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Fifth Third Bancorp (FITB)Company Profile: Cincinnati, Ohio-based Fifth Third Bancorp is a bank holding company which conducts its main lending, deposit gathering, transaction processing and service advisory activities through its banking and non-banking subsidiaries.
Fifth Third Bancorp shareholders will enjoy a 6-cent-per-share quarterly cash dividend, 5 cents or 500% more than its prior payout of a penny per share.
Fifth Third's increased dividend will be paid on April 21 to shareholders of record as of April 1.
That will bring the bank's yield to around 1.8% going forward.
In late March the Federal Reserve released the results of its second round of stress testing, and notified some of the largest banks to increase or restart dividend payments this year.
Fifth Third was among the banks that did not receive any regulatory objection to such dividend increases.
On April 15 analysts at Robert W. Baird issued an upgrade on Fifth Third shares to an outperform rating, from neutral. The firm set a $17 price target on the stock, up a dollar from its prior target.
On April 21 the regional bank returned to year-over-year profitability with first-quarter earnings of $88 million, 10 cents per share.
Excluding the impact of Troubled Asset Relief Program payback, Fifth Third would have earned 27 cents per share, beating consensus estimates by 6 cents.
Fifth Third's net charge-offs in the quarter, or loans written off as uncollectible, fell to $367 million, from $582 million a year ago, indicating the credit market continues to improve.