8-KMaterial AgreementsFinancial Events

FIFTH THIRD BANCORP 8-K Report, Material Agreement (Apr 23, 2012)

Filed April 23, 2012For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) filed an 8-K on April 23, 2012, to report the entry into a material definitive agreement concerning an accelerated share repurchase (ASR) transaction. The company announced its intention to repurchase approximately $75 million of its outstanding common stock through this ASR with Goldman, Sachs & Co. This transaction is part of Fifth Third's broader, previously announced 30 million share repurchase program, with approximately 19 million shares remaining under that program at the time of the filing. The ASR involves Fifth Third paying $75 million on April 26, 2012, and expecting to receive the majority of the repurchased shares shortly thereafter. The final number of shares repurchased will be influenced by the average daily volume-weighted average prices of Fifth Third's common stock during the ASR term. The agreement includes provisions for potential adjustments to the number of shares at settlement, where Goldman Sachs may deliver additional shares or Fifth Third may make a cash payment or deliver stock, with final settlement expected by July 26, 2012. The filing also includes standard forward-looking statements and risk factors relevant to the company's operations and the repurchase program.

Key Highlights

  • 1Fifth Third Bancorp entered into an accelerated share repurchase (ASR) transaction valued at approximately $75 million.
  • 2The ASR is part of the company's existing 30 million share repurchase program, with roughly 19 million shares remaining in that program.
  • 3The transaction was executed with Goldman, Sachs & Co. on April 23, 2012.
  • 4Fifth Third expects to pay $75 million on April 26, 2012, and receive a substantial majority of the shares by the same date.
  • 5The final number of shares repurchased will be determined based on the volume-weighted average price of FITB stock during the ASR period.
  • 6Settlement of the ASR is expected to occur on or before July 26, 2012, with potential adjustments to the share count.
  • 7The filing includes standard forward-looking statements and risk factors inherent to the banking industry and the company's operations.

Frequently Asked Questions

The $75 million ASR is part of Fifth Third Bancorp's previously announced program to repurchase its outstanding common stock. Share repurchases are often undertaken to return capital to shareholders and can potentially increase earnings per share by reducing the number of outstanding shares.

The shares are being repurchased from Goldman, Sachs & Co. The initial number of shares Fifth Third will receive is based on the $75 million payment, but the final number of shares will be determined by the volume-weighted average prices of Fifth Third's common stock during the term of the repurchase agreement, with potential adjustments at settlement.

At the time of this filing (April 23, 2012), approximately 19 million shares remained under the company's broader 30 million share repurchase program, after accounting for this $75 million ASR.

Yes, the filing mentions that the Repurchase Agreement is subject to customary adjustments and termination provisions. Goldman Sachs can terminate the agreement under certain extraordinary events, which could result in Fifth Third receiving fewer shares than initially anticipated. The report also generally outlines various risk factors that could materially affect Fifth Third's future results.