Thursday, April 19, 2012

Dynamic Change in Payments with ePlate


April 19, 2012 12:01 AM Eastern Daylight Time 

Dynamics Changes Payments Forever With the ePlate™ Payment Device

ePlate™ Developer Toolkit Allows Developers to Deliver Unique Consumer Experiences Using Their Payment Data While Earning 25 Basis Points Per Transaction
SAN FRANCISCO--()--Dynamics Inc., an innovator in next-generation payment devices, today unveiled the ePlate™ payment device that gives consumers the ability to change the experience they earn with each purchase by pressing different buttons on the device. The company also unveiled a large and growing experience™ application ecosystem with a developer toolkit that allows developers, such as charities, brands, retailers, and gaming companies, to create unique, branded experiences for ePlate™ consumers.
“However, it is also a business marvel for Developers. With the ePlate™ device, Dark Horse can create new, differentiating product functionality while offering exclusive content to the Dynamics user base.”
To encourage the development of revolutionary experience™ applications, Dynamics is providing experience™ providers with 25 basis points (bps) of each transaction where the experience™ application is used. Experience™ providers are also given consumer-approved purchase data so that highly personalized experiences can be developed. UMB Bank, a subsidiary of UMB Financial Corporation (NASDAQ: UMBF) and leader in payment platform solutions will issue the new ePlate™ devices.
“Dynamics’ vision is to change the world forever without changing the way the world works,” said Jeff Mullen, CEO of Dynamics. “Today, Dynamics once again delivers on that promise. The ePlate device gives the user the ability to personalize their payment experience in a way never before envisioned while earning exclusive content across the world’s first developer ecosystem for payments. Now, the experience of every credit card in the world can be captured in a single payment device that is issued by a single issuer. And, experience providers can use consumer-approved payment data and a new revenue stream of 25bps per transaction to develop new functionality and experiences that cannot be offered on anywhere else.”
The ePlate™ device itself has two buttons – each button associated with a different experience. For instance, the consumer presses the “Experience 1” button to select one Experience Provider application and presses the “Experience 2” button to select a different experience. At any time, a user can use the Experience Manager™ software, available via a user’s phone or online banking website, to change the experiences associated with each button. The new ePlate™ payment device represents a significant advance with its ability to provide consumers with new payment functionality as developers create new experience™ applications. The technology is ground breaking in the way it links payment devices with unique content and experiences, empowering consumers to engage with brands of their choice with every swipe or online purchase. The Dynamics ePlate™ device can be used worldwide anywhere a traditional credit card can be used.
“We believe that the uniqueness of the ePlate™ device clearly differentiates this product in the market place and will revolutionize the consumer’s payment experience—as one’s needs and interests evolve, so does the experience,” said George Schmelzel, senior vice president of UMB Credit Card Services.
Dynamics also introduced a toolkit for experience™ provides that includes an application programming interface (API) centered on four primary developer tools.
Dynamics’ first tool provides experience™ providers with customer-approved purchase data each time the brand’s experience™ application is used to make a purchase. The customer-approved purchase data can then be used by the experience™ provider to increase the functionality of their payment experience. For example, a game developer that receives customer-approved purchase data about the time, place, location, and amount of a purchase may use this information to give the user a unique social or mobile game based on the unique purchase data.
Dynamics’ second tool provides developers with 25 basis points for every purchase that leverages the developer’s application. This 25 basis point revenue stream is substantial and can be used to fund exclusive content. For a $1,000 purchase, for example, a developer can earn $2.50 and provide this $2.50 back to a user in the form of exclusive content.
Dynamics’ third tool provides developers with the ability to add, with user approval, a secondary transaction on top of any purchase. This would mean that a user could approve an experience™ application that adds a $1 secondary purchase to any purchase in order to obtain a more enhanced developer experience. For example, a charity may construct an experience application that adds a secondary $1.00 donation each time a purchase is made.
Dynamics’ fourth tool allows experience™ providers to give a statement credit to the user. Thus, a brand could provide a $10.00 statement credit to a user when certain purchase conditions are met (e.g., a user spends $100 in at the retail location of the developer).
“The Dynamics ePlate™ device is a technology marvel in its own right,” stated Mike Richardson, Dark Horse, CEO. “However, it is also a business marvel for Developers. With the ePlate™ device, Dark Horse can create new, differentiating product functionality while offering exclusive content to the Dynamics user base.”
