from previous acquisitions being fully amortized. Additionally, the  Bancorp recorded a $73 million reversal of the Visa litigation  reserve in 2009. The expense for representation and warranties,  which is included in losses and adjustments, totaled $110 million  and $31 million in 2010 and 2009, respectively, with the increase  resulting primarily from a higher volume of repurchase demands.  The decrease in the provision for unfunded commitments was  due to lower estimates of inherent losses resulting from a decrease  in delinquent loans as general economic conditions began to show  signs of moderation in 2010.  The Bancorp incurred $242 million of expense for FDIC  insurance and other taxes in 2010 compared to $269 million in  2009. Effective June 30, 2009, the FDIC imposed a special  assessment on each insured depository institution calculated as 5  bp of total assets less Tier 1 capital which resulted in the Bancorp  incurring a $55 million special assessment charge in the second  quarter of 2009. Due to the passage of the Dodd-Frank Act, the  FDIC was required to redefine the deposit insurance assessment  base, make changes to assessment rate methodology and  implement new DIF dividend provisions. The FDIC adopted the  final rule on February 7, 2011, that revises the risk-based  assessment system for all large insured depository institutions. The  Bancorp anticipates a decline in FDIC insurance for the year  ended December 31, 2011, compared to levels incurred for the  year ended December 31, 2010.  The efficiency ratio (noninterest expense divided by the sum  of net interest income and noninterest income) was 60.7% and  46.9% for 2010 and 2009, respectively. The increase from 2009  was driven by the Processing Business Sale which resulted in a  pre-tax gain of $1.8 billion in 2009. Excluding the gain from the  Processing Business Sale, the efficiency ratio was 60.0% for 2009.  The Bancorp continues to focus on efficiency initiatives, as part of  its core emphasis on operating leverage and on expense control.  The Bancorp’s income (loss) before income taxes, applicable  income tax expense (benefit) and effective tax rate for each of the  periods indicated are shown in Table 12. Applicable income tax  expense for all periods includes the benefit from tax-exempt  income, tax-advantaged investments and general business tax  credits, partially offset by the effect of nondeductible expenses.  The effective tax rate for the tax year ended December 31, 2010  was primarily impacted by $133 million in tax credits, a $26  million tax benefit resulting from the settlement of certain  uncertain tax positions with the IRS and $25 million of non-cash  charges relating to previously recognized tax benefits associated  with stock-based compensation that will not be realized. The  effective tax rate for the tax year ended December 31, 2009 was  primarily impacted by $112 million in tax credits, a $106 million  tax benefit related to the decision to surrender one of the  Bancorp’s BOLI policies and the determination that losses on the  policy recorded in prior periods are now tax deductible, and a $55  million reduction in income tax expense related to the Bancorp’s  leveraged lease litigation settlement with the IRS. See Note 21 of  the Notes to Consolidated Financial Statements for further  information on income taxes.  TABLE 11: COMPONENTS OF OTHER NONINTEREST  EXPENSE  For the years ended December 31 ($ in millions) 2010 2009 2008 FDIC insurance and other taxes  $242 269 73 Loan and lease  211 234 188 Losses and adjustments  187 110 95 Affordable housing investments  impairment  100 83 67 Marketing  98 79 102 Professional services fees  77 63 102 Travel  51 41 54 Postal and courier  48 53 Intangible asset amortization  43 57 56 Insurance expense  42 50 30 Operating lease  41 39 32 OREO  33 24 11 Recruitment and education  31 30 33 Supplies  24 25 31 Data processing  21 14 Visa litigation reserve - (73) (99) Provision for unfunded commitments and  letters of credit  (24) 99 98 Other  166 167 148 Total other noninterest expense  $1,394 1,371 1,089 For the years ended December 31 ($ in millions)   2010  2009  2008  2007 2006 Income (loss) before income taxes and cumulative effect  $940 767 (2,664) 1,537 1,627 Applicable income tax expense (benefit) 187 30 (551) 461 443 Effective tax rate  19.8% 3.9 20.7 30.0 27.2 TABLE 12: APPLICABLE INCOME TAXES  Applicable Income Taxes  34 Fifth Third Bancorp  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS