Here's the text of an article in the Cincy Enquirer this morning...for those who aren't local and didn't see it:
Fifth Third Bancorp became Dayton, Ohio's largest bank and mortgage lender Friday when it completed its acquisition of CitFed Bancorp Inc.
The deal's closing marked the third major acquisition that Cincinnati-based Fifth Third has completed this month, spending more than $1.74 billion for the three companies. The acquisitions were the latest in a string of purchases that Fifth Third started a year ago in a quest for new revenue and profit sources and increased market share.
"Fifth Third now has the No. 1 market share along the I-75 corridor from Northern Kentucky to Cincinnati, through Dayton and up to Toledo at the Michigan border," George A. Schaefer Jr., the bank's chief executive, said.
Bank One was Dayton's largest bank.
The deal's timing was a bonus for CitFed's investors, coming on the heels of a 23 percent increase in Fifth Third's stock price since early June.
Fifth Third bought CitFed in a stock swap valued at $740 million -- $52 million more than the estimated price for the thrift when the deal was agreed upon in January.
The buyout of CitFed came a week after Fifth Third completed its $918 million acquisition of Columbus-based State Savings Co. and two weeks after its purchase of Columbus-based brokerage Ohio Co., in a deal valued at $80 million to $85 million.
Though Fifth Third could take a charge of $115 million or so against its second-quarter earnings to complete the deals, analysts anticipate that the bank will make the operations efficient and profitable.
"One reason the stock has done so well is the market believes these (acquisitions) will become Fifth Third-like by year's end," said Michael Plodwick, an analyst at Lehman Brothers in New York.
Translation: Fifth Third has a reputation for cutting costs and improving revenue generation from companies it buys and making them quick contributors to its earnings.
Fifth Third shares closed Friday at $60.75, up 25 cents. At the end of May, before the three deals were completed, Fifth Third shares stood at $49.25.
Mr. Schaefer said the second-quarter charge will be less than projected because the purchases of CitFed and State Savings were smoother and faster than expected.
Acquiring CitFed will boost Fifth Third assets by $3.3 billion to $29 billion and increase its branches by 35 to 484, primarily in Ohio, Kentucky and Indiana.
Fifth Third plans to close 16 CitFed branches that overlap with its existing offices by mid-August. It also plans to close CitFed's mortgage office in Indianapolis.
Fifth Third has not determined how many of CitFed's 500 to 700 employees will remain with the bank. |
