Fifth Third Bancorp CEO Tim Spence says his $214.6 billion-asset company "is in a position to play offense" after reporting fourth-quarter financial results that included record revenue, a common equity Tier 1 capital ratio north of 10% and strong deposit growth.
That front-footed intent is perhaps nowhere more apparent than in Cincinnati-based Fifth Third's plans for the Southeast, where it expects to open 31 branches in 2024 — in addition to the 37 it opened in 2023.
Fifth Third already operates more than 320 branches in the Carolinas, Georgia, Florida and Tennessee, according to the Federal Deposit Insurance Corp.
"We're not running small loan-production offices," Spence said on a conference call with analysts Friday. "We have more than 200 client-facing people in those markets across commercial banking and wealth management alone, and then like another 1,700 that sit in more than 300 branches."
All five states in Fifth Third's Southeast footprint have added residents at a rapid clip in recent years, with Florida and South Carolina ranking first and second in population growth among the 50 states in 2022, according to
The trend has caught the eye of other banks. The $46.2 billion-asset F.N.B. Corp. in Pittsburgh, for example, has
For Fifth Third, the desire to expand in the Southeast region is hardly new. The company implemented the strategy in 2018 and has pursued it steadily since, said Spence, who joined Fifth Third in 2015, became CEO in 2022 and was
"These are multiyear investments that cannot be replicated easily by competitors through one to two years of hiring, a few new branches, or small tuck-in acquisitions," Spence said.
While executives did not detail the Southeast branch program past 2024, Chief Operating Officer Jamie Leonard hinted the buildout is far from over. "We opened our 10th branch in South Carolina this week, and we have plans to do 25 more over the next five years," Leonard said on the conference call. The effort, moreover, is shifting Fifth Third's geographic center away from its Midwest roots. Currently, about 31% of Fifth Third's branch network is based in the Southeast, but the total is expected to grow to 45% by 2028.
Beyond expansion, Fifth Third reported fourth-quarter net income totaling $492 million Friday, down 21% sequentially and 30% year over year, though results for the three months ending Dec. 31 included a $224 million Federal Deposit Insurance Corp. special assessment.
Like other banks,
"I would expect us to operate in the mid-70s, more than likely, from a long-term perspective," Preston said. "We were probably mid-80s pre-pandemic."
According to Spence, Fifth Third's latest earnings report was notable for record annual revenues totaling $8.7 billion and continued strong credit quality, with fourth-quarter net charge-offs of $96 million declining 23% on a linked-quarter basis. Deposit growth was also strong. Average deposits advanced 5% year-over-year to $169.4 billion.
Core earnings of $1 per share — excluding the FDIC special assessment and other one-time charges — exceeded analysts' consensus expectation of $0.90. "It looks like a solid end to the year," Piper Sandler Managing Director Scott Siefers wrote Friday in a research note.
