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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808006013/en/
Fifth Third BancorpSameer Gokhale (Investors),
513-534-2219orLarry Magnesen (Media), 513-534-8055
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