Good morning, my name is Hamilton and I will be your conference operator today. At this time, I would like to welcome everyone to the Fifth Third Bancorp Third Quarter 2009 Earnings Call. (Operator Instructions). I will now turn the conference over to Mr. Jeff Richardson.

Hello, and thanks for joining us this morning. We will be talking with you today about our third quarter 2009 results. This call may contain certain forward-looking statements about Fifth Third Bancorp pertaining to our financial condition, results of operations, plans and objectives. These statements involve certain risks and uncertainties. There are a number of factors that could cause results to differ materially from the historical performance in these statements. We’ve identified a number of those factors in our forward-looking cautionary statement at the end of our earnings release and in other materials and we encourage you to review those factors. Fifth Third undertakes no obligation and would not expect to update any such forward-looking statements after the date of this call. I am joined on the call by several people, Kevin Kabat, our Chairman, President and CEO, Chief Financial Officer, Dan Poston, Chief Risk Officer, Mary Tuuk, Treasurer, Mahesh Sankaran and Jim Eglseder of Investor Relations. During the question and answer period, please provide your name and that of your firm to the operator. With that I will turn the call over to Kevin Kabat. Kevin?

Thanks Jeff. Good morning everyone and thanks for joining us. Today I will make a few opening comments before I hand the call over to Mary and Dan for a more detailed discussion of our credit and financial performance. This morning we reported a third quarter net loss of $0.20 per share, which was in line with our expectations. That included $0.26 of benefit related to our sale of Visa shares and the release of Visa litigation reserves. High levels of credit costs continue to more than offset solid core operating results. In addition to current levels of charge-offs, results also include $0.16 of provision in excess of net charge-offs and approximately $0.12 of credit related costs. These include provision for un-funded commitments, loan workout costs and credit write downs within operating revenue and expense. Dan will provide more color on the scope of these costs and where the show up. Commercial credit continues to be challenging, but we've seen some positive signs on the consumer front. I think it’s too early to predict a trend from that, but it’s encouraging. Early stage consumer delinquencies were down slightly this quarter, after also being down pretty significantly in the second quarter. Consumer 90 plus delinquencies were also down, primarily in Florida, another positive sign. Commercial 90 plus delinquencies were up, but a good number of those are administrative. Customers whose loans are still current, but the notes have matured and we haven’t extended them. We expect many of those to be resolved in the fourth quarter and these don’t change our views with respect to NPA or charge-offs in the fourth quarter, which is reflected in our outlook that Mary will discuss. Early stage commercial delinquencies, 30 to 89 days pass due were down $200 million, which also suggest the pipeline…

Thanks Kevin. I will start with charge-offs. Total net charge-off of $756 million increased $130 million sequentially. On a sequential basis, consumer net charge-offs were down $28 million while commercial net charge-offs increased $158 million. $78 million of that sequential growth in commercial was attributable to credits reviewed during the shared national credit exam. Commercial net charge-offs in the portfolio totaled $500 million or 417 basis points, up from $342 million or 281 basis points in the second quarter. During the third quarter we realized $95 million of losses from Shared National Credit, $60 million in the C&I category and $35 million in commercial construction. Looking at charge-offs by product. C&I losses totaled $256 million with continued pressure from construction and real estate. $43 million of the $79 million sequential quarter increase came from the SNC portfolio. Commercial construction net charge-offs were $126 million, with Michigan and Florida generating 50% of losses. Commercial mortgage losses of $118 million increased $33 million increased $33 million from the second quarter, with Michigan and Florida contributing 55% of losses. Across the portfolio homebuilder developer losses were $108 million of total losses. You will recall that we suspended home builder origination two years ago, have already recognized significant charge-offs in that portfolio and work to reduce our exposure. Portfolio balances are $1.8 billion, down 45% from $3.3 billion a year ago. We would expect losses there to come down going forward given the work we've done in that portfolio. Looking ahead to the fourth quarter, we expect overall commercial net charge-offs to be lower in the fourth quarter. We generally expect commercial mortgage and construction losses to remain elevated, but C&I losses to be meaningfully lower. The high level of SNC losses in the third quarter would be a contributing factor the expected decline…