Dynamics' ePlate™ mobile payment device is a paper-thin, flexible computing platform in a payment card form factor. The device includes the Electronic Stripe® -- the world's first fully card-programmable magnetic stripe. The Electronic Stripe® can be read at any existing point-of-sale (POS) magnetic stripe reader. The device includes two buttons – one for a first experience and one for a second experience. Based on what button was selected, the device changes the information on the Electronic Stripe™ to reflect the selected experience so the user can swipe the card in any store and enjoy the selected experience.
A user can change the experiences associated with the buttons on the ePlate™ device at any time. All a user has to do is use Dynamics’ Experience Manager™ software through their favorite phone, or accessible through their bank’s website. Dynamics’ Experience Manager™ will provide a list of experiences that a user can select and associate with the different buttons on the ePlate™ device.
Those announced today as Dynamics eplate™ experience™ providers include:
  • Upper Deck®: A digital trading card system that includes exclusive sets of digital cards. When a user completes a digital card set, the user is mailed one of numerous exclusive, physical collector’s cards.
  • Dark Horse® Comics: As a user makes purchases, the user earns exclusive digital comic books from their favorite properties. After a user collects a certain number of digital comic books, the user is provided with exclusive physical collector copies of the comic books.
  • Evil Genius Games: A game for your iPhone and Android device that lets you experience the thrill of the craziest shopping day of the year every time you make a purchase.
  • Avenue Social Games: A massive multiplayer game on the Facebook platform that adds adventure to everyday shopping.
  • Social Cubix Games: A game on the Facebook platform where user’s engage in a scavenger hunt as they make purchases around the world.
  • Jersey Jack Pinball: Earn significant discounts to Jersey Jack products as well as exclusive Jersey Jack products while being provided with the chance to win exclusive Wizard of Oz Jersey Jack pinball machines.
  • Toys for Tots: Use your purchases to donate individual toys, work with groups to donate large community toys, or experience the Toys for Tots advent calendar and earn a commemorative item while donating at the point-of-sale.
  • Lemonade Day: Use your purchases to help children across the United States build an educational foundation in business.
  • A sweepstakes application where you can win your purchase for free as well as much larger prizes.
  • A Dynamics Credits application where you earn Dynamics Credits™ for the ePlate™ platform.
  • A social network application that allows your friends and family experiences purchases as you make them.
The ePlate™ device is as durable as a traditional payment card and will last over four years on a single battery charge. The technology does not require any change to the 60 million 1970s-era magnetic stripe readers or reeducation of its merchant base.
About UMB Bank
UMB Bank is a subsidiary of UMB Financial Corporation (NASDAQ: UMBF), a financial services holding company headquartered in Kansas City, Mo., offering complete banking, asset management, health spending solutions and related financial services to commercial, institutional and personal customers nationwide. Its banking subsidiaries own and operate banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. Subsidiaries of the holding company and the lead bank, UMB Bank, n.a., include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers. For more information, visit umb.com or follow us on Twitter at @UMBBank.
About Dark Horse
Since 1986, Dark Horse Comics has proven to be a solid example of how integrity and innovation can help broaden a unique storytelling medium and establish a small, homegrown company as an industry giant. The company is known for the progressive and creator-friendly atmosphere it provides for writers and artists. In addition to publishing comics from top talent like Frank Miller, Mike Mignola, Neil Gaiman, Gerard Way, and comics legend Will Eisner, Dark Horse has developed such successful properties as The Mask, Timecop, and SpyBoy. Additionally, its highly successful line of comics and products based on popular properties includes Star Wars, Indiana Jones, Buffy the Vampire Slayer, Aliens, Conan, Emily the Strange, Tim Burton, Trigun, Serenity, and Domo. Today Dark Horse Comics is the largest independent comic-book publisher in the US and is recognized as one of the world’s leading publishers of licensed comic material.
About Dynamics Inc.
Dynamics Inc. was founded in 2007 by Jeff Mullen. Dynamics produces and manufactures intelligent powered payment cards and advanced payment platforms. The company has won many of the world's most prestigious international business plan competitions, including the Rice Business Plan Competition, Carnegie Mellon McGinnis Venture Competition and the University of San Francisco Business Plan Competition. The company won DEMOgod and the $1M People's Choice Award at DEMO Fall 2010, Best of Show at FinovateFall 2010, FinovateFall 2011, and FinovateEurope 2012, Best of Show at Cartes 2011, and Best of Show at BAI Retail Delivery 2011. Dynamics won Best in Show for Personal Electronics and Technology Honors at the 2012 International CES show. Dynamics investors include Adams Capital Management and Bain Capital Ventures. Dynamics is headquartered in Pittsburgh, Pa. For more information, visit: www.dynamicsinc.com











