MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS BALANCE SHEET ANALYSIS  Loans and Leases  Fifth Third Bancorp 43 As of December 31 ($ in millions)  2010 2009 2008 2007 2006 Commercial: Commercial and industrial loans  $27,275 25,687 29,220 26,079 20,831 Commercial mortgage  10,992 11,936 12,731 11,967 10,405 Commercial construction  2,111 3,871 5,335 5,561 6,168 Commercial leases  3,378 3,535 3,666 3,737 3,841 Subtotal – commercial  43,756 45,029 50,952 47,344 41,245 Consumer:  Residential mortgage loans  10,857 9,846 10,292 11,433 9,905 Home equity  11,513 12,174 12,752 11,874 12,154 Automobile loans  10,983 8,995 8,594 11,183 10,028 Credit card  1,896 1,990 1,811 1,591 1,004 Other consumer loans and leases  702 812 1,194 1,157 1,167 Subtotal – consumer  35,951 33,817 34,643 37,238 34,258 Total loans and leases  $79,707 78,846 85,595 84,582 75,503 Total loans and leases (excludes held for sale)  $77,491 76,779 84,143 80,253 74,353 TABLE 18: COMPONENTS OF TOTAL LOANS AND LEASES (INCLUDES HELD FOR SALE)  Average consumer loans and leases were relatively flat  compared to 2009. An increase in average automobile loans of  $1.6 billion, or 18%, was offset by decreases in average residential  mortgage loans of $1.0 billion, or nine percent, and average home  equity loans of $538 million, or four percent. The impact of the  previously mentioned consolidation of automobile and home  equity loans was largely offset by a decrease in customer demand  and tighter underwriting standards. Residential mortgage originations in 2009 were higher than in 2010 resulting in a lower  annual average; however volume of new originations during the  fourth quarter of 2010 were greater than the fourth quarter of  2009 resulting in a higher period end balance at December 31,  2010 compared to December 31, 2009.  Average commercial loans and leases decreased $3.9 billion,  or eight percent, compared to 2009. The decrease in average  commercial loans consisted of a decrease of $1.6 billion, or 34%,  in average commercial construction loans, $1.2 billion, or four  percent, in average commercial and industrial loans and $926  million, or seven percent, in average commercial mortgage loans.  These decreases were driven by lower customer line utilization  rates, lower demand for new loans and tighter underwriting  standards on commercial real estate loans to manage risk, partially  offset by the impact of the previously discussed change in U.S.  GAAP. Commercial and industrial loans experienced an increase  in origination activity primarily during the fourth quarter of 2010  which led to a higher period end balance at December 31, 2010  compared to December 31, 2009  mentioned impact on automobile loans due to the change in U.S.  GAAP and a strategic focus to increase automobile lending during  2010 through consistent and competitive pricing, enhanced  customer service with our dealership network and disciplined sales  execution. Residential mortgage loans increased $1.0 billion, or  10%, from December 31, 2009 as a result of a 51% increase in  origination activity for the fourth quarter of 2010 compared to the  fourth quarter of 2009 and management’s decision in the third  quarter of 2010 to retain certain mortgage loans primarily  originated through the Bancorp’s retail branches. Home equity  loans decreased $660 million, or five percent, from December 31,  2009 as tighter underwriting standards and a decrease in customer  demand were partially offset by the previously mentioned impact  on home equity loans due to the change in U.S. GAAP. Credit  card loans decreased $94 million, or five percent, as a result of a  decrease in new account origination activity throughout 2010.  Other consumer loans and leases, primarily made up of student  loans designated as held for sale and automobile leases, decreased  $110 million, or 14%, due to a decline in new originations driven  by tighter underwriting standards. The Bancorp classifies its loans and leases based upon the primary  purpose of the loan. Table 18 summarizes end of period loans and  leases, including loans held for sale, and Table 19 summarizes  average total loans and leases, including loans held for sale. At December 31, 2010, total loans and leases, including loans  held for sale, increased $861 million, or one percent, compared to  December 31, 2009. The increase consisted of a $2.1 billion  increase in consumer loans partially offset by a $1.3 billion  decrease in commercial loans. In accordance with a change in U.S.  GAAP, on January 1, 2010 the Bancorp consolidated certain  commercial and industrial, automobile and home equity loans with  remaining outstanding balances of $372 million, $648 million and  $241 million, respectively, at December 31, 2010. Excluding the  impact of this change in U.S. GAAP, total loans and leases were  relatively flat compared to December 31, 2009. For further  discussion on this change in U.S. GAAP, refer to Note 1 of the  Notes to Consolidated Financial Statements.  Total commercial loans and leases decreased $1.3 billion, or  three percent, compared to December 31, 2009 primarily as the  result of decreases in commercial construction loans and  commercial mortgage loans, partially offset by an increase in  commercial and industrial loans. Commercial construction loans  decreased $1.8 billion, or 45%, from December 31, 2009 primarily  due to management’s strategy to suspend new lending on  commercial non-owner occupied real estate beginning in 2008 and  the outflow of completed construction projects that were  transitioned to commercial mortgage loans. Despite the transition  of commercial construction loans, commercial mortgage loans  decreased $944 million, or eight percent, from December 31, 2009  due to tighter underwriting standards on commercial real estate  loans in an overall effort to limit exposure to commercial real  estate. Commercial and industrial loans increased $1.6 billion, or  six percent, compared to December 31, 2009 as a result of the  previously mentioned change in U.S. GAAP and an increase in  new loan originations activity, primarily due to an increase in  customer demand with continued growth in the manufacturing  and healthcare industries. This increase was partially offset by an  $856 million decrease in loans originally issued to FTPS in  conjunction with the Processing Business Sale; FTPS refinanced  the original $1.25 billion in loans into a larger syndicated loan  structure in connection with an acquisition. Total consumer loans and leases increased $2.1 billion, or six  percent, from December 31, 2009. This increase was primarily the  result of increases in automobile loans and residential mortgage  loans, partially offset by a decrease in home equity loans.  Automobile loans increased $2.0 billion, or 22%, compared to  December 31, 2009 primarily as a result of the previously 