Jeff Richardson – Senior Vice President/Investor Relations Kevin Kabat – President and CEO Christopher Marshall – Executive Vice President and CFO Jim Eglseder – Vice President/Investor Relations

Matthew O’Connor – UBS Scott Siefers – Sandler O’Neill & Partners Michael Mayo – Deutsche Bank Securities Ed Najarian – Merrill Lynch David Campbell– [Owl Creek] [Garah Panthakar] – [Sun Nova Capital]

Hello, and thanks for joining us this morning. We’ll be talking with you today about our first quarter 2008 results, as well as our outlook for the remainder of 2008.

As a result, this call contains certain forward-looking statements about Fifth Third Bancorp pertaining 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. Fifth Third undertakes no obligation to update these statements after the date of the call.

I’m joined here in the room by Jim Eglseder of Investor Relations, Kevin Kabat, our President and CEO; and Chris Marshall, our CFO. 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. Kevin.

Good morning. Thanks for taking the time to join us today.

I have a few comments about the quarter; and then I’ll turn things over to Chris, who will review financial statements, credit trends, and also our outlook for the remainder of 2008. During the quarter Fifth Third continued to produce very strong core operating results.

Growth was broad-based across all businesses, from payments processing to our core retail banking franchise to corporate banking. We’re taking share and we’re able to get better pricing on that business.

Now that performance is being overshadowed by the current environment and the elevated credit costs we’re experiencing. We continue to see deterioration in our residential real estate book and the related exposures in commercial real estate, notably homebuilders and developers.

Those stresses, particularly in Michigan and Florida, as we’ve mentioned before, have elevated our loss in non-performing asset levels; and they led us to substantially increase our provision and loan loss allowance this quarter. These conditions have also contributed to wider credit spreads in the market, which resulted in a further market value loss on one of our BOLI insurance policies, which Chris will talk about in a few moments.

We’ve not yet seen any indication that the credit cycle has peaked. The situation will ultimately improve; but for the near-term, we expect credit conditions to continue to be difficult.

Chris will talk more about that in his comments as well. In this environment, we continue to be proactive with steps to mitigate the losses we’re facing.

You know the prime underwriter, and you know that we shutdown new lending in the two areas that we’ve experienced the most significant difficulties, those being homebuilders and brokered home equity. We’ve created additional safe guards to insure that our lending policies and practices are prudent given current market conditions, and we’re working with borrowers that find themselves in trouble to address their difficulties.

We’ve helped over 1,500 borrowers with solutions that have allowed them to stay in their homes. That’s a factor in our MPA growth.

Working with our customers to achieve optimal outcomes under the circumstances for them and for us is an important activity that benefits our borrowers and also creates higher recovery rates and higher retained value for shareholders. Before I turn to Chris, I’d like to take a moment to review some of the results this quarter, which are fundamentally very strong and continue to improve.

Average loan balances grew 9% from a year ago, and core deposit growth was 5%. Excluding CDs, transaction deposits are up 7%, which is great.

Net interest income increased a strong 11%; and non-interest income growth has been outstanding at 22%, excluding several items outlined in the release. The net interest margin expanded 12 basis points this quarter, which is significantly better than most of the industry; and the efficiency ratio, excluding non-operating items, improved as well to 54% versus 56% a year ago.

That’s good progress and operating performance in a tough environment. Now let me summarize some key aspects of the quarter.

Net interest income results were very strong, and our net interest margin improved significantly to 341 basis points. Active management of our deposit and loan rates, accompanied by the Fed’s aggressive moves, drove the improved margin.

We also produced solid loan and core deposit growth, which contributed to strong net interest income growth. Our commercial line of business is producing very positive results.

We saw robust loan growth throughout the first quarter; and on the fee income side, we continue to see very strong momentum, particularly in corporate banking. Our capital markets and treasury management areas drove fee income up 30% over the first quarter of 2007.

Sizeable increases in foreign exchange and interest rate derivative sales to customers were the primary drivers of this success. As I mentioned previously, we continue to maintain relatively strong capital levels.

Our tangible capital levels increased during the quarter. We also issued $1 billion in subordinated debt that raised our total capital ratio above our 11% target.

That was quite an accomplishment given the difficulties some are having in raising debt, and the issue was 2.5 times oversubscribed. We also securitized $2.7 billion of auto loans during the quarter, more than any other bank has been able to do.

Our payments business, Fifth Third Processing Solutions, posted another strong quarter. Fee income was up 15% from a year ago, reflecting strong results across the board for merchant process, financial institutions, and card-related revenue.

I’d not that this represents the 13th consecutive quarter that we reported 15% or better processing fee growth. I don’t think anybody else in the industry can claim half of the growth rate or half the duration of top performance in this business that we can.

We posted double-digit processing fee growth for 19 years straight, which is far back as we can track it. We have an exceptionally strong competitive position in this business, especially among large retailers.

Our position with these customers provides with the volumes that have allowed us to invest state-of-the-art technology; and as a result, the evidence we’ve seen suggests we probably have the lowest per transaction processing cost in the business. The result is that we earn excellent margins while providing our customers with customization and low prices that our competitors can’t afford.

We’ll continue to leverage our advantages, and we expect similar mid teens growth for the full year of 2008. Our mortgage banking operation produced outstanding results this quarter as well, reflecting both better spreads on sale as well as market share gains.

Our focus on improving the customer experience continues to produce a positive impact on the business, and the most recent University of Michigan Customer Satisfaction Survey we were tied for second among the large banks; and we’ve shown the second most improvement of any large bank over the last two years. This is something we’ve put a significant amount of effort into, and it’s nice to see continued external validation of those efforts.

As you’ve probably read, last week we reserved Federal Reserve approval of our first charter transaction; and we expect to close in the latter part of the second quarter. As you know, we’ve reached an agreement with First Horizon related to the purchase of nine branches in the Atlantic market, which we expect to close in mid second quarter.

To sum up, we know it was a difficult quarter and a noisy one. During a period like this, it’d be easy for our employees to get distracted from driving core results.

We’re not going to allow that to happen. Our people remain very focused, which these results should demonstrate.

At the same time, we continue to take aggressive actions in order to mitigate the effects of a very difficult credit environment. This is an unusually challenging cycle.

Fifth Third is well positioned relatively to many of its peers to weather this storm. Our capital positioning and underlying profitability give us a competitive advantage and we’re seeing that in our success in deposit taking and lending.

Our fee-based businesses also continue to perform exceptionally well. We continue to make very good progress in raising the profitability and growth of our underlying businesses, and that will stand us in good stead for putting up better bottom line results when we see a rebound from the credit cycle.

With that, I’ll turn things over to Chris to talk about first quarter results and the outlook for the remainder of 2008. Chris.

Thanks, Kevin. Good morning, everyone.

As Kevin just mentioned, and as you all certainly know very well, the banking environment remains difficult. However, we continue to post very strong operating results, and hopefully that’s going to be clear as I get into my discussion.

Loans are up 9% from a year ago and 12% including held for sell, while core deposits are up 5% and that’s driven NII growth 11% year-over-year. Fee income, excluding the items that I’ll outline in just a second, is up 22% from a year ago.

We feel really good about those results for the quarter; but more importantly, we believe they’re largely sustainable; and that’s going to provide us with a higher level of earnings power when we get through the credit cycle. The bad news obviously is that right now, and perhaps for several more quarters, these stronger results are being offset by elevated credit costs.

Now before I discuss our results in detail, I want to summarize things from an EPS standpoint. This morning we reported earnings per share of $0.55.

Now earnings contained a good bit of noise, including several large items, the first of which was a $273 million pre-tax gain of $0.33 per share after-tax related to proceeds from the sale of a portion of our Visa shares in connection with their IPO. In addition to this gain, we continue to hold approximately $7.2 million restricted Visa shares, and those shares are subject to potential dilution based on the outcome of pending Visa litigation.

Now not counting that potential dilution, the remaining shares will be worth approximately $510 million at yesterday’s closing price. In addition to the gain, we also reversed previously recorded Visa litigation reserves of $152 million pre-tax or $0.19 per share after-tax.

A third major item was a charge in one of our BOLI policies of $144 million pre-tax or $0.21 per share after-tax. This is the same policy on which we took a charge in the fourth and because of the BOLI policies are tax exempt, the charge is not carry a tax benefit against earnings.

As we noted in the release, we had a $9 million related to severance expense, which I’ll discuss further in a minute, and $7 million in merger-related costs which together resulted in a total impact of $0.02 per share after-tax. Then finally, as Kevin noted, we recorded a large provision expense this quarter, which exceeded charge-offs by $268 million or about $0.33 if looked at an after-tax per share basis.

The effective credit trends, including charge-offs, make it difficult to see the progress we’ve made over the past year or two. But if you look at pre-tax pre-provision earnings in the first quarter, excluding the items I just mentioned, they were $712 million, which is up 12% from the fourth quarter and up 19% from a year ago; and we’re not taking much comfort in that right now because credit expense is obviously suppressing our bottom line.

But we’re confident that we’re building substantial earnings momentum of the other end of the cycle. All right, let me move on to the details of credit starting with charge-offs.

