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 Fifth Third’s proposal for potential capital actions from July
1, 2017 through June 30, 2018 included in its capital plan submitted in
April under the Comprehensive Capital Analysis and Review (“CCAR”)
process.
“We are pleased to receive the Federal Reserve’s non-objection to our
plan to return excess capital through multiple dividend increases and
additional share repurchases,” said Greg Carmichael, president and CEO
of Fifth Third Bancorp. “Our plan includes a 29% increase in our
quarterly common dividend and a 76% increase in the amount invested in
share repurchases over our previous capital plan. This reflects our
ability to maintain prudent capital levels while returning a significant
amount of capital to our shareholders.”
2017 CCAR Capital Plan
Fifth Third’s capital plan included the following capital actions
related to common dividends and share repurchases for the period
beginning July 1, 2017 and ending June 30, 2018:
-
The increase in the quarterly common stock dividend to $0.16 from
$0.14 beginning 3Q 2017 and to $0.18 beginning 2Q 2018, a 29 percent
increase over the current dividend rate
-
The repurchase of common shares in an amount up to $1.161 billion, or
a 76 percent increase over the 2016 capital plan. These repurchases
include:
-
$88 million in repurchases related to share issuances under
employee benefit plans
-
$48 million in repurchases related to previously-recognized Vantiv
tax receivable agreement (“TRA”) transaction after-tax gains
-
The additional ability to repurchase common shares in the amount of
any after-tax capital generated from the sale of Vantiv, Inc.
(“Vantiv”) common stock
-
The additional ability to repurchase common shares in the amount of
any after-tax cash income generated from the termination and
settlement of gross cash flows from existing TRAs with Vantiv or
potential future TRAs that may be generated from additional sales of
Vantiv
The Federal Reserve’s non-objection applies only to those actions
proposed in Fifth Third’s CCAR submission to be taken from July 1, 2017
through June 30, 2018. Any potential actions that Fifth Third assumed it
could take subsequent to June 30, 2018 as part of this CCAR submission
would be subject to another 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
of Fifth Third’s performance, the state of the economic environment,
market conditions, regulatory factors, and other risks and uncertainties
and approval by the Board of Directors at any given time. 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, b) future gains from the sale of any portion of the tax
receivable agreement with Vantiv or c) other capital actions or
distributions requiring future Board approval, future regulatory
developments, or future requisite market conditions.
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of March 31, 2017, the Company had
$140 billion in assets and operates 1,155 full-service Banking Centers,
and 2,471 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida,
Tennessee, West Virginia, Georgia and North Carolina. Fifth Third
operates four main businesses: Commercial Banking, Branch Banking,
Consumer Lending and Wealth & Asset Management. Fifth Third also has a
17.8% interest in Vantiv Holding, LLC. Fifth Third is among the largest
money managers in the Midwest and, as of March 31, 2017, had $323
billion in assets under care, of which it managed $33 billion for
individuals, corporations and not-for-profit organizations through its
Trust, Brokerage and Insurance businesses. 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 release 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,” “anticipates,” “potential,” “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 as updated from
time to time by our Quarterly Reports on Form 10-Q. 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 is a risk that additional information may become known during
the company’s quarterly closing process or as a result of subsequent
events that could affect the accuracy of the statements and financial
information contained herein.
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 or real estate
market conditions, either nationally or in the states in which Fifth
Third, one or more acquired entities and/or the combined company do
business, weaken or 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 and adequate sources of
funding and liquidity 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)
changes in customer preferences or information technology systems; (12)
effects of critical accounting policies and judgments; (13) changes in
accounting policies or procedures as may be required by the Financial
Accounting Standards Board (FASB) or other regulatory agencies; (14)
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; (15) ability
to maintain favorable ratings from rating agencies; (16) failure of
models or risk management systems or controls; (17) fluctuation of Fifth
Third’s stock price; (18) ability to attract and retain key personnel;
(19) ability to receive dividends from its subsidiaries; (20)
potentially dilutive effect of future acquisitions on current
shareholders’ ownership of Fifth Third; (21) declines in the value of
Fifth Third’s goodwill or other intangible assets; (22) effects of
accounting or financial results of one or more acquired entities; (23)
difficulties from Fifth Third’s investment in, relationship with, and
nature of the operations of Vantiv Holding, LLC; (24) loss of income
from any sale or potential sale of businesses (25) difficulties in
separating the operations of any branches or other assets divested; (26)
losses or adverse impacts on the carrying values of branches and
long-lived assets in connection with their sales or anticipated sales;
(27) inability to achieve expected benefits from branch consolidations
and planned sales within desired timeframes, if at all; (28) ability to
secure confidential information and deliver products and services
through the use of computer systems and telecommunications networks; and
(29) 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
Sameer Gokhale (Investors), 513-534-2219
or
Larry Magnesen (Media), 513-534-8055