorp (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Bank and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of August 5, 2019 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2. The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	August 5, 2019
Forward Price Adjustment Amount:	[**]*
Calculation Period Start Date:	August 6, 2019
Scheduled Termination Date:	September 26, 2019
First Acceleration Date:	[**]*
Prepayment Amount:	$100,000,000
Prepayment Date:	August 7, 2019
Initial Shares:	3,150,482 Shares; provided that if, in connection with the Transaction, Bank is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Bank is able to so borrow or otherwise acquire, and Bank shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the “Initial Shares” for purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	August 7, 2019
Ordinary Dividend Amount:	[**]*

A - 1

Scheduled Ex-Dividend Dates:	September 27, 2019
Termination Price:	[**]*
Additional Relevant Days:	The 5 Exchange Business Days immediately following the Calculation Period.
Reserved Shares:	7,412,898 Shares.

3. Counterparty represents and warrants to Bank that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4. This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

[Remainder of Page Intentionally Blank]

A - 2

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to any particular Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Bank.

Yours faithfully,
CITIBANK, N.A.
By:	/s/ JAMES HEATHCOTE
Name:	James Heathcote
Title:	Authorized Signatory

Agreed and Accepted By:
FIFTH THIRD BANCORP
By:	/s/ JAMES C. LEONARD
Name:	James C. Leonard
Title:	Treasurer

EX-10.3

Exhibit 10.3

*CERTAIN INFORMATION IDENTIFIED WITH A MARK

OF [**] HAS BEEN EXCLUDED FROM THIS EXHIBIT

BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD

BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

SUPPLEMENTAL CONFIRMATION

To:	Fifth Third Bancorp 38 Fountain Square Plaza Cincinnati, Ohio 45263
From:	Citibank, N.A. Strategic Equity Solutions 388 Greenwich Street, 8th Floor New York, NY 10013
Subject:	Accelerated Stock Buyback, Tranche #1
Date:	August 7, 2019

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Citibank, N.A. (“Bank”) and Fifth Third Bancorp (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Bank and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.     This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of August 7, 2019 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.     The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	August 7, 2019
Forward Price Adjustment Amount:	[**]*
Calculation Period Start Date:	August 8, 2019
Scheduled Termination Date:	September 26, 2019
First Acceleration Date:	[**]*
Prepayment Amount:	$100,000,000
Prepayment Date:	August 9, 2019
Initial Shares:	3,202,713 Shares; provided that if, in connection with the Transaction, Bank is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Bank is able to so borrow or otherwise acquire, and Bank shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the “Initial Shares” for purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	August 9, 2019
Ordinary Dividend Amount:	[**]*

A - 1

Scheduled Ex-Dividend Dates:	September 27, 2019
Termination Price:	[**]*
Additional Relevant Days:	The 5 Exchange Business Days immediately following the Calculation Period.
Reserved Shares:	7,535,795 Shares.

Calculation Dates:

1.	August 8, 2019	2.	August 12, 2019	3.	August 14, 2019
4.	August 16, 2019	5.	August 20, 2019	6.	August 22, 2019
7.	August 26, 2019	8.	August 27, 2019	9.	August 28, 2019
10.	August 29, 2019	11.	August 30, 2019	12.	September 3, 2019
13.	September 4, 2019	14.	September 5, 2019	15.	September 6, 2019
16.	September 9, 2019	17.	September 10, 2019	18.	September 11, 2019
19.	September 12, 2019	20.	September 13, 2019	21.	September 16, 2019
22.	September 17, 2019	23.	September 18, 2019	24.	September 19, 2019
25.	September 20, 2019	26.	September 23, 2019	27.	September 24, 2019
28.	September 25, 2019	29.	September 26, 2019

Following the First Acceleration Date, each Exchange Business Day thereafter shall be a Calculation Date.

3.     Counterparty represents and warrants to Bank that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4.     This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

[Remainder of Page Intentionally Blank]

A - 2

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to any particular Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Bank.

Yours faithfully,
CITIBANK, N.A.
By:	/s/ JAMES HEATHCOTE
Name:	James Heathcote
Title:	Authorized Signatory

Agreed and Accepted By:
FIFTH THIRD BANCORP
By:	/s/ JAMES C. LEONARD
Name:	James C. Leonard
Title:	Treasurer

*CERTAIN INFORMATION IDENTIFIED WITH A MARK

OF [**] HAS BEEN EXCLUDED FROM THIS EXHIBIT

BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD

BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

SUPPLEMENTAL CONFIRMATION

To:	Fifth Third Bancorp 38 Fountain Square Plaza Cincinnati, Ohio 45263
From:	Citibank, N.A. Strategic Equity Solutions 388 Greenwich Street, 8th Floor New York, NY 10013
Subject:	Accelerated Stock Buyback, Tranche #2
Date:	August 7, 2019

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Citibank, N.A. (“Bank”) and Fifth Third Bancorp (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below. This Supplemental Confirmation is a binding contract between Bank and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.     This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of August 7, 2019 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time. All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.     The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	August 7, 2019
Forward Price Adjustment Amount:	[**]*
Calculation Period Start Date:	August 9, 2019
Scheduled Termination Date:	September 26, 2019
First Acceleration Date:	[**]*
Prepayment Amount:	$100,000,000
Prepayment Date:	August 9, 2019
Initial Shares:	3,202,713 Shares; provided that if, in connection with the Transaction, Bank is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that Bank is able to so borrow or otherwise acquire, and Bank shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction pursuant to this paragraph shall be the “Initial Shares” for purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	August 9, 2019
Ordinary Dividend Amount:	[**]*

A - 1

Scheduled Ex-Dividend Dates:	September 27, 2019
Termination Price:	[**]*
Additional Relevant Days:	The 5 Exchange Business Days immediately following the Calculation Period.
Reserved Shares:	7,535,795 Shares.

Calculation Dates:

1.	August 9, 2019	2.	August 13, 2019	3.	August 15, 2019
4.	August 19, 2019	5.	August 21, 2019	6.	August 23, 2019
7.	August 26, 2019	8.	August 27, 2019	9.	August 28, 2019
10.	August 29, 2019	11.	August 30, 2019	12.	September 3, 2019
13.	September 4, 2019	14.	September 5, 2019	15.	September 6, 2019
16.	September 9, 2019	17.	September 10, 2019	18.	September 11, 2019
19.	September 12, 2019	20.	September 13, 2019	21.	September 16, 2019
22.	September 17, 2019	23.	September 18, 2019	24.	September 19, 2019
25.	September 20, 2019	26.	September 23, 2019	27.	September 24, 2019
28.	September 25, 2019	29.	September 26, 2019

Following the First Acceleration Date, each Exchange Business Day thereafter shall be a Calculation Date.

3.     Counterparty represents and warrants to Bank that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs.

4.     This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

[Remainder of Page Intentionally Blank]

A - 2

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Bank) correctly sets forth the terms of the agreement between Bank and Counterparty with respect to any particular Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Bank.

Yours faithfully,
CITIBANK, N.A.
By:	/s/ JAMES HEATHCOTE
Name:	James Heathcote
Title:	Authorized Signatory

Agreed and Accepted By:
FIFTH THIRD BANCORP
By:	/s/ JAMES C. LEONARD
Name:	James C. Leonard
Title:	Treasurer

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

November 8, 2019

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

November 8, 2019

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 September 30, 2019 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

November 8, 2019

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 September 30, 2019 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

November 8, 2019

XML

Goodwill

9 Months Ended

Sep. 30, 2019

Goodwill

Goodwill

11. Goodwill

Business combinations entered into by the Bancorp typically result in the recognition of goodwill. Acquisition activity includes acquisitions in the respective period in addition to purchase accounting adjustments related to previous acquisitions. On March 22, 2019 the Bancorp completed its acquisition of MB Financial, Inc. In connection with the acquisition, the Bancorp recorded $1.8 billion of goodwill. The estimated fair value of assets acquired, liabilities assumed and noncontrolling interest recognized are considered preliminary as of September 30, 2019 and are subject to change for up to one year after the acquisition date as additional information becomes available. The amount of goodwill recognized and the allocation to the Bancorp’s reporting units are also considered preliminary and subject to change for up to one year from the acquisition date.

The Bancorp completed its annual goodwill impairment test as of September 30, 2019 and the estimated fair values of the Commercial Banking, Branch Banking and Wealth and Asset Management reporting units exceeded their carrying values, including goodwill.

Changes in the net carrying amount of goodwill, by reporting unit, for the nine months ended September 30, 2019 and the year ended December 31, 2018 were as follows:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
($ in millions)		Banking	Banking	Lending	Management	and Other	Total
Goodwill	$	1,363	1,655	215	177	-	3,410
Accumulated impairment losses		(750)	-	(215)	-	-	(965)
Net carrying value as of December 31, 2017	$	613	1,655	-	177	-	2,445
Acquisition activity		17	-	-	16	-	33
Net carrying value as of December 31, 2018	$	630	1,655	-	193	-	2,478
Acquisition activity		1,352	399	-	64	-	1,815
Sale of business		-	-	-	(3)	-	(3)
Net carrying value as of September 30, 2019	$	1,982	2,054	-	254	-	4,290

XML

Commitments - Standby and Commercial Letters of Credit (Parenthetical) (Details) - Financial Standby Letter of Credit $ in Millions	Sep. 30, 2019 USD ($)
Line of Credit Facility [Line Items]
Commitments	$ 2,219
Less Than One Year From The Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	1,124
Less Than One Year From The Balance Sheet Date | Commercial
Line of Credit Facility [Line Items]
Commitments	1
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	1,056
More than One and within Five Years from Balance Sheet Date | Commercial
Line of Credit Facility [Line Items]
Commitments	5
More than Five Years from Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	$ 39

XML

Commitments - Summary of Significant Commitments (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Commitments to extend credit
Long-term Purchase Commitment [Line Items]
Commitments	$ 79,076	$ 70,415
Letters of credit
Long-term Purchase Commitment [Line Items]
Commitments	2,219	2,041
Forward contracts related to residential mortgage loans held for sale
Long-term Purchase Commitment [Line Items]
Commitments	2,693	926
Purchase obligations
Long-term Purchase Commitment [Line Items]
Commitments	114	126
Capital commitments for private equity investments
Long-term Purchase Commitment [Line Items]
Commitments	77	32
Capital expenditures
Long-term Purchase Commitment [Line Items]
Commitments	$ 85	$ 45

XML

Commitments - Visa Funding and Bancorp Cash Payments (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Oct. 31, 2019	Sep. 30, 2018	Sep. 30, 2014	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Sep. 30, 2019	Jun. 30, 2018	Dec. 31, 2009
Visa Funding
Loss Contingencies [Line Items]
Escrow Deposit			$ 450	$ 150	$ 1,565	$ 400	$ 800	$ 500	$ 300	$ 600	$ 3,000
Bancorp Cash Payment
Loss Contingencies [Line Items]
Reduction of liability in cash to the swap counterparty	$ 12	$ 26	$ 18	$ 6	$ 75	$ 19	$ 35	$ 20

XML

Credit Quality and the Allowance for Loan and Lease Losses

9 Months Ended

Sep. 30, 2019

Credit Quality and the Allowance for Loan and Leases Losses

Credit Quality and the Allowance for Loan and Lease Losses

7. 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 September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	651	76	276	112	1,115
	Losses charged-off(a)		(34)	(2)	(94)	-	(130)
	Recoveries of losses previously charged-off(a)		1	1	29	-	31
	Provision for loan and lease losses		53	-	72	2	127
Balance, end of period		$	671	75	283	114	1,143
(a)	For the three months ended September 30, 2019, the Bancorp recorded $12 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the three months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	654	86	229	108	1,077
	Losses charged-off(a)		(36)	(3)	(73)	-	(112)
	Recoveries of losses previously charged-off(a)		9	1	30	-	40
	Provision for (benefit from) loan and lease losses		29	(1)	57	1	86
Balance, end of period		$	656	83	243	109	1,091
(a)	For the three months ended September 30, 2018, the Bancorp recorded $8 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	645	81	267	110	1,103
	Losses charged-off(a)		(87)	(5)	(266)	-	(358)
	Recoveries of losses previously charged-off(a)		14	4	84	-	102
	Provision for (benefit from) loan and lease losses		99	(5)	198	4	296
Balance, end of period		$	671	75	283	114	1,143
(a)	For the nine months ended September 30, 2019, the Bancorp recorded $35 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off(a)		(124)	(10)	(200)	-	(334)
	Recoveries of losses previously charged-off(a)		19	4	64	-	87
	Provision for (benefit from) loan and lease losses		8	-	145	(11)	142
Balance, end of period		$	656	83	243	109	1,091
(a)	For the nine months ended September 30, 2018, the Bancorp recorded $18 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
				Residential
As of September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	53	58	36	-	147
	Collectively evaluated for impairment		618	17	247	-	882
	Unallocated		-	-	-	114	114
Total ALLL		$	671	75	283	114	1,143
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	358	758	255	-	1,371
	Collectively evaluated for impairment		69,427	15,695	22,095	-	107,217
	Purchased credit impaired		581	38	18	-	637
Total portfolio loans and leases		$	70,366	16,491	22,368	-	109,225
(a)	Includes $1 related to leveraged leases at September 30, 2019.
(b)	Excludes $184 of residential mortgage loans measured at fair value and includes $492 of leveraged leases, net of unearned income at September 30, 2019.

				Residential
As of December 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	42	61	38	-	141
	Collectively evaluated for impairment		603	20	229	-	852
	Unallocated		-	-	-	110	110
Total ALLL		$	645	81	267	110	1,103
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	277	736	278	-	1,291
	Collectively evaluated for impairment		59,294	14,589	19,912	-	93,795
Total portfolio loans and leases		$	59,571	15,325	20,190	-	95,086
(a)	Includes $1 related to leveraged leases at December 31, 2018.
(b)	Excludes $179 of residential mortgage loans measured at fair value and includes $624 of leveraged leases, net of unearned income at December 31, 2018.

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 September 30, 2019 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	47,944	1,300	1,513	11	50,768
Commercial mortgage owner-occupied loans		4,419	152	197	-	4,768
Commercial mortgage nonowner-occupied loans		5,786	76	192	-	6,054
Commercial construction loans		5,192	42	47	-	5,281
Commercial leases		3,364	42	89	-	3,495
Total commercial loans and leases	$	66,705	1,612	2,038	11	70,366

			Special
As of December 31, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	42,695	779	853	13	44,340
Commercial mortgage owner-occupied loans		3,122	23	139	-	3,284
Commercial mortgage nonowner-occupied loans		3,632	27	31	-	3,690
Commercial construction loans		4,657	-	-	-	4,657
Commercial leases		3,475	72	53	-	3,600
Total commercial loans and leases	$	57,581	901	1,076	13	59,571

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, indirect secured consumer 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, 2018 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:
		September 30, 2019		December 31, 2018
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	16,469	22	15,303	22
Home equity		6,138	80	6,332	70
Indirect secured consumer loans		11,024	2	8,975	1
Credit card		2,440	27	2,444	26
Other consumer loans		2,655	2	2,341	1
Total residential mortgage and consumer loans(a)	$	38,726	133	35,395	120

(a) Excludes $184 and $179 of residential mortgage loans measured at fair value at September 30, 2019 and December 31, 2018, 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 September 30, 2019 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	50,504	131	133	264	50,768	15
	Commercial mortgage owner-occupied loans		4,742	9	17	26	4,768	3
	Commercial mortgage nonowner-occupied loans		6,025	13	16	29	6,054	15
	Commercial construction loans		5,280	-	1	1	5,281	1
	Commercial leases		3,479	2	14	16	3,495	1
Residential mortgage loans(a)			16,390	32	69	101	16,491	48
Consumer loans:
	Home equity		6,097	63	58	121	6,218	-
	Indirect secured consumer loans		10,892	120	14	134	11,026	10
	Credit card		2,375	49	43	92	2,467	38
	Other consumer loans		2,633	21	3	24	2,657	1
Total portfolio loans and leases(a)		$	108,417	440	368	808	109,225	132
(a)	Excludes $184 of residential mortgage loans measured at fair value at September 30, 2019.
(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 September 30, 2019, $96 of these loans were 30-89 days past due and $274 were 90 days or more past due. The Bancorp recognized $1 of losses during both the three and nine months ended September 30, 2019 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, 2018 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	44,213	32	95	127	44,340	4
	Commercial mortgage owner-occupied loans		3,277	1	6	7	3,284	2
	Commercial mortgage nonowner-occupied loans		3,688	1	1	2	3,690	-
	Commercial construction loans		4,657	-	-	-	4,657	-
	Commercial leases		3,597	1	2	3	3,600	-
Residential mortgage loans(a)			15,227	37	61	98	15,325	38
Consumer loans:
	Home equity		6,280	71	51	122	6,402	-
	Indirect secured consumer loans		8,844	119	13	132	8,976	12
	Credit card		2,381	47	42	89	2,470	37
	Other consumer loans		2,323	17	2	19	2,342	-
Total portfolio loans and leases(a)		$	94,487	326	273	599	95,086	93
(a)	Excludes $179 of residential mortgage loans measured at fair value at December 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 December 31, 2018, $90 of these loans were 30-89 days past due and $195 were 90 days or more past due. The Bancorp recognized $1 and $4 of losses during the three and nine months ended September 30, 2018, respectively, 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.

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 September 30, 2019 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	257	178		44
	Commercial mortgage owner-occupied loans		5	5		-
	Commercial mortgage nonowner-occupied loans		1	1		-
	Commercial leases		31	27		9
Restructured residential mortgage loans			451	448		58
Restructured consumer loans:
	Home equity		134	134		22
	Indirect secured consumer loans		4	4		1
	Credit card		46	44		13
Total impaired portfolio loans and leases with a related ALLL		$	929	841		147
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	129	121		-
	Commercial mortgage owner-occupied loans		21	20		-
	Commercial mortgage nonowner-occupied loans		3	3		-
	Commercial leases		3	3		-
Restructured residential mortgage loans			328	310		-
Restructured consumer loans:
	Home equity		73	72		-
	Indirect secured consumer loans		1	1		-
Total impaired portfolio loans with no related ALLL		$	558	530		-
Total impaired portfolio loans and leases		$	1,487	1,371	(a)	147

Includes $34, $748 and $210, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $235, $10 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at September 30, 2019.

			Unpaid
			Principal	Recorded
As of December 31, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	156	107		34
	Commercial mortgage owner-occupied loans		2	2		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		23	22		7
Restructured residential mortgage loans			465	462		61
Restructured consumer loans:
	Home equity		146	145		22
	Indirect secured consumer loans		5	4		1
	Credit card		47	44		15
Total impaired portfolio loans and leases with a related ALLL		$	846	787		141
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	137	125		-
	Commercial mortgage owner-occupied loans		9	9		-
	Commercial mortgage nonowner-occupied loans		11	11		-
Restructured residential mortgage loans			292	274		-
Restructured consumer loans:
	Home equity		85	83		-
	Indirect secured consumer loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	536	504		-
Total impaired portfolio loans and leases		$	1,382	1,291	a(a)	141
(a)	Includes $60, $724 and $237, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $147, $12 and $41, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2018.

The following table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:
			For the three months ended		For the nine months ended
			September 30, 2019		September 30, 2019
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	329	2	294	6
	Commercial mortgage owner-occupied loans		26	-	22	-
	Commercial mortgage nonowner-occupied loans		5	-	9	-
	Commercial leases		33	-	28	1
Restructured residential mortgage loans			751	7	742	22
Restructured consumer loans:
	Home equity		209	3	217	9
	Indirect secured consumer loans		5	-	6	-
	Credit card		43	1	43	3
Total average impaired portfolio loans and leases		$	1,401	13	1,361	41

			For the three months ended		For the nine months ended
			September 30, 2018		September 30, 2018
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	313	3	408	13
	Commercial mortgage owner-occupied loans		11	-	17	-
	Commercial mortgage nonowner-occupied loans		21	-	27	-
	Commercial leases		28	-	17	-
Restructured residential mortgage loans			767	7	744	21
Restructured consumer loans:
	Home equity		239	3	248	9
	Indirect secured consumer loans		7	-	8	-
	Credit card		44	1	44	3
Total average impaired loans and leases		$	1,430	14	1,513	46

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:
			September 30,	December 31,
($ in millions)			2019	2018
Commercial loans and leases:
	Commercial and industrial loans	$	293	193
	Commercial mortgage owner-occupied loans		24	11
	Commercial mortgage nonowner-occupied loans		2	2
	Commercial leases		30	22
Total nonaccrual portfolio commercial loans and leases			349	228
Residential mortgage loans			22	22
Consumer loans:
	Home equity		80	69
	Indirect secured consumer loans		2	1
	Credit card		27	27
	Other consumer loans		2	1
Total nonaccrual portfolio consumer loans			111	98
Total nonaccrual portfolio loans and leases(a)(b)		$	482	348
OREO and other repossessed property			37	47
Total nonperforming portfolio assets(a)(b)		$	519	395
(a)	Excludes $13 and $16 of nonaccrual loans held for sale at September 30, 2019 and December 31, 2018, respectively.
(b)	Includes $15 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at September 30, 2019 and December 31, 2018, respectively, of which $10 and $2 are restructured nonaccrual government insured commercial loans at September 30, 2019 and December 31, 2018, 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 $200 million and $153 million as of September 30, 2019 and December 31, 2018, 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, 2018 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 $46 million and $59 million, respectively, as of September 30, 2019 compared with $24 million and $67 million, respectively, as of December 31, 2018.

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		Increase
		Number of Loans	in Loans Modified		(Decrease)	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	27	$	72	(1)	-
	Commercial mortgage owner-occupied loans	4		1	-	-
Residential mortgage loans		256		39	1	-
Consumer loans:
	Home equity	21		1	-	-
	Indirect secured consumer loans	27		-	-	-
	Credit card	1,467		8	2	1
Total portfolio loans		1,802	$	121	2	1
(a)	Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
(b)	Represents number of loans post-modification and excludes loans previously modified in a TDR.

			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	16	$	52	(7)	7
Residential mortgage loans		185		24	1	-
Consumer loans:
	Home equity	30		2	-	-
	Indirect secured consumer loans	25		-	-	-
	Credit card	1,547		8	2	-
Total portfolio loans		1,803	$	86	(4)	7
(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 following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the nine months ended:
			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	65	$	168	(15)	5
	Commercial mortgage owner-occupied loans	13		10	-	-
Residential mortgage loans		531		74	1	-
Consumer loans:
	Home equity	58		3	-	-
	Indirect secured consumer loans	65		-	-	-
	Credit card	4,250		24	6	3
Total portfolio loans		4,982	$	279	(8)	8
(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.

			Recorded Investment
		Number of Loans	in Loans and Leases		Increase	Charge-offs
		Modified in a TDR	Modified in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans and leases:
	Commercial and industrial loans	41	$	187	2	7
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		969		148	4	-
Consumer loans:
	Home equity	84		6	-	-
	Indirect secured consumer loans	64		-	-	-
	Credit card	5,187		27	6	1
Total portfolio loans		6,347	$	368	12	8
(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, indirect secured consumer loan 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 September 30, 2019 and 2018 and were within 12 months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	3
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		67		10
Consumer loans:
	Home equity	7		-
	Credit card	69		-
Total portfolio loans		146	$	13

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	5	$	32
Residential mortgage loans		28		4
Consumer loans:
	Home equity	4		-
	Credit card	146		1
Total portfolio loans		183	$	37

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

The following tables provide a summary of TDRs that subsequently defaulted during the nine months ended September 30, 2019 and 2018 and were within twelve months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	20
	Commercial mortgage owner-occupied loans	4		1
Residential mortgage loans		196		30
Consumer loans:
	Home equity	12		-
	Credit card	605		3
Total portfolio loans		825	$	54

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	61
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		138		24
Consumer loans:
	Home equity	6		-
	Credit card	525		3
Total portfolio loans		679	$	88

(a) 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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Business Combination

9 Months Ended

Sep. 30, 2019

Business Combination

Business Combination

3. Business Combination

On March 22, 2019, Fifth Third Bancorp completed its acquisition of MB Financial, Inc. in a stock and cash transaction valued at approximately $3.6 billion. MB Financial, Inc. was headquartered in Chicago, Illinois with reported assets of approximately $20 billion and 86 branches (91 locations) as of December 31, 2018 and was the holding company of MB Financial Bank, N.A. The acquisition resulted in a combined company with a larger Chicago market presence and core deposit funding base while also building scale in a strategically important market.

Under the terms of the agreement, the Bancorp acquired 100% of the common stock of MB Financial, Inc. In exchange, common shareholders of MB Financial, Inc. received 1.45 shares of Fifth Third Bancorp common stock and $5.54 in cash for each share of MB Financial, Inc. common stock, for a total value per share of $42.49, based on the $25.48 closing price of Fifth Third Bancorp’s common stock on March 21, 2019. Upon closing of the transaction, MB Financial, Inc. became a subsidiary of the Bancorp. However, MB Financial, Inc.’s 6.00% non-cumulative Series C perpetual preferred stock with a fair value of $197 million remained outstanding and was recognized as a noncontrolling interest on the Condensed Consolidated Balance Sheets. Through its ownership of all of the common stock, the Bancorp controlled 95% of the voting equity interests in MB Financial, Inc. with the remainder attributable to the preferred shareholders’ noncontrolling interest.

On June 24, 2019, MB Financial, Inc. entered into an Agreement and Plan of Merger with the Bancorp to provide for the merger of MB Financial, Inc. with and into the Bancorp, with the Bancorp as the surviving corporation. A special meeting of MB Financial, Inc.’s stockholders was held on August 23, 2019 at which the holders of MB Financial, Inc.’s common stock and preferred stock, voting together as a single class, approved the merger. In the merger, each outstanding share of MB Financial, Inc.’s preferred stock was converted into the right to receive one share of a newly created series of preferred stock of the Bancorp having substantially the same terms as the MB Financial, Inc. preferred stock.

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative Class B perpetual preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative Series C perpetual preferred stock in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

The acquisition of MB Financial, Inc. constituted a business combination and was accounted for under the acquisition method of accounting. Accordingly, the assets acquired, liabilities assumed and noncontrolling interest recognized were recorded at their estimated fair values as of the acquisition date. These fair value estimates are considered preliminary as of September 30, 2019. Fair value estimates, including loans and leases, intangible assets, deposits and goodwill, are subject to change for up to one year after the acquisition date as additional information becomes available.

The following table reflects consideration paid and the noncontrolling interest recognized for MB Financial, Inc.’s net assets and the amounts of acquired identifiable assets and liabilities assumed at their estimated fair value as of the acquisition date:
($ in millions)
Consideration paid
Cash payments					$	469
Fair value of common stock issued						3,121
Stock-based awards						38
Dividend receivable from MB Financial, Inc.						(20)
Total consideration paid					$	3,608
Fair value of noncontrolling interest in acquiree					$	197
Net Identifiable Assets Acquired, at Fair Value:
Assets
Cash and due from banks		$	1,679
Federal funds sold			35
Other short-term investments			53
Available-for-sale debt and other securities			832
Held-to-maturity securities			4
Equity securities			51
Loans and leases held for sale			12
Portfolio loans and leases			13,409	(a)
Bank premises and equipment			250	(a)
Operating lease equipment			416	(a)
Intangible assets			195	(a)
Servicing rights			263
Other assets			723	(a)
Total assets acquired		$	17,922
Liabilities
Deposits		$	14,489
Other short-term borrowings			267	(a)
Accrued taxes, interest and expenses			260	(a)
Other liabilities			196	(a)
Long-term debt			720	(a)
Total liabilities assumed		$	15,932
Net identifiable assets acquired						1,990
Goodwill					$	1,815
(a)	Fair values have been updated from the estimates reported in the March 31, 2019 Form 10-Q.

In connection with the acquisition, the Bancorp recognized approximately $1.8 billion of goodwill, of which $15 million relates to 15-year tax deductible goodwill from MB Financial, Inc.’s prior acquisitions. See Note 11 for further information on goodwill recognized and Note 12 for further information on intangible assets acquired in the acquisition of MB Financial, Inc.

The following is a description of the methods used to determine the estimated fair values of significant assets and liabilities presented above.

Cash and due from banks and other short-term investments

For financial instruments with a short-term or no stated maturity, prevailing market rates and limited credit risk, carrying amounts approximate fair value.

Available-for-sale debt and other securities, held-to-maturity securities and equity securities

Fair values for securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that are not in an active market or other inputs that are observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or DCF methodologies.

Loans and leases held for sale and portfolio loans and leases

Fair values for loans were based on a DCF methodology that considered factors including the type of loan and related collateral, fixed or variable interest rate, remaining term, credit quality ratings or scores, amortization status and current discount rates. Loans with similar characteristics were pooled together when applying various valuation techniques. The discount rates used for loans were based on an evaluation of current market rates for new originations of comparable loans and a market participant’s required rate of return to purchase similar assets, including adjustments for liquidity and credit quality when necessary. For PCI loans, the DCF methodology was based on the Bancorp’s estimate of contractual cash flows expected to be collected.

Bank premises and equipment

Fair values for bank premises and equipment were generally based on appraisals of the property values.

Operating lease equipment

Fair values for operating lease equipment were generally developed using the cost approach. The seller’s historical cost was adjusted by cost trend indices relevant to the asset type and vintage to arrive at a current reproduction cost. This reproduction cost was then adjusted for deterioration based on the age and typical life of each class of assets. Residual values were estimated based on analysis of the seller’s historical trends of residual value realization by asset class.

Intangible assets

The core deposit intangible asset represents the value of relationships with deposit customers. The fair value was estimated based on a DCF methodology that considered expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds and the interest costs associated with customer deposits. The core deposit intangible is being amortized on an accelerated basis over its estimated useful life.

Servicing rights

Fair values for servicing rights were estimated using internal option-adjusted spread models with certain unobservable inputs, primarily prepayment speed assumptions, option-adjusted spread and weighted-average lives.

Other assets

Fair values for ROU assets associated with real estate operating leases were based on current market rental rates for similar properties in the same area, discounted at the Bancorp’s incremental borrowing rates as of the acquisition date. Estimates of current market rental rates were generally based on third-party market rent studies performed for each significant property.

Deposits

The fair values for time deposits were estimated using a DCF methodology whereby the contractual remaining cash flows were discounted using market rates currently being offered for time deposits of similar maturities. For transactional deposits, carrying amounts approximate fair value.

Long-term debt

The fair values of long-term debt instruments were estimated based on quoted market prices for identical or similar instruments if available, or by using DCF analyses based on current incremental borrowing rates for similar types of instruments.

Merger-Related Expenses

Direct merger-related expenses related to the acquisition of MB Financial, Inc. were expensed as incurred by the Bancorp and amounted to $28 million and $213 million for the three and nine months ended September 30, 2019, respectively.

The following table provides a summary of merger-related expenses recorded in noninterest expense:

		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Salaries, wages and incentives	$	14	-	85	-
Employee benefits		-	-	3	-
Technology and communications		8	-	68	-
Net occupancy expense		3	-	10	-
Card and processing expense		-	-	1	-
Equipment expense		-	-	1	-
Other noninterest expense		3	1	45	3
Total	$	28	1	213	3

Pro Forma Information

The following table presents unaudited pro forma information as if the acquisition of MB Financial, Inc. had occurred on January 1, 2018. This pro forma information combines the historical condensed consolidated results of operations of Fifth Third Bancorp and MB Financial, Inc. after giving effect to certain adjustments, including purchase accounting fair value adjustments, amortization of intangibles, stock-based compensation expense and acquisition costs, as well as the related income tax effects of those adjustments. The pro forma results also reflect reclassification adjustments to noninterest income and noninterest expense to conform MB Financial, Inc.’s presentation of operating lease income and the related depreciation expense with the Bancorp's presentation. Direct costs associated with the acquisition are included in pro forma earnings as of January 1, 2018.

The pro forma information does not necessarily reflect the results of operations that would have occurred had Fifth Third Bancorp acquired MB Financial, Inc. on January 1, 2018. Furthermore, cost savings and other business synergies related to the acquisition are not reflected in the unaudited pro forma amounts.

		Unaudited Pro Forma Information		Unaudited Pro Forma Information
		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)		2019	2018	2019	2018
Net interest income	$	1,222	1,214	3,692	3,583
Noninterest income		738	661	2,600	2,514
Net income attributable to common shareholders		513	469	1,824	1,743

Acquired Loans and Leases

Purchased loans are evaluated for evidence of credit deterioration at acquisition and recorded at their initial fair value. Generally, the fair value discount or premium on acquired loans and leases is amortized over the contractual life of the loan as an adjustment to yield. For loans acquired with evidence of credit impairment (PCI loans), the Bancorp determined at the acquisition date the excess of the loan’s contractually required payments over all cash flows expected to be collected as an amount that should not be accreted into interest income (nonaccretable difference). The remaining amount representing the difference in the expected cash flows of acquired loans and the initial investment in the acquired loans is accreted into interest income over the remaining life of the loan or pool of loans (accretable yield). This method of accounting for loans acquired with credit impairment does not apply to loans carried at fair value, residential mortgage loans held for sale and loans under revolving credit agreements. 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, 2018 for additional information on the accounting for PCI loans. The Bancorp has elected to account for loans acquired from MB Financial, Inc., which were not considered impaired but exhibited evidence of credit deterioration since origination, in the same manner as PCI loans.

The following table reflects the contractually required payments receivable, cash flows expected to be collected and estimated fair value of loans identified as PCI loans on the acquisition date of MB Financial, Inc. These fair value estimates are considered preliminary as of September 30, 2019.

($ in millions)		March 22, 2019
Contractually required payments including interest	$	1,139
Less: Nonaccretable difference		81
Cash flows expected to be collected		1,058
Less: Accretable yield		202
Fair value of loans acquired	$	856

A summary of activity related to accretable yield is as follows:
($ in millions)		Accretable Yield
Balance as of December 31, 2018	$	-
Additions		202
Accretion		(30)
Reclassifications (to) from nonaccretable difference		(2)
Balance as of September 30, 2019	$	170

As of September 30, 2019, contractual balances on the purchased PCI loans and leases totaled $872 million with a corresponding carry value of $637 million.

At the MB Financial, Inc. acquisition date, contractual balances on the purchased non-PCI loans and leases totaled $12.7 billion with a corresponding fair value of $12.5 billion.

Bank Merger

On May 3, 2019 MB Financial Bank, N.A. merged with and into Fifth Third Bank, with Fifth Third Bank as the surviving entity. Fifth Third Bank is a subsidiary of Fifth Third Bancorp.

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MSR - Servicing Assets and Residual Interests Economic Assumptions (Details)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Fixed Rate Residential Mortgage
Assumption For Fair Value As Of Balance Sheet Date Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities [Line Items]
Weighted- Average Life (in years)	5 years 6 months	6 years 6 months
Prepayment Speed (annual)	13.70%	11.10%
OAS spread (bps)	54300.00%	51700.00%
Adjustable Rate Residential Mortgage
Assumption For Fair Value As Of Balance Sheet Date Of Interests Continued To Be Held By Transferor Servicing Assets Or Liabilities [Line Items]
Weighted- Average Life (in years)		3 years 3 months 18 days
Prepayment Speed (annual)		23.70%
OAS spread (bps)		70000.00%

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Derivatives - Derivative Instruments Included in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	$ 2,097	$ 1,114
Fair value - Derivative Liabilities	911	874
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	615	346
Fair value - Derivative Liabilities	75	29
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	459	262
Fair value - Derivative Liabilities	3	2
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Fair Value Hedging | Interest Rate Swap | Long-Term Debt
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	2,705	3,455
Fair value - Derivative Assets	459	262
Fair value - Derivative Liabilities	3	2
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	156	84
Fair value - Derivative Liabilities	72	27
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging | Interest Rate Swap | Commercial and Industrial Loans
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	8,000	8,000
Fair value - Derivative Assets	0	15
Fair value - Derivative Liabilities	72	27
Accumulated Net Gain (Loss) from Designated or Qualifying Hedges | Cash Flow Hedging | Interest Rate Floor | Commercial and Industrial Loans
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	3,000	3,000
Fair value - Derivative Assets	156	69
Fair value - Derivative Liabilities	0	0
Nondesignated
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	1,482	768
Fair value - Derivative Liabilities	836	845
Nondesignated | Risk Management And Other Business Purposes
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	181	44
Fair value - Derivative Liabilities	163	147
Nondesignated | Risk Management And Other Business Purposes | Interest Rate Contract | Servicing Contracts
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	6,420	10,045
Fair value - Derivative Assets	178	40
Fair value - Derivative Liabilities	12	14
Nondesignated | Risk Management And Other Business Purposes | Forward Contracts | Loans Held For Sale
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	2,693	926
Fair value - Derivative Assets	3	0
Fair value - Derivative Liabilities	5	8
Nondesignated | Risk Management And Other Business Purposes | Swap
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	2,834	2,174
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	146	125
Nondesignated | Risk Management And Other Business Purposes | Foreign Exchange Contract
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	0	133
Fair value - Derivative Assets	0	4
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation
Derivatives, Fair Value [Line Items]
Fair value - Derivative Assets	1,301	724
Fair value - Derivative Liabilities	673	698
Nondesignated | Customer Accommodation | Interest Rate Contract
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	71,511	55,012
Fair value - Derivative Assets	727	262
Fair value - Derivative Liabilities	169	278
Nondesignated | Customer Accommodation | Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	1,096	407
Fair value - Derivative Assets	24	7
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation | Commodity Contract
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	8,144	6,511
Fair value - Derivative Assets	368	307
Fair value - Derivative Liabilities	353	278
Nondesignated | Customer Accommodation | TBAs
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	28	18
Fair value - Derivative Assets	0	0
Fair value - Derivative Liabilities	0	0
Nondesignated | Customer Accommodation | Foreign Exchange Contract
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	13,924	13,205
Fair value - Derivative Assets	182	148
Fair value - Derivative Liabilities	$ 151	$ 142

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CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Other short-term investments	$ 3,235	$ 1,825
Indirect secured consumer loans	11,026	8,976
ALLL	(1,143)	(1,103)
Other assets	8,819	7,372
Other liabilities	2,425	2,498
Long-term debt	14,474	14,426
Available-for-sale debt securities, amortized cost	35,662	33,128
Held-to-maturity securities, fair value	18	18
Bank premises and equipment held for sale	$ 87	$ 42
Common stock, stated value	$ 2.22	$ 2.22
Common stock, authorized	2,000,000,000	2,000,000,000
Common stock, outstanding	718,583,491	646,630,857
Common stock, treasury shares	205,309,090	277,261,724
Class B
Preferred stock, authorized	500,000
Preferred stock, liquidation preference	$ 1,000
Preferred stock, unissued	300,000
No Class
Preferred stock, authorized	500,000	500,000
Preferred stock, liquidation preference	$ 25,000	$ 25,000
Preferred stock, unissued	436,000	446,000
Residential Mortgage
Loans held for sale measured at FV	$ 1,136	$ 537
Loans measured at FV	184	179
Commercial
ALLL	(671)	(645)
Loans held for sale measured at FV	1	7
Variable Interest Entity, Primary Beneficiary
Other short-term investments	76	40
Indirect secured consumer loans	1,543	668
ALLL	9	4
Other assets	11	5
Other liabilities	3	1
Long-term debt	$ 1,438	$ 606

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Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share

Earnings Per Share

24. Earnings Per Share

The following tables provide the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:
		2019				2018
For the three months ended September 30,			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	$	530			421
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders	$	526	727	0.72	417	668	0.62
Earnings Per Diluted Share:
Net income available to common shareholders	$	530			421
Effect of dilutive securities:
Stock-based awards		-	9		-	11
Net income available to common shareholders		530			421
plus assumed conversions
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders
plus assumed conversions	$	526	736	0.71	417	679	0.61

		2019				2018
For the nine months ended September 30,			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	$	1,718			1,685
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders	$	1,702	709	2.40	1,667	680	2.45
Earnings Per Diluted Share:
Net income available to common shareholders	$	1,718			1,685
Effect of dilutive securities:
Stock-based awards		-	9		-	13
Net income available to common shareholders		1,718			1,685
plus assumed conversions
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders
plus assumed conversions	$	1,702	718	2.37	1,667	693	2.41

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 both the three and nine months ended September 30, 2019 excludes 2 million of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive. The diluted earnings per share computation for both the three and nine months ended September 30, 2018 excludes 2 million of SARs and an immaterial amount of stock options because their inclusion would have been anti-dilutive.