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Dynamics ePlate Deals with SocialCubx, Avenuesocial and Evil Genius


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Upper Deck and Dynamics Inc. Unveil Exclusive Trading Card Experience™ Application for ePlate™ Payment Devices

April 19, 2012 01:49 AM Eastern Daylight Time 

Upper Deck Gives Dynamics’ ePlate Users Exclusive Cards with Each Purchase
SAN FRANCISCO--()--Upper Deck today announced it is working with Dynamics Inc., an innovator in next-generation payment devices, to launch a new trading card experience™ application for ePlate™ payment devices. The offering brings a new kind of experience to trading card enthusiasts by enabling them to earn exclusive Upper Deck digital trading cards with every purchase made through the ePlate™ device. The technology is ground breaking in the way it links payment devices with exclusive trading card content by empowering consumers to engage with brands that excite them with every swipe or online purchase.
“The ePlate platform gives us an exciting new way of connecting with collectible card enthusiasts by providing them with a unique experience whenever they make a purchase”
At any time, consumers can enable the Upper Deck experience™ application for the ePlate™ payment device, and earn digital trading cards. The digital cards can be electronically traded, giving users the opportunity to collect entire digital trading card sets. Once a set is completed, Upper Deck will provide the consumer with a code that can be redeemed for one of 5 exclusive trading cards. As an added bonus, a limited edition autographed card will be available to consumers that redeem digital card sets for all 5 exclusive trading cards. Users will be able to earn digital trading cards even faster by making purchases at any Upper Deck certified retailer.
“The ePlate platform gives us an exciting new way of connecting with collectible card enthusiasts by providing them with a unique experience whenever they make a purchase”, said Richard McWilliam, CEO Upper Deck. “We look forward to providing our fans with trading card experiences that will surprise and delight them as they collect in ways never before possible.”
“Upper Deck knocked it out of the park with its experience application.” stated Jeff Mullen, Dynamics CEO, “This application is exciting in that it allows collectors to bridge, for the first time, the world of digital and physical card collecting – while making their everyday purchases.”
About the Dynamics’ ePlate™ Payment Device
Dynamics' ePlate™ payment device is a paper-thin, flexible computing platform in a payment card format. The device includes the Electronic Stripe® -- the world's first fully card-programmable magnetic stripe. The Electronic Stripe® can be read at any existing point-of-sale (POS) magnetic stripe reader. The device includes two buttons – one for a first experience and one for a second experience. Based on which experience option was selected, the device changes the information on the Electronic Stripe™ to reflect the selected experience so the user can swipe the card in any store and enjoy the selected experience.
A user can change the experiences associated with the buttons on the ePlate™ device at any time. All a user has to do is use the Dynamics Experience Manager™ software through their favorite phone or accessible through their online banking account. The Experience Manager™ provides an ecosystem of experiences that can be assigned to the buttons on a user’s ePlate™ device.
The ePlate™ device is as durable as a traditional payment card and will last over three years on a single battery charge. The technology does not require any change to the 60 million 1970s-era magnetic stripe readers or reeducation of its merchant base.
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Multicard delivers mobile payments to catering industry


ePaymentNews2 new results for NFC Mobile Payment
Multicard delivers mobile payments to catering industry
NFCNews
Following the initial successful launch of the solution in Dutch sports clubs, Multicard is now signing up commercial caterers who will use Cashless Betalen to enable NFC payments in company and school cafeterias across the country, according to ...
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Sprint keeps the NFC phones coming with Optimus Elite
NFCNews
Like with other NFC-enabled Sprint phones, Optimus Elite owners will be able to use Google Wallet to make contactless mobile payments at major retailers nationwide, including Bloomingdales, Toys "R" Us, CVS, Gap, Macy's and more.
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AJB Partners with First Data for Currency Conversion


