Jeff Richardson – Senior Vice President, Investor Relations Kevin T. Kabat – President & Chief Executive Officer Daniel T. Poston - Executive Vice President & Chief Financial Officer Mary E. Tuuk - Executive Vice President & Chief Risk Officer

Brian Foran - Goldman Sachs Michael Mayo – Deutsche Bank Securities Vivek Juneja - JP Morgan

Good morning. My name is Janice, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fifth Third Bancorp Second Quarter 2008 Earnings Conference Call. (Operator Instructions) Thank you. I would now like to turn the call over to Jeff Richardson, Director of Investor Relations.

Hello, and thanks for joining us this morning. We’ll be talking with you today about our second quarter 2008 results, our recent capital actions, and outlook for the remainder of 2008. As a result, this call contains 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. Fifth Third undertakes no obligation to update these statements after the date of this call. I’m joined here in the room by Kevin Kabat, our Chairman and CEO; Chief Financial Officer, Dan Poston; Chief Risk Officer, Mary Tuuk; 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. Kevin T. Kabat: Thanks, Jeff. Good morning everyone. Thanks for taking the time to join us on what I know is a very busy morning for everybody. I have a few opening comments about our core operating results plus some perspective on the significants of the quarter, including our capital actions and the impact of leveraged lease litigation reserves on results. And then I will hand it over to Dan and Mary who will review in detail our financial performance, our credit trends, and our outlook for the remainder of 2008. Let me start by saying that throughout this economic downturn we’ve not lost sight of our long-term goals and our objectives and it’s showing up in our operating results. We believe that our earnings power, our higher and strengthened capital levels, and our ability to generate capital are more than sufficient to allow us to manage through this cycle. We are well positioned to maintain our focus on producing continue strong operating results. We continue to make investments in our businesses to grow, diversify and leverage our platform, and we continue to support our customers in this difficult time. Strong operating results remain consistent with expectations and we are secure in our conviction that when this cycle turns, Fifth Third will be positioned to post bottom-line results outperforming the industry. Now for a few highlights from the quarter. Fee income growth continued to be robust. Electronic payment processing revenue of $235.0 million increased 10.0% sequentially and 15.0% from a year ago, driven by continued strong merchant processing results, the revenues were up 16.0%. Card issuer interchange revenue increased 20.0% from the previous year, driven by higher debit and credit card usage overall and higher dollars per use in debit. Electronic funds transfer revenue from our financial institutions clients grew 10.0% from the second quarter of 2007. Other major fee drivers, deposit service charges, corporate banking, and mortgage banking revenue, were strong again as well. Net interest income growth and net interest margin remain very strong and continue to improve. Our focus on the customer experience and satisfaction continues to demonstrate progress. In the J.D. Power & Associates 2008 retail banking satisfaction study, we were one of only two banks to improve out of the largest 20 banks in the survey. Customer experience and satisfaction is something we’ve put a significant amount of effort into as we continue to see positive external validation. We closed two transactions this quarter. We acquired First Charter, which brings up branches in North Carolina and Georgia, and added nine branches in Atlanta following the close of the deal with First Horizon. This further strengthened our presence in the Southeast and the demographic growth profile of Fifth Third Bank. These examples are driving consistent progress and producing strong core operating performance, even in the tough environment of the past year. Excluding leveraged lease charge to NII and merger expenses, pre-tax pre-provision earnings were up 16.0% and we expect to continue to produce strong performance of this nature. Several significant items have impacted this quarter’s core earnings, which I’ll touch on briefly. Clearly, the largest item of interest for the second quarter was credit. We still have the June announcement in our capital plans. The capital plan we announced in June involved four key elements. First, given recent trends and the potential for trends to remain negative for some time, we determined that we should raise our target range for Tier 1 capital to a 8.0%-9.0% range. Second, we issued $1.1 billion in convertible preferred stock, which increased our Tier 1 ratio by 93 basis points, to 8.5% at June 30, 2008. Third, we reduced our common dividend, which conserves $1.2 billion in common equity by the end of 2009 relative to our prior dividend. And finally, we announced our intention to sell certain non-core businesses over the next several quarters. We expect these actions to generate over $1.0 billion on an after-tax basis. Now, on the sale of non-strategic businesses, as you know, we can’t and won’t comment in any greater detail on what these businesses are or are not other than to say that the decision to sell these assets is strategic and has been contemplated for some time. While these businesses are valuable to us and perform very well, we believe they would be more valuable to a number of other buyers and we feel this is an opportune time to exit them, given the continued strong valuations and our desire to focus on our core businesses, as well as to bolster our capital position in addressing all reasonably possible credit scenarios. We realize that you would like more clarity here and it creates some near-term uncertainty for you, however, we strongly believe this is the best course to follow in order to minimize disruption to our operations and to ensure that our shareholders receive full value and we negotiate and execute the sale of these businesses. I will tell you that we would expect them to represent less than 10.0% of the normalized earnings of Fifth Third. We don’t expect these actions to alter the significant direction of our company or the investment thesis in Fifth Third and we are confident in the attractiveness of these businesses with a strong number of interested buyers. Now, with regard to our capital plan and credit, we evaluated a variety of possible outcomes for credit losses in 2009. Mary will discuss this more later. We provided the range of those scenarios in the Supplemental Credit package we filed with our earnings release. We have also provided a description of the methodology we followed, our underlying assumptions, and the key factors and drivers evaluated. This was a very significant exercise, undertaken to conservatively model and evaluate long-term credit risks. Also in this package are numerous additional stratifications to supplement what we have traditionally provided regarding our portfolios and geographies, particularly those experiencing more stress. We believe this gives you more insight into where we arrived, from a capital planning standpoint, and assist your analysis, given your own assumptions for the future direction of economic trends. Our capital plan was based upon the most negative of the scenarios model, which involves more stress than we currently believe is likely and maintains an expected Tier 1 ratio about 8.0% throughout