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2019

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 nine months ended September 30:
($ in millions)		2019	2018
Cash Payments:
Interest	$	1,166	760
Income taxes		524	297
Transfers:
Portfolio loans to loans held for sale		191	212
Loans held for sale to portfolio loans		30	83
Portfolio loans to OREO		23	28
Supplemental Disclosures:
Conversion of outstanding preferred stock issued by a Bancorp subsidiary		197	-
Additions to right-of-use assets under operating leases		43	-
Additions to right-of-use assets under finance leases		13	-
Right-of-use assets recognized at adoption of ASU 2016-02		509	-

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Unaudited (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Common stock, per share	$ 0.24	$ 0.18	$ 0.70	$ 0.52
Preferred stock, Series H
Preferred stock, per share			637.5	637.5
Preferred Stock, Series C
Preferred stock, per share	15.00		30
Class B Preferred stock, Series A
Preferred stock, per share	5.83		5.83
Preferred stock, Series I
Preferred stock, per share	414.06	414.06	1,242.18	1,242.18
Preferred stock, Series J
Preferred stock, per share	$ 612.50	$ 612.50	$ 1,225	$ 1,225

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Accounting and Reporting Developments - Additional Information (Details) - USD ($) $ in Millions	Jan. 01, 2019	Jan. 01, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Impact of cumulative effect of change in accounting principles	$ 10	$ 4
Right of use asset and lease liabilities	$ 509

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share

Calculation of Earnings Per Share and the Reconciliation of Earnings Per Share to Earnings Per Diluted Share

The following tables provide the calculation of earnings per share and the reconciliation of earnings per share and earnings per diluted share:
		2019				2018
For the three months ended September 30,			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	$	530			421
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders	$	526	727	0.72	417	668	0.62
Earnings Per Diluted Share:
Net income available to common shareholders	$	530			421
Effect of dilutive securities:
Stock-based awards		-	9		-	11
Net income available to common shareholders		530			421
plus assumed conversions
Less: Income allocated to participating securities		4			4
Net income allocated to common shareholders
plus assumed conversions	$	526	736	0.71	417	679	0.61

		2019				2018
For the nine months ended September 30,			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	$	1,718			1,685
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders	$	1,702	709	2.40	1,667	680	2.45
Earnings Per Diluted Share:
Net income available to common shareholders	$	1,718			1,685
Effect of dilutive securities:
Stock-based awards		-	9		-	13
Net income available to common shareholders		1,718			1,685
plus assumed conversions
Less: Income allocated to participating securities		16			18
Net income allocated to common shareholders
plus assumed conversions	$	1,702	718	2.37	1,667	693	2.41

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Securities - Fair Value and Gross Unrealized Losses on Available-for-Sale Securities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 708	$ 6,455
Less than 12 months Unrealized Losses	(8)	(70)
12 months or more Fair Value	200	15,111
12 months or more Unrealized Losses	(4)	(394)
Total Fair Value	908	21,566
Total Unrealized Losses	(12)	(464)
U.S. Treasury and federal agency
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value		0
Less than 12 months Unrealized Losses		0
12 months or more Fair Value		97
12 months or more Unrealized Losses		(1)
Total Fair Value		97
Total Unrealized Losses	0	(1)
Agency mortgage-backed securities | Residential mortgage backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	121	3,235
Less than 12 months Unrealized Losses	(1)	(21)
12 months or more Fair Value	4	7,892
12 months or more Unrealized Losses	0	(221)
Total Fair Value	125	11,127
Total Unrealized Losses	(1)	(242)
Agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	134	2,022
Less than 12 months Unrealized Losses	(1)	(37)
12 months or more Fair Value	0	5,260
12 months or more Unrealized Losses	0	(127)
Total Fair Value	134	7,282
Total Unrealized Losses	(1)	(164)
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value		884
Less than 12 months Unrealized Losses		(6)
12 months or more Fair Value		1,621
12 months or more Unrealized Losses		(41)
Total Fair Value		2,505
Total Unrealized Losses	0	(47)
Asset-backed securities and other debt securities
Investments, Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	453	314
Less than 12 months Unrealized Losses	(6)	(6)
12 months or more Fair Value	196	241
12 months or more Unrealized Losses	(4)	(4)
Total Fair Value	649	555
Total Unrealized Losses	(10)	(10)
Obligations of states and political subdivisions
Investments, Unrealized Loss Position [Line Items]
Total Unrealized Losses	$ 0	$ 0

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Credit Quality - Summary of the Credit Risk Profile of the Commercial Portfolio Segment by Class (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Modifications [Line Items]
Total loans and leases	$ 109,225	$ 95,086
Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	50,768	44,340
Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	4,768	3,284
Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	6,054	3,690
Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	5,281	4,657
Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	3,495	3,600
Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Total loans and leases	70,366	59,571
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	50,768	44,340
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	4,768	3,284
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	6,054	3,690
Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	5,281	4,657
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	3,495	3,600
Pass | Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Total loans and leases	66,705	57,581
Pass | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	47,944	42,695
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	4,419	3,122
Pass | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	5,786	3,632
Pass | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	5,192	4,657
Pass | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	3,364	3,475
Special Mention | Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Total loans and leases	1,612	901
Special Mention | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	1,300	779
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	152	23
Special Mention | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	76	27
Special Mention | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	42	0
Special Mention | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	42	72
Substandard | Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Total loans and leases	2,038	1,076
Substandard | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	1,513	853
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	197	139
Substandard | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	192	31
Substandard | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	47	0
Substandard | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	89	53
Doubtful | Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Total loans and leases	11	13
Doubtful | Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	11	13
Doubtful | Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	0	0
Doubtful | Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Total loans and leases	0	0
Doubtful | Commercial Portfolio Segment | Commercial Construction Loans
Financing Receivable, Modifications [Line Items]
Total loans and leases	0	0
Doubtful | Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Total loans and leases	$ 0	$ 0

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Credit Quality - Recorded Investment in Portfolio Loans and Leases by Age and Class (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 808		$ 808		$ 599
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	440		440		326
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	368		368		273
Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans measured at fair value on a recurring basis	184		184		179
Residential Mortgage Loans | Federal Housing Administration Loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
Losses Due To Claim Denials And Curtailments	1	$ 1	1	$ 4
Residential Mortgage Loans | Federal Housing Administration Loan | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	96		96		90
Residential Mortgage Loans | Federal Housing Administration Loan | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 274		$ 274		$ 195

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Segments - Additional Information (Details)	9 Months Ended
	Sep. 30, 2019 number
Organization, Consolidation and Presentation of Financial Statements
Full-service Banking Centers	1,143
Number of business segments	4

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Loans & Leases - Components of Net Investment in Leases (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Rental receivable, net of principal and interest on nonrecourse debt		$ 3,256
Estimated residual value of leased assets		804
Initial direct cost, net of amortization		19
Gross investment in lease financing		4,079
Unearned income		(479)
Net investment in lease financing	$ 492	3,600
Sales type lease unguaranteed residual asset	11
Direct financing lease unguaranteed residual asset	226
Net discount	202	296
Leveraged leases	492	$ 3,600
Direct financing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Lease payment receivable	2,415
Net discount	(6)
Direct financing deferred selling profit	0
Sales-type
Accounts, Notes, Loans and Financing Receivable [Line Items]
Lease payment receivable	357
Net discount	$ 0

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Fair Value Measurements - Reconciliation of Assets and Liabilities Measured at Recurring L3 Fair Value (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Derivative assets	$ 963	$ 1,085	$ 991	$ 1,037	$ 961	$ 861
Interest Rates
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Derivative assets	24			7
Derivative liabilities	$ 9			$ 8

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Credit Quality - Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 147		$ 141
Collectively evaluated for impairment	882		852
Unallocated	114		110
Total allowance for loan and lease losses	1,143	$ 1,115	1,103	$ 1,091	$ 1,077	$ 1,196
Individually evaluated for impairment	1,371		1,291
Collectively evaluated for impairment	107,217		93,795
Purchased credit impaired	637
Total portfolio loans and leases	109,225		95,086
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	53		42
Collectively evaluated for impairment	618		603
Unallocated	0		0
Total allowance for loan and lease losses	671	651	645	656	654	753
Individually evaluated for impairment	358		277
Collectively evaluated for impairment	69,427		59,294
Purchased credit impaired	581
Total portfolio loans and leases	70,366		59,571
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	58		61
Collectively evaluated for impairment	17		20
Unallocated	0		0
Total allowance for loan and lease losses	75	76	81	83	86	89
Individually evaluated for impairment	758		736
Collectively evaluated for impairment	15,695		14,589
Purchased credit impaired	38
Total portfolio loans and leases	16,491		15,325
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	36		38
Collectively evaluated for impairment	247		229
Unallocated	0		0
Total allowance for loan and lease losses	283	276	267	243	229	234
Individually evaluated for impairment	255		278
Collectively evaluated for impairment	22,095		19,912
Purchased credit impaired	18
Total portfolio loans and leases	22,368		20,190
Unallocated
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		0
Unallocated	114		110
Total allowance for loan and lease losses	114	$ 112	110	$ 109	$ 108	$ 120
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	0		0
Purchased credit impaired	0
Total portfolio loans and leases	$ 0		$ 0

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 193	$ 314	$ 193	$ 314
Fair Value Measured On Nonrecurring Basis Gains Losses	(15)	(5)	(79)	(58)
Commercial loans held for sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		3		3
Fair Value Measured On Nonrecurring Basis Gains Losses		(1)		(2)
Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	116	156	116	156
Fair Value Measured On Nonrecurring Basis Gains Losses	(11)	(16)	(45)	(46)
Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	12	2	12	2
Fair Value Measured On Nonrecurring Basis Gains Losses	0	0	0	6
Commercial leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	18	14	18	14
Fair Value Measured On Nonrecurring Basis Gains Losses	2	1	(9)	(9)
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	16	21	16	21
Fair Value Measured On Nonrecurring Basis Gains Losses	(2)	(2)	(5)	(6)
Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	23	36	23	36
Fair Value Measured On Nonrecurring Basis Gains Losses	(4)	0	(26)	(41)
Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		10		10
Fair Value Measured On Nonrecurring Basis Gains Losses		(1)		(4)
Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	8	72	8	72
Fair Value Measured On Nonrecurring Basis Gains Losses	0	14	6	44
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	187	245	187	245
Fair Value, Inputs, Level 3 | Commercial loans held for sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		3		3
Fair Value, Inputs, Level 3 | Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	116	156	116	156
Fair Value, Inputs, Level 3 | Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	12	2	12	2
Fair Value, Inputs, Level 3 | Commercial leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	18	14	18	14
Fair Value, Inputs, Level 3 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	16	21	16	21
Fair Value, Inputs, Level 3 | Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	23	36	23	36
Fair Value, Inputs, Level 3 | Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		10		10
Fair Value, Inputs, Level 3 | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	2	3	2	3
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	6	69	6	69
Fair Value, Inputs, Level 2 | Commercial loans held for sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		0		0
Fair Value, Inputs, Level 2 | Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 2 | Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 2 | Commercial leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 2 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 2 | Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 2 | Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		0		0
Fair Value, Inputs, Level 2 | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	6	69	6	69
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Commercial loans held for sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		0		0
Fair Value, Inputs, Level 1 | Commercial and Industrial Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Commercial Mortgage Loans | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Commercial leases | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0	0	0
Fair Value, Inputs, Level 1 | Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets		0		0
Fair Value, Inputs, Level 1 | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 0	$ 0	$ 0	$ 0

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Credit Quality - Summary of the Nonperforming Loans and Leases by Class (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	$ 482	$ 348
OREO and other repossessed property	37	47
Nonperforming portfolio assets	519	395
Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	349	228
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	293	193
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	24	11
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	2	2
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	30	22
Residential Mortgage Loans
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	22	22
Consumer Portfolio Segment
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	111	98
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	80	69
Consumer Portfolio Segment | Indirect secured consumer loans
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	2	1
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications [Line Items]
Nonaccrual portfolio loans and leases	27	27
Consumer Portfolio Segment | Other Consumer Loans
Financing Receivable, Modifications [Line Items]
Nonperforming portfolio assets	$ 2	$ 1

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Operating Lease Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Operating Lease Equipment

Undiscounted Future Lease Payments of Operating Leases

The following table presents undiscounted future lease payments for operating leases for the remainder of 2019 through 2024 and thereafter:
		Undiscounted Cash Flows
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	41
2020		143
2021		114
2022		85
2023		61
2024		36
Thereafter		62
Total operating lease payments	$	542

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2019

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 for automobile loan securitizations as of:
($ in millions)		September 30, 2019		December 31, 2018
Assets:
	Other short-term investments	$	76	40
	Indirect secured consumer loans		1,543	668
	ALLL		(9)	(4)
	Other assets		11	5
Total assets		$	1,621	709
Liabilities:
	Other liabilities	$	3	1
	Long-term debt		1,438	606
Total liabilities		$	1,441	607

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
September 30, 2019 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,424	440	1,424
Private equity investments		84	-	161
Loans provided to VIEs		2,628	-	3,979
Lease pool entities		66	-	66

		Total	Total	Maximum
December 31, 2018 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,198	376	1,198
Private equity investments		41	-	73
Loans provided to VIEs		2,331	-	3,617

Investments in Qualified Affordable Housing Tax Credits

The Bancorp has accounted for all of its qualifying LIHTC investments using the proportional amortization method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income related to these investments:
	Condensed Consolidated		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)	Statements of Income Caption(a)		2019	2018	2019	2018
Proportional amortization	Applicable income tax expense	$	31	35	105	118
Tax credits and other benefits	Applicable income tax expense		(35)	(44)	(122)	(146)

The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three and nine months ended September 30, 2019 and 2018.

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Lease Obligations - Lessee - Lease Costs (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Lease Cost [Line Items]
Total finance lease costs	$ 2	$ 5
Total operating lease costs	31	92
Total lease costs	33	97
Right of use asset, operating lease impairment	5	12
Net occupancy and equipment expense
Lease Cost [Line Items]
Amortization of right-of-use assets	2	5
Interest Expense, Long-Term Debt
Lease Cost [Line Items]
Interest on lease liabilities	0	0
Net occupancy expense
Lease Cost [Line Items]
Operating lease cost	25	72
Short-term lease cost	0	0
Variable lease cost	7	23
Sublease income	$ (1)	$ (3)

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AOCI - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Income Before Income Taxes	$ 689	$ 550	$ 2,261	$ 2,179
Applicable income tax expense	140	114	483	442
Net income	549	436	1,778	1,737
ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Net income	5	(5)	1	(14)
Net Unrealized Gains On Available For Sale Securities
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification adjustment for net losses (gains) included in net income	3	0	(3)	(9)
Income Before Income Taxes	3	0	3	(9)
Applicable income tax expense	(1)	0	(1)	2
Net income	2	0	2	(7)
Net Unrealized Gains On Available For Sale Securities | Net (Losses) Gains Included In Net Income
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification adjustment for net losses (gains) included in net income	3	0	3	(9)
Net Unrealized Gains On Cash Flow Hedge Activities
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	5	(2)	2	(2)
Income Before Income Taxes	5	(2)	2	(2)
Applicable income tax expense	(1)	0	0	0
Net income	4	(2)	2	(2)
Net Unrealized Gains On Cash Flow Hedge Activities | Interest Rate Contracts Related To C&I Loans
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	5	(2)	2	(2)
Amortization Of Defined Benefit Pension Items
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Income Before Income Taxes	(1)	(3)	(4)	(7)
Applicable income tax expense	0	0	1	2
Net income	(1)	(3)	(3)	(5)
Amortization Of Defined Benefit Pension Items | Net Actuarial Loss
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic pension cost	(1)	(1)	(4)	(5)
Amortization Of Defined Benefit Pension Items | Pension Settlement
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Net periodic pension cost	$ 0	$ (2)	$ 0	$ (2)

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Securities - Amortized Cost and Fair Value of Available-for-Sale and Held-to-Maturity Securities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt securities:
Less than 1 year	$ 197
1-5 years	13,391
5-10 years	16,568
Over 10 years	4,931
Other securities	575
Available-for-sale debt securities, amortized cost	35,662	$ 33,128
Debt securities:
Less than 1 year	207
1-5 years	13,817
5-10 years	17,390
Over 10 years	5,189
Other securities	575
Available-for-sale debt and other securities, fair value	37,178	32,830
Debt securities:
Less than 1 year	2
1-5 years	14
5-10 years	0
Over 10 years	2
Other securities	0
Held-to-maturity securities, amortized cost	18	18
Debt securities:
Under 1 year	2
1-5 years	14
5-10 years	0
Over 10 years	2
Other securities	0
Held-to-maturity securities, fair value	$ 18	$ 18

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Legal & Regulatory Proceedings - Additional Information (Details) $ in Millions	3 Months Ended				12 Months Ended
	Sep. 30, 2019 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2015 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2013 number
Loss Contingencies [Line Items]
Amount in excess of amounts reserved	$ 27
Number Of Putative Class Actions Filed | number						4
Damages sought	280	$ 40	$ 800
Federal Lawsuits
Loss Contingencies [Line Items]
Number of merchants requesting exclusion				500
Class Action Settlement
Loss Contingencies [Line Items]
Number of merchants requesting exclusion				8,000
Escrow Deposit				$ 46
Litigation Settlement Amount Awarded To Other Party					$ 6,240
Escrow Funds Returned Defendants	700				700
Litigation Settlement Amount Awarded To Other Party, Escrow					5,340
Litigation Settlement Amount Awarded To Other Party, Additional	$ 900				$ 900

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Securities - Investment Securities (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Disclosure - Investment Securities [Abstract]
FHLB, restricted stock holdings	$ 96	$ 184
FRB, restricted stock holdings	477	366
DTCC, restricted stock holdings	$ 2	$ 2

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Fair Value Measurements - Assets and Liabilities Measured at Recurring Fair Value (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Federal Home Loan Bank Stock	$ 96	$ 184
Federal Reserve Bank Stock	477	366
DTCC Stock	$ 2	$ 2

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Bank Premises & Equipment - Additional Information (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Bank Premises And Equipment [Line Items]
Bank premises impairment	$ 5	$ 27	$ 41
Branches fair value	$ 193	$ 193	$ 314
Branches and undeveloped parcels of land | MB Financial, Inc. | Chicago market
Bank Premises And Equipment [Line Items]
Other locations held for sale	11	11
Other locations fair value	$ 10	$ 10
Impairment as a result of acquisition		$ 14
2018 Branch Optimization Plan | Lower Limit
Bank Premises And Equipment [Line Items]
Branches held for sale	100	100
2018 Branch Optimization Plan | Upper Limit
Bank Premises And Equipment [Line Items]
Branches held for sale	125	125
Closed in 2019
Bank Premises And Equipment [Line Items]
Branches held for sale	65	65
Closed in 2019 | MB Financial, Inc.
Bank Premises And Equipment [Line Items]
Branches held for sale	45	45
To Be Closed in 2020
Bank Premises And Equipment [Line Items]
Branches held for sale	30	30
To be Closed in 2019
Bank Premises And Equipment [Line Items]
Branches held for sale	4	4
To Be Closed | MB Financial, Inc. | Chicago market
Bank Premises And Equipment [Line Items]
Branches held for sale	46	46

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Credit Quality - Summary of Loans Modified in a TDR (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	1,802	1,803	4,982	6,347
Recorded Investment in Loans Modified in a TDR During the Period	$ 121	$ 86	$ 279	$ 368
Increase (Decrease) to ALLL Upon Modification	2	(4)	(8)	12
Charge-offs Recognized Upon Modification	$ 1	$ 7	$ 8	$ 8
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	27	16	65	41
Recorded Investment in Loans Modified in a TDR During the Period	$ 72	$ 52	$ 168	$ 187
Increase (Decrease) to ALLL Upon Modification	(1)	(7)	(15)	2
Charge-offs Recognized Upon Modification	$ 0	$ 7	$ 5	$ 7
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	4		13	2
Recorded Investment in Loans Modified in a TDR During the Period	$ 1		$ 10	$ 0
Increase (Decrease) to ALLL Upon Modification	0		0	0
Charge-offs Recognized Upon Modification	$ 0		$ 0	$ 0
Residential Mortgage Loans
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	256	185	531	969
Recorded Investment in Loans Modified in a TDR During the Period	$ 39	$ 24	$ 74	$ 148
Increase (Decrease) to ALLL Upon Modification	1	1	1	4
Charge-offs Recognized Upon Modification	$ 0	$ 0	$ 0	$ 0
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	21	30	58	84
Recorded Investment in Loans Modified in a TDR During the Period	$ 1	$ 2	$ 3	$ 6
Increase (Decrease) to ALLL Upon Modification	0	0	0	0
Charge-offs Recognized Upon Modification	$ 0	$ 0	$ 0	$ 0
Consumer Portfolio Segment | Indirect secured consumer loans
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	27	25	65	64
Recorded Investment in Loans Modified in a TDR During the Period	$ 0	$ 0	$ 0	$ 0
Increase (Decrease) to ALLL Upon Modification	0	0	0	0
Charge-offs Recognized Upon Modification	$ 0	$ 0	$ 0	$ 0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications [Line Items]
Number of Loans Modified in a TDR During the Period	1,467	1,547	4,250	5,187
Recorded Investment in Loans Modified in a TDR During the Period	$ 8	$ 8	$ 24	$ 27
Increase (Decrease) to ALLL Upon Modification	2	2	6	6
Charge-offs Recognized Upon Modification	$ 1	$ 0	$ 3	$ 1

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Business Combination - Unaudited Pro Forma (Details) - MB Financial, Inc. - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Unaudited pro forma net income attributable to common shareholders	$ 513	$ 469	$ 1,824	$ 1,743
Net Interest Income
Business Acquisition [Line Items]
Unaudited pro forma revenue	1,222	1,214	3,692	3,583
Noninterest Income
Business Acquisition [Line Items]
Unaudited pro forma revenue	$ 738	$ 661	$ 2,600	$ 2,514

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Long-Term Debt - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Aggregate loans transferred to securitization	$ 82,700	$ 63,200
Senior Debt Obligations | Fixed Rate 3.65 Percent Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Face amount of notes issued or redeemed	$ 1,500
Maturity date(s) Start	Jan. 25, 2019
Maturity date(s) End	Jan. 25, 2024
Subordinated Debt | Floating Rate 3ML LIBOR Plus 64 BPs Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Face amount of notes issued or redeemed	$ 300
Maturity date(s) Start	Feb. 01, 2019
Maturity date(s) End	Feb. 01, 2022
Automobile Loan Securitization
Debt Instrument [Line Items]
Long-term debt retained	$ 68
Long-term debt outstanding	1,300
Automobile Loan Securitization | Variable Interest Entity, Primary Beneficiary
Debt Instrument [Line Items]
Face amount of notes issued or redeemed	1,370
Carry value of automobile loans securitized	$ 1,430

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Derivatives - Net Gains (Losses) Relating to Free-Standing Derivative Instruments Used For Risk Management (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest Rate Contract | Forward Contracts | Loans Held For Sale | Mortgage banking net revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	$ 11	$ 7	$ 6	$ 4
Interest Rate Contract | Servicing Rights | Mortgage banking net revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	130	(24)	308	(89)
Foreign Exchange Contract | Forward Contracts | Other noninterest income
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	2	(1)	(3)	3
Equity Contract | Swap | Other noninterest income
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	$ (11)	$ (17)	$ (63)	$ (66)

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Other Short-Term Borrowings - Components of Other Short-Term Borrowings (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Short Term Debt
FHLB advances	$ 2,850	$ 0
Derivative collateral	602	271
Securities sold under repurchase agreements	594	302
Total other short-term borrowings	$ 4,046	$ 573

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Commitments, Contingent Liabilities and Guarantees

9 Months Ended

Sep. 30, 2019

Commitments, Contingent Liabilities and Guarantees

Commitments, Contingent Liabilities and Guarantees

19. 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:
		September 30,	December 31,
($ in millions)		2019	2018
Commitments to extend credit	$	79,076	70,415
Letters of credit		2,219	2,041
Forward contracts related to residential mortgage loans held for sale		2,693	926
Purchase obligations		114	126
Capital commitments for private equity investments		77	32
Capital expenditures		85	45

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 September 30, 2019 and December 31, 2018, the Bancorp had a reserve for unfunded commitments, including letters of credit, totaling $154 million and $131 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 standard regulatory risk rating system utilized for its loan and lease portfolio.

Risk ratings of outstanding commitments to extend credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	78,124	69,928
Special mention		474	271
Substandard		477	216
Doubtful		1	-
Total commitments to extend credit	$	79,076	70,415

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 September 30, 2019:
($ in millions)
Less than 1 year(a)	$	1,124
1 - 5 years(a)		1,056
Over 5 years		39
Total letters of credit	$	2,219

(a) Includes $1 and $5 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 year and between 1 - 5 years, respectively. Standby letters of credit accounted for approximately 99% of total letters of credit at both September 30, 2019 and December 31, 2018, and are considered guarantees in accordance with U.S. GAAP. Approximately 63% and 60% of the total standby letters of credit were collateralized as of September 30, 2019 and December 31, 2018, 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 $28 million and $17 million at September 30, 2019 and December 31, 2018, respectively. The Bancorp monitors the credit risk associated with letters of credit using the same standard regulatory risk rating system utilized for its loan and lease portfolio.

Risk ratings of outstanding letters of credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	2,075	1,905
Special mention		11	10
Substandard		132	126
Doubtful		1	-
Total letters of credit	$	2,219	2,041

At September 30, 2019 and December 31, 2018, 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 September 30, 2019 and December 31, 2018, total VRDNs in which the Bancorp was the remarketing agent or were supported by a Bancorp letter of credit were $408 million and $487 million, respectively, of which FTS acted as the remarketing agent to issuers on $405 million and $481 million, respectively. As remarketing agent, FTS is responsible for actively remarketing VRDNs to other investors when they have been tendered. If another investor is not identified, FTS may choose to purchase the VRDNs into inventory at its discretion while it continues to remarket them. If FTS purchases the VRDNs into inventory, it can subsequently tender back the VRDNs to the issuer’s trustee with proper advance notice. The Bancorp issued letters of credit, as a credit enhancement, to $215 million and $256 million of the VRDNs remarketed by FTS, in addition to $3 million and $6 million in VRDNs remarketed by third parties at September 30, 2019 and December 31, 2018, respectively. These letters of credit are included in the total letters of credit balance provided in the previous table. The Bancorp held zero and $9 million of these VRDNs in its portfolio and classified them as trading securities at September 30, 2019 and December 31, 2018, 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.

Other commitments

The Bancorp has 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 20 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, 2018.

As of September 30, 2019 and December 31, 2018, the Bancorp maintained reserves related to loans sold with representation and warranty provisions totaling $7 million and $6 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 September 30, 2019 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 $11 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 September 30, 2019 and 2018, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $7 million and $4 million, respectively, in outstanding principal of loans to satisfy investor demands. For both the nine months ended September 30, 2019 and 2018, the Bancorp paid an immaterial amount in the form of make whole payments and repurchased $20 million and $11 million, respectively, in outstanding principal of loans to satisfy investor demands. Total repurchase demand requests during the three months ended September 30, 2019 and 2018 were $10 million and $6 million, respectively. Total repurchase demand requests during the nine months ended September 30, 2019 and 2018 were $38 million and $17 million, respectively. Total outstanding repurchase demand inventory was $5 million and $1 million at September 30, 2019 and December 31, 2018, respectively.

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Balance, beginning of period	$	7	7	6	9
Net additions (reductions) to the reserve		-	(1)	1	(3)
Balance, end of period	$	7	6	7	6

The following tables provide a rollforward of unresolved claims by claimant type for the nine months ended:
	GSE			Private Label
September 30, 2019 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	9	$	1	1	$	-
New demands	213		38	7		-
Loan paydowns/payoffs	(3)		-	-		-
Resolved demands	(194)		(34)	(3)		-
Balance, end of period	25	$	5	5	$	-

	GSE			Private Label
September 30, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	104		17	-		-
Resolved demands	(85)		(13)	-		-
Balance, end of period	25	$	5	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 $239 million and $272 million at September 30, 2019 and December 31, 2018, respectively, and the delinquency rates were 2.0% and 2.2% at September 30, 2019 and December 31, 2018, respectively. The Bancorp maintained an estimated credit loss reserve on these loans sold with credit recourse of $4 million and $5 million at September 30, 2019 and December 31, 2018, respectively, recorded in other liabilities in the Condensed Consolidated Balance Sheets. To determine the credit loss reserve, the Bancorp used an approach that is consistent with its overall approach in estimating credit losses for various categories of residential mortgage loans held in its loan portfolio.

Margin accounts

FTS, an indirect wholly-owned subsidiary of the Bancorp, guarantees the collection of all margin account balances held by its brokerage clearing agent for the benefit of its customers. FTS is responsible for payment to its brokerage clearing agent for any loss, liability, damage, cost or expense incurred as a result of customers failing to comply with margin or margin maintenance calls on all margin accounts. The margin account balances held by the brokerage clearing agent were $13 million at both September 30, 2019 and December 31, 2018. 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 $85 million and $62 million at September 30, 2019 and December 31, 2018, respectively.

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 25 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 September 30, 2019, 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 $146 million at September 30, 2019 and $125 million at December 31, 2018. Refer to Note 15 and Note 25 for further information.

After the Bancorp’s sale of the Class B Shares, Visa 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
Q2 2018		600	26	i
Q3 2019		300	(a)

(a) The Bancorp made a cash payment of $12 million to the swap counterparty on October 8, 2019 as a result of the Visa escrow funding in the third quarter of 2019.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Financial Instruments

Derivative Financial Instruments

15. 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, swaptions and TBA securities. 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, TBA securities 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 September 30, 2019 and December 31, 2018, the balance of collateral held by the Bancorp for derivative assets was $1.1 billion and $481 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 $748 million and $249 million were applied to reduce the respective derivative contracts and were also not included in the total amount of collateral held as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019 and December 31, 2018, the credit component negatively impacting the fair value of derivative assets associated with customer accommodation contracts was $21 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 September 30, 2019 and December 31, 2018, the balance of collateral posted by the Bancorp for derivative liabilities was $241 million and $551 million, respectively. Additionally, as of September 30, 2019 and December 31, 2018, $528 million and $23 million, respectively, of variation margin payments were applied to the respective derivative contracts to reduce the Bancorp’s derivative liabilities 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 September 30, 2019 and December 31, 2018, 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 Bancorp’s 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 Bancorp’s 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
September 30, 2019 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	2,705		459	3
Total fair value hedges				459	3
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		156	-
Interest rate swaps related to C&I loans		8,000		-	72
Total cash flow hedges				156	72
Total derivatives designated as qualifying hedging instruments				615	75
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		6,420		178	12
Forward contracts related to residential mortgage loans held for sale		2,693		3	5
Swap associated with the sale of Visa, Inc. Class B Shares		2,834		-	146
Total free-standing derivatives - risk management and other business purposes				181	163
Free-standing derivatives - customer accommodation:
Interest rate contracts(a)		71,511		727	169
Interest rate lock commitments		1,096		24	-
Commodity contracts		8,144		368	353
TBA securities		28		-	-
Foreign exchange contracts		13,924		182	151
Total free-standing derivatives - customer accommodation				1,301	673
Total derivatives not designated as qualifying hedging instruments				1,482	836
Total			$	2,097	911

Derivative assets and liabilities are presented net of variation margin of $36 and $621, respectively.

				Fair Value
		Notional		Derivative	Derivative
December 31, 2018 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,455		262	2
Total fair value hedges				262	2
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		69	-
Interest rate swaps related to C&I loans		8,000		15	27
Total cash flow hedges				84	27
Total derivatives designated as qualifying hedging instruments				346	29
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,045		40	14
Forward contracts related to residential mortgage loans held for sale		926		-	8
Swap associated with the sale of Visa, Inc. Class B Shares		2,174		-	125
Foreign exchange contracts		133		4	-
Total free-standing derivatives - risk management and other business purposes				44	147
Free-standing derivatives - customer accommodation:
Interest rate contracts		55,012		262	278
Interest rate lock commitments		407		7	-
Commodity contracts		6,511		307	278
TBA securities		18		-	-
Foreign exchange contracts		13,205		148	142
Total free-standing derivatives - customer accommodation				724	698
Total derivatives not designated as qualifying hedging instruments				768	845
Total			$	1,114	874

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. As of September 30, 2019, certain interest rate swaps met the criteria required to qualify for the shortcut method of accounting that permits the assumption of perfect offset. For all designated fair value hedges of interest rate risk as of September 30, 2019, that were not accounted for under the shortcut method of accounting, the Bancorp performed an assessment of hedge effectiveness using regression analysis 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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	75	(29)	219	(110)
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		(74)	31	(214)	113

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		September 30, 2019
Carrying amount of the hedged items	Long-term debt	$	3,455
Cumulative amount of fair value hedging adjustments included in the carrying
amount of the hedged items	Long-term debt		(467)

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 September 30, 2019, all hedges designated as cash flow hedges were assessed for effectiveness using either regression analysis (quantitative approach) or a qualitative approach. 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 September 30, 2019, the maximum length of time over which the Bancorp is hedging its exposure to the variability in future cash flows is 63 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 September 30, 2019 and December 31, 2018, $519 million and $160 million, respectively, of net deferred gains, net of tax, on cash flow hedges were recorded in AOCI in the Condensed Consolidated Balance Sheets. As of September 30, 2019, $10 million in net unrealized gains, net of tax, recorded in AOCI are expected to be reclassified into earnings during the next 12 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 September 30, 2019.

During the three and nine months ended September 30, 2019 and 2018, there were no gains or losses reclassified from AOCI into earnings associated with the discontinuance of cash flow hedges because it was probable that the original forecasted transaction would no longer occur by the end of the originally specified time period or within the additional period of time as defined by U.S. GAAP.

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Amount of pretax net gains (losses) recognized in OCI	$	105	(25)	456	(31)
Amount of pretax net gains (losses) reclassified from OCI into net income		5	(2)	2	(2)

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 A Shares. This total return swap is accounted for as a free-standing derivative. Refer to Note 25 for further discussion of significant inputs and assumptions used in the valuation of this instrument.

The net gains (losses) 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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Forward contracts related to residential mortgage loans
held for sale	Mortgage banking net revenue	$	11	7	6	4
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		130	(24)	308	(89)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2	(1)	(3)	3
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(11)	(17)	(63)	(66)

Free-Standing Derivative Instruments – Customer Accommodation

The majority of the free-standing derivative instruments the Bancorp enters into are for the benefit of its commercial customers. These derivative contracts are not designated against specific assets or liabilities on the Condensed Consolidated Balance Sheets or to forecasted transactions and, therefore, do not qualify for hedge accounting. These instruments include foreign exchange derivative contracts entered into for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations and commodity contracts to hedge such items as natural gas and various other derivative contracts. The Bancorp may economically hedge significant exposures related to these derivative contracts entered into for the benefit of customers by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. The Bancorp hedges its interest rate exposure on commercial customer transactions by executing offsetting swap agreements with primary dealers. Revaluation gains and losses on interest rate, foreign exchange, commodity and other commercial customer derivative contracts are recorded as a component of corporate banking revenue 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 September 30, 2019 and December 31, 2018, the total notional amount of the risk participation agreements was $4.3 billion and $4.0 billion, respectively, and the fair value was a liability of $9 million and $8 million at September 30, 2019 and December 31, 2018, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. As of September 30, 2019, the risk participation agreements had a weighted-average remaining life of 3.5 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:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	4,188	3,919
Special mention		144	79
Substandard		13	4
Total	$	4,345	4,002

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	12	7	30	23
Interest rate contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		(5)	-	(18)	-
Interest rate lock commitments	Mortgage banking net revenue		50	17	108	52
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		3	3	6	7
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		12	16	36	43
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		7	3	15	8
Foreign exchange contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		-	-	-	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 September 30, 2019 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	2,073	(550)	(630)		893
Total assets			2,073	(550)	(630)		893
Liabilities:
Derivatives			911	(550)	(18)		343
Total liabilities		$	911	(550)	(18)		343
(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		Gross Amounts Not Offset in the
		Recognized in the		Condensed Consolidated Balance Sheets
		Condensed Consolidated
As of December 31, 2018 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	1,107	(410)	(348)		349
Total assets			1,107	(410)	(348)		349
Liabilities:
Derivatives			874	(410)	(123)		341
Total liabilities		$	874	(410)	(123)		341
(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.

