Good morning. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to the Fifth Third Bank Second Quarter 2014 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Jim Eglseder, Director of Investor Relations. You may begin your conference.

Thank you, Jessica. Good morning. Today, we will be talking with you about our second quarter 2014 results. This discussion may contain certain forward-looking statements about Fifth Third 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 historical performance in these statements. We have identified some of these factors in our forward-looking cautionary statement at the end of our earnings release and in other materials and we encourage you to review them. 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 today by several people; our CEO, Kevin Kabat and CFO, Tayfun Tuzun; Frank Forrest, Chief Risk and Credit Officer; and Treasurer, Jamie Leonard. 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, Jim. Good morning, everyone. We reported second net income to common shareholders of $416 million and earnings per diluted share of $0.49. Results included a $125 million gain in the sale of Vantiv shares, a $63 million positive valuation on the Vantiv warrant, litigation reserve charges of $61 million and a few other items that Tayfun will cover. In total, these items benefited EPS in the quarter by approximately $0.06. Economic data has improved throughout the quarter and the economy appears to be moving in a positive direction after a weak first quarter. Although housing activity was slower than expected, new job formation should continue to help households increase their spending, while they further improve their balance sheets. We are also at a point in this cycle, where we would expect to see capital expenditures pickup after a lengthy period, where business investment has not been strong. Our overall financials are in line with and reflect the current state of the markets, regulatory environment and economic activity. Given this background, I am pleased with our results and believe that we will continue to grow our company profitably as conditions continue to improve. The strategies that we have executed including our deposit simplification project and diversified investments in corporate banking as well as ongoing activities such as the enhancements to our retail banking approach are together producing very good results in this environment and will be a differentiating factor for Fifth Third now and in the future. Loan growth remains solid despite relatively cautious customer demand. Average portfolio loans grew $1 billion sequentially and $3.8 billion from last year. Growth was driven by C&I, which was up 2% sequentially and 10% compared with last year. The sequential increase in commercial line utilization from 30% to 32% is an encouraging sign…

Thanks Kevin. Good morning and thank you for joining us. The financial summary on Page 4 of the presentation notes some highlights from the quarter. We reported net income to common shareholders of $416 million or $0.49 per diluted share. Second quarter earnings included the following items that in total benefited results by approximately $0.06. The $125 million pretax gain on the sale of Vantiv shares and $63 million positive valuation on the Vantiv warrant were partially offset by $61 million in litigation reserve charges and $17 million impairment charge on bank premises and $16 million in negative valuation adjustment under Visa total return swap and a $12 million negative impact to equity method earnings from our interest in Vantiv related to the one-time impact of their acquisition of Mercury Payment Systems during the quarter. Earnings per share adjusted for these items were $0.43 a share, consistent with a similarly adjusted $0.43 in the first quarter. Our operating results were solid reflecting the modest rebound in the economy following the weakness in the first quarter and some pickup in spending activity by businesses and consumers. Housing activity has been weaker than anticipated at the beginning of the year and consumers are maintaining their conservative perspective on new leverage. The environment is challenging, but we remain committed to achieving positive operating leverage and prudently growing leverage. I will start the detailed review with the average balance sheet and Page 5 of the presentation. Average earning assets increased 2% sequentially driven by higher investments and lower balances. In the second quarter, average investment securities increased by $1.3 billion or 6% from the first quarter reflecting $3.3 billion of purchases partially offset by sales of lower yielding assets as we continue to optimize our liquidity position. Notably, since the second quarter of 2013,…

(Operator Instructions) Your first question comes from Ken Zerbe from Morgan Stanley. Your line is now open.

And just in terms of the deposit advance products, looking at yields, it looks like they are down about four percentage points this quarter to about 35, has anything changed in terms of your expectation for how quickly that does run off and just to be super clear all that run off is already or is it already included in your current guidance? Thanks.

Yes, the progress on EAX this year is included in our guidance. I would say that the behavior, customer behavior is relatively in the range of our expectations. It is not a whole lot different from where expected when we made the announcement earlier this year.

