“We view MB Financial as a unique partner in our efforts to build scale in this strategically important market. Customers of both banks will benefit from greater convenience and the complementary capabilities that our banks, together, can offer,” said Fifth Third Bancorp CEO Greg Carmichael.
As part of the agreement, two members of MB Financial will join the board of directors of Fifth Third
The transaction is expected to be modestly accretive to Fifth Third’s operating earnings in the first year, and by 7% in the second year. Meanwhile, the bank is looking to complete its previously announced share repurchase program before the proxy solicitation in connection with the vote of MB Financial shareholders.
The banking sector is witnessing a shift in focus to regional expansion amidst concerns of asset quality getting affected by increasing interest rates, though there is a modest improvement in profitability. Meanwhile, taking a cue from uncertainties related to the recent tax reform and new trade policies, most banks are exploring ways to revise their operating model.
Shares of Fifth Third, which in mid-March had reached the highest level since the fiscal crisis, ended the last session lower and lost more than 5% in premarket trading Monday. Buoyed by the reports of the buyout, MB Financial shares jumped nearly 16%.