Magazine article American Banker

Fifth Third Acquiring 28 Branches in Ohio from First Nationwide

Magazine article American Banker

Fifth Third Acquiring 28 Branches in Ohio from First Nationwide

Article excerpt

In a transaction that was said to be in line with both companies' strategic goals, Cincinnati-based Fifth Third Bancorp has agreed to buy First Nationwide Bank's Ohio branch network for $129 million.

The purchase of 28 branches and $1.4 billion in deposits is expected to boost Fifth Third's earnings by reducing funding costs. The earnings boost is expected even though the purchase premium - 9.2% of the deposits - is relatively high in comparison to other deals.

The branch purchase also will nearly double the $17.2 billion- asset bank's branch network in and around Cleveland, helping management increase market share in an area where it wants to grow.

According to an investor note by Goldman, Sachs & Co., the branch acquisition will move Fifth Third from eighth to fifth in deposit share in Cleveland.

The sale is in keeping with First Nationwide's stated goal of abandoning previous owner Ford Motor Co.'s ambition to create a national thrift. Instead, Texas banker Gerald J. Ford, who teamed with New York investor Ronald O. Perelman to acquire First Nationwide last year, intends to expand in California.

"It fits in with our original strategy of divesting outside California and investing within the state," said First Nationwide president Carl B. Webb.

In addition to its Ohio network, $14.7 billion-asset First Nationwide has 49 branches in California, 26 in New York, 24 in Florida, 21 in Michigan, and four each in New Jersey and Texas.

The Ohio branch sale is expected to be completed in the first quarter, pending regulatory approval. …

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