One conversion down, four to go. Since the beginning of May, executives of Cincinnati-based Fifth Third Bancorp have been busy converting the Fort Wayne, Ind., operations of Old Kent Financial Corp., which was acquired in April.
Fort Wayne was the first of five major metropolitan market areas that were slated for integration, and Fifth Third executives say that so far they are pleased with their progress.
The biggest challenge will the conversion, scheduled to begin June 8, of 110 Chicago-area branches.
Old Kent, based in Grand Rapids, Mich., is Fifth Thirds biggest acquisition to date, but executives said 56 smaller deals over the last decade have helped them develop a battle plan.
For three weeks a crew of 30 Fifth Third managers worked alongside Old Kent employees at the 10 Fort Wayne branches that were being converted. Fifth Third has changed computers, signs, and marketing material for the Fort Wayne branches and mailed a welcome video to each of the 12,000 customers, along with pamphlets outlining the companys products and services.
A customer call center was also established, and operators telephoned customers to introduce the company.
This went flawlessly, said George Schaefer Jr., Fifth Thirds chairman and chief executive officer, in a recent interview. This feels pretty good.
As this one goes, so go the rest, he predicted.
Chicago is next, followed by Detroit, Northern Michigan, and Grand Rapids. The whole job should be over by October, Mr. Schaefer said.
The purchase brought Fifth Third into Chicago and Michigan for the first time, making it No. 5 in Chicago deposit share, with $5.5 billion, and No. 4 in Michigan, with a 9% share.
Still, Mr. Schaefer said the company has no special plans to overtake competitors like Bank One Corp., Huntington Corp., and National City Corp.
It will be the same Fifth Third marketing in the trenches, he said. We have been competing for years. We are pretty used to competing against Bank One.
Fifth Third plans to boost its commercial business lines in the new territories, increase sales of annuity products, and strengthen merchant processing. The company also plans to hold new checking account contests as a way to improve sales in the new markets, Mr. Schaefer said.
Mr. George called the Chicago market a great opportunity for Fifth Third. It is a fragmented banking market, he said. They will be able to take market share in Chicago in short order.
Mr. Schaefer said the company had made no secret of its desire to enter Michigan and bulk up in Illinois.
The post-merger Fifth Third has $70 billion of assets, $45 billion of deposits, 974 branches, and 1,930 automated teller machines.
Henry C. Dickson, an analyst at Lehman Brothers, said Fifth Thirds greatest challenge during the integrations will be holding on to the traditional customers.
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