Let me start at the bottom of the income statement. We reported a net loss of $97 million for the quarter, which was a $159 million on an available common shareholders basis or $0.20 per share. We paid $62 million of preferred dividends during the quarter, which should be indicative of level of dividends going forward. One caveat would be that we would need to assume conversion of the remaining convertible preferred shares in our EPS calculations when that is more dilutive. As we've said in the past, this would apply when our quarterly earnings are about $200 million or more. Operating results were solid but were burdened by continued elevated credit costs which were experienced through charge offs, provision above charge offs to build the reserve and credit cost realized fee income and operating expense. Those costs are all totaled were a little over $1 billion both this quarter and last. A majority of that cost is obviously in the provision for loan losses. But we also recorded $145 million in our revenue and expense lines this quarter versus about $55 million in both last quarter and in the year-ago quarter. Both provision for un-funding commitments and credit related operating losses were unusually high this quarter and I will talk about those in more detail where they occur. As you would recall, we announced the sale of our Visa Class-B shares in July. And during the quarter we recognized a pre-tax benefit of $288 million from that transaction. That benefit was split between fee income and expenses. In fee income, we recognize $244 million gain in other non-interest income. That gain reflects the value of the shares offset by the recognition of a total return swap that transferred the shares conversion ratio risk back to Fifth Third. In expense,…

(Operator Instructions). And our first question will come from Paul Miller - Friedman, Billings, Ramsey & Co. Paul Miller - Friedman, Billings, Ramsey & Co.: Can you address a little bit about the de-leveraging on your balance sheet, especially with respect to loans? Is that mainly coming out of your middle market and small business operations? And are you seeing any loan demand at that level or you continue to see people strengthen their balance sheets in this roll-down inventory, and when do you think that will reverse itself and actually we look at going forward with the size of your balance sheet?

Well, I think, as you have pointed out, loan demand remains weak and I think that’s especially true in the commercial space and I think it's pretty much across all categories of loans, certainly middle market and small business will be included in that. We expect that weakness to continue at least in the immediate term relative to the overall positioning in the balance sheet. I think as a result of that, we will consider expanding the securities portfolio somewhat. But clearly we would do that, with the lessons of the past clearly in mind with respect to the interest rate risk that, that might build and clearly we would take actions in connection with that to protect ourselves from any interest rate risk that we would take on there. So relative to the future, I think the demand in commercial lending I think will be dependent on economic recovery. Clearly we've seen some signs from a GDP basis that economic growth is beginning to return and we’re optimistic that in the near future we will begin to see a slowing of the weak loan demand and begin to see growth on a going forward basis. Paul Miller - Friedman, Billings, Ramsey & Co.: Is there any regions that has probably seen more de-leveraging loans relative to other regions like the -- the better part of the country down to Florida? Is it that Florida and Georgia where you’ve seen most of the loan contraction?

Yeah Paul. This is Kevin. Most of the concentration, if you had to look at it, would come out of our Florida and Michigan markets. The rest would be modest in terms of its decline in demand. The other thing that I think is quite telling that we alluded to in terms of the script was line utilizations are down very, very low, the lowest that I can recall in my career. So demand simply isn't there. People are being extremely cautious yet and I do think it will be tied as you might expect to confidence that comes back in terms of the economy. So we’re watching all those trends from that perspective and I think when that begins to turn we’ll see that first probably in some of the line utilization commitments already made in essence and then people beginning to think about investing more back into the business instead of taking it down and being more conservative.

Next question comes from the line Quan Mai of Goldman Sachs

This is Brian Foran. The on the different line item guidance you gave as well as kind of the comment on normal run rates versus some of the noise still with credit in FTPS set up, I mean can you just cut through as we put it all together. It seems like you are saying the core pre-provision run rate of the franchise is somewhere in the $625 million range. Is that kind of the message or it's just a lot of math or?

