Fifth Third Bank 2009 Annual Report Download - page 61

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 59
Dividend Policy and Stock Repurchase Program
The Bancorp’s common stock dividend policy reflects its earnings
outlook, desired payout ratios, the need to maintain adequate
capital levels and alternative investment opportunities. In 2009,
the Bancorp paid dividends per common share of $0.04, a
decrease from the $0.75 paid in 2008. The reduction in quarterly
common dividend was in response to the difficult operating
environment and the additional capital that may be needed. The
Bancorp’s quarterly dividend per common share for the fourth
quarter of 2009 was $0.01.
As previously discussed, the Bancorp has issued $3.4 billion
in senior preferred stock and related warrants to the U.S. Treasury
as part of the CPP. Upon issuance, the Bancorp agreed to limit
dividends to common stock holders to the quarterly dividend rate
paid prior to October 14, 2008, which was $0.15. This restriction
is in effect until the earlier of December 31, 2011 or the date upon
which the Series F senior preferred shares are redeemed in whole
or transferred to an unaffiliated third party.
The Bancorp’s repurchase of equity securities is shown in
Table 51. On May 21, 2007, the Bancorp announced that its
Board of Directors had authorized management to purchase 30
million shares of the Bancorp’s common stock through the open
market or in any private transaction. The authorization does not
include specific price targets or an expiration date. Under the
agreement with the U.S. Treasury, as part of the CPP, the Bancorp
is restricted in its repurchases of its common stock. This
restriction is in effect until the earlier of December 31, 2011 or the
date upon which the Series F senior preferred shares are redeemed
in whole or transferred to an unaffiliated third party.
TABLE 51: SHARE REPURCHASES
For the years ended December 31 2009 2008 2007
Shares authorized for repurchase at January 1 19,201,518 19,201,518 15,807,045
A
dditional authorizations - - 30,000,000
Shares repurchases (a) - - (26,605,527)
Shares authorized for repurchase at December 31 19,201,518 19,201,518 19,201,518
A
verage price paid per share N/A N/A 40.70
(a) Excludes 265,802, 63,270 and 365,867 shares repurchased during 2009, 2008 and 2007, respectively, in connection with various employee compensation plans. These repurchases
are not included in the calculation for average price paid and do not count against the maximum number of shares that may yet be repurchased under the Board of Directors’
authorization.