that scenario. This down-side scenario appears to conform with a variety of down-side views we have seen from experts in the industry and from a number of you. Now, of course, trends could become worse than those models, though we believe that is unlikely. If that were to develop, though, we have more than 200 basis points of cushion in our Tier 1 capital above the regulatory, well-capitalized level of 6.0%. We have also taken aggressive action to contain credit and stay ahead of emerging issues. As we have mentioned before, some of these actions include: eliminate all brokered home equity production last year; we’ve suspended new lending to home builders and developers; we’ve suspended for the near-term new lending for non-owner-occupied commercial real estate; we’ve expanded our consumer credit outreach program to ensure we are able to have conversations with our borrowers to intervene earlier in difficult situations; and a whole lot more. Mary will talk more about credit in just a moment. Another item affecting earnings if the $0.42 per share impact of charges and expenses related to leasing litigation. This resulted in a reported loss for the quarter. Dan will talk more about this charge in his remarks, but it removes the down-side risk we have related to leveraged leases and puts any potential negative outcome from this issue fully behind us. Final observation, while the environment is difficult, we do have very strong core earnings power. We earned a profit this quarter before taking the leasing charge and we currently expect to report a profit in the third quarter. This is a strong, well-capitalized company with good momentum in core businesses and we are determined to bring the bottom line kind of results you should expect from us. With that, I will turn things over to Dan and Mary to talk about these results, credit trends, and the outlook for the remainder of 2008. Daniel T. Poston: Thanks, Kevin, and good morning everyone. As Kevin highlighted, our core businesses continue to perform well in spite of the very challenging environment. But given the state of the industry, I am sure that capital and credit are the areas most people are going to want us to focus on today. So I am going to make just a few brief general comments before moving into those areas. I will comment on capital actions, and Mary will cover credit trends, and then I will finish up with operating trends and the outlook. With that in mind, there were a couple of items that impacted our results this quarter. The first is the charge related to our dispute with the IRS about leases that were originated between 1997 and 2004. This charge totaled $229.0 million, after tax, or $0.42 per share. Now this was a little lower than we estimated it could be last month, and the charge has two components. The first component is an increase to our tax expense of $140.0 million. The second component is $130.0 million pre-tax charge that reduced net interest income. These charges completely remove the previously recorded tax benefits of the disputed leases from our financials, as well as providing for any interest we may be charged if we lose our case. We continue to believe that we entered into good leases that should be respected for tax purposes, as we described in our 8-K last month and we are still pursuing our case in court. The second item impacting results would be the closing of the First Charter transaction. This transaction was relatively small. First Charter had about $5.5 billion in assets. But given the market for loan portfolios as of June 6, 2008, when we closed the transaction, the purchase accounting mark-to-market adjustments for loans were larger than normal. I will talk about the effect of this later in my remarks. Now to summarize the components of our EPS this quarter. We reported a loss of $202.0 million, or $0.37 per share, for the quarter. This result included the $229.0 million after-tax charge due to the leasing litigation, or $0.42 per diluted share. We also incurred $13.0 million, or $0.02 per share, after tax, of acquisition-related expenses. And our provision expense this quarter exceeded net charge-offs by $375.0 million, or $0.45, if looked at on an after-tax per share basis. Overall our businesses continue to perform very well. Average loan balances were up 11.0% year-over-year, including the effect of acquisitions and transaction deposits were up 6.0% year-over-year. Net interest income grew 6.0% sequentially and 17.0% on a year-over-year basis, excluding acquisitions and the lease charge. The accretion of fair value marks contributed about ¼ of those growth rates. Reported non-interest income of $722.0 million was down $142.0 million but was up $18.0 million, or 3.0% sequentially, excluding securities gains and losses and the net $121.0 million benefit from the Visa gain and BOLI charge we reported last quarter. On the same basis, fees were up about 8.0% from last year. Moving on to our capital actions from last month. As Kevin mentioned, we believe that our current capital levels and our strong earnings power are more than sufficient that deal with an environment that looks to remain difficult for at least the next several quarters. For purposes of our capital planning we assumed trends would remain difficult for the next 18 months. In the quarter we had two capital transactions. $400.0 million of trust preferred securities were issued in early May and $1.1 billion of convertible preferred securities were issued last month. These transactions, when combined with the dividend reduction and the expected proceeds from the sale of our non-core businesses, form the core of our capital plan. We raised our target for Tier 1 capital to the 8.0%-9.0% range and the security that we issued placed us squarely within the range at 8.5%. Going forward, the dividend reduction conserves over $1.0 billion of equity through the year end of 2009, and that’s relative to our prior dividend, and the sale of non-strategic assets is expected to provide more than $1.0 billion of additional equity in the next several quarters. These sources of capital are meant to allow for the absorption of credit costs that could be high if current trends are sustained throughout 2009. At 8.5% and with the leveraged lease charge behind us, we believe that we have enough capital now and we would expect to maintain a Tier 1 ratio north of 8.0% throughout the remainder of this year, even before the inclusion of gains from asset sales. We built our capital plan around reasonably possible down-side scenarios for credit losses with the intent that we would remain above an 8.0% Tier 1 capital ratio throughout the 2009 capital planning horizon. The capital we expect to generate through earnings and asset sales provides us with a substantial cushion above acceptable capital levels. The sequencing and the nature of the capital build was designed to provide capital that we could need and to provide it in relatively efficient forms and time to provide it in advance of when we might need it. The dividend reduction conserves approximately $170.0 million per quarter, or $1.2 billion through the end of 2009. That’s about 15 basis points of tangible equity capital per quarter, or over 100 basis points through the end of next year. The asset sales are expected to generate over $1.0 billion, or more than 85 basis points of tangible equity capital. Those sales have been considered for some time and they are an efficient way to generate capital in advance of a currently unclear environment for next year. Our plan provides over 200 basis points of cushion above regulatory well-capitalized