<PAGE> 1
Filed Pursuant to Rule 424(b)(1)
Registration File No: 333-49993
PROSPECTUS
3,600,000 SHARES
FIFTH THIRD LOGO
FIFTH THIRD BANCORP
COMMON STOCK
------------------------
This Prospectus relates to the offer and sale (the "Offering") by Fifth
Third Bancorp ("Fifth Third"), an Ohio corporation, of 3,600,000 shares of its
common stock, no par value (the "Common Stock").
The Common Stock is traded on the Nasdaq National Market under the symbol
"FITB." The last reported sale price of the Common Stock on the Nasdaq National
Market on May 6, 1998 was $50 13/16 per share.
------------------------
THE SHARES OF FIFTH THIRD COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==================================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) FIFTH THIRD(2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................. $50.8125 $1.2700 $49.5425
- ------------------------------------------------------------------------------------------------------------------
Total..................... $182,925,000 $4,572,000 $178,353,000
==================================================================================================================
</TABLE>
(1) For information regarding indemnification of the Underwriters, see
"Underwriting."
(2) Before deducting expenses estimated at $228,000 payable by Fifth Third.
------------------------
THE SHARES OF COMMON STOCK ARE BEING OFFERED BY THE SEVERAL UNDERWRITERS
NAMED HEREIN, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED BY THEM AND
SUBJECT TO CERTAIN CONDITIONS. IT IS EXPECTED THAT CERTIFICATES FOR THE SHARES
OF COMMON STOCK OFFERED HEREBY WILL BE AVAILABLE FOR DELIVERY ON OR ABOUT MAY
12, 1998 AT THE OFFICE OF SMITH BARNEY INC., 333 WEST 34TH STREET, NEW YORK, NEW
YORK 10001.
------------------------
SALOMON SMITH BARNEY
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
DONALDSON, LUFKIN & JENRETTE
MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
THE OHIO COMPANY
SECURITIES LLC
SECURITIES CORPORATION
May 6, 1998
<PAGE> 2
AVAILABLE INFORMATION
Fifth Third is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by Fifth Third can be inspected and copied at Room
1024 of the Offices of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices in New York (7 World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511), and
copies of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Fifth Third files its reports, proxy statements and other information with the
Commission electronically, and the Commission maintains a website located at
http://www.sec.gov containing such information.
Fifth Third has filed a Registration Statement on Form S-3 together with
all amendments and exhibits thereto with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement, including any amendments, schedules and
exhibits thereto, is available for inspection and copying as set forth above.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein include all material terms of such contracts
or other documents but are not necessarily complete, and in each instance
reference is made to the copy of any such contract or other document which may
have been filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
Fifth Third Common Stock is traded on the Nasdaq National Market under the
symbol "FITB." Documents filed by Fifth Third with the Commission also can be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, ENTERING STABILIZING BIDS, EFFECTING SYNDICATE
COVERING TRANSACTIONS AND IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS MAY ENGAGE IN
PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL
MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "UNDERWRITING."
2
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by Fifth Third with the Commission
are hereby incorporated into this Prospectus by reference:
(a) Fifth Third's Annual Report on Form 10-K for the year ended
December 31, 1997;
(b) Fifth Third's Proxy Statement dated February 9, 1998; and
(c) Fifth Third's Current Report on Form 8-K filed March 17, 1998.
In addition, all subsequent documents filed with the Commission by Fifth
Third pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein (or in any other
subsequently filed document which also is deemed to be incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents (excluding exhibits unless
specifically incorporated therein) are available without charge upon written or
oral request from Paul L. Reynolds, Assistant Secretary, Fifth Third Bancorp,
Fifth Third Center, Cincinnati, Ohio 45263 (telephone number: (513) 579-5300).
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
This Prospectus (including information included or incorporated by
reference herein) contains or may contain forward-looking statements with
respect to the financial condition, results of operations, plans, objectives,
future performance and business of Fifth Third, including statements preceded
by, followed by or that include the words, "believes," "expects," "anticipates"
or similar expressions. These forward-looking statements involve certain risks
and uncertainties and may relate to future operating results of Fifth Third and
the companies it is acquiring, as described herein under "RECENT TRANSACTIONS."
Factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among others, the
following possibilities: (1) expected cost savings from the acquisitions not
being fully realized or realized within the expected time frame; (2) revenues
following the acquisitions being lower than expected; (3) a significant increase
in competitive pressures among depository and other financial institutions; (4)
costs or difficulties related to the integration of the acquired business being
greater than expected; (5) changes in the interest rate environment resulting in
reduced margins; (6) general economic or business conditions, either nationally
or in the states in which Fifth Third will be doing business, being less
favorable than expected, resulting in, among other things, a deterioration in
credit quality or a reduced demand for credit; (7) legislative or regulatory
changes adversely affecting the businesses in which Fifth Third will be engaged;
(8) changes in the securities markets; and (9) changes in the banking industry
including the effects of consolidation resulting from possible mergers of
financial institutions.
3
<PAGE> 4
PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus and the documents incorporated herein by reference. This summary
is not intended to be a summary of all information relating to the Offering and
should be read in conjunction with, and is qualified in its entirety by
reference to, the more detailed information contained elsewhere in this
Prospectus, including the documents incorporated by reference in this
Prospectus.
FIFTH THIRD
Fifth Third is a multi-bank holding company which conducts its principal
activities through its banking and non-banking subsidiaries. Fifth Third's nine
affiliate banks and other subsidiaries focus on four key businesses: Commercial
Banking, Retail Banking, Investment Advisory Services and Data Processing.
Commercial Banking offers a full range of financial products and services to
business and government customers, including commercial loans and leases,
deposit accounts, cash management services, international letters of credit,
foreign exchange, venture capital investment, merger and acquisition services
and business banking software designed to automate financial reporting. Retail
Banking provides a full range of consumer financial services, including deposit
products, residential mortgages, prime home equity loans, credit cards,
automobile loans and leases and insurance sales, through 410 banking centers
located in Ohio, Kentucky, Indiana and Florida. Fifth Third Investment Advisors,
one of the largest money managers in the Midwest, provides a full range of
investment and financial services for individual, institutional and
not-for-profit clients, including investment management, trust, private banking,
brokerage and Fifth Third's proprietary family of mutual funds, the Fountain
Square(R) Funds. Midwest Payment Systems, Inc. ("MPS"), Fifth Third's data
processing subsidiary, is one of the leading national providers of electronic
funds transfer services and merchant transaction processing. MPS also operates
the Jeanie(R) automated teller machine ("ATM") network, a growing point-of-sale
business, and provides Fifth Third's affiliate banks with leading-edge
processing capabilities. See "BUSINESS OF FIFTH THIRD."