April 19, 2012 08:00 AM Eastern Daylight Time 
Payment service provides retailers with new revenue source and valuable way to attract international consumers
TORONTO & ATLANTA--()--AJB Software Design, Inc., a leader in integrated payment solutions, and First Data Corporation, a global leader in electronic commerce and payment processing, today announced that retailers across the globe are now processing international payment transactions, using First Data’s Dynamic Currency Conversion (DCC) service. DCC provides U.S. merchants with a way to entice increasing numbers of international consumers.
“Our products have proven to be a flexible, stable and capable set of solutions for tier-1 retailers. We are pleased to be working with First Data on a number of initiatives, including its market-leading DCC solution.”
According to the US Department of Commerce, international visits to the US is expected to grow by 36 percent between 2010-2016, which would result in more than 81 million visitors by 2016. First Data’ leading DCC service is offered in various countries and regions around the globe with the newest market being Canada, which is expected to launch within a few months.
AJB’s payment processing application suite now allows merchants to easily implement First Data’s DCC service. DCC is a currency and payment service that allows merchants to offer international Visa, MasterCard and branded payment cardholders with the option to execute purchases in their local currency. Working together the companies provide a premier DCC solution in the marketplace today.
AJB’s payment processing application suite includes Flexible Integrated Payment System (FIPay) and Retail Transaction Switch (RTS). FIPay provides the critical in-store system component responsible for integrating the PIN pad device into First Data’s DCC solution. AJB’s Retail Transaction Switch (RTS) provides real-time authorizations to First Data for the DCC transactions.
“AJB has over 18-years experience integrating payment-based vehicles into other payment products,” said Pat Polillo, vice president of Sales at AJB. “Our products have proven to be a flexible, stable and capable set of solutions for tier-1 retailers. We are pleased to be working with First Data on a number of initiatives, including its market-leading DCC solution.”
“Our organizations remain steadfast and focused on developing and delivering valuable products and services that drive value to both merchants and consumers alike,” said T. Michael Black, Jr., vice president, International Currency Solutions, First Data. “Partnering with AJB to integrate our global DCC solution into the AJB suite of products is a great example of how our two companies provide innovative solutions to our mutual customers.”
Without DCC, consumers can be charged up to seven percent of the total transaction cost on top of an undisclosed rate of exchange. Consumers do not know the exact cost of their purchase until the transaction is revealed on their credit card statements. With DCC, consumers have the choice to pay in the local base currency or their own currency. DCC provides consumers with full transparency into the details of the transaction helping them make an educated and informed decision. Consumers instantly know the precise amount they are paying in their local currency. There are no hidden fees or surprise currency exchange adjustments when they receive their credit card statements, and they receive a credit card receipt that will match the transaction amount posted to their credit card statement.
“DCC provides an important value-added service and ancillary revenue stream for merchant service providers with strong presence in tourist and corporate travel destinations,” said David Fish, senior analyst, Mercator Advisory Group. “It can also provide an attractive revenue stream for merchants that serve tourists, potentially offsetting a portion of their overall expense of managing the point of sale and the payment process.”
Merchants Generate New Profits with DCC
  • New revenue stream. Merchants that use DCC will earn a new revenue stream on every converted transaction while providing a better consumer shopping experience. The DCC conversion process redirects the revenue earned by the card associations and card issuers from currency conversion margins and fees to merchants.
  • Increased consumer satisfaction; higher sales. Providing consumers with the ability to pay in their own currency attracts more foreign consumers and entices them to spend more. DCC offers consumers a custom and luxury purchase experience. The majority of merchants offering First Data’s DCC have seen their international sales increase year over year.
  • Positive effect on chargebacks. DCC transactions can reduce the rate of chargebacks. Since DCC transactions are settled in the consumer’s native currency at point-of-sale, consumers will not be blindsided with unexpectedly high exchange rates and bank fees when they receive their credit card statement. In addition, they will easily recognize transactions on their card statement as the amount and currency will match their receipts.
  • Currency risk mitigation. Currency fluctuations associated with chargebacks can occur long after the original transaction. Exchange rates are not guaranteed through this period. DCC eliminates the risk of delayed chargebacks, guaranteeing the rate of exchange for the duration of the transaction.
About First Data
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.
About AJB Software Design, Inc. AJB is a leading provider of payment integration software solutions. Twenty percent of North America’s top 100 retailers and 10 percent of the top global retailers by sales volume, rely on AJB products and services. Founded in 1994, AJB has over 140 global clients, and its software is used by more than 250,000 POS terminals.
AJB makes it easy to connect the components required for real-time payment processing. It enables retailers to quickly comply with new standards and payment types. In addition, AJB allows banks and POS vendors to easily integrate their products with retailers, petroleum and convenience stores. AJB simplifies integration with existing systems; solutions are scalable, multi-channel and platform independent. For more information, visit www.ajbsoftware.com.

