8-KMaterial AgreementsFinancial Events

FIFTH THIRD BANCORP 8-K Report, Material Agreement (Mar 11, 2019)

Filed March 11, 2019For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) announced on March 11, 2019, a significant share repurchase program through an accelerated share repurchase (ASR) agreement with JPMorgan Chase Bank. This agreement involves the repurchase of $913 million of Fifth Third's outstanding common stock, signaling a strategic move to return capital to shareholders. The ASR is part of a previously announced 100 million share repurchase program and is contingent on the closing of the merger with MB Financial, Inc. The terms of the agreement indicate that Fifth Third will pay JPM $913 million and expects to receive a substantial majority of the shares promptly, with the final number of shares potentially adjusted based on market prices and subject to certain termination provisions. This action reflects management's confidence in the company's financial health and its commitment to enhancing shareholder value.

Key Highlights

  • 1Fifth Third Bancorp entered into an accelerated share repurchase (ASR) agreement for $913 million.
  • 2The ASR is part of a previously announced 100 million share repurchase program.
  • 3The completion of the ASR is contingent upon the closing of the merger with MB Financial, Inc.
  • 4The company will pay $913 million to JPM and expects to receive the majority of shares shortly after the effective date.
  • 5The number of shares repurchased will be determined by a discount to the average daily volume-weighted NASDAQ prices during the repurchase term.
  • 6The agreement includes provisions for potential adjustments to the number of shares delivered at settlement, which could result in additional shares for FITB or a cash/stock payment back to JPM.
  • 7The transaction is subject to customary adjustments and termination provisions, with JPM having the right to terminate under certain extraordinary events.

Frequently Asked Questions

The primary purpose of the accelerated share repurchase (ASR) agreement is to return capital to Fifth Third Bancorp's shareholders. It is part of the company's previously announced 100 million share repurchase program, indicating management's intent to reduce the number of outstanding shares and potentially enhance shareholder value.

The repurchases will not be effective until after the closing of the merger between Fifth Third Bancorp and MB Financial, Inc. The agreement also includes specific conditions and termination rights that could affect the timing and completion of the transaction.

The actual number of shares Fifth Third Bancorp will receive is based generally on a discount to the average of the daily Rule 10b-18 volume-weighted average NASDAQ prices of its common stock during the term of the repurchase agreement. At settlement, there may be an adjustment to deliver additional shares or a payment of cash/stock.

Yes, the agreement is subject to customary adjustments and termination provisions. JPMorgan Chase Bank is entitled to terminate the agreement upon the occurrence of certain extraordinary events, which could result in Fifth Third receiving fewer shares than initially anticipated. Additionally, the entire transaction is contingent on the closing of the merger with MB Financial, Inc.