Understood and you guys have not – do you have an estimate in terms of timing of when you might come up with an alternative product?

We are working on it Ken. Clearly it’s a pretty complex process. We know obviously that some agencies have provided guidance, others are working on it. There is no full clarity. And I think we have obviously a group of people working on it and we will be working on it for the remainder of the year. And we will share the upgrades with you as soon as we have more clarity. But I think it will take number of months before we can clarify where we are going.

Alright. And then last question just in terms of the litigation charges I guess Fifth Third is not one of the banks that normally think about having of – having high litigation expense, but can you give us anymore color in terms of what’s driving those expenses and whether there is any kind of resolution and insight on that? Thanks.

I am afraid I am not going to be able to give you more details than what is in our filings and you can go to our latest 10-Q filing and look at the items that we discussed. Its environmental, we are dealing similar issues that other banks are dealing with. And we expect these litigation charges obviously to end. And we don’t necessarily have a clear path to calendar time and will end, but the issues that we are dealing with are not a lot different from the issues that other peer banks are dealing with.

Alright. Thank you very much.

Thank you.

Your next question comes from Paul Miller from FBR Capital Markets. Your line is now open.

Hi, this is Jessica Ribner for Paul, how are you?

How are you?

Good, thank you. We have one question just on the mortgage banking side of the business, how are you addressing the segment as a whole and what’s going in the market that we are looking probably a sub-trillion market weighted towards purchase, but the purchase market hasn’t come back like we thought, how are you thinking about that going forward?

Right and we agree with you that our expectations coming to this year with respect to the spring and summer season were higher than what the actuals are coming out at. The volumes are lower. From our perspective the other added element is we decided to exit the brokerage channel in – during the first quarter that clearly is impacting our volumes. In terms of the remainder of this season and remainder of the year we are not expecting significant changes to our origination volumes. Our origination volumes when you exclude the brokerage channel are up at a very healthy level. Our pipeline when you exclude again the impact of the brokerage channel is actually up at a very healthy level 30 plus percent as well. So we have lowered our expectations given the housing activity that we have seen over the past two, three months. And our guidance for the remainder of the year reflects that sort of more of a flat performance on the top line revenue in that business.

Okay. And then just in terms of July, have you seen any upward trends from the second quarter?

In terms of just mortgage or overall?

In terms of mortgage.

Similar trends, once you get it late into the season, these trends don’t necessarily change much month-over-month. So, I would say that what you are seeing out with respect to housing data is probably reflective of what we are seeing.

Okay, great. Thank you so much.

Thank you.

Your next question comes from Erika Najarian from Bank of America/Merrill Lynch. Your line is now open. Erika Najarian - Bank of America/Merrill Lynch: Yes, good morning. Thank you.

Good morning. Erika Najarian - Bank of America/Merrill Lynch: My first question is in terms of your progress or if you prefer what inning you are in terms of reaping potential savings from your retail distribution resizing sort of where are you on your progress? And as we think about 2015, we appreciate certainly the guidance for the efficiency ratio in the second half, but if the interest rate environment doesn’t change, is there enough potential savings left in the till to continue to drive the efficiency ratio down further next year?

I believe that there is more room in our expenses. Clearly, we have been very focused in looking at the revenue trends, in looking at the future of our businesses with and without an increase in the interest rate environment and our efforts so far have produced very good results. Now, in terms of the retail business, the demographic trends and the customer usage trends are changing very rapidly. So, we end up adjusting our expectations continuously as every month data comes in with respect to how heavily customers are using the digital channels. We are up over 30% now in terms of the total deposit transactions that are coming through the ATMs and the mobile app. So – and also our pilot projects with respect to the design of our branches, with respect to the type of employment that we have in those branches are producing good results as well. So, there it is going to the more room as we continue to invest in technology and as the customers are also likely to exceed our expectations as to how they interact with us. Going back to what that means for efficiency ratio just even sort of beyond 2015, we have always said that where we are as a company 55% efficiency ratio with somehow from the interest rate environment is very achievable. We continue to believe that. And we will do our best to time the movement and the efficiency ratio along with the revenue patterns that we see. But for now, I think the fact that we are guiding to a sub 60% level for the second half of the year is pretty good given the rather subdued economic environment that we are seeing and sort of the challenges that we are facing for example with respect to mortgage revenues. I mean, that’s we are pleased I believe that there is more room and we will do our best to continue to produce those results. Erika Najarian - Bank of America/Merrill Lynch: Okay, thank you for answering my questions.

