No Objection from Federal Reserve to Company's Capital Plan
Fifth Third Bancorp (NASDAQ: FITB) announced today that the Board of
Governors of the Federal Reserve System (“the Federal Reserve”) did not
object to the proposed potential capital actions from April 1, 2014
through March 31, 2015 (the “CCAR period”) included in Fifth Third’s
capital plan submitted in January under the Comprehensive Capital
Analysis and Review (“CCAR”) process. Fifth Third also published on its
website the company-run internal stress test results required under the
Dodd-Frank Act stress testing rules.
In comments related to Fifth Third’s announcement regarding its 2014
capital plan under CCAR, Kevin Kabat, CEO of Fifth Third Bancorp, said,
“Our capital plan reflects our strong capital base, profitability and
earnings generation, which enable us to return excess capital to
shareholders while retaining more than sufficient capital to support
ongoing business opportunities and balance sheet growth. Our proposed
capital distributions would represent an estimated total payout ratio in
the mid to upper end of our longer-term target range of 60 to 80
percent. We designed our 2014 CCAR plan to maintain regulatory common
equity capital ratios generally at current levels, similar to our goals
in previous submissions. We believe our plan for capital management and
retention is balanced and prudent given our expectations, our capital
position, current regulatory capital rules and expectations, and the
current economic outlook.”
2014 CCAR Capital Plan
Fifth Third’s capital plan included the following potential capital
actions related to common dividends and share repurchases for the period
beginning April 1, 2014 and ending March 31, 2015, subject to Board
approval and other factors including regulatory developments and market
conditions.
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The potential increase in the quarterly common stock dividend to $0.13
during the CCAR period
-
The potential repurchase of common shares in an amount up to $669
million
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The additional ability to repurchase shares in the amount of any
after-tax gains from the sale of Vantiv, Inc. (“Vantiv”) stock, if
realized.
The Federal Reserve’s non-objection applies only to those actions
proposed in Fifth Third’s CCAR submission to be taken from April 1, 2014
through March 31, 2015. Any actions that Fifth Third assumed as part of
this CCAR submission that it may potentially take subsequent to March
31, 2015 would be subject to a subsequent CCAR plan submission and
non-objection for that subsequent period. Any capital actions, including
those contemplated in the above announced actions, are subject to
evaluation and approval by the Board of Directors at any given time,
Fifth Third’s performance, the state of the economic environment, market
conditions, regulatory factors, and other risks and uncertainties. Fifth
Third has no current information and makes no representations as to
whether, when or in what amounts there may be a) future gains from the
sale of Vantiv stock or b) other capital actions or distributions
requiring future Board approval, future regulatory developments, or
future requisite market conditions.
Disclosure of Company-Run Dodd-Frank Act Stress Test (DFAST)
Additionally, Fifth Third is disclosing the results of its company-run
stress test as required by the Dodd-Frank Act stress testing rules (12
CFR Part 252), or “DFAST.” These rules require that covered companies
disclose certain results from its stress test including: a description
of the types of risk included in the stress test, a general description
of methodologies used in the stress test, estimates of certain financial
results and pro forma capital ratios, and an explanation of the most
significant causes of the changes in regulatory capital ratios. The
results are available on Fifth Third’s Investor Relations website at http://ir.53.com
by clicking on “Financials & Regulatory Filings”. The results are also
available at the following link: http://phx.corporate-ir.net/phoenix.zhtml?c=72735&p=disclosures.
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of December 31, 2013, the Company
had $130 billion in assets and operated 17 affiliates with 1,320
full-service Banking Centers, including 104 Bank Mart® locations, most
open seven days a week, inside select grocery stores and 2,586 ATMs in
Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth
Third operates four main businesses: Commercial Banking, Branch Banking,
Consumer Lending, and Investment Advisors. Fifth Third also has a 25%
interest in Vantiv Holding, LLC. Fifth Third is among the largest money
managers in the Midwest and, as of December 31, 2013, had $302 billion
in assets under care, of which it managed $27 billion for individuals,
corporations and not-for-profit organizations. Investor
information and press
releases can be viewed at www.53.com.
Fifth Third's common stock is traded on the NASDAQ® Global Select Market
under the symbol "FITB."
Forward-Looking Statements
This report contains statements that we believe are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Rule 175 promulgated thereunder, and Section 21E
of the Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder. These statements relate to our financial
condition, results of operations, plans, objectives, future performance
or business. They usually can be identified by the use of
forward-looking language such as “will likely result,” “may,” “are
expected to,” “is anticipated,” “estimate,” “forecast,” “projected,”
“intends to,” or may include other similar words or phrases such as
“believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or
similar expressions, or future or conditional verbs such as “will,”
“would,” “should,” “could,” “might,” “can,” or similar verbs. You should
not place undue reliance on these statements, as they are subject to
risks and uncertainties, including but not limited to the risk factors
set forth in our most recent Annual Report on Form 10-K. When
considering these forward-looking statements, you should keep in mind
these risks and uncertainties, as well as any cautionary statements we
may make. Moreover, you should treat these statements as speaking only
as of the date they are made and based only on information then actually
known to us.
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) general economic conditions and
weakening in the economy, specifically the real estate market, either
nationally or in the states in which Fifth Third, one or more acquired
entities and/or the combined company do business, are less favorable
than expected; (2) deteriorating credit quality; (3) political
developments, wars or other hostilities may disrupt or increase
volatility in securities markets or other economic conditions;
(4) changes in the interest rate environment reduce interest margins;
(5) prepayment speeds, loan origination and sale volumes, charge-offs
and loan loss provisions; (6) Fifth Third’s ability to maintain required
capital levels and adequate sources of funding and liquidity;
(7) maintaining capital requirements may limit Fifth Third’s operations
and potential growth; (8) changes and trends in capital markets;
(9) problems encountered by larger or similar financial institutions may
adversely affect the banking industry and/or Fifth Third;
(10) competitive pressures among depository institutions increase
significantly; (11) effects of critical accounting policies and
judgments; (12) changes in accounting policies or procedures as may be
required by the Financial Accounting Standards Board (FASB) or other
regulatory agencies; (13) legislative or regulatory changes or actions,
or significant litigation, adversely affect Fifth Third, one or more
acquired entities and/or the combined company or the businesses in which
Fifth Third, one or more acquired entities and/or the combined company
are engaged, including the Dodd-Frank Wall Street Reform and Consumer
Protection Act; (14) ability to maintain favorable ratings from rating
agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to
attract and retain key personnel; (17) ability to receive dividends from
its subsidiaries; (18) potentially dilutive effect of future
acquisitions on current shareholders’ ownership of Fifth Third;
(19) effects of accounting or financial results of one or more acquired
entities; (20) difficulties from Fifth Third’s investment in or the
results of operations of Vantiv, LLC; (21) loss of income from any sale
or potential sale of businesses that could have an adverse effect on
Fifth Third’s earnings and future growth; (22) ability to secure
confidential information and deliver products and services through the
use of computer systems and telecommunications networks; and (23) the
impact of reputational risk created by these developments on such
matters as business generation and retention, funding and liquidity.
You should refer to our periodic and current reports filed with the
Securities and Exchange Commission, or “SEC,” for further information on
other factors, which could cause actual results to be significantly
different from those expressed or implied by these forward-looking
statements.
Fifth Third Bancorp
Jim Eglseder (Investors), 513-534-8424
Larry Magnesen (Media), 513-534-8055