levels, should the credit or economic environment deteriorate significantly more than we anticipated. Markets remain volatile and having this off the table was very important. There was uncertainty about the length of the credit cycle and when we will see a change in the direction of trends. As such, we believe that an 8.0%-9.0% Tier 1 target range was the right target to set and that we should put ourselves above 8.0% now, to address any market concerns about what an appropriate capital level might be. If we ultimately don’t need it because credit costs and earnings normalize sooner, that capital will support our ability to reinvest in our core businesses, seek good business opportunities, and manage our dividend policy. As a result of the developments during the quarter, our Tier 1 ration is up about 80 basis points, from 7.7% to 8.5%, total capital was also up 80 basis points to 12.15%, and tangible equity increased to 6.37%, all very positive and all within the targets we set for ourselves. Now let me turn it over to Mary to discuss some of our credit trends. Mary E. Tuuk: Thanks, Dan. I will start with charge-offs. Net charge-offs were 166 basis points for the quarter. That’s up 29 basis points from last quarter and in line with our expectations laid out last month. Of that, consumer net charge-offs were $167.0 million, or 204 basis points, versus $135.0 million, or 158 basis points, in the first quarter. Real estate-related lending continued to show the most weakness. Residential mortgage net charge-offs were up $29.0 million and home equity net charge-offs were up $13.0 million. These were offset by a $9.0 million decline in auto net charge-offs in from the first quarter, as expected due to seasonal trends. Mortgage losses of $63.0 million were driven by the effect of lower property values on foreclosures, a trend that we don’t see changing in the near term as HPA indices from Case Shiller and OFHEO continue to fall. And again, those higher losses were concentrated in Michigan and Florida, which accounted for 72.0% of our second quarter mortgage net charge-off. The rate of increase slowed in Michigan this quarter but we saw continued deterioration in Florida. Home equity losses continued to be high at $54.0 million, or 183 basis points of loans, with brokered home equity accounting for about ¾ of those losses. The brokered portfolio totals $2.5 billion and represents about 20.0% of our home equity loans. This portfolio is currently running off and you will recall that we shut down brokered home equity production last year. Brokered home equity annualized net losses were slightly more than 400 basis points of loans. This disproportionate split of losses is expected to continue as the brokered portfolio winds down. Charge-offs in credit card were up $1.0 million. Card losses remain relatively benign and below peers, although we would expect losses to continue to grow in a period of economic weakness and seasoning of the portfolio. Now, let’s move to commercial. Commercial net charge-offs were $177.0 million, or 141 basis points, versus $141.0 million, or 121 basis points, in the first quarter. Residential developers and home builders continue to represent a significant challenge. Overall, the represented 19.0% of commercial charge-offs and 10.0% of total charge-offs with a charge-off ratio for that portfolio of over 4.0%. Going forward we would expect to see elevated losses in this category in the near term as companies further deplete their cash reserve and the level of demand for new housing continues to be weak across most of the country. Home builder non-performers grew $238.0 million this quarter, taking the non-accrual ratio for this portfolio up to 17.0% for this loan type. We have aggressively moved to deal with issues here and have taken either charge-offs, reserves, or marks of close to 30.0% against our homebuilder NPAs. About 20.0%, or $165.0 million, of our commercial funded reserves are held against this portfolio to represent inherent losses already taken through the P&L but not yet charged off. And we do expect losses among homebuilder credits to be higher in the second half than what we saw this quarter. Charge-offs in the commercial construction and commercial mortgage portfolios were down a combined $35.0 million from high levels in the first quarter, particularly in Michigan and Florida. We still have a large concentration of non-performing assets located in both of the geographies and combined with the elevation of home builder/developer NPAs we would expect commercial real estate losses would be back up the next couple of quarters. C&I charge-offs were up $71.0 million. Over ¾ of this growth came from a $23.0 million fraud loss and about $30.0 million in C&I losses from loans associated with the residential construction and development sector. We currently expect C&I losses to be lower in the third quarter. C&I won’t be immune to the economy but it is holding up reasonably well. Dan will summarize our outlook further in a few moments. Now, moving on to NPAs. NPAs totaled $2.2 billion, up 39.0% from last year and were 256 basis points of loans, up from 196 basis points last quarter. Commercial NPAs of $1.5 billion were up approximately $465.0 million, or 44.0%. Commercial construction NPAs grew $133.0 million and commercial mortgage NPAs were up $216.0 million. As with last quarter, Michigan and Florida represented about 2/3 of our total commercial real estate NPA growth. Homebuilders and developers accounted for more than ½ of the increase in commercial NPAs overall, up $238.0 from last quarter. This category accounts for $547.0 million, or 25.0% of total NPAs on $3.3 billion, or 6.0%, of our total loan portfolio. C&I NPAs increased $107.0 million sequentially with nearly all this increase in C&I loans tied to builders and developers, or otherwise associated with the residential construction and development sector. More than half of all C&I NPAs at present are associated with that sector. Consumer NPAs of $674.0 million were up $141.0 million, or 26.0%. Residential mortgage and home equity loans continue to account for nearly all of the growth. We restructured $138.0 million of consumer loans during the quarter, for a total of $318.0 million since the second quarter of 2007. These PDRs accounted for virtually all of our consumer NPA growth in the quarter. Let me take a minute to share some of the characteristics of our NPAs in terms of write-downs that are already inherent and the carrying amounts that you see in our reports. Total NPAs were $2.2 billion at the end of the second quarter. The total discount on our NPAs is about 25.0%, which has already hit our P&L, either through being written down or reserved for. Of total NPAs, $210.0 million are OREO and other repossessed assets, which are carried at their expected realizable value and don’t require additional reserves. On the consumer side, $318.0 million are TDRs, against which we hold specific reserves of approximately $39.0 million. The remaining $207.0 million of consumer non-performing loans have already been charged down by about $46.0 million and have approximately $74.0 million of additional reserves held against them. Now, on to the commercial portfolio. $121.0 million of non-performing loans are from acquisitions and have been marked in purchase accounting to fair value due to credit deterioration, therefore we don’t hold reserves against those loans. $429.0 million of commercial non-performing loans have already been charged-down by $289.0 million and have specific reserves of $56.0 million held against them. Another $343.0 million of non-performing