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Bank Freedom (PrePaYd) Teams with FIS Mobile

Image representing Business Wire as depicted i...
Image via CrunchBase

April 19, 2012 08:15 AM Eastern Daylight Time 
New offering provides safe and convenient alternative for underbanked consumers
JACKSONVILLE, Fla.--()--FIS™ (NYSE:FIS), the world’s largest provider of banking and payments technology, today announced that Bank Freedom, a wholly owned subsidiary of PrepaYd, Inc. (OTC PINK :PPDC), has signed a multi-year agreement for the FIS Mobile offering in support of Bank Freedom’s mobile application for the underbanked market.
“More and more consumers are relying on the ability to manage their finances via their mobile phone”
Bank Freedom provides financial services, including prepaid debit cards, to underbanked consumers. PrepaYd, Inc. also owns PrepaYd Wireless, a wireless phone provider that offers cell phones to consumers without the requirement of a long-term contract or the ability to prove credit worthiness.
With FIS Mobile at its center, PrepaYd, Inc. will launch a new mobile application targeted to the underbanked market that combines PrepaYd Wireless’ cellular phone service and Bank Freedom’s prepaid debit card programs. The new mobile application will enable consumers to manage their finances remotely via a mobile phone – including checking balances, paying bills, viewing recent account activity and managing multiple cards. In addition to having transaction alerts sent to the mobile phone, consumers will also have the ability to manage funds via text message – including the ability to send payments to other consumers and businesses. The application empowers a population that typically is excluded from the growing trend of mobile financial management because they do not possess a traditional bank account and may not have the credit record typically required for a cellular phone contract. The application will be available for iPhone®, Android™, BlackBerry® and other Internet-enabled mobile phones.
“We believe to be a leader in the electronic payments industry you must integrate reliable, robust and secure mobile financial services,” said Bruce Berman, CEO, Bank Freedom and PrepaYd, Inc. “We selected FIS because of its ability to design a state-of-the-art mobile financial application that would meet our unique needs.”
“More and more consumers are relying on the ability to manage their finances via their mobile phone,” said Anthony Jabbour, executive vice president, FIS Financial Solutions Group. “FIS’ intuitive, reliable and secure mobile financial services platform will enable PrepaYd, Inc. to expand the availability of these services to an entirely new market segment.”
PrepaYd, Inc. is a provider of financial services in the prepaid debit card industry and is in the process of becoming a prepaid wireless phone provider. The company, through one of its wholly owned subsidiaries Bank Freedom, offers prepaid debit cards to America’s estimated 60 million underbanked citizens. In addition to the underbanked consumer demographic, small and mid-size businesses have found a much needed product with the company’s Prepaid Business Expense Card Program. With the diminishing credit card markets, companies need a new way to fund employees’ expenses other than through traditional credit cards or cash reimbursements. Through another wholly owned subsidiary PrepaYd Wireless, the company intends to offer mobile services to an estimated 110 million consumer demographic. Prepaid Wireless Services is an alternative to the traditional Postpaid Wireless Service Plans provided by major carriers. In addition, PrepaYd Wireless offers mobile phones and wireless plans compatible for mobile financial services.
FIS (NYSE:FIS) is the world’s largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs more than 32,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. First in financial technology, FIS tops the annual FinTech 100 list, is ranked third on the Barron’s 500, 426 on the Fortune 500 and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.

