Fifth Third CEO Tim Spence: We will be able to scale Comerica's middle market platform with deal

Merger Overview - Fifth Third is acquiring Comica in an all-stock deal valued at $109 billion, representing a 20% premium over Comica's 10-day average stock price [1] - Post-merger, Fifth Third shareholders will own 73% of the combined company [1] - The acquisition aims to combine Fifth Third's stability, profitability, and organic growth focus with Comica's middle market commercial banking platform and access to high-growth markets like Texas and California [3] Strategic Rationale - Fifth Third plans to scale Comica's middle market platform and specialty verticals across its footprint [4] - Fifth Third intends to leverage its denovo branch opening program to build 150 additional branches in Texas, aiming for a top-five position in Dallas, Houston, and Austin [4] - Comica's management believed that becoming part of a larger company was necessary to continue building their franchise, given their asset size [6] Regulatory and Financial Considerations - Fifth Third was approved to bid on failed banks in 2023, indicating regulatory confidence in its capacity to manage a larger bank [8] - Purchase accounting will allow Fifth Third to address rate hedges at Comica, potentially impacting income by over $80 million in the second quarter [13] - Comica's commercial real estate charge-off rate has been approximately 10 basis points, indicating excellent credit performance [13] Risk Management and Integration - Fifth Third conducted a robust diligence process, involving top leaders in reviewing loan files and operational processes [11][12] - Fifth Third is confident in its ability to integrate Comica and deliver consistent performance, leveraging its existing risk programs designed for a $210 billion balance sheet [14]