Fifth Third's principal executive offices are located at Fifth Third
Center, 38 Fountain Square Plaza, Cincinnati, Ohio 45263, and its telephone
number is (513) 579-5300.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by Fifth Third............. 3,600,000 shares
Common Stock to be outstanding
immediately after this Offering............... 236,730,522 shares(1)
Use of proceeds................................. Fifth Third intends to use the net proceeds from
the Offering for general corporate purposes. See
"USE OF PROCEEDS."
Nasdaq National Market symbol................... FITB
</TABLE>
- ---------------
(1) Based on shares of Fifth Third Common Stock outstanding as of March 31,
1998. Excludes (i) 16,997,653 shares of Common Stock reserved for issuance
under Fifth Third's Amended 1990 Stock Option Plan and Fifth Third's 1998
Long-Term Incentive Stock Plan (adopted at Fifth Third's 1998 Annual Meeting
of Stockholders) under which options for 9,244,653 shares are outstanding
and (ii) approximately 31,193,165 shares of Common Stock expected to be
issued in Fifth Third's pending acquisitions as described under "RECENT
TRANSACTIONS."
4
<PAGE> 5
FIRST QUARTER RESULTS
For the first quarter of 1998, Fifth Third's net income was $109.0 million
compared to $94.5 million for the same period last year. Diluted earnings per
share, as adjusted for the three-for-two stock split declared on March 17, 1998
and paid on April 15, 1998, were $0.46 per share for the first quarter of 1998,
up 18% over the same period last year. Fifth Third had an annualized return on
average assets of 2.00%, a return on average equity of 19.9% and an overhead
ratio of 41.6%. At March 31, 1998, Fifth Third had consolidated total assets of
$22.9 billion and consolidated total stockholders' equity of $2.3 billion. Fifth
Third's net interest income for the first quarter of 1998 was $197.9 million, a
9% increase over the net interest income for the same period last year. Fifth
Third's other operating income was $126.4 million for the first quarter of 1998,
representing a 28% increase over other operating income for the same period in
1997.
RECENT TRANSACTIONS
Fifth Third's strategy for growth includes strengthening its presence in
its core markets, expanding into contiguous markets and broadening its product
offerings. Consistent with this strategy, Fifth Third entered into agreements to
acquire The Ohio Company, a provider of broker/dealer investment banking and
investment advisory services, State Savings Company, a Columbus, Ohio based
savings and loan holding company, and CitFed Bancorp, Inc., a Dayton, Ohio based
savings and loan holding company. Fifth Third believes that these acquisitions
will further strengthen its competitive position in these two major Ohio markets
and will broaden the financial services it can offer to its customers. See
"RECENT TRANSACTIONS."
Consummation of this Offering is not subject to the consummation of any
such pending acquisitions.
5
<PAGE> 6
BUSINESS OF FIFTH THIRD
Fifth Third is an Ohio multi-bank holding company registered under the Bank
Holding Company Act of 1956 (the "Bank Holding Company Act") and subject to
regulation by the Federal Reserve Board. Headquartered in Cincinnati, Ohio,
Fifth Third operates nine affiliate banks in Ohio, Kentucky, Indiana and
Florida. Fifth Third has a decentralized affiliate bank structure which helps to
promote a customer-responsive and sales-oriented culture.
Fifth Third believes it has consistently delivered superior financial
performance, and it is recognized as one of the most efficient commercial
banking organizations in the United States. In 1997, Fifth Third's annual net
income increased for the 24th consecutive year. From 1992 to 1997, Fifth Third
delivered over 15% compounded annual growth in earnings per share. For the year
ended December 31, 1997, Fifth Third had a return on average assets of 1.96%, a
return on average equity of 19.6% and an industry-leading overhead ratio of 41%.
At December 31, 1997, Fifth Third had consolidated total assets of $21.4
billion, consolidated total deposits of $14.9 billion and consolidated total
stockholders' equity of $2.3 billion. Fifth Third's market capitalization as of
March 31, 1998 was approximately $13.3 billion.
Fifth Third engages primarily in four lines of business: Commercial
Banking, Retail Banking, Investment Advisory Services and Data Processing. Fifth
Third's Commercial Banking Group offers services and products to business and
government customers. These services and products include commercial loans and
leases, deposit accounts, cash management services, international letters of
credit, foreign exchange, venture capital investment, merger and acquisition
services and business banking software designed to automate financial reporting.
Furthermore, Fifth Third effectively leverages its commercial banking presence
by cross-selling investment services. Fifth Third's Commercial Banking Group
focuses on providing credit services to middle market clients and is one of the
top 10 banks providing lease financing in the United States. In 1997, Fifth
Third's Commercial Banking Group generated revenues of $373.2 million and net
income of $146.0 million, and its commercial loan and lease portfolio aggregated
approximately $6.6 billion at year end.
Fifth Third's Retail Banking Group provides a full range of consumer
financial services, including deposit products, residential mortgages, prime
home equity loans, credit cards, automobile loans and leases and insurance
sales. All of Fifth Third's retail banking services are provided through a
variety of delivery channels that include 410 full-service offices, 1,000 ATMs,
telephone banking and electronic payment services. Fifth Third was one of the
pioneers of supermarket banking and has 100 Bank Mart(R) locations open seven
days a week inside select grocery stores. Fifth Third believes that its
decentralized affiliate bank structure enhances its ability to originate
consumer assets, as demonstrated by a 32% increase to $920 million in the home
equity loan portfolio from 1996 to 1997. In 1997, Fifth Third's Retail Banking
Group generated revenues of $591 million and net income of $176.1 million, and
its consumer loan and lease portfolio aggregated approximately $6.9 billion at
year end.
