1  Fifth Third Bank | All Rights Reserved The U.S. Economy: Taking Measure of 2012 Presented by: Jeff Korzenik SVP, Chief Investment Strategist Fifth Third Bank

2  Fifth Third Bank | All Rights Reserved Beginning at the End In 2011 the Economy was: “A Glass Half-Empty” —Weak GDP growth, particularly for this stage of the business cycle —Weak but noticeable employment growth —Deleveraging of the household balance sheet —A new age of limits for state and local governments —Federal government unable to make substantive progress in addressing imbalances —Economic “headwinds” from events overseas In 2012 the economy will be: “A Glass Half-Full” —Weak GDP growth, particularly for this stage of the business cycle —Weak but noticeable employment growth —Deleveraging of the household balance sheet —A new age of limits for state and local governments —Federal government unable to make substantive progress in addressing imbalances —Economic “headwinds from events overseas

3  Fifth Third Bank | All Rights Reserved “A Glass Half-Empty” —Estimated real GDP Growth of 1.8% —CPI: 3.0% —Core CPI: 2.2% —10-year Treasury yield fell from 3.37% to 1.87% —The total return of the S&P500 was 2.11%, almost all of which was attributable to dividends 2011 in Review

4  Fifth Third Bank | All Rights Reserved The Historical Case for Robust Recoveries Source: Ned Davis Research charts are used with permission

5  Fifth Third Bank | All Rights Reserved Corporate Earnings Follow the Playbook

6  Fifth Third Bank | All Rights Reserved Source: Bureau of Labor Statistics But Employment Doesn’t: Source: FactSet Charts are use with permissions.

7  Fifth Third Bank | All Rights Reserved Recessions vs. Panics

8  Fifth Third Bank | All Rights Reserved Recessions vs. Panics “The symptoms of an approaching panic… are wonderful prosperity… by a rise in the price of all commodities, of land, of houses, etc, etc….a lowering of interest, by the gullibility of the public, by a general taste for speculating in order to grow rich at once, by a growing luxury leading to excessive expenditures, a very large amount of discounts and loans and bank notes and a very small reserve in specie and legal-tender notes and poor and decreasing deposits [leverage].

9  Fifth Third Bank | All Rights Reserved Copyright 2011 Ned Davis Research, Inc Deleveraging the Private Sector

10  Fifth Third Bank | All Rights Reserved Copyright 2011 Ned Davis Research, Inc Deleveraging the Private Sector

11  Fifth Third Bank | All Rights Reserved Source: Federal Reserve, Pew Center for the States Traditional Debt Unfunded Pension Liabilities Unfunded Retiree Health Benefits Deleveraging the Public Sector: It’s Worse Than We Thought

12  Fifth Third Bank | All Rights Reserved States Lead the Way Source: Pew Center on the States

13  Fifth Third Bank | All Rights Reserved Source: Strategas Research, used with permission Deleveraging the Public Sector: Washington’s turn next?

14  Fifth Third Bank | All Rights Reserved The Vicious Cycle of Long-Term Unemployment Long-term unemployment leads to long-term unemployment Weak housing lessens labor mobility Hiring “intensity” stays weak Average Duration on Unemployment in the U.S. (weeks, seasonally adjusted) Source: BLS Source: FactSet Research System charts are use with permission.

15  Fifth Third Bank | All Rights Reserved Deconstructing Inflation: Wage Pressures Source: Bloomberg Charts are used with permission. YOY change: US Avg Hourly Earnings U.S. Unemployment Rate

16  Fifth Third Bank | All Rights Reserved Deconstructing Inflation: Commodity Pricing Source: Source:

17  Fifth Third Bank | All Rights Reserved Deconstructing Inflation: Commodity Pricing Source: FactSet Charts are use with permission.

18  Fifth Third Bank | All Rights Reserved Source: Cleveland Fed (Haubrich, Pennacchi, Ritchken) Deconstructing Inflation: Expectations

19  Fifth Third Bank | All Rights Reserved Deconstructing Inflation: The Real Risk

20  Fifth Third Bank | All Rights Reserved Global Impacts in 2012

21  Fifth Third Bank | All Rights Reserved Anticipating the Impact of Euro Zone Recession Source: FactSet

22  Fifth Third Bank | All Rights Reserved When a Half-Full Cup Beats One Half-Empty

23  Fifth Third Bank | All Rights Reserved percentage of the adult, nonbusiness-owner population that starts a business each month The Potential For Upside Surprises

24  Fifth Third Bank | All Rights Reserved Potential Upside in Reshoring Manufacturing Source: BLS $ Labor Costs in Manufacturing vs. U.S.

25  Fifth Third Bank | All Rights Reserved Will Manufacturing Return? Source: Bloomberg Charts are use with permissions $/ Chinese Yuan

26  Fifth Third Bank | All Rights Reserved Looking At 2012 Consensus Federal Reserve Estimate Wall Street Consensus Surprise Potential Bias vs Street Real GDP2.45%2.2%Higher Unemployment8.35%8.2%Lower CPI1.60%2.30%Same Fed Funds Raten/a0.25%Same 10-Year Tsyn/a2.56%Lower

27  Fifth Third Bank | All Rights Reserved Disclosures & Definitions Opinions are provided by Fifth Third Private Bank.This information is intended for educational purposes only and does not constitute the rendering of investment advice or a specific recommendation on investment activities and trading. The mention of any specific security does not constitute a solicitation or an offer to buy or sell any security. This information is current as of the date of this presentation and is subject to change at any time, based on market and other conditions. The Standard & Poor's 500 Stock Index is a composite of the 500 largest companies in the United States and it often used as a measure of the overall U.S. stock market. The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market of goods and services purchased by individuals. The weights of components are based on consumer spending patterns U.S. Treasury notes are issued with maturities of one to 10 years in denominations beginning at $1,000. Investors purchase bills at a discounted price from their face value. At maturity, the Treasury redeems the bills at full face value. The difference between the discounted price paid and the face value of the bill when it is redeemed is its return. U.S. GDP (Gross Domestic Product) is the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports CRB/Reuters Futures Price Index is an equal-weighted geometric average of commodity price levels relative to the base year average price. Indexes are unmanaged and do not incur investment management fees. You cannot invest directly in an index. Past performance is no guarantee of future results. Ned Davis Research Charts, Bloomberg Charts and FactSet Charts are used with permissions. Fifth Third Bancorp provides access to investments and investment services through various subsidiaries. Investments and Investment Services: Are Not FDIC InsuredOffer No Bank GuaranteeMay Lose Value Are Not Insured By Any Federal Government AgencyAre Not A Deposit

28  Fifth Third Bank | All Rights Reserved The U.S. Economy: A Difference of Kind Q & A