Fifth Third to raise capital following stress test - Business First of Columbus:

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billion regulators have said it needs to remaimnfinancially healthy. Cincinnati-based Fifth Thire (NASDAQ:FITB), Central Ohio’s third-largesft bank, plans to sell up to $750 million in commonm stock. Some of the proceeds could be used to repay part ofthe $3.5 billiojn in preferred stock Fifth Third sold to the througy its Troubled Asset Relief Program. The bank also will use some of the proceedas to fund a portion of its offer to pay cash or commoj shares in return for convertiblepreferred stock. Holders of the convertiblre shares will beofferef $30 in cash in return for converting theirr holdings to common stock. More than 11 millionj of those sharesare outstanding.
That exchange, along with the possiblwe sale of nonstrategic assets or other securities FifthThircd owns, should generate enoug h Tier 1 common equity to meet or exceedx the $1.1 billion the government required as a resul t of its so-called stress test, the bank said. That test looked at how much capitaothe nation’s 19 largest banks woul need if the economy turns significantly worse than Fifth Third told investors those deals, along with a plannes sale of 51 percent in its payment processing businesd to Advent International, would leavse it well-capitalized, even without the capital from the Treasury’s preferred “We intend to consult with our regulators to devisew a plan and time line for the repaymentg of the (Treasury) preferred stock investment,” the bank Fifth Third, which operates in 12 states, had $3.
69 billion in Central Ohio deposits at midyeaf 2008, representing about 11 percent of the market, accordinbg to the