Fifth Third plans 23 branch closures this year

Fifth Third Bancorp is planning 23 branch closures in 2023 with the majority located in the Midwest.

The Cincinnati bank is consolidating operations in the Midwest, including two closures within 20 miles of Fifth Third's corporate headquarters, according to a regulatory filing from the Office of the Comptroller of the Currency.

Overall, Fifth Third is planning to close eight branches in Ohio, five in Michigan, six throughout Kentucky, Indiana and Illinois, two in Florida and one in North Carolina. In 2022, the bank closed 41 total branches, according to a Fifth Third spokesperson.

The bank's reduced footprint in the Midwest comes as Fifth Third has turned to the Southeast for new business. In the same filing, the bank notes that the only two branches that Fifth Third reported in December as opening in 2023 are also in Florida and North Carolina.

Last month, during a Goldman Sachs U.S. Financial Services Conference presentation, Fifth Third CEO Tim Spence described the new strategy as "effective" for the bank at "gaining share in both households and deposits." According to Fifth Third, its Southeast deposits are growing at an annual rate of 7.3%, compared to 2.4% in the Midwest.

Spence said that "new branches are achieving breakeven in the two- to three-year range."

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Fifth Third has also seen deposit runoff in recent months, reporting a 10% decline in commercial transaction deposits during last year's third quarter while consumer transaction deposits grew 5%.

Earlier this week, Fifth Third rolled out a new consumer perk offering customers signed up for direct deposit with early access to their federal tax refunds. Ben Mendelsohn, the bank's director of product management, said that the tax refund advance program will help customers "engage and bank with us for a longer period of time."

In 2018, Fifth Third announced that it would resume a Southeast expansion plan it had put on hold during the 2008 financial crisis. The bank has aimed to add more than 100 branches in Florida, Georgia, North Carolina and Tennessee.

Fifth Third opened 12 branches last year and is targeting 30 to 35 branch openings in 2023 and up to 40 over the next two years.