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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2004

Commission File Number 0-8076

FIFTH THIRD BANCORP

(Exact name of Registrant as specified in its charter)

Fifth Third Center

Cincinnati, Ohio 45263

(Address of principal executive offices)

Registrant’s telephone number, including area code: (513) 534-5300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X        No          

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X        No          

There were 561,292,585 shares of the Registrant’s Common Stock, without par value, outstanding as of October 31, 2004.

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FIFTH THIRD BANCORP

INDEX

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Registrant including statements preceded by, followed by or that include the words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions increase significantly; (2) changes in the interest rate environment reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (4) general economic conditions, either national or in the states in which the Registrant does business, are less favorable than expected; (5) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (6) changes and trends in the securities markets; (7) legislative or regulatory changes or actions, or significant litigation, adversely affect the Registrant or the businesses in which the Registrant is engaged; (8) difficulties in combining the operations of acquired entities; and (9) the impact of reputational risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity. The Registrant undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this report.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 2)

TABLE 1: Selected Financial Data

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The following is management’s discussion and analysis of certain significant factors that have affected Fifth Third Bancorp’s financial condition and results of operations during the periods included in the Condensed Consolidated Financial Statements, which are a part of this filing.

Overview

This overview of management’s discussion and analysis highlights selected information in the financial results of the Registrant and may not contain all of the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources and critical accounting estimates, you should carefully read this entire document. Each of these items could have an impact on the Registrant’s financial condition and results of operations.

The Registrant is a diversified financial services company headquartered in Cincinnati, Ohio. The Registrant has $98 billion in assets, operates 17 affiliates with 1,005 full-service Banking Centers including 130 Bank Mart^® locations open seven days a week inside select grocery stores and 1,872 Jeanie^® ATMs in Ohio, Indiana, Kentucky, Michigan, Illinois, Florida, West Virginia and Tennessee. The financial strength of two of the Registrant’s affiliate banks, Fifth Third Bank and Fifth Third Bank (Michigan), continues to be recognized by rating agencies with deposit ratings of AA- and Aa1 from Standard & Poor’s and Moody’s, respectively. Additionally, the Registrant is recognized by Moody’s with one of the highest senior debt ratings for any U.S. bank holding company of Aa2. The Registrant operates four main businesses: Commercial Banking, Retail Banking, Investment Advisors and Fifth Third Processing Solutions.

The Registrant’s revenues are fairly evenly dependent on net interest income and noninterest income. For the nine months ended September 30, 2004, net interest income, on a fully taxable equivalent (“FTE”) basis, and noninterest income provided 54% and 46% of total revenue, respectively. Changes in interest rates, credit quality and the capital markets are therefore primary factors that drive the performance of the Registrant. As described on pages 62-64 of the Registrant’s 2003 Annual Report, risk identification, measurement, monitoring, control and reporting are important to the management of risk and to the continuation of the strong financial performance and capital strength of the Registrant.

Net interest income is derived from the interest collected from borrowers and on interest-earning investments and loans less interest paid to depositors and on other interest-bearing liabilities. Generally, the rates of interest the Registrant earns on its assets and owes on its liabilities are established for a period of time. The change in market interest rates over time exposes the Registrant to interest rate risk and potential adverse changes in net interest income. The Registrant manages this risk by continually analyzing and adjusting the composition of its assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to changes in market interest rates. Additionally, in the ordinary course of business, the Registrant enters into certain derivative transactions as part of its overall strategy to manage its interest rate risks and prepayment risks.

The Registrant is also exposed to the risk of losses on its loan and lease portfolio as a result of changing expected cash flows caused by loan defaults, inadequate collateral or changes in prepayment rates, among other factors.

Noninterest income is derived primarily from electronic funds transfer (“EFT”) and merchant transaction processing fees, fiduciary and investment management fees, banking fees and service charges, mortgage banking revenue and operating lease revenue. The Registrant manages market risk and credit risk by monitoring and reacting to changes that may impact revenue.

Net interest income, net interest margin, net interest rate spread and the efficiency ratio are presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations on an FTE basis as the interest on certain loans and securities held by the Registrant is not taxable for federal income tax purposes. The FTE basis adjusts for the tax-favored status of income from certain loans and securities. The Registrant believes this measure to be the preferred industry measurement of net interest income as it provides a relevant comparison between taxable and non-taxable amounts.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Registrant’s net income available to common shareholders was $471 million for the third quarter of 2004, up 13% compared to $417 million for the same period last year. Earnings per diluted share were $.83 for the third quarter, up 15% from $.72 for the same period last year. The Registrant’s quarterly dividend of $.32 per common share increased from $.29, an increase of 10% on a year-over-year basis. The financial results reflect growth experienced across nearly all of the lines of business, including solid growth in both commercial and consumer loans and continued expense control. Additionally, as a result of the recent improvement and expected stability in credit quality trends, the Registrant decreased the reserve for credit losses by $27 million during the third quarter of 2004.

