Chairman, President and CEO, Fifth Third Bancorp Inc.
The proposed $4.7 billion acquisition of MB Financial Inc. would significantly expand Cincinnati, Ohio-based Fifth Third Bancorp Inc.’s presence in the Chicago market and give it additional capabilities to deploy to serve the middle market across its entire 10-state footprint. In a recent visit to Grand Rapids, Fifth Third Chairman, President and CEO Greg Carmichael discussed the deal with MiBiz, as well as the bank’s leading role in West Michigan and the issue that seemingly every business faces today: finding and keeping good talent.
For a long time, Fifth Third Bank has been the largest bank in the West Michigan market in terms of deposit market share. Given that position, what are the bank’s growth opportunities today in this market?
First of all, the market’s growing. That’s nice to see. Being the largest player in retail and in the top three in commercial lending in the market, as the market continues to be healthy and expand, it creates additional opportunities for us. There are still opportunities for us to be more competitive in certain parts of the market where we could benefit by increasing our talent base against those opportunities, and continue to promote the products and services that we work hard to put into the hands of our bankers and the capabilities of the bank.
It’s looking for ways to expand what you offer your existing customers, right?
So organic growth is absolutely a great opportunity here, but also to continue to advance some of our services and product lines that we’re adding to the bank’s portfolio, such as property and casualty insurance as an example, and additional wealth and asset management capabilities, and additional commercial capabilities such as transactions that automate the back office accounts payable and processes. From a penetration perspective, we have great opportunity because we have a large base of customers that we can basically promote those products into.
What can Fifth Third do to meet the challenge of finding and holding on to good talent?
People want to come work for a company that has a good strong brand, that’s well-recognized as a leader in their industry. People want to work for an organization that they know they can be successful in with respect to the value they bring, and they can be successful from a career perspective and there’s growth opportunities in the business. They’re going to work for an organization that has what I call a winning approach to the market and is recognized as a strong company that serves its community well. That reputation is important. The leadership that they’re working for is important, and the opportunities that they’re provided are extremely important.
What will the acquisition of MB Financial in Chicago do for Fifth Third?
MB Financial is a very well-run, well-established, strong-performing commercial and retail business in one of the largest (markets) in the country. We’re buying a quality franchise with strong leaderships, strong product and great brand recognition. Chicago is the third-largest MSA in the United States and the second-largest middle- market commercial client base — (second) only to New York City. There are 6,000 middlemarket client companies in the Chicago MSA. It’s a big opportunity. Now, with this acquisition, we become the second-largest retail franchise in Chicago, we become the second-largest middle- market commercial bank in Chicago, both behind Chase. When we do that, we will (serve as the bank for) one in every five commercial customers in Chicago.
What benefits from the deal will be felt in Fifth Third’s markets outside of Chicago?
(MB Financial) has other products and services that they offer that are extremely attractive to the rest of our footprint, such as a middlemarket asset-based lending platform, such as a middle-market equipment leasing business that’s focused on health care, technology, and material handling. They also have an indirect business that we’re not in that serves the marine, RV and motorcycle industry. We don’t even do that and they do that nationally. They do that ABL (asset-based lending) nationally. They do that leasing nationally. All that’s going to fit really well serving our middle-market clients across our footprint well outside of the Chicago MSA.
How does this change your existing service line in asset-based lending?
We were good at asset-based lending when you go up to mid-corp., large corp. companies. We just didn’t have a good platform in the middlemarket space, which is what our core business is. We’ve been trying to figure out how to build it and deploy it. We acquired it through this acquisition.
Does the deal signify that Fifth Third has moved into acquisition mode or is looking for another deal?
No. We’re not a serial acquirer. We’ll continue to do acquisitions in the non-bank space to be additive, like property and casualty (insurance) and employee benefits, fintech capabilities, and other things in wealth and asset management that we’re interested in acquiring. But bank acquisition — our bucket’s full the next couple of years just getting this done.