As part of the Comprehensive Capital Analysis and Review
("CCAR"), on January 9, 2012, Fifth Third Bancorp (NASDAQ: FITB)
submitted to the Federal Reserve (“FRB”) a capital plan (“Capital
Plan”) approved by its board of directors covering the period from
January 1, 2012 to March 31, 2013.
The Federal Reserve indicated to Fifth Third on March 13, 2012
that it does not object to the following capital actions: a
continuation of its quarterly common dividend of $0.08 per share;
the redemption of up to $1.4 billion in certain trust preferred
securities; and the repurchase of common shares in an amount equal
to any after-tax gains realized by Fifth Third from the sale of
Vantiv, Inc. (“Vantiv”) common shares by either Fifth Third or
Vantiv. Vantiv has made preliminary filings related to a potential
initial public offering. Fifth Third makes no representations as to
whether, when or in what amounts any such gains may occur from any
such sale. Fifth Third’s Board of Directors will meet at its
regularly scheduled meeting next week to take action on the first
quarter 2012 common dividend.
The Federal Reserve indicated to Fifth Third that it does object
to other elements of its capital plan, including increases in its
quarterly common dividend and the initiation of common share
repurchases other than those described in the paragraph above.
Fifth Third has previously stated that its capital plan was
designed to limit the further growth of its common equity ratios,
which are above targeted levels and regulatory requirements, during
the CCAR period.
The Federal Reserve today has published a set of disclosures for
each bank holding company (“BHC”) covered by the CCAR process,
including estimated results of operations, credit losses, and
resultant capital ratios under its Supervisory Stress scenario, a
hypothetical and unlikely scenario depicting a severely adverse
economic environment. Fifth Third was one of 15 of the 19 CCAR BHCs
that were estimated to maintain capital ratios above all four of
the regulatory minimum levels under the hypothetical stress
scenario, even after considering the capital actions and
distributions proposed by the BHC in their capital plans. Fifth
Third’s capital ratios, as estimated and disclosed by the FRB,
would in most cases be in either the highest quartile or second
highest quartile relative to the other CCAR BHCs. These disclosures
are more fully described at:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120313a1.pdf.
Accordingly, Fifth Third believes that the objection to some
elements of its capital plan is not based on its financial
condition.
The Federal Reserve has established a process for the
resubmission of CCAR capital plans, which are more fully described
in the FRB’s Capital Plan Rule which can be found at:
http://www.gpo.gov/fdsys/pkg/FR-2011-12-01/pdf/2011-30665.pdf.
Fifth Third intends to resubmit its capital plan to the FRB as soon
as practicable in order to address the reasons for the FRB’s
objections. BHCs are not permitted to disclose confidential
supervisory information, and Fifth Third has been informed that
this includes any reason for an FRB objection to capital plans
submitted under CCAR, as well as the ongoing status of any
resubmitted capital plan. The resubmitted capital plan is unlikely
to alter the strategic and tactical direction and levels of Fifth
Third’s capital actions. Fifth Third believes its capital plan
demonstrated a balanced and prudent approach given our expectations
and the current economic outlook, and demonstrated the financial
strength of Fifth Third under a variety of stressed conditions.
Therefore, Fifth Third expects the resubmitted capital plan to
include similar capital actions and distributions as those
submitted in its capital plan in January. Fifth Third expects its
resubmitted plan to help clarify and address those factors which
led to the FRB’s objections and to enable it to achieve an
appropriate outcome with respect to managing the growth of its
capital.
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. The Company has $117 billion in
assets and operates 15 affiliates with 1,316 full-service Banking
Centers, including 105 Bank Mart® locations open seven days a week
inside select grocery stores and 2,412 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
49% interest in Vantiv, LLC, formerly Fifth Third Processing
Solutions, LLC. Fifth Third is among the largest money managers in
the Midwest and, as of December 31, 2011, had $282 billion in
assets under care, of which it managed $24 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 about Fifth Third Bancorp
(“Fifth Third”) that we believe are “forward-looking statements”
within the meaning of Sections 27A of the Securities Act of 1933,
as amended, and Rule 175 promulgated thereunder, and 21E of the
Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder, that involve inherent risks and
uncertainties. 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 those described in this
prospectus supplement or the documents incorporated by reference
herein, including 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 (“Dodd-Frank 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 the separation of Vantiv Holding, LLC, formerly
Fifth Third Processing Solutions, LLC, from Fifth Third; (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 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 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. Copies of those
filings are available at no cost on the SEC’s Web site at
www.sec.gov or on our Web site at www.53.com. We undertake no
obligation to release revisions to these forward-looking statements
or reflect events or circumstances after the date of this
report.
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