I would like to welcome everyone to the Fifth Third Bancorp fourth quarter 2008 earnings call. (Operator Instructions) Mr. Jeff Richardson, you may begin your conference.

Hello, and thanks for joining us this morning. We'll be talking with you today about our fourth quarter 2008 and full year results as well as recent developments. 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 historical performance in these statements. We've identified a number of these factors in our forward-looking cautionary statement at the end of our earnings release and other materials and we encourage you to review those factors. Fifth Third undertakes no obligation and does not expect to update any such forward-looking statements after the date of this call. I'm joined here in the room by several people. Kevin Kabat, our CEO, Chief Financial Officer Ross Kari, Chief Risk Officer Mary Tuuk, our Controller, Dan Poston 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'll turn the call over to Kevin Kabat.

Good morning everyone and thanks for joining us. We know it's a very busy morning for you this morning. I'll make a few comments about the environment, the industry and Fifth Third before talking about high level quarterly results. Then I'll turn things over to Mary and Ross who will review in detail our financial performance during the quarter, our credit trends and some of our expectations going forward. Obviously the environment is extraordinarily difficult right now. Like last earnings season, the broader financial industry situation is again in turmoil. The U.S. government and financial authorities have taken significant steps over the past several months. They've created more stability in money markets. Equity markets are less settled and there seems to be less differentiation among institutions in the past couple of weeks. We experienced credit challenges earlier than others given our geography and I believe the actions we've taken will better position us for the remainder of this cycle. The economy is very weak right now, not just in credit but where consumer spending is important such as deposit service charges and transaction processing. Trends in the economy are uncertain which reduces visibility beyond the immediate future. We're intently focused on those things we control; expenses, getting in front of customers, modifying loans where appropriate, making difficult decisions and evaluating our businesses. This company retained its underlying strengths and we will continue to manage through these issues and move the company forward. Now in terms of our results, some high level comments. We continue to produce strong operating metrics across many areas of the bank. That gives us confidence and evidence of our underlying strengths in an environment that's been difficult for the industry. That said, the industry environment is unusually challenging given the low rates and that's put some…

As Kevin mentioned, we undertook a number of initiatives this quarter related to our commercial loan portfolio in order to deal with our most problematic loan pool where we believes that our chances were worst. This increased the level of net charge-offs in the fourth quarter. For purposes of this credit discussion, we're going to distinguish between loans remaining in the portfolio versus those loans sold or transferred to held-for-sale. During the fourth quarter, we incurred $800 million in losses on loans sold or moved to held-for-sale. These steps were intended to further reduce the risk of some of the more problematic loan portfolios, particularly real estate loans in Michigan and Florida, and with an emphasis on home builders and non-owner occupied commercial real estate loans. To give some more color on the loan types and geographies for the credit actions, let me walk through the components of the $1.6 billion of loans that were sold or moved to held-for-sale. We sold loans for $240 million on contractual balances and a carrying value of $177 million at September 30 incurring losses in the fourth quarter of $120 million. We also moved loans with contractual balances of $1.4 billion and carrying values of $1.2 billion to held-for-sale, incurring losses of $680 million. Taken in aggregate, the loans we sold or moved to held-for-sale were sold or marked to values averaging $0.33 on the dollar. We're confident that we can clear the loans remaining in held-for-sale at that level. Let me give some additional color on the geographic distribution, industry concentration and types of loans sold or moved to held-for-sale. Of the $800 million of charge-offs on loans sold or moved to held-for-sale, 44% were on loans in Michigan and 49% were on loans in Florida. Of those losses, $440 million were…

First I'd like to say it's a pleasure to be here. I've been at Fifth Third for about two months now and it's been quite a couple of months. The industry is facing a lot of challenges right now and I found at Fifth Third a great group of talented people, very focused on addressing the problems the environment has presented, while still ensuring we keep creating value in the company for long term success. I look forward to getting re-acquainted for those of you I haven't seen in several years and to meeting the rest of you. Let me start with a summary of earnings per share and some high level results. For the quarter, we reported a loss of $2.2 billion or $3.82 per share. The primary driver of this loss was net charge-offs that totaled $1.6 billion, of which $800 million was attributable to loans that were sold or moved to held-for-sale. Additionally, we increased our reserves by a very substantial $729 million to provide for higher inherent losses in the portfolio given the deteriorating environment. The other major driver was Goodwill impairment charge that Kevin mentioned of $940 million after tax. This non-cash charge was triggered by the recent decline in the market value of our common stock and the subsequent evaluation of the Goodwill from a line of business standpoint. The impairment was ultimately determined to be in the commercial and consumer lending lines of business and were recorded there for segment reporting purposes. Obviously, that's a big headline number. We believe we have significantly better positioned the company for dealing with what will remain a very difficult environment in the near-term. We believe we should see lower credit costs going forward given our expectations and positioning today. Let me walk through our results in…

