Comerica Jumps as Fed Grants Final Approval for Fifth Third Merger
The all-stock deal, valued at nearly $11 billion, clears its last regulatory hurdle, paving the way for the creation of a top-10 U.S. regional banking powerhouse.
Comerica Incorporated (NYSE: CMA) shares gained on Tuesday after the company and Fifth Third Bancorp (NASDAQ: FITB) announced they had received all material regulatory approvals for their pending merger, including the final and most anticipated sign-off from the Federal Reserve Board.
The approval removes the last significant obstacle for the nearly $11 billion all-stock transaction, which is set to create one of the largest regional banks in the United States. Following the news, Comerica's stock saw increased activity, reflecting investor relief and optimism as the deal moves toward its conclusion. Comerica, with a market capitalization of approximately $11.5 billion, is now poised to combine with Cincinnati-based Fifth Third, which boasts a market value of over $32 billion.
In a joint announcement on Tuesday, the banks confirmed the receipt of the Fed's approval. The news, first reported by Bloomberg, marks the culmination of a regulatory review process that has been closely watched by the market since the deal was first announced in October 2025.
The merger unites two of the nation's most prominent regional lenders. The strategic rationale for the deal centers on creating a financial institution with greater scale, a more diverse geographic footprint, and enhanced profitability. Fifth Third's strength in retail banking and wealth management is seen as a strong complement to Comerica’s established leadership in middle-market commercial lending.
The combined entity will have a significant presence in high-growth markets, including Texas, California, and the southeastern U.S., leveraging the footprints of both banks. Executives have previously highlighted the potential for significant cost savings, with initial projections targeting around $850 million in annual operating expense reductions.
Shareholders from both banks overwhelmingly approved the transaction earlier this month, signaling strong support for the strategic combination. The deal had also previously secured clearance from the Office of the Comptroller of the Currency (OCC) in December 2025, leaving the Federal Reserve as the final regulatory body to weigh in.
The transaction is structured as an all-stock deal, where Comerica stockholders are set to receive 1.8663 shares of Fifth Third for each Comerica share they hold. The merger is expected to be significantly accretive to Fifth Third's earnings per share by 2027.
With all regulatory approvals now in hand, the banks expect the merger to close in the first quarter of 2026. The focus will now shift to the complex task of integrating the two large organizations, a process that will involve combining technology systems, streamlining branch networks, and merging corporate cultures. The successful execution of this integration will be critical to realizing the full financial and strategic benefits of the deal.
The approval comes at a time of increased scrutiny for large bank mergers, and the green light from the Fed is a significant victory for both management teams. For investors, the cleared path to closing the deal resolves a period of uncertainty and allows them to value the combined company based on its future potential as a newly scaled competitor in the U.S. banking landscape.