Fifth Third Bancorp (NASDAQ:FITB) executives detailed the company’s integration plans and expected financial benefits from its acquisition of Comerica during a conference discussion featuring Chief Operating Officer Jamie Leonard and Treasurer Brennen Willingham. The executives emphasized execution, cost and revenue synergy targets, and how the deal expands Fifth Third’s footprint and capabilities, particularly in Texas and key commercial verticals.
Strategic rationale and integration timeline
Leonard said the company evaluated the acquisition through the lens of whether it would create “a meaningfully better bank,” arguing the answer was “unequivocally yes” across strategic, financial, and operational dimensions. He highlighted that the transaction is structured for no tangible book value dilution at close and is expected to generate tangible book value per share accretion each quarter in 2026, alongside “achievable” cost synergies and what he described as a long runway for sustainable growth.
Leonard said Fifth Third has already made “substantial progress” on data mapping, technology alignment, and operational readiness. Compared with both the MB integration and Fifth Third’s initial targets for Comerica, he said the bank is “meaningfully further ahead,” enabling it to accelerate customer conversion to Labor Day rather than mid-October. He said the earlier conversion is intended to provide a cleaner view of financial performance in the fourth quarter of 2026, and that performance is expected to reflect return and efficiency levels originally targeted for full-year 2027.
Leadership retention and lessons from MB Financial
Leonard pointed to leadership retention as a key lesson from MB Financial, arguing that keeping the “right leaders in the right roles” supported relationship manager and customer retention. For the Comerica integration, he said several senior leaders are joining Fifth Third in “meaningful roles,” including regional presidents in Michigan, Southern California, and North Texas, as well as segment leaders in areas such as environmental services, tech and life sciences, and dealer services.
He also cited a “learned the hard way” issue from the MB conversion involving consumer data transfers and fraud rules. Leonard said Fifth Third plans to “hydrate” fraud and internal control analytics so that Comerica customers are not treated like new customers immediately after conversion—an issue he tied to controls such as Zelle limits and fraud settings.
Synergies: cost savings and growth investments
Leonard said Fifth Third expects $850 million in annual pre-tax expense synergies, which he described as roughly 35% of Comerica’s expense base. He said the savings are expected to come from consolidating duplicative functions, optimizing facilities and vendors, aligning overlapping systems, and creating a more efficient operating model.
He added that Fifth Third originally expected to recognize about $320 million of the savings in 2026, but with an earlier “legal day one,” it now expects an additional $80 million of savings, with half flowing to the bottom line and half reinvested for growth.
Later, Leonard said the expense synergies are “predominantly” people-related and that the company is tracking “ahead of pace.” He said Fifth Third plans to reinvest some of the excess to pull forward revenue opportunities, and referenced delivering roughly $400 million of expense synergies this year, while expecting to spend about $40 million on growth investments. He said the largest portion of that investment would be marketing tied to a direct mail campaign designed to increase deposits and test market response in the Southwest, with additional spending including hiring mortgage loan originators to be based in Comerica branches and continued hiring in commercial roles such as middle market relationship managers and treasury management officers.
Revenue opportunities: consumer, small business, Texas buildout, and innovation
Leonard said Fifth Third sees more than $500 million in identifiable revenue synergies over the next five years, and described several initiatives intended to drive growth in legacy Comerica markets. On the consumer side, he said Fifth Third plans to bring an analytics-driven strategy, segmentation tools, digital onboarding, and an “award-winning mobile experience.” He also said Comerica will see its first major consumer deposit campaign in more than a decade, including roughly 1 million direct mail pieces initially and more than 13 million over 2026.
Before full systems conversion, Leonard said Fifth Third intends to introduce its Provide fintech lending platform to small businesses across legacy Comerica markets. He said Provide has helped Fifth Third become a top 15 national SBA lender and cited a No. 2 ranking in J.D. Power’s 2025 National Small Business Banking Satisfaction Study among regional banks.
Leonard also outlined a major retail expansion plan in Texas, saying Fifth Third will open 150 new financial centers across the state from 2027 through 2029. He said the bank has already secured more than a quarter of those sites and aims to achieve top-four branch share in Dallas, Houston, and Austin by the end of the decade.
In commercial banking, Willingham said Comerica’s middle market business is a “crown jewel,” and argued the franchise had been constrained by balance sheet availability, particularly after the 2023 Silicon Valley crisis. He said Fifth Third’s liquidity, capital, and balance sheet diversification could “unlock” value for those bankers and clients, adding that some clients have reacted positively to an expected ratings upgrade, which he said can affect deposit hold limits.
Operating environment: loan growth, deposits, NII drivers, and regulation
On the operating backdrop, management described a constructive start to 2026. Leonard said the company exited the fourth quarter with strong middle market production, citing a 20% year-over-year increase in loan production. He also said corporate banking paydowns and weaker line utilization had rebounded, and referenced being up roughly $1 billion on C&I balances through January, while also stating that the company was affirming its guidance for the year.
Asked about deposit pricing, Willingham said the environment remains “rational, but firm,” with ongoing competition for operational deposits in the middle market. On net interest income, he said loan growth is a key driver within Fifth Third’s guidance framework and added that a steeper yield curve and securities portfolio deployment could provide additional benefit. He noted the bank is restructuring parts of the investment portfolio and that cash from the Comerica portfolio is being held for deployment at attractive entry points.
On regulation, Willingham said banks want clarity on the Basel “Endgame” rules, including the treatment of AOCI, while noting that Fifth Third continues to evaluate capital on a marked basis. Leonard added that regulations are “not binding constraints” for Fifth Third, pointing to continued internal practices such as daily liquidity calculations and semi-annual capital stress testing even when not required.
About Fifth Third Bancorp (NASDAQ:FITB)
Fifth Third Bancorp is a Cincinnati, Ohio–based bank holding company whose primary banking subsidiary operates as Fifth Third Bank. The company provides a broad range of financial services to individual consumers, small businesses, middle-market companies and large corporations. Its business mix includes retail and commercial banking, lending, payment and card services, treasury and cash management, and wealth management and investment advisory services delivered through a combination of branch locations, commercial offices and digital platforms.
On the consumer side, Fifth Third offers deposit accounts, consumer loans, mortgages, auto financing and credit card products, along with digital banking and mobile services.
