Comerica Bank Acquisition: Fifth Third and What Customers Want

The Fifth Third Comerica Deal: A Matter of Timing and Valuation

Fifth Third's proposed $10.9 billion acquisition of Comerica, slated to close in early 2026, is undeniably the richest banking deal of 2025. But the details emerging from the acquisition disclosures raise a critical question: was this really the best deal Comerica could get?

The timeline itself is interesting. Comerica received a verbal offer from "Financial Institution A" in September 2025, before Fifth Third formally entered the picture. Another bank tried to buy Comerica before Fifth Third deal - American Banker Comerica's board, according to the filings, decided Fifth Third was the "optimal merger partner" if they offered an appropriately high valuation. (Note the "if"—a big caveat). CEO Curt Farmer then contacted Fifth Third CEO Tim Spence on September 18th, followed by an in-person meeting the next day. Two business days later, Comerica's board favored Fifth Third, citing a higher valuation.

This rapid sequence of events raises a few red flags. Was Financial Institution A given a fair chance to counter? Did Comerica’s board genuinely explore all options, or were they already leaning toward Fifth Third? The filings, predictably, don’t offer much in the way of specifics.

The Numbers Game: What "Higher Valuation" Really Means

The core of the issue boils down to valuation. Comerica's board chose Fifth Third because they claimed a "higher valuation." But what does that actually mean? Was it a higher multiple of earnings? A better price-to-book ratio? Or simply a larger headline number?

Without access to the specific offers from both institutions (which, naturally, aren’t public), it’s impossible to definitively say. However, we can look at Comerica's financial performance and CEO compensation as context. In 2024, CEO Curt Farmer made $8.86 million. Now, I'm not saying that CEO compensation is always directly correlated with shareholder value (it definitely isn’t), but it does offer a glimpse into the priorities of the leadership.

Consider this: a verbal offer was on the table, but the board seemingly rushed into an agreement with Fifth Third after a single meeting. Was the "higher valuation" significantly higher, or was it a marginal difference that swayed the decision? And this is the part of the report that I find genuinely puzzling. The difference between a good deal and a great deal can be millions, even billions, in shareholder value. Did Comerica leave money on the table by not playing Financial Institution A and Fifth Third off each other more aggressively? It’s a question worth asking.

The acquisition is an all-stock transaction. So, in essence, Comerica's shareholders are trading their equity for shares in the combined entity. This means the perceived value of Fifth Third's stock is just as important as the nominal dollar amount of the offer. If investors believe Fifth Third overpaid, its stock price could suffer, effectively reducing the value of the deal for Comerica shareholders.

The Human Element: Relationships and Legacy

Beyond the numbers, there's a human element at play. The filings mention that Farmer and Spence had "periodically discussed" trends in finance for years. Farmer even congratulated Spence when Fifth Third won the Direct Express prepaid-card program contract, which Comerica previously held.

These personal connections, while not necessarily nefarious, can influence decision-making. It's human nature to favor those you know and trust. But in a deal of this magnitude, it's crucial to ensure that personal relationships don't overshadow the fiduciary duty to maximize shareholder value. This isn't to say that Spence and Farmer engaged in anything untoward, but the close relationship might have made Comerica's board more receptive to Fifth Third's offer.

The article notes that readers can sometimes feel "a second-hand thrill" from the drama in bank acquisition disclosures. While Fifth Third's account of the Comerica deal lacked some of that drama, the rapid sequence of events warrants further scrutiny.

Was It Really the Best?

The Fifth Third acquisition of Comerica might be a good deal, or even a great one, for both banks. But the available data doesn't definitively prove it was the best possible outcome for Comerica's shareholders. The speed of the deal, the reliance on a "higher valuation" claim without detailed specifics, and the pre-existing relationship between the CEOs all raise questions. Until more information emerges, a healthy dose of skepticism is warranted.