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its principal shareholders, directors and executives at December 31: 

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The commitments to lend are in the form of loans and guarantees for various business and personal interests. This indebtedness was incurred in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties. This indebtedness does not involve more than the normal risk of repayment or present other features unfavorable to the Bancorp. 

On June 30, 2009, the Bancorp completed the sale of a majority interest in its Processing Businesses, FTPS. Advent International acquired an approximate 51% interest in FTPS for cash and warrants. The Bancorp retained the remaining approximate 49% interest in FTPS and, as part of the sale, FTPS assumed loans totaling $1.25 billion owed to the Bancorp. The Bancorp recognized $26 million and $15 million, respectively, in noninterest income as part of its equity method investment in FTPS for the years ended December 31, 2010 and 2009 and received distributions totaling $25 million and $18 million, respectively, during 2010 and 2009. 

## 21. INCOME TAXES 

The Bancorp and FTPS have various agreements in place covering services relating to the operations of FTPS. The services provided by the Bancorp to FTPS were required to support FTPS as a standalone entity during the deconversion period. These services involve transition support, including product development, risk management, legal, accounting and general business resources. FTPS paid the Bancorp $49 million and $76 million, respectively, for these services for the years ended December 31, 2010 and 2009. Other services provided to FTPS by the Bancorp, which will continue beyond the deconversion period, include treasury management, clearing, settlement, sponsorship, data center support and office space. FTPS paid the Bancorp $34 million and $14 million, respectively, for these services for the years ended December 31, 2010 and 2009. In addition to the previously mentioned services, the Bancorp entered into an agreement under which FTPS will provide processing services to the Bancorp. The total amount of fees relating to the processing services provided to the Bancorp by FTPS totaled $64 million and $33 million, respectively, for the years ended December 31, 2010 and 2009. 

During the fourth quarter of 2010, FTPS refinanced its debt into a larger syndicated loan structure that included the Bancorp. As a result, loans to FTPS declined to $381 million as of December 31, 2010 from $1.24 billion at December 31, 2009. The Bancorp recognized $4 million in syndication fees in 2010 associated with the refinanced loan to FTPS. The amount of FTPS’ line of credit with the Bancorp was also reduced to $50 million as of December 31, 2010 from $125 million as of December 31, 2009. FTPS did not draw upon its lines of credit during the years ended December 31, 2010 or 2009. Interest income relating to the loans was $102 million and $60 million, respectively, for the years ended December 31, 2010 and 2009 and is included in interest and fees on loans and leases in the Consolidated Statements of Income. 

The Bancorp and its subsidiaries file a consolidated federal income tax return. The following is a summary of applicable income taxes included in the Consolidated Statements of Income for the years ended December 31: 

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The following is a reconciliation between the statutory U.S. income tax rate and the Bancorp’s effective tax rate for the years ended December 31: 

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Tax-exempt income in the rate reconciliation table includes interest on municipal bonds, interest on tax-exempt lending, income/charges on life insurance policies held by the Bancorp, and certain gains on sales of leases that are exempt from federal taxation. 

During 2010, the Bancorp settled its outstanding dispute with the IRS relating to a specific capital raising transaction. This favorable settlement reduced income tax expense (including interest) by $19 million. During 2009, the Bancorp settled its outstanding dispute with the IRS relating to certain leveraged 

