Fifth Third Bancorp (FITB) recently stated full year 2016 net income of $1.6 billion, down 9 percent from net income of $1.7 billion in 2015. After preferred dividends, 2016 net income available to common shareholders was $1.5 billion, or $1.93 per diluted share, down 9 percent contrast with 2015 net income available to common shareholders of $1.6 billion, or $2.01 per diluted share. Results were significantly influenced by Vantiv-related transactions throughout 2015 and 2016.
Fourth quarter 2016 net income was $395 million, a decrease of 23 percent from net income of $516 million in the third quarter of 2016 and a decrease of 40 percent from net income of $657 million in the fourth quarter of 2015. Results were significantly influenced by Vantiv-related transactions explained in further detail below, counting $280 million in pre-tax income in third quarter of 2016 and $469 million in pre-tax income in fourth quarter of 2015. After preferred dividends, net income available to common shareholders was $372 million, or $0.49 per diluted share, in the fourth quarter 2016, contrast with $501 million, or $0.65 per diluted share, in the third quarter 2016, and $634 million, or $0.79 per diluted share, in the fourth quarter of 2015.
Fourth quarter 2016 included:
- $9 million gain on the Vantiv warrant net exercise and share sale
- $6 million benefit related to the valuation of the Visa total return swap
- ($16 million) reduction to net interest income for refunds offered to certain bankcard customers
- ($5 million) contribution to Fifth Third Foundation
Results also included a $6 million tax benefit from the early adoption of an accounting standard, and a $33 million annual payment recognized from Vantiv following the tax receivable agreement, which was recorded in other noninterest income.
Third quarter 2016 included:
- $280 million gain from the termination and settlement of gross cash flows from existing Vantiv tax receivable agreements (TRA) and the expected obligation to terminate and settle the remaining TRA cash flows upon the exercise of put or call options
- $11 million gain on the sale of a non-branch facility
- ($28 million) non-cash impairment charge related to formerly declared plans to sell or consolidate certain bank branches and land attained for future branch expansion
- ($12 million) charge related to the valuation of the Visa total return swap
- ($9 million) charge from the transfer of certain nonconforming investments affected by the Volcker Rule to held-for-sale
- ($2 million) negative valuation adjustment on the Vantiv warrant
Results also included an $8 million beneficial tax impact in connection with certain commercial lease terminations.
Fourth quarter 2015 included:
- $331 million gain on the sale of Vantiv shares
- $89 million gain on Vantiv warrant actions taken during the quarter
- $49 million payment received from Vantiv to terminate a portion of its tax receivable agreement
- $21 million positive valuation adjustment on the remaining Vantiv warrant
- ($10 million) related to the valuation of the Visa total return swap
- ($10 million) contribution to Fifth Third Foundation
Genworth Financial Inc (GNW) recently stated results for the period ended December 31, 2016. The company stated a net loss of $122 million, or $0.25 per diluted share, in the fourth quarter of 2016, contrast with a net loss of $292 million, or $0.59 per diluted share, in the fourth quarter of 2015. The adjusted operating loss for the fourth quarter of 2016 was $137 million, or $0.27 per diluted share, contrast with an adjusted operating loss of $82 million, or $0.17 per diluted share, in the fourth quarter of 2015.
The company stated a net loss of $277 million, or $0.56 per diluted share, in 2016, contrast with a net loss of $615 million, or $1.24 per diluted share, in 2015. The company stated an adjusted operating loss of $316 million, or $0.63 per diluted share, in 2016, contrast with adjusted operating income of $255 million, or $0.51 per diluted share, in 2015.
The formerly declared transaction with China Oceanwide is subject to receipt of required approvals by Genworth’s stockholders, regulators and other closing conditions. On January 25, 2017, Genworth filed a definitive proxy statement with the Securities and Exchange Commission (SEC) and begind mailing to stockholders of record the definitive proxy materials in connection with the transaction. The special meeting of Genworth stockholders will be held on Tuesday, March 7, 2017, at 9:00 a.m. Eastern Time.
All filings required under the merger agreement for regulatory approval of the transaction have been presented, counting those for the Committee on Foreign Investment in the United States (CFIUS), where we are waiting for the CFIUS staff to initiate the review period, and the other regulators in the U.S., China, and other international markets. Both parties are engaging with regulators regarding the applications and the pending transaction. Genworth and China Oceanwide continue to expect the transaction to close by mid-2017.
“China Oceanwide is continuing to work diligently with Genworth to obtain all regulatory approvals and satisfy other necessary conditions to closing,” said Mr. Lu Zhiqiang, Chairman of China Oceanwide.
“The Genworth Board of Directors continues to believe that this transaction is in the best interests of Genworth’s stockholders and unanimously recommends the approval of the transaction,” said Tom McInerney, President and CEO of Genworth.