Your next question comes from Keith Murray from ISI. Your line is now open.

Thank you. Just touching on litigation expense and I appreciate you can’t give too much specific information, but just curious if the increase is related to new items or changes in existing items based on what you have seen in other settlements etcetera?

Yes, I am afraid I am not going to be able to give you more detail really than what we have in the Q. I mean, we will be updating obviously our 10-Q filing here shortly. If there is any update, we are going to communicate that via Q.

Okay. And then just back on the deposit advance products, can you just explain the revenue dynamic for ‘14, so let’s assume for augment sake, you don’t have a replacement product in place by the beginning of ‘15? Would there be like a cliff decline in revenue in the first quarter of ‘15 as you phase out at the end of ‘14 just how does that work?

Yes. In my discussion at the beginning of this call, I mentioned that we are working both on what the product or the set of products and services is going to look like as well as how we are going to manage the transition period as we tend to – as we intend to avoid an abrupt disruption to the delivery to our customers, so more to come on that as we get closer to the end of the year.

Okay, thanks.

Your next question comes from Matt O’Connor from Deutsche Bank. Your line is now open.

Hey, guys. Good morning. This is Dan (indiscernible) from Matt’s team.

Good morning.

Good morning. If you could just comment on the commercial pricing trends that you are seeing and your expectations for that going forward, it seems like utilization was up a little bit this quarter on the commercial side and what do you think that means for C&I growth?

We typically – let me answer the second part of your question. We typically don’t have aggressive assumptions on utilization rates, because we don’t really see an abrupt increase in the economic activity. So, our guidance really does not rely much on continuing pickups in utilization rates. In terms of pricing, it continues to be competitive. The segments that we are growing mid corp and large corp are very attractive segments for all banks and we expect that environment to continue. It likely is not going to change much. The other part from our perspective is we are continuously booking commercial loans on better credit profile compared to previous periods. And so from a new yield perspective, what you are seeing in our overall portfolio yield progress is impacted by that improving credit profile of new loans that are coming on the sheet. So, in general, we have no expectations that this pricing environment is going to change much. We don’t really and we have not built in any utilization rate increases into our outlook. Our production continues to be very strong. I looked at our production – new production patterns going back to the beginning of 2011 and if you take out Q4, because Q4 is always a very high origination volume quarter. This quarter’s production beat 8 of the 11 quarters. So, production patterns continue to be well, just the refi and payoff activity is producing more subdued results from a just portfolio outstanding perspective, but we are pleased with the activity levels.

Alright, thank you. Just lastly, can you just remind us of the pace of the contingent tax liability going forward?

In terms of dollars, dollar payment?

Dollars and timing.

The timing is you are talking about Vantiv I am assuming.

Yes.

Okay. So, the timing is going to be Q4 and as we have discussed this is a very long series of contingent cash flows upwards of 15 years. And our – when you look at Vantiv’s filings based on what they disclosed, the Q4 amount is about $23 million.

Okay, thank you very much.

Thank you.

Your next question comes from Brian Foran from Autonomous. Your line is now open.