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VIE - Classifications of Consolidated VIEs Included in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Assets
Other short-term investments	$ 3,235		$ 1,825
Automobile loans	11,026		8,976
ALLL	(1,143)	$ (1,115)	(1,103)	$ (1,091)	$ (1,077)	$ (1,196)
Other assets	8,819		7,372
Liabilities
Other liabilities	2,425		2,498
Long-term debt	14,474		14,426
Variable Interest Entity, Primary Beneficiary
Assets
Other short-term investments	76		40
Automobile loans	1,543		668
ALLL	9		4
Other assets	11		5
Liabilities
Other liabilities	3		1
Long-term debt	1,438		606
Variable Interest Entity, Primary Beneficiary | Indirect secured consumer loans
Assets
Other short-term investments	76		40
Automobile loans	1,543		668
ALLL	(9)		(4)
Other assets	11		5
Total Assets	1,621		709
Liabilities
Other liabilities	3		1
Long-term debt	1,438		606
Total liabilities	$ 1,441		$ 607

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Goodwill - Changes in Goodwill by Reporting Segment (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Mar. 22, 2019	Dec. 31, 2016
Goodwill
Goodwill			$ 1,800	$ 3,410
Accumulated impairment losses				(965)
Goodwill Roll Forward
Net carrying value, beginning of period:	$ 2,478	$ 2,445
Acquisition activity	1,815	33
Sale of Business	3
Net carrying value, end of period:	4,290	2,478
Commercial Banking
Goodwill
Goodwill				1,363
Accumulated impairment losses				(750)
Goodwill Roll Forward
Net carrying value, beginning of period:	630	613
Acquisition activity	1,352	17
Sale of Business	0
Net carrying value, end of period:	1,982	630
Branch Banking
Goodwill
Goodwill				1,655
Accumulated impairment losses				0
Goodwill Roll Forward
Net carrying value, beginning of period:	1,655	1,655
Acquisition activity	399	0
Sale of Business	0
Net carrying value, end of period:	2,054	1,655
Consumer Lending
Goodwill
Goodwill				215
Accumulated impairment losses				(215)
Goodwill Roll Forward
Net carrying value, beginning of period:	0	0
Acquisition activity	0	0
Sale of Business	0
Net carrying value, end of period:	0	0
Wealth and Asset Management
Goodwill
Goodwill				177
Accumulated impairment losses				0
Goodwill Roll Forward
Net carrying value, beginning of period:	193	177
Acquisition activity	64	16
Sale of Business	3
Net carrying value, end of period:	254	193
General Corporate and Other
Goodwill
Goodwill				0
Accumulated impairment losses				$ 0
Goodwill Roll Forward
Net carrying value, beginning of period:	0	0
Acquisition activity	0	0
Sale of Business	0
Net carrying value, end of period:	$ 0	$ 0

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Lease Obligations - Lessee (Tables)

9 Months Ended

Sep. 30, 2019

Lease Obligations - Lessee

Lease Assets and Lease Liabilities

The following table provides a summary of lease assets and lease liabilities as of:
($ in millions)	Condensed Consolidated Balance Sheets Caption		September 30, 2019
Assets
Operating lease right-of-use assets	Other assets	$	462
Finance lease right-of-use assets	Bank premises and equipment		25
Total right-of-use assets(a)		$	487
Liabilities
Operating lease liabilities	Accrued taxes, interest and expenses	$	543
Finance lease liabilities	Long-term debt		26
Total lease liabilities		$	569

(a) Operating and finance lease right-of-use assets are recorded net of accumulated amortization of $57 and $25 as of September 30, 2019, respectively.

Components of Lease Costs

The following table presents the components of lease costs:
				For the three months ended September 30, 2019	For the nine months ended September 30, 2019
($ in millions)		Condensed Consolidated Statements of Income Caption
Lease costs:
	Amortization of right-of-use assets	Net occupancy and equipment expense	$	2	5
	Interest on lease liabilities	Interest on long-term debt		-	-
Total finance lease costs			$	2	5
	Operating lease cost	Net occupancy expense	$	25	72
	Short-term lease cost	Net occupancy expense		-	-
	Variable lease cost	Net occupancy expense		7	23
	Sublease income	Net occupancy expense		(1)	(3)
Total operating lease costs			$	31	92
Total lease costs			$	33	97

Undiscounted Cash Flows for Operating and Finance Leases

The following table presents undiscounted cash flows for both operating leases and finance leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease liabilities as follows:
		Operating Leases	Finance Leases
As of September 30, 2019 ($ in millions)				Total
Remainder of 2019	$	25	2	27
2020		88	6	94
2021		77	5	82
2022		72	4	76
2023		63	1	64
2024		55	1	56
Thereafter		258	14	272
Total undiscounted cash flows	$	638	33	671
Less: Difference between undiscounted cash flows and discounted cash flows		95	7	102
Present value of lease liabilities	$	543	26	569

Lease Obligations, Other Information

The following table presents the weighted-average remaining lease term and weighted-average discount rate as of:
		September 30, 2019
Weighted-average remaining lease term (years):
	Operating leases	9.35
	Finance leases	11.35
Weighted-average discount rate:
	Operating leases	3.24	%
	Finance leases	4.78

The following table presents information related to lease transactions for the nine months ended:
($ in millions)			September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:(a)
	Operating cash flows from operating leases	$	72
	Operating cash flows from finance leases		1
	Financing cash flows from finance leases		3
Gains on sale and leaseback transactions			5
(a)	The cash flows related to the short-term and variable lease payments are not included in the amounts in the table as they were not included in the measurement of lease liabilities.

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Sales of Receivables and Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2019

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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Residential mortgage loan sales(a)	$	2,397	1,446	5,212	3,919
Origination fees and gains on loan sales		64	25	126	77
Gross mortgage servicing fees		71	56	196	162

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

Changes in the Servicing Assets

The following table presents changes in the servicing rights related to residential mortgage loans for the nine months ended September 30:
($ in millions)		2019	2018
Balance, beginning of period	$	938	858
Servicing rights originated - residential mortgage loans		99	62
Servicing rights acquired - residential mortgage loans		26	82
Servicing rights obtained in acquisition - residential mortgage loans		263	-
Changes in fair value:
Due to changes in inputs or assumptions(a)		(294)	103
Other changes in fair value(b)		(122)	(95)
Balance, end of period	$	910	1,010

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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Securities gains (losses), net - non-qualifying hedges on MSRs	$	-	(1)	5	(18)
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio(a)		130	(24)	308	(89)
MSR fair value adjustment due to changes in inputs or assumptions(a)		(120)	25	(294)	103

(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 September 30, 2019 and 2018 were as follows:
		September 30, 2019				September 30, 2018
	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	5.5	13.7	%	543	6.5	11.1	%	517
Servicing rights	Adjustable	-	-		-	3.3	23.7		700

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

At September 30, 2019, 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	$	899	4.7	15.4	%	$	(32)	(62)	(143)	619	$	(18)	(36)
Servicing rights	Adjustable		11	3.4	23.4			(1)	(1)	(3)	914		-	-

(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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Subsequent Event - Additional Information (Details) $ in Millions	3 Months Ended
	Sep. 30, 2019 USD ($)
Fixed Rate 2.375 Percent Senior Notes Due 2025 [Member]
Subsequent Event [Line Items]
Debt Instrument, Face Amount	$ 750
Maturity date(s) Start	Oct. 28, 2019
Maturity date(s) End	Jan. 28, 2025
Redemption description	These notes will be redeemable at the Bancorp’s option, in whole or in part, at any time or from time to time, on or after April 25, 2020, and prior to December 29, 2024, in each case at a redemption price, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date, equal to the greater of (i) 100% of the aggregate principal amount of the notes being redeemed on that redemption date; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed that would be due if the notes to be redeemed matured on December 29, 2024 discounted to the redemption date on a semi-annual basis at the applicable treasury rate plus 15 bps. Additionally, 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.
June 2019 Repurchase Program
Subsequent Event [Line Items]
Stock repurchase, value	$ 300
Subsequent Event Date Start	Oct. 23, 2019
Subsequent Event End Date	Oct. 25, 2019
Settlement Date	Dec. 17, 2019

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Securities - Investment Securities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	$ 37,178	$ 32,830
Available-for-sale debt securities, unrealized losses	(12)	(464)
Available-for-sale debt securities, unrealized gains	1,528	166
Available-for-sale debt securities, amortized cost	35,662	33,128
Held-to-maturity securities, fair value	18	18
Held-to-maturity, unrealized losses	0	0
Held-to-maturity, unrealized gains	0	0
Held-to-maturity securities, amortized cost	18	18
Trading debt securities, fair value	297	287
Equity securities, fair value	459	452
U.S. Treasury and federal agency
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	75	97
Available-for-sale debt securities, unrealized losses	0	(1)
Available-for-sale debt securities, unrealized gains	1	0
Available-for-sale debt securities, amortized cost	74	98
Obligations of states and political subdivisions
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	2	2
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	2	2
Held-to-maturity securities, fair value	16	16
Held-to-maturity, unrealized losses	0	0
Held-to-maturity, unrealized gains	0	0
Held-to-maturity securities, amortized cost	16	16
Agency mortgage-backed securities | Residential mortgage backed securities
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	15,694	16,247
Available-for-sale debt securities, unrealized losses	(1)	(242)
Available-for-sale debt securities, unrealized gains	510	86
Available-for-sale debt securities, amortized cost	15,185	16,403
Agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	15,276	10,650
Available-for-sale debt securities, unrealized losses	(1)	(164)
Available-for-sale debt securities, unrealized gains	826	44
Available-for-sale debt securities, amortized cost	14,451	10,770
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	3,400	3,267
Available-for-sale debt securities, unrealized losses	0	(47)
Available-for-sale debt securities, unrealized gains	154	9
Available-for-sale debt securities, amortized cost	3,246	3,305
Asset-backed securities and other debt securities
Investment Holdings [Line Items]
Available-for-sale debt securities, fair value	2,156	2,015
Available-for-sale debt securities, unrealized losses	(10)	(10)
Available-for-sale debt securities, unrealized gains	37	27
Available-for-sale debt securities, amortized cost	2,129	1,998
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 [Line Items]
Available-for-sale debt securities, fair value	575	552
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	$ 575	$ 552

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Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net fair value of the interest rate lock commitments	$ 24,000,000		$ 24,000,000
Change in FV of IRLCs, due to 10% adverse changes in the assumed loan closing rates	2,000,000		2,000,000
Change in FV of IRLCs, due to 20% adverse changes in the assumed loan closing rates	5,000,000		5,000,000
Commercial aggregate borrower relationship subject to individual review for impairment	1,000,000		1,000,000
Operating lease equipment impairment		$ 2,000,000		$ 4,000,000
OTTI	0	0	(1,000,000)	0
Private equity, observable price change adjustment	0	13,000,000	11,000,000	64,000,000
Private equity, impairment	0		5,000,000	11,000,000
Private equity, cumulative impairment	17,000,000		17,000,000
Private equity, cumulative observable price change	53,000,000		53,000,000
Fair value changes included in earnings for instruments for which the fair value option was elected			35,000,000	12,000,000
Change in FV of IRLCs, due to 10% favorable changes in the assumed loan closing rates	2,000,000		2,000,000
Change in FV of IRLCs, due to 20% favorable changes in the assumed loan closing rates	5,000,000		5,000,000
Change In Fair Value of IRLC Due To Rate Increase 25 Bp	11,000,000		11,000,000
Change In Fair Value of IRLC Due To Rate Increase 50 Bp	23,000,000		23,000,000
Change In Fair Value of IRLC Due To Rate Decrease 25 Bp	10,000,000		10,000,000
Change In Fair Value of IRLC Due To Rate Decrease 50 Bp	17,000,000		17,000,000
Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value adjustment	1,000,000	1,000,000	3,000,000	3,000,000
Private Equity Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OTTI				10,000,000
Transfer | Other Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value gains or losses	$ 1,000,000	$ 1,000,000	2,000,000	$ 3,000,000
Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
FVO valuation adjustments related to instrument-specific credit risk			$ 1,000,000		$ 1,000,000

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Bank Premises & Equipment - Bank Premises and Equipment (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Bank Premises And Equipment [Line Items]
Land and improvements	$ 640	$ 586
Branches and undeveloped parcels of land
Bank Premises And Equipment [Line Items]
Land and improvements	$ 60	$ 55

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Credit Quality - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Troubled Debt Restructuring
Line of credit commitments for modified troubled debt restructurings	$ 46	$ 24
Letter of credit commitments for modified troubled debt restructurings	59	67
Mortgage loans in process of foreclosure amount	200	$ 153
Commercial aggregate borrower relationship subject to individual review for impairment	$ 1

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Business Combination - Merger-Related Expenses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Business Acquisition [Line Items]
Salaries, wages and incentives	$ 497	$ 421	$ 1,527	$ 1,339
Employee benefits	87	82	316	270
Technology and communications	100	71	319	206
Net occupancy expense	84	70	248	219
Card and processing expense	33	31	98	91
Equipment expense	33	31	96	92
Other noninterest expense	325	266	895	767
Total noninterest expense	1,159	972	3,499	2,984
MB Financial, Inc.
Business Acquisition [Line Items]
Salaries, wages and incentives	14	0	85	0
Employee benefits	0	0	3	0
Technology and communications	8	0	68	0
Net occupancy expense	3	0	10	0
Card and processing expense	0	0	1	0
Equipment expense	0	0	1	0
Other noninterest expense	3	1	45	3
Total noninterest expense	$ 28	$ 1	$ 213	$ 3

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Lease Obligations - Lessee - Lease Assets and Lease Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jan. 01, 2019
Lessee Lease Description [Line Items]
Operating lease right-of-use assets		$ 509
Total right-of-use assets	$ 487
Operating lease liabilities	543
Finance lease liabilities	26
Total lease liabilities	569
Finance lease right of use asset accumulated amortization	25
Operating lease right of use asset accumulated amortization	57
Other assets
Lessee Lease Description [Line Items]
Operating lease right-of-use assets	462
Bank premises and equipment
Lessee Lease Description [Line Items]
Finance lease right-of-us assets	25
Accrued taxes, interest and expenses
Lessee Lease Description [Line Items]
Operating lease liabilities	543
Long-term debt
Lessee Lease Description [Line Items]
Finance lease liabilities	$ 26

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EPS - Calculation of EPS and the Reconciliation of Earnings Per Share to Earnings Per Diluted Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings per share:
Net income (loss) available to common shareholders	$ 530	$ 421	$ 1,718	$ 1,685
Less: Income allocated to participating securities	4	4	16	18
Earnings per share - basic	526	417	1,702	1,667
Earnings per diluted share:
Net income available to common shareholders	530	421	1,718	1,685
Stock-based awards	0	0	0	0
Net income available to common shareholders plus assumed conversions	530	421	1,718	1,685
Less: Income allocated to participating securities	4	4	16	18
Net income allocated to common shareholders	$ 526	$ 417	$ 1,702	$ 1,667
Earnings per share:
Net income allocated to common shareholders	726,715,542	667,624,132	708,848,535	680,181,785
Effect of dilutive securities:
Stock-based awards	9,000,000	11,000,000	9,000,000	13,000,000
Net income allocated to common shareholders	736,086,399	679,198,715	718,413,237	693,078,647
Earnings per share:
Earnings per share - basic	$ 0.72	$ 0.62	$ 2.40	$ 2.45
Earnings per diluted share:
Earnings per share - diluted	$ 0.71	$ 0.61	$ 2.37	$ 2.41

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Securities - Additional Information (Details) - USD ($) $ in Billions	Sep. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Securities with a fair value, pledged as collateral	$ 7.4	$ 7.0

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Related Party Transactions - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) shares
Worldpay Holding, LLC
Related Party Transactions [Line Items]
Membership Units	10,252,826
Worldpay, Inc.
Related Party Transactions [Line Items]
Membership Units	10,252,826
Worldpay, Inc. | Other noninterest income
Related Party Transactions [Line Items]
Recognized gain | $	$ 562

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Derivatives - Net Gains (Losses) Relating to Derivative Instruments Designated as Cash Flow Hedges (Details) - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Amount of pretax net (losses) gains recognized in OCI	$ 105	$ (25)	$ 456	$ (31)
Interest Income (Expense) Net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of pretax net gains reclassified from OCI into net income	$ 5	$ (2)	$ 2	$ (2)

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Derivatives - Offsetting Derivative Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	$ 2,097	$ 1,114
Derivative, Collateral, Obligation to Return Cash	(602)	(271)
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	911	874
Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	2,073	1,107
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(550)	(410)
Derivative, Collateral, Obligation to Return Cash	(630)	(348)
Derivative, Fair Value, Amount Offset Against Collateral, Net	893	349
Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	911	874
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(550)	(410)
Derivative, Collateral, Right to Reclaim Cash	(18)	(123)
Derivative Fair Value Amount Offset Against Collateral Net	343	341
Derivative | Assets
Derivative Fair Value Gross Amount Assets Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	2,073	1,107
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	(550)	(410)
Derivative, Collateral, Obligation to Return Cash	(630)	(348)
Derivative, Fair Value, Amount Offset Against Collateral, Net	893	349
Derivative | Liability
Derivative Fair Value Gross Amount Liabilities Not Offset Against Collateral Net
Gross amount recognized in the balance sheet	911	874
Derivative Liability, Fair Value, Amount Not Offset Against Collateral	(550)	(410)
Derivative, Collateral, Right to Reclaim Cash	(18)	(123)
Derivative Fair Value Amount Offset Against Collateral Net	$ 343	$ 341

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Capital Actions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Proceeds from issuance of preferred stock		$ 242	$ 0
Open Market Share Repurchase
Stock repurchase, value	$ 50
Stock repurchase, shares	1,667,735
Repurchase Date	Jul. 29, 2019
Repurchase Date, secondary	Jul. 30, 2019
Settlement date	Jul. 31, 2019
Settlement date, secondary	Aug. 01, 2019
Preferred Stock, Series K
Preferred stock, issued	10,000	10,000
Preferred stock, liquidation preference	$ 25,000	$ 25,000
Proceeds from issuance of preferred stock	$ 242
Depositary shares	10,000,000	10,000,000
Preferred stock, redemption terms	Subject to any required regulatory approval, the Bancorp may redeem the Series K preferred shares at its option (i) in whole or in part, on any dividend payment date on or after September 30, 2024 and (ii) in whole, but not in part, at any time following a regulatory capital event.
Class B Preferred stock, Series A
Preferred stock, issued	200,000	200,000
Preferred stock, liquidation preference	$ 1,000	$ 1,000

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VIE - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Variable Interest Entity, Primary Beneficiary | Automobile Loan Securitization
Variable Interest Entity [Line Items]
LongTermDebtRetained	$ 68,000,000		$ 68,000,000
Face amount of notes issued or redeemed	1,370,000,000		1,370,000,000
Carry value of automobile loans securitized	1,430,000,000		1,430,000,000
Variable Interest Entity, Not Primary Beneficiary | Loans Provided to VIEs
Variable Interest Entity [Line Items]
Unfunded commitment amounts	1,400,000,000		1,400,000,000		$ 1,300,000,000
Variable Interest Entity, Not Primary Beneficiary | Fifth Third Community Development Corporation Investments
Variable Interest Entity [Line Items]
Maximum Exposure	1,424,000,000		1,424,000,000		1,198,000,000
Total Assets	1,424,000,000		1,424,000,000		1,198,000,000
Variable Interest Entity, Not Primary Beneficiary | Fifth Third Community Development Corporation Investments | Qualified Affordable Housing Tax Credits
Variable Interest Entity [Line Items]
Total Assets	1,100,000,000		1,100,000,000		1,100,000,000
Unfunded commitments in qualifying LIHTC investments	440,000,000		440,000,000		374,000,000
Variable Interest Entity, Not Primary Beneficiary | Private Equity Funds
Variable Interest Entity [Line Items]
Maximum Exposure	161,000,000		161,000,000		73,000,000
Total Assets	84,000,000		84,000,000		41,000,000
Unfunded commitment amounts	7,000,000		7,000,000		$ 32,000,000
Capital Contribution To Private Equity Investments	$ 2,000,000	$ 1,000,000	9,000,000	$ 6,000,000
OTTI			$ 0	$ 8,000,000

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Intangible Assets - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Mar. 22, 2019
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets		$ 14	$ 2	$ 31	$ 4
Core deposit intangible asset						$ 195
MB Financial, Inc.
Finite-Lived Intangible Assets [Line Items]
Estimated weighted-average life (in years)	7 years 2 months 12 days

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Capital Actions

9 Months Ended

Sep. 30, 2019

Capital Actions

Capital Actions

18. Capital Actions

Accelerated Share Repurchase Transactions

During the nine months ended September 30, 2019, the Bancorp entered into and 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 which were entered into and settled during the nine months ended September 30, 2019:
Repurchase Dates			Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement	Total Shares Repurchased	Settlement Dates
March 27, 2019(a)		$	913	31,779,280	2,026,584	33,805,864			June 28, 2019
April 29, 2019(b)			200	6,015,570	1,217,805	7,233,375	May 23, 2019	-	May 24, 2019
August 7, 2019			100	3,150,482	694,238	3,844,720			August 16, 2019
August 9, 2019(b)			200	6,405,426	1,475,487	7,880,913			August 28, 2019
(a)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $456.5 million.
(b)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $100 million.

Open Market Share Repurchase Transactions

Between July 29, 2019 and July 30, 2019, the Bancorp entered into repurchase transactions of 1,667,735 shares, or $50 million, of its outstanding common stock through the open market, which settled between July 31, 2019 and August 1, 2019.

Preferred Stock Offerings

On August 26, 2019, the Bancorp issued 200,000 shares of 6.00% non-cumulative perpetual Class B preferred stock, Series A. Each preferred share has a $1,000 liquidation preference. These shares were issued to the holders of MB Financial, Inc.’s 6.00% non-cumulative perpetual preferred stock, Series C, in conjunction with the merger of MB Financial, Inc. with and into Fifth Third Bancorp. This transaction resulted in the elimination of the noncontrolling interest in MB Financial, Inc. which was previously reported in the Bancorp’s Condensed Consolidated Financial Statements. The newly issued shares of Class B preferred stock, Series A were recognized by the Bancorp at the carrying value previously assigned to the MB Financial, Inc. Series C preferred stock prior to the transaction.

On September 17, 2019, the Bancorp issued in a registered public offering 10,000,000 depositary shares, representing ,10000 shares of 4.95% non-cumulative perpetual preferred stock, Series K, for net proceeds of approximately $242 million. Each preferred share has a $25,000 liquidation preference. Subject to any required regulatory approval, the Bancorp may redeem the Series K preferred shares at its option (i) in whole or in part, on any dividend payment date on or after September 30, 2024 and (ii) in whole, but not in part, at any time following a regulatory capital event. The Series K preferred shares are not convertible into Bancorp common shares or any other securities.

For further information on a subsequent event related to capital actions, refer to Note 27.

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Sales of Receivables and Servicing Rights

9 Months Ended

Sep. 30, 2019

Sales of Receivables and Servicing Rights

Sales of Receivables and Servicing Rights

14. Sales of Receivables and Servicing Rights

Residential Mortgage Loan Sales

The Bancorp sold fixed and adjustable-rate residential mortgage loans during both the three and nine months ended September 30, 2019 and 2018. 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 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Residential mortgage loan sales(a)	$	2,397	1,446	5,212	3,919
Origination fees and gains on loan sales		64	25	126	77
Gross mortgage servicing fees		71	56	196	162

Represents the unpaid principal balance at the time of the sale.Servicing RightsThe 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 table presents changes in the servicing rights related to residential mortgage loans for the nine months ended September 30:
($ in millions)		2019	2018
Balance, beginning of period	$	938	858
Servicing rights originated - residential mortgage loans		99	62
Servicing rights acquired - residential mortgage loans		26	82
Servicing rights obtained in acquisition - residential mortgage loans		263	-
Changes in fair value:
Due to changes in inputs or assumptions(a)		(294)	103
Other changes in fair value(b)		(122)	(95)
Balance, end of period	$	910	1,010

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 debt and trading debt 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Securities gains (losses), net - non-qualifying hedges on MSRs	$	-	(1)	5	(18)
Changes in fair value and settlement of free-standing derivatives purchased
to economically hedge the MSR portfolio(a)		130	(24)	308	(89)
MSR fair value adjustment due to changes in inputs or assumptions(a)		(120)	25	(294)	103

(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 September 30, 2019 and 2018 were as follows:
		September 30, 2019				September 30, 2018
	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	5.5	13.7	%	543	6.5	11.1	%	517
Servicing rights	Adjustable	-	-		-	3.3	23.7		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 September 30, 2019 and December 31, 2018, the Bancorp serviced $82.7 billion and $63.2 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 September 30, 2019, 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	$	899	4.7	15.4	%	$	(32)	(62)	(143)	619	$	(18)	(36)
Servicing rights	Adjustable		11	3.4	23.4			(1)	(1)	(3)	914		-	-

(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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Commitments - Visa Funding and Bancorp Cash Payments (Parenthetical) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Oct. 31, 2019	Sep. 30, 2018	Sep. 30, 2014	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Bancorp Cash Payment
Loss Contingencies
Reduction of liability in cash to the swap counterparty	$ 12	$ 26	$ 18	$ 6	$ 75	$ 19	$ 35	$ 20

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Loans and Leases

9 Months Ended

Sep. 30, 2019

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. 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 acquired indirect motorcycle, powersport, recreational vehicle and marine loans in the acquisition of MB Financial, Inc. These loans are included in addition to automobile loans in the line item “indirect secured consumer loans”. 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 7.

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:
			September 30,	December 31,
($ in millions)			2019	2018
Loans and leases held for sale:
	Commercial and industrial loans	$	86	67
	Commercial mortgage loans		-	3
	Residential mortgage loans		1,137	537
Total loans and leases held for sale		$	1,223	607
Portfolio loans and leases:
	Commercial and industrial loans	$	50,768	44,340
	Commercial mortgage loans		10,822	6,974
	Commercial construction loans		5,281	4,657
	Commercial leases		3,495	3,600
Total commercial loans and leases		$	70,366	59,571
	Residential mortgage loans	$	16,675	15,504
	Home equity		6,218	6,402
	Indirect secured consumer loans		11,026	8,976
	Credit card		2,467	2,470
	Other consumer loans		2,657	2,342
Total consumer loans		$	39,043	35,694
Total portfolio loans and leases		$	109,409	95,265

Portfolio loans and leases are recorded net of unearned income, which totaled $404 million as of September 30, 2019 and $479 million as of December 31, 2018. Additionally, portfolio loans and leases, excluding PCI loans, 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 $202 million and $296 million as of September 30, 2019 and December 31, 2018, respectively.

The Bancorp’s FHLB and FRB borrowings are generally secured by loans. The Bancorp had loans of $16.6 billion and $13.1 billion at September 30, 2019 and December 31, 2018, respectively, pledged at the FHLB, and loans of $48.1 billion and $42.6 billion at September 30, 2019 and December 31, 2018, 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
		September 30,	December 31,	September 30,	December 31,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	50,854	44,407	15	4
Commercial mortgage loans		10,822	6,977	18	2
Commercial construction loans		5,281	4,657	1	-
Commercial leases		3,495	3,600	1	-
Residential mortgage loans		17,812	16,041	48	38
Home equity		6,218	6,402	-	-
Indirect secured consumer loans		11,026	8,976	10	12
Credit card		2,467	2,470	38	37
Other consumer loans		2,657	2,342	1	-
Total loans and leases	$	110,632	95,872	132	93
Less: Loans and leases held for sale		1,223	607
Total portfolio loans and leases	$	109,409	95,265
The following table presents a summary of net charge-offs (recoveries):
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	29	28	67	102
Commercial mortgage loans		-	(1)	(1)	3
Commercial construction loans		-	-	-	-
Commercial leases		4	-	7	-
Residential mortgage loans		1	2	1	6
Home equity		2	3	8	9
Indirect secured consumer loans		13	9	34	28
Credit card		33	21	101	72
Other consumer loans		17	10	39	27
Total net charge-offs	$	99	72	256	247

The Bancorp engages in commercial lease products primarily related to the financing of commercial equipment. Leases are classified as sales-type if the Bancorp transfers control of the underlying asset to the lessee. The Bancorp classifies leases that do not meet any of the criteria for a sales-type lease as a direct financing lease if the present value of the sum of the lease payments and any residual value guaranteed by the lessee and/or any other third party equals or exceeds substantially all of the fair value of the underlying asset and the collection of the lease payments and residual value guarantee is probable.

The following table presents the components of the net investment in leases as of:
($ in millions)			September 30, 2019(a)
Net investment in direct financing leases:
	Lease payment receivable (present value)	$	2,415
	Unguaranteed residual assets (present value)		226
	Net discount on acquired leases		(6)
	Deferred selling profits		-
Net investment in sales-type leases:
	Lease payment receivable (present value)		357
	Unguaranteed residual assets (present value)		11
	Net discount on acquired leases		-

(a) Excludes $492 of leveraged leases at September 30, 2019.

The following table presents the components of the commercial lease financing portfolio as of:
($ in millions)		December 31, 2018
Rentals receivable, net of principal and interest on nonrecourse debt	$	3,256
Estimated residual value of leased assets		804
Initial direct cost, net of amortization		19
Gross investment in commercial lease financing		4,079
Unearned income		(479)
Net investment in commercial lease financing	$	3,600

Interest income recognized in the Condensed Consolidated Statements of Income for the three months and nine months ended September 30, 2019 was $22 million and $70 million, respectively, for direct financing leases and $4 million and $7 million, respectively, for sale-type leases.

The following table presents undiscounted cash flows for both direct financing and sales-type leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease receivables as follows:
		Direct Financing Leases	Sales-Type Leases
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	220	19
2020		693	81
2021		514	91
2022		433	73
2023		262	43
2024		184	33
Thereafter		274	63
Total undiscounted cash flows	$	2,580	403
Less: Difference between undiscounted cash flows and discounted cash flows		165	46
Present value of lease payments (recognized as lease receivables)	$	2,415	357

The lease residual value represents the present value of the estimated fair value of the leased equipment at the end of the lease. The Bancorp performs quarterly reviews of residual values associated with its leasing portfolio considering factors such as the subject equipment, structure of the transaction, industry, prior experience with the lessee and other factors that impact the residual value to assess for impairment. At September 30, 2019, the Bancorp maintained an allowance of $20 million to cover the inherent losses, including the potential losses related to the residual value, in the net investment in leases. Refer to Note 7 for additional information on credit quality and the ALLL.

At December 31, 2018, the Bancorp maintained an allowance of $18 million to cover the losses related to the minimum lease payments. Any declines in residual value that were deemed to be other-than-temporary were recognized as a loss and included as a component of corporate banking revenue in the Condensed Consolidated Statements of Income.

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Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2019

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 nine months ended September 30:
($ in millions)		2019	2018
Cash Payments:
Interest	$	1,166	760
Income taxes		524	297
Transfers:
Portfolio loans to loans held for sale		191	212
Loans held for sale to portfolio loans		30	83
Portfolio loans to OREO		23	28
Supplemental Disclosures:
Conversion of outstanding preferred stock issued by a Bancorp subsidiary		197	-
Additions to right-of-use assets under operating leases		43	-
Additions to right-of-use assets under finance leases		13	-
Right-of-use assets recognized at adoption of ASU 2016-02		509	-

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Lease Obligations - Lessee

9 Months Ended

Sep. 30, 2019

Lessee Disclosure [Abstract]

Lease Obligations - Lessee

10. Lease Obligations - Lessee

The Bancorp leases certain banking centers, ATM sites, land for owned buildings and equipment. Substantially all of the Bancorp’s leases include options to renew and the exercise of lease renewal options is at the Bancorp’s discretion. At the lease commencement date, the Bancorp assesses whether it is reasonably certain to exercise the renewal option by considering all economic factors relevant to the contract. If the Bancorp is reasonably certain to exercise the option, the renewal period is included in the lease term in measuring the right-of-use asset and lease liability at the commencement of the lease.

The Bancorp’s lease agreements typically do not contain any residual value guarantees or any material restrictive covenants. The Bancorp has elected not to recognize leases with an initial term of 12 months or less (“short-term leases”) on the Condensed Consolidated Balance Sheets.

The Bancorp recognizes lease costs associated with operating leases in the Condensed Consolidated Statements of Income on a straight-line basis over the remaining lease term unless there is another systematic and rational basis that better reflects how the benefits of the underlying asset are consumed over the lease term. Variable lease payments associated with operating leases are recognized in the period in which the obligation for those payments is incurred.

After the commencement of a finance lease, the Bancorp measures its lease liability by using the effective interest method such that the liability is increased for interest based on the discount rate that is implicit in the lease, or the Bancorp’s incremental borrowing rate if the implicit rate cannot be readily determined, offset by a decrease in the liability resulting from the periodic lease payments. The right-of-use asset associated with a finance lease is amortized on a straight-line basis unless there is another systematic and rational basis that better reflects how the benefits of the underlying asset are consumed over the lease term. The period over which the right-of-use asset is amortized is generally the lesser of the remaining lease term or the remaining useful life of the leased asset. Variable lease payments associated with finance leases are recognized in the period in which the obligation for those payments is incurred.

The following table provides a summary of lease assets and lease liabilities as of:
($ in millions)	Condensed Consolidated Balance Sheets Caption		September 30, 2019
Assets
Operating lease right-of-use assets	Other assets	$	462
Finance lease right-of-use assets	Bank premises and equipment		25
Total right-of-use assets(a)		$	487
Liabilities
Operating lease liabilities	Accrued taxes, interest and expenses	$	543
Finance lease liabilities	Long-term debt		26
Total lease liabilities		$	569

(a) Operating and finance lease right-of-use assets are recorded net of accumulated amortization of $57 and $25 as of September 30, 2019, respectively.

The following table presents the components of lease costs:
				For the three months ended September 30, 2019	For the nine months ended September 30, 2019
($ in millions)		Condensed Consolidated Statements of Income Caption
Lease costs:
	Amortization of right-of-use assets	Net occupancy and equipment expense	$	2	5
	Interest on lease liabilities	Interest on long-term debt		-	-
Total finance lease costs			$	2	5
	Operating lease cost	Net occupancy expense	$	25	72
	Short-term lease cost	Net occupancy expense		-	-
	Variable lease cost	Net occupancy expense		7	23
	Sublease income	Net occupancy expense		(1)	(3)
Total operating lease costs			$	31	92
Total lease costs			$	33	97

The Bancorp performs impairment assessments for ROU assets when events or changes in circumstances indicate that their carrying values may not be recoverable. In addition to the lease costs disclosed in the table above, the Bancorp recognized $5 million and $12 million of impairment losses and termination charges for the ROU assets related to certain operating leases for the three and nine months ended September 30, 2019, respectively. The recognized impairment losses were recorded in net occupancy expense in the Condensed Consolidated Statements of Income.

The following table presents undiscounted cash flows for both operating leases and finance leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease liabilities as follows:
		Operating Leases	Finance Leases
As of September 30, 2019 ($ in millions)				Total
Remainder of 2019	$	25	2	27
2020		88	6	94
2021		77	5	82
2022		72	4	76
2023		63	1	64
2024		55	1	56
Thereafter		258	14	272
Total undiscounted cash flows	$	638	33	671
Less: Difference between undiscounted cash flows and discounted cash flows		95	7	102
Present value of lease liabilities	$	543	26	569

The following table presents the weighted-average remaining lease term and weighted-average discount rate as of:
		September 30, 2019
Weighted-average remaining lease term (years):
	Operating leases	9.35
	Finance leases	11.35
Weighted-average discount rate:
	Operating leases	3.24	%
	Finance leases	4.78

The following table presents information related to lease transactions for the nine months ended:
($ in millions)			September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:(a)
	Operating cash flows from operating leases	$	72
	Operating cash flows from finance leases		1
	Financing cash flows from finance leases		3
Gains on sale and leaseback transactions			5
(a)	The cash flows related to the short-term and variable lease payments are not included in the amounts in the table as they were not included in the measurement of lease liabilities.

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Commitments - Letters of Credit Risk Ratings (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Letters of credit	$ 2,219	$ 2,041
Pass
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Letters of credit	2,075	1,905
Special Mention
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Letters of credit	11	10
Substandard
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Letters of credit	132	126
Doubtful
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Letters of credit	$ 1	$ 0

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Commitments - Commitment Risk Ratings (Details) - Commitments to Extend Credit - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Commitments	$ 79,076	$ 70,415
Pass
Line of Credit Facility [Line Items]
Commitments	78,124	69,928
Special Mention
Line of Credit Facility [Line Items]
Commitments	474	271
Substandard
Line of Credit Facility [Line Items]
Commitments	477	216
Doubtful
Line of Credit Facility [Line Items]
Commitments	$ 1	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 3,261	$ 2,681
Other short-term investments	3,235	1,825
Available-for-sale debt and other securities	37,178	32,830
Held-to-matury securities	18	18
Trading debt securities	297	287
Equity securities	459	452
Loans and leases held for sale	1,223	607
Portfolio loans and leases	109,409	95,265
ALLL	(1,143)	(1,103)
Portfolio loans and leases, net	108,266	94,162
Bank premises and equipment	2,053	1,861
Operating lease equipment	869	518
Goodwill	4,290	2,478
Intangible assets	201	40
Servicing rights	910	938
Other assets	8,819	7,372
Total Assets	171,079	146,069
Deposits
Noninterest-bearing deposits	35,893	32,116
Interest-bearing deposits	89,454	76,719
Total deposits	125,347	108,835
Federal funds purchased	876	1,925
Other short-term borrowings	4,046	573
Accrued taxes, interest and expenses	2,507	1,562
Other liabilities	2,425	2,498
Long-term debt	14,474	14,426
Total liabilities	149,675	129,819
Equity
Common stock	2,051	2,051
Preferred stock	1,770	1,331
Capital surplus	3,589	2,873
Retained earnings	17,786	16,578
Accumulated other comprehensive income	1,635	(112)
Treasury stock	(5,427)	(6,471)
Total Bancorp Shareholders' Equity	21,404	16,250
Noncontrolling interests	0	0
Total Equity	21,404	16,250
Total Liabilities and Equity	$ 171,079	$ 146,069

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Fair Value Measurements

25. 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, 2018.

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
September 30, 2019 ($ 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 agency securities	$	75	-	-	75
Obligations of states and political subdivisions securities		-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,694	-	15,694
Agency commercial mortgage-backed securities		-	15,276	-	15,276
Non-agency commercial mortgage-backed securities		-	3,400	-	3,400
Asset-backed securities and other debt securities		-	2,156	-	2,156
Available-for-sale debt and other securities(a)		75	36,528	-	36,603
Trading debt securities:
U.S. Treasury and federal agency securities		2	1	-	3
Obligations of states and political subdivisions securities		-	29	-	29
Agency residential mortgage-backed securities		-	69	-	69
Asset-backed securities and other debt securities		-	196	-	196
Trading debt securities		2	295	-	297
Equity securities		449	10	-	459
Residential mortgage loans held for sale		-	1,136	-	1,136
Residential mortgage loans(b)		-	-	184	184
Commercial loans held for sale		-	1	-	1
MSRs		-	-	910	910
Derivative assets:
Interest rate contracts		3	1,520	24	1,547
Foreign exchange contracts		-	182	-	182
Commodity contracts		89	279	-	368
Derivative assets(d)		92	1,981	24	2,097
Total assets	$	618	39,951	1,118	41,687
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	247	9	261
Foreign exchange contracts		-	151	-	151
Equity contracts		-	-	146	146
Commodity contracts		9	344	-	353
Derivative liabilities(e)		14	742	155	911
Short positions(e)		68	44	-	112
Total liabilities	$	82	786	155	1,023

Excludes FHLB, FRB and DTCC restricted stock holdings totaling $96, $477 and $2, respectively, at September 30, 2019.Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.During the nine months ended September 30, 2019, 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, 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 agency securities		$	97	-	-	97
Obligations of states and political subdivisions securities			-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities			-	16,247	-	16,247
Agency commercial mortgage-backed securities			-	10,650	-	10,650
Non-agency commercial mortgage-backed securities			-	3,267	-	3,267
Asset-backed securities and other debt securities			-	2,015	-	2,015
Available-for-sale debt and other securities(a)			97	32,181	-	32,278
Trading debt securities:
U.S. Treasury and federal agency securities			-	16	-	16
Obligations of states and political subdivisions securities			-	35	-	35
Agency residential mortgage-backed securities			-	68	-	68
Asset-backed securities and other debt securities			-	168	-	168
Trading debt securities			-	287	-	287
Equity securities			452	-	-	452
Residential mortgage loans held for sale			-	537	-	537
Residential mortgage loans(b)			-	-	179	179
Commercial loans held for sale			-	7	-	7
MSRs			-	-	938	938
Derivative assets:
Interest rate contracts			-	648	7	655
Foreign exchange contracts			-	152	-	152
Commodity contracts			93	214	-	307
Derivative assets(d)			93	1,014	7	1,114
Total assets		$	642	34,026	1,124	35,792
Liabilities:
Derivative liabilities:
Interest rate contracts		$	8	313	8	329
Foreign exchange contracts			-	142	-	142
Equity contracts			-	-	125	125
Commodity contracts			19	259	-	278
Derivative liabilities(e)			27	714	133	874
Short positions(e)			110	28	-	138
Total liabilities		$	137	742	133	1,012
(a)	Excludes FHLB, FRB, and DTCC restricted stock holdings totaling $184, $366 and $2, respectively, at December 31, 2018.
(b)	Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
(c)	During the year ended December 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.

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 equity securities. 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 agency securities, obligations of states and political subdivisions securities, agency residential mortgage-backed securities, agency and non-agency commercial mortgage-backed securities, asset-backed securities and other debt securities and equity securities. These securities are generally valued using a market approach based on observable prices of securities with similar characteristics.

Residential mortgage loans held for sale

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

Residential mortgage loans

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

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.

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 14 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 September 30, 2019 and December 31, 2018, 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 September 30, 2019 was $24 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 $10 million and $17 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 $11 million and $23 million, respectively. The decrease in fair value of IRLCs due to immediate 10% and 20% adverse changes in the assumed loan closing rates would be approximately $2 million and $5 million, respectively, and the increase in fair value due to immediate 10% and 20% favorable changes in the assumed loan closing rates would be approximately $2 million and $5 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 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)
		Residential		Interest Rate
		Mortgage		Derivatives,	Equity	Total
For the three months ended September 30, 2019 ($ in millions)		Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period	$	192	1,039	5	(151)		1,085
Total (losses) gains (realized/unrealized):
Included in earnings		-	(171)	51	(11)		(131)
Purchases/originations		-	42	(1)	-		41
Settlements		(11)	-	(40)	16		(35)
Transfers into Level 3(b)		3	-	-	-		3
Balance, end of period	$	184	910	15	(146)		963
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 September 30, 2019(c)	$	-	(131)	24	(11)		(118)

Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.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
			Mortgage		Derivatives,	Equity	Total
For the three months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	162	959	4	(164)		961
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(8)	18	(17)		(8)
Purchases/originations			-	59	(1)	-		58
Settlements			(4)	-	(22)	37		11
Transfers into Level 3(b)			15	-	-	-		15
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(1)	(8)	7	(17)		(19)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8 respectively, as of September 30, 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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2019 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	179	938	(1)	(125)		991
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(416)	110	(63)		(370)
Purchases/originations/acquisitions			-	388	(3)	-		385
Settlements			(22)	-	(91)	42		(71)
Transfers into Level 3(b)			28	-	-	-		28
Balance, end of period		$	184	910	15	(146)		963
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 September 30, 2019(c)		$	(1)	(329)	25	(63)		(368)
(a)	Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.
(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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	137	858	3	(137)		861
Total (losses) gains (realized/unrealized):
Included in earnings			(5)	8	54	(66)		(9)
Purchases/originations			-	144	(5)	-		139
Settlements			(12)	-	(53)	59		(6)
Transfers into Level 3(b)			52	-	-	-		52
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(5)	8	9	(66)		(54)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8, respectively, as of September 30, 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.

The total losses and gains 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(121)	9	(309)	56
Corporate banking revenue		1	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(131)	(8)	(370)	(9)

The total losses and gains included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at September 30, 2019 and 2018 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(109)	(2)	(307)	11
Corporate banking revenue		2	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(118)	(19)	(368)	(54)

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	184	Loss rate model	Interest rate risk factor	(6.8)		-	6.9	%		(0.2)	%
				Credit risk factor		0	-	31.8	%		0.5	%
										(Fixed)	15.4	%
MSRs		910	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.4	%
										(Fixed)	619
				OAS spread (bps)		484	-	1,513		(Adjustable)	914
IRLCs, net		24	DCF	Loan closing rates		5.7	-	96.7	%		76.9	%
Swap associated with the sale of Visa, Inc.		(146)	DCF	Timing of the resolution		6/30/2021			-	2/7/2022
Class B Shares				of the Covered Litigation		12/31/2023

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	172	Loss rate model	Interest rate risk factor	(12.7)		-	11.0	%		(0.6)	%
				Credit risk factor		0	-	40.3	%		0.7	%
										(Fixed)	9.1	%
MSRs		1,010	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.2	%
										(Fixed)	533
				OAS spread (bps)		449	-	1,513		(Adjustable)	842
IRLCs, net		7	DCF	Loan closing rates		6.2	-	96.7	%		76.6	%
Swap associated with the sale of Visa, Inc.		(144)	DCF	Timing of the resolution		1/31/2021			-	9/6/2021
Class B Shares				of the Covered Litigation		11/30/2023

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 September 30, 2019 and 2018 and for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2019 and 2018, 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	Total (Losses) Gains
						For the three months ended September 30, 2019	For the nine months ended September 30, 2019
As of September 30, 2019 ($ in millions)		Level 1	Level 2	Level 3	Total
Commercial and industrial loans	$	-	-	116	116	(11)	(45)
Commercial mortgage loans		-	-	12	12	-	-
Commercial leases		-	-	18	18	2	(9)
OREO		-	-	16	16	(2)	(5)
Bank premises and equipment		-	-	23	23	(4)	(26)
Private equity investments		-	6	2	8	-	6
Total	$	-	6	187	193	(15)	(79)

		Fair Value Measurements Using				Total (Losses) Gains	Total (Losses) Gains
						For the three months	For the nine months
As of September 30, 2018 ($ in millions)		Level 1	Level 2	Level 3	Total	ended September 30, 2018	ended September 30, 2018
Commercial loans held for sale	$	-	-	3	3	(1)	(2)
Commercial and industrial loans		-	-	156	156	(16)	(46)
Commercial mortgage loans		-	-	2	2	-	6
Commercial leases		-	-	14	14	1	(9)
OREO		-	-	21	21	(2)	(6)
Bank premises and equipment		-	-	36	36	-	(41)
Operating lease equipment		-	-	10	10	(1)	(4)
Private equity investments		-	69	3	72	14	44
Total	$	-	69	245	314	(5)	(58)

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial and industrial loans	$	116	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		12	Appraised value	Collateral value	NM	NM
Commercial leases		18	Appraised value	Collateral value	NM	NM
OREO		16	Appraised value	Appraised value	NM	NM
Bank premises and equipment		23	Appraised value	Appraised value	NM	NM
Private equity investments		2	Comparable company analysis	Market comparable transactions	NM	NM

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs				Weighted-Average
Commercial loans held for sale	$	3	Appraised value	Appraised value			NM		NM
				Costs to sell			NM		10.0	%
Commercial and industrial loans		156	Appraised value	Collateral value			NM		NM
Commercial mortgage loans		2	Appraised value	Collateral value			NM		NM
Commercial leases		14	Appraised value	Collateral value			NM		NM
OREO		21	Appraised value	Appraised value			NM		NM
Bank premises and equipment		36	Appraised value	Appraised value			NM		NM
Operating lease equipment		10	Appraised value	Appraised value			NM		NM
Private equity investments		-	Liquidity discount applied	Liquidity discount	0	-	43.0	%	12.9	%
			to fund's NAV
		3	Comparable company analysis	Market comparable transactions			NM		NM

Portfolio commercial loans and leases

During the three and nine months ended September 30, 2019 and 2018, 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 the three and nine months ended September 30, 2019 and 2018, 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. These losses included $1 million and $2 million of charge-offs on new OREO properties transferred from loans during the three and nine months ended September 30, 2019, respectively, and $1 million and $3 million for the three and nine months ended September 30, 2018, respectively. These losses also included $1 million and $3 million in losses for the three and nine months ended September 30, 2019, respectively, and $1 million and $3 million in losses for the three and nine months ended September 30, 2018, respectively, 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 appraisals 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. Enterprise Workplace Services, which reports to the Bancorp’s Chief Human Resources 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 8.

Operating lease equipment

During the three and nine months ended September 30, 2018, 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. 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

The Bancorp accounts for its private equity investments, except for those accounted for under the equity method of accounting, at each investment’s 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 Bancorp recognized gains resulting from observable price changes of zero and $11 million during the three and nine months ended September 30, 2019, respectively, and $13 million and $64 million during the three and nine months ended September 30, 2018, respectively. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2019 includes a cumulative $53 million of positive adjustments as a result of observable price changes since January 1, 2018. 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 DCF 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 Bancorp recognized impairment of zero and $5 million during the three and nine months ended September 30, 2019, respectively, and an immaterial amount and $11 million during the three and nine months ended September 30, 2018, respectively. The carrying value of the Bancorp’s private equity investments still held as of September 30, 2019 includes a cumulative $17 million of impairment charges recognized since adoption of the measurement alternative to fair value on January 1, 2018.

The Bancorp did not recognize any OTTI during the three and nine months ended September 30, 2019 and recognized an immaterial amount and $10 million of OTTI primarily associated with certain nonconforming investments affected by the Volcker Rule during the three and nine months ended September 30, 2018, respectively. 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 NAV of the fund or through a DCF 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 NAVs 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 Consumer Banking, Payments and Strategy, 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 be 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 September 30, 2019 and 2018 for which the fair value option was elected, as well as the changes in fair value of the underlying IRLCs, included gains of $35 million and $12 million for the nine months ended September 30, 2019 and 2018, 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 September 30, 2019 and 2018 for which the fair value option was elected included gains of an immaterial amount for both the nine months ended September 30, 2019 and 2018. 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 $1 million at both September 30, 2019 and December 31, 2018. 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 both September 30, 2019 and December 31, 2018. 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
September 30, 2019 ($ in millions)		Fair Value	Principal Balance	Difference
Residential mortgage loans measured at fair value	$	1,320	1,285	35
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-
Commercial loans measured at fair value		1	1	-
December 31, 2018
Residential mortgage loans measured at fair value	$	716	696	20
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		2	2	-
Commercial loans measured at fair value		7	7	-

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 September 30, 2019 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	3,261	3,261	-	-	3,261
Other short-term investments		3,235	3,235	-	-	3,235
Other securities		575	-	575	-	575
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		86	-	-	86	86
Portfolio loans and leases:
Commercial and industrial loans		50,239	-	-	50,721	50,721
Commercial mortgage loans		10,740	-	-	10,626	10,626
Commercial construction loans		5,241	-	-	5,305	5,305
Commercial leases		3,475	-	-	3,243	3,243
Residential mortgage loans		16,416	-	-	17,472	17,472
Home equity		6,178	-	-	6,452	6,452
Indirect secured consumer loans		10,976	-	-	10,889	10,889
Credit card		2,311	-	-	2,532	2,532
Other consumer loans		2,620	-	-	2,777	2,777
Unallocated ALLL		(114)	-	-	-	-
Total portfolio loans and leases, net	$	108,082	-	-	110,017	110,017
Financial liabilities:
Deposits	$	125,347	-	125,342	-	125,342
Federal funds purchased		876	876	-	-	876
Other short-term borrowings		4,046	-	4,046	-	4,046
Long-term debt		14,474	14,644	779	-	15,423

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2018 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,681	2,681	-	-	2,681
Other short-term investments		1,825	1,825	-	-	1,825
Other securities		552	-	552	-	552
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		63	-	-	63	63
Portfolio loans and leases:
Commercial and industrial loans		43,825	-	-	44,668	44,668
Commercial mortgage loans		6,894	-	-	6,851	6,851
Commercial construction loans		4,625	-	-	4,688	4,688
Commercial leases		3,582	-	-	3,180	3,180
Residential mortgage loans		15,244	-	-	15,688	15,688
Home equity		6,366	-	-	6,719	6,719
Indirect secured consumer loans		8,934	-	-	8,717	8,717
Credit card		2,314	-	-	2,759	2,759
Other consumer loans		2,309	-	-	2,428	2,428
Unallocated ALLL		(110)	-	-	-	-
Total portfolio loans and leases, net	$	93,983	-	-	95,698	95,698
Financial liabilities:
Deposits	$	108,835	-	108,782	-	108,782
Federal funds purchased		1,925	1,925	-	-	1,925
Other short-term borrowings		573	-	573	-	573
Long-term debt		14,426	14,287	445	-	14,732

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Business Combination (Tables)

9 Months Ended

Sep. 30, 2019

Business Combination

Consideration Paid, Noncontrolling Interest Recognized, and Acquired Identifiable Assets and Liabilities

The following table reflects consideration paid and the noncontrolling interest recognized for MB Financial, Inc.’s net assets and the amounts of acquired identifiable assets and liabilities assumed at their estimated fair value as of the acquisition date:
($ in millions)
Consideration paid
Cash payments					$	469
Fair value of common stock issued						3,121
Stock-based awards						38
Dividend receivable from MB Financial, Inc.						(20)
Total consideration paid					$	3,608
Fair value of noncontrolling interest in acquiree					$	197
Net Identifiable Assets Acquired, at Fair Value:
Assets
Cash and due from banks		$	1,679
Federal funds sold			35
Other short-term investments			53
Available-for-sale debt and other securities			832
Held-to-maturity securities			4
Equity securities			51
Loans and leases held for sale			12
Portfolio loans and leases			13,409	(a)
Bank premises and equipment			250	(a)
Operating lease equipment			416	(a)
Intangible assets			195	(a)
Servicing rights			263
Other assets			723	(a)
Total assets acquired		$	17,922
Liabilities
Deposits		$	14,489
Other short-term borrowings			267	(a)
Accrued taxes, interest and expenses			260	(a)
Other liabilities			196	(a)
Long-term debt			720	(a)
Total liabilities assumed		$	15,932
Net identifiable assets acquired						1,990
Goodwill					$	1,815
(a)	Fair values have been updated from the estimates reported in the March 31, 2019 Form 10-Q.

Merger-Related Expenses

The following table provides a summary of merger-related expenses recorded in noninterest expense:

		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Salaries, wages and incentives	$	14	-	85	-
Employee benefits		-	-	3	-
Technology and communications		8	-	68	-
Net occupancy expense		3	-	10	-
Card and processing expense		-	-	1	-
Equipment expense		-	-	1	-
Other noninterest expense		3	1	45	3
Total	$	28	1	213	3

Unaudited Pro Forma

The following table presents unaudited pro forma information as if the acquisition of MB Financial, Inc. had occurred on January 1, 2018.

		Unaudited Pro Forma Information		Unaudited Pro Forma Information
		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)		2019	2018	2019	2018
Net interest income	$	1,222	1,214	3,692	3,583
Noninterest income		738	661	2,600	2,514
Net income attributable to common shareholders		513	469	1,824	1,743

Accounting for Certain Loans Acquired in Transfer Disclosure [Table Text Block]

The following table reflects the contractually required payments receivable, cash flows expected to be collected and estimated fair value of loans identified as PCI loans on the acquisition date of MB Financial, Inc. These fair value estimates are considered preliminary as of September 30, 2019.

($ in millions)		March 22, 2019
Contractually required payments including interest	$	1,139
Less: Nonaccretable difference		81
Cash flows expected to be collected		1,058
Less: Accretable yield		202
Fair value of loans acquired	$	856

A summary of activity related to accretable yield is as follows:
($ in millions)		Accretable Yield
Balance as of December 31, 2018	$	-
Additions		202
Accretion		(30)
Reclassifications (to) from nonaccretable difference		(2)
Balance as of September 30, 2019	$	170

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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, 2017	$ 16,220	$ 2,051	$ 1,331	$ 2,790	$ 14,957	$ 73	$ (5,002)	$ 16,200	$ 20
Net income (loss)	1,737
Other comprehensive income (loss)	(846)
Ending Balance at Sep. 30, 2018	15,701	2,051	1,331	2,856	16,291	(775)	(6,073)	15,681	20
Impact of cumulative effect of change in accounting principles	4				6	(2)		4
Beginning Balance at Jan. 01, 2018	16,224	2,051	1,331	2,790	14,963	71	(5,002)	16,204	20
Net income (loss)	1,737				1,737			1,737
Other comprehensive income (loss)	(846)					(846)		(846)
Cash dividends declared:
Common stock	355				355			355
Preferred stock	52				52			52
Shares acquired for treasury	1,053			(41)			1,094	1,053
Impact of stock transactions under stock compensation plans, net	46			25			21	46
Other	0				(2)		2	0
Ending Balance at Sep. 30, 2018	15,701	2,051	1,331	2,856	16,291	(775)	(6,073)	15,681	20
Beginning Balance at Jun. 30, 2018	16,100	2,051	1,331	2,833	15,991	(552)	(5,574)	16,080	20
Net income (loss)	436				436			436
Other comprehensive income (loss)	(223)					(223)		(223)
Cash dividends declared:
Common stock	121				121			121
Preferred stock	15				15			15
Shares acquired for treasury	500						500	500
Impact of stock transactions under stock compensation plans, net	24			23			1	24
Ending Balance at Sep. 30, 2018	15,701	2,051	1,331	2,856	16,291	(775)	(6,073)	15,681	20
Beginning Balance at Dec. 31, 2018	16,250	2,051	1,331	2,873	16,578	(112)	(6,471)	16,250	0
Net income (loss)	1,778
Other comprehensive income (loss)	1,747
Ending Balance at Sep. 30, 2019	21,404	2,051	1,770	3,589	17,786	1,635	(5,427)	21,404	0
Impact of cumulative effect of change in accounting principles	10				10			10
Beginning Balance at Jan. 01, 2019	16,260	2,051	1,331	2,873	16,588	(112)	(6,471)	16,260	0
Net income (loss)	1,778				1,778			1,778
Other comprehensive income (loss)	1,747					1,747		1,747
Cash dividends declared:
Common stock	518				518			518
Preferred stock	60				60			60
Shares acquired for treasury	1,463						1,463	1,463
Issuance of preferred stock	242		242					242
Conversion of outstanding preferred stock	0		197					197	(197)
Impact of stock transactions under stock compensation plans, net	59			5	1		53	59
Impact of MB Financial, Inc. acquisition	3,356			712			2,447	3,159	197
Other	3			(1)	(3)		7	3
Ending Balance at Sep. 30, 2019	21,404	2,051	1,770	3,589	17,786	1,635	(5,427)	21,404	0
Beginning Balance at Jun. 30, 2019	20,671	2,051	1,331	3,572	17,431	1,178	(5,089)	20,474	197
Net income (loss)	549				549			549
Other comprehensive income (loss)	457					457		457
Cash dividends declared:
Common stock	175				175			175
Preferred stock	19				19			19
Shares acquired for treasury	350						350	350
Issuance of preferred stock	242		242					242
Conversion of outstanding preferred stock	0		197					197	(197)
Impact of stock transactions under stock compensation plans, net	24			17			7	24
Other	5						5	5
Ending Balance at Sep. 30, 2019	$ 21,404	$ 2,051	$ 1,770	$ 3,589	$ 17,786	$ 1,635	$ (5,427)	$ 21,404	$ 0

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MSR - Activity Related to the MSR Portfolio (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Servicing Assets at Fair Value [Line Items]
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	$ 0	$ (1)	$ 5	$ (18)
MSR fair value adjustments due to change in inputs or assumptions	(120)	25	(294)	103
Interest Rate Contract | Servicing Rights | Mortgage banking net revenue
Servicing Assets at Fair Value [Line Items]
Changes in fair value and settlement of free-standing derivatives purchased to economically hedge the MSR portfolio (Mortgage banking net revenue)	$ 130	$ (24)	$ 308	$ (89)

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Derivatives - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Valuation adjustments related to the credit risk associated with counterparties of customer accomodation derivative contracts	$ 21	$ 3
Notional amount of the risk participation agreements	4,345	4,002
Amount of variation margin payment applied to derivative asset contracts	748	249
Amount of variation margin payment applied to derivative liability contracts	528	23
Total collateral
Derivative [Line Items]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	1,100	481
Derivative Liability, Fair Value, Amount Offset Against Collateral	$ 241	551
Interest Rate Contract | Credit Risk
Derivative [Line Items]
Credit Risk Derivatives Average Remaining Life	3 years 6 months
Fair value of risk participation agreements	$ 9	8
Interest Rate Contract | Cash Flow Hedging
Derivative [Line Items]
Maximum length of time hedged in cash flow hedge	63 months
Deferred gains or losses, net of tax, on cash flow hedges were recorded in accumulated other comprehensive income	$ 519	$ 160
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	$ 10

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Supplemental Cash Flow - Noncash Investing and Financing Activities (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Interest paid
Interest			$ 1,166	$ 760
Income taxes paid, net
Income taxes			524	297
Transfers:
Portfolio loans to loans held for sale			191	212
Loans held for sale to portfolio loans			30	83
Portfolio loans to OREO			23	28
Conversion of preferred stock	$ 0	$ 0	197	0
Additions to right of use assets under operating leases			43	0
Additions to right of use assets under finance leases			13	0
Right-of-use assets recognized at adoption of ASU 2016-02			$ 509	$ 0

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2019

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
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities
	arising during period	$	497	(118)	379
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			494	(117)	377	781	377	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		105	(22)	83
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(5)	1	(4)
Net unrealized gains on cash flow hedge derivatives			100	(21)	79	440	79	519
Reclassification of amounts to net periodic benefit costs			1	-	1
Defined benefit pension plans, net			1	-	1	(43)	1	(42)
Total		$	595	(138)	457	1,178	457	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(271)	64	(207)
Reclassification adjustment for net losses on available-for-sale
	debt securities included in net income		-	-	-
Net unrealized losses on available-for-sale debt securities			(271)	64	(207)	(485)	(207)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(25)	6	(19)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(23)	6	(17)	(16)	(17)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			3	-	3
Defined benefit pension plans, net			1	-	1	(51)	1	(50)
Total		$	(293)	70	(223)	(552)	(223)	(775)

The tables below present the activity of the components of OCI and AOCI for the nine months ended:
			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities arising
	during period	$	1,817	(430)	1,387
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			1,814	(429)	1,385	(227)	1,385	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		456	(95)	361
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(2)	-	(2)
Net unrealized gains on cash flow hedge derivatives			454	(95)	359	160	359	519
Reclassification of amounts to net periodic benefit costs			4	(1)	3
Defined benefit pension plans, net			4	(1)	3	(45)	3	(42)
Total		$	2,272	(525)	1,747	(112)	1,747	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(1,082)	248	(834)
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			(1,073)	246	(827)	135	(827)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(31)	7	(24)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(29)	7	(22)	(11)	(22)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			7	(2)	5
Defined benefit pension plans, net			5	(2)	3	(53)	3	(50)
Total		$	(1,097)	251	(846)	71	(846)	(775)

Reclassification Out of Accumulated Other Comprehensive Income to Net Income

The table below presents reclassifications out of AOCI:
			For the three months ended September 30,		For the nine months ended September 30,
	Condensed Consolidated
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Net unrealized gains (losses) on available-for-sale debt securities:(b)
Net gains (losses) included in net income	Securities gains (losses), net	$	3	-	3	(9)
	Income before income taxes		3	-	3	(9)
	Applicable income tax expense		(1)	-	(1)	2
	Net income		2	-	2	(7)
Net unrealized gains (losses) on cash flow hedge derivatives:(b)
Interest rate contracts related to C&I loans	Interest and fees on loans and leases		5	(2)	2	(2)
	Income before income taxes		5	(2)	2	(2)
	Applicable income tax expense		(1)	-	-	-
	Net income		4	(2)	2	(2)
Net periodic benefit costs:(b)
Amortization of net actuarial loss	Employee benefits(a)		(1)	(1)	(4)	(5)
Settlements	Employee benefits(a)		-	(2)	-	(2)
	Income before income taxes		(1)	(3)	(4)	(7)
	Applicable income tax expense		-	-	1	2
	Net income		(1)	(3)	(3)	(5)
Total reclassifications for the period	Net income	$	5	(5)	1	(14)

This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 20 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018 for further information.Amounts in parentheses indicate reductions to net income.

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Fair Value Measurements - Reconciliation of Assets and Liabilities Measured at Recurring L3 Fair Value (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	$ 1,085	$ 961	$ 991	$ 861
Included in earnings	(131)	(8)	(370)	(9)
Purchases/originations/acquisitions	41	58	385	139
Settlements	(35)	11	(71)	(6)
Transfers Into Level 3	3	15	28	52
Ending Balance	963	1,037	963	1,037
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	(118)	(19)	(368)	(54)
Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	192	162	179	137
Included in earnings	0	(1)	(1)	(5)
Purchases/originations/acquisitions	0	0	0	0
Settlements	(11)	(4)	(22)	(12)
Transfers Into Level 3	3	15	28	52
Ending Balance	184	172	184	172
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	0	(1)	(1)	(5)
Servicing Contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	1,039	959	938	858
Included in earnings	(171)	(8)	(416)	8
Purchases/originations/acquisitions	42	59	388	144
Settlements	0	0	0	0
Transfers Into Level 3	0	0	0	0
Ending Balance	910	1,010	910	1,010
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	(131)	(8)	(329)	8
Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	5	4	(1)	3
Included in earnings	51	18	110	54
Purchases/originations/acquisitions	(1)	(1)	(3)	(5)
Settlements	(40)	(22)	(91)	(53)
Transfers Into Level 3	0	0	0	0
Ending Balance	15	(1)	15	(1)
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	24	7	25	9
Equity Contract
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Beginning Balance	(151)	(164)	(125)	(137)
Included in earnings	(11)	(17)	(63)	(66)
Purchases/originations/acquisitions	0	0	0	0
Settlements	16	37	42	59
Transfers Into Level 3	0	0	0	0
Ending Balance	(146)	(144)	(146)	(144)
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	$ (11)	$ (17)	$ (63)	$ (66)

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Credit Quality - Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	$ 1,143	$ 1,115	$ 1,103	$ 1,091	$ 1,077	$ 1,196
Portfolio loans and leases	109,225		95,086
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans measured at fair value on a recurring basis	184		179
Leveraged leases
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses	1		1
Portfolio loans and leases	$ 492		$ 624

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Fair Value Measurements - Fair Values of Recurring Assets and Liabilities With Significant Unobservable L3 Inputs (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	$ 910	$ 1,010
Derivative instruments	2,097		$ 1,114
Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured at fair value on a recurring basis	184	172
Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured at fair value on a recurring basis	24	7
Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans measured at fair value on a recurring basis	$ (146)	$ (144)
Lower Limit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Prepayment speed	0.50%	0.50%
OAS spread (bps)	48400.00%	44900.00%
Lower Limit | Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate risk factor	(6.80%)	(12.70%)
Credit risk factor	0.00%	0.00%
Lower Limit | Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan closing rates	5.70%	6.20%
Lower Limit | Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Timing of the resolution of the covered litigation	Jun. 30, 2021	Jan. 31, 2021
Upper Limit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Prepayment speed	97.00%	97.00%
OAS spread (bps)	151300.00%	151300.00%
Upper Limit | Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate risk factor	0.069%	11.00%
Credit risk factor	31.80%	40.30%
Upper Limit | Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan closing rates	96.70%	96.70%
Upper Limit | Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Timing of the resolution of the covered litigation	Dec. 31, 2023	Nov. 30, 2023
Weighted average | Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate risk factor	(0.20%)	(0.60%)
Credit risk factor	0.005%	0.007%
Weighted average | Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan closing rates	0.769%	0.766%
Weighted average | Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Timing of the resolution of the covered litigation	Feb. 07, 2022	Sep. 06, 2021
Weighted average | Fixed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Prepayment speed	0.154%	0.091%
OAS spread (bps)	61900.00%	53300.00%
Weighted average | Adjustable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Prepayment speed	0.234%	0.232%
OAS spread (bps)	91400.00%	84200.00%

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Credit Quality - Summary of the Nonperforming Loans and Leases by Class (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Modifications [Line Items]
Loans and leases held for sale	$ 1,223	$ 607
Portfolio loans and leases	109,225	95,086
Commercial Portfolio Segment
Financing Receivable, Modifications [Line Items]
Portfolio loans and leases	70,366	59,571
Nonaccrual
Financing Receivable, Modifications [Line Items]
Loans and leases held for sale	13	16
Portfolio loans and leases	133	120
Nonaccrual | Government Insured
Financing Receivable, Modifications [Line Items]
Portfolio loans and leases	15	6
Restructured nonaccrual loans and leases	$ 10	$ 2

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Loans & Leases - Loans and Leases Classified by Primary Purpose (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Loans held for sale:
Loans and leases held for sale	$ 1,223	$ 607
Portfolio loans and leases:
Commercial and industrial loans	50,768	44,340
Commercial mortgage loans	10,822	6,974
Commercial construction loans	5,281	4,657
Commercial leases	3,495	3,600
Residential mortgage loans	16,675	15,504
Home equity	6,218	6,402
Indirect secured consumer loans	11,026	8,976
Credit card	2,467	2,470
Other consumer loans and leases	2,657	2,342
Portfolio loans and leases	109,409	95,265
Commercial Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases	70,366	59,571
Consumer Portfolio Segment
Portfolio loans and leases:
Portfolio loans and leases	39,043	35,694
Commercial and industrial loans
Loans held for sale:
Loans and leases held for sale	86	67
Commercial mortgage loans
Loans held for sale:
Loans and leases held for sale	0	3
Residential mortgage loans
Loans held for sale:
Loans and leases held for sale	$ 1,137	$ 537

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Credit Quality - Summary of the Credit Risk Profile of the Residential Mortgage and Consumer Portfolio Segments by Class (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Total loans and leases	$ 109,225	$ 95,086
Residential Mortgage
Total loans and leases	16,491	15,325
Home Equity
Total loans and leases	6,218	6,402
Indirect secured consumer loans
Total loans and leases	11,026	8,976
Credit Card
Total loans and leases	2,467	2,470
Other consumer loans
Total loans and leases	2,657	2,342
Performing Financing Receivable
Total loans and leases	38,726	35,395
Performing Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	16,469	15,303
Performing Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases	6,138	6,332
Performing Financing Receivable | Indirect secured consumer loans | Consumer Portfolio Segment
Total loans and leases	11,024	8,975
Performing Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases	2,440	2,444
Performing Financing Receivable | Other consumer loans | Consumer Portfolio Segment
Total loans and leases	2,655	2,341
Nonperforming Financing Receivable
Total loans and leases	133	120
Nonperforming Financing Receivable | Residential Mortgage | Residential Mortgage Loans
Total loans and leases	22	22
Nonperforming Financing Receivable | Home Equity | Consumer Portfolio Segment
Total loans and leases	80	70
Nonperforming Financing Receivable | Indirect secured consumer loans | Consumer Portfolio Segment
Total loans and leases	2	1
Nonperforming Financing Receivable | Credit Card | Consumer Portfolio Segment
Total loans and leases	27	26
Nonperforming Financing Receivable | Other consumer loans | Consumer Portfolio Segment
Total loans and leases	$ 2	$ 1

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Credit Quality - Recorded Investment in Impaired Loans and Related Allowance by Class (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	$ 929	$ 846
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	558	536
Unpaid Principal Balance	1,487	1,382
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	841	787
Impaired Financing Receivable With No Related Allowance Recorded Investment	530	504
Recorded investment	1,371	1,291
Allowance	147	141
Commercial Portfolio Segment | Commercial and Industrial Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	257	156
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	129	137
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	178	107
Impaired Financing Receivable With No Related Allowance Recorded Investment	121	125
Allowance	44	34
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	5	2
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	21	9
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	5	2
Impaired Financing Receivable With No Related Allowance Recorded Investment	20	9
Allowance	0	1
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	1	2
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	3	11
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	1	1
Impaired Financing Receivable With No Related Allowance Recorded Investment	3	11
Allowance	0	0
Commercial Portfolio Segment | Commercial Leases
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	31	23
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	3
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	27	22
Impaired Financing Receivable With No Related Allowance Recorded Investment	3
Allowance	9	7
Residential Mortgage Loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	451	465
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	328	292
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	448	462
Impaired Financing Receivable With No Related Allowance Recorded Investment	310	274
Allowance	58	61
Consumer Portfolio Segment | Home Equity
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	134	146
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	73	85
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	134	145
Impaired Financing Receivable With No Related Allowance Recorded Investment	72	83
Allowance	22	22
Consumer Portfolio Segment | Indirect secured consumer loans
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	4	5
Impaired Financing Receivable With No Related Allowance Unpaid Principal Balance	1	2
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	4	4
Impaired Financing Receivable With No Related Allowance Recorded Investment	1	2
Allowance	1	1
Consumer Portfolio Segment | Credit Card
Impaired Financing Receivable Unpaid Principal Balance
Impaired Financing Receivable With Related Allowance Unpaid Principal Balance	46	47
Impaired Financing Receivable Recorded Investment Abstract
Impaired Financing Receivable With Related Allowance Recorded Investment	44	44
Allowance	$ 13	$ 15

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Fair Value Measurements - Carrying Amounts and Estimated Fair Values for Certain Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Financial assets:
Cash and due from banks	$ 3,261	$ 2,681	$ 2,100	$ 2,514
Other short-term investments	3,235	1,825
Held-to-matury securities	18	18
Loans and leases held for sale	1,223	607
Commercial and industrial loans	50,768	44,340
Commercial mortgage loans	10,822	6,974
Commercial construction loans	5,281	4,657
Commercial leases	3,495	3,600
Residential mortgage loans	16,675	15,504
Home equity	6,218	6,402
Indirect secured consumer loans	11,026	8,976
Credit card	2,467	2,470
Other consumer loans and leases	2,657	2,342
Portfolio loans and leases, net	108,266	94,162
Financial liabilities:
Deposits	125,347	108,835
Federal funds purchased	876	1,925
Other short-term borrowings	4,046	573
Long-term debt	14,474	14,426
Net Carrying Amount
Financial assets:
Cash and due from banks	3,261	2,681
Other short-term investments	3,235	1,825
Other securities	575	552
Held-to-matury securities	18	18
Loans and leases held for sale	86	63
Commercial and industrial loans	50,239	43,825
Commercial mortgage loans	10,740	6,894
Commercial construction loans	5,241	4,625
Commercial leases	3,475	3,582
Residential mortgage loans	16,416	15,244
Home equity	6,178	6,366
Indirect secured consumer loans	10,976	8,934
Credit card	2,311	2,314
Other consumer loans and leases	2,620	2,309
Unallocated Allowance For Loan And Lease Losses	(114)	(110)
Portfolio loans and leases, net	108,082	93,983
Financial liabilities:
Deposits	125,347	108,835
Federal funds purchased	876	1,925
Other short-term borrowings	4,046	573
Long-term debt	14,474	14,426
Total Fair Value
Financial assets:
Cash and due from banks	3,261	2,681
Other short-term investments	3,235	1,825
Other securities	575	552
Held-to-matury securities	18	18
Loans and leases held for sale	86	63
Commercial and industrial loans	50,721	44,668
Commercial mortgage loans	10,626	6,851
Commercial construction loans	5,305	4,688
Commercial leases	3,243	3,180
Residential mortgage loans	17,472	15,688
Home equity	6,452	6,719
Indirect secured consumer loans	10,889	8,717
Credit card	2,532	2,759
Other consumer loans and leases	2,777	2,428
Unallocated Allowance For Loan And Lease Losses	0	0
Portfolio loans and leases, net	110,017	95,698
Financial liabilities:
Deposits	125,342	108,782
Federal funds purchased	876	1,925
Other short-term borrowings	4,046	573
Long-term debt	15,423	14,732
Fair Value, Inputs, Level 1
Financial assets:
Cash and due from banks	3,261	2,681
Other short-term investments	3,235	1,825
Other securities	0	0
Held-to-matury securities	0	0
Loans and leases held for sale	0	0
Commercial and industrial loans	0	0
Commercial mortgage loans	0	0
Commercial construction loans	0	0
Commercial leases	0	0
Residential mortgage loans	0	0
Home equity	0	0
Indirect secured consumer loans	0	0
Credit card	0	0
Other consumer loans and leases	0	0
Unallocated Allowance For Loan And Lease Losses	0	0
Portfolio loans and leases, net	0	0
Financial liabilities:
Deposits	0	0
Federal funds purchased	876	1,925
Other short-term borrowings	0	0
Long-term debt	14,644	14,287
Fair Value, Inputs, Level 2
Financial assets:
Cash and due from banks	0	0
Other short-term investments	0	0
Other securities	575	552
Held-to-matury securities	0	0
Loans and leases held for sale	0	0
Commercial and industrial loans	0	0
Commercial mortgage loans	0	0
Commercial construction loans	0	0
Commercial leases	0	0
Residential mortgage loans	0	0
Home equity	0	0
Indirect secured consumer loans	0	0
Credit card	0	0
Other consumer loans and leases	0	0
Unallocated Allowance For Loan And Lease Losses	0	0
Portfolio loans and leases, net	0	0
Financial liabilities:
Deposits	125,342	108,782
Federal funds purchased	0	0
Other short-term borrowings	4,046	573
Long-term debt	779	445
Fair Value, Inputs, Level 3
Financial assets:
Cash and due from banks	0	0
Other short-term investments	0	0
Other securities	0	0
Held-to-matury securities	18	18
Loans and leases held for sale	86	63
Commercial and industrial loans	50,721	44,668
Commercial mortgage loans	10,626	6,851
Commercial construction loans	5,305	4,688
Commercial leases	3,243	3,180
Residential mortgage loans	17,472	15,688
Home equity	6,452	6,719
Indirect secured consumer loans	10,889	8,717
Credit card	2,532	2,759
Other consumer loans and leases	2,777	2,428
Unallocated Allowance For Loan And Lease Losses	0	0
Portfolio loans and leases, net	110,017	95,698
Financial liabilities:
Deposits	0	0
Federal funds purchased	0	0
Other short-term borrowings	0	0
Long-term debt	$ 0	$ 0