loans haven’t incurred charge-offs to date but have specific reserves of $106.0 million held against them. And finally, the last $593.0 million of non-performing loans are viewed as having sufficient collateral and guarantors such that no specific reserve is required. I would note that $291.0 million of our total commercial non-performing loans, or 21.0%, are less than 90 days past due. So, adding this all up, including charge-offs, marks, and reserves, we are carrying these non-performing loans at approximately 75.0% of their original face value. Provision expenses this quarter was $719.0 million and was a little more than 2x charge-offs, resulting in an increase in the reserve-to-loan ratio from 1.49% to 1.85%. I would note that given the state of the market for fair market valuation of loans, we have a significant mark related to First Charter’s loan portfolio. Credit marks on just NPAs totaled $77.0 million for the acquired portfolio, including $39.0 million for First Charter. If these marks, which are available to absorb losses on acquired loans, were added to our reserve, our reserve-to-loan ratio would go up about 10 basis points to 1.95%. We have an additional $734.0 million in liquidity-related marks, largely for First Charter, of which we would expect to recapture a significant amount and would also be available to absorb potential losses. Provision expenses this quarter reflected significant additions, particularly related to home builders and residential developers, reflecting the inherent losses in these loans. We would expect to recognize a substantial amount of charge-offs related to these loans in the second half of this year as they proceed to that stage. Now, I would like to talk about our capital planning exercise and some of the key elements. We developed our capital plan around a range of outcomes that could happen through the end of 2009. The purpose of this process was not to forecast expected losses, but instead to build a capital plan that could absorb credit losses and stress scenarios that could be viewed as reasonably possible. Our analysis is not meant to suggest that macro trends won’t improve, but given the uncertainty of future trends, until we see evidence that would point to an improvement, we believed it was prudent to assume for capital planning purposes that they wouldn’t improve. This was not an exercise into any possible up-side or down-side scenario, only what is plausible given current trends and external leading indicators, most of which do have a negative flow to them over the past few quarters. We did shock those negative trends and we’re comfortable that we took an appropriately conservative view of the range of loss outcome. Now, the process of developing these scenarios was complex. We ran multiple scenarios on about 50 different portfolios. On the consumer side, as an example, we segmented the home equity portfolio by delivery channels, retail and broker, and also by LTD splits. For mortgage, we treated lot loans separately, and we treated lot loans in Florida residential property as the same trend as the rest of the footprint. We divided the commercial portfolio into 10 industry segments and 3 geographic pools, Florida, Michigan, and the remainder, to create 30 portfolio segments. Let me start by describing the consumer modeling process. I’m going to spend my time discussing the most stressed scenarios, which is what we based our capital planning on. For home prices we used Moody’s Economy.com forecast. Their expectation for national devaluation in what they term a severe recession, is a further 25.0% from now until the end of 2009. And that’s on top of the devaluation experience to date. We took that national expectation and applied it to the majority of our residential real estate portfolio, excluding Florida, which I’ll come back to. We believe that the use of the national data is pretty conservative. The rest of our footprint did not experience the run-up in values or the extent of decline as the national index, given the impact of California and Florida on it. It is important to note that Midwestern markets are not forecasted to decline as much as the U.S. index. For Florida, we used Moody’s severe recession expectation for 27.0% home-price depreciation from now through the end of 2009, beyond what’s been seen thus far. We also applied roll rate unit stresses to all of the portfolios and bankruptcy forecast stress as appropriate. These stress components, the varied, roll rate, and bankruptcy, ultimate represent an increase of approximately 55.0% in additional losses incorporated into the high-stress scenarios for the second half of 2008 and for 2009. We believe that this high-stress scenario represents how the portfolio would perform in a severe recession. Again, we’re not predicting a severe recession, but we want to make sure that we’re prepared for that. I would add that, as you’ve probably assumed, we would expect the real estate segment to drive most of the potential consumer losses that we would experience, about 2/3. Our commercial analysis was a little bit different. For each of the 30 portfolio segments that I mentioned, we extrapolated the trends that we’ve experience over the past 3 and 6 quarters to determine the local trend for criticized assets, non-accrual loans, and losses within each of these 30 segments. These historical trends generally have increasing slopes, as you know. We projected these trends forward and used them to create base-line levels for determining our loss rates, with the worst of those two trends representing what would clearly be a severe recession. For out 2008 scenarios, we further shocked the real estate-related segments with an incremental layer of loss to approximate a 35.0%-50.0% reduction on our highest risk non-accruals. We also evaluated the lagged correlation between 15 leading economic indicators and our loss trends in these 30 segments to provide additional perspective in approximating losses in each of our scenarios. Building upon our 2008 work, we extended this through 2009. We incorporated within the portfolio segments the recent trends for criticized assets to migrate into non-performing status and then to charge off. We used Moody’s 2009 Net Income Forecast By Industry to project the movement and levels of our criticized assets for all four quarters in each of the 30 segments. We supplemented this quantitative exercise with discussions with lending experts in the geographies and industries at hand. Based on the information gathered, we stressed growth and problem assets by up to 10.0% and migration trends by up to 20.0%. The most significant stress was assumed in Michigan and Florida and in the real estate-related industries. The stress components from this exercise ultimately represented 35.0% in additional losses in our high-stress scenario for the second half of this year and 2009 relative to our base line. Similar to the consumer portfolio, we would expect real estate to account for about 2/3 of commercial losses under the range of scenarios evaluated. We have outlined our scenario modeling process further in a few slides in one of the credit supplements we provided with earnings. And as Kevin noted, we have also provided the range of outcomes that resulted from this exercise. You will find this in the package but the output of our scenario modeling for 2009 losses was $1.5 bilion-$2.2 billion, or about 170 basis points-250 basis points. That compares with 152 basis points in the first half of 2008. As we’ve said, we don’t view the high end of that range as likely but we would expect to maintain a Tier 1 capital ratio