NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  29. CERTAIN REGULATORY REQUIREMENTS AND CAPITAL RATIOS  The principal source of income and funds for the Bancorp (parent  company) are dividends from its subsidiaries. The dividends paid  by the Bancorp’s state chartered bank are subject to regulations  and limitations prescribed by the appropriate state authority. The  Bancorp’s nonbank subsidiaries are also limited by certain federal  and state statutory provisions and regulations covering the amount  of dividends that may be paid in any given year.  The Bancorp’s subsidiary banks must maintain cash reserve  balances when total reservable deposit liabilities are greater than  the regulatory exemption. These reserve requirements may be  satisfied with vault cash and noninterest-bearing cash balances on  deposit with the FRB. In 2010 and 2009, the subsidiary banks were  required to maintain average cash reserve balances of $547 million  and $439 million, respectively. The FRB adopted guidelines pursuant to which it assesses the  adequacy of capital in examining and supervising a bank holding  company and in analyzing applications to it under the Bank  Holding Company Act of 1956, as amended. These guidelines  include quantitative measures that assign risk weightings to assets  and off-balance sheet items, as well as define and set minimum  regulatory capital requirements. All bank holding companies are  required to maintain core capital (Tier I) of at least four percent of  risk-weighted assets (Tier I capital ratio), total capital of at least  eight percent of risk-weighted assets. (Total risk-based capital  ratio) and Tier I capital of at least three percent of adjusted  quarterly average assets (Tier I leverage ratio). Failure to meet the  minimum capital requirements can initiate certain actions by  regulators that could have a direct material effect on the  Consolidated Financial Statements of the Bancorp. Tier I capital consists principally of shareholders’ equity  including Tier I qualifying trust preferred securities. It excludes  unrealized gains and losses on available-for-sale securities and  unrecognized pension actuarial gains and losses and prior service  cost, goodwill and certain other intangibles. Current provisions of  the recently enacted Dodd-Frank Act will phase out the inclusion  of certain trust preferred securities as a component of Tier I  capital beginning January 1, 2013. Under these provisions, these  trust preferred securities would qualify as a component of Tier II  capital. At December 31, 2010, the Bancorp’s Tier I capital  included $2.8 billion of trust preferred securities.  Tier II capital consists principally of perpetual and trust  preferred stock that is not eligible to be included as Tier I capital,  term subordinated debt, intermediate-term preferred stock and,  subject to limitations, allowances for loan and lease losses. The following table presents capital and risk-based capital and  leverage ratios for the Bancorp and its subsidiary bank at  December 31:  Assets and credit equivalent amounts of off-balance-sheet  items are assigned to one of several broad risk categories,  according to the obligor, guarantor or nature of collateral. The  aggregate dollar value of the amount of each category is multiplied  by the associated risk weighting of that category. The resulting  weighted values from each of the risk categories in sum is the total  risk-weighted assets. Quarterly average assets for this purpose do  not include goodwill and any other intangible assets and other  investments that the FRB determines should be deducted from  Tier I capital. The supervisory agencies, including the Bancorp’s primary  regulator, the Federal Reserve Bank of Cleveland, have issued  regulations regarding the capital adequacy of subsidiary banks.  These requirements are substantially similar to those adopted by  the FRB regarding bank holding companies, as described  previously. In addition, the federal banking agencies have issued  substantially similar regulations to implement the system of  prompt corrective action established by Section 38 of the Federal  Deposit Insurance Act. Under the regulations, a bank generally  shall be deemed to be well-capitalized if it has a Total risk-based  capital ratio of 10% or more, a Tier I capital ratio of six percent or  more, a Tier I leverage ratio of five percent or more and is not  subject to any written capital order or directive. If an institution  becomes undercapitalized, it would become subject to significant  additional oversight, regulations and requirements as mandated by  the Federal Deposit Insurance Act. On September 30, 2009 the Bancorp merged its Fifth Third  Bank (Michigan) and Fifth Third Bank N.A. charters into the Fifth  Third Bank (Ohio) charter. As a result, regulatory capital  requirements are only applicable to the Bancorp and its subsidiary  bank, Fifth Third Bank (Ohio) as of December 31, 2010 and 2009.  The Bancorp and its subsidiary bank had Tier I, Total risk-based  capital and Tier I leverage ratios above the well-capitalized levels at  December 31, 2010 and 2009. As of December 31, 2010, the most  recent notification from the FRB categorized the Bancorp and its  subsidiary bank as well-capitalized under the regulatory framework  for prompt corrective action. To continue to qualify for financial  holding company status pursuant to the Gramm-Leach-Bliley Act  of 1999, the Bancorp’s subsidiary banks must, among other things,  maintain “well-capitalized” capital ratios.  ( a) Under the banking agencies risk-based capital guidelines, assets and credit equivalent amounts of derivatives and off-balance sheet exposures are assigned to broad risk categories. The  aggregate dollar amount in each risk category is multiplied by the associated risk weight of the category. The resulting weighted values are added together resulting in the Bancorp’s total  risk-weighted assets.  2010  2009  ($ in millions)  Amount Ratio Amount Ratio  Total risk-based capital (to risk-weighted assets):  (a) Fifth Third Bancorp (Consolidated)  $18,173 18.14 % $17,648 17.48 % Fifth Third Bank 14,931 15.17 15,663 15.56  Tier I capital (to risk-weighted assets):  Fifth Third Bancorp (Consolidated)  13,965 13.94 13,428 13.30  Fifth Third Bank 12,976 13.18 13,574 13.49  Tier I leverage (to average assets):  Fifth Third Bancorp (Consolidated)  13,965 12.79 13,428 12.34  Fifth Third Bank 12,976 12.08 13,574 12.69  124 Fifth Third Bancorp