Net charge-offs were up 48 basis points from last quarter to a total of 137 basis points for the quarter. We expect the charge-offs to be up a good bit this quarter, though frankly the drop in real estate values was more significant than we had anticipated, which caused the amount of loss on certain real estate loans to be greater than we’d forecasted.

Homebuilders overall represented 20 basis points that were charge-offs at over half of our commercial charge-off growth. On the consumer side, residential real estate charge-offs were up $25 million, with two-thirds of that growth in Florida and Michigan.

In the first quarter, consumer net charge-offs were $135 million versus $99 million in the fourth quarter. The majority of that $35 million growth was housing related, with residential mortgage charge-offs up $16 million and home equity charge-offs up $9 million.

Now as I mentioned, the increase in mortgage losses was driven by the effect of lower property values on foreclosures and, again, those higher losses were concentrated in Michigan and Florida, which accounted for 78% of our first quarter mortgage charge-offs. Home equity losses continue to be very high, at 139 basis points of loans, with brokered home equity the most significant cause.

That portfolio, which is now in run-off mode, totals 2.6 billion and represents about 22% of our home equity portfolio. But charge-offs in that book were $23 million or 55% of total home equity charge-offs.

In the brokered home equity portfolio, first quarter losses were over 340 basis points, while losses in the direct branch originated channel were 80 basis points overall. Outside of Michigan and Florida, direct losses were about 50 basis points this quarter, which is higher than normal but we view that as manageable.

Auto loan charge-offs were up $5 million. We’re seeing some effect from a weaker economy there in line with what the industry’s seeing, and that’s driving about 10 basis points increase in our charge-off ratio.

The remaining increase of the ratio has been driven by the effect of our securitization activity. Now that exercise is leaving more mature loans in the portfolio, a good part of which are in their peak loss stages.

Over time these loans are going to season away from their peak losses, but right now that’s producing an optically high loss ratio. Charge-offs were up $5 million in the card portfolio as well, again, reflecting economic conditions, as well as some initial seasoning, though overall our losses are still within our expectations and industry norms.

Commercial net charge-offs were $141 million or 121 basis points versus $75 million or 66 basis points in the fourth quarter. Commercial real estate charge-offs were up $78 million with virtually all the growth in Michigan and Florida.

Losses on home builder and developer loans were $42 million, up $34 million from the fourth quarter, which is more than half a total commercial charge-off growth. C&I charge-offs were down $12 million, largely in line with our expectations due to the $15 million fraud related charge-off we recorded in the fourth quarter.

75% of our total charge-offs, commercial charge-offs were in Michigan and Florida, which represent just 30% of our commercial loans. As I discussed earlier, the higher losses we’ve experienced, as well as growth in NPAs and other criticized loans, led us to increase our provision very substantially during the quarter.

Provision expense was $544 million and exceeded net charge-offs by $268 million and that drove our allowance ratio up to 149 basis points of loans. Credit marks we hold against acquired loan portfolios would represent another 11 basis points of coverage for our loans.

If those were added to our reserves, we’d hold about 168 basis points of coverage. Those marks, by the way, are almost entirely related to the recent acquisition of RG Crown.

All right, moving on to NPAs. Our NPAs totaled $1.6 billion or 196 basis points of loans, up 64 basis points from last quarter.

Commercial NPAs of $1.1 billion accounted for approximately two-thirds of the NPA increase, with more than half coming from commercial mortgage and construction. Commercial construction NPAs grew $162 million, and commercial mortgage NPAs were up $70 million.

Overall, Michigan and Florida represented about two-thirds of our total CRE NPAs and our CRE NPA growth. Homebuilders and developers accounted for $309 million of total NPAs, up $133 million from the fourth quarter, and then C&I NPAs increased $125 million from the quarter and about a quarter of our C&I NPAs are two businesses associated with the overall real estate industry.

Consumer NPAs of $534 million were up $165 million. Residential mortgage and home equity loans accounted for nearly all of that growth.

Florida and Michigan represented 75% of consumer NPA growth and accounted for 55% of our total consumer NPAs. As I just mentioned, we restructured $92 million of consumer loans during the quarter for a total of $172 million since the second quarter of 2007.

Well these TDRs accounted for more than half of our consumer NPA growth in the quarter; and as a reminder, these loans are classified as NPAs for six months after which those that are performing come out of NPA status. Now we’ve obviously spent a lot of time carefully examining credit data in order to remain comfortable with the level of provision expense we needed to record in the quarter.

