Acquisition-related resubmission does not delay
capital distributions
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, 2018 through June 30, 2019 included in
its capital plan submitted in April under the Comprehensive Capital
Analysis and Review (“CCAR”) process.
“We are pleased that the Federal Reserve’s non-objection will
enable us to return a significant amount of excess capital to our
shareholders,” said Greg Carmichael, chairman, president and CEO of
Fifth Third Bancorp. “The plan includes a substantial increase in
capital returns, with a 33% increase in our quarterly common
dividend and a 42% increase in share repurchases compared to last
year’s capital plan. This capital plan is in line with our goal to
maintain prudent capital levels while returning excess capital to
our shareholders. Additionally, we are pleased that the Federal
Reserve has again not objected to the use of after-tax capital
generated by any sale of our Worldpay stake to repurchase Fifth
Third common shares.”
“Given our pending acquisition of MB Financial, our regulators
have informed us that we are required to resubmit our 2018 CCAR
plan on a combined basis. However, we are permitted to execute our
capital distributions consistent with this CCAR plan without having
to wait for the Federal Reserve’s review of the resubmitted plan,
including expected share repurchases associated with our most
recent sale of 5 million shares of Worldpay which resulted in an
after-tax gain of approximately $154 million.”
2018 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, 2018 and ending June 30, 2019:
- The increase in the quarterly common
stock dividend to $0.22 from $0.18 beginning 4Q 2018 and to $0.24
beginning 2Q 2019, a 33 percent increase over the current dividend
rate
- The repurchase of common shares in an
amount up to $1.651 billion, or a 42 percent increase over the 2017
capital plan. Included in these repurchases are:
- $81 million in repurchases related to
share issuances under employee benefit plans
- $53 million in repurchases related to
previously-recognized Worldpay 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 Worldpay, Inc. (“Worldpay”) 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 Worldpay or potential future TRAs that may be
generated from additional sales of Worldpay
The Federal Reserve’s non-objection applies only to those
actions proposed in Fifth Third’s CCAR submission to be taken from
July 1, 2018 through June 30, 2019. On May 21, 2018, Fifth Third
announced an agreement to merge with MB Financial, Inc. Because of
the recently announced transaction, the Federal Reserve will
require Fifth Third to resubmit its CCAR plan recognizing the pro
forma impact of the combined Fifth Third MB Financial post-merger
entity. This resubmission process, including the timeline for
re-approval of the CCAR submission, is subject to the Federal
Reserve’s internal processes and the formal timeline for subsequent
approval is not defined at this time. The CCAR resubmission, and
any subsequent objection/non-objection, should not be taken as an
indication of the likelihood of approval of the Bank Holding
Company Application or the Bank Merger Act application, which are
subject to approval by the Board of Governors of the Federal
Reserve System. 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 Worldpay stock, b) future gains from the sale of any
portion of the tax receivable agreement with Worldpay 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, 2018, the
Company had $142 billion in assets and operates 1,153 full-service
Banking Centers, and 2,459 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 54,000 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 March 31, 2018, had $363
billion in assets under care, of which it managed $37 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.”
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger, Fifth Third Bancorp has
filed with the SEC a Registration Statement on Form S-4 that
includes the Proxy Statement of MB Financial, Inc. and a Prospectus
of Fifth Third Bancorp, as well as other relevant documents
concerning the proposed transaction. This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. INVESTORS
AND STOCKHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND
THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.A free copy of the Proxy Statement/Prospectus, as well
as other filings containing information about Fifth Third Bancorp
and MB Financial, Inc., may be obtained at the SEC’s Internet site
(http://www.sec.gov). You will also be able to obtain these
documents, free of charge, from Fifth Third Bancorp at ir.53.com or
from MB Financial, Inc. by accessing MB Financial, Inc.’s website
at investor.mbfinancial.com. Copies of the Proxy
Statement/Prospectus can also be obtained, free of charge, by
directing a request to Fifth Third Investor Relations at Fifth
Third Investor Relations, MD 1090QC, 38 Fountain Square Plaza,
Cincinnati, OH 45263, by calling (866) 670-0468, or by sending an
e-mail to ir@53.com or to MB Financial, Attention: Corporate
Secretary, at 6111 North River Road, Rosemont, Illinois 60018, by
calling (847) 653-1992 or by sending an e-mail to
dkoros@mbfinancial.com.Fifth Third Bancorp and MB Financial, Inc.
and certain of their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies
from the stockholders of MB Financial, Inc. in respect of the
transaction described in the Proxy Statement/Prospectus.
Information regarding Fifth Third Bancorp’s directors and executive
officers is contained in Fifth Third Bancorp’s Annual Report on
Form 10-K for the year ended December 31, 2017 and its Proxy
Statement on Schedule 14A, dated March 6, 2018, which are filed
with the SEC. Information regarding MB Financial, Inc.’s directors
and executive officers is contained in its Proxy Statement on
Schedule 14A filed with the SEC on April 3, 2018. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the Proxy Statement/Prospectus regarding the
proposed merger. Free copies of this document may be obtained as
described in the preceding paragraph.
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including, but not limited to, Fifth Third Bancorp’s and MB
Financial, Inc.’s expectations or predictions of future financial
or business performance or conditions. Forward-looking statements
are typically identified by words such as “believe,” “expect,”
“anticipate,” “intend,” “target,” “estimate,” “continue,”
“positions,” “plan,” “predict,” “project,” “forecast,” “guidance,”
“goal,” “objective,” “prospects,” “possible” or “potential,” by
future conditional verbs such as “assume,” “will,” “would,”
“should,” “could” or “may”, or by variations of such words or by
similar expressions. These forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made and we assume no duty to update forward-looking statements.
Actual results may differ materially from current projections.In
addition to factors previously disclosed in Fifth Third Bancorp’s
and MB Financial, Inc.’s reports filed with or furnished to the SEC
and those identified elsewhere in this communication, the following
factors, among others, could cause actual results to differ
materially from forward-looking statements or historical
performance: the ability to obtain regulatory approvals and meet
other closing conditions to the merger, including approval of the
merger by MB Financial, Inc.’s stockholders on the expected terms
and schedule, including the risk that regulatory approvals required
for the merger are not obtained or are obtained subject to
conditions that are not anticipated; delay in closing the merger;
difficulties and delays in integrating the businesses of MB
Financial, Inc. or fully realizing cost savings and other benefits;
business disruption following the merger; changes in asset quality
and credit risk; the inability to sustain revenue and earnings
growth; changes in interest rates and capital markets; inflation;
customer acceptance of Fifth Third Bancorp’s products and services;
customer borrowing, repayment, investment and deposit practices;
customer disintermediation; the introduction, withdrawal, success
and timing of business initiatives; competitive conditions; the
inability to realize cost savings or revenues or to implement
integration plans and other consequences associated with mergers,
acquisitions and divestitures; economic conditions; and the impact,
extent and timing of technological changes, capital management
activities, and other actions of the Federal Reserve Board and
legislative and regulatory actions and reforms.Annualized, pro
forma, projected and estimated numbers are used for illustrative
purpose only, are not forecasts and may not reflect actual
results.
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version on businesswire.com: https://www.businesswire.com/news/home/20180628006315/en/
Fifth Third BancorpInvestors:Sameer Gokhale,
513-534-2219orMedia:Larry Magnesen,
513-534-8055
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