On August 7, 2017, Fifth Third Bancorp and Fifth Third Bank entered into
a transaction agreement with Vantiv, Inc. and Vantiv Holding, LLC (the “Repurchase
Agreement”) pursuant to which (i) Fifth Third Bank has agreed to
exercise its right to exchange 19.79 million of its Class B Units in
Vantiv Holding, LLC for 19.79 million shares of Vantiv, Inc.’s Class A
common stock and (ii) Vantiv, Inc. has agreed to repurchase the newly
issued shares of Class A common stock upon issue (the “Share
Repurchase”) directly from Fifth Third Bank at a price of $64.04
per share, the closing share price of the Class A common stock on the
New York Stock Exchange on August 4, 2017. The Share Repurchase is
conditioned on Vantiv, Inc. publishing a firm offer to acquire Worldpay
Group plc. and is subject to termination, if among other things, the
firm offer is not made by August 31, 2017.
During the third quarter, Fifth Third expects to recognize a pre-tax
gain of approximately $1.0 billion (approximately $650 million
after-tax) related to these transactions. Following the Share
Repurchase, Fifth Third is expected to beneficially own approximately
8.6% of Vantiv’s equity through its ownership of approximately 15.25
million Class B units of Vantiv Holding, LLC. Following the closing of
the Worldpay acquisition (if it occurs), Fifth Third is expected to
beneficially own approximately 4.9% of Vantiv’s equity. Consistent with
Fifth Third’s 2017 CCAR capital plan, Fifth Third currently expects to
repurchase common shares from the realized after-tax gains from the
transaction.
On consummation of the Share Repurchase, Fifth Third will no longer be
entitled to appoint a director to Vantiv’s board of directors, and
consequently Fifth Third’s remaining director will resign from Vantiv’s
board.
Fifth Third will continue to account for its ownership in Vantiv
Holding, LLC under the equity method of accounting given the nature of
Vantiv Holding, LLC’s structure as a limited liability company and
contractual arrangements between Vantiv Holding, LLC and Fifth Third.
Subsequent to these transactions, Fifth Third’s equity method earnings
in Vantiv Holding, LLC will decline approximately in proportion to the
decline in Fifth Third’s ownership of Vantiv Holding, LLC. Assuming the
after-tax proceeds are deployed into share repurchases, the impacts of
these transactions are expected to be accretive to 2018 earnings per
share.
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. As of June 30, 2017, the Company had
$141 billion in assets and operates 1,157 full-service Banking Centers,
and 2,461 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan,
Illinois, Florida, Tennessee, West Virginia, Georgia and North Carolina.
In total, Fifth Third provides its customers with access to more than
45,000 fee-free ATMs across the United States. Fifth Third operates four
main businesses: Commercial Banking, Branch Banking, Consumer Lending,
and Wealth & Asset Management. Fifth Third is among the largest money
managers in the Midwest and, as of June 30, 2017, had $330 billion in
assets under care, of which it managed $34 billion for individuals,
corporations and not-for-profit organizations through its Trust and
Registered Investment Advisory 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 press 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;
(29) the negotiation and (if any) implementation by Vantiv and/or
Worldpay Group plc of the potential acquisition of Worldpay Group plc by
Vantiv and such other actions as Vantiv and Worldpay Group plc may take
in furtherance thereof; and (30) 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