Hi. So, I guess not to beat a dead horse on this deposit advance, but is it fair to say if I hear you right, it’s in the ‘14 outlook, but it’s also kind of slowly starting to bleed down. And as we look to ‘15, you have to do the review on the replacement products, but you kind of referenced any replacement product maybe fewer customers that will qualify in the ability to repay, maybe there would be a little bit higher underwriting expense going along with it. So, is it right to think it’s annualizing maybe $125 million I think of revenue right now? And maybe as we look to ‘15 for those would kind of have to put something in the model maybe haircut it by half or something? I mean is that clearly that half is my estimate, not yours, but is it right to think that ‘15 has a step down kind of regardless of what the outcome of the review is and it’s just a question of how much that step down is?

Look, I mean, I think we have not provided guidance with respect to ‘15 on specific percentage terms. The other thing that I want to clarify is we believe that ultimately the solution needs to be evaluated as more of a different nature of products and services rather than just one-for-one product substitution, because the nature of the offer is going to be broader. We are looking at a package of different products and services that this segment is going to need and we are designing our offer relative to that type of demand. What’s difficult is ultimately it is the new offer or bundle of products and services is going to address a most likely a wider segment of customers than the set of customers who are using our existing EAX product. So, part of the change in the revenues and profits tied to this is going to depend on that widening up in customer base. Whether the number is 50%, 60% lower, I don’t have enough information, if I had I would have given you that guidance today. But in terms of there is going to be at the end of 2014, we will update you guys on that progress, but clearly the change in the revenue line item in ‘15 is going to be reflective of a more discreet change on revenue that are coming through that line.

It’s very helpful. On the commercial side, I guess two numbers that I was grappling with, one on the NPL inflows. Clearly, there is kind of a walk back in most credit metric this quarter, which is good news. The NPL inflows have been a little higher kind of as a run rate if I smooth out over the past couple of quarters. So, I wonder if you could just talk broadly about the commercial credit cycle and whether do you think we are bouncing along the trough or whether you think we are starting kind of a process of normalization fully realizing that there were some unusual credits last quarter, let’s call them? And then secondly, I think you mentioned the commercial core deposit growth was up 16% year-over-year, I guess regardless of whether that number is right more broadly as you think about commercial deposits, any ability you had to parse apart, how much of it is core customer growth, new accounts, things like that versus how much of it you feel like might be excess liquidity sitting around because of the low rate cycle?

This is Frank Forrest. Let me take the first part of your question and I will let Tayfun answer the second part. On the NPL question, we are certainly making very good progress and continuing to move both NPAs and NPLs down. We did have a slight pushup in the second quarter on NPLs. Quite frankly, that came from a very thorough review of our portfolio, specifically our leverage book. So, we had a few credits that we moved into the NPL category as a result of that review. We are very pleased overall however with the review and the quality of the book once we went back and reconfirmed it. But the overall trend and the guidance we have given both on NPAs and NPLs projects that we continue to see opportunity for further decline through the end of this year into next year. We are working that very carefully. We are very pleased with the results today than especially with the decline in NPAs in the second quarter. So, there is still room for improvement.

On the commercial deposit side, I would say that the increase that we have seen is related to core growth, our existing customers and relationships. It’s difficult to judge how much of that core increase is related to the excess liquidity that they have, but clearly in this LCR environment, our focus is on LCR friendly core commercial deposit growth, but there is clearly a segment of that increase that is related to excess liquidity. Jamie, I don’t know if you have any additional comments on that?

Yes. I think the nature of your question is just getting in how are we modeling deposit behavior for what potentially could be a rising rate environment. And one of the things we continue to do is reevaluate what occurred in 2004 which was the last time we entered a Fed tightening cycle. And for us, three significant differences with how we model the deposit behavior going forward versus what we actually experienced back then, one is we currently assume no lag in increasing deposit rates whereas back then you certainly had a lag and how the industry responded to raising rates in order to restore historical deposit spreads. Second, we have a higher level of absolute betas assumed today than we did actually experienced back then. But then finally, to your point we do assume significant run off in certain deposit classes and wholesale DDAs is one of them. So we do model fairly significant run off and yet after all of these conservative and prudent modeling we still are asset sensitive and pretty comfortable with our position.

That is very helpful. Thank you.