Clearly there was a challenge to sort through all of the impacts of FTPS on our PPNR run rates and that's why last quarter we gave a fair amount of guidance to help guide you through what we anticipated those impacts would be and largely I think that guidance was proven out in the third quarter. In the second quarter we talked about pro-forma PPNR being about 640 for the second quarter, that wasn't our expectations necessarily going forward. That was a prof-orma number with respect to the second quarter and we gave some guidance around trends that we expected and results that we expected on an overall basis. If you look at PPNR changes from second quarter to third, you see a couple of things, one mortgage income was down about $15 million, that was a little less than we had expected in terms of the decline in mortgage, but that did decreased PPNR quarter-to-quarter by $50 million. And then on the credit side we saw a couple of things, credit related expenses increased about $56 million, the line share of that being in provision for unfunded commitments and from a fee income perspective, we had an increase in offsets to fee income of about $36 million related to evaluation adjustments and gains and losses, related to loans held for sale as well as OREO. So between those two items, credit related items, we had a $92 million increase in PPNR, quarter-to-quarter. And then there were about $30 million in other improvements, throughout the other income and other expense line items to get to the 530 or so in PPNR for this quarter. In terms our outlook going forward, certainly, there is potential for considerable improvement given the credit related items that I just talked about. Those were about $100 million higher or $90 million higher this quarter than they were last quarter or a year ago. So as we return to a more normalized credit environment, clearly the decline in credit related items that are included in PPNR rather than in the provision would certainly get you to a more normalized PPNR number in excess of $600 million.

Can I follow up with one question on credit, if I just kind of compared the numbers this quarter, the final numbers versus what you pre-announced or guided to a month ago, it seems like NPA’s and charge-offs a little bit better, maybe the early delinquencies better than 90-plus whereas the reserves kind of maybe a little higher than people are expecting. If you kind of mix it all together and think about how you feel about credit now, mid October versus how you felt in mid September, is the message that you feel a little bit better on credit or about the same or a little bit worse?

How fine a point do you want me to put on that Brian? I think the questions and the point that you raised are the ones that we tried to highlight relative to where we were. We’re again, trying to be as transparent as possible in terms of what we see and what we’re dealing with from that perspective. That’s why we came out when we came out with the information and still feel that way today. I guess the only thing I'd add to your perspective on the issues that you raised was that it’s still mixed messages and still mixed things that we see out there. We know what we have to do. We know our books really well and we’re attacking them aggressively from that perspective. So that would be kind of our orientation of where we stand today.

And next we have Betsy Graseck - Morgan Stanley.

Two questions, one on credit and one on, just a profitability question. On credit could you just help me understand what kind of industries they were that drove the increase in the C&I? I realize that Florida and Michigan were the vast majority of the increase in C&I. What were the standout industries?

Betsy there is really no particular standout industries that I would point out. Clearly in the third quarter there was some influence coming from the SNC review that was completed. But in terms of any particular industry trends it was really a fair amount of diversification. You'll always have a couple of credits in there that might be larger credits that sometimes can skew any kind of a potential industry trend that you would see So from a C&I perspective there is really nothing I would point out. Clearly from a real estate perspective we have been transparent on what that trend continues to be and as we have said we continue to expect that the elevation there of credit issues will remain in place.

But the SNC review, did it call out more with regard to commercial real estate versus housing versus manufacturing or was it just, if I look the SNC review that was a reflection of what happened in your portfolio.

The SNC review at least from our perspective had a larger weight towards the C&I portion of the portfolio.

And housing wasn't a big piece of that? Because sometimes you find housing embedded within C&I.

No.

No, okay. And just on the look forward, when we're thinking about the pre-provision as we were just discussing, obviously you should get some list as credit improves given that's embedded within the top line and in the expense base. How should I think about what you are anticipating if you can drive your overall ROA to overtime if I factor in a little bit more efficient balance sheets plus the (inaudible) plus, where your think your credits could end up going?

