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The pressure is on Comerica CEO Ralph Babb to prove the deal, which closed Thursday, was worth it. American Banker offers him some free talking points.
July 28
Ralph Babb has had a momentous week. The head of Comerica Inc. simultaneously closed a major acquisition and tapped a new finance chief.
The changes actually underscore the Dallas lender's slow-going approach to things, Babb said. It has been about ten years since Comerica last had a new chief financial officer or purchased another bank.
Its $800 million-acquisition of Sterling Bancshares Inc. of Houston is proceeding as smoothly as planned so far, he said. Sterling had 57 branches and $5 billion of assets. Sterling's systems should be integrated and converted by the end of the year, Babb said.
Some investors and analysts criticized the relatively high price Comerica paid, but Babb said it was justified. "There aren't other opportunities that really fit our model like Sterling did," he said. "From our perspective, it was very strategically important to us."
There are not many big, Texas banks to be bought he said. Sterling is complementary from a geographic and business-line standpoint.
"It has been ten years since we have done the last one - we're very regimented," Babb said.
Its last big deal was its 2001 purchase of the $7 billion-asset Imperial Bancorp. of Los Angeles.
The Sterling purchase is off to a good early start, Babb said. Comerica's merger-related expense, loan-loss, and cost-saving projections have not changed since announcing the deal in January.
Babb also predicted a smooth transition at CFO.
Outgoing CFO Beth Acton will stay on as an advisor through mid-2012 once she hands over the reins in September to Karen Parkhill.
Parkhill, 45, was CFO of JPMorgan Chase & Co.'s commercial bank since 2007.
Acton, 60, and CFO since 2002, "has long had an objective of retiring at about this point," Babb said.
Parkhill was the right candidate to replace her after a comprehensive search, Babb said, because of her 25 years of banking experience and her tenure at JPMorgan Chase, a top rival of Comerica's for business loans in California.
Are there other executives changes on the horizon?
Babb, 62, the chairman and CEO since 2002, declined to get specific about how much longer he aimed to run the $55 billion-asset bank.
"I love what I do," he said. "One of the things we talk about here is our culture. Succession planning as you know is always very important. … We have a very diverse team, a very strong team. We're well prepared for the future."
