- Key Insight: The deal marks the largest bank acquisition announcement of 2025, and Fifth Third’s first since 2019.
- What’s at Stake: Comerica had been facing calls from an activist investor to sell itself for months, though CEO Curt Farmer said that the external pressure wasn’t a factor
- Supporting Data: When completed, the deal will create the ninth-largest bank in the country, with $288 billion of assets.
Note: This is a developing story. Check back for additional updates from management and analysts.
Fifth Third Bancorp said it has inked a deal to acquire Comerica in a $10.9 billion transaction that will create the ninth-largest bank in the country.
The Cincinnati-based company will buy the Dallas-based peer in an all-stock purchase expected to close in the first quarter of 2026, creating a company with a combined $288 billion of assets.
Fifth Third has been focused on an organic growth strategy across the Southeast, along with expanding its payments capabilities. Fifth Third CEO Tim Spence said in an interview on Monday that the Comerica purchase will not only complement his bank’s strategic initiatives, but will also become its top priority going forward.
“This is officially the biggest thing we’ve ever done as a company, by any measure,” Spence said. “So it is number one, two and three for us, in terms of the focus.”
When completed, Fifth Third expects half of its branches to be in the higher-growth Southeast, including Texas and Arizona.
Fifth Third Chief Financial Officer Bryan Preston said on a Monday morning call with analysts that the deal “brings together highly compatible businesses and industry-leading products and services,” adding that the combination cements Fifth Third’s presence in the Midwest, and “dramatically” expands growth prospects in Texas, Arizona and California.
Scott Siefers, an analyst at Piper Sandler, wrote in a note that the deal marks a “significant acceleration” of Fifth Third’s growth in Texas, calling it “basically a game-changer.”
The acquisition comes amid a flurry of bank deals, as the regulatory and economic environment has greased the wheels for financial institutions to buy each other after several years of relatively tepid acquisition activity.
The deal also comes 10 weeks after activist investor HoldCo Asset Management issued a report calling for Comerica to sell itself, arguing that the Dallas-based company made poor financial decisions in recent years and keeps failing to address its lagging stock price performance.
The asset manager’s 52-page report called out Comerica’s stock price since Curt Farmer became CEO in 2019 and accused the bank of not taking responsibility for what it said were “disastrous decisions” related to interest-rate risk and other blunders by the bank’s management. It urged Comerica to hire an investment banker and begin the process of marketing and selling itself.
HoldCo owns approximately 1.8% of Comerica’s common shares. The group was in the midst of launching a proxy battle to install up to five new directors on Comerica’s 11-person board.
Farmer, in a Monday morning interview with American Banker, declined to comment on any specific activist investors, but said that external pressure “did not factor into our decisioning here.”
“We had been thinking about — really coming out of the regional bank crisis in the spring of 2023 — more and more about the need for scale, for the need for a bigger, granular retail deposit base. It’s something our board had been weighing for a while.”
He added that those thoughts had accelerated over the last six months, and then it was “a matter of evaluating the decision.” Farmer said the deal proposal with Fifth Third “unfolded fairly quickly.”
Farmer will stay on at Fifth Third as vice chair for an undisclosed period of time to assist with the transition, but he told American Banker he’ll remain for as long as it’s valuable for the franchise. Spence said that “when the time is right,” Farmer will also become part of the bank’s board of directors.
Jon Arfstrom, an analyst at RBC Capital Markets who covers Comerica, wrote in a note that the announcement was “consistent” with his expectations for the Dallas company, following the “dialogue around Comerica’s longer-term performance and strategic outlook.”
“In our view, while the interest rate environment has been a challenge for Comerica’s profitability, we continue to see significant value in the company’s commercial lending franchise and footprint which encompasses attractive markets in Michigan, California and Texas,” Arfstrom wrote.
Fifth Third’s stock was relatively flat as of mid-morning Monday. Comerica’s stock price was up more than 14%.
Allissa Kline contributed to this story.