Fifth Third Investment Advisors works to build wealth for its individual,
institutional and not-for-profit clients, including employee benefit plans,
foundations and endowments, by providing a full range of investment and
financial services. These services include investment management, trust, private
banking and brokerage. As a result of Fifth Third's continued growth in its
existing and new markets, Fifth Third managed over $13.1 billion in assets at
December 31, 1997. In addition, Fifth Third had over $117.3 billion of total
assets under care at year end. Fifth Third's proprietary family of mutual funds,
the Fountain Square(R) Funds, had $3.1 billion in assets under management at
December 31, 1997. In 1997, Fifth Third Investment Advisors generated revenues
of $106.9 million and net income of $40.5 million.
Fifth Third's Data Processing Services are delivered by MPS throughout the
United States. MPS has three primary product lines: ATM processing, card
products (including debit cards) and merchant processing. MPS provides ATM
processing for approximately 600 financial institution customers and for Fifth
Third's proprietary Jeanie(R) ATM network. In merchant processing, MPS processes
credit card transactions for over 41,000 retail merchant locations through
point-of-sale device support, authorization processing, local, regional and
national gateway access, network management, back-office automation support and
comprehensive reporting software. In 1997, MPS was ranked among the top three
electronic funds transfer processors and among the top 10 merchant transaction
processors in the United States. MPS' technological capabilities and processing
capacity also contribute to the efficiency of Fifth Third's banking businesses.
Since 1994, MPS has generated compounded
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<PAGE> 7
annual revenue and net income growth of over 20%. In 1997, MPS generated
revenues of $120.0 million and net income of $34.6 million.
Fifth Third is a corporate entity legally separate and distinct from its
affiliates. The principal source of Fifth Third's income is dividends from its
affiliates. There are certain regulatory restrictions as to the extent to which
Fifth Third's banking affiliates can pay dividends or otherwise supply funds to
Fifth Third. See "DESCRIPTION OF CAPITAL STOCK."
FIRST QUARTER RESULTS
For the first quarter of 1998, Fifth Third's net income was $109.0 million
compared to $94.5 million for the same period last year. Diluted earnings per
share, as adjusted for the three-for-two stock split declared on March 17, 1998
and paid on April 15, 1998, were $0.46 per share for the first quarter of 1998,
up 18% over the same period last year. Fifth Third had an annualized return on
average assets of 2.00%, a return on average equity of 19.9% and an overhead
ratio of 41.6%. At March 31, 1998, Fifth Third had consolidated total assets of
$22.9 billion and consolidated total stockholders' equity of $2.3 billion. Fifth
Third's net interest income for the first quarter of 1998 was $197.9 million, a
9% increase over the net interest income for the same period last year. Fifth
Third's other operating income was $126.4 million for the first quarter of 1998,
representing a 28% increase over other operating income for the same period in
1997. Pro forma for the three acquisitions described under "RECENT
TRANSACTIONS," Fifth Third would have total deposits of $18.9 billion and total
assets of $29.3 billion as of March 31, 1998.
Fifth Third's Commercial Banking Group's loan and lease portfolio
aggregated approximately $6.7 billion at March 31, 1998, which represents an
increase of 8% over the same period last year. Fifth Third's Retail Banking
Group's loan and lease portfolio aggregated approximately $6.9 billion at March
31, 1998, which represents an increase of 10% over the same period last year.
Direct installment loan originations and residential mortgage originations
exceeded $313 million and $677 million, respectively, for the first quarter of
1998. Fifth Third Investment Advisors generated a 29% growth in investment
advisory income in the first quarter of 1998 compared to the first quarter of
1997 due to successful new sales efforts and continued strength in the financial
markets. Fifth Third managed over $14.4 billion in assets and had over $128.2
billion of total assets under care at March 31, 1998. In addition, the Fountain
Square(R) Funds had $3.5 billion in assets under management at March 31, 1998.
MPS's income increased 31% in the first quarter of 1998 over the same period
last year as a result of new customers and resulting increases in merchant
transaction volumes, the success of debit cards and the increased popularity of
ATMs.
RECENT TRANSACTIONS
Fifth Third's strategy for growth includes strengthening its presence in
its core markets, expanding into contiguous markets and broadening its product
offerings. Consistent with this strategy, Fifth Third has entered into
agreements to acquire The Ohio Company, State Savings Company and CitFed
Bancorp, Inc. All three of these acquisitions are expected to be completed in
the second quarter of 1998.
Fifth Third believes it has an excellent track record in integrating
acquired businesses. Since 1989, Fifth Third has completed 18 acquisitions,
which have contributed to its growth. In April 1998, Fifth Third acquired W.
Lyman Case & Company, a commercial mortgage banking firm based in Columbus, Ohio
that originated more than $800 million in financing and equity transactions in
1997 and has a loan servicing portfolio in excess of $2 billion. Fifth Third
continues to explore acquisition opportunities that would meet its objectives.
This Offering will be consummated prior to the closing of the pending
acquisitions described below and there can be no assurance that any or all of
these acquisitions or any future acquisitions will be closed successfully.
THE OHIO COMPANY
On December 22, 1997, Fifth Third agreed to acquire The Ohio Company, a
full service provider of broker/dealer, investment banking and investment
advisory services through 48 offices in Ohio, Michigan,
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<PAGE> 8
Indiana, West Virginia and Florida. The Ohio Company also manages over $1
billion in assets in its proprietary family of six mutual funds, and an
additional $1 billion in asset management accounts through its personal,
employee benefit and not-for-profit trustee relationships. Fifth Third believes
that The Ohio Company's investment banking, debt financing, mutual fund product
line and 80,000 client relationships will broaden its product line and client
reach within its key Midwestern markets. Together, Fifth Third Investment
Advisors and The Ohio Company will have over $16.0 billion in assets under
management, over $4.0 billion invested in their respective families of mutual
funds and over 155,000 client relationships.
In connection with the acquisition of The Ohio Company, Fifth Third will
exchange all of the outstanding shares of capital stock of The Ohio Company for
shares of Fifth Third Common Stock having a fair market value of $80.0 million.
Fifth Third anticipates that approximately 1,500,000 shares of Fifth Third
Common Stock will be issued to the shareholders of The Ohio Company pursuant to
the merger. Prior to the closing of this acquisition, Fifth Third may repurchase
up to 1,500,000 shares of Fifth Third Common Stock in the open market to be used
solely for such issuance. Fifth Third expects that its acquisition of The Ohio
Company will be accounted for as a purchase.
