Fifth Third Bancorp Eyes Texas Growth and AI Gains After Comerica Integration

Key Points

• Comerica’s integration is opening growth opportunities, particularly in Texas, which Fifth Third expects could become its largest middle-market banking market within about 12 months. The bank plans to build on deposit campaigns, branches and commercial banking investments.
• Fifth Third is expanding AI use: employees use Microsoft Copilot daily, and AI generates about 40% of code and performs roughly 90% of testing, with engineering productivity gains of 20%–30%. The bank plans to upgrade its Jeanie chatbot to handle customer tasks, subject to safety and adoption considerations.
• The bank is strengthening cybersecurity and maintaining a disciplined approach to spending and acquisitions. It says a new code-scanning tool helped cut zero-day vulnerability patching from 30 days to one, while future deals must support strategy and shareholder returns.

Fifth Third Bancorp NASDAQ: FITB sees opportunities to grow in Texas and deepen commercial banking relationships following its integration of Comerica, while investing in artificial intelligence to improve employee productivity and customer services, executives said at an investor event.

Chief Financial Officer Bryan Preston said the combination has given Fifth Third access to markets and opportunities that could support faster growth. Chief Information Officer Jude Schramm said the bank is preparing to expand its use of AI, although governance and customer protections will influence the pace of deployment.

Comerica Deal Expands Growth Opportunities

Preston said Fifth Third’s investments in deposit gathering, new branches and middle-market banking could help it build on Comerica’s franchise. He said early deposit marketing campaigns under the Comerica brand generated strong response rates, and the bank plans campaigns using the Fifth Third brand and products.

Texas is now Fifth Third’s third-largest middle-market banking market, Preston said. He added that it could surpass Michigan, currently the largest, within roughly 12 months.

Preston said the bank has engineered a business model capable of delivering a 53% efficiency ratio and a return on tangible common equity above 19% through the cycle. He also described a business that should grow at nominal gross domestic product plus one or two percentage points, supported by investments in faster-growing markets.

The CFO said the bank prioritizes consumer checking relationships, middle-market banking and commercial payments. Investment decisions are made incrementally, he said, allowing Fifth Third to adjust spending when returns no longer justify further investment.

AI Moves From Employees to Customers

Schramm said Fifth Third has taken an “inside-out” approach to AI. About 13,000 to 14,000 employees use Microsoft Copilot daily, and the bank requires its engineering workforce to use AI tools, he said.

According to Schramm, AI produces about 40% of the bank’s code during a typical 12-week planning period and performs about 90% of testing. He said the engineering team is seeing productivity gains of roughly 20% to 30%, measured by how much more work it completes while also improving quality.

The bank also plans to transition its consumer chatbot, Jeanie, to agentic AI beginning this quarter and continuing into the first half of next year. Over time, Schramm said, the bank wants customers to be able to ask Jeanie to perform tasks such as making payments or moving money between accounts. The pace will depend partly on the bank’s comfort with the technology and customers’ willingness to use it.

Schramm said Fifth Third currently blocks direct access by third-party agents, including Muse, while questions about liability, authentication and cybersecurity are addressed. The bank does allow certain aggregator access, he said, and could eventually consider allowing agents to view information without moving money.

Cybersecurity and Technology Spending

Schramm said Fifth Third developed a code-scanning tool called LUCY through its participation in Project Glasswing, a cybersecurity research effort co-sponsored by Anthropic and the U.S. government. The tool can scan the bank’s internet-facing code in about a day, identify vulnerabilities that could be combined into a larger threat and produce patches for engineers to review, he said.

The bank has made the scanning framework available to other banks, with more than 100 downloads, Schramm said. He added that Fifth Third has reduced a patching cycle for zero-day vulnerabilities from 30 days to one day.

Fifth Third’s technology budget has grown at roughly a 6% compound annual rate over the past five to seven years, Schramm said. Following the Comerica integration, the bank wants to allocate 45% to 50% of technology spending to advancing capabilities and around 15% to cybersecurity, with the remainder supporting ongoing operations.

Disciplined Approach to Acquisitions

Asked about future deals, Preston said Fifth Third views mergers and acquisitions as an accelerant to its strategy rather than a strategy in itself. Any transaction must make financial sense for shareholders and advance the company’s objectives, he said.

Preston noted that the Comerica conversion required technology and product teams to divert attention from developing core capabilities. He characterized Comerica as a particularly strong fit and said Fifth Third would be disciplined when considering future transactions.

About Fifth Third Bancorp (NASDAQ:FITB)

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. Its principal subsidiary, Fifth Third Bank, provides banking and financial services to individuals, businesses, government entities and institutional clients.

The company's offerings include checking and savings accounts, consumer and commercial lending, mortgages, credit and debit cards, treasury management, cash management and payment-processing services. Through its wealth and asset management businesses, Fifth Third also provides investment management, brokerage, trust, private banking and financial planning services.

Fifth Third primarily serves customers across the Midwest and Southeast, with a branch and banking-center network spanning states including Ohio, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, South Carolina, Tennessee and West Virginia.

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