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BofA Reports Net Income of $653 Million for Q1

Bank of America Merrill Lynch
Bank of America Merrill Lynch (Photo credit: Wikipedia)

April 19, 2012 07:00 AM Eastern Daylight Time 

Bank of America Reports First-Quarter 2012 Financial Results

  • Net Income of $653 Million, or $0.03 Per Diluted Share
  • Results Include Negative Valuation Adjustments of $4.8 Billion Pretax, or $0.28 Per Share, From the Narrowing of the Company's Credit Spreads
  • Fortress Balance Sheet Strengthened; Record Tier 1 Common Equity Ratio of 10.78 Percent
  • Global Excess Liquidity Sources Increased to a Record $406 Billion; Time-to-Required Funding Improved to 31 Months
  • Strong Performance in Global Markets; Sales and Trading Revenue Excluding DVA Third Highest Since Merrill Lynch Acquisition
  • Investment Bank Ranked No. 2 in Global Net Investment Banking Fees
  • Average U.S. Commercial Loans With Corporate and Commercial Clients Increased for the Fifth
  • Consecutive Quarter, Reflecting 3 Percent Growth From the Fourth Quarter of 2011
  • Global Wealth and Investment Management Earns $547 Million, Second-Highest Quarterly Net Income Since Merrill Lynch Acquisition
  • Provision for Credit Losses Declines to Lowest Level Since Third Quarter of 2007 as Credit Quality Continues to Improve
CHARLOTTE, N.C.--()--Bank of America Corporation today reported net income of $653 million, or $0.03 per diluted share, for the first quarter of 2012. Revenue, net of interest expense, on a fully taxable-equivalent (FTE)1 basis was $22.5 billion, including negative valuation adjustments related to changes in the company’s credit spreads of $4.8 billion pretax, or $0.28 a share.
“The narrowing of our credit spreads reflects the significant progress we’ve made to strengthen the balance sheet”
The results compare to net income of $2.0 billion, or $0.17 per diluted share, in the year-ago quarter on revenue of $27.1 billion when the company reported negative valuation adjustments of $943 million, or $0.06 per share. Excluding the valuation adjustments from both periods, revenue was down 3 percent in the first quarter of 2012 to $27.3 billion2.
“By focusing on building strong customer and client relationships, we’re doing more business and winning in the marketplace,” said Chief Executive Officer Brian Moynihan. “Our strategy is paying off: With the economy steadily improving and because of the work we have done to strengthen and simplify our company, we saw improved profitability in all of our businesses this quarter compared to the fourth quarter of last year.”
“The narrowing of our credit spreads reflects the significant progress we’ve made to strengthen the balance sheet,” said Chief Financial Officer Bruce Thompson. “During the quarter, we increased our Tier 1 common equity ratio by 92 basis points from the prior quarter, improved our liquidity to record levels and continued to reduce risk-weighted assets. While the improvement in our credit spreads results in a negative adjustment to earnings this quarter, it should not overshadow the positive momentum that we are seeing in our businesses.”
1 Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 23-26 of this press release. Total revenue, net of interest expense on a GAAP basis, was $22.3 billion and $26.9 billion for the three months ended March 31, 2012 and 2011. Total revenue, net of interest expense, FTE basis excluding DVA and FVO adjustments is a non-GAAP financial measure. For a reconciliation to GAAP financial measures, refer to page 2 of this press release.
Selected Financial Highlights
 
    Three Months Ended
(Dollars in millions except per share data)    March 31, 
2012		 December 31,
2011		 March 31,
2011
Net interest income, FTE basis1$11,053 $10,959 $12,397
Noninterest income11,43214,18714,698
Total revenue, net of interest expense, FTE basis22,48525,14627,095
Total revenue, net of interest expense, FTE basis excluding DVA and FVO valuation adjustments227,25826,43428,038
Provision for credit losses2,4182,9343,814
Noninterest expense19,14119,52220,283
Net income6531,9912,049
Diluted earnings per common share    $0.03  $0.15  $0.17
1 Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 23-26 of this press release. Net interest income on a GAAP basis was $10.8 billion, $10.7 billion and $12.2 billion for the three months ended March 31, 2012, December 31, 2011 and March 31, 2011. Total revenue, net of interest expense on a GAAP basis, was $22.3 billion, $24.9 billion and $26.9 billion for the three months ended March 31, 2012, December 31, 2011 and March 31, 2011.
2 Total revenue, net of interest expense, FTE basis excluding DVA and FVO adjustments is a non-GAAP financial measure. DVA losses were $1.5 billion, $474 million and $357 million for the three months ended March 31, 2012, December 31, 2011 and March 31, 2011. Valuation losses related to FVO were $3.3 billion, $814 million and $586 million for the three months ended March 31, 2012, December 31, 2011 and March 31, 2011.
The following selected items affected financial results in the first quarter of 2012.
 
