- Key insight: Comerica worked fast to land its massive sale to Fifth Third after considering Regions’ bid, according to two sources familiar with the matter.
- Supporting data: The 17-day timeline from when the bank CEOs began conversations to when the deal agreement was signed is the fastest among any of the top-20 largest bank deals announced this year.
- Forward look: If Comerica doesn’t provide additional disclosure about how its agreement with Fifth Third came together, it could face legal action from an activist investor.
Regions Financial tried to buy Comerica earlier this year, shortly before the Dallas-based company sold itself to Fifth Third Bancorp in the largest bank transaction announced in 2025, two sources familiar with the matter told American Banker.
Comerica rejected Regions’ offer, and then moved quickly to strike its $10.9 billion deal with Fifth Third, according to the sources, who spoke on condition of anonymity. The timeline in their account matches up with information that Comerica released in a recent regulatory filing.
Comerica said in its recent filing that in September, it received a proposal for an all-stock deal from an unnamed financial institution. Comerica described the bid as “preliminary.”
Comerica declined to comment for this article. Regions spokesperson Jeremy King said in an email Monday: “We never discuss rumors about M&A.”
The sources familiar with the matter said that Comerica executives went into a panic during the summer after an activist investor group called HoldCo Asset Management demanded that the $78 billion-asset company pursue a transaction due to underperformance and financial strain.
HoldCo now has questions about the deal’s timeline, and about Comerica’s process for getting there. In a new report Monday, HoldCo asked Comerica to disclose additional information about how the deal with Fifth Third came together, including whether Comerica solicited other offers, how conversations between the two banks evolved and how Comerica CEO Curt Farmer’s post-merger compensation was decided.
Farmer will become Fifth Third’s vice chair after the companies merge, and will earn $8.75 million in annual compensation, per public filings. He will eventually serve as a senior advisor to the bank and receive the same pay in that role.
If Farmer’s employment agreement falls through, or he loses his position in the next roughly two years, Fifth Third will pay him $42 million. At his current compensation, he will earn that amount in about five years, though he’s eligible to sit on Fifth Third’s board until a decade from now.
If Comerica doesn’t answer the activist investor’s questions, HoldCo said in its report that it will consider legal action. The firm said it may seek expedited relief in the Delaware Court of the Chancery to gather the disclosures it’s after, and would consider bringing fiduciary-duty claims in the court.
Farmer said in an interview back when the Fifth Third deal was announced that HoldCo’s July report wasn’t a factor in its decision to sell.
Comerica had been weighing a sale since the regional banking crisis of 2023, Farmer told American Banker last month. During that mini-crisis, a string of bank failures put a spotlight on liquidity — and Comerica’s relative shortfall of stable, low-cost deposits. Over the years, Comerica’s commercial business had become its bread and butter, and the bank didn’t have a similar stronghold in retail products.
The bank lost $3.7 billion of deposits in a few weeks amid the upheaval, and its stock price fell some 50% between mid-March and mid-May 2023.
Financial regulators also ramped up scrutiny of Comerica around the same time, sources familiar with the matter said. The bank was hit with confidential supervisory notices that cited dozens of concerns, including risk technology, risk governance and controls, the sources said.
Comerica has been “rebuilding” since the regional banking crisis, Farmer said on Comerica’s earnings call in July. Weeks later, HoldCo published its initial report.
Regions’ bid came shortly thereafter, according to the sources, despite the bank’s long-standing avoidance of M&A. Regions Chief Financial Officer David Turner said earlier this month that deals aren’t part of the bank’s strategic plan.
“That being said, we have to be cognizant of what’s going on around us,” he said at an industry conference. “We’ve talked a little bit about taking advantage of disruption that is occurring in our market. And so it’s just not part of where we want to focus our time and attention. And we understand things can change, but that’s just not where we are today.”
In September, as Comerica determined that the initial bank’s bid wouldn’t be able to beat out another party’s, per the public filing, it set its sights on selling itself to Fifth Third.
The sale of Comerica will solve a major problem for the beleaguered bank: a lack of low-cost deposits. Meanwhile, the addition of Comerica will propel the Cincinnati bank’s market share in fast-growing geographies it has been targeting, like Texas.
The deal that Comerica inked with Fifth Third came together faster than any other of the top-20 bank deals announced this year, per an American Banker analysis of public filings. Just 17 days passed from when Farmer and Fifth Third CEO Tim Spence first made contact about a deal to when they signed the merger agreement.
According to the companies’ public filing, Farmer called Spence on Sept. 18, and less than three weeks later a deal was signed. The process was faster than most other recent bank deals of similar sizes by several weeks, and in some cases months.
The two banks’ CEOs have known each other for several years, and have periodically met, but the public filing said that “prior discussions did not involve the possibility of Fifth Third acquiring or combining with Comerica.”
Spence and Farmer had been in contact prior to Sept. 18, according to sources familiar with the matter. One source said that the CEOs had started having conversations about “possibilities” last year, but that those didn’t yet entail serious negotiations about an acquisition.
A Fifth Third spokesperson said it’s not accurate to say that acquisition conversations began last year, and pointed to the two banks’ public securities filing for an account of the timeline.
The leaders of Fifth Third and Comerica did confirm the nature of one conversation they had before the deal was hatched.
Farmer said in an interview last month that he rang Spence in early September to congratulate him on Fifth Third taking over a government contract from Comerica. Fifth Third was chosen by the U.S. Treasury Department as the financial agent for a government prepaid debit card program, after Comerica lost the agreement following regulatory concerns.
“I had actually called [Spence] to congratulate him, and literally did not know that I’d be talking to him, you know, in the week or so after that, about the possibility of an acquisition,” Farmer told American Banker in early October. “We certainly were thinking about a potential acquisition partner or merger partner, but had not reached that conclusion.”
Fifth Third and Comerica will hold special shareholder meetings on Jan. 6 to vote on the adoption of the merger agreement.