over 8.0% if it happens. During this exercise we developed methodologies that we believe provide a lot of additional support to us as we manage our actual ongoing forecasting process. Our forecasting process has continued to be pretty accurate throughout this cycle from a unit default standpoint. Loss severity has been the issue and that’s really been a function of residential real estate. Every month, the predictions seem to have gotten worse and the reality has followed that. With the process that we have developed, while we can’t forecast home price trends, we can forecast the effect of a variety of outcomes on our likely losses. This recalibration has given us more insight into what may happen in the future than traditional forecasting methods. Before I turn it over to Dan, I would also mention that we have provided some expanded disclosure stratifying our portfolios by the characteristics that are driving differential loss experience. These stratifications are intended to provide you with some of the information that we have available in doing our own analysis. Now, let me turn it back over to Dan to discuss our operating trends and our outlook. He will talk on our credit expectations for the remainder of the year in his comments. Daniel T. Poston: Thanks, Mary. Now I want to walk through our results in a little greater detail and I will start with the balance sheet. It is worth noting before I get going that the results include First Charter beginning on June 6, 2008, the date of the acquisition, so the effect on average balances is less than a full quarter’s effect. On an average basis, loans and leases increased 3.0% from the first quarter, or 2.0% before the First Charter acquisition, and 11.0% from a year ago, or about 8.0% before acquisitions. End of period loans and leases were up 6.0% from the first quarter, or 3.0% excluding First Charter. Breaking that down, average commercial loans, excluding acquisitions, grew 7.0% sequentially, and 19.0% versus a year ago. The majority of that growth was in C&I loans. Commercial loan growth included about $1.0 billion in high quality commercial loans that were held for sale but that we moved to the portfolio in early April given the state of the commercial paper markets. Excluding that effect also, average commercial loan growth was 5.0% sequentially and 17.0% versus a year ago. Excluding acquisitions and held-for-sale activity, C&I loans grew 7.0% from the first quarter and 26.0% on a year-over-year basis. Commercial mortgage loans grew 5.0% sequentially and 11.0% from last year. And commercial construction loans were flat versus both periods. On the consumer loan side, excluding acquisitions, average loans were down 4.0% sequentially and 5.0% from a year ago. This reflects the economic environment, improved underwriting practices, and the sales and securitizations of loans in the first quarter. Excluding the effect of both securitizations and acquisitions, consumer loans were up 3.0% from a year ago. Breaking that down, auto loans were down 9.0% sequentially and down 20.0% compared with last year. This reflects the first quarter loan sales and securitizations as well as increased spreads on new originations over the past nine months or so. Spreads were increased to help ensure that the loans we originate can be sold, as market conditions permit, or provide an otherwise strong return. New volume is coming onto the balance sheet at spreads that are approximately 100 basis points wider than our historical results and with better credit performance characteristics. Credit card balances were up $455.0 million, or 36.0%, on a year-over-year basis. This continues to be a key strategic initiatives for us and our model remains a relationship-based one. Excluding the effect of acquisitions, residential mortgages were down 5.0% versus last year and up just 1.0% sequentially, while home equity loans were flat for both comparisons. Moving on to deposits, the average quarter deposits were down 2.0% from the first quarter, but up 3.0% year-over-year. Total transaction deposits were up 1.0% quarter-over-quarter and up 6.0% year-over-year, while DDAs were up 6.0% for the quarter and 5.0% from a year ago. And those all include about 1.0% from acquisitions. Higher retail balances and higher commercial compensating balances contributed to the growth of both. Deposit account production remains strong with new consumer DDA production up 18.0% from a year ago. The number of consumer DDA accounts was up 9.0% over the same period. The average balance per account, however, were down 5.0%, this reflecting a slowing economy. Other transaction deposits, consisting of interest checking, money market accounts, and savings accounts, were down 2.0% sequentially but up 4.0% from last year, excluding acquisitions. Consumer CDs were down 14.0% from last quarter and 17.0% from last year, excluding acquisitions. We generally chose not to match aggressive CD rates offered by competitors during the quarter, which we believe to be higher than warranted relative to the value of those deposits. Moving on to revenue. As mentioned earlier, NII was impacted by the $130.0 million pre-tax leasing charge. If you exclude that charge, NII was up 6.0% sequentially and 17.0% from last year. If acquisitions and purchase accounting accretion are also excluded, NII growth was 2.0% from last quarter and 13.0% from a year ago. NII growth was driven by a steeper yield curve in the second quarter, which was partially offset by the effect of higher non-accrual loans. Let me provide just a little more background on the purchase accounting impact. Net interest income for the quarter includes $31.0 million in accretion of discounts associated with a $663.0 million purchase accounting discount for First Charter. These discounts to par relate primarily to real estate-backed loans and they reflect the overall market conditions as of June 6, 2008, rather than specific loan level credit deterioration since origination. These fair market discounts are being accredited into net interest income over the remaining contractual terms of the loans. Based on currently anticipated activity, we expect that the accretion of these discounts will approximate $100.0 million each in the third and fourth quarters and will then decline substantially in 2009 as the portfolios amortize. The overall net interest margin was down 37 basis points sequentially to 304 basis points with the decrease driven primarily by the leveraged lease charge. Excluding that charge, NIM for the quarter was 357 basis points compared to 341 basis points last quarter. That improvement included 13 basis points from purchase accounting accretion in the quarter. So the core margin expanded modestly, reflecting the benefit of a steeper yield curve, again offset by the effect of non-accrual loans. As noted above, our margin will continue to benefit from purchase account accretion in coming quarters and I will discuss that more in the outlook section. Let’s move on to non-interest income. As I mentioned earlier, fee income was impacted by a number of items in the first quarter, most significantly the Visa gain of $273.0 million and the BOLI loss of $152.0 million. Additionally, securities gains were $27.0 million last quarter compared with losses of $10.0 million this quarter. On a core basis, fee income increased 2.0% sequentially and 8.0% year-over-year. We had continued strong growth in the payments processing revenue, which was up 15.0% compared with last year. As you would expect, this business is affected by the impact of higher food and energy prices on disposable income and consumer