STATE SAVINGS COMPANY
On January 2, 1998, Fifth Third agreed to acquire State Savings Company
("State Savings"), a savings and loan holding company based in Columbus, Ohio,
which owns State Savings Bank, F.S.B. and certain related subsidiaries. As of
December 31, 1997, State Savings had total assets of $2.8 billion and total
deposits of $2.3 billion. As a result of the acquisition, Fifth Third will
operate 82 retail banking centers in the Columbus, Ohio market and will enter
the attractive Arizona market with 10 branch offices, $481.1 million in total
assets and $424 million in total deposits at December 31, 1997. Pro forma for
the acquisition, Fifth Third will have approximately a 13% deposit market share
in Columbus, Ohio.
Fifth Third believes that this in-market merger presents significant
opportunities for cost savings through consolidation, growth and increased
competitiveness for Fifth Third's Columbus banking affiliate. Fifth Third also
anticipates that this merger will greatly enhance its ability to provide
full-service banking to more customers and to cross-sell its retail, commercial,
consumer lending, trust, investment, brokerage and data processing services to
former State Savings customers.
Fifth Third is expected to issue approximately 16,625,340 shares of Fifth
Third Common Stock in the merger. Based on the fair market value per share of
Fifth Third Common Stock as of May 6, 1998, such shares would have an aggregate
value of approximately $845 million. Fifth Third expects that its acquisition of
State Savings will be accounted for as a pooling-of-interests.
CITFED BANCORP, INC.
On January 13, 1998, Fifth Third agreed to acquire CitFed Bancorp, Inc.
("CitFed Bancorp"), a savings and loan holding company based in Dayton, Ohio
which owns Citizens Federal Bank, F.S.B. and certain related subsidiaries. As of
December 31, 1997, CitFed Bancorp had total assets of $3.5 billion and total
deposits of $1.9 billion. Upon completion of the merger, Fifth Third will
operate 72 banking centers and will be the largest banking organization in the
Dayton, Ohio marketplace with combined assets of $5.3 billion and total deposits
of $3.5 billion and will have approximately a 28% deposit market share. Fifth
Third believes that the acquisition of CitFed Bancorp will permit aggressive
expansion of Fifth Third's product line within the fourth largest market in
Ohio, representing a population of over one million people. In addition, the
acquisition of CitFed Bancorp will add over 110,000 new checking account
relationships and significant loan origination capacity through a network of 15
loan production offices in Fifth Third's core markets, including offices in
Dayton, Columbus and Cincinnati, Ohio, Lexington and Louisville, Kentucky and
Indianapolis, Indiana.
Fifth Third is expected to issue approximately 13,067,825 shares of Fifth
Third Common Stock in the merger. Based on the fair market value per share of
Fifth Third Common Stock as of May 6, 1998, such shares would have an aggregate
value of approximately $664 million. Fifth Third expects that its acquisition of
CitFed Bancorp will be accounted for as a pooling-of-interests.
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<PAGE> 9
USE OF PROCEEDS
The net proceeds (after deducting estimated expenses and underwriting
discounts and commissions) to Fifth Third from the sale of the shares of Common
Stock offered hereby are estimated to be $178,125,000.
The net proceeds from the sale of the Common Stock will be used by Fifth
Third as working capital for general corporate purposes. The Offering will also
facilitate Fifth Third's ability to account for the acquisition of State Savings
and/or the acquisition of CitFed Bancorp as a pooling-of-interests, although the
Offering is not conditioned upon the completion of either of these acquisitions.
MARKET PRICE AND DIVIDEND INFORMATION
The following table sets forth, for the periods indicated, the high and low
sales prices of the Common Stock as reported on the Nasdaq National Market.
<TABLE>
<CAPTION>
FIFTH THIRD COMMON STOCK(1)
------------------------------
DIVIDENDS
HIGH LOW DECLARED
------ ------- ---------
<S> <C> <C> <C>
1996
First Quarter.......................................... $26.45 $19.33 $0.116
Second Quarter......................................... 25.83 22.00 0.116
Third Quarter.......................................... 25.95 22.11 0.129
Fourth Quarter......................................... 33.00 25.55 0.129
1997
First Quarter.......................................... 39.78 27.00 0.129
Second Quarter......................................... 38.05 30.95 0.147
Third Quarter.......................................... 44.33 36.33 0.147
Fourth Quarter......................................... 55.67 41.08 0.147
1998
First Quarter.......................................... 58.83 49.50 0.170
Second Quarter (through May 6, 1998)................... 59.50 50.38 --
</TABLE>
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(1) Per share amounts of the Common Stock reflect the three-for-two stock split
effected in the form of a stock dividend declared March 17, 1998 and
distributed on April 15, 1998.
On March 31, 1998, there were approximately 16,443 holders of record of
Common Stock.
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<PAGE> 10
CAPITALIZATION
The following table sets forth the capitalization of Fifth Third as of
December 31, 1997, as adjusted to give effect to the sale of the shares of
Common Stock offered hereby at an offering price of $50.8125 per share, after
deducting underwriting discounts and commissions and estimated offering expenses
payable by Fifth Third and as adjusted pro forma to give effect to the pending
acquisitions described under "RECENT TRANSACTIONS."
<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------------------------
ACTUAL(1) AS ADJUSTED PRO FORMA(2)
---------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Total long-term debt.................................... $ 457,878 $ 457,878 $1,320,743
Stockholders' equity:
Common stock.......................................... 516,898 524,890 594,139
Capital surplus....................................... 452,568 500,229 506,658
Retained earnings..................................... 1,401,649 1,401,649 1,817,021
Unrealized gains on securities available for sale..... 90,876 90,876 94,254
Treasury stock........................................ (184,580) (62,108) --
---------- ---------- ----------
Total stockholders' equity.............................. 2,277,411 2,455,536 3,012,072
---------- ---------- ----------
Total capitalization.................................... 2,735,289 2,913,414 4,332,815
========== ========== ==========
CAPITAL RATIOS:
Tier 1 risk-adjusted.................................... 12.09% 13.10% 13.55%
Total risk-adjusted capital............................. 14.70 15.70 15.92
Tier 1 leverage capital................................. 10.16 10.94 10.38
</TABLE>
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(1) Stockholders' equity adjusted to reflect the three-for-two stock split
effected in the form of a stock dividend declared on March 17, 1998 and
distributed April 15, 1998.