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Loans & Leases - Undiscounted Cash Flows (Details) $ in Millions	Sep. 30, 2019 USD ($)
Direct financing
Sales Type And Direct Financing Leases Lease Receivable Fiscal Year Maturity [Line Items]
Remainder of 2019	$ 220
2020	693
2021	514
2022	433
2023	262
2024	184
Thereafter	274
Total undiscounted cash flows	2,580
Less: Difference between undiscounted cash flows and discounted cash flows	(165)
Lease payment receivable	2,415
Sales-type
Sales Type And Direct Financing Leases Lease Receivable Fiscal Year Maturity [Line Items]
Remainder of 2019	19
2020	81
2021	91
2022	73
2023	43
2024	33
Thereafter	63
Total undiscounted cash flows	403
Less: Difference between undiscounted cash flows and discounted cash flows	(46)
Lease payment receivable	$ 357

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Securities - Amounts Recognized in Income from Available-for-Sale and Trading Securities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Investments Debt And Equity Securities [Line Items]
Available-for-sale debt and other securities, realized gains	$ 3	$ 4	$ 51	$ 61
Available-for-sale debt and other securities, realized losses	0	(4)	(47)	(69)
OTTI	0	0	(1)	0
Net realized gains (losses) on available-for-sale debt and other securities	3	0	3	(8)
Total trading debt securities gains (losses)	0	(1)	5	(18)
Total equity securities gains (losses)	2	(6)	27	(13)
Total available for sale debt and other, trading debt and equity securities gains (losses) recognized in income	$ 5	$ (7)	$ 35	$ (39)

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Operating Lease Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Property Subject To Or Available For Operating Lease [Line Items]
Operating lease equipment	$ 869		$ 869		$ 518
Other asset impairment charges		$ 2		$ 4
Operating lease income relating to lease payments			(111)	0
Operating lease equipment
Property Subject To Or Available For Operating Lease [Line Items]
Operating lease income relating to lease payments	$ 44	20	$ 110	65
Operating lease equipment | Commercial Banking
Property Subject To Or Available For Operating Lease [Line Items]
Other asset impairment charges		$ 2		$ 4

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Credit Quality - Summary of Subsequent Defaults (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Financing Receivable, Modifications [Line Items]
Number of contracts	146	183	825	679
Recorded Investment in Loans Modified in a TDR During the Period	$ 13	$ 37	$ 54	$ 88
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Modifications [Line Items]
Number of contracts	1	5	8	8
Recorded Investment in Loans Modified in a TDR During the Period	$ 3	$ 32	$ 20	$ 61
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Modifications [Line Items]
Number of contracts	2		4	2
Recorded Investment in Loans Modified in a TDR During the Period	$ 0		$ 1	$ 0
Residential Mortgage Loans
Financing Receivable, Modifications [Line Items]
Number of contracts	67	28	196	138
Recorded Investment in Loans Modified in a TDR During the Period	$ 10	$ 4	$ 30	$ 24
Consumer Portfolio Segment | Home Equity
Financing Receivable, Modifications [Line Items]
Number of contracts	7	4	12	6
Recorded Investment in Loans Modified in a TDR During the Period	$ 0	$ 0	$ 0	$ 0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Modifications [Line Items]
Number of contracts	69	146	605	525
Recorded Investment in Loans Modified in a TDR During the Period	$ 0	$ 1	$ 3	$ 3

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Business Combination - Loans Identified as PCI Loans At Acquisition (Details) - USD ($) $ in Millions	Sep. 30, 2019	Mar. 22, 2019	Dec. 31, 2018
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Acquired During Period [Abstract]
Contractually required payments including interest		$ 1,139
Less: Nonaccretable difference		81
Cash flows expected to be collected		1,058
Less: Accretable yield	$ (170)	(202)	$ 0
Fair value of loans acquired		$ 856

XML

Fair Value Measurements - Assets and Liabilities Measured at Recurring Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Assets:
Available-for-sale debt securities, fair value	$ 37,178	$ 32,830
Trading debt securities	297	287
Equity securities	459	452
Mortgage servicing rights	910		$ 1,010
Total assets	193		314
Commercial
Assets:
Loans held for sale measured at FV	1	7
Residential Mortgage Loans
Assets:
Loans measured at FV	184	179
Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	36,603	32,278
Trading debt securities	297	287
Equity securities	459	452
Residential mortgage loans held for sale	1,136	537
Loans measured at FV	184	179
Loans held for sale measured at FV	1	7
Mortgage servicing rights	910	938
Derivative assets	2,097	1,114
Total assets	41,687	35,792
Liabilities:
Derivative liabilities	911	874
Short positions	(112)	(138)
Total liabilities	1,023	1,012
Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets	1,547	655
Liabilities:
Derivative liabilities	261	329
Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets	182	152
Liabilities:
Derivative liabilities	151	142
Equity Contract | Fair value, recurring
Liabilities:
Derivative liabilities	146	125
Commodity Contract | Fair value, recurring
Assets:
Derivative assets	368	307
Liabilities:
Derivative liabilities	353	278
U.S. Treasury and federal agency
Assets:
Available-for-sale debt securities, fair value	75	97
U.S. Treasury and federal agency | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	75	97
Trading debt securities	3	16
Obligations of states and political subdivisions
Assets:
Available-for-sale debt securities, fair value	2	2
Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	2	2
Trading debt securities	29	35
Agency mortgage-backed securities | Residential mortgage backed securities
Assets:
Available-for-sale debt securities, fair value	15,694	16,247
Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	15,694	16,247
Trading debt securities	69	68
Agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale debt securities, fair value	15,276	10,650
Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	15,276	10,650
Non-agency mortgage-backed securities | Commercial mortgage backed securities
Assets:
Available-for-sale debt securities, fair value	3,400	3,267
Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	3,400	3,267
Asset-backed securities and other debt securities
Assets:
Available-for-sale debt securities, fair value	2,156	2,015
Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	2,156	2,015
Trading debt securities	196	168
Fair Value, Inputs, Level 1
Assets:
Total assets	0		0
Fair Value, Inputs, Level 1 | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	75	97
Trading debt securities	2	0
Equity securities	449	452
Residential mortgage loans held for sale	0	0
Loans measured at FV	0	0
Loans held for sale measured at FV	0	0
Mortgage servicing rights	0	0
Derivative assets	92	93
Total assets	618	642
Liabilities:
Derivative liabilities	14	27
Short positions	(68)	(110)
Total liabilities	82	137
Fair Value, Inputs, Level 1 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets	3	0
Liabilities:
Derivative liabilities	5	8
Fair Value, Inputs, Level 1 | Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets	0	0
Liabilities:
Derivative liabilities	0	0
Fair Value, Inputs, Level 1 | Equity Contract | Fair value, recurring
Liabilities:
Derivative liabilities	0	0
Fair Value, Inputs, Level 1 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets	89	93
Liabilities:
Derivative liabilities	9	19
Fair Value, Inputs, Level 1 | U.S. Treasury and federal agency | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	75	97
Trading debt securities	2	0
Fair Value, Inputs, Level 1 | Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 1 | Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 1 | Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Fair Value, Inputs, Level 1 | Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Fair Value, Inputs, Level 1 | Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 2
Assets:
Total assets	6		69
Fair Value, Inputs, Level 2 | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	36,528	32,181
Trading debt securities	295	287
Equity securities	10	0
Residential mortgage loans held for sale	1,136	537
Loans measured at FV	0	0
Loans held for sale measured at FV	1	7
Mortgage servicing rights	0	0
Derivative assets	1,981	1,014
Total assets	39,951	34,026
Liabilities:
Derivative liabilities	742	714
Short positions	(44)	(28)
Total liabilities	786	742
Fair Value, Inputs, Level 2 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets	1,520	648
Liabilities:
Derivative liabilities	247	313
Fair Value, Inputs, Level 2 | Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets	182	152
Liabilities:
Derivative liabilities	151	142
Fair Value, Inputs, Level 2 | Equity Contract | Fair value, recurring
Liabilities:
Derivative liabilities	0	0
Fair Value, Inputs, Level 2 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets	279	214
Liabilities:
Derivative liabilities	344	259
Fair Value, Inputs, Level 2 | U.S. Treasury and federal agency | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	1	16
Fair Value, Inputs, Level 2 | Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	2	2
Trading debt securities	29	35
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	15,694	16,247
Trading debt securities	69	68
Fair Value, Inputs, Level 2 | Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	15,276	10,650
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	3,400	3,267
Fair Value, Inputs, Level 2 | Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	2,156	2,015
Trading debt securities	196	168
Fair Value, Inputs, Level 3
Assets:
Total assets	187		$ 245
Fair Value, Inputs, Level 3 | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Equity securities	0	0
Residential mortgage loans held for sale	0	0
Loans measured at FV	184	179
Loans held for sale measured at FV	0	0
Mortgage servicing rights	910	938
Derivative assets	24	7
Total assets	1,118	1,124
Liabilities:
Derivative liabilities	155	133
Short positions	0	0
Total liabilities	155	133
Fair Value, Inputs, Level 3 | Interest Rate Contract | Fair value, recurring
Assets:
Derivative assets	24	7
Liabilities:
Derivative liabilities	9	8
Fair Value, Inputs, Level 3 | Foreign Exchange Contract | Fair value, recurring
Assets:
Derivative assets	0	0
Liabilities:
Derivative liabilities	0	0
Fair Value, Inputs, Level 3 | Equity Contract | Fair value, recurring
Liabilities:
Derivative liabilities	146	125
Fair Value, Inputs, Level 3 | Commodity Contract | Fair value, recurring
Assets:
Derivative assets	0	0
Liabilities:
Derivative liabilities	0	0
Fair Value, Inputs, Level 3 | U.S. Treasury and federal agency | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 3 | Obligations of states and political subdivisions | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 3 | Agency mortgage-backed securities | Residential mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	0	0
Fair Value, Inputs, Level 3 | Agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Fair Value, Inputs, Level 3 | Non-agency mortgage-backed securities | Commercial mortgage backed securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Fair Value, Inputs, Level 3 | Asset-backed securities and other debt securities | Fair value, recurring
Assets:
Available-for-sale debt securities, fair value	0	0
Trading debt securities	$ 0	$ 0

XML

AOCI - Activity of the Components of Other Comprehensive Income and AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2018
Net activity for accumulated net unrealized gain (loss) on available-for-sale debt securities
Unrealized holding gains (losses) on available-for-sale debt securities arising during period	$ 379	$ (207)		$ 1,387	$ (834)
Reclassification adjustment for net (gains) losses included in net income	(2)	0		(2)	7
Net activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	83	(19)		361	(24)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(4)	2		(2)	2
Net activity for defined benefit plans, net
Net actuarial gain (loss) arising during the period	0	2		0	2
Reclassification of amounts to net periodic benefit costs	(1)	(3)		(3)	(5)
Total Other Comprehensive Activity
Pre-tax activity total	595	(293)		2,272	(1,097)
Total, Tax	(138)	70		(525)	251
Other comprehensive income (loss)	457	(223)	$ 1,747	1,747	(846)	$ (846)
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	1,178	(552)		(112)	71
Other comprehensive income (loss), Net of Tax	457	(223)	1,747	1,747	(846)	(846)
Total Accumulated Other Comprehensive Income - Ending Balance	1,635	(775)	1,635	1,635	(775)	(775)
Accumulated Net Unrealized Investment Gain (Loss)
Pre-tax activity for accumulated net unrealized gain (loss) on available-for-sale debt securities
Unrealized holding gains (losses) on available-for-sale debt securities arising during period	497	(271)		1,817	(1,082)
Reclassification adjustment for net losses (gains) included in net income	(3)	0		3	9
Net unrealized gains on available-for-sale debt securities	494	(271)		1,814	(1,073)
Tax effect for accumulated net unrealized gain (loss) on available-for-sale debt securities
Unrealized holding gains (losses) on available-for-sale debt securities arising during period	(118)	64		(430)	248
Reclassification adjustment for net losses (gains) included in net income	(1)	0		(1)	(2)
Net unrealized gains on available-for-sale debt securities	(117)	64		(429)	246
Net activity for accumulated net unrealized gain (loss) on available-for-sale debt securities
Unrealized holding gains (losses) on available-for-sale debt securities arising during period	379	(207)		1,387	(834)
Reclassification adjustment for net (gains) losses included in net income	(2)	0		(2)	7
Net unrealized gains on available-for-sale debt securities	377	(207)		1,385	(827)
Total Other Comprehensive Activity
Other comprehensive income (loss)	377	(207)		1,385	(827)
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	781	(485)		(227)	135
Other comprehensive income (loss), Net of Tax	377	(207)		1,385	(827)
Total Accumulated Other Comprehensive Income - Ending Balance	1,158	(692)	1,158	1,158	(692)	(692)
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	105	(25)		456	(31)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(5)	2		(2)	2
Net unrealized gains on cash flow hedge derivatives	100	(23)		454	(29)
Tax effect for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	(22)	6		(95)	7
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	1	0		0	0
Net unrealized gains on cash flow hedge derivatives	(21)	6		(95)	7
Net activity for net unrealized gain (loss) on cash flow hedge derivatives
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	83	(19)		361	(24)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(4)	2		(2)	2
Net unrealized gains on cash flow hedge derivatives	79	(17)		359	(22)
Total Other Comprehensive Activity
Other comprehensive income (loss)	79	(17)		359	(22)
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	440	(16)		160	(11)
Other comprehensive income (loss), Net of Tax	79	(17)		359	(22)
Total Accumulated Other Comprehensive Income - Ending Balance	519	(33)	519	519	(33)	(33)
Amortization Of Defined Benefit Pension Items
Pre-tax activity for defined benefit plans, net
Net actuarial loss		2			2
Reclassification of amounts to net periodic benefit costs	1	3		4	7
Defined benefit plans, net	1	1		4	5
Tax effect for defined benefit plans, net
Net actuarial loss		0			0
Reclassification of amounts to net periodic benefit costs	0	0		(1)	(2)
Defined benefit plans, net	0	0		(1)	(2)
Net activity for defined benefit plans, net
Net actuarial gain (loss) arising during the period		2			2
Reclassification of amounts to net periodic benefit costs	(1)	3		3	(5)
Defined benefit plans, net	1	1		3	3
Total Other Comprehensive Activity
Other comprehensive income (loss)	1	(1)		3	3
Total Accumulated Other Comprehensive Income
Total Accumulated Other Comprehensive Income - Beginning Balance	(43)	(51)		(45)	(53)
Other comprehensive income (loss), Net of Tax	1	(1)		3	3
Total Accumulated Other Comprehensive Income - Ending Balance	$ (42)	$ (50)	$ (42)	$ (42)	$ (50)	$ (50)

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Bank Premises and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Bank Premises and Equipment

Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:
($ in millions)		September 30, 2019	December 31, 2018
Land and improvements(a)	$	640	586
Buildings(a)		1,552	1,547
Equipment		2,095	1,987
Leasehold improvements		415	403
Construction in progress(a)		98	81
Bank premises and equipment held for sale:
Land and improvements		50	25
Buildings		32	14
Equipment		5	3
Accumulated depreciation and amortization		(2,834)	(2,785)
Total bank premises and equipment	$	2,053	1,861

(a) At September 30, 2019 and December 31, 2018, land and improvements, buildings and construction in progress included $60 and $55, respectively, associated with parcels of undeveloped land intended for future branch expansion.

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

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 September 30, 2019
Core deposit intangibles	$	229	(57)	172
Customer relationships		29	(5)	24
Non-compete agreements		13	(11)	2
Other		4	(1)	3
Total intangible assets	$	275	(74)	201
As of December 31, 2018
Core deposit intangibles	$	34	(30)	4
Customer relationships		32	(3)	29
Non-compete agreements		14	(11)	3
Other		7	(3)	4
Total intangible assets	$	87	(47)	40

Estimated Amortization Expense

Estimated amortization expense for the remainder of 2019 through 2023 is as follows:
($ in millions)		Total
Remainder of 2019	$	14
2020		48
2021		40
2022		32
2023		24

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Segments - Results of Operations and Average Assets by Segment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Net interest income	$ 1,242	$ 1,043		$ 3,569	$ 3,059
Provision for (benefit from) credit losses	134	84		310	111
Net interest income after provision for credit losses	1,108	959		3,259	2,948
Noninterest Income
Service charges on deposits	143	139		417	414
Wealth and asset management revenue	124	114		358	335
Corporate banking revenue	168	100		417	308
Card and processing revenue	94	82		266	245
Mortgage banking net revenue	95	49		214	158
Other noninterest income	111	86		794	794
Securities gains (losses), net	5	(6)		30	(21)
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	(1)		5	(18)
Total noninterest income	740	563		2,501	2,215
Noninterest Expense
Salaries, wages and incentives	497	421		1,527	1,339
Employee benefits	87	82		316	270
Net occupancy expense	84	70		248	219
Technology and communications	100	71		319	206
Equipment expense	33	31		96	92
Card and processing expense	33	31		98	91
Other noninterest expense	325	266		895	767
Total noninterest expense	1,159	972		3,499	2,984
Income (Loss) Before Income Taxes	689	550		2,261	2,179
Applicable income tax expense	140	114		483	442
Net income (loss)	549	436	$ 1,778	1,778	1,737	$ 1,737
Goodwill	4,290	2,462	4,290	4,290	2,462	2,462	$ 2,478	$ 2,445
Total Assets	171,079	141,590	171,079	171,079	141,590	141,590	146,069
Intersegment Elimination
Segment Reporting Information [Line Items]
Net interest income	0	0		0	0
Provision for (benefit from) credit losses	0	0		0	0
Net interest income after provision for credit losses	0	0		0	0
Noninterest Income
Service charges on deposits	0	0		0	0
Wealth and asset management revenue	(37)	(35)		(106)	(104)
Corporate banking revenue	0	0		0	0
Card and processing revenue	0	0		0	0
Mortgage banking net revenue	0	0		0	0
Other noninterest income	0	0		0	0
Securities gains (losses), net	0	0		0	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	0		0	0
Total noninterest income	(37)	(35)		(106)	(104)
Noninterest Expense
Salaries, wages and incentives	0	0		0	0
Employee benefits	0	0		0	0
Net occupancy expense	0	0		0	0
Technology and communications	0	0		0	0
Equipment expense	0	0		0	0
Card and processing expense	0	0		0	0
Other noninterest expense	(37)	(35)		(106)	(104)
Total noninterest expense	(37)	(35)		(106)	(104)
Income (Loss) Before Income Taxes	0	0		0	0
Applicable income tax expense	0	0		0	0
Net income (loss)	0	0		0	0
Goodwill	0	0	0	0	0	0
Total Assets	0	0	0	0	0	0
Branch Banking
Segment Reporting Information [Line Items]
Net interest income	598	525		1,802	1,490
Provision for (benefit from) credit losses	58	34		164	124
Net interest income after provision for credit losses	540	491		1,638	1,366
Noninterest Income
Service charges on deposits	65	71		191	205
Wealth and asset management revenue	41	38		117	113
Corporate banking revenue	1	1		3	4
Card and processing revenue	74	67		212	199
Mortgage banking net revenue	2	1		4	4
Other noninterest income	21	26		63	33
Securities gains (losses), net	0	0		0	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	0		0	0
Total noninterest income	204	204		590	558
Noninterest Expense
Salaries, wages and incentives	122	109		360	329
Employee benefits	26	22		84	75
Net occupancy expense	44	44		130	131
Technology and communications	1	1		3	4
Equipment expense	12	12		35	37
Card and processing expense	32	30		92	89
Other noninterest expense	232	215		671	638
Total noninterest expense	469	433		1,375	1,303
Income (Loss) Before Income Taxes	275	262		853	621
Applicable income tax expense	58	55		179	131
Net income (loss)	217	207		674	490
Goodwill	2,054	1,655	2,054	2,054	1,655	1,655	1,655	1,655
Total Assets	69,021	60,222	69,021	69,021	60,222	60,222
Commercial Banking
Segment Reporting Information [Line Items]
Net interest income	623	427		1,761	1,273
Provision for (benefit from) credit losses	54	(11)		100	(41)
Net interest income after provision for credit losses	569	438		1,661	1,314
Noninterest Income
Service charges on deposits	79	68		227	207
Wealth and asset management revenue	1	1		2	3
Corporate banking revenue	167	100		413	304
Card and processing revenue	16	14		49	42
Mortgage banking net revenue	0	0		0	0
Other noninterest income	72	52		170	125
Securities gains (losses), net	0	0		0	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	0		0	0
Total noninterest income	335	235		861	681
Noninterest Expense
Salaries, wages and incentives	107	71		299	214
Employee benefits	11	8		47	36
Net occupancy expense	7	6		21	20
Technology and communications	3	2		8	6
Equipment expense	7	6		18	18
Card and processing expense	2	2		6	3
Other noninterest expense	288	212		799	652
Total noninterest expense	425	307		1,198	949
Income (Loss) Before Income Taxes	479	366		1,324	1,046
Applicable income tax expense	86	65		242	184
Net income (loss)	393	301		1,082	862
Goodwill	1,982	630	1,982	1,982	630	630	630	613
Total Assets	75,143	60,040	75,143	75,143	60,040	60,040
Consumer Lending
Segment Reporting Information [Line Items]
Net interest income	88	60		234	178
Provision for (benefit from) credit losses	14	10		34	30
Net interest income after provision for credit losses	74	50		200	148
Noninterest Income
Service charges on deposits	0	0		0	0
Wealth and asset management revenue	0	0		0	0
Corporate banking revenue	0	0		0	0
Card and processing revenue	0	0		0	0
Mortgage banking net revenue	92	48		209	153
Other noninterest income	4	3		10	11
Securities gains (losses), net	0	0		0	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	(1)		5	(18)
Total noninterest income	96	50		224	146
Noninterest Expense
Salaries, wages and incentives	39	38		117	120
Employee benefits	9	8		29	28
Net occupancy expense	3	3		8	8
Technology and communications	2	2		6	3
Equipment expense	0	0		0	0
Card and processing expense	0	0		0	0
Other noninterest expense	61	49		175	151
Total noninterest expense	114	100		335	310
Income (Loss) Before Income Taxes	56	0		89	(16)
Applicable income tax expense	12	0		19	(3)
Net income (loss)	44	0		70	(13)
Goodwill	0	0	0	0	0	0	0	0
Total Assets	26,171	22,188	26,171	26,171	22,188	22,188
Wealth and Asset Management
Segment Reporting Information [Line Items]
Net interest income	44	46		141	134
Provision for (benefit from) credit losses	0	3		0	8
Net interest income after provision for credit losses	44	43		141	126
Noninterest Income
Service charges on deposits	0	0		1	1
Wealth and asset management revenue	119	110		345	324
Corporate banking revenue	0	0		1	1
Card and processing revenue	1	1		2	4
Mortgage banking net revenue	1	0		1	1
Other noninterest income	4	4		9	13
Securities gains (losses), net	0	0		0	0
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	0		0	0
Total noninterest income	125	115		359	344
Noninterest Expense
Salaries, wages and incentives	45	44		140	131
Employee benefits	6	6		25	23
Net occupancy expense	3	3		10	9
Technology and communications	0	0		1	1
Equipment expense	0	0		1	0
Card and processing expense	0	0		1	0
Other noninterest expense	75	73		219	217
Total noninterest expense	129	126		397	381
Income (Loss) Before Income Taxes	40	32		103	89
Applicable income tax expense	8	7		22	19
Net income (loss)	32	25		81	70
Goodwill	254	177	254	254	177	177	193	177
Total Assets	9,961	9,171	9,961	9,961	9,171	9,171
General Corporate and Other
Segment Reporting Information [Line Items]
Net interest income	(111)	(15)		(369)	(16)
Provision for (benefit from) credit losses	8	48		12	(10)
Net interest income after provision for credit losses	(119)	(63)		(381)	(6)
Noninterest Income
Service charges on deposits	(1)	0		(2)	1
Wealth and asset management revenue	0	0		0	(1)
Corporate banking revenue	0	(1)		0	(1)
Card and processing revenue	3	0		3	0
Mortgage banking net revenue	0	0		0	0
Other noninterest income	10	1		542	612
Securities gains (losses), net	5	(6)		30	(21)
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	0		0	0
Total noninterest income	17	(6)		573	590
Noninterest Expense
Salaries, wages and incentives	184	159		611	545
Employee benefits	35	38		131	108
Net occupancy expense	27	14		79	51
Technology and communications	94	66		301	192
Equipment expense	14	13		42	37
Card and processing expense	(1)	(1)		(1)	(1)
Other noninterest expense	(294)	(248)		(863)	(787)
Total noninterest expense	59	41		300	145
Income (Loss) Before Income Taxes	(161)	(110)		(108)	439
Applicable income tax expense	(24)	(13)		21	111
Net income (loss)	(137)	(97)		(129)	328
Goodwill	0	0	0	0	0	0	$ 0	$ 0
Total Assets	$ (9,217)	$ (10,031)	$ (9,217)	$ (9,217)	$ (10,031)	$ (10,031)

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Other Short Term Borrowings (Tables)

9 Months Ended

Sep. 30, 2019

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:
		September 30,	December 31,
($ in millions)		2019	2018
FHLB advances	$	2,850	-
Derivative collateral		602	271
Securities sold under repurchase agreements		594	302
Total other short-term borrowings	$	4,046	573

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Legal and Regulatory Proceedings

9 Months Ended

Sep. 30, 2019

Legal And Regulatory Proceedings

Legal and Regulatory Proceedings

20. 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, Case No. 05-MD-1720). 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 currently also subject to a possible indemnification obligation of Visa as discussed in Note 19 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 had previously paid $46 million into a class settlement escrow account. 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 had been already returned to the control of the defendants. The remaining approximately 75% of the settlement funds paid by the Bancorp are currently 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. On June 5, 2018, the defendants in the consolidated class action reached an agreement to settle in principle with the proposed plaintiffs’ class seeking monetary damages (the “Plaintiff Damages Class”). On September 17, 2018, those parties signed a settlement agreement (the “Amended Settlement Agreement”) superseding the original settlement agreement entered into in October 2012. The Amended Settlement Agreement included, among other terms, a release from participating class members for liability for claims that accrue no later than five years after the Amended Settlement Agreement becomes final. The Amended Settlement Agreement provided for a total payment by all defendants of approximately $6.24 billion, composed of approximately $5.34 billion held in escrow plus an additional $900 million in new funds. However, the Settlement Agreement also provided that if between 15% and 25% of class members (by payment volume) opted out of the class, up to $700 million of the additional settlement funds would be returned to the defendants. It has now been determined that more than 25% of the class members have elected to opt out of the Amended Settlement Agreement, and, therefore, $700 million of the additional $900 million will be returned to the defendants. In either event, the Bancorp’s allocated share of the putative settlement is within existing reserves. The Court issued an order preliminarily approving the settlement on January 24, 2019 and scheduled a hearing on final approval of the settlement for November 7, 2019. The putative settlement does not resolve the claims of the separate proposed plaintiffs’ class seeking injunctive relief or the claims of merchants who have opted out of the proposed class settlement and are pursuing, or may in the future decide to pursue, private lawsuits. The ultimate outcome in this matter, including the timing of resolution, therefore remains uncertain. Refer to Note 19 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 (Case No. 1:12-CV-00851). On behalf of a putative class, the plaintiffs sought 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. On May 28, 2019, the Sixth Circuit Court of Appeals reversed the dismissal of plaintiffs’ breach of contract claim and remanded for further proceedings. The plaintiffs’ claimed damages for the alleged breach of contract claim exceed $280 million. Under the Court’s scheduling order, the plaintiffs’ motion for class certification is currently due February 28, 2020. No trial date has been set.

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, Case No. 2015003814). The plaintiffs alleged 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 sought over $800 million in alleged damages, attorney’s fees, removal of Fifth Third as trustee, and injunctive relief. Fifth Third denied 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. The plaintiffs filed a notice of appeal on May 5, 2018. The appeal is pending.

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, 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 asserted claims for breach of contract and the implied covenant of good faith and fair dealing and for alleged failure to comply with Article 4A-202 of the Uniform Commercial Code (the “UCC claim”), with losses allegedly totaling almost $40 million, plus interest. Fifth Third denied 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 (Upsher-Smith Laboratories Inc. v. Fifth Third Bank, Case No. 16-cv-00556). On March 22, 2019, the Court granted summary judgment to Fifth Third on Upsher-Smith’s claims for breach of contract and the implied covenant of good faith and fair dealing, but denied summary judgment on the UCC claim. On June 27, 2019, the parties entered into a confidential settlement of this matter for an amount that was immaterial to the Bancorp’s Condensed Consolidated Financial Statements.

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, OCC, 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 $27 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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Intangible Assets - Estimated Amortization Expense (Details) - Other Intangible Assets $ in Millions	Sep. 30, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Remainder of 2019	$ 14
2020	48
2021	40
2022	32
2023	$ 24

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Lease Obligations - Lessee - Other Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Other Information
Finance Lease Weighted Average Discount Rate, Percent	4.78%
Operating Lease Weighted Average Discount Rate, Percent	3.24%
Operating Lease Weighted Average Remaining Lease Term	9 years 4 months 6 days
Finance Lease Weighted Average Remaining Lease Term	11 years 4 months 6 days
Gains and losses on sale and leaseback transations, net	$ 5
Lease liability
Other Information
Operating Cash Flows from Operating Leases	72
Operating Cash Flows from Finance Leases	1
Financing Cash Flows from Finance Leases	$ 3

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VIE - Investments in Qualified Affordable Housing Tax Credits (Details) - Applicable income tax expense - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Schedule of Equity Method Investments [Line Items]
Proportional amortization	$ 31	$ 35	$ 105	$ 118
Tax credits and other benefits	$ (35)	$ (44)	$ (122)	$ (146)

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Other Short Term Borrowings

9 Months Ended

Sep. 30, 2019

Other Short Term Borrowings

Other Short Term Borrowings

16. 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:
		September 30,	December 31,
($ in millions)		2019	2018
FHLB advances	$	2,850	-
Derivative collateral		602	271
Securities sold under repurchase agreements		594	302
Total other short-term borrowings	$	4,046	573

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 September 30, 2019 and December 31, 2018, all securities sold under repurchase agreements were secured by agency residential mortgage-backed securities and the repurchase agreements have an overnight remaining contractual maturity.

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Intangible Assets

9 Months Ended

Sep. 30, 2019

Intangible Assets

Intangible Assets

12. Intangible Assets

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

On March 22, 2019, the Bancorp completed its acquisition of MB Financial, Inc. In connection with the acquisition, the Bancorp recorded a $195 million core deposit intangible asset with a weighted-average amortization period of 7.2 years. The fair value of the core deposit intangible is subject to change as additional information becomes available.

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 September 30, 2019
Core deposit intangibles	$	229	(57)	172
Customer relationships		29	(5)	24
Non-compete agreements		13	(11)	2
Other		4	(1)	3
Total intangible assets	$	275	(74)	201
As of December 31, 2018
Core deposit intangibles	$	34	(30)	4
Customer relationships		32	(3)	29
Non-compete agreements		14	(11)	3
Other		7	(3)	4
Total intangible assets	$	87	(47)	40

As of September 30, 2019, all of the Bancorp’s intangible assets were being amortized. Amortization expense recognized on intangible assets was $14 million and $2 million for the three months ended September 30, 2019 and 2018, respectively, and $31 million and $4 million for the nine months ended September 30, 2019 and 2018, respectively. The Bancorp's projection of amortization expense shown in the following table is based on existing balances as of September 30, 2019. Future amortization expense may vary from these projections.

Estimated amortization expense for the remainder of 2019 through 2023 is as follows:
($ in millions)		Total
Remainder of 2019	$	14
2020		48
2021		40
2022		32
2023		24

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Derivatives - Risk Ratings of the Notional Amount of Risk Participation Agreements (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Notional amount of the risk participation agreements	$ 4,345	$ 4,002
Pass
Derivatives, Fair Value [Line Items]
Notional amount of the risk participation agreements	4,188	3,919
Special Mention
Derivatives, Fair Value [Line Items]
Notional amount of the risk participation agreements	144	79
Substandard
Derivatives, Fair Value [Line Items]
Notional amount of the risk participation agreements	$ 13	$ 4

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Capital Actions - Capital Actions ASRs (Details) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Capital Actions
Shares acquired for treasury	$ (350)			$ (500)	$ (1,463)	$ (1,053)
August 2019 ASR
Capital Actions
Repurchase Date	Aug. 07, 2019
Shares acquired for treasury	$ 100
Shares repurchased on repurchase date	3,150,482
Shares received from forward contract settlement	694,238
Total shares repurchased	3,844,720
Settlement date	Aug. 16, 2019
August 2019 ASR II
Capital Actions
Repurchase Date	Aug. 09, 2019
Shares acquired for treasury	$ 200
Shares repurchased on repurchase date	6,405,426
Shares received from forward contract settlement	1,475,487
Total shares repurchased	7,880,913
Settlement date	Aug. 28, 2019
Accelerated Share Repurchase Program
Capital Actions
Repurchase Date		Apr. 29, 2019	Mar. 27, 2019
Shares acquired for treasury		$ 200	$ 913
Shares repurchased on repurchase date		6,015,570	31,779,280
Shares received from forward contract settlement		1,217,805	2,026,584
Total shares repurchased		7,233,375	33,805,864
Settlement date		May 23, 2019	Jun. 28, 2019
Settlement date, secondary		May 24, 2019

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

23. 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
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities
	arising during period	$	497	(118)	379
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			494	(117)	377	781	377	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		105	(22)	83
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(5)	1	(4)
Net unrealized gains on cash flow hedge derivatives			100	(21)	79	440	79	519
Reclassification of amounts to net periodic benefit costs			1	-	1
Defined benefit pension plans, net			1	-	1	(43)	1	(42)
Total		$	595	(138)	457	1,178	457	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(271)	64	(207)
Reclassification adjustment for net losses on available-for-sale
	debt securities included in net income		-	-	-
Net unrealized losses on available-for-sale debt securities			(271)	64	(207)	(485)	(207)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(25)	6	(19)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(23)	6	(17)	(16)	(17)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			3	-	3
Defined benefit pension plans, net			1	-	1	(51)	1	(50)
Total		$	(293)	70	(223)	(552)	(223)	(775)

The tables below present the activity of the components of OCI and AOCI for the nine months ended:
			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2019 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding gains on available-for-sale debt securities arising
	during period	$	1,817	(430)	1,387
Reclassification adjustment for net gains on available-for-sale
	debt securities included in net income		(3)	1	(2)
Net unrealized gains on available-for-sale debt securities			1,814	(429)	1,385	(227)	1,385	1,158
Unrealized holding gains on cash flow hedge derivatives arising
	during period		456	(95)	361
Reclassification adjustment for net gains on cash flow hedge
	derivatives included in net income		(2)	-	(2)
Net unrealized gains on cash flow hedge derivatives			454	(95)	359	160	359	519
Reclassification of amounts to net periodic benefit costs			4	(1)	3
Defined benefit pension plans, net			4	(1)	3	(45)	3	(42)
Total		$	2,272	(525)	1,747	(112)	1,747	1,635

			Total OCI			Total AOCI
			Pretax	Tax	Net	Beginning	Net	Ending
September 30, 2018 ($ in millions)			Activity	Effect	Activity	Balance	Activity	Balance
Unrealized holding losses on available-for-sale debt securities
	arising during period	$	(1,082)	248	(834)
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			(1,073)	246	(827)	135	(827)	(692)
Unrealized holding losses on cash flow hedge derivatives arising
	during period		(31)	7	(24)
Reclassification adjustment for net losses on cash flow hedge
	derivatives included in net income		2	-	2
Net unrealized losses on cash flow hedge derivatives			(29)	7	(22)	(11)	(22)	(33)
Net actuarial loss arising during the period			(2)	-	(2)
Reclassification of amounts to net periodic benefit costs			7	(2)	5
Defined benefit pension plans, net			5	(2)	3	(53)	3	(50)
Total		$	(1,097)	251	(846)	71	(846)	(775)

The table below presents reclassifications out of AOCI:
			For the three months ended September 30,		For the nine months ended September 30,
	Condensed Consolidated
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Net unrealized gains (losses) on available-for-sale debt securities:(b)
Net gains (losses) included in net income	Securities gains (losses), net	$	3	-	3	(9)
	Income before income taxes		3	-	3	(9)
	Applicable income tax expense		(1)	-	(1)	2
	Net income		2	-	2	(7)
Net unrealized gains (losses) on cash flow hedge derivatives:(b)
Interest rate contracts related to C&I loans	Interest and fees on loans and leases		5	(2)	2	(2)
	Income before income taxes		5	(2)	2	(2)
	Applicable income tax expense		(1)	-	-	-
	Net income		4	(2)	2	(2)
Net periodic benefit costs:(b)
Amortization of net actuarial loss	Employee benefits(a)		(1)	(1)	(4)	(5)
Settlements	Employee benefits(a)		-	(2)	-	(2)
	Income before income taxes		(1)	(3)	(4)	(7)
	Applicable income tax expense		-	-	1	2
	Net income		(1)	(3)	(3)	(5)
Total reclassifications for the period	Net income	$	5	(5)	1	(14)

This AOCI component is included in the computation of net periodic benefit cost. Refer to Note 20 of the Notes to Consolidated Financial Statements included in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2018 for further information.Amounts in parentheses indicate reductions to net income.