I want to share some of the characteristics of our NPAs in terms of discounts or haircuts to original value that’s already inherent in the carrying amounts you’ll see in our reports. As I said, total NPAs were $1.6 billion at the end of the first quarter, that total includes $204 million of OREO and other repossessed assets.

These assets are charged down and carried at their expected realizable value and as a result, they don’t require any reserves. That leaves NPLs of $1.4 billion, and of that $356 million are related to consumer loans, including the $172 million in consumer TDRs.

We hold specific reserves about $20 million or about 12% against the TDRs representing the discount to original value to recasting the cash flows in the restructuring. The TDRs, I should point out, have been performing quite well with about an 80% cure rate up to this point.

The remaining consumer $186 million of consumer NPLs have already been charged down by about $50 million and have approximately $60 million of additional reserves against them. The rest of the $1 billion in NPLs relates to the commercial portfolio with $65 million of that coming from the RG Crown acquisition that have been marked in purchase accounting to fair value.

So far experience indicates that those marks are accurate and so no additional reserves are required. Now that leaves $987 million of remaining NPLs, and of those $280 million have already been written down by over $200 million or about 42% and they also have additional specific reserves of $34 million held against them.

There’s another $210 million of NPLs that have not incurred any charge-offs to day but which have specific reserves of $66 million held against them. Then finally, there’s a remaining pool of $480 million of NPLs that are viewed as having sufficient collateral and guarantors such that no specific reserve is required.

I’d note that $210 million of total commercial NPLs were about 20% or less than 90 days past due. So adding this all up, including charge-offs, marks, and reserves, we’re carrying these NPLs at approximately 72% of the original face value, consumer at about 67%, original face value of commercial at 74%.

The difference or the discount of about 28% has already hit our P&L even through being written down or through booking reserves. Now just one comment on past dues, loans 90 days past due were $539 million at the end of the quarter, which is up 10% from the fourth quarter, but in turn it’s down from a 36% growth rate fourth quarter over third.

That’s potentially a good sign for the future, though it is much too soon for us to call that a trend. In fact, looking forward, and I’ll speak more about this in the outlook, our initial expectation for the second quarter is for continued NPA growth, though at a lower level than we’ve seen in the past couple of quarters and charge-offs also to be somewhat lower than we saw in the first quarter.

Now let me turn to the balance sheets starting with loans. Average loans and leases were up 4% from the fourth quarter and up 9% year-over-year.

These numbers include the effect of about $3.3 billion in sales and securitizations in the first quarter, which included $2.7 billion of auto loans and about $600 million of residential real estate loans. Average commercial loans grew 5% sequentially and 13% versus a year ago and C&I loans were up 7% from the fourth quarter and 21% compared to last year.

Average consumer loans were up 1% sequentially and up 3% year-over-year, largely driven by robust mortgage and credit card production. Auto loans were down 2% sequentially and down 9% compared with last year as a result of our securitizations as well a much more discipline pricing process that insures that all of our new production is priced at spreads that will clear current market conditions.

All right, moving on to deposits. Average core deposits were up 2% from the fourth quarter and 5% year-over-year while transaction deposits were up 7% year-over-year.

DDA balances were down 1% from last quarter and commercial DDA balances were off from seasonally high fourth quarter levels while consumer DDAs grew 7% sequentially with both good account growth and higher average balances per account contributing to that increase. Interest, checking, and savings balances were both up 3% sequentially, and money market balances grew 8% from the fourth quarter with the majority of money market growth in commercial accounts.

Balances and CDs were down 1% sequentially, which was in line with our expectations as we’ve consciously not kept pace with some of the ore aggressive pricing we’ve seen from some of our competitors. Moving on to revenue: As Kevin mentioned before, we saw very strong results in net interest income for the quarter.

NII was up 5% from last quarter and 11% from the same quarter last quarter. This reflected lower funding costs on core deposits and wholesale borrowings, which outweigh the effect of lower yields on assets.

The net interest margin was up 12 basis points sequentially to 341. The primary driver of this was spread widening in on deposits.

Overall the net interest spread widened 26 basis points during the quarter. While loan yields are down with market rates, we spent a lot of effort making sure our new loan originations better reflect current market spreads and we’re pleased so far with early results were focused there.

I’ll talk more about margin when I review our outlooks in just a few minutes. Let’s move on to fees: Noninterest income of $872 million was up $363 million sequentially.

Now that increase includes $273 million from the Visa IPO, partially offset by the $144 million BOLI charge. As a reminder, fourth quarter results included $177 million BOLI charge, so fee growth, excluding these items, was 8% sequentially and 22% year-over-year as a result of a solid sequential growth in mortgage banking revenue and strong year-over-year growth in virtually all fee categories.