(2) Assumes issuance of approximately 1,500,000 shares of Fifth Third Common
Stock to effect the purchase of the Ohio Company, and the issuance of
16,625,340 and 13,067,825 shares of Fifth Third Common Stock to effect the
mergers of State Savings and CitFed Bancorp, respectively, into Fifth Third,
which mergers will be accounted for as pooling-of-interests.
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<PAGE> 11
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain historical financial data concerning
Fifth Third for the five years ended December 31, 1997 and for the three months
ended March 31, 1998 and 1997. All year end information is based on information
contained in Fifth Third's 1997 Annual Report to Stockholders which is
incorporated by reference in Fifth Third's Annual Report on Form 10-K for the
year ended December 31, 1997. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF
OPERATIONS:
Interest income...... $ 392,996 $ 362,745 $1,478,388 $1,385,113 $1,173,165 $ 922,301 $ 812,914
Interest expense..... 195,096 181,429 733,426 695,869 609,733 405,548 339,399
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest
income............. 197,900 181,316 744,962 689,244 563,432 516,753 473,515
Provision for credit
losses............. 19,825 17,446 80,342 64,014 42,962 35,780 48,037
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income
after provision for
credit losses...... 178,075 163,870 664,620 625,230 520,470 480,973 425,478
Other operating
income............. 126,381 98,560 445,461 368,415 305,715 255,908 231,150
Operating expenses
(1)................ 139,874 120,975 506,158 493,330 395,617 371,545 352,720
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
taxes.............. 164,582 141,455 603,923 500,315 430,568 365,336 303,908
Applicable income
taxes.............. 55,601 46,959 202,686 165,256 142,883 120,877 97,673
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income........... 108,981 94,496 401,237 335,059 287,685 244,459 206,235
========== ========== ========== ========== ========== ========== ==========
COMMON SHARE DATA:
(2)
Earnings per share... $ .47 $ .41 $ 1.73 $ 1.43 $ 1.29 $ 1.13 $ .97
Diluted earnings per
share.............. .46 .39 1.69 1.41 1.26 1.10 .95
Cash dividends
declared per
share.............. .17 .129 .569 .489 .427 .356 .302
Book value at period
end................ 10.03 8.28 9.78 9.00 7.63 6.40 5.91
Average shares
outstanding
(000's)............ 232,980 234,869 232,655 233,987 222,479 217,305 211,440
Average diluted
shares outstanding
(000's)............ 237,905 238,373 236,526 239,405 230,945 225,873 220,517
</TABLE>
- ---------------
(1) Operating expenses for 1996 include the impact of the special SAIF
assessment of $16.6 million pretax ($10.8 million after tax or $.04 per
share).
(2) Per share amounts and shares outstanding reflect the three-for-two stock
split effected in the form of a stock dividend declared March 17, 1998 and
distributed on April 15, 1998.
11
<PAGE> 12
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1998(5) 1997(5) 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL CONDITION AT
PERIOD END:
Securities................ $7,310,413 $6,553,553 $6,469,313 $6,400,685 $4,338,269 $3,637,035 $2,674,468
Loans and Leases.......... 13,548,595 12,427,977 13,438,717 12,514,792 11,690,643 10,286,457 9,566,898
Assets.................... 22,856,499 20,175,697 21,375,054 20,548,998 17,052,883 14,957,009 13,128,544
Deposits.................. 14,731,989 13,922,516 14,914,132 14,374,656 12,485,780 10,630,878 9,477,306
Short-Term Borrowings..... 4,102,971 3,402,405 3,060,931 3,265,432 2,005,495 2,452,218 1,691,744
Long-Term Debt and
Convertible Subordinated
Notes................... 947,964 457,747 457,878 277,661 425,396 178,713 407,864
Stockholders' Equity...... 2,339,447 1,914,891 2,277,411 2,144,125 1,724,575 1,398,774 1,277,660
AVERAGE BALANCES DURING
THE PERIOD:
Securities................ $7,038,228 $6,587,116 $6,355,035 $5,905,341 $4,280,773 $3,101,320 $2,365,897
Loans and Leases.......... 13,402,493 12,521,429 12,783,555 12,304,544 10,960,757 9,902,901 8,869,432
Assets.................... 22,069,719 20,425,409 20,460,460 19,480,238 16,166,207 13,829,341 12,041,054
Deposits.................. 12,195,829 12,033,502 14,193,072 13,960,186 11,257,248 9,997,710 8,961,228
Short-Term Borrowings..... 4,154,509 3,582,982 3,283,835 2,780,806 2,669,477 1,967,819 1,365,070
Long Term Debt and
Convertible Subordinated
Notes................... 645,575 295,690 417,823 342,187 290,824 249,612 343,617
Stockholders' Equity...... 2,225,678 2,049,500 2,052,081 1,946,435 1,586,722 1,314,341 1,157,412
RATIOS:
PROFITABILITY RATIOS:
Return on average assets
(1)..................... 2.00% 1.88% 1.96% 1.72% 1.78% 1.77% 1.71%
Return on average
stockholders' equity
(1)..................... 19.9 18.7 19.6 17.2 18.1 18.6 17.8
Net interest margin....... 4.11 4.07 4.11 3.99 3.90 4.16 4.39
Overhead ratio (1)(2)..... 41.6 41.6 41.0 45.0 43.9 46.6 48.6
Other operating income to
total income (3)........ 38.2 35.1 37.1 34.6 34.8 33.1 32.2
CAPITAL RATIOS:
Average stockholders'
equity to average
assets.................. 10.09% 10.04% 10.03% 9.99% 9.82% 9.50% 9.61%
Tier 1 risk-adjusted
capital................. 11.35 11.59 12.09 11.3 11.03 11.26 11.50
Total risk adjusted
capital................. 13.71 14.30 14.70 14.0 14.33 13.21 13.85
Tier 1 leverage........... 9.90 9.23 10.16 9.22 9.47 9.62 9.59
RATIO OF EARNINGS TO
FIXED CHARGES (4):
Including deposit
interest................ 1.84x 1.77x 1.82x 1.71x 1.70x 1.89x 1.89x
Excluding deposit
interest................ 3.48 3.65 3.92 3.93 3.49 4.75 5.77
CREDIT QUALITY RATIOS:
Reserve for credit losses
to nonperforming
assets.................. 450.23% 418.84% 516.84% 531.48% 436.06% 570.50% 362.84%
Reserve for credit losses
to loans and leases
outstanding ............ 1.50 1.51 1.50 1.50 1.50 1.52 1.51
Net charge-offs to average
loans and leases
outstanding............. .55 .56 .54 .49 .27 .18 .31
Nonperforming assets to
loans, leases and other
real estate owned....... .33 .36 .29 .28 .35 .27 .42
</TABLE>
- ---------------
(1) Operating expenses for 1996 include the impact of the special SAIF
assessment of $16.6 million pretax ($10.8 million after tax or $.04 per
share). For comparability, excluding the impact of this assessment, return
on average assets, return on average equity and the overhead ratio would
have been 1.78%, 17.8% and 43.5%, respectively.