Selected First-Quarter 2012 Items1
(Dollars in billions)    
Gains on debt and trust-preferred repurchases$1.2
Equity investment income0.8
Net gains on sales of debt securities0.8
Fair value adjustment on structured liabilities(3.3)
Debit valuation adjustments (DVA) on trading liabilities(1.5)
Annual retirement-eligible compensation costs(0.9)
Litigation expense    (0.8)
1 All items pretax.

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Fifth Third Bancorp Announces First Quarter 2012 Net Income to Common Shareholders of $421 Million


April 19, 2012 06:30 AM Eastern Daylight Time 
  • 1Q12 net income available to common shareholders of $421 million, or $0.45 per diluted common share, vs. $305 million, or $0.33 per share, in 4Q11 and $88 million, or $0.10 per share in 1Q11
    • Included benefit of $115 million pre-tax (approximately $75 million or $0.08 per share after-tax), from gains associated with Vantiv, Inc’s. initial public offering (IPO), as well as the previously disclosed $36 million estimated pre-tax charge (approximately $23 million after-tax, or $0.02 per share), from Vantiv debt termination-related charges recorded in equity method earnings
    • Also included benefit of $46 million pre-tax (approximately $30 million after-tax, or $0.03 per share), from gains on the higher valuation of the warrant Fifth Third holds in Vantiv
    • 1Q12 return on assets (ROA) of 1.49%; ROA 1.20% excluding above items
    • 1Q12 return on average common equity of 13.1%; return on average tangible common equity* of 16.2%
  • Pre-provision net revenue (PPNR)* of $694 million, or $569 million excluding above items
    • Net interest income (FTE) of $903 million, down 2% sequentially; net interest margin 3.61%; average portfolio loans up 2% sequentially driven by 5% growth in C&I loans
    • Noninterest income of $769 million compared with $550 million in prior quarter; increase largely driven by Vantiv IPO and warrant gains and lower charges related to the Visa total return swap. Other drivers included higher mortgage banking, corporate banking, and investment advisory revenue
    • Noninterest expense of $973 million, down 2% sequentially; benefit from certain outstanding disputes for non-income tax related assessments, largely offset by seasonally higher employee benefits expense, additions to litigation reserves, debt termination charges, and severance expense
  • Credit trends remain favorable
    • 1Q12 net charge-offs of $220 million (1.08% of loans and leases) vs. 4Q11 NCOs of $239 million and 1Q11 NCOs of $367 million; lowest NCO level since 4Q07; 1Q12 provision expense of $91 million compared with 4Q11 provision of $55 million and 1Q11 provision of $168 million
    • Loan loss allowance declined $129 million sequentially reflecting continued improvement in credit trends; allowance to loan ratio of 2.59%, 127% of nonperforming assets, 157% of nonperforming loans and leases, and 2.4 times 1Q12 annualized net charge-offs
    • Total nonperforming assets (NPAs) of $1.8 billion including loans held-for-sale (HFS) declined $164 million or 8% sequentially; NPAs excluding loans HFS of $1.7 billion declined $143 million or 8%; lowest levels since 1Q08
    • NPA ratio of 2.03% down 20 bps from 4Q11, NPL ratio of 1.64% down 12 bps from 4Q11; gross NPL inflows of $352 million down 11% sequentially
    • Total delinquencies (includes loans 30-89 days past due and over 90 days past due) down 11% sequentially, lowest levels since 3Q05
    • No direct European sovereign exposure; total exposure to European peripheral borrowers less than $0.2 billion; total exposure to European banks less than $0.1 billion**
  • Strong capital ratios; exceed fully phased-in Basel III proposed standards
    • Tier 1 common ratio 9.64%*, up 29 bps sequentially (pro forma*** ~10.0% on a fully-phased in Basel III-adjusted basis, estimated among highest of large cap U.S. banks)
    • Tier 1 capital ratio 12.19%, Total capital ratio 16.06%, Leverage ratio 11.31%
    • Tangible common equity ratio* of 9.02% excluding unrealized gains/losses; 9.37% including them
  • Book value per share of $14.30; tangible book value per share* of $11.64 up 3% from 4Q11 and 15% from 1Q11