These are challenging times and they will remain challenging for some period of time, but we retain the strength and the flexibility to manage through this and we'll continue to deal with our issues aggressively and as transparently as we can. Our employees are working extraordinarily hard for shareholders under trying circumstances and I'd like to thank them and to assure you that that will continue. At the same time, they're also remaining very focused on producing the core results that will under pin stronger earnings power on the other side of the cycle. We appreciate you time this morning. We know it's been a long and difficult earning season and you have a busy day, so we appreciate your attention. And with that, we can now open it up for questions.

(Operator Instructions) Your first question comes from Matthew O'Connor – UBS. Matthew O'Connor – UBS: I appreciate the commentary regarding the tangible common equity which seems like it matters during bad days and doesn't matter so much during the good days, but just trying to get my arms around, is there a magic number that if it dipped down to, would cause you to reconsider selling assets of asking the government for additional help? It's very tough for the investor and analyst community I think to figure out what number is kind of the floor before something happens.

I don't think we have a magic number. Clearly as we said, at 4.25%, we're below where we'd like to stay long term so it leads us to look at all of the avenues that we have which may include some that you mentioned. But there is no magic number. There's no absolute floor that we would consider. Matthew O'Connor – UBS: I think your new expectations are implying another 20 basis points or so decline in the quadrant in 1Q. As we look forward to the rest of the year, a lot of moving pieces, you said it would bottom, but do you think that stabilizes or is there an opportunity for expansion? What's your best guess on that outlook?

I think clearly it's going to be driven by market pricing and opportunities and spreads on both asset and deposit side. But, as we model it right now, we see it bottoming in the first quarter with some expansion opportunity going forward into 2009.

Obviously in this environment, it's hard for the Fed to get below 0.5% and so again, I think Ross kind of summarized our expectations in terms of where we are and what we can do in terms of an outlook perspective to try and really address that.

Your next question comes from Betsy Graseck – Morgan Stanley. Betsy Graseck – Morgan Stanley: Two questions. One is on how you assess the degree which you'll be moving future loan pools to held-for-sale. What are the triggers that you look for to make that decision?

I think clearly it's a very detailed evaluation of markets, products sets, the economy and where we feel that the opportunity to recover non-performing assets through work out is less than what may be available in the secondary market we will seriously consider. We don't have any other markets or product sets that we're focused on right now, but that's a quarter to quarter, month to month activity we're undertaking.

I would just add that this particular quarter, we really focused on those assets that we thought were at the greatest risk for further deterioration, and in particular looked at the feasibility or likelihood of a successful work out outcome in the future. And on that basis, in combination with a very rigorous and methodical review that we did of the markets and the asset classes, came up with those decisions. Betsy Graseck – Morgan Stanley: Obviously you touched on the market for the interest in these assets, so do you anticipate that you'll be able to sell the assets during the quarter?

Yes. A number of the assets that we've moved to held-for-sale are already under contractual commitments and we'll continue those other activities as we previously described.

I'll just add that it's uncertain whether we will move all of the assets in the first quarter of '09. It's something, an activity that we'll be undergoing into the future perhaps for a few quarters, but as Mary said, we have found an active market for many of these assets are under contract and that list of loans that are under contract will continue to grow. Betsy Graseck – Morgan Stanley: The second question is on new loans and making new loans. Can you give us a sense of how you are assessing the quality of the borrowers to make new loans in an environment where there is such deterioration in some of the core economies that you're dealing with?

I think it's first of all important to understand that we're in the lending business and so we continue to make loans in a very disciplined fashion to quality borrowers. So to that end, we continue to review all of our underwriting standards to make sure that those standards meet the appropriate balance of risk and return.

Obviously Betsy you're exactly right. In this environment both borrowers and ourselves are cautious and we've raised and changed a lot of expectations of standards in terms of those loans. But there is still good business to do out there and there's still a need, an important role for lending to play both in our business and in our customers business. That's really what we're focused and that that's really kind of the significance of some of the changes that we've made both in terms of the business mix and we've hopefully been pretty transparent in terms of the market relative to the changes we've implemented over this time period as well as some of the businesses we've shut down and areas we don't do business any more on a go forward basis. Betsy Graseck – Morgan Stanley: There's a couple of different levers. Obviously pricing, collateral and then covenants and I'm sure that those levers you use differently for different customer types. It's a delicate balance because if you move too much you're going to choke off demand.

