Fifth Third buying health care lender Provide

Fifth Third Bancorp in Cincinnati is buying Provide, a fintech that lends to health care professionals and in which the bank is already an investor.

The $207 billion-asset Fifth Third first invested in Provide in 2018 and began funding loans through its platform last year, it said in a press release announcing the deal late Tuesday. Fifth Third did not disclose financial terms of the acquisition.

Bloomberg

Health care has been a hot niche for the banking industry. KeyCorp in Cleveland, for example, recently launched a national online bank for health care professionals. Synchrony Financial in Stamford, Connecticut, recently bought a health care-focused consumer lender and also created a new health and wellness division as part of a larger reorganization. Bank of America has recently made tech investments in payment processing services for health care providers and Zions Bancorp. in Salt Lake City also recently said that it would expand its own practice lending business nationwide.

“The health care industry is one of the largest and fastest growing segments of the U.S. economy. Over the last decade, Fifth Third’s health care team has expanded its presence and expertise to become one of the top health care banking platforms for middle-market and corporate clients,” Greg Carmichael, Fifth Third’s chairman and CEO, said in the press release.

Provide specializes in practice lending to health care professionals looking to grow or establish their own practice. Its clients include dentists, veterinarians, optometrists or other small or solo providers. Those borrowers tend to be early in their careers and often have hundreds of thousands of dollars’ worth of student debt, as well.

Key to the deal will be the opportunity to Fifth Third's offer banking services to Provide's borrowers, Fifth Third said in a regulatory filing. Provide will retain its name and will continue to operate nationwide. Fifth Third currently holds around $400 million of Provide’s loans and will retain all of its new originations. The fintech has made around $1 billion in commercial loans since 2016.

The deal is expected to add around $6 million of revenue and $14 million of expenses in 2021, Fifth Third said in the filing.