Fifth Third’s (FITB) Comerica Merger Is Done, Now Comes The Payoff

On September 8, Fifth Third Bancorp (NASDAQ: FITB ) said it had finished moving close to 600,000 former Comerica customers and 293 branches across Arizona, California, Florida, Michigan and Texas onto its own systems, a conversion carried out over Labor Day weekend. The move caps the integration that began when the two banks joined forces on February 1, and turns Fifth Third into the ninth-biggest bank in the country by size, with north of $300 billion on the balance sheet. The systems work is finished. Whether that translates into durable earnings growth is the part investors still have to watch.

Comerica customers now get the full Fifth Third menu, including the Momentum Banking suite, Early Pay and Extra Time, backed by roughly 1,500 branches and 21,300 ATMs. In Michigan, where Fifth Third already leads in retail deposits statewide and in Detroit, former Comerica customers get 60% more branch access and existing Fifth Third customers get 42% more. Texas is the bigger story. Fifth Third now runs 107 financial centers there and plans to spend nearly $1 billion over five years, adding 150 new centers by 2029 in one of the country's fastest-growing state economies. By 2030, the bank expects roughly 1,750 branches total, with more than half sitting in Texas, the Southeast, Arizona and California.

The early numbers back up the strategy. Fifth Third pulled in $2.5 billion of consumer deposits from its Comerica Southwest marketing push, and Newline deposits climbed $2.1 billion while fee revenue there jumped 35% year over year. Net interest margin widened 6 basis points sequentially to 3.36%, and the adjusted efficiency ratio improved 480 basis points from the prior quarter to 57.1%. Credit quality held up too. Net charge-offs fell to 30 basis points in the second quarter, the lowest reading since the second quarter of 2023.

None of this came free. Merger-related charges cut $155 million from after-tax income in the second quarter, part of a $0.19 per share drag from certain items, and management says year-to-date merger costs already represent about 65% of what it expects to spend for the full year. Noninterest expense fell 12% from the first quarter but was still up 67% from a year earlier.

Average wholesale funding rose 20% sequentially as the bank leaned on $3.3 billion more in short-term Federal Home Loan Bank advances to bridge a seasonal dip in commercial deposits, a reminder that funding costs can swing while the deal digests. The CET1 capital ratio sat at 9.93%, still below the 10.58% posted a year earlier, reflecting $933 million of pre-tax merger-related capital hits, and Fifth Third did not repurchase any shares in the first half of 2026. Nonperforming loans also crept higher, with the NPL ratio rising to 0.58% from 0.54% the prior quarter.