- On Jan. 6, 2026, Fifth Third and Comerica shareholders approved a roughly $10.9B all-stock merger, targeting an early Q1 close pending remaining regulators.
- The deal would create the ninth-largest U.S. bank with about $288–$290B in assets and expand Fifth Third’s reach into high-growth Sun Belt markets while strengthening commercial banking.
- Management projects about $850M of annual cost synergies, but integration, credit, and capital pressures could complicate execution.
- Activist HoldCo opposes the terms and is suing, while community groups and regulators could still impose conditions or delays.
Read More
The acquisition of Comerica by Fifth Third represents one of the most consequential bank mergers in recent U.S. history. Economically, the deal accelerates Fifth Third’s strategy to diversify its geographic footprint beyond the Midwest into higher-growth Sun Belt states and enhances its commercial and middle-market banking operations. The size of the combined footprint—operating in 17 of the 20 fastest-growing U.S. markets—confers scale advantages in both retail and fee income businesses, particularly in Wealth & Asset Management and Commercial Payments.
Financially, the deal is structured as an all-stock transaction valued at approximately US$10.9 billion. Comerica shareholders will receive ~1.8663 Fifth Third shares per Comerica share, valuing Comerica at roughly US$82.88 per share—representing a premium of 20% over its 10-day VWAP prior to announcement. Upon closing, Fifth Third shareholders will own ~73% of the combined company; Comerica shareholders roughly 27%.
Cost synergies are estimated at US$850 million annually, including branch rationalizations and corporate overhead reductions. However, Moody’s projects the leverage of these synergies will impact financial ratios—e.g., common equity Tier 1 capitalization is expected to lean toward ~10.0% (vs ~10.6% alone as of mid-2025), introducing some near-term pressure on regulatory capital. Achieving efficiency ratio improvements, cost savings, and integration fluency will be critical to realizing projected return metrics: for example, return on tangible common equity (ROTCE) in excess of peer averages and return on assets above ~1.5% are among analysts’ modeled expectations for 2027 once synergies are fully phased in.
Strategically, the merger strengthens Fifth Third’s competitive positioning amid regional banking consolidation. With both banks having exposure to higher growth southwestern and southern states, the combined entity can better absorb macro risks tied to economic cyclicality, interest rate cycles, and regional downturns. However, these same exposures are double-edged: Texas’s construction slowdown and California’s employment weakness expose credit risk, particularly in commercial real estate tied to office / hotel sectors and non-deposit-bearing funding roll-offs.
Governance and regulatory risks are also material. Activist investor HoldCo argues the deal process was flawed, citing lack of auction, conflict of interest concerns, and restrictive deal protections. They have filed suit in Delaware, seeking enhanced disclosures and possibly a revised price. On regulatory side, the deal has already secured approval from the OCC, but requires final consent from the Federal Reserve, Texas banking regulators, and others, and faces opposition from advocacy groups focused on fair lending records and community reinvestment.
Open questions remain: Can Fifth Third execute the integration without losing customers, especially in overlapping branch markets? Will regulatory bodies impose conditions or delay closing? Can earnings accretion be realized by late decade, or will capital, credit quality, and macro headwinds blunt the upside?
Supporting Notes
- Special meetings held on January 6, 2026 saw Fifth Third and Comerica shareholders approve the merger by approximately 99.7% and 97% respectively. Expected closing by end of March, subject to regulatory approval.
- The deal is valued around US$10.9 billion in an all-stock transaction, with Comerica shareholders receiving ~1.8663 shares of Fifth Third per share; Fifth Third shareholders will own ~73% of the combined entity.
- The combined bank will hold approximately US$288-290 billion in assets, becoming the ninth-largest U.S. bank, with operations in 17 of the 20 fastest-growing U.S. markets, expanding into Texas, Arizona, California, while consolidating strength in the Midwest.
- Projected cost synergies of about US$850 million annually, involving branch closures and corporate overhead reductions. Efficiency, ROTCE, ROA projections include return on assets >1.5% and tangible common equity returns >20% once the merger is fully integrated.
- Regulatory approval granted by the Office of the Comptroller of the Currency; additional approvals needed from the Federal Reserve and state regulators. Advocacy groups have opposed, citing concerns about fair lending and community reinvestment.
- Issues raised by HoldCo Asset Management: that Comerica’s board accepted a low bid, process was rushed in only ~17 days, and that no shop restrictions/termination fees are coercive; lawsuit filed.