In one of the biggest bank mergers in recent years, Fifth Third Bancorp (NYSE:FITB) has acquired Comerica Bank (NYSE:CMA) in a deal valued at $10.9 billion.
Cincinnati-based Fifth Third is the 20th largest U.S. bank with some $209 billion in assets as of June 30, while Dallas-bank Comerica is the 34th largest bank with about $78 billion in assets.
The combined bank will have $288 billion in domestic assets, which the company says will make it the ninth largest U.S. bank. Its exact ranking will be determined after third quarter earnings come out next week, as both banks report on October 17.
Whether the merger makes it the ninth, 10th, or 11th largest bank, either way, it becomes a major player in the banking space with a broader geographic footprint, added scale, and additional offerings and revenue opportunities.
Through the deal, Comerica’s stockholders will get 1.8663 Fifth Third shares for each Comerica share. That comes out to $82.88 per share – a 20% premium over Comerica’s 10-day average stock price.
When the deal closes in the first quarter of 2026, Fifth Third shareholders will own approximately 73% and Comerica shareholders will own roughly 27% of the combined company.
The merger brings together Fifth Third, which has a strong presence in the Midwest, and Comerica, which serves the Southern U.S.
The combined bank will operate in 17 of the 20 fastest-growing markets in the country, including Texas, California, Arizona, and key regions in the Southeast. By 2030, officials estimate that more than half of Fifth Third’s branches will be located in the Southeast, Texas, Arizona and California.
Further, the merger gives the bank two $1 billion recurring and high return fee businesses – Commercial Payments and Wealth and Asset Management. These two additional business lines will provide Fifth Third with diversified revenue and earnings. It is expected to be immediately accretive to shareholders.
This combination marks a pivotal moment for Fifth Third as we accelerate our strategy to build density in high-growth markets and deepen our commercial capabilities,” Tim Spence, chairman, CEO and president of Fifth Third Bank, said. “Comerica’s strong middle market franchise and complementary footprint make this a natural fit.”
Peter Sefzik, Comerica’s chief banking officer, will lead Fifth Third’s Wealth & Asset Management business.
The announcement sent Comerica’s stock price soaring about 14% on Monday, while Fifth Third stock Sputtered, down about 2%.
This is not an unusual market reaction, given the 20% premium that Fifth Third paid for Comerica. Investors bought in because the guaranteed sale price is higher than the trading price at the start of the day. It is currently trading at $80 per share, which is still below the $82 per share offer price.
Fifth Third stock may have been down as the market saw it paying too much. Also, while it may be a good long-term deal, in the short-term, it could sputter during the integration.
Both of these banks report Q3 earnings on October 17, so investors should tune in for more details and visibility on its outlook.
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