For immediate release

The Federal Reserve Board today announced its approval of the notice of Fifth Third Bancorp, Cincinnati, Ohio, to acquire all the voting shares of The Ohio Company, Columbus, Ohio, and thereby engage in various nonbanking activities, including underwriting and dealing in, to a limited extent, all types of debt and equity securities, other than interests in open-end investment companies. Attached is the Board's Order relating to this action.

Fifth Third Bancorp Cincinnati, Ohio Order Approving Notice to Engage in Nonbanking Activities

Fifth Third Bancorp ("Bancorp"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to acquire all of the voting shares of The Ohio Company ("Company"), and thereby indirectly acquire Cardinal Management Corp., both in Columbus, Ohio. Bancorp would thereby engage in the following nonbanking activities: performing functions or activities that may be performed by a trust company, pursuant to section 225.28(b)(5) of Regulation Y (12 C.F.R. 225.28(b)(5)); providing financial and investment advisory services, pursuant to section 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)); providing securities brokerage, riskless principal, and private placement services, pursuant to section 225.28(b)(7)(i)-(iii) of Regulation Y (12 C.F.R. 225.28(b)(7)(i)-(iii)); underwriting and dealing in government obligations and money market instruments in which state member banks may underwrite and deal under 12 U.S.C. §§ 335 and 24(7) ("bank-eligible securities"), pursuant to section 225.28(b)(8)(i) of Regulation Y (12 C.F.R. 225.28(b)(8)(i)); providing employee benefit consulting services, pursuant to section 225.28(b)(9)(ii) of Regulation Y (12 C.F.R. 225.28(b)(9)(ii)); and underwriting and dealing in, to a limited extent, all types of debt and equity securities other than interests in open-end investment companies ("bank-ineligible securities"). Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (63 Federal Register 17,181 (1998)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. Bancorp, with total consolidated assets of approximately $21.4 billion, is the 39th largest banking organization in the United States.1 Bancorp operates subsidiary banks in 4 states, and engages through other subsidiaries in a broad range of permissible nonbanking activities. Company is, and after consummation of the proposal will continue to be, registered as a broker-dealer with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), and a member of the National Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is, and will continue to be, subject to the record-keeping and reporting obligations, fiduciary standards, and other requirements of the Securities Exchange Act of 1934, the SEC, and NASD. Cardinal Management Corp. ("Cardinal Management") is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940 (15 U.S.C. § 80b-1 et seq.) ("Advisers Act") and is, and will continue to be, subject to the record-keeping and reporting obligations, fiduciary standards, and other requirements of the Advisers Act and the SEC.2 Underwriting and Dealing in Bank-Ineligible Securities The Board has determined that -- subject to the framework of prudential limitations established in previous decisions to address the potential for conflicts of interests, unsound banking practices, or other adverse effects -- underwriting and dealing in bank-ineligible securities is so closely related to banking as to be a proper incident thereto within the meaning of section 4(c)(8) of the BHC Act.3 The Board also has determined that underwriting and dealing in bank-ineligible securities is consistent with section 20 of the Glass-Steagall Act (12 U.S.C. § 377), provided that the company engaged in the activity derives no more than 25 percent of its gross revenues from underwriting and dealing in bank-ineligible securities.4 Bancorp has committed that Company will conduct its underwriting and dealing activities using the methods and procedures and subject to the prudential limitations established by the Board in the Section 20 Orders. Bancorp also has committed that Company will conduct its bank-ineligible securities underwriting and dealing activities subject to the Board's revenue limitation. As a condition of this order, Bancorp is required to conduct its bank-ineligible securities activities subject to the revenue limitation and Operating Standards established for section 20 subsidiaries ("Operating Standards").5 Other Activities Approved by Regulation or Order The Board previously has determined that trust company activities; financial and investment advisory activities; securities brokerage, riskless principal, and private placement activities; bank-eligible securities underwriting and dealing activities; and employee benefits consulting services are closely related to banking within the meaning of section 4(c)(8) of the BHC Act.6 Bancorp has committed that it will conduct these activities in accordance with the limitations set forth in Regulation Y and the Board's orders and interpretations relating to each of the activities.7 Other Considerations In order to approve this notice, the Board also must determine that the proposed activities "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."8 As part of its review of these factors, the Board considers the financial and managerial resources of the notificant and its subsidiaries and the effect the transaction would have on such resources.9 In considering the financial resources of the notificant, the Board has reviewed the capitalization of Bancorp and Company in accordance with the standards set forth in the Section 20 Orders and finds the capitalization of each to be consistent with approval. This determination is based on all the facts of record, including Bancorp's projections of the volume of Company's underwriting and dealing activities in bank-ineligible securities. The Board also has reviewed the managerial resources of each of the entities involved in the proposal in light of examination reports and other supervisory information. In connection with the proposal, the Federal Reserve Bank of Cleveland ("Reserve Bank") has reviewed the policies and procedures of Company to ensure compliance with this order and the Section 20 Orders, including Company's operational and managerial infrastructure, computer, audit, and accounting systems, and internal risk management procedures and controls. On the basis of the Reserve Bank's review and all other facts of record, including the commitments provided in this case and the proposed managerial and risk management systems of Company, the Board has concluded that financial and managerial considerations are consistent with approval of the notice. The Board also has carefully considered the competitive effects of the proposal. To the extent that Bancorp and Company offer different types of products and services, the proposed acquisition would result in no loss of competition. In those markets where the product offerings of Bancorp's nonbanking subsidiaries and Company overlap, such as securities brokerage and investment advisory activities, there are numerous existing and potential competitors. Consummation of the proposal, therefore, would have a de minimis effect on competition in the market for these services, and the Board has concluded that the proposal would not have any significantly adverse competitive effects in any relevant market. In order to approve the proposal, the Board also must find that the performance of the proposed activities by Bancorp can reasonably be expected to produce benefits that would outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act. Under the framework established in this and prior decisions, consummation of the proposal is not likely to result in any significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. The Board expects that consummation of the proposal would provide added convenience to the customers of Bancorp and Company. Bancorp has indicated that consummation of the proposal would expand the range of products and services available to its customers and those of Company and has stated that the acquisition would permit Bancorp to further diversify its nonbanking operations, thereby making it less vulnerable to economic fluctuations in individual business lines. Based on all the facts of record, the Board has determined that performance of the proposed activities by Bancorp can reasonably be expected to produce public benefits that outweigh any adverse effects of the proposal. Accordingly, the Board has determined that the performance of the proposed activities by Bancorp is a proper incident to banking for purposes of section 4(c)(8) of the BHC Act. Conclusion On the basis of all the facts of record, the Board has determined that the notice should be, and hereby is, approved, subject to all the terms and conditions described in this order. The Board's approval of the proposal extends only to activities conducted within the limitations of this order, including the Board's reservation of authority to establish additional limitations to ensure that Company's activities are consistent with safety and soundness, avoidance of conflicts of interests, and other relevant considerations under the BHC Act. Underwriting and dealing in any manner other than as approved in this order is not within the scope of the Board's approval and is not authorized for Company. The Board's determination is subject to all the terms and conditions set forth in Regulation Y, including those in sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authority to require modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, or to prevent evasion of, the provisions and purposes of the BHC Act and the Board's regulations and orders issued thereunder. The Board's decision is specifically conditioned on compliance with all the commitments made in connection with the notice, including the commitments and conditions discussed in this order and the Board regulations and orders noted above. The commitments and conditions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. The proposal shall not be consummated later than three months after the effective date of this order, unless such period is extended for good cause by the Board or the Reserve Bank, acting pursuant to delegated authority.