Thank you.

Your next question comes from Ken Usdin from Jefferies. Your line is now open.

Good morning Ken.

Tayfun to your comments earlier about expenses understanding that you are anticipating a sub-60 efficiency ratio, is the second quarter where you guys have done really well and relatively well compared to expectations on core expenses, yet we see a reduction in the fee guidance and no further reduction in the expense guidance, so I am just wondering what those moving dynamics are between revenues and expenses in terms of the delta in pre-pre and what are the drivers of incremental expense growth that you wouldn’t be able to adjust against the changes you are making on the fee outlook side?

Yes, just to reiterate the outlook. The outlook is for the entire year and is reflective of sort of the realized changes in mortgage. And in corporate mortgages clearly it’s been affected by a little bit higher amortization in the MSI itself. As we look forward to the remainder of the year, we still believe that we are going to do a good job of non-interest income and different fee categories we had very expectations as we updated payment processing, IA continues to be strong. And corporate banking activity is going to be strong as well. It’s currently being impacted by low volatility in certain sensitive line items. The expenses, there are some seasonal changes from Q2 to Q3. The market specifically picks up in Q3. There are some – the impact of known amortizations from previous capital investments in IT etcetera. Remember we are continuing to invest in the company. We are not stopping it. But clearly what I would tell you is whether we achieve it in a given quarter, if we do see significant changes to revenue we do actually act and we make sure that our expense line does not necessarily cross the revenue growth line. So what I can tell you is so far we have done a good job in adjusting our expenses based on revenue trends and some of it obviously has been impacted by important decisions exiting brokerage channel was an important event that impacted the mortgage line of revenues. But I can guarantee you that the focus on expenses is very much high on our priority list. We believe that when you see our numbers going forward we will continue to prove that it’s a high priority item.

Okay and my second question is the automobile loans line has been now flat line for a several quarters and understanding the competition and the spreads that are out there flushed out against the fact that SAAR industry sales are continuing to go up every quarter, can you just talk about originations versus pay downs and where you stand on desire to grow that business?

So let me give you a couple of data points with respect to production. Last year’s Q2 2013 production was $1.6 billion I think first quarter was $1.3 billion that’s down from $1.4 billion in Q1. We are being very careful in putting to work our shareholders equity in that business line and we are trying to find the best balance as we get into right profitability and the right product profile. The business continues to be very competitive, good pay off performance is really not much different, so with the impact of the outstanding volumes is really more due to changing production patterns. Our first goal is to book profitable loans. We are not going after volume and we will not change that approach. We have done a better job the last six months compared to the previous six months in achieving a better spread in that business and we kept the credit profile, duration profile of that business fairly stable. So, we are pleased. We are not complaining that origination volumes are slightly down, but we will continue to look for opportunities and when it’s time to increase production, we will do so, but it has to be done on a profitable basis. We are not going to just do it to show higher loan growth.

Okay, got it. Thank you.

Thank you.

Your next question comes from Mike Mayo from CLSA. Your line is now open.

Hi. Your lower guidance for fees and pre-provision net revenue, is that solely due to the reduction in mortgage that we have seen so far year-to-date?

Largely, yes. I mean, there is some drop in corporate revenues that are more against sensitive item interest rate derivative volume was a little bit less than we expected. Our investment advisory business is doing well, bit below because we are moving that business from a transactional focus to a stable growth in asset management, but in general, Mike, it’s more reflective of what’s happening in mortgage than anything else.

And is the forward guidance indicative of everything you have seen so far year-to-date, whether it’s the investment advisory, the mortgage broker channel, or the MSR write-down or is that also more subdued expectations when you look ahead?

It’s more reflective of what we have seen.

Okay. So, there is no real change in the forward outlook, except that it starts for a little lower base?

That’s about right, yes.

Okay. But if a lot of this is due to the mortgage broker channel, why wouldn’t you have known about this guidance after first quarter earnings, I mean, what’s the new information here?

