Fifth Third deal paying off - Charlotte Business Journal:

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Not Bob James. The former chief executivee of acknowledgeshis bank’s mergetr with Cincinnati-based a year ago presentee challenges. But overall, the deal has helped the local bankinb operation weather the recession by adding muscle and diversity toits “It was definitely the right decisionj — the timing could not have been says James, now president of Fifth Third’sx North Carolina affiliate. “If we had waited six months, we nevet would have got it Fifth Third acquired First Charter in June after the local bank had grownto $4.8 billio in assets and expanded into Raleigh and Atlanta.
First Chartetr had begun more than a centurt ago as a community bank in Cabarrus The deal allowed Fifth one ofthe nation’s largest regionalp banks, to move into North But, more important to James, it gave the formetr First Charter operation some extra ammunition that’s now beingg put to use as the recessiobn weighs on banks. Jamesa says the N.C. banking operation has seen its depositzrise 15% since the thanks to a large marketingb push and some new products. The bank has addede 10 lenders here and is now offering credit cards andmore wealth-management servicezs to its customers. Another noticeable change is a cool-down in the operation’zs real estate lending.
Nearly 70% of First Charter’sw loan book was tied to real estate beforrethe merger. But under Fifth Third, the company can now offerr middle-market commercial and industrial loans in North James says the real estatse loanportfolio hasn’t grown since the merger. And he’s tryin to achieve more balance eventuallyonly 50% of the loans will be in real estater — by pushing Fifth Third’s othe products. “We’re trying to let the real estatw loans run down some andlet middle-markegt fill that space,” he says.
George Dick, Fifth Third’s marketing director in North Carolina, says the bank also is tryiny toignite small-business lending through the Small Business He recently launched an advertising campaign that seekws to attract small-business owners to Fifth Third. James says First Charter only dabbled in SBA lending beforethe merger. “We really run the gamut now, from smallo business to major Still, the merger has presented its share of James says about 600 customeras temporarily lost use of their debit cards when the bankz mergedtheir card-processing The company encountered minor problemss in merging online bill-payment functions.
Abou 300 support jobs were slashe d at the former Firsy Charter when the companies AndFifth Third, like most of its peers, is strugglint with the recession. The bank has received $3.4 billion in governmeny aid through the CapitalPurchase Program. UNC Charlotte finance professot Tony Plath notes Fifth Third has had heavy losses from real estatee loansin recession-battered Florida and Michigan. And real estater is weighted heavily in the government stress testsfor banks, he putting Fifth Third “in the croszs hairs” for more regulatoryy scrutiny. But James says the benefits of the mergerr far outweighthose challenges.
The local Fiftb Third operation is addinh personnel to help with the rising demand formortgagre refinancing, and it will open two branches here this (See related story.) Meanwhile, First Charter’s sale price last year of $31 per sharew -— a 50% premium looks better all the time. Says “Considering the economy, I think thingse are going really well.”