By order of the Board of Governors,10 effective June 1, 1998. (signed) Robert deV. Frierson Robert deV. Frierson Associate Secretary of the Board

Footnotes 1 Asset and ranking data are as of December 31, 1997. 2 Company currently owns certain subsidiaries other than Cardinal Management. Bancorp has committed that Company will divest its ownership of such subsidiaries prior to consummation of the proposal or that Bancorp will otherwise conform its ownership and the activities of such subsidiaries to the requirements of the BHC Act immediately on consummation. 3 See J.P. Morgan & Co. Inc., et. al., 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, 73 Federal Reserve Bulletin 473 (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert. denied, 486 U.S. 1059 (1988), as modified by Review of Restrictions on Director, Officer and Employee Interlocks, Cross-Marketing Activities, and the Purchase and Sale of Financial Assets Between a Section 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996), Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal Register 45,295 (1997); and Clarification to the Board's Section 20 Orders, 63 Federal Register 14,803 (1998) (collectively, "Section 20 Orders"). 4 Compliance with the revenue limitation shall be calculated in accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989); 10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 48,953 (1996); and Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 68,750 (1996) (collectively, "Modification Orders"). In light of the fact that Bancorp proposes to acquire a going concern, the Board believes that allowing Company to calculate compliance with the revenue limitation on an annualized basis during the first year after consummation of the acquisition and thereafter on a rolling quarterly average basis would be consistent with the Section 20 Orders. See Dauphin Deposit Corporation, 77 Federal Reserve Bulletin 672 (1991). 5 12 C.F.R. 225.200. Company may provide services that are necessary incidents to the proposed underwriting and dealing activities. Unless Company receives specific approval under section 4(c)(8) of the BHC Act to conduct the activities independently, any revenues from the incidental activities must be treated as ineligible revenues subject to the Board's revenue limitation. 6 See 12 C.F.R. 225.28(b)(5), (6), (7)(i)-(iii), (8)(i), and (9)(ii). 7 Cardinal Management currently serves as adviser, administrator and distributor of the Cardinal Funds, a family of open-end investment companies ("mutual funds"). Bancorp has committed that Cardinal Management will cease its mutual fund distribution activities prior to consummation. In addition, Bancorp has stated that the Cardinal Funds will be merged with and into Bancorp's existing family of proprietary mutual funds shortly after consummation of the proposal and that, after such merger, Cardinal Management will not provide administrative services to mutual funds. In light of the proposed merger, Bancorp has not requested authority for Company to provide administrative services to mutual funds under section 4(c)(8) of the BHC Act. 8 12 U.S.C. § 1843(c)(8). 9 See 12 C.F.R. 225.26(b). 10 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Meyer, Ferguson, and Gramlich. Absent and not voting: Governors Kelley and Phillips.

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1998 Orders on banking applications