I think what’s happened was that the change was a bit more abrupt than what we expected. The MSR performance clearly when you compare just when you look at Q1 numbers, our hedge gains were a little bit higher in Q1 moving production away from broker mortgage also impacted the amortization of the asset itself as new originations were a bit lower than we expected. So, it’s a combined effect between what’s happening to the servicing asset as well as the origination volumes.

Sure. But wouldn’t you have known about that amortization change since you knew in advance you were moving product away from the broker channel or was there something that was missed or the rates changed or something changed, right?

Just remember going back to the earlier part of the discussion, somebody asked what we thought about the housing activity on origination levels, even excluding the broker channel we put on less in our servicing portfolio than we originally anticipated due to the subdued housing activity. So, we thought that the purchase activity would be higher even just based on our retail channels.

Okay. But as it relates to mortgage really the damage has been done as reflected by this quarter’s results?

We believe that we will have a fairly flat performance in mortgage for the remainder of the year, yes.

Okay. Switching gears, so what were second quarter revenues from the deposit advance product?

About $30 million.

$30 million, okay.

That’s a gross number.

And what was the net?

I don’t have the credit numbers in front of me, Mike, we can…

Or even ballpark, I mean, I will take is it bigger than a breadbox sort of answer here, just trying to size this.

It’s just about a breadbox probably.

You can buy lot of breadboxes for $30 million. So, I mean, what sort of loss rates do you have on this product?

Mike, I don’t have those numbers with me, but it’s a small number, it’s not a very big number.

Okay. So, this is a big nut to swallow here, I mean either you mitigate this or per the prior question, lose $120 million in revenues per year, is that too draconian simply to take $120 million off the top starting day one of 2015?

I believe that is too draconian, ultimately the outcome will depend on the transition period and also the replacement of this revenue stream. But as we said in our opening lines revenues will be considerably lower, but taking the entire amount out I think…

And what sort of efficiency ratio does that business line have?

A very low efficiency ratio.

Okay. So it’s pretty low. As far as your buybacks, shares were reduced by 1%, but you didn’t redeploy the Vantiv gain, so should we assume maybe the pace of buybacks picking up here in the next quarter?

Yes. I mean they should, it’s more of a really calendar issue Mike, it’s we will obviously resume our activities as we get out of blackout period. So it’s not indicative of a change in pattern. And we should – we should see a pick up here in the activity this quarter.

When does your blackout period end?

Look, Mike its Jamie. The more important thing is the current ASR expires at the end of July.

Yes. So it’s difficult to have two ASRs at the same time in the market you can do it but, our blackout there is started with our Board meeting in mid-June and its now is over with this earnings release.

And just a follow up on that, at what price level does it make sense to buyback your stock I mean up to what price or what sort of parameters do you use for that?

So far we have focused on share buybacks as a systemic return of capital to our shareholders and we have refrained from necessarily acting based on day-to-day, month-to-month stock awards. We always believe that our stock is a good buy. And so far when we look at the IRR in the last two years of aspiring stock the performance has been very good. We will continue that approach. We still believe that our stock is a very good investment. And at this point we are not necessarily being guided by the stock prices today.

Sure. Alright, thank you.

Thank you.

Your next question comes from Terry McEvoy from Sterne, Agee. Your line is now open.

Hi, thanks. Just one question left on my list. Do you have the Vantiv gain in the second quarter and I am not connecting any dots, but you also had the land valuation adjustment, so you made a decision to look at the value of the land, I am just thinking about the litigation reserve, was that something that could have been taken in future quarters much like the land valuation adjustment or was there something specific in terms of conversations or something that is event driven that was behind that charge?

Terry these are totally independent events. The litigation reserves are tied to activity that we see during the quarter and what we have in front of us the land valuation that’s we look at every quarter, so none of these are tied together. These are all independent decisions that we have made based on the facts that we know as of today.

Great, thank you.

Thank you.

And this does conclude today’s conference call. As we have reached our allotted time, you may now disconnect. Thank you.