Yeah, on an overall basis obviously, difficult to predict at this particular point in time, a lot of moving pieces at this particular point in time and there is many things about the industry that will be fundamentally reset as a result of the economic environment that we are in. But on a longer-term basis I would think that something in the range of 130 to 150 basis points is something that's achievable. We see with respect to our results in particular, on a longer-term basis, a number of things that are drivers of potential increases in profitability going forward. Obviously the one that you mentioned is significant with respect to credit costs, both from a provision standpoint and from the standpoint of other credit costs that are embedded in the revenue and expense line items. We also think that our balance sheet right now is under leveraged, both from a capital and liquidity perspective and therefore we believe that we have untapped NII potential in our balance sheet at this particular point in time which could fuel additional profitability going forward. And from an expense standpoint, I think we’ve always had pretty tightly controlled expenses. But that being said, I do believe that our expense base is leverageable and that we can support increased levels of activity going forward as the economy begins to improve. So, I think there are levers to trigger incremental profitability going forward that would get us into that 130 to 150 basis point range on an early basis.

Lastly on that, when you think about where the normalized credit goes versus what was pre-cycled, does that take into consideration any expectation for change in what your normalized loss rates were likely to be after having taken out quite a bit of exposure?

Yes Betsy, as we think about it, if you -- and I know we’ve talked and we’ve tried to be transparent in terms of all of the different channels and all of the different pieces of business that we’ve really kind of exited and gotten out of, from that perspective. I don’t see that necessarily coming back into our book or our portfolio and I think that will have a positive impact on our overall performance on a historical comparison basis. So I haven’t translated that into specifics bits, difference. But I have to believe that again as we focus more on our core consumer and our core commercial C&I middle market, that’s where you can drive some significant improvement from a historical comparison perspective.

And to that end I would add, we've been very transparent. All of the different improvements that we've made both in business practices, underwriting strategies, et cetera, particularly with respect to things like portfolio concentrations, more aggressive strategies in terms of portfolio management as well. So that all leads too much more anticipated improvement and performance going forward.

Our final question comes from Matthew Burnell - Wells Fargo Security.

Two unrelated questions for Mary I think. First of all Mary I noticed on the period balance sheet, that it appears that other short term investments are up pretty visibly quarter-over-quarter. The same thing with the average balance sheet, whereas we didn’t growth in the other securities portfolios. Can you give us a little more detail as to what's going on there and what your plans are? And then second, you mentioned commercial real estate recoveries were up slightly from obviously very depressed levels. Just trying to get a little more detail on what you're seeing there, because that’s really the first time in this reporting season that we've heard anybody talk about that?

Let me take that first question with respect to other short-term investments. That line item is typically driven by overnight funding activities and consists primarily of fed funds sold and in managing our overall overnight liquidity position; those overnight balances tend to fluctuate somewhat. So that balance has been somewhat higher reflecting the liquidity that's in our balance sheet this particular point in time, but that's not an indication of any kind of longer-term commitment to the securities portfolio.

Some of that is the reflection of improvement in business strategies and their practices and processes in addition that we are seeing more liquidity in the market and that certainly been a positive contribution as well.

Okay, and just in terms of follow up on the security side. As I said you didn't appear to grow your investment securities portfolio very much this quarter and that's a little bit different from some of other banks that have reported. What are your thoughts about using additional repayments and other deposit growth to grow the securities portfolio further?

Well, that's clearly an alternative that we will be considering as we go forward. We do expect continue to be grow in demand and therefore we do expect to be giving consideration to things that we could do with respect to the investments securities portfolio. Clearly we have room there to grow the portfolio and I would expect that as we work through those issues going forward that we will be adding somewhat to the portfolio. Again I would just point out that we are very cognizant of the lessons that were learned by this organization from past leveraging of the investment portfolio and anything that we do will be done in conjunction with actions that make sure that any action that we take does not add significantly to interest rate risk as we go forward and that we would be very mindful of the very environment that we are in and the expected actions that were said will be taken in the next 12 to 18 months.

I just have one comment, which our deposit to loan ratio has exceeded one for probably the first time ever. And so we’ve got a lot of liquidity and its durable core funding that gives us a different set of opportunities from looking at what we are investing then wholesale funding. All right, that ends our call, thank you everybody for your attention. Appreciate it, talk to you next quarter.

That ends today’s call, and you may now disconnect.