Comerica Bank's Acquisition Drama: Merger Mania and Customer Concerns

Fifth Third's Comerica Deal: Was There Really a Choice?

The proposed acquisition of Comerica by Fifth Third for $10.9 billion is making headlines, but the details suggest a narrative far more nuanced than a simple merger of equals. Let's dissect the numbers and see what they reveal.

The Fifth Third Premium and the "Other" Offer

Comerica received an all-stock offer from "Financial Institution A" in September 2025. The board, however, deemed Fifth Third's offer superior due to its higher valuation. This raises a critical question: how much higher? The announcement lacks specifics, leaving us to speculate if the difference was substantial or marginal. Was it a true bidding war, or a pre-ordained outcome? Another bank tried to buy Comerica before Fifth Third deal - American Banker

The timeline is also tight. Comerica CEO Curt Farmer called Fifth Third CEO Tim Spence on September 18th, they met the very next day, and two business days later, Comerica's board favored Fifth Third. That's a rapid decision-making process for a deal of this magnitude. It suggests either an extraordinary level of pre-existing familiarity or a degree of urgency that hasn't been publicly disclosed. (Perhaps the regulatory environment was seen as more favorable at that moment?)

The Golden Parachute (or, Executive Alignment?)

Curt Farmer's future compensation package is... noteworthy. He'll become a Fifth Third vice chair with an $8.75 million annual salary. He also gets $10 million in cash for "integration" (half upfront, half a year later) and stands to receive $10.63 million in deferred compensation. And even after transitioning to a "senior advisor" role, he'll still pull in $8.75 million annually, plus executive perks.

In 2024, Farmer made $8.86 million at Comerica. So, this deal essentially guarantees him a similar, if not slightly better, compensation for years to come, with potentially less responsibility. Is this an example of aligning executive interests with the success of the merger, or a sweetened deal to ensure a smooth transition? I've seen enough of these deals to know that the line between "incentive" and "payoff" can get blurry.

And this is the part of the report that I find genuinely puzzling. Why the extended, guaranteed compensation after the integration period? What specific expertise is Farmer bringing to the table that justifies that ongoing expense?

The Direct Express Connection

The backstory adds another layer. Farmer and Spence had been discussing finance trends for years. Farmer even congratulated Spence when Fifth Third snagged the Direct Express prepaid-card program away from Comerica in 2024. That's a significant contract—one Comerica held since 2008. Did losing that contract play a role in Comerica's openness to a merger? It's impossible to say for sure, but the timing is certainly suggestive.

Comerica, headquartered in Dallas, with $86.9 billion in assets as of June 2022, has a significant presence in Texas, Arizona, California, Florida, and Michigan. Fifth Third likely sees this as an opportunity to expand its footprint and market share, particularly in the Sun Belt states. The acquisition is not just about size; it's about strategic positioning.

So, What's the Real Story?

Ultimately, the Fifth Third-Comerica deal appears less like a merger and more like a strategic acquisition, carefully orchestrated with incentives to ensure executive cooperation. The speed of the deal, the generous compensation package for Farmer, and the pre-existing relationship between the CEOs all point to a pre-determined outcome. The question isn't whether this deal should have happened, but whether Comerica's shareholders got the best possible value, or if the "higher valuation" was simply the price of admission to a done deal.