Fifth Third Bank 2012 Annual Report Download - page 141

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
139 Fifth Third Bancorp
22. COMMON, PREFERRED AND TREASURY STOCK
The following is a summary of the share activity within common, preferred and treasury stock for the years ended December 31:
Common Stock Preferred Stock Treasury Stock
($ in millions, except share data)
V
alue Shares
V
alue Shares
V
alue Shares
Shares at December 31, 2009 $ 1,779 801,504,188 $ 3,609 152,771 $ 201 6,436,024
A
ccretion from dividends on preferred shares, Series F - - 45 - - -
Stock-based awards issued or exercised, including treasury shares issued - - - - (6) 16,391
Restricted stock grants - - - - (62) (1,334,967)
Other - - - - (3) 114,218
Shares at December 31, 2010 $ 1,779 801,504,188 $ 3,654 152,771 $ 130 5,231,666
Issuance of common shares 272 122,388,393 - - - -
Exchange of preferred shares, Series G - - - (1) - -
Redemption of preferred shares, Series F - - (3,408) (136,320) - -
A
ccretion from dividends on preferred shares, Series F - - 153 - - -
Stock-based awards issued or exercised, including treasury shares issued - - - - (7) (336,735)
Restricted stock grants - - - - (58) (756,381)
Other - - (1) (1) (50,405)
Shares at December 31, 2011 $ 2,051 923,892,581 $ 398 16,450 $ 64 4,088,145
Shares acquired for treasury - - - - 627 42,424,014
Stock-based awards issued or exercised, including treasury shares issued - - - - (7) (1,776,508)
Restricted stock grants - - - - (47) (2,877,657)
Other - - - - (3) (117,470)
Shares at December 31, 2012 $ 2,051 923,892,581 $ 398 16,450 $ 634 41,740,524
Common Stock
On January 25, 2011, the Bancorp raised $1.7 billion in new
common equity through the issuance of common stock in an
underwritten offering with an initial price of $14.00 per share.
121,428,572 shares were issued, which included 12,142,857 shares
issued to the underwriters, who exercised their option to purchase
additional shares at the offering price of $14.00 per share on January
24, 2011. In connection with this exercise, the Bancorp entered into
a forward sale agreement which resulted in a final net payment of
959,821 shares on February 4, 2011.
Preferred Stock—Series G
In 2008, the Bancorp issued 8.5% non-cumulative Series G
convertible preferred stock. The depository shares represent shares
of its convertible preferred stock and have a liquidation preference
of $25,000 per share. The preferred stock is convertible at any time,
at the option of the shareholder, into 2,159.8272 shares of common
stock, representing a conversion price of approximately $11.575 per
share of common stock.
As of December 31, 2012, Series G preferred stock had
4,112,750 depositary shares representing 16,450 shares outstanding
and 1,700 shares reserved for issuance.
Preferred Stock—Series F
On December 31, 2008, the U.S. Treasury purchased $3.4 billion, or
136,320 shares, of the Bancorp’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series F, with a liquidation preference of $25,000
per share and related 10-year warrant in the amount of 15% of the
preferred stock investment. The warrant gave the U.S Treasury the
right to purchase 43,617,747 shares of the Bancorp’s common stock
at $11.72 per share. The Series F senior preferred stock was issued
complying with the terms established by the CPP. Per the program
terms, the U.S. Treasury’s investment consisted of senior preferred
stock with a five percent dividend for each of the first five years of
investment and nine percent thereafter, unless the shares were
redeemed. The shares were callable by the Bancorp at par after three
years and could be repurchased at any time under certain
circumstances. The terms also included restrictions on the
repurchase of common stock and an increase in common stock
dividends, which required the U.S. Treasury’s consent, for a period
of three years from the date of investment unless the preferred
shares were redeemed in whole or the U.S. Treasury had transferred
all of the preferred shares to a third party.
The proceeds from issuance of the Series F preferred stock
were allocated to the preferred stock and to the warrant based on
their relative fair values, which resulted in an initial book value of
$3.2 billion for the preferred stock and $239 million for the warrant.
The resulting discount to the preferred stock was being accreted
over five years through retained earnings as a preferred stock
dividend, resulting in an effective yield of 6.7% for the Series F
preferred stock for the first five years.
On February 2, 2011, the Bancorp used proceeds from the
issuance of common shares along with proceeds from a senior debt
offering and other available resources to repurchase all 136,320
Series F preferred shares. In connection with the redemption of the
Series F Preferred Stock, the Bancorp accelerated the accretion of
the remaining issuance discount on the Series F Preferred Stock and
recorded a reduction in retained earnings and a corresponding
increase in preferred stock of $153 million in the Bancorp’s
Consolidated Balance Sheet. On March 16, 2011, the Bancorp
repurchased the warrant issued to the U.S. Treasury in connection
with the CPP preferred stock investment at an agreed upon price of
$280 million, which was recorded as a reduction to capital surplus in
the Bancorp’s Consolidated Financial Statements.
Treasury Stock
On March 13, 2012, the Bancorp announced the results of its capital
plan submitted to the FRB as part of the 2012 CCAR. The FRB
indicated to the Bancorp that it did not object to the repurchase of
common shares in an amount equal to any after-tax gains realized by
the Bancorp from the sale of Vantiv, Inc. common shares by either
the Bancorp or Vantiv, Inc. Following the Vantiv Inc. IPO, the
Bancorp entered into an accelerated share repurchase transaction
with a counterparty pursuant to which the Bancorp purchased
4,838,710 shares, or approximately $75 million, of its outstanding
common stock on April 26, 2012. As part of this transaction and all
subsequent accelerated share repurchase transactions in 2012, the
Bancorp entered into forward contracts in which the final number