Before I continue, let me provide a little more color on BOLI. As you know, we don’t manage these assets which create some issues for us.

First, we mentioned last quarter that the information we receive on BOLI is received on a lag basis. As a result, last quarter when we got the final numbers for yearend, the loss was $22 million higher than the initial estimate.

Now we’ve received data recently for the end of March and we’ve provided some adjustment for that, as well as we’ve also reviewed preliminary estimates up through this weekend; and given the estimates and the information that we’ve received, we don’t expect any change in the final valuation; although, our final numbers won’t be official for another week or two. You may have noticed that we filed suit last week against our insurance provider in Federal District Court in the Southern District of Ohio for their failure to properly discharge their obligations regarding these BOLI investments.

This is a controversial issue for us. We feel we have a very strong case, though obviously we don’t know at this point whether we’ll have a recovery or what the timing of it might be.

But because we’re now in litigation, we’re unlikely to talk much about BOLI, and specifically this policy in the near future. Turning to payments processing: That business has continued to perform very, very well for us and continues to post very strong results.

As you know, the first quarter numbers are always seasonally weaker and accordingly revenue was down 5% sequentially, but it was up 15% on a year-over-year basis right in line with our expectations. Now I’ve been saying for quite awhile that our payment processing business is the best in the country.

Based on the growth statistics that Kevin just cited, I’d hope you’d agree with us. Within payments processing, merchant revenue was up 23% from the prior year, and card issuer interchange was up 17% from a year ago.

Financial institutions revenue was up a more modest 6% due to continued industry consolidation that we’ve been talking about for the last year or so. Moving on to deposit service charges, they were down 8% from the seasonally strong fourth quarter, but up 17% from a year ago.

Commercial service charges were up 3% from the fourth quarter and 17% year-over-year. We found that due to lower rates, customers are electing to pay for treasury management services with fees rather than balances, which has been driving most of the growth there.

Consumer service charges declined 16% seasonally from the very strong fourth quarter, but were up 17% year-over-year. Corporate banking revenue was up 1% from last quarter and 30% year-over-year, and our results included $8 million in losses on commercial mortgages held for sale.

Excluding those losses, corporate banking revenue was up 5% sequentially and 39% year-over-year, the main drivers of strong growth there over both periods of foreign exchange and customer interest rates derivative sales. Investment advisory revenue decreased 1% sequentially and 3% year-over-year, largely reflecting lower market valuations and trading activity.

Mortgage banking revenue was $97 million for the quarter and that $97 million is a $71 million increase from the fourth quarter. The lower rates we saw during much of the quarter drove a very strong first quarter originations.

Originations were $4 billion for the quarter, which was up 48% sequentially. Gains on deliveries of mortgages were $71 million compared with $18 million in the fourth quarter, largely due to the result of the higher origination activity.

Revenue during the quarter included $13 million related to the gains on the sale of portfolio loans, and we also had a net pickup of about $25 million related to the January 1st adoption of FAS 159 for mortgage banking, and that’s described more fully in our press release. Other noninterest income totaled $185 million in the first quarter compared with a negative $113 million last quarter.

Now this quarter’s results included the Visa gain as well as the BOLI charge I mentioned earlier, and $12 million in losses related to auto securitizations, while results in the fourth quarter largely reflected the pervious BOLI charge that I mentioned. Moving on to expenses: Expenses were down 24% sequentially and 5% year-over-year.

First quarter results included the reversal of Visa litigation reserves and the acquisition and severance expenses, which I’ve mentioned, as well as approximately $20 million in higher mortgage compensation expense related to adopting FAS 159. As a reminder, fourth quarter results included $94 million in expenses related to Visa and $8 million in merger related charges.

Excluding these items, first quarter expenses were down 1% sequentially as a result of aggressive actions we took to contain expense growth in light of the environment. Earlier in the quarter, we eliminated more than 1,300 positions from our planned staffing levels.

The reductions were spread throughout our footprint and are now complete, so we’ll expect to see expenses begin to benefit in the second quarter. Moving on to capital: Capital ratios increased during the quarter due to the effect of lower interest rates, higher retained earnings, and loan securitizations which increased the tangible common equity ratio by 17 basis points to 622.

As Kevin mentioned, the total capital ratio was 1132, up over 100 basis points as a result of the subordinated debt assurance. All right, I’m going to turn to the outlook now, and you’ll find this on Page 12 of our earnings release.

As we note in the release, the guidance doesn’t include the impact of our pending transaction with First Charter. To give you a better sense of our run rates, it also excludes Visa, BOLI, and merger and severance charges.

