Fifth Third's $11 Billion Comerica Acquisition: Implications for Investors
Last month, Cincinnati-based Fifth Third Bancorp (FITB +0.78%) announced its plan to acquire Dallas-based Comerica (CMA +0.84%) in an all-stock deal valued at approximately $10.9 billion. The merger marks a major regional banking move under the Trump administration, which has encouraged a wave of mergers and acquisitions within the sector.
Once completed, the transaction will create the ninth-largest bank in the United States with total assets reaching about $288 billion. The acquisition strengthens Fifth Third’s retail presence in Michigan and pushes its growth further into dynamic markets like Texas.
The newly combined bank will have more than two-thirds of its loan portfolio distributed between commercial real estate and commercial and industrial lending. It will also operate strong fee-generating divisions in commercial payments, along with asset and wealth management services.
Previously, Comerica had managed the U.S. Department of Treasury’s Direct Express program, which handled the distribution of federal benefits via prepaid cards.
The contract provided Comerica with around $3 billion in non-interest-bearing deposits — low-cost funding that supported its lending and investment activities.
However, the Treasury Department later awarded that same contract to Fifth Third, further enhancing its deposit base and strategic advantage ahead of the merger.
Author’s Summary
Fifth Third’s $10.9 billion merger with Comerica will elevate it to the ninth-largest U.S. bank, expanding its retail influence, loan portfolio, and national growth potential.