Fifth Third's $11 Billion Comerica Grab: What It Means for Investors | The Motley Fool

Fifth Third’s $11 Billion Acquisition of Comerica: Investor Impact

Last month, Fifth Third Bancorp, based in Cincinnati, announced a major acquisition of Comerica, a Dallas-based regional bank, for $10.9 billion in an all-stock deal. This move marks a significant shake-up in the regional banking sector.

A New Regional Banking Powerhouse

The merger will create the ninth-largest bank in the United States, combining holdings of $288 billion in assets. This acquisition provides Fifth Third with the largest retail deposit franchise in Michigan and strengthens its presence in rapidly growing markets like Texas.

Loan Portfolio and Business Focus

Post-acquisition, the combined bank’s loan portfolio will be dominated by commercial real estate and commercial and industrial loans, representing over two-thirds of its total loans. Additionally, it will maintain strong fee-based businesses in commercial payments, asset management, and wealth management.

Loss and Gain of Treasury Contract

Previously, Comerica held the U.S. Department of Treasury’s Direct Express contract, managing federal benefit distributions via prepaid cards. This contract supplied Comerica with about $3 billion in non-interest-bearing deposits, providing nearly free funds for loan origination and securities purchases.

"The Treasury Department then awarded the contract to Fifth Third."

Business Implications

This acquisition aligns with the recent surge in bank mergers and acquisitions as regulatory barriers are lowered. The deal enhances Fifth Third’s competitive edge and expands its operational scale.

"The all-stock deal continues a run of bank deals that are starting to kick into high gear as the Trump administration opens the flood gates for bank mergers and acquisitions."

Author’s Summary: Fifth Third’s acquisition of Comerica creates a regional banking giant with a strong loan portfolio and expanded market reach, leveraging regulatory changes to enable growth.

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The Motley Fool The Motley Fool — 2025-11-07

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