Fifth Third(US:FITB) ZACKSยท2024-06-13 13:47Core Viewpoint - Fifth Third Bancorp (FITB) announced a new share repurchase agreement, leading to a 3% increase in its shares during after-market trading, reflecting the company's commitment to enhancing capital distribution and generating long-term value for shareholders [1][5]. Financial Performance and Guidance - The company has trimmed its second-quarter revenue guidance, now expecting total revenues to be stable sequentially, down from a previous forecast of nearly 1% growth [10]. - Non-interest income is now anticipated to be stable, a decrease from the earlier guidance of 2-4% growth [10]. - The net charge-off ratio is projected to be 50 basis points, revised from the earlier guidance of 35-45 basis points [4]. - The effective tax rate is now expected to be 22%, compared to the previous range of 22-23% [5]. - Non-interest expenses are projected to decline by 7-8%, an increase from the previous guidance of a 6% decrease [11]. - The allowance for credit losses is estimated to be a $50 million release, contrasting with the earlier guidance of flat to a $25 million build [11]. Market Position and Growth - Fifth Third Bancorp holds a top five market share in commercial payments across several product categories, with total assets of $215 billion and deposits of $170 billion [5]. - Over the past year, FITB shares have increased by 45.4%, outperforming the industry growth of 35.5% [6]. - The company plans to expand its branch network by opening 35-45 branches annually through 2028 [12]. Share Repurchase Agreement - The new share repurchase agreement involves buying back nearly $125 million of outstanding common stock, part of a broader 100 million share repurchase program initiated in June 2019 [1][5]. - The company expects to receive a substantial majority of the shares related to the repurchase agreement by June 12, 2024 [9].