(2) Operating expenses divided by the sum of taxable equivalent net interest
income and other operating income.
(3) Other operating income excluding securities gains and losses as a percent of
net interest income and other operating income excluding securities gains
and losses.
(4) Earnings represent income before income taxes plus fixed charges. Fixed
charges include interest expense and the proportion deemed representative of
the interest factor of rental expense.
(5) Ratios and percentages relating to the three month periods ended March 31,
1998 and 1997 have been annualized where appropriate for comparative
purposes.
12
<PAGE> 13
DESCRIPTION OF CAPITAL STOCK
Fifth Third is authorized to issue 300,000,000 shares of Fifth Third Common
Stock, no par value, and 500,000 shares of preferred stock, no par value ("Fifth
Third Preferred Stock"). As of March 31, 1998, Fifth Third had outstanding
233,130,522 shares of Fifth Third Common Stock and no shares of Fifth Third
Preferred Stock. The following summary description of the capital stock of Fifth
Third does not purport to be complete and is qualified in its entirety by
reference to Fifth Third's Second Amended Articles of Incorporation, as amended,
incorporated by reference in Fifth Third's Annual Report on Form 10-K for the
year ended December 31, 1997.
COMMON STOCK
Voting. Under Fifth Third's Second Amended Articles of Incorporation, as
amended, the holders of Common Stock have no preemptive rights and the Common
Stock has no redemption, sinking fund, or conversion privileges. The holders of
Fifth Third Common Stock are entitled to one vote per share on all matters
submitted to a vote of stockholders. The Code of Regulations of Fifth Third
provides for the division of its Board of Directors into three classes of
approximately equal size. Directors are elected for three-year terms and the
terms of office of approximately one-third of the classified Board of Directors
expire each year. The holders of Fifth Third Common Stock have the right to vote
cumulatively in the election of directors. Under applicable Ohio law, unless a
corporation's articles of incorporation are amended to provide that no
stockholder of the corporation may cumulate his or her voting power, each
stockholder has the right to vote cumulatively in the election of directors of
such corporation if (i) written notice is given by any stockholder of such
corporation to the President, a Vice President or the Secretary of such
corporation not less than forty-eight hours before the time fixed for holding
the meeting at which directors are to be elected, indicating that such
stockholder desires that voting for the election of directors be cumulative, and
(ii) announcement of the giving of such notice is made upon the convening of the
meeting by the Chairman or the Secretary or by or on behalf of the stockholder
giving such notice. In such event, each stockholder will be entitled to cumulate
such voting power as he or she possesses and to give one nominee as many votes
as the number of directors to be elected multiplied by the number of his or her
shares, or to distribute such votes on the same principle among two or more
candidates, as each stockholder sees fit.
Dividends. Holders of Fifth Third Common Stock are entitled to dividends
as and when declared by the Board of Directors out of funds legally available
for the payment of dividends.
Most of the revenues of Fifth Third available for payment of dividends
derive from amounts paid to it by its subsidiaries. Under applicable banking
law, the total of all dividends declared in any calendar year by a national bank
or a state-chartered bank may not, without the approval of the Comptroller of
the Currency, the Federal Reserve Board, or the FDIC, as the case may be, exceed
the aggregate of such bank's net profits (as defined) and retained net profits
for the preceding two years.
The affiliates of Fifth Third include both state and nationally chartered
banks. The Comptroller of the Currency and banking authorities of the States of
Ohio, Indiana and Kentucky, the principal regulators of such affiliates, have
the statutory authority to prohibit a depository institution under their
supervision from engaging in what, in their opinion, constitutes an unsafe or
unsound practice in conducting its banking or savings association business. The
payment of dividends could, depending upon the financial condition of such
banking affiliates, be deemed to constitute such an unsafe or unsound practice.
No affiliate of Fifth Third has ever been prohibited from declaring dividends or
restricted in paying any dividends declared.
If, in the opinion of the applicable regulatory authority, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such authority
may require, after notice and hearing, that such bank cease and desist from the
practice. The Federal Reserve Board has similar authority with respect to bank
holding companies. In addition, the Federal Reserve Board, the Comptroller of
the Currency and the FDIC have issued policy statements which provide that
insured banks and bank holding companies should generally only pay dividends out
of current operating earnings. Finally, these and other regulatory authorities
have established guidelines with respect to the maintenance of appropriate
levels of capital by a bank, bank holding company or savings association under
their jurisdiction. Compliance with the standards set forth in such guidelines
could limit the amount of dividends which Fifth Third and its banking affiliates
may pay.
13
<PAGE> 14
Liquidation. In the event of any liquidation, dissolution or winding up of
Fifth Third, the holders of Fifth Third Common Stock would be entitled to
receive, after payment or provision for payment of all debts and liabilities of
Fifth Third (including the payment of all fees, taxes and other expenses
incidental thereto), the remaining assets of Fifth Third available for
distribution. If Fifth Third Preferred Stock is issued, the holders thereof may
have priority over the holders of Fifth Third Common Stock in the event of
liquidation or dissolution.
PREFERRED STOCK
Pursuant to Article Fourth of Fifth Third's Second Amended Articles of
Incorporation, as amended, the Board of Directors of Fifth Third may, without
further action of the Stockholders, (a) divide into one or more new series the
authorized shares of Fifth Third Preferred Stock which have not previously been
designated, (b) fix the number of shares constituting any such new series, and
(c) fix the dividend rates, payment dates, whether dividend rights shall be
cumulative or non-cumulative, conversion rights, redemption rights (including
sinking fund provisions) and liquidation preferences. Except as otherwise
provided by law, holders of any series of Fifth Third Preferred Stock shall not
be entitled to vote on any matter.
