Don't look for blockbuster deals from the Fifth Third Bancorp people. It's not their style.
Small acquisitions are the Cincinnati company's bread and butter. Consider last year's $2.1 billion purchase of $7.1 billion-asset CNB Bancshares in Evansville, Ind., the buyer's biggest deal ever.
Fifth Third rapidly became the third-largest bank in Indiana on the strength of such modest pickups. In another one last year it bought $650 million-asset People's Bancorp in Indianapolis, and it now has 141 offices in the Hoosier State - its biggest presence outside Ohio.
Fifth Third president and chief executive officer George A. Schaefer now has his sights trained on Michigan, particularly western Michigan. "These are three really good markets for us," he said in an interview Friday. "We think there's good growth potential there. We like the type of business that's done there."
Fifth Third already does business with a lot of western Michigan companies, including Meijer Inc., which runs grocery and general goods stores, and the office furniture manufacturer Steelcase Inc.
"It's really a natural extension of our northern Indiana market," said Robert P. Niehaus, executive vice president in charge of retail administration for Fifth Third. "We would really want to concentrate on growing our new customer base" in Michigan.
Fifth Third's formula for entering a market or expanding in one is to opens a few low-risk branches, build on them, and make a small purchase to cement its presence.
The formula has been put to work in Michigan. Late Thursday afternoon the company announced it had reached an agreement to buy $1.1 billion-asset Ottawa Financial Bancorp of Holland and its Ameribank subsidiary for $160.2 million in a stock deal expected to close in the fourth quarter.
Fifth Third already has 16 branches in the state. Adding Ottawa Financial's 27 branches in Holland, Muskegon, and Grand Rapids would almost double its presence in western Michigan.
"They like markets that are similar to their home market," Lori Appelbaum, an analyst with Goldman Sachs & Co., said of Fifth Third. "Michigan is very similar to Ohio in how the banking market is served and its demographics." She also speculated that Fifth Third aims to exploit an underserved consumer market.
Mr. Niehaus said Ottawa Financial "has a nice distribution presence. By putting our capital strength and products behind their distribution network, we really think we've got some great growth opportunities."
Mr. Schaefer said further deals in Michigan are a strong possibility, but he would not say when they might happen.
From Our Archive:
- Fifth Third to Acquire Ottawa of Michigan - September 1, 2000
- Midwest Payment To Buy Processor - August 21, 2000
- Wells, Firstar, Fifth Third Looking Primed - August 2, 2000
- A Fifth Third Deal Gives It A Foothold In Insurance - March 8, 2000
- Fifth Third Deal Turns the Heat Up Another Notch on Indiana Banks - July 13, 1999
- Fifth Third in $2.1B Deal to Buy CNB - June 17, 1999