All right, first we raised our NII guidance from mid single digits to mid-to-high single digits. The main driver of the change is a higher expected NIM which we’ve also raised to the 3.30 to 3.40 range, up about 10 basis points from January.

We continue to expect long growth to be in the mid-to-high single digits, commercial loan growth is expected to be driven by C&I lending, and we’d expect consumer loan growth to be fairly modest due to the impact of auto loan sales, as well as a continued focus on disciplined underwriting. We’re now expecting core deposit growth to be in the mid single digits, down from mid-to-high, and that’s really only a result of what we saw in the first quarter.

Turning to noninterest income, we’re currently planning for a low teens growth rate. Now that guidance is up from our pervious high single digit estimate.

The biggest driver here is our expectation for stronger mortgage banking revenue from both underlying business trends and the effect of the adoption of FAS 159 for mortgage banking. We still expect mid teens growth in payments processing revenue.

We continue to capture a significant amount of market share here. While we’re extremely sensitive to a further slowdown in consumer spending, mid teens still feels very comfortable to us.

We’ve not changed our outlook for corporate banking and deposit revenue growth, which is estimated to be in the low double digits. Our expense growth expectations are flat to down from our previous plans; however, the effect of adopting FAS 159 for mortgage origination costs will increase actual recorded expense growth to be in the high single digits.

Now just as a reminder, Crown, RG Crown, as well as our de novos will each add about a percent to our expected expense growth. Then the increase in FDIC deposit costs is expected to add another percent.

Then processing expense growth, driven by very strong revenue and volumes adds about 2%, and then finally FAS 159 also adds about 2%. So we peg core growth to be in the 2% to 3% range excluding those factors, which is down a bit from our January expectation because of the actions I just mentioned that we took earlier in the quarter.

We’ve updated our full year net charge-off outlook to be somewhere in the 100 to 115 basis points range. As we discussed earlier, we expect NPAs and delinquencies to continue to trend upwards to a slightly lower rate than we’ve seen in the past couple of quarters.

Obviously our provision expense was significantly higher than charge-offs in the first quarter, and we’d expect provision expense to continue to exceed charge-offs not at the same level as we’ve just seen. Provisioning is driven by our reserve model and it’s much more difficult to estimate future provisioning requirements than it is charge-offs, so we can offer a more specific guidance on what our provision is going to be.

Moving on to the tax rate, we’d expect the effective tax rate to be approximately 32% for the full year, and that’s up about 2% from January, that’s really a reflection of the BOLI charge that I just mentioned, which is not tax deductible. Then finally, our long-term capital targets remain the same as we discussed earlier in the year.

We continue to target a 6.5% TCE ratio. Now including First Charter, we’re planning to close, as Kevin said, we’re planning to close that late in the second quarter and with the effect of First Charter, we’d expect the TCE ratio to be around 6% at the end of the quarter and really for most of the rest of 2008.

We’ll continue to target a Tier 1 ratio above 7.5 and a total capital ratio above 11% and we feel comfortable with both of those targets. All right, to wrap things up, our core businesses, as we’ve discussed, are performing very well.

However, the credit environment, as you all know, remains very difficult; and we expect credit pressure to remain an issue for us for the next several quarters. So we’re operating tactically to make sure we’re doing everything we can to mitigate that pressure.

We do expect to continue to deliver strong operating results throughout 2008, and that’s reflected in the outlook I just went through; but we’re not taking anything for granted. We’ll continue to manage expenses, spreads, and our capital very carefully.

I’d like to thank you teammates for their hard work. It’s a very difficult time, and we appreciate everyone staying focused on producing strong balance sheet and fee income growth while at the same time dealing with the tough credit situation.

Despite the environment, we’re all intent on building value for our shareholders during 2008 and making sure we’re in the best competitive position possible when the credit cycle turns. So with that I’d like to thank you for your attention, and we’d be happy to take any of your questions.

Fifth Thirds always been a bit more conservative when it comes to capital than most banks carrying more, and I’m just wondering your thoughts, and the environments very uncertain here, your capital ratios will be at the lower end of your targeted levels, and I’m just wondering what you might be able to do to get them up there whether there’s some additional asset sales or securitization or would you consider non-dilutive capital rays? Of course, while we’re on the topic, if you could comment on your dividend which does screen high on a couple of different metrics.

Actually we expect our capital to be comfortably within our targets. The TCE ratio is probably what you’re referencing.

I said it would be at 6% from the rest of the year with a target of 6.5%, and that’s the result of First Charter more than anything else. We expect to rebuild that following that acquisition.

