Incoming Fifth Third CEO calls NC, SC expansions ‘most important investment’ in Southeast
.JPG "Tim Spence said that North and South Carolina are the “single most important investment” in Fifth Third Bank’s Southeast expansion. Spence will take on the CEO title at the bank this summer.")
Tim Spence’s roots in North Carolina date back to his teen years, when he spent a summer as a Senate page at the state legislature in Raleigh.
Now, the current president at Fifth Third Bancorp is slated to take over a bank deepening its N.C. ties. In July, he’ll become CEO of the bank, replacing retiring chief executive Greg Carmichael.
The Cincinnati-based regional bank is North Carolina’s seventh largest by deposits, with 1.4% of the market here. Under Spence’s watch, he said, the number will grow.
“The Carolinas have been the largest investment and our single most important investment,” Spence said, describing the bank’s expansion in the Southeast.
Spence and regional president Lee Fite spoke with The Charlotte Observer Thursday about the bank’s local growth strategy, long-term vision and why it’s still important to build physical branches in 2022.
Growing locally
Fifth Third is rapidly expanding through the Southeast, with North and South Carolina driving much of the growth
Since 2018, the number of Fifth Third branches in the states has increased 50%, Spence said, and the number of employees in the Carolinas is up about 40%.
The rapid expansion includes Charlotte: the bank has added 10 new branches here since the beginning of 2020, according to regulatory filings. It plans to open three more before 2025.
The bank also employs 460 workers in Charlotte.
The region is “an incredibly vibrant and robust market,” Spence said. North Carolina has served as a beta market for new Fifth Third products such as Momentum Banking, a fintech-esque saving and checking account with digital goal-setting tools and early access to direct deposits.
Both Spence and Fite said they try not to focus too much on competing with local retail banking titans such as Bank of America or Truist.
“I don’t really worry a lot about the competition,” said Fite.
He wants to keep his focus on high-quality service that draws customers organically.
“People want to be a part of an organization that they believe in, that they think is going to treat people with respect,” he said.
And while competitors have a strong grip on the Charlotte market, Spence pointed to the fact that Fifth Third ranks fourth behind the city’s three biggest banks — Bank of America, Truist and Wells Fargo — when it comes to the amount of its total deposits in the metro area.
The bank “already has a really strong initial foothold here,” Spence said.
In Charlotte, Fifth Third also wants to make an impact beyond banking, Fite said. He pointed to the bank’s $20 million investment in the West End as an example. The bank is working with local nonprofit LISC Charlotte to provide lending, donations and other investments to fund the economic revitalization of the historically Black neighborhood.
“This idea of strong communities is more than lip service to us,” Spence said.
Building branches
Though big Charlotte banks such as Wells Fargo or Bank of America are shrinking their retail footprint locally, Spence said adding new branches remains an important part of Fifth Third’s strategy.
Expanding in the region aligns with the bank’s Project NorthStar, an initiative launched in 2016 under Carmichael to build the bank’s profitability and national reputation.
“Branches are great at building awareness of the bank,” Spence said.
But Fifth Third’s new branches now look different than they used to, he said.
For one thing, they’re smaller. Today’s locations are half the square footage of traditional branches, Spence said. And the space is allocated differently, with less emphasis on teller transactions.
Digital banking has given customers much easier ways to take care of those, Spence said. But sometimes, customers just want to talk to a real person.
“The branches are there to support you as it relates to advice or to resolve problems that come up,” he said. “They’re there to give you the peace of mind that... there’s going to be somebody there who’s looking after your relationship (with the bank).”
Looking ahead
Spence said he’s also keeping an eye on some of the headwinds the broader banking industry will likely face in 2022.
“Thankfully, I didn’t get a lot of sleep heading into the job,” he joked.
So he won’t be losing much when he transitions from president to CEO this summer.
But with rising mortgage rates taking a bite of the home lending business and some economists warning of a recession on the horizon, there’s plenty to monitor when it comes to the business environment.
“My view is the macro(economic) backdrop in general is just going to be more volatile over the intermediate term,” Spece said. “That’s not saying that it’s necessarily going to be worse, it’s just the level of uncertainty that we all have to contend with.”
But he added that he feels confident about the Fifth Third’s ability to deal with that change.
“We’re just going to have to be nimble,” he said. “And so is everybody else.”
This story was originally published April 29, 2022 at 6:00 AM.