* Non-GAAP measure; See Reg. G reconciliation on page 32 in Exhibit 99.1 of 8-k filing dated 4/19/12
** “European” includes non-Eurozone countries; “European peripheral” includes Greece, Ireland, Italy, Portugal, Spain
*** Current estimate (non-GAAP), subject to final rule-making and clarification by U.S. banking regulators; currently assumes unrealized securities gains are included in common equity for purposes of this calculation
CINCINNATI--()--Fifth Third Bancorp (Nasdaq: FITB) today reported first quarter 2012 net income of $430 million, compared with net income of $314 million in the fourth quarter of 2011 and net income of $265 million in the first quarter of 2011. After preferred dividends, first quarter 2012 net income available to common shareholders was $421 million or $0.45 per diluted share, compared with fourth quarter net income of $305 million or $0.33 per diluted share, and net income of $88 million or $0.10 per diluted share in the first quarter of 2011.
“That was the case with or without the earnings benefit from Vantiv. We continue to see solid growth in commercial lending volumes and fee income results were particularly strong in the mortgage banking, corporate banking, and investment advisory businesses.”
As previously announced, first quarter 2012 results included $115 million in pre-tax gains on the initial public offering of Vantiv, Inc., as well as the estimated $36 million of charges recorded in equity method earnings in other noninterest income related to Vantiv’s bank debt refinancing and debt termination charges. First quarter 2012 results also included $46 million in positive valuation adjustments on the Vantiv warrant and put option. In total, these items generated first quarter earnings of $125 million pre-tax, or approximately $81 million after-tax (approximately $0.09 per diluted share).
Additionally, first quarter results included the impact of $23 million in income from an agreement reached on certain outstanding disputes for non-income tax related assessments and a $19 million charge related to the increase in fair value of the liability related to a change in value of the total return swap entered into as part of the 2009 sale of Visa, Inc. Class B shares, as well as investment securities gains of $9 million, additions to litigation reserves of $13 million, debt termination charges of $9 million, and severance expense of $6 million.
Fourth quarter 2011 results included $10 million in positive valuation adjustments on the Vantiv warrant and put option, a $54 million charge related to the Visa total return swap, additions to litigation reserves of $19 million, and $5 million of investment securities gains. First quarter 2011 results included $2 million in negative valuation adjustments on the Vantiv warrant and put option, a $9 million charge related to the Visa total return swap, and $8 million in investment securities gains.
Earnings Highlights
 For the Three Months Ended % Change
March December September June March  
2012 2011 2011 2011 2011 Seq Yr/Yr
Earnings ($ in millions)
Net income attributable to Bancorp$430$314$381$337$26537%62%
Net income available to common shareholders$421$305$373$328$8838%377%
 
Common Share Data
Earnings per share, basic0.460.330.410.360.1039%360%
Earnings per share, diluted0.450.330.400.350.1036%
350%
Cash dividends per common share0.080.080.080.060.06-33%
 
Financial Ratios
Return on average assets1.49%1.08%1.34%1.22%0.97%38%54%
Return on average common equity13.19.511.911.03.138%323%
Return on average tangible common equity16.211.914.914.04.236%286%
Tier I capital12.1911.9111.9611.9312.202%-
Tier I common equity9.649.359.339.208.993%7%
Net interest margin (a)3.613.673.653.623.71(2%)(3%)
Efficiency (a)58.367.560.459.162.5(14%)(7%)
 
Common shares outstanding (in thousands)920,056919,804919,779919,818918,728--
Average common shares outstanding (in thousands):
Basic915,226914,997914,947914,601880,830-4%
Diluted957,416956,349955,490955,478894,841-7%
 
(a) Presented on a fully taxable equivalent basis
The percentages in all of the tables in this earning release are calculated on actual dollar amounts not the rounded dollar amounts.

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