Old Kent Bank customers in the Detroit area woke up Monday to discover that they were Fifth Third Bank customers and Fifth Third Bancorp says that is just the beginning.
The Cincinnati company says it plans expanded services and more branches for the area, where the conversion of Old Kents 74 branches was completed this weekend.
Fifth Third gained 210,000 customers in Detroit from Aprils $4.6 billion acquisition of Old Kent, which was based in Farmington Hills, Mich.
Two new Detroit-area branches are to be opened in September, with more to come later on.
To help launch several new services in the area international banking, equipment leasing, and merchant card processing, among others Fifth Third added 100 employees there for back-office operations. The company now employs 850 workers in Michigan.
The integration came away flawlessly, said Patrick Fehring, the president of Fifth Thirds eastern Michigan division. Mr. Fehring previously worked for Fifth Third in Ohio.
Fifth Third is following a buy and build strategy for Detroit, he said. The company now holds a 3% market share, with $3 billion of assets and $2.6 billion of deposits.
Since coming to Michigan earlier this year, Mr. Fehring said, Fifth Third has opened more than 10,000 consumer checking accounts and made more than 2,500 new loans. All signs now point to a long, rewarding relationship with the people of eastern Michigan, he said.
The only Old Kent branches still to be converted are those in the Grand Rapids, Mich., area. They are to be switched at the end of September.
Catherine Murray, an analyst with J.P. Morgan Securities in New York, said she expects the company to build its market share in the seven-county Detroit region but not, for now, by leaps and bounds.
Initially I would expect it to be organic growth and branch openings, Ms. Murray said. I expect them to go slowly. It shouldnt be that hard. Fifth Third has a well-defined growth strategy.
Fifth Third also has plans to expand in Chicago as a way to build on its 3.6% market share in that area. Fifth Third added 110 branches there through the Old Kent acquisition, and now plans to build as many as five more in the Chicago suburbs over the next 18 months.
The company reported problem-free transitions this summer in Chicago, where it temporarily sent 300 employees to help smooth the process, and in Fort Wayne, Ind.
Converting the Fort Wayne branches began in early June, when Fifth Third officially took over and replaced the computers, signs, and marketing materials.
Fifth Third has estimated the cost of the entire Old Kent integration at about $300 million. In June the company announced it was taking a $250 million second-quarter charge in connection with the purchase. In a filing that month with the Securities and Exchange Commission, Fifth Third said it would take more merger-related charges in future quarters.
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