Fifth Third CEO on Comerica integration: So far, so good

• Key insight: Fifth Third is optimistic that its acquisition of Comerica will deliver even better results than it previously expected. But there's still important work ahead, as the systems conversion is slated for Labor Day weekend.
  
• Supporting data: The company plans to deliver $360 million of net cost savings this year, and to reach an $850 million annual run rate by the fourth quarter.
  
• What's at stake: Fifth Third is counting on retaining and growing its customer base across legacy Comerica markets.
  

Fifth Third Bancorp says there haven't been any surprises as it has started to integrate Comerica after the blockbuster merger crossed the finish line earlier this year.

The Cincinnati-based bank said Friday it is on track to meet its previously outlined expectations for cost savings and data conversion as it folds Comerica into its systems. Fifth Third spent $635 million on the merger in the first quarter, which is about half of the bank's expected merger-related costs for the full year.

CEO Tim Spence said during a Friday call with analysts that the bank's integration of Comerica has continued "at an accelerated pace." The company plans to deliver $360 million of net cost savings this year, and to reach an $850 million annual run rate by the fourth quarter.

"When it comes to these large transactions, the absence of any surprises is a positive," Spence said. "So getting one quarter closer to the point where we're operating on a single common platform is an important milestone unto itself. In terms of just the core integration, I think things have gone really well. There really haven't been big surprises."

The bank has completed its required risk-based process reviews and its data conversion strategy, Spence said. He added that the bank's marketing and promotion efforts to retain and add customers in certain Comerica markets will likely pay off. Fifth Third expects the initial effort to generate about $1 billion of deposits across Texas, Arizona and California, Spence said.

Fifth Third also isn't seeing elevated levels of employee attrition, Spence noted.

The deal, which closed Feb. 1, was the largest bank deal announced in 2025, valued at $10.9 billion when it was inked in October.

During the first quarter, Fifth Third logged diluted earnings per share of $0.15, down almost 80% from the same period last year. But most of the drop was related to previously expected costs from swallowing Comerica. On top of the merger-related expenses, the bank took a $63 million charge to build its allowance for credit losses from Comerica's loan book.

The $297 billion-asset company reported adjusted earnings per share of $0.83 for the first quarter, excluding integration and one-off expenses, in line with consensus analyst estimates.

Fifth Third's adjusted bottom line was $734 million, up 38% from the prior year, compared with a 73% annual drop in GAAP net income, to $128 million.

Revenue was $2.8 billion, up 33% from the previous year. Spence said the bank is "already building a strong pipeline of revenue synergies."

Chief Financial Officer Bryan Preston told analysts that any revenue synergies the bank notches will help improve its outlook. When Fifth Third announced the deal, it forecast full-year earnings per share of $4.89 in 2027, which would mark a 39% jump from 2025. Preston said he's confident the bank can maintain that trajectory.

"Obviously, 2027 is a long time away," he said. "The environment, the rate environment and a lot of other things can change. But we certainly are more positive today about the opportunity in front of us, even though we were incredibly positive at the time of the acquisition."

But the integration work isn't over yet.

"It's very early days, so this is not by any stretch of the imagination a declaration of success," Spence said. The bank is on track to convert all its systems over Labor Day weekend.

The technology conversion is the largest point of risk in the transaction, Spence said. It's important that the bank not disrupt customers' experiences, and there may be a learning curve as legacy Comerica users get used to Fifth Third's technology.

But the tech conversion will also open more channels for Fifth Third to access retail business, since Comerica's systems didn't allow consumers to open deposit accounts digitally.