CHANGE OF CONTROL PROVISIONS
The Second Amended Articles of Incorporation, as amended, and Code of
Regulations of Fifth Third contain various provisions which could make more
difficult a change in control of Fifth Third or discourage a tender offer or
other plan to restructure Fifth Third. Under Fifth Third's Second Amended
Articles of Incorporation, as amended, Fifth Third's Board of Directors has the
authority to issue 500,000 shares of Fifth Third Preferred Stock and to fix the
designations, powers, preferences and rights of such shares and the
qualifications, limitations or restrictions applicable thereto.
Chapter 1704 of the Ohio Revised Code prohibits an "Issuing Public
Corporation" from engaging in a "Chapter 1704 Transaction" with an "Interested
Shareholder" for a period of three years following the date on which the person
became an Interested Shareholder unless, prior to such date, the directors of
the Issuing Public Corporation approve either the Chapter 1704 Transaction or
the acquisition of shares pursuant to which such person became an Interested
Shareholder. Fifth Third is an Issuing Public Corporation for purposes of the
statute. An Interested Shareholder is any person who is the beneficial owner of
a sufficient number of shares to allow such person, directly or indirectly,
alone or with others, including affiliates and associates, to exercise or direct
the exercise of 10% of the voting power of the Issuing Public Corporation in the
election of directors.
A Chapter 1704 Transaction includes any merger, consolidation, combination
or majority share acquisition between or involving an Issuing Public Corporation
and an Interested Shareholder or an affiliate or associate of an Interested
Shareholder. A Chapter 1704 Transaction also includes certain transfers of
property, dividends and issuance or transfers of shares, from or by an Issuing
Public Corporation or a subsidiary of an Issuing Public Corporation to, with or
for the benefit of an Interested Shareholder or an affiliate or associate of an
Interested Shareholder unless such transaction is in the ordinary course of
business of the Issuing Public Corporation on terms no more favorable to the
Interested Shareholder than those acceptable to third parties as demonstrated by
contemporaneous transactions. Finally, Chapter 1704 Transactions include certain
transactions which (a) increase the proportionate share ownership of an
Interested Shareholder, (b) result in the adoption of a plan or proposal for the
dissolution, winding up of the affairs, or liquidation of the Issuing Public
Corporation if such plan is proposed by or on behalf of the Interested
Shareholder, or (c) pledge or extend the credit or financial resources of the
Issuing Public Corporation to or for the benefit of the Interested Shareholder.
After the initial three-year moratorium has expired, an Issuing Public
Corporation may engage in a Chapter 1704 Transaction if (a) the acquisition of
shares pursuant to which the person became an Interested Shareholder received
the prior approval of the board of directors of the Issuing Public Corporation,
(b) the Chapter 1704 Transaction is approved by the affirmative vote of the
holders of shares representing at least two-thirds of the voting power of the
Issuing Public Corporation and by the holders of shares representing at least a
majority of voting shares which are not beneficially owned by an Interested
Shareholder or an affiliate or associate of an Interested Shareholder, or (c)
the Chapter 1704 Transaction meets certain statutory tests designed to ensure
that it be economically fair to all shareholders.
14
<PAGE> 15
Ohio law prevents a person, under certain circumstances, from purchasing
large amounts of shares of stock of a corporation without shareholder approval.
Under Section 1701.831 of the Ohio Revised Code, unless the articles or
regulations otherwise provide, any "control share acquisition" of an Issuing
Public Corporation can only be made with the prior approval of the corporation's
shareholders. A control share acquisition is defined as any acquisition,
directly or indirectly (by tender offer, open market purchase, private
transaction or otherwise) of shares of a corporation which, when added to all
other shares of that corporation owned by the acquiring person, would entitle
that person to exercise specified levels of voting power when electing
directors. Specifically, unless the provisions of Section 1701.831 have been
satisfied, a person may not purchase additional shares of a corporation if that
purchase would result in such person holding more than 20%, 33 1/3% or 50% of
the voting power. These percentages reflect the Ohio legislature's view that
each such acquisition of shares which results in a person's voting power
exceeding these levels involves an increase in the ability of a person to
control a corporation. These levels of voting power are considered so great that
the transaction involved should be considered and approved or rejected by the
shareholders.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is the Fifth Third
Bank, Cincinnati, Ohio.
REGULATION OF FINANCIAL INSTITUTIONS
CAPITAL REQUIREMENTS
The federal banking regulators have issued regulations to implement certain
capital requirements on commercial banks and large bank holding companies, such
as Fifth Third. Under these regulations, commercial banks are required to
maintain minimum capital ratios of: (i) Tier 1 capital to total assets (a
"leverage ratio") in the range of 3% to 5%, (ii) Tier 1 capital of at least 4%
of total risk-weighted assets and off-balance sheet exposures, and (iii) "total"
capital of at least 8% of total risk-weighted assets and off-balance sheet
items. Banks with capital ratios that equal or exceed 5%, 6% and 10% for
leverage, Tier 1 risk-based and total risk-based capital ratios, respectively,
are generally considered "well capitalized" and enjoy certain regulatory
advantages. Tier 1 capital generally consists of common stockholders' equity,
retained income and certain noncumulative perpetual preferred stock and related
income, except that no intangibles and certain purchased mortgage servicing
rights and purchased credit card relationships may be included in capital.
"Total capital" means Tier 1 capital plus "Tier 2 capital," provided that the
amount of Tier 2 capital may not exceed the amount of Tier 1 capital, less
certain assets. The components of Tier 2 capital include certain permanent and
maturing capital instruments that do not qualify as Tier 1 capital and general
valuation loan and lease loss allowances up to a maximum of 1.25% of
risk-weighted assets.
The Federal Reserve Board has established capital requirements for bank
holding companies that generally parallel the capital requirements for
commercial banks.
Fifth Third and each of its subsidiary banks are in compliance with current
capital requirements. As of December 31, 1997, Fifth Third had a leverage ratio
of 10.16%, its Tier 1 risk-based capital ratio was 12.09% and its total
risk-based capital ratio was 14.70%.