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Subsequent Event

9 Months Ended

Sep. 30, 2019

Subsequent Event

Subsequent Event

27. Subsequent Events

On October 23, 2019, the Bancorp entered into an accelerated share repurchase transaction with a counterparty pursuant to which the Bancorp paid $300 million on October 25, 2019 to repurchase shares of its outstanding common stock. The Bancorp is repurchasing the shares of its common stock as part of its Board-approved 100 million share repurchase program previously announced on June 18, 2019. The Bancorp expects the settlement of the transaction to occur on or before December 17, 2019.

On October 28, 2019, the Bancorp issued and sold $750 million of 2.375% senior fixed-rate notes, which will mature on January 28, 2025. These notes will be redeemable at the Bancorp’s option, in whole or in part, at any time or from time to time, on or after April 25, 2020, and prior to December 29, 2024, in each case at a redemption price, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date, equal to the greater of (i) 100% of the aggregate principal amount of the notes being redeemed on that redemption date; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed that would be due if the notes to be redeemed matured on December 29, 2024 discounted to the redemption date on a semi-annual basis at the applicable treasury rate plus 15 bps. Additionally, 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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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest Income
Interest and fees on loans and leases	$ 1,320	$ 1,040	$ 3,799	$ 2,975
Interest on securities	291	269	862	798
Interest on other short-term investments	14	6	33	17
Total interest income	1,625	1,315	4,694	3,790
Interest Expense
Interest on deposits	243	144	692	359
Interest on federal funds purchased	4	10	23	17
Interest on other short-term borrowings	8	6	23	25
Interest on long-term debt	128	112	387	330
Total interest expense	383	272	1,125	731
Net Interest Income	1,242	1,043	3,569	3,059
Provision for credit losses	134	84	310	111
Net Interest Income After Provision for Credit Losses	1,108	959	3,259	2,948
Noninterest Income
Service charges on deposits	143	139	417	414
Wealth and asset management revenue	124	114	358	335
Corporate banking revenue	168	100	417	308
Card and processing revenue	94	82	266	245
Mortgage banking net revenue	95	49	214	158
Other noninterest income	111	86	794	794
Securities gains (losses), net	5	(6)	30	(21)
Securities gains (losses), net - non-qualifying hedges on mortgage servcing rights	0	(1)	5	(18)
Total noninterest income	740	563	2,501	2,215
Noninterest Expense
Salaries, wages and incentives	497	421	1,527	1,339
Employee benefits	87	82	316	270
Net occupancy expense	84	70	248	219
Technology and communications	100	71	319	206
Equipment expense	33	31	96	92
Card and processing expense	33	31	98	91
Other noninterest expense	325	266	895	767
Total noninterest expense	1,159	972	3,499	2,984
Income (Loss) Before Income Taxes	689	550	2,261	2,179
Applicable income tax expense	140	114	483	442
Net Income (loss)	549	436	1,778	1,737
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net income attributable to Bancorp	549	436	1,778	1,737
Dividends on preferred stock	19	15	60	52
Net income (loss) available to common shareholders	$ 530	$ 421	$ 1,718	$ 1,685
Earnings per share - basic	$ 0.72	$ 0.62	$ 2.40	$ 2.45
Earnings per share - diluted	$ 0.71	$ 0.61	$ 2.37	$ 2.41
Average common shares outstanding- basic	726,715,542	667,624,132	708,848,535	680,181,785
Average common shares oustanding - diluted	736,086,399	679,198,715	718,413,237	693,078,647

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Derivatives - Derivative Instruments Included in the Consolidated Balance Sheets (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value
Amount of variation margin payment applied to derivative asset contracts	$ 748	$ 249
Amount of variation margin payment applied to derivative liability contracts	528	$ 23
Nondesignated | Customer Accommodation | Interest Rate Contract
Derivatives, Fair Value
Amount of variation margin payment applied to derivative asset contracts	36
Amount of variation margin payment applied to derivative liability contracts	$ 621

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MSR - Activity Related to Mortgage Banking Net Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale
Residential mortgage loan sales	$ 2,397	$ 1,446	$ 5,212	$ 3,919
Origination fees and gains on loan sales	64	25	126	77
Gross mortgage servicing fees	$ 71	$ 56	$ 196	$ 162

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MSR - Additional Information (Details) - USD ($) $ in Billions	Sep. 30, 2019	Dec. 31, 2018
Disclosure - Activity Related to Mortgage Banking Net Revenue [Abstract]
Aggregate loans transferred to securitization	$ 82.7	$ 63.2

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating Activities
Net income	$ 1,778	$ 1,737
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (benefit from) credit losses	310	111
Depreciation, amortization and accretion	289	275
Stock-based compensation expense	109	106
Provision for (benefit from) deferred income taxes	(197)	(15)
Securities gains (losses), net	(30)	23
Securities gains (losses), net - non-qualifying hedges on mortgage servicing rights	(5)	18
MSR fair value adjustment	416	(8)
Net gains on sales of loans and fair value adjustments on loans held for sale	(96)	(52)
Net losses (gains) on disposition and impairment of bank premises and equipment	(24)	(37)
Net losses on disposition and impairment of operating lease equipment	(2)	1
Gain on Vantiv and Worldpay transaction	0	(414)
Gain on sale of Worldpay, Inc. shares	(562)	(205)
Proceeds from sales of loans and leases held for sale	5,457	4,017
Cash received under operating leases	(111)	0
Loans originated or purchased for sale, net of repayments	(6,032)	(4,222)
Dividends representing return on equity investments	40	9
Net change in:
Trading debt and equity securities	66	131
Other assets	(825)	355
Accrued taxes, interest and expenses	(130)	3
Other liabilities	(276)	20
Net Cash Provided by (Used in) Operating Activities	445	1,927
Proceeds from sales:
Available-for-sale debt and other securities	8,424	10,867
Loans	221	211
Bank premises and equipment	35	40
Proceeds from repayments / maturities:
Available-for-sale debt and other securities	1,620	1,450
Held-to-maturity securities	3	6
Purchases:
Available-for-sale debt and other securities	(11,204)	(13,322)
Bank premises and equipment	(180)	(145)
MSRs	(26)	(82)
Proceeds from settlement of BOLI	21	11
Proceeds from sale and dividends representing return of equity investments	1,028	601
Net cash received (paid) on acquisitions	1,210	(20)
Net change in:
Other short-term investments	(1,357)	1,324
Loans and leases	(1,132)	(1,882)
Operating lease equipment	(25)	40
Federal funds sold	35	0
Net Cash Provided by (Used in) Investing Activities	(1,327)	(901)
Net change in:
Deposits	2,027	1,180
Federal funds purchased	(1,049)	2,142
Other short-term borrowings	3,206	(2,898)
Dividends paid on common stock	(486)	(347)
Dividends paid on preferred stock	(60)	(60)
Proceeds from issuance of long-term debt	3,103	2,438
Repayment of long-term debt	(4,012)	(2,774)
Repurchase of treasury stock and related forward contract	1,463	1,053
Issuance of preferred shares	242	0
Other	(46)	(68)
Net Cash Provided by (Used in) Financing Activities	1,462	(1,440)
Increase (Decrease) in Cash and Due from Banks	580	(414)
Cash and Due from Banks at Beginning of Period	2,681	2,514
Cash and Due from Banks at End of Period	$ 3,261	$ 2,100

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Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2019

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:
			September 30,	December 31,
($ in millions)			2019	2018
Loans and leases held for sale:
	Commercial and industrial loans	$	86	67
	Commercial mortgage loans		-	3
	Residential mortgage loans		1,137	537
Total loans and leases held for sale		$	1,223	607
Portfolio loans and leases:
	Commercial and industrial loans	$	50,768	44,340
	Commercial mortgage loans		10,822	6,974
	Commercial construction loans		5,281	4,657
	Commercial leases		3,495	3,600
Total commercial loans and leases		$	70,366	59,571
	Residential mortgage loans	$	16,675	15,504
	Home equity		6,218	6,402
	Indirect secured consumer loans		11,026	8,976
	Credit card		2,467	2,470
	Other consumer loans		2,657	2,342
Total consumer loans		$	39,043	35,694
Total portfolio loans and leases		$	109,409	95,265

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
		September 30,	December 31,	September 30,	December 31,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	50,854	44,407	15	4
Commercial mortgage loans		10,822	6,977	18	2
Commercial construction loans		5,281	4,657	1	-
Commercial leases		3,495	3,600	1	-
Residential mortgage loans		17,812	16,041	48	38
Home equity		6,218	6,402	-	-
Indirect secured consumer loans		11,026	8,976	10	12
Credit card		2,467	2,470	38	37
Other consumer loans		2,657	2,342	1	-
Total loans and leases	$	110,632	95,872	132	93
Less: Loans and leases held for sale		1,223	607
Total portfolio loans and leases	$	109,409	95,265
The following table presents a summary of net charge-offs (recoveries):
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Commercial and industrial loans	$	29	28	67	102
Commercial mortgage loans		-	(1)	(1)	3
Commercial construction loans		-	-	-	-
Commercial leases		4	-	7	-
Residential mortgage loans		1	2	1	6
Home equity		2	3	8	9
Indirect secured consumer loans		13	9	34	28
Credit card		33	21	101	72
Other consumer loans		17	10	39	27
Total net charge-offs	$	99	72	256	247

Net Investment in Lease Financing

The following table presents the components of the net investment in leases as of:
($ in millions)			September 30, 2019(a)
Net investment in direct financing leases:
	Lease payment receivable (present value)	$	2,415
	Unguaranteed residual assets (present value)		226
	Net discount on acquired leases		(6)
	Deferred selling profits		-
Net investment in sales-type leases:
	Lease payment receivable (present value)		357
	Unguaranteed residual assets (present value)		11
	Net discount on acquired leases		-

(a) Excludes $492 of leveraged leases at September 30, 2019.

The following table presents the components of the commercial lease financing portfolio as of:
($ in millions)		December 31, 2018
Rentals receivable, net of principal and interest on nonrecourse debt	$	3,256
Estimated residual value of leased assets		804
Initial direct cost, net of amortization		19
Gross investment in commercial lease financing		4,079
Unearned income		(479)
Net investment in commercial lease financing	$	3,600

Schedule Of Future Minimum Lease Payments For Commercial Leases Table Text Block

The following table presents undiscounted cash flows for both direct financing and sales-type leases for the remainder of 2019 through 2024 and thereafter as well as a reconciliation of the undiscounted cash flows to the total lease receivables as follows:
		Direct Financing Leases	Sales-Type Leases
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	220	19
2020		693	81
2021		514	91
2022		433	73
2023		262	43
2024		184	33
Thereafter		274	63
Total undiscounted cash flows	$	2,580	403
Less: Difference between undiscounted cash flows and discounted cash flows		165	46
Present value of lease payments (recognized as lease receivables)	$	2,415	357

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Bank Premises and Equipment

9 Months Ended

Sep. 30, 2019

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)		September 30, 2019	December 31, 2018
Land and improvements(a)	$	640	586
Buildings(a)		1,552	1,547
Equipment		2,095	1,987
Leasehold improvements		415	403
Construction in progress(a)		98	81
Bank premises and equipment held for sale:
Land and improvements		50	25
Buildings		32	14
Equipment		5	3
Accumulated depreciation and amortization		(2,834)	(2,785)
Total bank premises and equipment	$	2,053	1,861

(a) At September 30, 2019 and December 31, 2018, land and improvements, buildings and construction in progress included $60 and $55, 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.

During the second quarter of 2018, the Bancorp adopted a plan to close approximately 100 to 125 branches over the next three years (the “2018 Branch Optimization Plan”). As of September 30, 2019, the Bancorp expects the total number of branch closures under the 2018 Branch Optimization Plan to be approximately 125 branches of which 65 branches have already been closed and an additional 4 branches are expected to close in the fourth quarter of 2019, 30 branches have been identified for closure in 2020 and the Bancorp expects to identify the remaining branches to be closed under the 2018 Branch Optimization Plan in 2020 with expected closure dates in 2021. 

As a result of the MB Financial, Inc. acquisition, the Bancorp identified 46 branches in the Chicago market that it planned to close. Of these locations, 45 were closed in the third quarter of 2019 and the 46^th location is expected to close in the first quarter of 2020. These 46 branches are not part of the aforementioned 2018 Branch Optimization Plan and are in addition to the branch in the Chicago market that the Bancorp closed in November 2018. In addition, the Bancorp has identified 11 other non-branch locations with a fair value, less cost to sell, of $10 million that were acquired from MB Financial, Inc. and are classified as held for sale by the Bancorp.

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 $5 million and immaterial for the three months ended September 30, 2019 and 2018, respectively. Impairment losses associated with such assessments and lower of cost or market adjustments were $27 million and $41 million for the nine months ended September 30, 2019 and 2018, respectively. For the nine months ended September 30, 2019, impairment charges included $14 million associated with Fifth Third branches in the Chicago market that have been assessed for impairment as a result of the MB Financial, Inc. acquisition. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.

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Accounting and Reporting Developments

9 Months Ended

Sep. 30, 2019

Accounting and Reporting Developments

Accounting and Reporting Developments

4. Accounting and Reporting Developments

Standards Adopted in 2019

The Bancorp adopted the following new accounting standards effective January 1, 2019:

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 12 months. Leases are 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. Subsequent to the issuance of ASU 2016-02, the FASB has issued additional guidance to clarify certain implementation issues and provide transition relief in certain circumstances including ASUs 2018-01 (Land Easement Practical Expedient, issued in January 2018), 2018-10 (Codification Improvements, issued in July 2018), 2018-11 (Targeted Improvements, also issued in July 2018), 2018-20 (Narrow-Scope Improvements for Lessors, issued in December 2018) and 2019-01 (Codification Improvements, issued in March 2019). These subsequent amendments do not change the core principles in the original ASU, but do provide an additional optional transition method which is to initially apply the amended guidance at the adoption date and record a cumulative-effect adjustment to opening retained earnings without retrospective application to prior comparative periods. Entities not electing to use this optional transition method must apply the amended guidance on a modified retrospective basis to all periods presented.

The Bancorp adopted the amended guidance on January 1, 2019, using the optional transition method. The Bancorp initially applied the new standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date without restating the prior comparative periods. As part of the adoption, the Bancorp has elected certain accounting policies as allowed under the ASU. The Bancorp elected the practical expedients package provided within the new standard, which among other things, permitted the Bancorp not to reassess the lease classification of existing leases. The Bancorp also elected not to use hindsight in evaluating the lease term. Additionally, the Bancorp elected to not recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less on the Condensed Consolidated Balance Sheets and elected a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and instead, to account for them as a single lease component. Upon adoption on January 1, 2019, the Bancorp recognized additional ROU assets and lease liabilities of $509 million related to its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption and also recorded a cumulative-effect adjustment to retained earnings of $10 million for the remaining deferred gains on sale-leaseback transactions that occurred prior to January 1, 2019. From a lessor perspective, adoption of the amended guidance did not have a material impact on the Bancorp’s Condensed Consolidated Financial Statements at transition. The required disclosures are included in Note 6, Note 9 and Note 10.

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 Bancorp adopted the amended guidance on January 1, 2019 on a modified retrospective basis. The adoption did not have a material impact on the Condensed Consolidated Financial Statements.

Standards Issued but Not Yet Adopted

The following accounting standards were issued but not yet adopted by the Bancorp as of September 30, 2019:

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, but the Bancorp will 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.

The FASB has established a Transition Resource Group for Credit Losses to evaluate implementation issues arising from the amended guidance and make recommendations to the FASB on which issues may warrant the issuance of additional clarifying guidance. The Bancorp continues to monitor the issues discussed by the Transition Resource Group and the recommended amendments proposed to the FASB as part of its implementation analysis. As a result of continued deliberation and recommendations from the Transition Resource Group, the FASB has issued additional ASUs containing clarifying guidance, transition relief provisions and minor updates to the original ASU. These include ASU 2018-19 (issued in November 2018), ASU 2019-04 (issued in April 2019) and ASU 2019-05 (issued in May 2019). The Bancorp has considered the guidance in these ASUs as part of its ongoing implementation analysis.

The Bancorp’s implementation process includes data sourcing and validation, loss model development, development of governance processes over economic forecasting, development of a qualitative framework, evaluation of technical accounting topics, updates to allowance policies and methodology documentation, development of reporting processes and related internal controls and overall operational readiness for adoption of the amended guidance, which will continue throughout 2019, including parallel runs for the expected credit loss accounting model alongside the Bancorp’s current ALLL process. The Bancorp is in the process of validating and implementing models used to estimate credit losses under the amended guidance and expects to complete the validation process for its loan models during 2019.

Based on the composition and credit quality of its investment securities portfolio as of September 30, 2019, the Bancorp does not currently expect adoption of the amendments related to investment securities to have a material impact on the Condensed Consolidated Financial Statements.

The Bancorp provides updates to senior leadership, the Audit Committee and the Risk and Compliance Committee of the Board of Directors. These communications provide an update on the status of the implementation project plan and any identified risks.

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 2018-13 – Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13 which modifies the disclosure requirements for fair value measurements. The amendments remove the requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation processes for Level 3 fair value measurements. The amendments also add new disclosure requirements regarding unrealized gains and losses from recurring Level 3 fair value measurements and the significant unobservable inputs used to develop Level 3 fair value measurements. The amended guidance is effective for the Bancorp on January 1, 2020 with early adoption permitted. Certain of the amendments are to be applied prospectively while others are to be applied retrospectively. Also, early adoption of the removed and modified disclosure requirements is permitted before adoption of the newly added requirements. The Bancorp plans to adopt the amended guidance effective January 1, 2020 and will conform to the amended disclosure requirements in the Bancorp’s first quarter of 2020 Form 10-Q.

ASU 2018-15 – Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued ASU 2018-15 which provides guidance on the accounting for implementation, setup, and other upfront costs incurred by customers in cloud computing arrangements that are accounted for as service contracts. The amendments require that implementation costs be evaluated for capitalization using the framework applicable to costs incurred to develop or obtain internal-use software. Those capitalized costs are to be expensed over the term of the cloud computing arrangement and presented in the same financial statement line items as the service contract and its associated fees. The amended guidance is effective for the Bancorp on January 1, 2020, with early adoption permitted, and may be applied either retrospectively or prospectively. The Bancorp plans to adopt the amended guidance on January 1, 2020 and to apply the amendments prospectively.

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Commitments - Unresolved Claims by Claimant (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
GSE
Loss Contingencies Dollars
Balance, beginning of period	$ 1	$ 1
New demands	38	17
Loan paydowns/payoffs	0
Resolved demands	34	13
Balance, end of period	$ 5	$ 5
Loss Contingencies Units
Balance, beginning of period	9	6
New demands	213	104
Loan paydowns/payoffs	(3)
Resolved demands	(194)	(85)
Balance, end of period	25	25
Private Label
Loss Contingencies Dollars
Balance, beginning of period	$ 0	$ 0
New demands	0	0
Loan paydowns/payoffs	0
Resolved demands	0	0
Balance, end of period	$ 0	$ 0
Loss Contingencies Units
Balance, beginning of period	1	1
New demands	7	0
Loan paydowns/payoffs	0
Resolved demands	(3)	0
Balance, end of period	5	1

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Commitments - Standby and Commercial Letters of Credit (Details) - Financial Standby Letter of Credit $ in Millions	Sep. 30, 2019 USD ($)
Line of Credit Facility [Line Items]
Commitments	$ 2,219
Less Than One Year From The Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	1,124
More than One and within Five Years from Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	1,056
More than Five Years from Balance Sheet Date
Line of Credit Facility [Line Items]
Commitments	$ 39

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Fair Value Measurements - Amounts Included in Earnings for Assets and Liabilites Measured at Recurring L3 Fair Value (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains and losses included in earnings	$ (131)	$ (8)	$ (370)	$ (9)
Mortgage banking net revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains and losses included in earnings	(121)	9	(309)	56
Corporate banking revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains and losses included in earnings	1	0	2	1
Other noninterest income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains and losses included in earnings	$ (11)	$ (17)	$ (63)	$ (66)

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Fair Value Measurements - Fair Values of Assets and Liabilities (Significant Unobservable L3 Inputs Nonrecurring Basis) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019
Commercial loans held for sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	$ 3
Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	156	$ 116
Commercial mortgage loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	2	12
Commercial leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	14	18
OREO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	21	16
Bank premises and equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	36	23
Operating lease equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value measurements nonrecurring assets	10
Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Comparable company analysis, fair value	3	$ 2
Liquidity discount, fair value	$ 0
Minimum | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liquidity discount	0.00%
Maximum | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liquidity discount	43.00%
Weighted average | Commercial loans held for sale | Commercial
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost to sell	10.00%
Weighted average | Private Equity Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liquidity discount	0.129%

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Loans & Leases - Total Loans And Leases Managed By The Bancorp (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	$ 110,632		$ 110,632		$ 95,872
Balance of Loans 90 days or More Past Due	132		132		93
Net Charge-Offs	99	$ 72	256	$ 247
Commercial and Industrial Loans | Commercial Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	50,854		50,854		44,407
Balance of Loans 90 days or More Past Due	15		15		4
Net Charge-Offs	29	28	67	102
Commercial mortgage loans | Commercial Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	10,822		10,822		6,977
Balance of Loans 90 days or More Past Due	18		18		2
Net Charge-Offs		(1)	(1)	3
Net Recoveries	0
Commercial construction loans | Commercial Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	5,281		5,281		4,657
Balance of Loans 90 days or More Past Due	1		1		0
Net Charge-Offs	0	0	0	0
Commercial leases | Commercial Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	3,495		3,495		3,600
Balance of Loans 90 days or More Past Due	1		1		0
Net Charge-Offs	4	0	7	0
Residential Mortgage | Residential Mortgage
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	17,812		17,812		16,041
Balance of Loans 90 days or More Past Due	48		48		38
Net Charge-Offs	1		1	6
Net Recoveries		2
Home Equity | Consumer Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	6,218		6,218		6,402
Balance of Loans 90 days or More Past Due	0		0		0
Net Charge-Offs	2	3	8	9
Indirect secured consumer loans | Consumer Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	11,026		11,026		8,976
Balance of Loans 90 days or More Past Due	10		10		12
Net Charge-Offs	13	9	34	28
Credit Card | Consumer Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	2,467		2,467		2,470
Balance of Loans 90 days or More Past Due	38		38		37
Net Charge-Offs	33	21	101	72
Other Consumer Loans | Consumer Portfolio Segment
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	2,657		2,657		2,342
Balance of Loans 90 days or More Past Due	1		1		0
Net Charge-Offs	17	$ 10	39	$ 27
Loans Held For Sale
Assets that Continue to be Recognized, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items]
Balance	1,223		1,223		607
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 [Line Items]
Balance	$ 109,409		$ 109,409		$ 95,265

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Credit Quality - Recorded Investment in Portfolio Loans and Leases by Age and Class (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	$ 108,417	$ 94,487
Total Past Due	808	599
Total portfolio loans and leases	109,225	95,086
90-Days past Due and Still Accruing	132	93
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	440	326
90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	368	273
Commercial and Industrial Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	50,504	44,213
Total Past Due	264	127
Total portfolio loans and leases	50,768	44,340
90-Days past Due and Still Accruing	15	4
Commercial and Industrial Loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	131	32
Commercial and Industrial Loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	133	95
Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	4,742	3,277
Total Past Due	26	7
Total portfolio loans and leases	4,768	3,284
90-Days past Due and Still Accruing	3	2
Commercial Mortgage Loans, Owner-occupied | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	9	1
Commercial Mortgage Loans, Owner-occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17	6
Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	6,025	3,688
Total Past Due	29	2
Total portfolio loans and leases	6,054	3,690
90-Days past Due and Still Accruing	15	0
Commercial Mortgage Loans, Nonowner-Occupied | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	13	1
Commercial Mortgage Loans, Nonowner-Occupied | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	16	1
Commercial construction loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	5,280	4,657
Total Past Due	1	0
Total portfolio loans and leases	5,281	4,657
90-Days past Due and Still Accruing	1	0
Commercial construction loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Commercial construction loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	0
Commercial Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	3,479	3,597
Total Past Due	16	3
Total portfolio loans and leases	3,495	3,600
90-Days past Due and Still Accruing	1	0
Commercial Leases | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2	1
Commercial Leases | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	14	2
Residential Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	16,390	15,227
Total Past Due	101	98
Total portfolio loans and leases	16,491	15,325
90-Days past Due and Still Accruing	48	38
Residential Mortgage | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	32	37
Residential Mortgage | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	69	61
Home Equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	6,097	6,280
Total Past Due	121	122
Total portfolio loans and leases	6,218	6,402
90-Days past Due and Still Accruing	0	0
Home Equity | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	63	71
Home Equity | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	58	51
Indirect secured consumer loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	10,892	8,844
Total Past Due	134	132
Total portfolio loans and leases	11,026	8,976
90-Days past Due and Still Accruing	10	12
Indirect secured consumer loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	120	119
Indirect secured consumer loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	14	13
Credit Card
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	2,375	2,381
Total Past Due	92	89
Total portfolio loans and leases	2,467	2,470
90-Days past Due and Still Accruing	38	37
Credit Card | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	49	47
Credit Card | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	43	42
Other consumer loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans and Leases	2,633	2,323
Total Past Due	24	19
Total portfolio loans and leases	2,657	2,342
90-Days past Due and Still Accruing	1	0
Other consumer loans | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	21	17
Other consumer loans | 90 Days and Greater Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 3	$ 2

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Credit Quality - Summary of Average Impaired Loans and Leases and Interest Income by Class (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 1,401	$ 1,430	$ 1,361	$ 1,513
Interest Income Recognized	13	14	41	46
Commercial Portfolio Segment | Commercial and Industrial Loans
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	329	313	294	408
Interest Income Recognized	2	3	6	13
Commercial Portfolio Segment | Commercial Mortgage Loans, Owner-occupied
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	26	11	22	17
Interest Income Recognized	0	0	0	0
Commercial Portfolio Segment | Commercial Mortgage Loans, Nonowner-Occupied
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	5	21	9	27
Interest Income Recognized	0	0	0	0
Commercial Portfolio Segment | Commercial Leases
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	33	28	28	17
Interest Income Recognized	0	0	1	0
Residential Mortgage Loans
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	751	767	742	744
Interest Income Recognized	7	7	22	21
Consumer Portfolio Segment | Home Equity
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	209	239	217	248
Interest Income Recognized	3	3	9	9
Consumer Portfolio Segment | Indirect secured consumer loans
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	5	7	6	8
Interest Income Recognized	0	0	0	0
Consumer Portfolio Segment | Credit Card
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	43	44	43	44
Interest Income Recognized	$ 1	$ 1	$ 3	$ 3

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Credit Quality - Summary of Transactions in the ALLL by Portfolio Segment (Parenthetical) (Details) - Other Consumer Loans, Point of Sale - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Losses charged-off	$ 12	$ 8	$ 35	$ 18
Recoveries of losses previously charged- off	$ 12	$ 8	$ 35	$ 18

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Business Combination - Additional Information (Details) $ / shares in Units, $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Mar. 22, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Total Assets	$ 171,079		$ 141,590	$ 171,079	$ 141,590		$ 146,069
Full-service Banking Centers	1,143			1,143
Total noninterest expense	$ 1,159		972	$ 3,499	2,984
Class B Preferred stock, Series A
Business Acquisition [Line Items]
Preferred stock, issued | shares	200,000			200,000
Preferred stock, liquidation preference | $ / shares	$ 1,000			$ 1,000
MB Financial, Inc.
Business Acquisition [Line Items]
Total consideration paid		$ 3,608
Total Assets							$ 20,000
Full-service Banking Centers							86
Fair value of noncontrolling interest in acquiree						$ 197
Goodwill						1,815
Tax deductible goodwill						15
Total noninterest expense	$ 28		$ 1	$ 213	$ 3
Contractual balances on the purchased non credit impaired loans and leases						12,700
Fair value of the purchased non credit impaired loans and leases						$ 12,500
Cash consideration transferred per share | $ / shares						$ 5.54
Share consideration transferred | shares						1.45
Total value per share | $ / shares						$ 42.49
Closing price of common stock | $ / shares						$ 25.48
Concractual balances on PCI	872			872
Fair value for PCI	$ 637			$ 637
Locations							91

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

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
September 30, 2019 ($ 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 agency securities	$	75	-	-	75
Obligations of states and political subdivisions securities		-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities		-	15,694	-	15,694
Agency commercial mortgage-backed securities		-	15,276	-	15,276
Non-agency commercial mortgage-backed securities		-	3,400	-	3,400
Asset-backed securities and other debt securities		-	2,156	-	2,156
Available-for-sale debt and other securities(a)		75	36,528	-	36,603
Trading debt securities:
U.S. Treasury and federal agency securities		2	1	-	3
Obligations of states and political subdivisions securities		-	29	-	29
Agency residential mortgage-backed securities		-	69	-	69
Asset-backed securities and other debt securities		-	196	-	196
Trading debt securities		2	295	-	297
Equity securities		449	10	-	459
Residential mortgage loans held for sale		-	1,136	-	1,136
Residential mortgage loans(b)		-	-	184	184
Commercial loans held for sale		-	1	-	1
MSRs		-	-	910	910
Derivative assets:
Interest rate contracts		3	1,520	24	1,547
Foreign exchange contracts		-	182	-	182
Commodity contracts		89	279	-	368
Derivative assets(d)		92	1,981	24	2,097
Total assets	$	618	39,951	1,118	41,687
Liabilities:
Derivative liabilities:
Interest rate contracts	$	5	247	9	261
Foreign exchange contracts		-	151	-	151
Equity contracts		-	-	146	146
Commodity contracts		9	344	-	353
Derivative liabilities(e)		14	742	155	911
Short positions(e)		68	44	-	112
Total liabilities	$	82	786	155	1,023

Excludes FHLB, FRB and DTCC restricted stock holdings totaling $96, $477 and $2, respectively, at September 30, 2019.Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.During the nine months ended September 30, 2019, 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, 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 agency securities		$	97	-	-	97
Obligations of states and political subdivisions securities			-	2	-	2
Mortgage-backed securities:
Agency residential mortgage-backed securities			-	16,247	-	16,247
Agency commercial mortgage-backed securities			-	10,650	-	10,650
Non-agency commercial mortgage-backed securities			-	3,267	-	3,267
Asset-backed securities and other debt securities			-	2,015	-	2,015
Available-for-sale debt and other securities(a)			97	32,181	-	32,278
Trading debt securities:
U.S. Treasury and federal agency securities			-	16	-	16
Obligations of states and political subdivisions securities			-	35	-	35
Agency residential mortgage-backed securities			-	68	-	68
Asset-backed securities and other debt securities			-	168	-	168
Trading debt securities			-	287	-	287
Equity securities			452	-	-	452
Residential mortgage loans held for sale			-	537	-	537
Residential mortgage loans(b)			-	-	179	179
Commercial loans held for sale			-	7	-	7
MSRs			-	-	938	938
Derivative assets:
Interest rate contracts			-	648	7	655
Foreign exchange contracts			-	152	-	152
Commodity contracts			93	214	-	307
Derivative assets(d)			93	1,014	7	1,114
Total assets		$	642	34,026	1,124	35,792
Liabilities:
Derivative liabilities:
Interest rate contracts		$	8	313	8	329
Foreign exchange contracts			-	142	-	142
Equity contracts			-	-	125	125
Commodity contracts			19	259	-	278
Derivative liabilities(e)			27	714	133	874
Short positions(e)			110	28	-	138
Total liabilities		$	137	742	133	1,012
(a)	Excludes FHLB, FRB, and DTCC restricted stock holdings totaling $184, $366 and $2, respectively, at December 31, 2018.
(b)	Includes residential mortgage loans originated as held for sale and subsequently transferred to held for investment.
(c)	During the year ended December 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.

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 September 30, 2019 ($ in millions)		Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period	$	192	1,039	5	(151)		1,085
Total (losses) gains (realized/unrealized):
Included in earnings		-	(171)	51	(11)		(131)
Purchases/originations		-	42	(1)	-		41
Settlements		(11)	-	(40)	16		(35)
Transfers into Level 3(b)		3	-	-	-		3
Balance, end of period	$	184	910	15	(146)		963
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 September 30, 2019(c)	$	-	(131)	24	(11)		(118)

Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.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
			Mortgage		Derivatives,	Equity	Total
For the three months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	162	959	4	(164)		961
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(8)	18	(17)		(8)
Purchases/originations			-	59	(1)	-		58
Settlements			(4)	-	(22)	37		11
Transfers into Level 3(b)			15	-	-	-		15
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(1)	(8)	7	(17)		(19)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8 respectively, as of September 30, 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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2019 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	179	938	(1)	(125)		991
Total (losses) gains (realized/unrealized):
Included in earnings			(1)	(416)	110	(63)		(370)
Purchases/originations/acquisitions			-	388	(3)	-		385
Settlements			(22)	-	(91)	42		(71)
Transfers into Level 3(b)			28	-	-	-		28
Balance, end of period		$	184	910	15	(146)		963
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 September 30, 2019(c)		$	(1)	(329)	25	(63)		(368)
(a)	Net interest rate derivatives include derivative assets and liabilities of $24 and $9, respectively, as of September 30, 2019.
(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)
			Residential		Interest Rate
			Mortgage		Derivatives,	Equity	Total
For the nine months ended September 30, 2018 ($ in millions)			Loans	MSRs	Net(a)	Derivatives	Fair Value
Balance, beginning of period		$	137	858	3	(137)		861
Total (losses) gains (realized/unrealized):
Included in earnings			(5)	8	54	(66)		(9)
Purchases/originations			-	144	(5)	-		139
Settlements			(12)	-	(53)	59		(6)
Transfers into Level 3(b)			52	-	-	-		52
Balance, end of period		$	172	1,010	(1)	(144)		1,037
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 September 30, 2018(c)		$	(5)	8	9	(66)		(54)
(a)	Net interest rate derivatives include derivative assets and liabilities of $7 and $8, respectively, as of September 30, 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.