spending. We still expect mid teens growth for the year, in spite of that, given our expectations for new merchant customer acquisitions later in the year. Deposit service charges also remain strong, up 8.0% from the first quarter. Most of the $12.0 million sequential growth came from consumer service charges. Commercial deposit fees reflect strong sales in our expanded treasury management suite, which was offset to some extent by the effect of lower earnings credit rates on service charge income. Corporate banking revenue performed extremely well again this quarter, up 3.0% from a strong quarter in the first quarter and 26.0% year-over-year. The main driver of the strong growth year-over-year was foreign exchange, where revenues increased 79.0%. Investment Advisory revenue decreased 1.0% sequentially and 5.0% from a year ago, largely reflecting lower market valuations and trading activity. Mortgage Banking net revenue totaled $86.0 million, which was down $11.0 million from a very strong first quarter. Originations were $3.3 billion, about $700.0 million lower than last quarter and that was driven by rising mortgage rates that led to lower application and origination volumes in the latter part of the quarter. Results for the quarter also included $9.0 million related to gains on the sale of portfolio loans and that compared with $11.0 million last quarter. You will recall that we adopted the fair value provision of FAS 159 last quarter and that positively impacted second quarter year-over-year comparisons by about $17.0 million. I mentioned earlier that we recorded $10.0 million in securities losses this quarter, compared with net gains of $27.0 million last quarter. The losses this quarter were driven by a $13.0 million other-than-temporary impairment charge on GSE preferred securities and we hold just $58.0 million in face value of these securities, which now have a carrying value of $55.0 million. Moving on to expenses. You may recall that the first quarter results included the reversal of $152.0 million visa litigation reserve which lowered our expenses in the quarter. The first quarter also included $9.0 million in severance-related costs, $7.0 million in acquisition-related expenses due to R-G Crown, and about $18.0 million in seasonally higher FICA and unemployment expenses. In the second quarter we incurred $13.0 million in acquisition-related expenses for First Charter and the inclusion of First Charter in last month’s results also added about $7.0 million to the sequential growth. If you exclude the effect of these items, non-interest expense was relatively flat. On the same basis, year-over-year expense growth was 7.0%, which reflects volume-related processing expense of technology investments that more than offset lower compensation costs as a result of expense initiatives in the past year. Now let me turn to the full year outlook. You will find this on page 13 of the earnings release. To give you a better sense of run rates the outlook excludes unusual items such as lease litigation, Visa, BOLI, and merger and severance charges. I also want to point out that the outlook now includes the impact of acquisitions that we closed this quarter. First, our NII guidance if for mid teens growth. That strong growth rate is driven by both continued solid organic growth and the effect of purchase accounting accretion, which represents about ½ of the growth rate. The full year net interest margin outlook is approximately 350 basis points-360 basis points, probably more toward the high end of that range. Purchase accounting accretion is adding about 20 basis points to the full-year margin. We expect the NIM to increase in the third quarter, given the full quarter’s effect of the accretion but then some of that benefit will be offset during the remainder of the year from an assumed Fed rate increase and from what continues to be pretty stiff competition on the deposit front in a number of our markets. I would note that the guidance excludes the impact of the leveraged lease litigation which will lower our reported NIM for the year by about 15 basis points. Loan growth is expected to be in the high single digits. Commercial growth will continue to be driven by C&I lending. We would expect consumer loan growth to be flat or fairly modest, due to the current economic conditions as well as from a continued focus on disciplined underwriting and pricing. We are expecting core deposit growth to be in the mid-single digits. We expect transaction deposits, excluding consumer CDs, to grow in the mid-single digits as well. Turning to non-interest income, we are expecting a low- to mid-teens growth rate overall. We still expect mid-teens growth in the payment processing revenue. We continue to capture significant market share and overall we feel very good about our growth prospects although we’re cognizant of slower consumer spending and the potential impact that could have on volumes. Corporate banking looks to be up in the high teens, given the strong performance so far and we expect this to continue. Deposit fee growth should continue in the low teens, as we’ve seen thus far and while mortgage banking will post a strong year relative to 2007, we currently expect lower mortgage banking income over the next couple of quarters. Our expense growth expectations haven’t changed much other than the effect of acquisitions. Core growth is expected to still be in the 3.0% range. Just to walk that forward, R-G Crown and First Charter will add about 3.0% to expected expense growth. Processing expense will add 1.0%-2.0% and we expect about 1.0% each from de novos and FDIC deposit insurance costs. And then finally, FAS 159 adds about 2.0% We have updated our full-year net charge-off outlook to be in the 160 basis points-170 basis points range. Now this is a little higher than we expected in our June 8-K, which is a reflection of market trends during the past month, which have been generally negative. We still expect to be well within the capital planning cases that we developed. As Mary noted, we expect home builder charge-offs in the second half to be fairly high as we work through that portfolio. Right now we would expect the majority of those losses to come in the third quarter. If you exclude home builders, we expect losses to trend upward somewhat but at a more moderate pace than we experienced over the last couple of quarters. We expect MPAs to continue to rise, although we currently expect both the growth rate and the dollar growth to slow in the third quarter. Provision expense was obviously high in the quarter and we expect provision expense to continue to exceed net charge-offs, although not at the second quarter level. Provision expense will ultimately be determined by our reserve model. However, I would reiterate that we expect the reserve-to-loan ratio to be above 2.0% by the end of the year and it would be pretty close to that by the end of the third quarter. For taxes, we expect the effective tax rate to be approximately 27.0%-28.0%. Finally, we outlined our revised capital targets last month and those are Tier 1 capital 8.0%-9.0%, total capital ratio of 11.5%-12.5% and tangible equity to tangible assets of 6.0%-7.0%. I will now turn it over to Q&A at this point. Our management team is working very hard for you and our employees continue to deliver for us. Our core business results remain very strong and we believe that the actions we are taking to address our credit concerns are the right steps. We feel very well positioned to deliver outstanding performance when the cycle turns. Operator, can you open the line for questions now, please.

