Fifth Third Bancorp
Fifth Third Bancorp (FITB): A large, decentralized Midwestern bank with a strong history of focusing on cost controls. The company operates over 1,100 branches spread across ten different states: Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, and Missouri. Fifth Third has over $100 billion in assets.
In addition to its banking operations, Fifth Third also operates one of the Midwest’s largest money managers and one of the nation’s largest EFT processors.
Fifth Third consists of nineteen affiliates operating in ten different states. The company’s three largest affiliates account for approximately a third of the company’s total assets. These three largest affiliates are located in Cincinnati, Chicago, and Western Michigan. None of the other sixteen affiliates accounts for more than 7% of Fifth Third’s total assets.
Fifth Third focuses on smaller markets with below average population growth. The company seeks to operate more efficiently than its local competitors and thereby obtain a dominant share of each market.
The unattractive demographics of the largely Midwestern markets in which Fifth Third operates partially insulates the company from the ravages of competition. Many banks seek out pockets of above average population growth and high concentrations of wealth instead of expanding into one of Fifth Third’s markets.
Over the last ten years, Fifth Third has averaged a 1.68% return on assets and an 18.34% return on equity.
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