Dive Brief:
- With its acquisition of Comerica set to close Feb. 1, Fifth Third CEO Tim Spence on Tuesday alluded to forthcoming job cuts to both banks' employee bases.
- During Fifth Third’s fourth-quarter earnings call Tuesday, Spence thanked employees “from both companies whose hard work brought us to this point, but who will not be continuing with us on this journey.”
- A Jan. 7 Worker Adjustment and Retraining Notification notice in Texas indicates 184 Comerica jobs are being cut at its Frisco location, with a layoff date of March 13.
Dive Insight:
A Fifth Third spokesperson declined Tuesday to provide a projected job cuts figure, but said the Cincinnati-based bank is “focused on creating a new Fifth Third that creates meaningful opportunities for employees from both organizations, and both companies will experience changes to align staffing with future business needs.”
“While these decisions are never easy, we believe these actions position us to deliver greater future value to our customers, communities, and shareholders,” the spokesperson said. “We are committed to treating all impacted employees with respect and providing support throughout this transition.”
A spokesperson for Dallas-based Comerica issued a similar statement, noting “both companies are thoughtfully aligning roles to support future business needs.”
The $10.9 billion deal between Fifth Third and Comerica received Federal Reserve approval last week – the last regulatory green light needed. Fifth Third and Comerica shareholders voted in favor of the transaction this month, ignoring an activist investor’s push to reject the deal.
Fifth Third identified $850 million in cost savings with the merger, to be achieved mainly through “the elimination of facilities, systems, vendors, and some headcount reductions concentrated in overhead and noncustomer-facing roles,” Spence said in December.
“We are way ahead of where I think we had hoped to be at this stage, and frankly way ahead of where we were at the same time with MB,” Spence said, referring to the bank’s 2019 acquisition of MB Financial.
The conversion for Comerica customers is now scheduled for Labor Day, rather than mid-October, he said.
Timing adjustments have Fifth Third executives planning to deliver more expense synergies this year than previously expected, CFO Bryan Jordan said.
“But we also do intend to invest a little bit more in growth as well,” he added. “So we might be approaching $400 million of in-year expense saves in ‘26, if all goes well,” of the $850 million identified, “but we're hoping to reinvest maybe $40 million of that.”
The most immediate opportunity from the merger, Spence said, “is going to come from some of the things we can do tactically, in both leaning into Comerica's existing customer base, as well as what our … analytically driven deposit marketing and product strategies will allow us to do in Comerica's branch network.”
Medium- and long-term opportunities include building out the Texas market from a regional distribution perspective, and the ramp-up of the innovation banking business, Spence said.
Fifth Third has about 43 of the 150 locations it intends to build in Texas already secured, executives noted Tuesday. “The brick and mortar will actually come out of the ground faster in Texas than it did when we started the Southeast expansion,” Spence said.
Spence was quick to shut down any possibility Fifth Third is looking to do another bank deal.
“That is the last thing on my mind right now, for what that’s worth,” Spence replied when asked about acquisition consideration. “We’ve got plenty of work on it as it is.”
The Fifth Third-Comerica deal was approved by regulators 99 days after the proposal went public. Once the deal closes next month, Fifth Third is set to become the nation’s 16th-largest bank, with $290.4 billion in assets.
Fifth Third had about 18,676 full-time employees, as of the end of December, according to an earnings release. Comerica had about 7,876, according to a securities filing.
