Terms

Series

4.95% Non-Cumulative Perpetual Preferred Stock, Series K

Liquidation Preference

$25.00

Coupon Rate

4.95%

Rate Type

Fixed

Annual Dividend

$1.24

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 30, 2024

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Secured Debt, All Unsecured Debt, All Subordinated Debt; Pari Passu With: Series H Preferred Stock (5.10% Fixed-To-Floating), Series I Preferred Stock (6.625% Fixed-To-Floating), Series J Preferred Stock (4.90% Fixed-To-Floating), Series A Class B Preferred Stock (6.00%); Senior To: Common Stock, All Equity Securities Designated As Junior To Series K Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

No

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

10,000,000

Prospectus Summary

Fifth Third Bancorp is offering 10,000,000 Depositary Shares, each representing a 1/1000th interest in a share of its 4.95% Non-Cumulative Perpetual Preferred Stock, Series K, with a liquidation preference of $25 per Depositary Share ($25,000 per underlying preferred share). Dividends accrue at a fixed annual rate of 4.95% ($1.2375 per Depositary Share annually, or approximately $0.3094 quarterly) and are payable quarterly on March 31, June 30, September 30, and December 31. The stock is non-cumulative — if the board does not declare a dividend for any period, that dividend is permanently lost and holders have no claim to it in future periods. Series K Preferred Stock sits above Fifth Third's common stock and all junior equity in the capital stack, and ranks pari passu with existing Series H, I, J, and Series A Class B Preferred Stock. It is junior to all of Fifth Third's secured and unsecured debt, including subordinated debt — and because Fifth Third is a holding company, it is structurally subordinated to all obligations of its banking subsidiary, Fifth Third Bank. The Series K includes a regulatory capital call: if a change in law or regulation causes Fifth Third to determine there is more than an insubstantial risk that the stock will no longer qualify as additional Tier 1 capital, the company may redeem the entire issue at par at any time. This provision protects Fifth Third's capital structure but introduces early redemption risk for investors. At the $25 offering price, the Series K Preferred Stock yields exactly 4.95%. Dividends are payable quarterly on the last day of each calendar quarter, beginning December 31, 2019, with record dates set by the board prior to each payment. Corporate holders may be eligible for the dividends-received deduction; QDI eligibility for individual investors is not explicitly confirmed. Dividend payments can be interrupted if Fifth Third is in default on, or is deferring interest on, its junior subordinated debt securities. Additionally, as long as any Series K dividends for the current period remain unpaid, Fifth Third is blocked from paying dividends on or repurchasing common stock or other junior securities.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Fifth Third has not paid or set aside full dividends on Series K Preferred Stock for the current period, it cannot declare or pay dividends on common stock or any junior securities, and cannot repurchase junior stock. Separately, if Fifth Third is deferring interest or in default on its junior subordinated debt securities, it is blocked from paying dividends on the Series K Preferred Stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)