There are a number of things we’re looking at. We have a very aggressive plan in place to continue auto securitizations in line with the plans we’ve talked about previously.

We’d like to see our on balance auto portfolio be about half of what it was at the beginning of the year, and we’re on track to get there. We will look selectively at other assets sales when they make sense.

But we actually think, while we’re very, very mindful of managing our capital carefully, we actually think we feel pretty comfortable with where we are. With regard to the dividend, that’s a great question.

I guess I’d answer it this way: We can’t take anything for granted in the current environment. Yet, we are very conscious of our commitment to maintaining our dividend.

We are doing everything and will continue to do everything to maintain our commitment to our shareholders and to deliver on their expectations. So I can’t predict what our dividend will be, but I can tell you that we take our commitment to our dividend policy very, very seriously; and you can expect us to continue to operate that way.

So on the capital side at this point, you’ll just throw into the targeted levels or the higher end of the target levels as opposed to raising anything?

We have normal issuances planned, which I can’t really comment on more than that. I wouldn’t expect to see us do anything out of the ordinary and certainly nothing resembling any of the extreme capital raises you’ve seen from some of our more stressed peers.

We don’t think that’s… I mean we think of ourselves as being in entirely different category and don’t need to do any of those things.

Thank you very much.

Let’s see, Chris, I guess I was just hoping that you could comment in a bit more detail on the charge-off guidance for the full year because I guess we’re at about 137 basis points of charge-offs right now, so it implies some pretty good improvement. I think at least a couple of things you mentioned that implies that there should be lower loss in a couple of portfolios; but if you could basically sort of connect the dots as to how we go from 137 down to 100 to 150 basis points through the end of the year.

Then I guess just a clarification: In some of your early remarks, I heard you say, “Delinquencies and out performers will be up in the second quarter.” I couldn’t recall if you said up or down for net charge-off sale.

We expect charge-offs and NPAs both to be higher than we had originally expected in the second quarter, but to be at lower levels than we saw in the first quarter. With regard to charge-offs, Scott, we started the year with the expectation that first quarter was going to be a high water mark for us, and it was higher than we’d expected, again, due to more significant declines in property values than we had been forecasting, especially in certain markets like Detroit and South Florida.

As we go into the second quarter, while our visibility is not perfect, we do expect to see some improvement, largely in the consumer side as well as in some of our commercial construction portfolio. It’s a little early in the quarter to be predicting NPAs and charge-offs, but we feel based on that information things look like they’ll improve.

So beyond that, I’m not sure there’s any more data I can give you.

Sounds good. Thank you.

Just a follow-up to the problem loans: It looks most of the increase was in the commercial category broadly, but also over $100 million increase in commercial loans separate from real estate, so can you discuss what’s going on there?

Beyond the concentration in real estate related companies, Mike, there wasn’t a single concentration anywhere.

I’m looking at: In December it was 175 million, now this quarter it’s 300 million in the category commercial loans, which is separate from commercial mortgage or commercial construction or commercial leases. So if it’s not just one area, can you just give us a little more color as far as the several parts that might be in there?

Well again, the $125 million in C&I, about a quarter of that were to companies that are generally related to the real estate industry. So that’s one concentration.

Beyond that, while losses were higher in Florida and Michigan just due to stressed economies there, there’s no other industry concentration I could point to so…

What percent of your total commercial loans would you say somehow relates to the real estate industry?

About half. Let’s see, of the 25%, our C&I portfolio, I’d say about 15% of it is related to companies with [SIC] codes that are real estate related.

On that 15%, 25% of our NPAs came from that portion of the portfolio.

That makes sense. So what type of companies are these that are somehow related, if you can just give us a little more color?

Mike, it’s everything. It’s plumbing companies; it’s wood companies.

I mean it’s just anything related to the development of or that contributes to anything in the real estate cycle or chain. It’s all of those things that you can imagine – doorbells to doorknobs.

So you’re not really seeing a spillover other than those companies tied to real estate?

No, the only thing I’d say is Florida and Michigan are a little weaker given the economies, but I wouldn’t point to anything other than that.

Then last question. You mentioned stress competitors.

What’s your status on doing acquisitions right now, especially with First Charter having a clear closed date?

Right now, Mike, we feel like our plate is very full. Our focus really is around our continued strong core operating performance and our internal growth as well as Chris just outlined for Matt, our focus in terms of rebuilding our capital position.

So we feel pretty good about where we’re positioned. We feel pretty good about our focus and we’re not out actively knocking on doors at this point so…

All right, thank you.

Morning. I think my question was partially answered, and I apologize because I missed the first of the call.