(Operator Instructions) Your first question comes from Brian Foran with Goldman Sachs. Brian Foran - Goldman Sachs: Thanks for all this credit detail. This is actually extraordinarily helpful. I think we’re all trying to struggle with how to get arms around auto risk and when I look at your detail on the auto portfolio, it is actually surprising to me that the biggest differentiation is in the less than 100 and greater than 100% advance rates and the less than 60-month term and the greater tan 60-month term in terms of MPAs and charge-offs between those pockets even more so than the SUV versus the auto, which is what I think we all were afraid of. Do you expect that to continue over time and are those two metrics we should start to think about when we think about the riskiness of your auto book versus everyone else’s our do you think SUVs versus autos over the long term be a bigger differentiator? Mary E. Tuuk: A couple of comments that I would make with respect to our auto portfolio. First of all, if you look at our mix of new and used, it is very much in line with the industry. In addition, if you look at our mix of large trucks and SUVs, it’s also very much in line with the industry. And as part of the modeling that we performed, particularly with respect to the proportion of the portfolio that is comprised of the large truck and large SUV portion, we did shock that more specifically in our various planning scenarios to be able to account for what we might see, in a rise in energy costs or otherwise. So if you look at some of the other portfolio characteristics that you described, we do feel very, very good overall about the performance of the portfolio. And as we continue to provide more specific analysis into the different vintages of the portfolio, we do believe that it is performing very well and we continue to see that. Kevin T. Kabat: The only thing that we continue to watch as we’ve stressed the portfolios, obviously out of the box from the portfolio’s perspective and the economy today, cost of gas becomes a bigger driver related to the larger vehicles. If that shifts, in terms of a recession where unemployment becomes a greater concern, that can obviously have a broader impact and that’s what we really added to the stress and some of the assumptions as we looked at the stress in that portfolio. So that’s kind of the metrics we’re looking at as we go through the analysis.

Your next question comes from Michael Mayo with Deutsche Bank Securities. Michael Mayo – Deutsche Bank Securities : I’m just trying to understand the core trends a little more. You alluded to this. If you exclude First Charter from the results and exclude one-timers, I think you said net income went up 2.0%. Daniel T. Poston: If you exclude First Charter and you exclude the one-timers we would have printed $0.05 in the quarter, which actually includes $0.02 merger-related charge, Mike. Michael Mayo – Deutsche Bank Securities : Right. So I’m just trying to look at core revenue trends. So net interest income would have increased 2.0% sequentially? Kevin T. Kabat: It’s in the release. I don’t have that right in front of me, Mike. Michael Mayo – Deutsche Bank Securities : So just bottom line is total revenues, excluding First Charter and excluding the one-timers, increased how much and how much did expenses increase excluding First Charter and one-timers? Daniel T. Poston: I’ll tell you what, Mike. We’ll do that calc. It can be calced out of what we disclose in the release. So, you’re asking for revenue and we just need to do some quick math. Michael Mayo – Deutsche Bank Securities : Okay. And deposits. They went down 2.0% including First Charter? Daniel T. Poston: Correct. And that’s on an average balance basis and First Charter contributed very little to that because the acquisition occurred so late in the quarter. Michael Mayo – Deutsche Bank Securities : Okay. So deposits down, can you give some color on that? Kevin T. Kabat: Overall, Mike, it’s really [inaudible] if you take a look at the deposit growth. Transaction deposits were up 6.0% on a year-over-year basis. Good account production and really where you saw some of the mix change is really where we actually decided not to match the aggressive CD rates, which we believed were higher than warranted given the value of those deposits. So, overall, we’re pleased with deposit production. We think we’re doing in it the right way and we think we’re doing it with relationships that we can build with value over time as opposed to simply high cost of funds single relationship only deposits. So it really goes back to the same type of conversation we’ve had regarding the every day great rate strategy over time. So, again, we think the deposits and transaction growth is strong and continues to be strong in terms of its core production. Michael Mayo – Deutsche Bank Securities : Okay. Let me get off that then. Are you done with your capital raises and what gives you confidence that you’re done with capital raises? Kevin T. Kabat: Mike, as we went through and evaluated our capital situation, and we tried to explain in terms of the extended information expressed today, we really evaluated all of our options. We didn’t make the decision lightly. And with the volatility in the market we wanted to be proactive and have the capital which allows us to weather a severe-stressed case, in case that happens. Not that we’re predicting it, but in case that happens. So, the strategy we have developed we believe provides the most long-term value for our shareholders and gets us through a very severe-stressed scenario that we’ve tried to outline for you in the call this morning. Michael Mayo – Deutsche Bank Securities : Maybe some of that goes to your outlook. You’re at a 166 basis points loan losses and you’re guiding to 160 basis points-170 basis points for the year. With First Charter. It’s not really apples-to-apples, right? So, maybe you can just give a little more color on your outlook compared to where you are in the second quarter. Mary E. Tuuk: If you look at our guidance for the remainder of the year, essentially what we are guiding you to is the fact that we do expect an increase in homebuilder charge-offs for the remainder of the year. And of that increase we would expect a larger proportion of that increase to occur within the third quarter. And we would give you that guidance based on our analysis of the migration of that portfolio. However, if you were to exclude home builder charge-offs, we would expect the remainder of losses to increase at a very modest pace. Kevin T. Kabat: The other thing we would say, Mike, is by and large the First Charter portfolio is performing as expected and really better than the overall portfolio so it’s a slight positive to us in terms of the magnitude of contribution. Michael Mayo – Deutsche Bank Securities : And just a little more color on your outlook which is appreciate. So your core margin, I guess that would be excluding First Charter, should that go higher from here? Kevin T. Kabat: Core margin went up 4 basis points if you exclude the effect of First Charter. And again, we’re expecting that to, as Dan said in the outlook, to stay relatively flat, maybe down slightly toward the end of the year is really what our expectation is. Daniel T. Poston: Purchase accounting is going to add about 20 basis points to the annual net interest margin. Exclusive of that we do see some pressure on margins in the second half. Particularly from deposit competition, as banks prepare for what might be a rising rate environment, there will be increased competition for deposits and to extend maturities. The other thing I would point out in terms of the impact of First Charter, while we have the pickup that we described, relative to the purchase accounting accretion, before purchase accounting First Charter actually has a slight drag on margins. Their margin was running about 3.0% right before the acquisition. And then lastly LIBOR/Fed Fund spreads have been historically wide in the first half of the year and we’ve benefited somewhat from that. We expect that to narrow somewhat in the second half, especially with an assumed Fed rate increase.