GENERAL REGULATION OF BANK HOLDING COMPANIES
Fifth Third is extensively regulated under both federal and state law. To
the extent that the following information describes statutory and regulatory
provisions, it is qualified in its entirety by reference to the particular
statutory and regulatory provisions.
As a bank holding company, Fifth Third is registered with and subject to
regulation by the Federal Reserve Board. A bank holding company is required to
file with the Federal Reserve Board an annual report and such additional
information as the Federal Reserve Board may require pursuant to the Bank
Holding Company Act.
The Federal Reserve Board also makes examinations of bank holding
companies. The Bank Holding Company Act requires each bank holding company to
obtain the prior approval of the Federal Reserve Board
15
<PAGE> 16
before it may acquire substantially all of the assets of any bank, or before it
may acquire ownership or control of any voting shares of any company if, after
such acquisition, it would own or control directly or indirectly, more than 5%
of the voting shares of such bank or company.
The Bank Holding Company Act also restricts the types of businesses and
operations in which a bank holding company and its subsidiaries (other than bank
subsidiaries) may engage. Generally, permissible activities are limited to
banking and activities found by the Federal Reserve Board to be closely related
to banking.
GENERAL REGULATION OF COMMERCIAL BANKS
The operations of the subsidiary banks of Fifth Third are subject to
requirements and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restrictions on the types
and amounts of loans that may be granted and the interest that may be charged
thereon, and limitations on the types of investments that may be made and the
types of services which may be offered. Various consumer laws and regulations
also affect the operations of these banking subsidiaries.
National banks are subject to the supervision of and are regularly examined
by the Comptroller of the Currency. In addition, national banks are, and
state-chartered banks may be, members of the Federal Reserve System and their
deposits are insured by the FDIC. As such, banks also may be subject to
examination by those agencies. State chartered banking corporations are subject
to federal and state regulation of their business and activities, including, in
the case of banks chartered in Ohio, by the Ohio Division of Financial
Institutions, in the case of banks chartered in Kentucky, by the Kentucky
Department of Financial Institutions, and in the case of banks chartered in
Indiana, by the Indiana Department of Financial Institutions.
UNDERWRITING
Upon the terms and subject to the conditions stated in the Underwriting
Agreement dated the date hereof, each of the underwriters (the "Underwriters")
named below has severally agreed to purchase, and Fifth Third has agreed to sell
to such Underwriter, the number of shares of Common Stock set forth opposite the
name of such Underwriter.
<TABLE>
<CAPTION>
NAME OF UNDERWRITER NUMBER OF SHARES
------------------- ----------------
<S> <C>
Smith Barney Inc.......................................... 840,000
Goldman, Sachs & Co....................................... 840,000
J. P. Morgan Securities Inc............................... 840,000
Donaldson, Lufkin & Jenrette Securities Corporation....... 270,000
Merrill Lynch & Co, Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................. 270,000
NationsBanc Montgomery Securities LLC..................... 270,000
The Ohio Company.......................................... 270,000
---------
Total........................................... 3,600,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby if any such shares are taken.
The Underwriters propose to offer part of the shares directly to the public
at the public offering price set forth on the cover page of this Prospectus and
part of the shares to certain dealers at a price which represents a concession
not in excess of $0.76 per share under the public offering price. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of $0.10 per share to certain other dealers. After the initial offering of
shares to the public, the public offering price and such concessions may be
changed by the Underwriters.
Fifth Third has agreed that it will not, without the prior written consent
of Smith Barney Inc., for a period of 90 days after the date of this Prospectus,
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual
16
<PAGE> 17
disposition or effective economic disposition due to cash settlement or
otherwise) by Fifth Third or any affiliate of Fifth Third or any person in
privity with Fifth Third or any affiliate of Fifth Third), directly or
indirectly, or announce the offering of, any other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common Stock (except
for the issuance of shares of Common Stock pursuant to existing stock option,
purchase and compensation plans, or upon conversion of any currently outstanding
convertible securities or the issuance of shares of Common Stock as
consideration for the acquisition of one or more businesses including the
acquisitions of The Ohio Company, State Savings and CitFed Bancorp), or sell or
grant options, rights or warrants with respect to any shares of Common Stock
(other than the grant of options pursuant to existing stock option, purchase and
compensation plans), otherwise than in accordance with this Agreement or as
contemplated in the Prospectus.
Fifth Third and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids for and purchase of the Common Stock so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Common Stock in the open market in order
to cover syndicate short positions. Penalty bids permit the Underwriters to
reclaim a selling concession from a syndicate member when the Common Stock
originally sold by such syndicate member is purchased in a stabilizing
transaction or syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Common Stock to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
The Underwriters have from time to time performed various investment
banking services for Fifth Third and its affiliates, and received customary
compensation therefor. In addition, Fifth Third has agreed to acquire The Ohio
Company, an entity serving as an Underwriter, as described under "RECENT
TRANSACTIONS."
LEGAL MATTERS
The authorization and the issuance of the shares of Common Stock offered
hereby will be passed upon for Fifth Third by Graydon, Head & Ritchey,
Cincinnati, Ohio. Certain legal matters in connection with this Offering will be
passed upon for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New
York, New York.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from Fifth Third Bancorp's Annual Report on Form 10-K for the year
ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
17
<PAGE> 18
======================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY FIFTH THIRD OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES
OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO WHICH IT
RELATES IN ANY STATE OR TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH
OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 3
Cautionary Statement Concerning
Forward-Looking Information......... 3
Prospectus Summary.................... 4
Business of Fifth Third............... 6
First Quarter Results................. 7
Recent Transactions................... 7
Use of Proceeds....................... 9
Market Price and Dividend
Information......................... 9
Capitalization........................ 10
Selected Historical Financial Data.... 11
Description of Capital Stock.......... 13
Regulation of Financial
Institutions........................ 15
Underwriting.......................... 16
Legal Matters......................... 17
Experts............................... 17
============================================
</TABLE>
======================================================
3,600,000 SHARES
FIFTH THIRD BANCORP
COMMON STOCK
FIFTH THIRD LOGO
------------
PROSPECTUS
MAY 6, 1998
------------
SALOMON SMITH BARNEY
GOLDMAN, SACHS & CO.
J. P. MORGAN & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
SECURITIES LLC
THE OHIO COMPANY
======================================================
