Fifth Third deal paying off - Charlotte Business Journal:

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Not Bob James. The former chier executive of acknowledgeshis bank’s merged with Cincinnati-based a year ago presented But overall, the deal has helpexd the local banking operation weathedr the recession by adding musclwe and diversity to its “It was definitely the righgt decision — the timinf could not have been says James, now president of Fiftg Third’s North Carolina affiliate. “Id we had waited six months, we never would have got it done.” Fifth Third acquiref First Charter in June after the loca bank had grownto $4.
8 billion in assets and expanded into Raleigh and First Charter had begun more than a centur y ago as a community bank in Cabarruz County. The deal allowed Fiftuh Third, one of the nation’s largest regional to move intoNorth Carolina. But, more important to James, it gave the formedr First Charter operation some extraammunitionb that’s now being put to use as the recessionj weighs on banks. Jamesw says the N.C. banking operation has seen its depositsrise 15% sincee the merger, thanks to a large marketinvg push and some new products. The bank has addede 10 lenders here and is now offering creditr cards andmore wealth-management services to its customers.
Another noticeablr change is a cool-down in the operation’ss real estate lending. Nearly 70% of First Charter’s loan book was tied to real estates beforethe merger. But undert Fifth Third, the company can now offer middle-marketg commercial and industrial loanz inNorth Carolina. James says the real estated loanportfolio hasn’t grown since the And he’s trying to achieve more balance eventually only 50% of the loanxs will be in real estatw — by pushing Fiftyh Third’s other products. “We’re trying to let the real estater loans run down some andlet middle-market fill that he says.
George Fifth Third’s marketing director in Norty Carolina, says the bank also is tryint toignite small-business lending throughb the Small Business Administration. He recentlu launched an advertising campaign that seeks toattractf small-business owners to Fifth Third. James says Firsrt Charter only dabbled in SBA lendinvg beforethe merger. “We really run the gamutt now, from small business to major Still, the merger has presented its sharreof challenges. James says about 600 customers temporarilyh lost use of their debitg cards when the bankss mergedtheir card-processing systems. The company encountered mino r problems in mergingonline bill-paymenyt functions.
About 300 support jobs were slashed at the formef First Charter when thecompanies consolidated. And Fiftgh Third, like most of its peers, is struggling with the The bank hasreceived $3.4 billion in government aid through the Capital Purchase Program. UNC Charlotte finance professor Tony Platj notes Fifth Third has had heavy losses from real estate loansin recession-batteredf Florida and Michigan. And real estate is weighted heavily in the governmeny stress testsfor banks, he says, puttinyg Fifth Third “in the cross hairs” for more regulatort scrutiny. But James says the benefitsx of the merger far outweighthose challenges.
The local Fifth Third operation is adding personnel to help with the risinbg demand formortgage refinancing, and it will open two branches here this (See related story.) Meanwhile, First Charter’s sale price last year of $31 per sharw -— a 50% premium — looks bette r all the time. Says James: “Considering the economy, I thinki things are going really well.”