I’ve just done some quick math here and I think the information is in the release, so don’t, I might have forgotten something here. But if you take NII and you add back the effect of the LILO charge, which was 130, you get to 874. If you subtract the purchase accounting accretion, and First Charter, if you think of, they added some NII for the 24 days that they were with us, but there’s funding costs associated with that, so there’s not a lot of NII effect of First Charter overall. You end up with NII being up about 2.0% and then fees. You’ve got Visa, BOLI, and securities gained last quarter, you have security losses this quarter. If you take those out, fees are up about 2.0%. First Charter added about a few million dollars, maybe $5.0 million for the quarter. So fees are up about 2.0% excluding First Charter, also. So revenue is up about 2.0% sequentially. Michael Mayo – Deutsche Bank Securities : And expenses under the same analysis?

Well, you didn’t ask for expenses so I haven’t done the math on that. But that is crystal clear in the release. Michael Mayo – Deutsche Bank Securities : Well, no, because you still have First Charter expenses.

No, it’s in there. I think Dan mentioned expenses were relatively flat, excluding First Charter and some of the other things, the Visa reversal last quarter and that sort of thing. Michael Mayo – Deutsche Bank Securities : Second bullet in your release is pre-tax pre-provision earnings for basically $745.0 million on a core basis. Do you think of that future kind of earnings as being a cushion for your loan losses? Does that factor into your analysis of how much capital you need? Kevin T. Kabat: Yes, we did take that into consideration. Our expectation as we’ve really kind of expressed all along is that we do have strong core earnings in the company, we’ve been able to continue that strong core growth and we expect to be able to continue that strong core growth. So, absolutely, that was taken into consideration as well. Michael Mayo – Deutsche Bank Securities : And under analysis, how much will you haircut that $745.0 million when you’re doing your analysis the next couple of years? Or do you not? Kevin T. Kabat: You will have to wait for the outlook, when we get to 2009. Again, we did that relative to trying to put a good capital plan together. We won’t give guidance for 2009 until we get closer to that mark. We will give you more information as it becomes more transparent to us, as we get closer. Daniel T. Poston: The only thing I would add to that is we have talked a bit about the degree to which we stressed our credit scenarios as we built our capital plan and while we did stress them quite significantly, the core earning trends, we did not apply the level of stress to those because we didn’t feel like the uncertainty surrounding those items was the same as it was with respect to credit.

Your next question comes from Vivek Juneja with JP Morgan. Vivek Juneja - JP Morgan: A couple of clarifications on the pre-tax pre-provision earnings. How much of that would go away from the business sale that you are incorporating into your capital raise? Does that include any of that? Kevin T. Kabat: One of the things that we’re very sensitive to, and obviously you missed it, is kind of not commenting in greater detail in what businesses are involved or aren’t involved, in terms of the sale. Our expectation in terms of the business evaluating in total is less than 10.0% of the Bancorp, as we mentioned in our script, and our earnings up front. So that’s about all the color I can give you right now. Vivek Juneja - JP Morgan: And then the same one on the pre-tax pre-provision. You said you didn’t measure the credit impact, and I’m assuming the credit impact of additional non-performers or rising collection costs, those are not factored into that? Daniel T. Poston: Right. Kevin T. Kabat: The expense impact of those. The only thing we excluded is the provision. So to the extent that we’ve incurred additional collection expenses and so forth or we’ve lost NII because of non-accruals, that would be impacting that overall result. Vivek Juneja - JP Morgan: Going back to the auto-related question on SUVs and pickup trucks, what are you assuming in terms of recovery values? How much decline are you assuming in that? Mary E. Tuuk: In some cases we’re seeing decline as much as 62.0% in that portfolio, the large trucks and large SUVs.

There are no further questions. Kevin T. Kabat: We appreciate you time this morning. We know everyone must be on the key call. It’s a long earnings season and it’s a busy day. We recognize the steps we last month were difficult decisions that we don’t take lightly, but stronger capital and stronger reserves are necessary in this environment to deal with any potential possibility of negative trends in the industry, which may continue for an extended time and it’s our responsibility to ensure that’s the case. So, our people are focused in delivering and we are confident they will continue to do that and would like to thank those who are listening for their hard work during these difficult time. We are well positioned at this point and we are committed to delivering above industry performance. We continue to demonstrate that through strong operating results and the earnings power we continue to build will provide significant bottom line earnings power when this cycle turns, and it will. So thanks again for joining us. Talk to you next quarter.

This concludes today’s conference call. You may now disconnect.