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 losses and gains 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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(121)	9	(309)	56
Corporate banking revenue		1	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(131)	(8)	(370)	(9)

The total losses and gains included in earnings attributable to changes in unrealized gains and losses related to Level 3 assets and liabilities still held at September 30, 2019 and 2018 were recorded in the Condensed Consolidated Statements of Income as follows:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Mortgage banking net revenue	$	(109)	(2)	(307)	11
Corporate banking revenue		2	-	2	1
Other noninterest income		(11)	(17)	(63)	(66)
Total losses	$	(118)	(19)	(368)	(54)

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 September 30, 2019 and 2018 and for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2019 and 2018, 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	Total (Losses) Gains
						For the three months ended September 30, 2019	For the nine months ended September 30, 2019
As of September 30, 2019 ($ in millions)		Level 1	Level 2	Level 3	Total
Commercial and industrial loans	$	-	-	116	116	(11)	(45)
Commercial mortgage loans		-	-	12	12	-	-
Commercial leases		-	-	18	18	2	(9)
OREO		-	-	16	16	(2)	(5)
Bank premises and equipment		-	-	23	23	(4)	(26)
Private equity investments		-	6	2	8	-	6
Total	$	-	6	187	193	(15)	(79)

		Fair Value Measurements Using				Total (Losses) Gains	Total (Losses) Gains
						For the three months	For the nine months
As of September 30, 2018 ($ in millions)		Level 1	Level 2	Level 3	Total	ended September 30, 2018	ended September 30, 2018
Commercial loans held for sale	$	-	-	3	3	(1)	(2)
Commercial and industrial loans		-	-	156	156	(16)	(46)
Commercial mortgage loans		-	-	2	2	-	6
Commercial leases		-	-	14	14	1	(9)
OREO		-	-	21	21	(2)	(6)
Bank premises and equipment		-	-	36	36	-	(41)
Operating lease equipment		-	-	10	10	(1)	(4)
Private equity investments		-	69	3	72	14	44
Total	$	-	69	245	314	(5)	(58)

Quantitative Information About Significant Unobservable Level 3 Fair Value Measurement Inputs

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	184	Loss rate model	Interest rate risk factor	(6.8)		-	6.9	%		(0.2)	%
				Credit risk factor		0	-	31.8	%		0.5	%
										(Fixed)	15.4	%
MSRs		910	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.4	%
										(Fixed)	619
				OAS spread (bps)		484	-	1,513		(Adjustable)	914
IRLCs, net		24	DCF	Loan closing rates		5.7	-	96.7	%		76.9	%
Swap associated with the sale of Visa, Inc.		(146)	DCF	Timing of the resolution		6/30/2021			-	2/7/2022
Class B Shares				of the Covered Litigation		12/31/2023

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs		Ranges of Inputs				Weighted-Average
Residential mortgage loans	$	172	Loss rate model	Interest rate risk factor	(12.7)		-	11.0	%		(0.6)	%
				Credit risk factor		0	-	40.3	%		0.7	%
										(Fixed)	9.1	%
MSRs		1,010	DCF	Prepayment speed		0.5	-	97.0	%	(Adjustable)	23.2	%
										(Fixed)	533
				OAS spread (bps)		449	-	1,513		(Adjustable)	842
IRLCs, net		7	DCF	Loan closing rates		6.2	-	96.7	%		76.6	%
Swap associated with the sale of Visa, Inc.		(144)	DCF	Timing of the resolution		1/31/2021			-	9/6/2021
Class B Shares				of the Covered Litigation		11/30/2023

The following tables present information as of September 30, 2019 and 2018 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 September 30, 2019 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs	Weighted-Average
Commercial and industrial loans	$	116	Appraised value	Collateral value	NM	NM
Commercial mortgage loans		12	Appraised value	Collateral value	NM	NM
Commercial leases		18	Appraised value	Collateral value	NM	NM
OREO		16	Appraised value	Appraised value	NM	NM
Bank premises and equipment		23	Appraised value	Appraised value	NM	NM
Private equity investments		2	Comparable company analysis	Market comparable transactions	NM	NM

As of September 30, 2018 ($ in millions)
Financial Instrument		Fair Value	Valuation Technique	Significant Unobservable Inputs	Ranges of Inputs				Weighted-Average
Commercial loans held for sale	$	3	Appraised value	Appraised value			NM		NM
				Costs to sell			NM		10.0	%
Commercial and industrial loans		156	Appraised value	Collateral value			NM		NM
Commercial mortgage loans		2	Appraised value	Collateral value			NM		NM
Commercial leases		14	Appraised value	Collateral value			NM		NM
OREO		21	Appraised value	Appraised value			NM		NM
Bank premises and equipment		36	Appraised value	Appraised value			NM		NM
Operating lease equipment		10	Appraised value	Appraised value			NM		NM
Private equity investments		-	Liquidity discount applied	Liquidity discount	0	-	43.0	%	12.9	%
			to fund's NAV
		3	Comparable company analysis	Market comparable transactions			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
September 30, 2019 ($ in millions)		Fair Value	Principal Balance	Difference
Residential mortgage loans measured at fair value	$	1,320	1,285	35
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		1	1	-
Commercial loans measured at fair value		1	1	-
December 31, 2018
Residential mortgage loans measured at fair value	$	716	696	20
Past due loans of 90 days or more		2	2	-
Nonaccrual loans		2	2	-
Commercial loans measured at fair value		7	7	-

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 September 30, 2019 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	3,261	3,261	-	-	3,261
Other short-term investments		3,235	3,235	-	-	3,235
Other securities		575	-	575	-	575
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		86	-	-	86	86
Portfolio loans and leases:
Commercial and industrial loans		50,239	-	-	50,721	50,721
Commercial mortgage loans		10,740	-	-	10,626	10,626
Commercial construction loans		5,241	-	-	5,305	5,305
Commercial leases		3,475	-	-	3,243	3,243
Residential mortgage loans		16,416	-	-	17,472	17,472
Home equity		6,178	-	-	6,452	6,452
Indirect secured consumer loans		10,976	-	-	10,889	10,889
Credit card		2,311	-	-	2,532	2,532
Other consumer loans		2,620	-	-	2,777	2,777
Unallocated ALLL		(114)	-	-	-	-
Total portfolio loans and leases, net	$	108,082	-	-	110,017	110,017
Financial liabilities:
Deposits	$	125,347	-	125,342	-	125,342
Federal funds purchased		876	876	-	-	876
Other short-term borrowings		4,046	-	4,046	-	4,046
Long-term debt		14,474	14,644	779	-	15,423

		Net Carrying	Fair Value Measurements Using			Total
As of December 31, 2018 ($ in millions)		Amount	Level 1	Level 2	Level 3	Fair Value
Financial assets:
Cash and due from banks	$	2,681	2,681	-	-	2,681
Other short-term investments		1,825	1,825	-	-	1,825
Other securities		552	-	552	-	552
Held-to-maturity securities		18	-	-	18	18
Loans and leases held for sale		63	-	-	63	63
Portfolio loans and leases:
Commercial and industrial loans		43,825	-	-	44,668	44,668
Commercial mortgage loans		6,894	-	-	6,851	6,851
Commercial construction loans		4,625	-	-	4,688	4,688
Commercial leases		3,582	-	-	3,180	3,180
Residential mortgage loans		15,244	-	-	15,688	15,688
Home equity		6,366	-	-	6,719	6,719
Indirect secured consumer loans		8,934	-	-	8,717	8,717
Credit card		2,314	-	-	2,759	2,759
Other consumer loans		2,309	-	-	2,428	2,428
Unallocated ALLL		(110)	-	-	-	-
Total portfolio loans and leases, net	$	93,983	-	-	95,698	95,698
Financial liabilities:
Deposits	$	108,835	-	108,782	-	108,782
Federal funds purchased		1,925	1,925	-	-	1,925
Other short-term borrowings		573	-	573	-	573
Long-term debt		14,426	14,287	445	-	14,732

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Capital Actions (Tables)

9 Months Ended

Sep. 30, 2019

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 which were entered into and settled during the nine months ended September 30, 2019:
Repurchase Dates			Amount ($ in millions)	Shares Repurchased on Repurchase Date	Shares Received from Forward Contract Settlement	Total Shares Repurchased	Settlement Dates
March 27, 2019(a)		$	913	31,779,280	2,026,584	33,805,864			June 28, 2019
April 29, 2019(b)			200	6,015,570	1,217,805	7,233,375	May 23, 2019	-	May 24, 2019
August 7, 2019			100	3,150,482	694,238	3,844,720			August 16, 2019
August 9, 2019(b)			200	6,405,426	1,475,487	7,880,913			August 28, 2019
(a)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $456.5 million.
(b)	This accelerated share repurchase transaction consisted of two supplemental confirmations each with a notional amount of $100 million.

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MSR - Changes in the Servicing Assets (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Servicing Assets at Fair Value [Line Items]
Fair value at beginning of period	$ 938	$ 858
Servicing rights originated	99	62
Servicing rights acquired	26	82
Servicing rights obtained in acquisition	263	0
Changes in fair value due to changes in inputs or assumptions	(294)	103
Changes in fair value due to other changes in fair value	(122)	(95)
Fair value at end of period	$ 910	$ 1,010

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MSR - Sensitivity of the Current Fair Value of Residual Cash Flows to Adverse Changes in Assumptions (Details) $ in Millions	3 Months Ended
	Sep. 30, 2019 USD ($)
Fixed Rate Residential Mortgage
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair Value	$ 899
Weighted- Average Life (in years)	4 years 8 months 12 days
Prepayment Speed (annual)	15.40%
Impact of Adverse Change on Fair Value 10%	$ (32)
Impact of Adverse Change on Fair Value 20%	(62)
Impact of Adverse Change on Fair Value 50%	$ (143)
OAS spread (bps)	61900.00%
Impact of Adverse Change on Fair Value 10%	$ (18)
Impact of Adverse Change on Fair Value 20%	(36)
Adjustable Rate Residential Mortgage
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Fair Value	$ 11
Weighted- Average Life (in years)	3 years 4 months 24 days
Prepayment Speed (annual)	23.40%
Impact of Adverse Change on Fair Value 10%	$ (1)
Impact of Adverse Change on Fair Value 20%	(1)
Impact of Adverse Change on Fair Value 50%	$ (3)
OAS spread (bps)	91400.00%
Impact of Adverse Change on Fair Value 10%	$ 0
Impact of Adverse Change on Fair Value 20%	$ 0

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Basis of Presentation

9 Months Ended

Sep. 30, 2019

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. The investments in those entities in which the Bancorp does not have the ability to exercise significant influence are generally carried at fair value unless the investment does not have a readily determinable fair value. The Bancorp accounts for equity investments without a readily determinable fair value using the measurement alternative to fair value, representing the cost of the investment minus impairment recorded, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. 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 and changes in equity for the three and nine months ended September 30, 2019 and 2018 and the cash flows for the nine months ended September 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. Financial information as of December 31, 2018 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. Certain prior period data has been reclassified to conform to current period presentation. Specifically, Fifth Third reclassified the provision for the reserve for unfunded commitments from other noninterest expense to the provision for credit losses.

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2019

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
September 30, 2019 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	74	1	-	75
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,185	510	(1)	15,694
		Agency commercial mortgage-backed securities		14,451	826	(1)	15,276
		Non-agency commercial mortgage-backed securities		3,246	154	-	3,400
	Asset-backed securities and other debt securities			2,129	37	(10)	2,156
	Other securities(a)			575	-	-	575
Total available-for-sale debt and other securities			$	35,662	1,528	(12)	37,178
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18

Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $96, $477 and $2, respectively, at September 30, 2019, that are carried at cost.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2018 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	98	-	(1)	97
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		16,403	86	(242)	16,247
		Agency commercial mortgage-backed securities		10,770	44	(164)	10,650
		Non-agency commercial mortgage-backed securities		3,305	9	(47)	3,267
	Asset-backed securities and other debt securities			1,998	27	(10)	2,015
	Other securities(a)			552	-	-	552
Total available-for-sale debt and other securities			$	33,128	166	(464)	32,830
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18
(a)	Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $184, $366 and $2, respectively, at December 31, 2018, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:
		September 30,	December 31,
($ in millions)		2019	2018
Trading debt securities	$	297	287
Equity securities		459	452

Realized Gains and Losses Recognized in Income from Investment Securities

The following table presents securities gains (losses) recognized in the Condensed Consolidated Statements of Income:
			For the three months ended		For the nine months ended
			September 30,		September 30,
($ in millions)			2019	2018	2019	2018
Available-for-sale debt and other securities:
	Realized gains	$	3	4	51	61
	Realized losses		-	(4)	(47)	(69)
	OTTI		-	-	(1)	-
Net realized gains (losses) on available-for sale debt and other securities		$	3	-	3	(8)
Total trading debt securities gains (losses)		$	-	(1)	5	(18)
Total equity securities gains (losses)(a)		$	2	(6)	27	(13)
Total gains (losses) recognized in income from available-for-sale debt and other
	securities, trading debt securities and equity securities(b)	$	5	(7)	35	(39)

Includes an immaterial net unrealized gain and a net unrealized gain of $23 for the three and nine months ended September 30, 2019, respectively, and net unrealized losses of $6 and $12 for the three and nine months ended September 30, 2018, respectively.Excludes an insignificant amount of securities gains (losses) included in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income related to securities held by FTS to facilitate the timely execution of customer transactions.

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 September 30, 2019 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	$	197	207	2	2
	1-5 years		13,391	13,817	14	14
	5-10 years		16,568	17,390	-	-
	Over 10 years		4,931	5,189	2	2
Other securities			575	575	-	-
Total		$	35,662	37,178	18	18

(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
September 30, 2019
Agency residential mortgage-backed securities	$	121	(1)	4	-	125	(1)
Agency commercial mortgage-backed securities		134	(1)	-	-	134	(1)
Asset-backed securities and other debt securities		453	(6)	196	(4)	649	(10)
Total	$	708	(8)	200	(4)	908	(12)
December 31, 2018
U.S. Treasury and federal agency securities	$	-	-	97	(1)	97	(1)
Agency residential mortgage-backed securities		3,235	(21)	7,892	(221)	11,127	(242)
Agency commercial mortgage-backed securities		2,022	(37)	5,260	(127)	7,282	(164)
Non-agency commercial mortgage-backed securities		884	(6)	1,621	(41)	2,505	(47)
Asset-backed securities and other debt securities		314	(6)	241	(4)	555	(10)
Total	$	6,455	(70)	15,111	(394)	21,566	(464)

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Cover [Abstract]
Entity Central Index Key	0000035527
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity Registrant Name	FIFTH THIRD BANCORP
Entity File Number	001-33653
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-0854434
Entity Address, Address Line One	Fifth Third Center
Entity Address, City or Town	Cincinnati
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45263
City Area Code	800
Local Phone Number	972-3030
Entity Listings [Line Items]
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		709,667,397
Common Stock, Without Par Value
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, Without Par Value
Trading Symbol	FITB
Security Exchange Name	NASDAQ
Preferred stock, Series I
Entity Listings [Line Items]
Title of 12(b) Security	6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I
Trading Symbol	FITBI
Security Exchange Name	NASDAQ
Preferred Stock, Series K
Entity Listings [Line Items]
Title of 12(b) Security	4.95% Non-Cumulative Perpetual Preferred Stock, Series K
Trading Symbol	FITBO
Security Exchange Name	NASDAQ
Class B Preferred stock, Series A
Entity Listings [Line Items]
Title of 12(b) Security	6.00% Non-Cumulative Perpetual Class B Preferred Stock, Series A
Trading Symbol	FITBP
Security Exchange Name	NASDAQ

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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Taxes

Income Taxes

22. Income Taxes

The applicable income tax expense was $140 million and $114 million for the three months ended September 30, 2019 and 2018, respectively, and $483 million and $442 million for the nine months ended September 30, 2019 and 2018, respectively. The effective tax rates for the three months ended September 30, 2019 and 2018 were 20.2% and 20.7%, respectively, and 21.4% and 20.3% for the nine months ended September 30, 2019 and 2018, respectively. The increase in the effective tax rate for the nine months ended September 30, 2019 compared to the same period in the prior year was primarily related to an increase in state income tax expense, a decrease in excess tax benefits related to share-based compensation and a decrease in expected low-income housing tax credits and other tax benefits, partially offset by a decrease in proportional amortization of qualifying LIHTC investments as well as an increase in non-taxable income.

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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Business Segments

9 Months Ended

Sep. 30, 2019

Segment Reporting

Business Segments

26. 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 and credit rates to classes of assets and liabilities, respectively, based on the estimated amount and timing of the 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, 2019 to reflect the current market rates and updated market assumptions. These rates were generally higher than those in place during 2018, thus net interest income for deposit-providing business segments was positively impacted during 2019. 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 2019.

The Bancorp’s methodology for allocating provision for credit 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 credit 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 funding operations by accessing the capital markets as a collective unit.

The following is a description of each of the Bancorp’s business segments and the products and services they provide to their respective client bases.

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

Branch Banking provides a full range of deposit and loan and lease products to individuals and small businesses through 1,143 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, automobile and other indirect lending activities. Residential mortgage activities within Consumer Lending include the origination, retention and servicing of residential mortgage loans, sales and securitizations of those loans, pools of loans and all associated hedging activities. Residential mortgages are primarily originated through a dedicated sales force and through third-party correspondent lenders. Automobile and other indirect lending activities include extending loans to consumers through automobile dealers, motorcycle dealers, powersport dealers, recreational vehicle dealers and marine dealers.

Wealth and Asset Management provides a full range of investment alternatives for individuals, companies and not-for-profit organizations. Wealth and Asset Management is made up of four main businesses: FTS, an indirect wholly-owned subsidiary of the Bancorp; Fifth Third Insurance Agency; 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. Fifth Third Insurance Agency assists clients with their financial and risk management needs. Fifth Third Private Bank offers wealth management strategies to high net worth and ultra-high net worth clients through wealth planning, investment management, banking, insurance, trust and estate services. Fifth Third Institutional Services provides advisory services for institutional clients including middle market businesses, non-profits, 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
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	623	598	88	44	(111)	-	1,242
Provision for credit losses		54	58	14	-	8	-	134
Net interest income after provision for credit losses		569	540	74	44	(119)	-	1,108
Noninterest income:
Corporate banking revenue		167	1	-	-	-	-	168
Service charges on deposits		79	65	-	-	(1)	-	143
Wealth and asset management revenue		1	41	-	119	-	(37)(a)	124
Card and processing revenue		16	74	-	1	3	-	94
Mortgage banking net revenue		-	2	92	1	-	-	95
Other noninterest income(b)		72	21	4	4	10	-	111
Securities gains, net		-	-	-	-	5	-	5
Securities gains, net - non-qualifying hedges on MSRs		-	-	-	-	-	-	-
Total noninterest income		335	204	96	125	17	(37)	740
Noninterest expense:
Salaries, wages and incentives		107	122	39	45	184	-	497
Employee benefits		11	26	9	6	35	-	87
Technology and communications		3	1	2	-	94	-	100
Net occupancy expense		7	44	3	3	27	-	84
Card and processing expense		2	32	-	-	(1)	-	33
Equipment expense		7	12	-	-	14	-	33
Other noninterest expense		288	232	61	75	(294)	(37)	325
Total noninterest expense		425	469	114	129	59	(37)	1,159
Income (loss) before income taxes		479	275	56	40	(161)	-	689
Applicable income tax expense (benefit)		86	58	12	8	(24)	-	140
Net income (loss)		393	217	44	32	(137)	-	549
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.Includes impairment charges of $5 for branches and land. For more information refer to Note 8 and Note 25.Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	427	525	60	46	(15)	-	1,043
Provision for (benefit from) credit losses			(11)	34	10	3	48	-	84
Net interest income after provision for credit losses			438	491	50	43	(63)	-	959
Noninterest income:
Corporate banking revenue			100 (c)	1	-	-	(1)	-	100
Service charges on deposits			68	71	-	-	-	-	139
Wealth and asset management revenue			1	38	-	110	-	(35)(a)	114
Card and processing revenue			14	67	-	1	-	-	82
Mortgage banking net revenue			-	1	48	-	-	-	49
Other noninterest income			52	26	3	4	1	-	86
Securities losses, net			-	-	-	-	(6)	-	(6)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(1)	-	-	-	(1)
Total noninterest income			235	204	50	115	(6)	(35)	563
Noninterest expense:
Salaries, wages and incentives			71	109	38	44	159	-	421
Employee benefits			8	22	8	6	38	-	82
Technology and communications			2	1	2	-	66	-	71
Net occupancy expense			6	44	3	3	14	-	70
Card and processing expense			2	30	-	-	(1)	-	31
Equipment expense			6	12	-	-	13	-	31
Other noninterest expense			212	215	49	73	(248)	(35)	266
Total noninterest expense			307	433	100	126	41	(35)	972
Income (loss) before income taxes			366	262	-	32	(110)	-	550
Applicable income tax expense (benefit)			65	55	-	7	(13)	-	114
Net income (loss)			301	207	-	25	(97)	-	436
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(b)	-	141,590
(a)	Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
(b)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.
(c)	Includes impairment charges of $2 for operating lease equipment. For more information refer to Note 25.

The following tables present the results of operations and assets by business segment for the nine months ended:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	1,761	1,802	234	141	(369)	-	3,569
Provision for credit losses		100	164	34	-	12	-	310
Net interest income after provision for credit losses		1,661	1,638	200	141	(381)	-	3,259
Noninterest income:
Corporate banking revenue		413	3	-	1	-	-	417
Service charges on deposits		227	191	-	1	(2)	-	417
Wealth and asset management revenue		2	117	-	345	-	(106)(a)	358
Card and processing revenue		49	212	-	2	3	-	266
Mortgage banking net revenue		-	4	209	1	-	-	214
Other noninterest income(b)		170	63	10	9	542	-	794
Securities gains, net		-	-	-	-	30	-	30
Securities gains, net - non-qualifying hedges on MSRs		-	-	5	-	-	-	5
Total noninterest income		861	590	224	359	573	(106)	2,501
Noninterest expense:
Salaries, wages and incentives		299	360	117	140	611	-	1,527
Employee benefits		47	84	29	25	131	-	316
Technology and communications		8	3	6	1	301	-	319
Net occupancy expense		21	130	8	10	79	-	248
Card and processing expense		6	92	-	1	(1)	-	98
Equipment expense		18	35	-	1	42	-	96
Other noninterest expense		799	671	175	219	(863)	(106)	895
Total noninterest expense		1,198	1,375	335	397	300	(106)	3,499
Income (loss) before income taxes		1,324	853	89	103	(108)	-	2,261
Applicable income tax expense		242	179	19	22	21	-	483
Net income (loss)		1,082	674	70	81	(129)	-	1,778
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.Includes impairment charges of $27 for branches and land. For more information refer to Note 8 and Note 25.Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	1,273	1,490	178	134	(16)	-	3,059
Provision for (benefit from) credit losses			(41)	124	30	8	(10)	-	111
Net interest income after provision for credit losses			1,314	1,366	148	126	(6)	-	2,948
Total noninterest income
Corporate banking revenue			304 (c)	4	-	1	(1)	-	308
Service charges on deposits			207	205	-	1	1	-	414
Wealth and asset management revenue			3	113	-	324	(1)	(104)(a)	335
Card and processing revenue			42	199	-	4	-	-	245
Mortgage banking net revenue			-	4	153	1	-	-	158
Other noninterest income(b)			125	33	11	13	612	-	794
Securities losses, net			-	-	-	-	(21)	-	(21)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(18)	-	-	-	(18)
Total noninterest income			681	558	146	344	590	(104)	2,215
Noninterest expense
Salaries, wages and incentives			214	329	120	131	545	-	1,339
Employee benefits			36	75	28	23	108	-	270
Technology and communications			6	4	3	1	192	-	206
Net occupancy expense			20	131	8	9	51	-	219
Card and processing expense			3	89	-	-	(1)	-	91
Equipment expense			18	37	-	-	37	-	92
Other noninterest expense			652	638	151	217	(787)	(104)	767
Total noninterest expense			949	1,303	310	381	145	(104)	2,984
Income (loss) before income taxes			1,046	621	(16)	89	439	-	2,179
Applicable income tax expense (benefit)			184	131	(3)	19	111	-	442
Net income (loss)			862	490	(13)	70	328	-	1,737
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(d)	-	141,590
(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 $41 for branches and land. For more information refer to Note 8 and Note 25.
(c)	Includes impairment charges of $4 for operating lease equipment. For more information refer to Note 25.
(d)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement Of Income And Comprehensive Income
Net income (loss)	$ 549	$ 436	$ 1,778	$ 1,737
Other Comprehensive Income (Loss), Net of Tax
Unrealized holding gains (losses) on available-for-sale debt securities arising during period	379	(207)	1,387	(834)
Reclassification adjustment for net (gains) losses included in net income	(2)	0	(2)	7
Unrealized holding gains (losses) on cash flow hedge derivatives arising during period	83	(19)	361	(24)
Reclassification adjustment for net gains on cash flow hedge derivatives included in net income	(4)	2	(2)	2
Net actuarial gain (loss) arising during the year	0	(2)	0	(2)
Reclassification of amounts to net periodic benefit costs	1	3	3	5
Other comprehensive income (loss)	457	(223)	1,747	(846)
Comprehensive income	1,006	213	3,525	891
Comprehensive income attributable to noncontrolling interests	0	0	0	0
Comprehensive income attributable to Bancorp	$ 1,006	$ 213	$ 3,525	$ 891

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Derivatives - Change in the Fair Value for Interest Rate Contracts and Related Hedged Items (Details) - Fair Value Hedging - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Long-Term Debt
Derivatives, Fair Value [Line Items]
Carrying Amount of Hedged Item	$ 3,455		$ 3,455
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items	(467)		(467)
Interest Rate Contract | Interest Expense, Long-Term Debt
Derivatives, Fair Value [Line Items]
Change in fair value of interest rate swaps hedging long-term debt	75	$ (29)	219	$ (110)
Change in fair value of hedged long-term debt	$ (74)	$ 31	$ (214)	$ 113

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Commitments - Activity in Reserve for Representation and Warranty Provisions (Details) - Residential Mortgage - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance, beginning of period	$ 7	$ 7	$ 6	$ 9
Net (reductions) additions to the reserve	0	(1)	1	(3)
Balance, end of period	$ 7	$ 6	$ 7	$ 6

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Commitments - Additional Information (Details) - USD ($) shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Sep. 30, 2014	Sep. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Dec. 31, 2009
Loss Contingencies [Line Items]
Letters of credit	$ 2,219,000,000		$ 2,219,000,000			$ 2,041,000,000
Margin account balance held by the brokerage clearing agent	13,000,000		13,000,000			13,000,000
Amount in excess of amounts reserved	27,000,000		27,000,000
Credit loss reserve	1,143,000,000	$ 1,091,000,000	1,143,000,000	$ 1,091,000,000	$ 1,115,000,000	1,103,000,000	$ 1,077,000,000	$ 1,196,000,000
Residential Mortgage
Loss Contingencies [Line Items]
Amount in excess of amounts reserved	11,000,000		11,000,000
Outstanding balances on residential mortgage loans sold with representation and warranty provisions	7,000,000	6,000,000	7,000,000	6,000,000	$ 7,000,000	6,000,000	7,000,000	$ 9,000,000
Outstanding Repurchase Demand Inventory	5,000,000		5,000,000			1,000,000
Outstanding balances on residential mortgage loans sold with credit recourse	$ 239,000,000		$ 239,000,000			$ 272,000,000
Delinquency Rates	2.00%		2.00%			2.20%
Credit loss reserve	$ 4,000,000		$ 4,000,000			$ 5,000,000
Repurchased Outstanding Principal	7,000,000	4,000,000	20,000,000	11,000,000
Repurchase Demand Request	10,000,000	$ 6,000,000	38,000,000	$ 17,000,000
Secured Debt
Loss Contingencies [Line Items]
Fully and unconditionally guaranteed certain long-term borrowing obligations issued by wholly-owned issuing trust entities	85,000,000		85,000,000			62,000,000
Standby Letters of Credit
Loss Contingencies [Line Items]
Reserve for unfunded commitments	$ 28,000,000		$ 28,000,000			$ 17,000,000
Standby letters of credit as a percentage of total letters of credit	99.00%		99.00%			99.00%
Standby Letters of Credit | Secured Debt
Loss Contingencies [Line Items]
Standby letters of credit as a percentage of total letters of credit	63.00%		63.00%			60.00%
Variable Rate Demand Note
Loss Contingencies [Line Items]
Fifth Third Securities, Inc. (FTS) acted as the remarketing agent to issuers of VRDNs	$ 405,000,000		$ 405,000,000			$ 481,000,000
Letters of credit	3,000,000		3,000,000			6,000,000
Total Variable Rate Demand Notes	408,000,000		408,000,000			487,000,000
Letters of credit issued by the Bancorp related to variable rate demand notes	215,000,000		215,000,000			256,000,000
Variable Rate Demand Note | Trading Securities
Loss Contingencies [Line Items]
Total Variable Rate Demand Notes	0		0			9,000,000
Other Liabilities
Loss Contingencies [Line Items]
Reserve for unfunded commitments	154,000,000		154,000,000			131,000,000
Visa
Loss Contingencies [Line Items]
Recorded share of litigation formally settled by Visa and for probable future litigation settlements	146,000,000		146,000,000			$ 125,000,000
Visa IPO, shares of Visa's Class B common stock received															10.1
Visa Class B shares carryover basis															$ 0
Escrow Deposit	$ 300,000,000		$ 300,000,000				$ 600,000,000		$ 450,000,000	$ 150,000,000	$ 1,565,000,000	$ 400,000,000	$ 800,000,000	$ 500,000,000	$ 3,000,000,000

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Operating Lease Equipment

9 Months Ended

Sep. 30, 2019

Operating Lease Equipment

Operating Lease Equipment

9. Operating Lease Equipment

Operating lease equipment was $869 million and $518 million at September 30, 2019 and December 31, 2018, respectively. Lease income relating to lease payments for operating leases was $44 million and $20 million for the three months ended September 30, 2019 and 2018, respectively and $110 million and $65 million for the nine months ended September 30, 2019 and 2018, respectively.

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. As a result of these recoverability assessments, the Bancorp did not recognize impairment losses associated with operating lease assets for both the three months and nine months ended September 30, 2019 and recognized $2 million and $4 million of impairment losses for the three and nine months ended September 30, 2018, respectively. The recognized impairment losses were recorded in corporate banking revenue in the Condensed Consolidated Statements of Income.

The following table presents undiscounted future lease payments for operating leases for the remainder of 2019 through 2024 and thereafter:
		Undiscounted Cash Flows
As of September 30, 2019 ($ in millions)
Remainder of 2019	$	41
2020		143
2021		114
2022		85
2023		61
2024		36
Thereafter		62
Total operating lease payments	$	542

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Investment Securities

9 Months Ended

Sep. 30, 2019

Securities

Securities

5. 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
September 30, 2019 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	74	1	-	75
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		15,185	510	(1)	15,694
		Agency commercial mortgage-backed securities		14,451	826	(1)	15,276
		Non-agency commercial mortgage-backed securities		3,246	154	-	3,400
	Asset-backed securities and other debt securities			2,129	37	(10)	2,156
	Other securities(a)			575	-	-	575
Total available-for-sale debt and other securities			$	35,662	1,528	(12)	37,178
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18

Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $96, $477 and $2, respectively, at September 30, 2019, that are carried at cost.

				Amortized	Unrealized	Unrealized	Fair
December 31, 2018 ($ in millions)				Cost	Gains	Losses	Value
Available-for-sale debt and other securities:
	U.S. Treasury and federal agency securities		$	98	-	(1)	97
	Obligations of states and political subdivisions securities			2	-	-	2
	Mortgage-backed securities:
		Agency residential mortgage-backed securities		16,403	86	(242)	16,247
		Agency commercial mortgage-backed securities		10,770	44	(164)	10,650
		Non-agency commercial mortgage-backed securities		3,305	9	(47)	3,267
	Asset-backed securities and other debt securities			1,998	27	(10)	2,015
	Other securities(a)			552	-	-	552
Total available-for-sale debt and other securities			$	33,128	166	(464)	32,830
Held-to-maturity securities:
	Obligations of states and political subdivisions securities		$	16	-	-	16
	Asset-backed securities and other debt securities			2	-	-	2
Total held-to-maturity securities			$	18	-	-	18
(a)	Other securities consist of FHLB, FRB and DTCC restricted stock holdings of $184, $366 and $2, respectively, at December 31, 2018, that are carried at cost.

The following table provides the fair value of trading debt securities and equity securities as of:
		September 30,	December 31,
($ in millions)		2019	2018
Trading debt securities	$	297	287
Equity securities		459	452

The Bancorp uses investment securities as a means of managing interest rate risk, providing collateral for pledging purposes and for liquidity to satisfy regulatory requirements. As part of managing interest rate risk, the Bancorp acquires securities as a component of its MSR non-qualifying hedging strategy, with net gains or losses recorded in securities gains (losses), net – non-qualifying hedges on MSRs in the Condensed Consolidated Statements of Income.

The following table presents securities gains (losses) recognized in the Condensed Consolidated Statements of Income:
			For the three months ended		For the nine months ended
			September 30,		September 30,
($ in millions)			2019	2018	2019	2018
Available-for-sale debt and other securities:
	Realized gains	$	3	4	51	61
	Realized losses		-	(4)	(47)	(69)
	OTTI		-	-	(1)	-
Net realized gains (losses) on available-for sale debt and other securities		$	3	-	3	(8)
Total trading debt securities gains (losses)		$	-	(1)	5	(18)
Total equity securities gains (losses)(a)		$	2	(6)	27	(13)
Total gains (losses) recognized in income from available-for-sale debt and other
	securities, trading debt securities and equity securities(b)	$	5	(7)	35	(39)

Includes an immaterial net unrealized gain and a net unrealized gain of $23 for the three and nine months ended September 30, 2019, respectively, and net unrealized losses of $6 and $12 for the three and nine months ended September 30, 2018, respectively.Excludes an insignificant amount of securities gains (losses) included in corporate banking revenue and wealth and asset management revenue in the Condensed Consolidated Statements of Income related to securities held by FTS to facilitate the timely execution of customer transactions.At September 30, 2019 and December 31, 2018, investment securities with a fair value of $7.4 billion and $7.0 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 September 30, 2019 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	$	197	207	2	2
	1-5 years		13,391	13,817	14	14
	5-10 years		16,568	17,390	-	-
	Over 10 years		4,931	5,189	2	2
Other securities			575	575	-	-
Total		$	35,662	37,178	18	18

(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
September 30, 2019
Agency residential mortgage-backed securities	$	121	(1)	4	-	125	(1)
Agency commercial mortgage-backed securities		134	(1)	-	-	134	(1)
Asset-backed securities and other debt securities		453	(6)	196	(4)	649	(10)
Total	$	708	(8)	200	(4)	908	(12)
December 31, 2018
U.S. Treasury and federal agency securities	$	-	-	97	(1)	97	(1)
Agency residential mortgage-backed securities		3,235	(21)	7,892	(221)	11,127	(242)
Agency commercial mortgage-backed securities		2,022	(37)	5,260	(127)	7,282	(164)
Non-agency commercial mortgage-backed securities		884	(6)	1,621	(41)	2,505	(47)
Asset-backed securities and other debt securities		314	(6)	241	(4)	555	(10)
Total	$	6,455	(70)	15,111	(394)	21,566	(464)

At both September 30, 2019 and December 31, 2018, an immaterial amount of unrealized losses in the available-for-sale debt and other securities portfolio were represented by non-rated securities.

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Loans & Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unamortized premiums and discounts, deferred direct loan origination fees and costs, and fair value adjustments	$ 202	$ 202		$ 296
Unearned Income	404	404		479
Loans pledged at the FHLB	16,600	16,600		13,100
Loans pledged at the FRB	48,100	48,100		42,600
Sales type lease - interest income	4	7
Direct financing lease - interest income	22	70
Allowance for loan and lease losses	1,143	1,143	$ 1,115	1,103	$ 1,091	$ 1,077	$ 1,196
Commercial leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan and lease losses	$ 20	$ 20		$ 18

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Credit Quality - Summary of the Credit Risk Profile of the Residential Mortgage and Consumer Portfolio Segments by Class (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Residential Mortgage Loans
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans measured at fair value on a recurring basis	$ 184	$ 179

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Credit Quality - Recorded Investment in Impaired Loans and Related Allowance by Class (Parenthetical) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 1,487	$ 1,382
Commercial Portfolio Segment | TDR on accrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	34	60
Commercial Portfolio Segment | TDR on nonaccrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	235	147
Residential Mortgage Loans | TDR on accrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	748	724
Residential Mortgage Loans | TDR on nonaccrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	10	12
Consumer Portfolio Segment | TDR on accrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	210	237
Consumer Portfolio Segment | TDR on nonaccrual status
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 45	$ 41

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Credit Quality - Summary of Transactions in the ALLL by Portfolio Segment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	$ 1,115	$ 1,077	$ 1,103	$ 1,196
Losses charged-off	(130)	(112)	(358)	(334)
Recoveries of losses previously charged- off	31	40	102	87
Provision for (benefit from) loan and lease losses	127	86	296	142
Balance, end of period	1,143	1,091	1,143	1,091
Commercial Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	651	654	645	753
Losses charged-off	(34)	(36)	(87)	(124)
Recoveries of losses previously charged- off	1	9	14	19
Provision for (benefit from) loan and lease losses	53	29	99	8
Balance, end of period	671	656	671	656
Residential Mortgage Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	76	86	81	89
Losses charged-off	(2)	(3)	(5)	(10)
Recoveries of losses previously charged- off	1	1	4	4
Provision for (benefit from) loan and lease losses	0	(1)	(5)	0
Balance, end of period	75	83	75	83
Consumer Portfolio Segment
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	276	229	267	234
Losses charged-off	(94)	(73)	(266)	(200)
Recoveries of losses previously charged- off	29	30	84	64
Provision for (benefit from) loan and lease losses	72	57	198	145
Balance, end of period	283	243	283	243
Unallocated
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	112	108	110	120
Losses charged-off	0	0	0	0
Recoveries of losses previously charged- off	0	0	0	0
Provision for (benefit from) loan and lease losses	2	1	4	(11)
Balance, end of period	$ 114	$ 109	$ 114	$ 109

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Fair Value Measurements - Amounts Included in Earnings Attributable to Changes in Unrealized Gains and Losses Related to Recurring L3 Assets and Liabilites Still Held at Year End (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain and losses included in earnings	$ (118)	$ (19)	$ (368)	$ (54)
Mortgage banking net revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain and losses included in earnings	(109)	(2)	(307)	11
Corporate banking revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain and losses included in earnings	2	0	2	1
Other noninterest income
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain and losses included in earnings	$ (11)	$ (17)	$ (63)	$ (66)

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Fair Value Measurements - Difference Between the Aggregate Fair Value and the Aggregate Unpaid Principal Balance Loans Measured at Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Residential mortgage loans
Aggregate fair value
Loans measured at fair value	$ 1,320	$ 716
Past due loans of 90 days or more	2	2
Nonaccrual loans	1	2
Aggregate unpaid principal balance
Loans measured at fair value	1,285	696
Past due loans of 90 days or more	2	2
Nonaccrual loans	1	2
Difference
Loans measured at fair value	35	20
Past due loans of 90 days or more	0	0
Nonaccrual loans	0	0
Commercial loans
Aggregate fair value
Loans measured at fair value	1	7
Aggregate unpaid principal balance
Loans measured at fair value	1	7
Difference
Loans measured at fair value	$ 0	$ 0

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2019

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
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	623	598	88	44	(111)	-	1,242
Provision for credit losses		54	58	14	-	8	-	134
Net interest income after provision for credit losses		569	540	74	44	(119)	-	1,108
Noninterest income:
Corporate banking revenue		167	1	-	-	-	-	168
Service charges on deposits		79	65	-	-	(1)	-	143
Wealth and asset management revenue		1	41	-	119	-	(37)(a)	124
Card and processing revenue		16	74	-	1	3	-	94
Mortgage banking net revenue		-	2	92	1	-	-	95
Other noninterest income(b)		72	21	4	4	10	-	111
Securities gains, net		-	-	-	-	5	-	5
Securities gains, net - non-qualifying hedges on MSRs		-	-	-	-	-	-	-
Total noninterest income		335	204	96	125	17	(37)	740
Noninterest expense:
Salaries, wages and incentives		107	122	39	45	184	-	497
Employee benefits		11	26	9	6	35	-	87
Technology and communications		3	1	2	-	94	-	100
Net occupancy expense		7	44	3	3	27	-	84
Card and processing expense		2	32	-	-	(1)	-	33
Equipment expense		7	12	-	-	14	-	33
Other noninterest expense		288	232	61	75	(294)	(37)	325
Total noninterest expense		425	469	114	129	59	(37)	1,159
Income (loss) before income taxes		479	275	56	40	(161)	-	689
Applicable income tax expense (benefit)		86	58	12	8	(24)	-	140
Net income (loss)		393	217	44	32	(137)	-	549
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.Includes impairment charges of $5 for branches and land. For more information refer to Note 8 and Note 25.Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	427	525	60	46	(15)	-	1,043
Provision for (benefit from) credit losses			(11)	34	10	3	48	-	84
Net interest income after provision for credit losses			438	491	50	43	(63)	-	959
Noninterest income:
Corporate banking revenue			100 (c)	1	-	-	(1)	-	100
Service charges on deposits			68	71	-	-	-	-	139
Wealth and asset management revenue			1	38	-	110	-	(35)(a)	114
Card and processing revenue			14	67	-	1	-	-	82
Mortgage banking net revenue			-	1	48	-	-	-	49
Other noninterest income			52	26	3	4	1	-	86
Securities losses, net			-	-	-	-	(6)	-	(6)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(1)	-	-	-	(1)
Total noninterest income			235	204	50	115	(6)	(35)	563
Noninterest expense:
Salaries, wages and incentives			71	109	38	44	159	-	421
Employee benefits			8	22	8	6	38	-	82
Technology and communications			2	1	2	-	66	-	71
Net occupancy expense			6	44	3	3	14	-	70
Card and processing expense			2	30	-	-	(1)	-	31
Equipment expense			6	12	-	-	13	-	31
Other noninterest expense			212	215	49	73	(248)	(35)	266
Total noninterest expense			307	433	100	126	41	(35)	972
Income (loss) before income taxes			366	262	-	32	(110)	-	550
Applicable income tax expense (benefit)			65	55	-	7	(13)	-	114
Net income (loss)			301	207	-	25	(97)	-	436
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(b)	-	141,590
(a)	Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.
(b)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.
(c)	Includes impairment charges of $2 for operating lease equipment. For more information refer to Note 25.