I'll also add that obviously in any underwriting decision you evaluate stress scenarios for the customer and clearly the type of stress scenarios we're looking at now are probably a little more severe than would have been evaluating in the past. Betsy Graseck – Morgan Stanley: How are you seeing demand for loans in your core, in your customer footprint in both commercial and the consumer side?

We still have good demand, but I think as Kevin said earlier in his prepared remarks, a lot of customers are being cautious so the concern that banks are not lending, it's because a lot of customers are being very cautious and perhaps in many ways the demand may not be there as it had been in past years.

Your next question comes from Michael Mayo – Deutsche Bank. Michael Mayo – Deutsche Bank: In deciding to take the CFO position, this quarter Fifth Third didn't exceed its cost of capital and I'm sure you wouldn't have taken the position if you didn't think Fifth Third wouldn't be able to do that over some course of time, so why did you take the job and how do you think Fifth Third can eventually exceed its cost of capital?

I clearly as you indicated expect that in the long term Fifth Third will be able to exceed its cost of capital. I think the support of the TARP program and everything gives us even more confidence going forward that there's plenty of capital to absorb the potential long term marks on the credit portfolio. The footprint and the franchise is still unique and very competitive in our markets and I think once we get through this credit bubble, I have full faith that we'll be able to return to a position where we will be more than covering our cost of capital. Michael Mayo – Deutsche Bank: I guess that's the long term question. The medium term question, when you talk about you evaluate your options as it relates to capital and you said in the tangible comment we might not improve for a few quarters so I guess that implies that you don't expect to earn much money next few quarters, so what are some of these options having been around for a few quarters now?

I think as I've read back at the history of some of the discussions, certainly some have been around for a few quarters and those options are still there. I'm not sure that we had talked previously about the possibility of converting preferred shares. It doesn't impact total capital but it would benefit tangible common equity which is a major focus right now. They are still there and still very much alive in terms of how we're evaluating them. Michael Mayo – Deutsche Bank: Kevin, anything else for the options in terms of sales of businesses or business lines.

We've tried to be as transparent as we can be at this point. I don't think there's really anything more to add at this point to your point. Again, we've tried to be transparent. It's now a matter of n now moving through the period and executing. Michael Mayo – Deutsche Bank: And then the short term, so you broke down these $0.33 on the dollar, but you only sold $120 million of the $800 million. Is there a chance we would have any more losses on the $680 million that's been transferred but not sold or is that, we're not going to have any more losses there.

We believe that the actions that we took were very prudent and conservative in the methodology that we employed for the write downs so at this point we don't see a future risk of loss. Michael Mayo – Deutsche Bank: And the commercial charge-offs went up quite a bit, the real estate related industries. So what is this? The commercial loans that actually wind up being real estate related after all. What are these real estate related industries?

These would be industries that have a dependency to the real estate business. It could be a rental and leasing kind of borrower or it could be a borrower that would have some other dependency on the real estate industry such as furniture or supplies or other types of activities. Michael Mayo – Deutsche Bank: And what percent of your commercial loans would you say would be somehow real estate related if you had to guess?

We would say if you were to look at both the non-owner occupied portfolio as well as other aspects of our commercial real estate portfolio and then anything else outside of the commercial real estate portfolio that would have some connection to the real estate industry, we think it would be roughly in the range of about half of the portfolio. Michael Mayo – Deutsche Bank: I guess I asked the question differently, but I'm trying to understand your answer.

I'm just trying to make sure we understand your question. If we look at the SIC codes or the mix codes within commercial book, I don't have that number handy, but I think it's closer to 20%. I think Mary was really speaking of industries that are more tangentially related. Retail has, Lowe's and Home Depot for example. The way we report our external SEC reports would be purpose driven, so it's not collateral driven. That's the way the regulatory reports are set up. So these are C&I loans to companies, some of whom are in mixed codes in the real estate industry and construction industry, and that's what we're suggesting when we talk about C&I having a real estate component is that these are C&I loans to companies within the real estate industry. Michael Mayo – Deutsche Bank: So it's not unique for Fifth Third, it's the industry.

Right. Michael Mayo – Deutsche Bank: Salaries were up 5%. Is there anything unusual in that figure?

No, there's nothing unusual in that figure.

I don't think there's anything unusual. You have to look at the impact of acquisitions year-over-year but I think if you back out the impact of acquisitions we have clearly invested in growth in some areas such as the credit work out area an credit risk management but all in all, beyond those, we've been very efficient on salaries and head count.

We have reached the allotted time for questions. Do you have any closing remarks?

No. Thank you very much everybody and have a good day.