CINCINNATI, Dec. 16 /PRNewswire-FirstCall/ -- Fifth Third Bancorp (Nasdaq:
FITB) today declared its fourth quarter 2008 cash dividends on its common
shares and Series G preferred shares.
Fifth Third declared a fourth quarter 2008 cash dividend on its common
shares of $0.01, a reduction from the third quarter level of $0.15 per share.
The dividend will be payable on January 22, 2009 to shareholders of record on
December 31, 2008.
"Fifth Third and the banking industry are currently operating in a very
difficult environment, particularly related to trends in economic activity and
employment levels," said Kevin T. Kabat, chairman, president and CEO of Fifth
Third Bancorp. "It is not currently clear when those trends will begin to
improve but we do not expect improvement in the near term.
"As a result, we have made the difficult but prudent decision to reduce
our dividend on common shares. This will permit the retention of more than
$300 million of tangible equity annually and benefit the tangible equity ratio
by approximately 30 bps over the course of 2009 compared with the prior
dividend. This additional capital will provide further flexibility for us to
take action to resolve issues as they develop." Kabat added that stronger
capital will allow Fifth Third to more fully serve qualified borrowers with
loans and other services critical in the current economic environment, as well
as to better insulate Fifth Third from the possibility of further
deterioration in economic and market conditions.
"We understand the importance of dividends to our common shareholders, and
would expect to increase the dividend when we believe it is consistent with
our outlook for economic and market activity and associated improvement in
earnings and capital generation," he said.
As previously announced, Fifth Third expects to participate in the U.S.
Treasury's Capital Purchase Program ("CPP") and has applied for $3.46 billion
in preferred shares under this program. Our participation requires shareholder
approval for the granting of certain voting rights related to these preferred
shares, as discussed more fully in a proxy statement filed on December 8,
2008. This vote is scheduled to take place on December 29, 2008.
"Our participation in the Treasury Capital Purchase Program will provide
us with significant additional capital to supplement our capital position,"
said Kabat. "This investment is important to help ensure our capital position
remains very strong to enable us to continue making and growing loans during a
difficult economic environment."
Fifth Third also declared its fourth quarter dividend on its 8.50%
Non-Cumulative Perpetual Convertible Preferred Stock, Series G, at the rate of
$531.25 per share, which equates to approximately $2.125 for each depositary
share. Each depositary share represents a 1/250th ownership interest in a
share of Series G Preferred Stock. The Series G dividend is payable on
December 31, 2008 to shareholders of record on December 26, 2008.
Corporate Profile
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio. The Company has $116 billion in assets,
operates 18 affiliates with 1,308 full-service Banking Centers, including 92
Bank Mart(R) locations open seven days a week inside select grocery stores and
2,341 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee,
West Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth Third
operates five main businesses: Commercial Banking, Branch Banking, Consumer
Lending, Investment Advisors and Fifth Third Processing Solutions. Fifth Third
is among the largest money managers in the Midwest and, as of September 30,
2008, has $196 billion in assets under care, of which it managed $30 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(R) National Global Select Market under
the symbol "FITB."
FORWARD-LOOKING STATEMENTS
This report may contain forward-looking statements about Fifth Third
Bancorp 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. This report may contain certain
forward-looking statements with respect to the financial condition, results of
operations, plans, objectives, future performance and business of Fifth Third
Bancorp including statements preceded by, followed by or that include the
words or phrases such as "believes," "expects," "anticipates," "plans,"
"trend," "objective," "continue," "remain" or similar expressions or future or
conditional verbs such as "will," "would," "should," "could," "might," "can,"
"may" or similar expressions. 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
national or in the states in which Fifth Third does 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) changes and trends in capital markets; (8)
competitive pressures among depository institutions increase significantly;
(9) effects of critical accounting policies and judgments; (10) changes in
accounting policies or procedures as may be required by the Financial
Accounting Standards Board or other regulatory agencies; (11) legislative or
regulatory changes or actions, or significant litigation, adversely affect
Fifth Third, or the businesses in which Fifth Third, one is engaged; (12)
ability to maintain favorable ratings from rating agencies; (13) fluctuation
of Fifth Third's stock price; (14) ability to attract and retain key
personnel; (15) ability to receive dividends from its subsidiaries; (16)
potentially dilutive effect of future acquisitions on current shareholders'
ownership of Fifth Third; (17) effects of accounting or financial results of
one or more acquired entities; (18) difficulties in combining the operations
of acquired entities; (19) inability to generate the gains on sale and related
increase in shareholders' equity that it anticipates from the sale of certain
non-core businesses, (20) loss of income from the sale of certain non-core
businesses could have an adverse effect on Fifth Third's earnings and future
growth (21) ability to secure confidential information through the use of
computer systems and telecommunications networks; (22) the impact of
reputational risk created by these developments on such matters as business
generation and retention, funding and liquidity; and (23) the Treasury
providing satisfactory definitive documentation for its purchase of senior
preferred shares and agreement on final terms and conditions. Additional
information concerning factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements
is available in the Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2007, filed with the United States Securities and Exchange
Commission (SEC). Copies of this filing are available at no cost on the SEC's
Web site at www.sec.gov or on the Fifth Third's Web site at www.53.com. Fifth
Third undertakes no obligation to release revisions to these forward-looking
statements or reflect events or circumstances after the date of this report.
