Fifth Third Bank 2013 Annual Report Download - page 85

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
83 Fifth Third Bancorp
 Repurchase of common shares in an amount up to $984
million, including any shares issued in a Series G preferred
stock conversion;
 Incremental repurchase of common shares in the amount
of any after-tax gains from the sale of Vantiv, Inc stock;
and
 Issuance of an additional $500 million in preferred stock.
The capital plan also included the assumption that the Bancorp
would issue approximately 3.5 million shares in restricted stock
under employee compensation plans in 2013. The above potential
capital actions are subject to Board approval and other factors
including regulatory developments and market conditions. Actions
consistent with the above proposed capital actions were
substantially completed in 2013.
The DFA requires that BHCs with over $50 billion in
consolidated assets that participated in the 2009 Supervisory Capital
Assessment Program, including the Bancorp, conduct two stress
tests each year. On May 13, 2013, the FRB launched the 2013 Mid-
Cycle Stress Tests, which was submitted to the FRB in July of 2013.
The stress tests required the BHCs to develop their own baseline,
adverse and severely adverse scenarios to reflect its individual
operations and risks. Each BHC was required to release its results
under the severely adverse scenario, which the Bancorp disclosed on
its website on September 24, 2013.
The FRB launched the 2014 stress testing program and CCAR
on November 1, 2013. The stress testing results and capital plan
were submitted by the Bancorp to the FRB on January 6, 2014.
The FRB expects to release summary results of the 2014 stress
testing program and CCAR in March of 2014. The results will
include supervisory projections of capital ratios, losses and revenues
under the supervisory adverse and supervisory severely adverse
scenarios. The FRB will also issue an objection or non-objection to
each participating institution’s capital plan submitted under CCAR.
Additionally, as a CCAR institution, Fifth Third is required to
disclose its own estimates of results under the supervisory severely
adverse scenario using the same consistently applied capital actions
noted above, and to provide information related to risks included in
its stress testing; a summary description of the methodologies used;
estimates of aggregate pre-provision net revenue, losses, provisions,
and pro forma capital ratios at the end of the forward-looking
planning horizon of at least nine quarters; and an explanation of the
most significant causes of changes in regulatory capital ratios. These
disclosures are required to be sent to the FRB and publicly disclosed
by March 31, 2014.