Magazine article American Banker

Fifth Third Looking to Buy in the Neighborhood

Magazine article American Banker

Fifth Third Looking to Buy in the Neighborhood

Article excerpt

When it comes to acquisitions, George A. Schaefer Jr. has little desire to venture far from home.

The chief executive officer of Cincinnati's Fifth Third Bancorp said he sees plenty of opportunity to expand in Ohio, Indiana, and Kentucky, the three states where the bank already operates.

Mr. Schaefer said that if he could make a large deal in any of those markets-including buying $28 billion-asset Huntington Bancshares of Columbus, Ohio-there's a good chance he would.

"If Huntington Bank was interested in selling, would we have an interest in looking at it? Yes," he said in an interview this week. "But that would be true of any company above $500 million of assets in Ohio, Kentucky, or Indiana."

Fifth Third, which has $29 billion of assets, holds about 10% of total deposits in those three states, Mr. Schaefer said. Its proposed deal for Emerald Financial Corp. of Strongsville, Ohio, announced March 1, would make it the No. 2 bank in the state, behind KeyCorp.

With 400 banks and thrifts left in Ohio, there are still plenty of opportunities to buy, Mr. Schaefer said. And with a market capitalization of $19 billion, Fifth Third could snap up any but a handful of competitors.

By way of comparison, KeyCorp, with $80 billion of assets, has a market capitalization of $14.6 billion.

Fifth Third "can do anything they want to do anytime they want to do it," said a chief executive of a competing bank that has been outbid by Fifth Third on several deals.

A Lehman Brothers report says Fifth Third probably could pay a high price for Huntington-nearly $72 per share without dilution if it could cut Huntington's expenses by 20%. …

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