You had a 137 charge-off ratio in 1Q and obviously looking at the full year ’08 guidance, you would expect a lower charge-off ratio than that in upcoming quarters. With the significant increase in NPA, the big jump in the charge-off ratio in 1Q, can you give me, and you might have gone over this and I just missed it earlier, some indication of what gives you confidence that that NCO ratio is going to down in subsequent quarters?

We did cover it, but real quickly to recap: If we look at the trends in our delinquencies, largely in the consumer side, 30, 60, and 90 days are lower than they were fourth quarter over the third, as well just looking at our charge-off pipeline and the seasoning in it that we feel that the second quarter is trending lower. But again, we did cover a little bit earlier and I think Jeff could probably go through some of those statistics with you offline.

Then just one quick follow-up: Did you discuss anything about how much your NPAs have been written down as they have gone on to non-performing status what kind of charge you’ve taken against that NPA portfolio?

Yeah, actually we had several comments related to that. Overall the discount in our MPA portfolio is 28% from the original face value, but there were several comments in our text that Jeff could go through with you.

All right, thank you. I appreciate that.

I just wanted to compare the ratio of allowances to non-performing assets and loans 90 days past due. A year ago you were reserved at 117% of NPAs in 90 days (inaudible) and now the ratio’s about 61% unadjusted for those write-downs to the NPAs.

Is that an appropriate level of reserves?

Yeah, we think based on all the comments we just went through that our reserves are appropriate. It’s kind of a hard question to answer any other way than that, but when you say unadjusted, I’d ask you to go back through the text and go through the details we shared with you; and then if you got some questions based on those adjustments, that you can follow-up with Jeff offline; we’d be happy to answer any other questions.

The adjustments would have the effect, I mean fitting those through the analysis, they would have the effect of showing a more aggressive or a lower level of reserves to bad loans.

David, I’m not following your question. We did go through quite a bit of detail on our NPAs, and I’m not sure exactly you’re trying to get at; but I’d be happy to take your question offline and go through the detail again.

Just one more: Are you all keeping an eye on these GM strikes? What effect does that have on your loan portfolio if it lasts another, I don’t know, another eight weeks?

I’m not sure I could give you a good specific answer on that, David.

Yeah, David, I mean if you’re talking about the overall general stress in terms of the marketplace, we’d tell you that portions of our state economies have been impacted for the last couple of years and really no change for us, particularly when you talk about Michigan so…

Just a question on the competitive strategy: I mean a lot of your Company (inaudible) have been in the news lately and a lot of things are happening. Can you give us some color on some of the steps that you might be taking in terms of maybe hiring people or some of the rate strategies and deposits, other things to kind of take advantage of this?

I hope that one of the things that is obvious is that we’ve obviously attacked the marketplace very well to take advantage what’s happening competitively. We’ve done a number of other things; I won’t go into some of the specifics because we don’t want to give away trade secrets (inaudible) what’s happening from that standpoint.

But we are very aggressive and have our people focused on the street and calling. We’re also getting very good (inaudible) to questions about the strength of Fifth Third in the marketplace at this time.

Again, I think it’s showing through relative to the strong core operating. It’s giving us a good opportunity to get a lot of (inaudible) for a lot of very good relationships that for many years we haven’t had the chance maybe of having that we do today, so we feel good about that.

The only thing I’d add to that is it appears to be working because while credit is an outlier for us and it’s going to be an issue for another few quarters. In terms of deposit growth, loan growth, fee growth, we’re substantially outperforming our competitors and we’re doing it with an improving ratio, so we feel good about the performance of the business.

Thanks. One quick follow-up: In terms of the greater than 90 days when you said that it may or may not make a trend, but the incremental growth has definitely slowed, are there are any other trends that you see in terms of anything below that, maybe like criticize (inaudible) or anything that you can share with us in terms of the trends that you’re seeing?

Has the incremental growth really started slowing in some of the stress areas or it could be an outlier?

The only thing I could share with you is 30-, 60-, and 90-day growth right now looks lower than it was fourth quarter over third. But even that, I just caution you that it’s early in the quarter and, again, we’re careful to say we’re not calling that a trend and we are predicting, again, higher NPA and charge-off levels in the second quarter over our original expectations.

But beyond that, we can’t give you anymore additional guidance at this point.

Thank you.

I’d just like to say that we appreciate your attention this morning. We know it’s been an active two weeks for you and appreciate your paying attention.

We’re working hard to stay focused. As I finish my first year as CEO, I’d tell you it’s been an interesting and challenging time period, but I think we’ve got people very motivated and excited about competing in the industry in a difficult environment.

So thanks for your attention, and we’ll take to you next quarter.