The following tables present the results of operations and assets by business segment for the nine months ended:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2019 ($ in millions)		Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income	$	1,761	1,802	234	141	(369)	-	3,569
Provision for credit losses		100	164	34	-	12	-	310
Net interest income after provision for credit losses		1,661	1,638	200	141	(381)	-	3,259
Noninterest income:
Corporate banking revenue		413	3	-	1	-	-	417
Service charges on deposits		227	191	-	1	(2)	-	417
Wealth and asset management revenue		2	117	-	345	-	(106)(a)	358
Card and processing revenue		49	212	-	2	3	-	266
Mortgage banking net revenue		-	4	209	1	-	-	214
Other noninterest income(b)		170	63	10	9	542	-	794
Securities gains, net		-	-	-	-	30	-	30
Securities gains, net - non-qualifying hedges on MSRs		-	-	5	-	-	-	5
Total noninterest income		861	590	224	359	573	(106)	2,501
Noninterest expense:
Salaries, wages and incentives		299	360	117	140	611	-	1,527
Employee benefits		47	84	29	25	131	-	316
Technology and communications		8	3	6	1	301	-	319
Net occupancy expense		21	130	8	10	79	-	248
Card and processing expense		6	92	-	1	(1)	-	98
Equipment expense		18	35	-	1	42	-	96
Other noninterest expense		799	671	175	219	(863)	(106)	895
Total noninterest expense		1,198	1,375	335	397	300	(106)	3,499
Income (loss) before income taxes		1,324	853	89	103	(108)	-	2,261
Applicable income tax expense		242	179	19	22	21	-	483
Net income (loss)		1,082	674	70	81	(129)	-	1,778
Total goodwill	$	1,982	2,054	-	254	-	-	4,290
Total assets	$	75,143	69,021	26,171	9,961	(9,217)(c)	-	171,079

Revenue sharing agreements between wealth and asset management and branch banking are eliminated in the Condensed Consolidated Statements of Income.Includes impairment charges of $27 for branches and land. For more information refer to Note 8 and Note 25.Includes bank premises and equipment of $87 classified as held for sale. For more information refer to Note 8.

						Wealth	General
			Commercial	Branch	Consumer	and Asset	Corporate
September 30, 2018 ($ in millions)			Banking	Banking	Lending	Management	and Other	Eliminations	Total
Net interest income		$	1,273	1,490	178	134	(16)	-	3,059
Provision for (benefit from) credit losses			(41)	124	30	8	(10)	-	111
Net interest income after provision for credit losses			1,314	1,366	148	126	(6)	-	2,948
Total noninterest income
Corporate banking revenue			304 (c)	4	-	1	(1)	-	308
Service charges on deposits			207	205	-	1	1	-	414
Wealth and asset management revenue			3	113	-	324	(1)	(104)(a)	335
Card and processing revenue			42	199	-	4	-	-	245
Mortgage banking net revenue			-	4	153	1	-	-	158
Other noninterest income(b)			125	33	11	13	612	-	794
Securities losses, net			-	-	-	-	(21)	-	(21)
Securities losses, net - non-qualifying hedges on MSRs			-	-	(18)	-	-	-	(18)
Total noninterest income			681	558	146	344	590	(104)	2,215
Noninterest expense
Salaries, wages and incentives			214	329	120	131	545	-	1,339
Employee benefits			36	75	28	23	108	-	270
Technology and communications			6	4	3	1	192	-	206
Net occupancy expense			20	131	8	9	51	-	219
Card and processing expense			3	89	-	-	(1)	-	91
Equipment expense			18	37	-	-	37	-	92
Other noninterest expense			652	638	151	217	(787)	(104)	767
Total noninterest expense			949	1,303	310	381	145	(104)	2,984
Income (loss) before income taxes			1,046	621	(16)	89	439	-	2,179
Applicable income tax expense (benefit)			184	131	(3)	19	111	-	442
Net income (loss)			862	490	(13)	70	328	-	1,737
Total goodwill		$	630	1,655	-	177	-	-	2,462
Total assets		$	60,040	60,222	22,188	9,171	(10,031)(d)	-	141,590
(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 $41 for branches and land. For more information refer to Note 8 and Note 25.
(c)	Includes impairment charges of $4 for operating lease equipment. For more information refer to Note 25.
(d)	Includes bank premises and equipment of $38 classified as held for sale. For more information refer to Note 8.

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Commitments, Contingent Liabilities and Guarantees (Tables)

9 Months Ended

Sep. 30, 2019

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:
		September 30,	December 31,
($ in millions)		2019	2018
Commitments to extend credit	$	79,076	70,415
Letters of credit		2,219	2,041
Forward contracts related to residential mortgage loans held for sale		2,693	926
Purchase obligations		114	126
Capital commitments for private equity investments		77	32
Capital expenditures		85	45

Credit Risk Associated With Commitments

Risk ratings of outstanding commitments to extend credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	78,124	69,928
Special mention		474	271
Substandard		477	216
Doubtful		1	-
Total commitments to extend credit	$	79,076	70,415

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 September 30, 2019:
($ in millions)
Less than 1 year(a)	$	1,124
1 - 5 years(a)		1,056
Over 5 years		39
Total letters of credit	$	2,219

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

Credit Risk associated with Letters of Credit

Risk ratings of outstanding letters of credit under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	2,075	1,905
Special mention		11	10
Substandard		132	126
Doubtful		1	-
Total letters of credit	$	2,219	2,041

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		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Balance, beginning of period	$	7	7	6	9
Net additions (reductions) to the reserve		-	(1)	1	(3)
Balance, end of period	$	7	6	7	6

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following tables provide a rollforward of unresolved claims by claimant type for the nine months ended:
	GSE			Private Label
September 30, 2019 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	9	$	1	1	$	-
New demands	213		38	7		-
Loan paydowns/payoffs	(3)		-	-		-
Resolved demands	(194)		(34)	(3)		-
Balance, end of period	25	$	5	5	$	-

	GSE			Private Label
September 30, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	104		17	-		-
Resolved demands	(85)		(13)	-		-
Balance, end of period	25	$	5	1	$	-

Visa Funding and Bancorp Cash Payments

After the Bancorp’s sale of the Class B Shares, Visa 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
Q2 2018		600	26	i
Q3 2019		300	(a)

(a) The Bancorp made a cash payment of $12 million to the swap counterparty on October 8, 2019 as a result of the Visa escrow funding in the third quarter of 2019.

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Business Combination - Acquired Identifiable Assets and Liabilities Assumed (Details) - MB Financial, Inc. - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 22, 2019
Consideration paid
Cash payments	$ 469
Fair value of common stock issued	3,121
Stock-based awards	38
Dividend receivable from MB Financial, Inc.	(20)
Total consideration paid	$ 3,608
Fair value of noncontrolling interest in acquiree		$ 197
Assets
Cash and due from banks		1,679
Federal funds sold		35
Other short-term investments		53
Available-for-sale debt and other securities		832
Held-to-maturity securities		4
Equity securities		51
Loans and leases held for sale		12
Portfolio loans and leases		13,409
Bank premises and equipment		250
Operating lease equipment		416
Intangible assets		195
Servicing rights		263
Other assets		723
Total assets acquired		17,922
Liabilities
Deposits		14,489
Other short-term borrowings		267
Accrued taxes, interest and expenses		260
Other liabilities		196
Long-term debt		720
Total liabilities assumed		15,932
Net identifiable assets acquired		1,990
Goodwill		$ 1,815

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EPS - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock Appreciation Rights
Earnings Per Share Disclosure [Line Items]
Anti-dilutive securities	2	2	2	2

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Taxes
Applicable income tax expense	$ 140	$ 114	$ 483	$ 442
Effective tax rate	20.20%	20.70%	21.40%	20.30%

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Securities - Amounts Recognized in Income from Available-for-Sale and Trading Securities (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Equity securities unrealized gains (losses)	$ (6)	$ 23	$ (12)

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Operating Lease Equipment - Operating Lease Equipment Payments (Details) $ in Millions	Sep. 30, 2019 USD ($)
Property Subject To Or Available For Operating Lease [Line Items]
Remainder of 2019	$ 41
2020	143
2021	114
2022	85
2023	61
2024	36
Thereafter	62
Total operating lease payments	$ 542

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Bank Premises & Equipment - Bank Premises and Equipment (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Bank Premises and Equipment
Land and improvements	$ 640	$ 586
Buildings	1,552	1,547
Equipment	2,095	1,987
Leasehold improvements	415	403
Construction in progress	98	81
Land and improvements held for sale	50	25
Branches held for sale	32	14
Equipment held for sale	5	3
Accumulated depreciation and amortization	(2,834)	(2,785)
Total bank premises and equipment	$ 2,053	$ 1,861

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Business Combination - Accretable Yield Rollforward (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Accretable yield, beginning balance	$ 0
Additions	202
Accretion	30
Reclassifications from nonaccretable difference	(2)
Accretable yield, ending balance	$ 170

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Segments - Results of Operations and Average Assets by Segment (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Bank premises impairment	$ 5		$ 27	$ 41
Other asset impairment charges		$ 2		4
Bank premises and equipment held for sale	87		87		$ 42
Commercial Banking | Operating lease equipment
Segment Reporting Information [Line Items]
Other asset impairment charges		2		4
General Corporate and Other
Segment Reporting Information [Line Items]
Bank premises and equipment held for sale	$ 87	$ 38	$ 87	$ 38

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

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
September 30, 2019 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	2,705		459	3
Total fair value hedges				459	3
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		156	-
Interest rate swaps related to C&I loans		8,000		-	72
Total cash flow hedges				156	72
Total derivatives designated as qualifying hedging instruments				615	75
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		6,420		178	12
Forward contracts related to residential mortgage loans held for sale		2,693		3	5
Swap associated with the sale of Visa, Inc. Class B Shares		2,834		-	146
Total free-standing derivatives - risk management and other business purposes				181	163
Free-standing derivatives - customer accommodation:
Interest rate contracts(a)		71,511		727	169
Interest rate lock commitments		1,096		24	-
Commodity contracts		8,144		368	353
TBA securities		28		-	-
Foreign exchange contracts		13,924		182	151
Total free-standing derivatives - customer accommodation				1,301	673
Total derivatives not designated as qualifying hedging instruments				1,482	836
Total			$	2,097	911

Derivative assets and liabilities are presented net of variation margin of $36 and $621, respectively.

				Fair Value
		Notional		Derivative	Derivative
December 31, 2018 ($ in millions)		Amount		Assets	Liabilities
Derivatives Designated as Qualifying Hedging Instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,455		262	2
Total fair value hedges				262	2
Cash flow hedges:
Interest rate floors related to C&I loans		3,000		69	-
Interest rate swaps related to C&I loans		8,000		15	27
Total cash flow hedges				84	27
Total derivatives designated as qualifying hedging instruments				346	29
Derivatives Not Designated as Qualifying Hedging Instruments:
Free-standing derivatives - risk management and other business purposes:
Interest rate contracts related to MSR portfolio		10,045		40	14
Forward contracts related to residential mortgage loans held for sale		926		-	8
Swap associated with the sale of Visa, Inc. Class B Shares		2,174		-	125
Foreign exchange contracts		133		4	-
Total free-standing derivatives - risk management and other business purposes				44	147
Free-standing derivatives - customer accommodation:
Interest rate contracts		55,012		262	278
Interest rate lock commitments		407		7	-
Commodity contracts		6,511		307	278
TBA securities		18		-	-
Foreign exchange contracts		13,205		148	142
Total free-standing derivatives - customer accommodation				724	698
Total derivatives not designated as qualifying hedging instruments				768	845
Total			$	1,114	874

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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Change in fair value of interest rate swaps hedging long-term debt	Interest on long-term debt	$	75	(29)	219	(110)
Change in fair value of hedged long-term debt attributable to the risk being hedged	Interest on long-term debt		(74)	31	(214)	113

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		September 30, 2019
Carrying amount of the hedged items	Long-term debt	$	3,455
Cumulative amount of fair value hedging adjustments included in the carrying
amount of the hedged items	Long-term debt		(467)

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

The following table presents the pretax net gains (losses) recorded in the Condensed Consolidated Statements of Income and in the Condensed Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2019	2018	2019	2018
Amount of pretax net gains (losses) recognized in OCI	$	105	(25)	456	(31)
Amount of pretax net gains (losses) reclassified from OCI into net income		5	(2)	2	(2)

Schedule of Price Risk Derivatives

The net gains (losses) 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:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Forward contracts related to residential mortgage loans
held for sale	Mortgage banking net revenue	$	11	7	6	4
Interest rate contracts related to MSR portfolio	Mortgage banking net revenue		130	(24)	308	(89)
Foreign exchange contracts:
Foreign exchange contracts for risk management purposes	Other noninterest income		2	(1)	(3)	3
Equity contracts:
Swap associated with sale of Visa, Inc. Class B Shares	Other noninterest income		(11)	(17)	(63)	(66)

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:
		September 30,	December 31,
($ in millions)		2019	2018
Pass	$	4,188	3,919
Special mention		144	79
Substandard		13	4
Total	$	4,345	4,002

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

The net gains (losses) recorded in the Condensed Consolidated Statements of Income relating to free-standing derivative instruments used for customer accommodation are summarized in the following table:
			For the three months		For the nine months
	Condensed Consolidated		ended September 30,		ended September 30,
($ in millions)	Statements of Income Caption		2019	2018	2019	2018
Interest rate contracts:
Interest rate contracts for customers (contract revenue)	Corporate banking revenue	$	12	7	30	23
Interest rate contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		(5)	-	(18)	-
Interest rate lock commitments	Mortgage banking net revenue		50	17	108	52
Commodity contracts:
Commodity contracts for customers (contract revenue)	Corporate banking revenue		3	3	6	7
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		12	16	36	43
Foreign exchange contracts for customers (contract revenue)	Other noninterest income		7	3	15	8
Foreign exchange contracts for customers (credit portion of
fair value adjustment)	Other noninterest expense		-	-	-	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 September 30, 2019 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	2,073	(550)	(630)		893
Total assets			2,073	(550)	(630)		893
Liabilities:
Derivatives			911	(550)	(18)		343
Total liabilities		$	911	(550)	(18)		343
(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		Gross Amounts Not Offset in the
		Recognized in the		Condensed Consolidated Balance Sheets
		Condensed Consolidated
As of December 31, 2018 ($ in millions)		Balance Sheets(a)		Derivatives	Collateral(b)	Net Amount
Assets:
Derivatives		$	1,107	(410)	(348)		349
Total assets			1,107	(410)	(348)		349
Liabilities:
Derivatives			874	(410)	(123)		341
Total liabilities		$	874	(410)	(123)		341
(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.

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

9 Months Ended

Sep. 30, 2019

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 September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	651	76	276	112	1,115
	Losses charged-off(a)		(34)	(2)	(94)	-	(130)
	Recoveries of losses previously charged-off(a)		1	1	29	-	31
	Provision for loan and lease losses		53	-	72	2	127
Balance, end of period		$	671	75	283	114	1,143
(a)	For the three months ended September 30, 2019, the Bancorp recorded $12 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the three months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	654	86	229	108	1,077
	Losses charged-off(a)		(36)	(3)	(73)	-	(112)
	Recoveries of losses previously charged-off(a)		9	1	30	-	40
	Provision for (benefit from) loan and lease losses		29	(1)	57	1	86
Balance, end of period		$	656	83	243	109	1,091
(a)	For the three months ended September 30, 2018, the Bancorp recorded $8 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	645	81	267	110	1,103
	Losses charged-off(a)		(87)	(5)	(266)	-	(358)
	Recoveries of losses previously charged-off(a)		14	4	84	-	102
	Provision for (benefit from) loan and lease losses		99	(5)	198	4	296
Balance, end of period		$	671	75	283	114	1,143
(a)	For the nine months ended September 30, 2019, the Bancorp recorded $35 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the nine months ended September 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off(a)		(124)	(10)	(200)	-	(334)
	Recoveries of losses previously charged-off(a)		19	4	64	-	87
	Provision for (benefit from) loan and lease losses		8	-	145	(11)	142
Balance, end of period		$	656	83	243	109	1,091
(a)	For the nine months ended September 30, 2018, the Bancorp recorded $18 in losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

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 September 30, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	53	58	36	-	147
	Collectively evaluated for impairment		618	17	247	-	882
	Unallocated		-	-	-	114	114
Total ALLL		$	671	75	283	114	1,143
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	358	758	255	-	1,371
	Collectively evaluated for impairment		69,427	15,695	22,095	-	107,217
	Purchased credit impaired		581	38	18	-	637
Total portfolio loans and leases		$	70,366	16,491	22,368	-	109,225
(a)	Includes $1 related to leveraged leases at September 30, 2019.
(b)	Excludes $184 of residential mortgage loans measured at fair value and includes $492 of leveraged leases, net of unearned income at September 30, 2019.

				Residential
As of December 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	42	61	38	-	141
	Collectively evaluated for impairment		603	20	229	-	852
	Unallocated		-	-	-	110	110
Total ALLL		$	645	81	267	110	1,103
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	277	736	278	-	1,291
	Collectively evaluated for impairment		59,294	14,589	19,912	-	93,795
Total portfolio loans and leases		$	59,571	15,325	20,190	-	95,086
(a)	Includes $1 related to leveraged leases at December 31, 2018.
(b)	Excludes $179 of residential mortgage loans measured at fair value and includes $624 of leveraged leases, net of unearned income at December 31, 2018.

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 September 30, 2019 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	47,944	1,300	1,513	11	50,768
Commercial mortgage owner-occupied loans		4,419	152	197	-	4,768
Commercial mortgage nonowner-occupied loans		5,786	76	192	-	6,054
Commercial construction loans		5,192	42	47	-	5,281
Commercial leases		3,364	42	89	-	3,495
Total commercial loans and leases	$	66,705	1,612	2,038	11	70,366

			Special
As of December 31, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	42,695	779	853	13	44,340
Commercial mortgage owner-occupied loans		3,122	23	139	-	3,284
Commercial mortgage nonowner-occupied loans		3,632	27	31	-	3,690
Commercial construction loans		4,657	-	-	-	4,657
Commercial leases		3,475	72	53	-	3,600
Total commercial loans and leases	$	57,581	901	1,076	13	59,571

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:
		September 30, 2019		December 31, 2018
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	16,469	22	15,303	22
Home equity		6,138	80	6,332	70
Indirect secured consumer loans		11,024	2	8,975	1
Credit card		2,440	27	2,444	26
Other consumer loans		2,655	2	2,341	1
Total residential mortgage and consumer loans(a)	$	38,726	133	35,395	120

(a) Excludes $184 and $179 of residential mortgage loans measured at fair value at September 30, 2019 and December 31, 2018, 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 September 30, 2019 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	50,504	131	133	264	50,768	15
	Commercial mortgage owner-occupied loans		4,742	9	17	26	4,768	3
	Commercial mortgage nonowner-occupied loans		6,025	13	16	29	6,054	15
	Commercial construction loans		5,280	-	1	1	5,281	1
	Commercial leases		3,479	2	14	16	3,495	1
Residential mortgage loans(a)			16,390	32	69	101	16,491	48
Consumer loans:
	Home equity		6,097	63	58	121	6,218	-
	Indirect secured consumer loans		10,892	120	14	134	11,026	10
	Credit card		2,375	49	43	92	2,467	38
	Other consumer loans		2,633	21	3	24	2,657	1
Total portfolio loans and leases(a)		$	108,417	440	368	808	109,225	132
(a)	Excludes $184 of residential mortgage loans measured at fair value at September 30, 2019.
(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 September 30, 2019, $96 of these loans were 30-89 days past due and $274 were 90 days or more past due. The Bancorp recognized $1 of losses during both the three and nine months ended September 30, 2019 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, 2018 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	44,213	32	95	127	44,340	4
	Commercial mortgage owner-occupied loans		3,277	1	6	7	3,284	2
	Commercial mortgage nonowner-occupied loans		3,688	1	1	2	3,690	-
	Commercial construction loans		4,657	-	-	-	4,657	-
	Commercial leases		3,597	1	2	3	3,600	-
Residential mortgage loans(a)			15,227	37	61	98	15,325	38
Consumer loans:
	Home equity		6,280	71	51	122	6,402	-
	Indirect secured consumer loans		8,844	119	13	132	8,976	12
	Credit card		2,381	47	42	89	2,470	37
	Other consumer loans		2,323	17	2	19	2,342	-
Total portfolio loans and leases(a)		$	94,487	326	273	599	95,086	93
(a)	Excludes $179 of residential mortgage loans measured at fair value at December 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 December 31, 2018, $90 of these loans were 30-89 days past due and $195 were 90 days or more past due. The Bancorp recognized $1 and $4 of losses during the three and nine months ended September 30, 2018, respectively, due to claim denials and curtailments associated with these insured or guaranteed loans.
(c)	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 September 30, 2019 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	257	178		44
	Commercial mortgage owner-occupied loans		5	5		-
	Commercial mortgage nonowner-occupied loans		1	1		-
	Commercial leases		31	27		9
Restructured residential mortgage loans			451	448		58
Restructured consumer loans:
	Home equity		134	134		22
	Indirect secured consumer loans		4	4		1
	Credit card		46	44		13
Total impaired portfolio loans and leases with a related ALLL		$	929	841		147
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	129	121		-
	Commercial mortgage owner-occupied loans		21	20		-
	Commercial mortgage nonowner-occupied loans		3	3		-
	Commercial leases		3	3		-
Restructured residential mortgage loans			328	310		-
Restructured consumer loans:
	Home equity		73	72		-
	Indirect secured consumer loans		1	1		-
Total impaired portfolio loans with no related ALLL		$	558	530		-
Total impaired portfolio loans and leases		$	1,487	1,371	(a)	147

Includes $34, $748 and $210, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $235, $10 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at September 30, 2019.

			Unpaid
			Principal	Recorded
As of December 31, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	156	107		34
	Commercial mortgage owner-occupied loans		2	2		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		23	22		7
Restructured residential mortgage loans			465	462		61
Restructured consumer loans:
	Home equity		146	145		22
	Indirect secured consumer loans		5	4		1
	Credit card		47	44		15
Total impaired portfolio loans and leases with a related ALLL		$	846	787		141
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	137	125		-
	Commercial mortgage owner-occupied loans		9	9		-
	Commercial mortgage nonowner-occupied loans		11	11		-
Restructured residential mortgage loans			292	274		-
Restructured consumer loans:
	Home equity		85	83		-
	Indirect secured consumer loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	536	504		-
Total impaired portfolio loans and leases		$	1,382	1,291	a(a)	141
(a)	Includes $60, $724 and $237, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $147, $12 and $41, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2018.

The following table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:
			For the three months ended		For the nine months ended
			September 30, 2019		September 30, 2019
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	329	2	294	6
	Commercial mortgage owner-occupied loans		26	-	22	-
	Commercial mortgage nonowner-occupied loans		5	-	9	-
	Commercial leases		33	-	28	1
Restructured residential mortgage loans			751	7	742	22
Restructured consumer loans:
	Home equity		209	3	217	9
	Indirect secured consumer loans		5	-	6	-
	Credit card		43	1	43	3
Total average impaired portfolio loans and leases		$	1,401	13	1,361	41

			For the three months ended		For the nine months ended
			September 30, 2018		September 30, 2018
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	313	3	408	13
	Commercial mortgage owner-occupied loans		11	-	17	-
	Commercial mortgage nonowner-occupied loans		21	-	27	-
	Commercial leases		28	-	17	-
Restructured residential mortgage loans			767	7	744	21
Restructured consumer loans:
	Home equity		239	3	248	9
	Indirect secured consumer loans		7	-	8	-
	Credit card		44	1	44	3
Total average impaired loans and leases		$	1,430	14	1,513	46

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:
			September 30,	December 31,
($ in millions)			2019	2018
Commercial loans and leases:
	Commercial and industrial loans	$	293	193
	Commercial mortgage owner-occupied loans		24	11
	Commercial mortgage nonowner-occupied loans		2	2
	Commercial leases		30	22
Total nonaccrual portfolio commercial loans and leases			349	228
Residential mortgage loans			22	22
Consumer loans:
	Home equity		80	69
	Indirect secured consumer loans		2	1
	Credit card		27	27
	Other consumer loans		2	1
Total nonaccrual portfolio consumer loans			111	98
Total nonaccrual portfolio loans and leases(a)(b)		$	482	348
OREO and other repossessed property			37	47
Total nonperforming portfolio assets(a)(b)		$	519	395
(a)	Excludes $13 and $16 of nonaccrual loans held for sale at September 30, 2019 and December 31, 2018, respectively.
(b)	Includes $15 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at September 30, 2019 and December 31, 2018, respectively, of which $10 and $2 are restructured nonaccrual government insured commercial loans at September 30, 2019 and December 31, 2018, 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		Increase
		Number of Loans	in Loans Modified		(Decrease)	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	27	$	72	(1)	-
	Commercial mortgage owner-occupied loans	4		1	-	-
Residential mortgage loans		256		39	1	-
Consumer loans:
	Home equity	21		1	-	-
	Indirect secured consumer loans	27		-	-	-
	Credit card	1,467		8	2	1
Total portfolio loans		1,802	$	121	2	1
(a)	Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
(b)	Represents number of loans post-modification and excludes loans previously modified in a TDR.

			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	16	$	52	(7)	7
Residential mortgage loans		185		24	1	-
Consumer loans:
	Home equity	30		2	-	-
	Indirect secured consumer loans	25		-	-	-
	Credit card	1,547		8	2	-
Total portfolio loans		1,803	$	86	(4)	7
(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 following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the nine months ended:
			Recorded Investment		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2019 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	65	$	168	(15)	5
	Commercial mortgage owner-occupied loans	13		10	-	-
Residential mortgage loans		531		74	1	-
Consumer loans:
	Home equity	58		3	-	-
	Indirect secured consumer loans	65		-	-	-
	Credit card	4,250		24	6	3
Total portfolio loans		4,982	$	279	(8)	8
(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.

			Recorded Investment
		Number of Loans	in Loans and Leases		Increase	Charge-offs
		Modified in a TDR	Modified in a TDR		to ALLL Upon	Recognized Upon
September 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans and leases:
	Commercial and industrial loans	41	$	187	2	7
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		969		148	4	-
Consumer loans:
	Home equity	84		6	-	-
	Indirect secured consumer loans	64		-	-	-
	Credit card	5,187		27	6	1
Total portfolio loans		6,347	$	368	12	8
(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.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended September 30, 2019 and 2018 and were within 12 months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	3
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		67		10
Consumer loans:
	Home equity	7		-
	Credit card	69		-
Total portfolio loans		146	$	13

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	5	$	32
Residential mortgage loans		28		4
Consumer loans:
	Home equity	4		-
	Credit card	146		1
Total portfolio loans		183	$	37

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

The following tables provide a summary of TDRs that subsequently defaulted during the nine months ended September 30, 2019 and 2018 and were within twelve months of the restructuring date:
		Number of		Recorded
September 30, 2019 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	20
	Commercial mortgage owner-occupied loans	4		1
Residential mortgage loans		196		30
Consumer loans:
	Home equity	12		-
	Credit card	605		3
Total portfolio loans		825	$	54

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

		Number of		Recorded
September 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	8	$	61
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		138		24
Consumer loans:
	Home equity	6		-
	Credit card	525		3
Total portfolio loans		679	$	88

(a) 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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Goodwill (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill

Changes in the Net Carrying Amount of Goodwill by Reporting Segment

Changes in the net carrying amount of goodwill, by reporting unit, for the nine months ended September 30, 2019 and the year ended December 31, 2018 were as follows:
					Wealth	General
		Commercial	Branch	Consumer	and Asset	Corporate
($ in millions)		Banking	Banking	Lending	Management	and Other	Total
Goodwill	$	1,363	1,655	215	177	-	3,410
Accumulated impairment losses		(750)	-	(215)	-	-	(965)
Net carrying value as of December 31, 2017	$	613	1,655	-	177	-	2,445
Acquisition activity		17	-	-	16	-	33
Net carrying value as of December 31, 2018	$	630	1,655	-	193	-	2,478
Acquisition activity		1,352	399	-	64	-	1,815
Sale of business		-	-	-	(3)	-	(3)
Net carrying value as of September 30, 2019	$	1,982	2,054	-	254	-	4,290

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VIE - Assets and Liabilities Related to Non-consolidated VIEs and Maximum Exposure to Losses (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Private Equity Investments
Variable Interest Entity [Line Items]
Total Assets	$ 84	$ 41
Total Liabilities	0	0
Maximum Exposure	161	73
Loans Provided to VIEs
Variable Interest Entity [Line Items]
Total Assets	2,628	2,331
Total Liabilities	0	0
Maximum Exposure	3,979	3,617
Lease pool entities
Variable Interest Entity [Line Items]
Total Assets	66
Total Liabilities	0
Maximum Exposure	66
Fifth Third Community Development Corporation Investments
Variable Interest Entity [Line Items]
Total Assets	1,424	1,198
Total Liabilities	440	376
Maximum Exposure	$ 1,424	$ 1,198

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Long-Term Debt

9 Months Ended

Sep. 30, 2019

Long-Term Debt

Long-Term Debt

17. Long-Term Debt

On January 25, 2019, the Bancorp issued and sold $1.5 billion of 3.65% senior fixed-rate notes, with a maturity of five years, due on January 25, 2024. 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 up to, but excluding, the redemption date.

On February 1, 2019, Fifth Third Bank issued and sold, under its bank notes program, $300 million of senior floating-rate notes, with a maturity of three years, due on February 1, 2022. Interest on the floating-rate notes is 3-month LIBOR plus 64 bps. These notes will be redeemable by Fifth Third Bank, 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 up to, but excluding, the redemption date.

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million of the asset-backed notes were retained by the Bancorp, resulting in approximately $1.3 billion of outstanding notes included in long-term debt in the Condensed Consolidated Balance Sheets. Additionally, as previously discussed in Note 13, the bankruptcy remote trust was deemed to be a VIE and the Bancorp, as the primary beneficiary, consolidated the VIE. The third-party holders of the asset-backed notes do not have recourse to the general assets of the Bancorp.

For further information on a subsequent event related to long-term debt, refer to Note 27.

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VIE

9 Months Ended

Sep. 30, 2019

Variable Interest Entities

Variable Interest Entities

13. 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 for automobile loan securitizations as of:
($ in millions)		September 30, 2019		December 31, 2018
Assets:
	Other short-term investments	$	76	40
	Indirect secured consumer loans		1,543	668
	ALLL		(9)	(4)
	Other assets		11	5
Total assets		$	1,621	709
Liabilities:
	Other liabilities	$	3	1
	Long-term debt		1,438	606
Total liabilities		$	1,441	607

Automobile loan securitizations

In a securitization transaction that occurred in May of 2019, the Bancorp transferred $1.43 billion in aggregate automobile loans to a bankruptcy remote trust which was deemed to be a VIE. This trust then subsequently issued approximately $1.37 billion of asset-backed notes, of which approximately $68 million were retained by the Bancorp. Refer to Note 17 for further information. The Bancorp also has previously completed securitization transactions in which the Bancorp transferred certain consumer automobile loans to bankruptcy remote trusts which were deemed to be VIEs. In each of these securitization transactions, 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. The third-party holders of the asset-backed 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.

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
September 30, 2019 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,424	440	1,424
Private equity investments		84	-	161
Loans provided to VIEs		2,628	-	3,979
Lease pool entities		66	-	66

		Total	Total	Maximum
December 31, 2018 ($ in millions)		Assets	Liabilities	Exposure
CDC investments	$	1,198	376	1,198
Private equity investments		41	-	73
Loans provided to VIEs		2,331	-	3,617

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. As a limited partner/investor member, the Bancorp has no substantive kick-out or substantive participating rights over the managing member. 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 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. For information regarding the Bancorp’s accounting for these investments, 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, 2018.

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 September 30, 2019 and December 31, 2018, the Bancorp’s CDC investments included $1.1 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 $440 million and $374 million at September 30, 2019 and December 31, 2018, respectively. The unfunded commitments as of September 30, 2019 are expected to be funded from 2019 to 2035.

The Bancorp has accounted for all of its qualifying LIHTC investments using the proportional amortization method of accounting. The following table summarizes the impact to the Condensed Consolidated Statements of Income related to these investments:
	Condensed Consolidated		For the three months ended September 30,		For the nine months ended September 30,
($ in millions)	Statements of Income Caption(a)		2019	2018	2019	2018
Proportional amortization	Applicable income tax expense	$	31	35	105	118
Tax credits and other benefits	Applicable income tax expense		(35)	(44)	(122)	(146)

The Bancorp did not recognize impairment losses resulting from the forfeiture or ineligibility of tax credits or other circumstances during both the three and nine months ended September 30, 2019 and 2018.

Private equity investments

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 September 30, 2019 and December 31, 2018, the unfunded commitment amounts to the funds were $77 million and $32 million, respectively. As part of previous commitments, the Bancorp made capital contributions to private equity investments of $2 million and $1 million during the three months ended September 30, 2019 and 2018, respectively, and $9 million and $6 million during the nine months ended September 30, 2019 and 2018, respectively. The Bancorp did not recognize OTTI associated with certain nonconforming investments affected by the Volcker Rule during both the three months ended September 30, 2019 and 2018, respectively, and recognized zero and $8 million during the nine months ended September 30, 2019 and 2018, respectively. Refer to Note 25 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 6. As of September 30, 2019 and December 31, 2018, the Bancorp’s unfunded commitments to these entities were $1.4 billion and $1.3 billion, respectively. The loans and unfunded commitments to these VIEs are included in the Bancorp’s overall analysis of the ALLL and reserve for unfunded commitments, respectively. The Bancorp does not provide any implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.

Lease pool entities

As a result of the acquisition of MB Financial, Inc., the Bancorp co-invested with other unrelated leasing companies in three LLCs designed for the purpose of purchasing pools of residual interests in leases which have been originated or purchased by the other investing member. For each LLC, the leasing company is the managing member and has full authority over the day-to-day operations of the entity. While the Bancorp holds more than 50% of the equity interests in each LLC, the operating agreements require both members to consent to significant corporate actions, such as liquidating the entity or removing the manager. In addition, the Bancorp has a preference with regards to distributions such that all of the Bancorp’s equity contribution for each pool must be distributed, plus a pre-defined rate of return, before the other member may receive distributions. The leasing company is also entitled to the return of its investment plus a pre-defined rate of return before any residual profits are distributed to the members.

The lease pool entities are primarily subject to risk of losses on the lease residuals purchased. The Bancorp has determined that it is not the primary beneficiary of these VIEs because it does not have the power to direct the activities that most significantly impact the economic performance of the entities. This power is held by the leasing company, who as managing member controls the servicing of the leases and collection of the proceeds on the residual interests.

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions Abstract

Related Party Transactions

21. Related Party Transactions

On March 18, 2019, the Bancorp exchanged its remaining 10,252,826 Class B Units of Worldpay Holding, LLC for 10,252,826 shares of Class A common stock of Worldpay, Inc., and subsequently sold those shares. As a result of this transaction, the Bancorp recognized a gain of $562 million in other noninterest income during the first quarter of 2019. As a result of the sale, the Bancorp no longer beneficially owns any of Worldpay, Inc.’s equity securities.

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Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 275	$ 87
Accumulated Amortization	(74)	(47)
Net Carrying Amount	201	40
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	229	34
Accumulated Amortization	(57)	(30)
Net Carrying Amount	172	4
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4	7
Accumulated Amortization	(1)	(3)
Net Carrying Amount	3	4
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	13	14
Accumulated Amortization	(11)	(11)
Net Carrying Amount	2	3
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	29	32
Accumulated Amortization	(5)	(3)
Net Carrying Amount	$ 24	$ 29

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Lease Obligations - Lessee - Undiscounted Cash Flows (Details) $ in Millions	Sep. 30, 2019 USD ($)
Operating Leases
Remainder of 2019	$ 25
2020	88
2021	77
2022	72
2023	63
2024	55
Thereafter	258
Total undiscounted cash flows	638
Less: Difference between undiscounted cash flows and discounted cash flows	(95)
Operating lease liabilities	543
Finance Leases
Remainder of 2019	2
2020	6
2021	5
2022	4
2023	1
2024	1
Thereafter	14
Total undiscounted cash flows	33
Less: Difference between undiscounted cash flows and discounted cash flows	(7)
Finance lease liabilities	26
Total
Remainder of 2019	27
2020	94
2021	82
2022	76
2023	64
2024	56
Thereafter	272
Total undiscounted cash flows	671
Less: Difference between undiscounted cash flows and discounted cash flows	102
Total lease liabilities	$ 569

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Derivatives - Net Gains (Losses) Relating to Free-Standing Derivative Instruments Used For Customer Accommodation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest Rate Contract | Customer Contracts | Corporate banking revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	$ 12	$ 7	$ 30	$ 23
Interest Rate Contract | Customer Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	(5)	0	(18)	0
Interest Rate Contract | Interest Rate Lock Commitments | Mortgage banking net revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	50	17	108	52
Commodity Contract | Customer Contracts | Corporate banking revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	3	3	6	7
Commodity Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	0	0	0	(1)
Foreign Exchange Contract | Customer Contracts | Corporate banking revenue
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	12	16	36	43
Foreign Exchange Contract | Customer Contracts | Other noninterest income
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	7	3	15	8
Foreign Exchange Contract | Fair Value Adjustments on Hedges and Derivative Contracts | Other noninterest expense
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) recorded in earnings	$ 0	$ 0	$ 0	$ 1

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Capital Actions - Capital Actions ASRs (Parenthetical) (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
Supplemental confirmation, notional	$ 100.0	$ 100.0	$ 456.5