Shares of Fifth Third Bancorp (NASDAQ: FITB) opened higher this morning after the company said last night it won Federal Reserve approval for a 25% dividend hike and an expanded, $600 million share buyback plan.
The board of Fifth Third authorized the repurchase of up to 100 million shares, replacing an authorization from 2007, of which about 14 million shares remained. The regional bank’s plan includes possible share buybacks of up to $600 million through the first quarter of next year.
The board also is expected to consider a dividend increase to $0.10 per share for the third quarter when it meets next month. The quarterly dividend has been at $0.08 a share for the past four quarters.
The approval for the plan came after Fifth Third resubmitted its request because it was initially denied in March. Fifth Third did not disclose the reasons for the previous denial.
Shares of Fifth Third opened near $14.83 this morning, up about 3% from the previous close. The share price reached as high as $15.02 in early trading. The 52-week range was $9.31 to $14.73, and the mean price target of analysts was $15.86 before this announcement.