The Registrant continues to invest in the geographic areas within its footprint that offer the best growth prospects. The Registrant opened 59 new banking centers that did not involve the relocation or consolidation of existing facilities during the first nine months of 2004. In August, the Registrant announced an agreement to acquire First National Bankshares of Florida, Inc., a $5.6 billion asset bank holding company with a presence in Orlando, Tampa and the west coast of Florida. The acquisition is subject to legal and regulatory approvals and is expected to close in the first quarter of 2005. When it is complete, the Registrant will have over 90 banking centers and $6 billion in assets in Florida.

The Registrant’s capital ratios exceed the “well-capitalized” guidelines as defined by the Board of Governors of the Federal Reserve System (“FRB”). As of September 30, 2004, the Tier 1 capital ratio was 10.59% and the Total Risk Based capital ratio was 12.64%. The Registrant’s capital strength and financial stability have enabled the Registrant to maintain credit ratings that are equaled or surpassed by only three other U.S. bank holding companies.

Statements of Income Analysis

Net Interest Income

Net interest income (FTE) for the third quarter of 2004 was $766 million, a four percent increase over $735 million for the same period last year. The increase in net interest income was due to the $6.3 billion or eight percent increase in average interest-earning assets, mitigated by the 10 basis point (“bp”) decrease in net interest margin. Tables 3 and 4 provide the relative impact of the growth in the balance sheet and changes in interest rates on net interest income. The net interest margin contracted as a result of efforts to reduce interest rate risk and improve the long-term profile of the Registrant. These efforts included (i) termination of approximately $2.2 billion in notional of receive-fixed/pay-variable interest rate swaps resulting in an approximate $4 million negative impact to net interest income from the loss of positive spread and termination charges in the third quarter, (ii) increased rates offered on interest-bearing deposit accounts in order to improve the funding profile resulting in a 21 bp increase in the average rate paid on interest-bearing deposits and (iii) increased contribution of variable investment securities in the available-for-sale portfolio from seven percent at December 31, 2003 to 15% at September 30, 2004. The contribution of noninterest-bearing funding to the net interest margin equaled 30 bp in both the third quarter of 2003 and 2004.

Interest income (FTE) from loans and leases increased $44 million or six percent compared to the third quarter of 2003. The increase resulted from the growth in average loans and leases of $3.8 billion or seven percent for the third quarter of 2004 over the comparable period in 2003. The increase in average loans and leases included growth in commercial loans of $3.5 billion or 13% in 2004. Excluding the impact of the Franklin Financial Corporation acquisition that was completed in June 2004, average commercial loans increased by 11%. The Registrant’s continued investment in additional commercial sales people has largely contributed to its commercial loan portfolio growth in a period of declining commercial loan demand. The Registrant continues to benefit from increased credit line usage from existing commercial customers as well as success in gaining new customers within its footprint. Average consumer loans increased by $355 million or one percent compared to the third quarter of 2003. Excluding the impact of the Franklin acquisition and the $750 million auto loan securitization that occurred in June 2004, average consumer loans increased by four percent.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 2: Components of Average Loan Portfolio (including held for sale)

The interest income (FTE) from investment securities and short term investments increased by $15 million or five percent during the third quarter of 2004 compared to the same period in 2003. The increase in interest is due to the growth in average investment securities and other short-term investments for the third quarter of 2004 of $2.4 billion or eight percent from the third quarter of 2003. Over the past several months, the Registrant has taken action to migrate the investment portfolio to be more heavily weighted towards adjustable-rate and shorter-term securities in connection with its efforts to reduce liability sensitivity. This action contributed to the 12 bp decline in yield from the taxable securities portfolio compared to the third quarter of 2003.

The interest paid on interest-bearing deposits increased $5 million or four percent in third quarter of 2004 over the comparable period in 2003 due to the increase in short-term rates. Average interest-bearing deposits were lower by $241 million or less than one percent compared to the third quarter of 2003. The decline is largely attributable to certificates of deposits greater than $100,000, which declined $1.4 billion or 38% from the comparable period in 2003. The movement in this deposit type is a function of overall balance sheet funding requirements. Average demand deposits for the third quarter of 2004 increased $1.7 billion or 15% over the third quarter of 2003 reflecting the Registrant’s success in generating new account growth in its commercial line of business. The growth in non-interest bearing funding is a critical component in the growth in net interest income. A key focus of the Registrant for the remainder of the year continues to be growing its transaction account products such as checking, savings and money market accounts in order to reduce its reliance on other sources to fund the expected growth in the balance sheet.

The interest paid on long-term debt increased by $11 million or 13% in the third quarter over the comparable period in 2003 due to the increase in the average long-term debt outstanding. Average long-term debt increased $5.5 billion or 57% in the third quarter of 2004 over the comparable period in 2003. The Registrant has increased long-term debt to fund the growth in the balance sheet and to reduce its short-term wholesale funding position. Average federal funds purchased declined $2.5 billion or 34% compared to the third quarter of 2003. The interest expense associated with federal funds declined by only $2 million or 10% due to the federal fund rate increases that took place in the second and third quarters of 2004.

The Registrant expects net interest income growth year-over-year to continue to be in the mid-single digits in the short-term assuming asset growth is consistent with recent periods, modest contraction in net interest margin and an environment with a measured pace of interest rate increases.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

TABLE 3: Consolidated Average Balance Sheets and Analysis of Net Interest Income (FTE)