Inside Fifth Third’s Southeast Expansion Strategy
If the Southeast were a Monopoly board, Fifth Third would be putting down an awful lot of green houses in key southeastern markets. More are coming.
By Steve Cocheo, Senior Executive Editor at The Financial Brand
During a recent analyst conference, Bryan Preston, Fifth Third Bancorp’s EVP and CFO, said the bank is focused on stability, profitability and growth "in that order," but added that they weren’t "mutually exclusive concepts." Case in point: the bank’s significant commitment to geographic expansion.
"An often overlooked driver of stability is investment and where you choose to grow," Preston explained. For Fifth Third, he said, building up the bank’s branch footprint to benefit from the Southeast’s population growth was the way to find that opportunity.
"This region grows two to three times faster than the rest of the United States, and six times faster than our legacy Midwest markets," said Preston. The region also contains 20 of the country’s 30 fastest-growing metropolitan markets.
Preston and Jamie Leonard, Fifth Third’s EVP and COO, gave some milestones during the March RBC Capital Markets Global Financial Institutions Conference:
• Since 2018, Fifth Third has opened 138 branches in the Southeast, which nearly matched the branch builds of all of its peer institutions nationally. At the end of 2024, Fifth Third had 352 branches in the Southeast, 31 added that year.
• Going forward, Fifth Third is stepping up the pace of branch expansion, intending to add 50 to 60 branches annually in the region through the end of 2028. The goal is to have approximately 575 in place by the end of that year.
• Fifth Third’s strategy calls for the continued optimization of the bank’s midwestern branch network — already down 5% from pre-pandemic levels —so that roughly half its branches will be in the Southeast. (That number was 32% at year end and is expected to be around 35% by the end of 2025.) Management anticipates that the company will be in the top five banks for every target market in the Southeast, based on number of locations.
Leonard said the midwestern network would see closures, two-for-one branch mergers and relocations.
"Our approach is to consolidate branches and use that consolidation to pay for the Southeast," Leonard explained.
The massive reinvestment has already been paying off. The bank says that FDIC’s annual summary of deposits indicates that Fifth Third finished at the top of all large banks in retail branch deposit growth, for two years in a row. The bank reports 10.9% deposit share in the Midwest and 3.9% in the developing Southeast (see the map).
On the flip side, because of the strong role of digitization of routine functions at Fifth Third, Leonard says attrition has been lower than modeled in the consolidating Midwest branch system. There, a branch count of 881 in 2017 is projected to fall to roughly 675 by the end of 2028.
Making the Southeast Strategy an Ongoing Reality
To get a deeper understanding of the how of Fifth Third’s expansion, The Financial Brand interviewed Shawn Niehaus, EVP and head of consumer banking. Niehaus is a 28-year veteran at the bank and started out in its branches as a part-time teller.
Niehaus says that some mistake the bank’s strategy: "We are not trying to go everywhere. We’re trying to stay very specific to our strategy, which is not a shotgun approach."
A key aspect of the bank’s branching decisions at the ground level is reliance on an intense level of data analytics, part of which entails heat mapping to identify priority markets and locations.
"We have a proprietary model that uses trillions of data points to lead us to where we want to go," says Niehaus.
One of the early lessons learned in the southeastern push was the benefits of building a dense network in each area selected.
"We’ve learned that density matters, not picking an MSA and being all in the outskirts, but having branches throughout the market," says Niehaus.
"You can’t just put one or two branches in and move on," says Niehaus. He says Atlanta is a good example of the need to build density. The bank began building out the northern part of the Atlanta market and is now filling in the southern portion. "So we’ll get the whole place done," he says.
Today, the target for locational share in a given market is about 8%. Niehaus some very large institutions can get by with less because they enjoy greater national brand awareness.
For Fifth Third, 8% is not only the target, but an urgency.
"We learned that you need to try to get that scale and density as soon as you can, if you want to get the appropriate outcomes," says Niehaus. "The last thing we want to do is start with a little scale and take 10 years to get there. If you do, you turn around and everything you were trying to do takes way too long."
Niehaus adds that congruency is an important overlay to density.
"If you can’t manage an expansion appropriately, then it’s hard to win," says Niehaus. "If you have one or two branches that are two hours away from each other, it’s a little hard to lead and manage those markets." He says this lesson was learned in the Midwest and has stuck, because it typically led to closures.
Lessons learned between now and 2028 will influence where and how the bank goes next. Markets evolve, Niehaus reflects, and population trends and market strengths can only be predicted so far. The movement of people and economic factors will influence the midwestern optimization, for example. Fine tuning of the southeastern network could also lie ahead.
But for now Fifth Third continues in the building phase in the Southeast.
Read more: Big Banks Are Heading South… and Loving It
The First Challenge: Finding the Locations and Then Securing Them
It’s one thing to know where the model tells Fifth Third to branch, but pushing pins into a map doesn’t build a network. And high-tech doesn’t find properties by itself.
"We have real estate folks who go into each market and, quite frankly, many times go knocking on doors to make sure we know what’s available and what’s not," says Niehaus.
Fifth Third looks for sites where the branch can be freestanding. The model size is about 1,900 square feet, in what the bank calls its NextGen branch design. This look and feel, as illustrated below, moves the branches towards consultation — which Niehaus says is their main role, with digital handling many transactional needs.
Private booths are intended to encourage people to sit with bankers for enrollments, problem solving, and so on. Niehaus notes that one of the features of Fifth Third’s approach is that the banker who signs you up becomes your first point of contact going forward.
Niehaus says that most sites are land- leased — that is, the bank obtains a long-term lease on the property but doesn’t own it. He says that land companies in the Southeast tend to handle commercial properties in this way. In the Midwest, by contrast, many more bank branch sites are found on bank-owned land.
"These folks aren’t going to give up that land," he says. A good plot in front of a shopping center will usually only be available on a land lease.
The bank will renovate where an existing structure on the land suits, but Niehaus says most of the time what’s there, if anything, gets bulldozed and the NextGen branch goes up from the ground.
The new branches are more intimate and personable than Fifth Third’s legacy locations, which can resemble carpeted bowling alleys. Niehaus came up in such offices and he jokes that it used to feel like you had to shout to greet a customer.
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Staffing Up the Southeastern Branches
Fifth Third’s Southeast strategy hinges on people as much as getting the branches sited and built.
"From the beginning, we’ve worked to make sure we get our teams up and running early," says Niehaus. "We get them hired and we ensure that they’re out there in the communities we want to serve. That is a big one, because we know that you’ve got to get in there and win over the market early or you’re probably not going to win in the long run."
Finding people with the right fit is a key part of the staffing. Niehaus says he’s not looking for sales types, but for people who are adept at building relationships. Sales will come along.
"Some people are more introverted," he says, but the jobs call for people who can pick up a phone and make a call, or go out talking to groups or to individuals to get the bank’s name out into the community. The bank loops in all of its other consumer and business services, from mortgages to wealth management to commercial banking, so another skillset is the ability to match up customers’ and prospects’ needs with Fifth Third’s offerings.
Niehaus likes to hire locally for branch jobs, but that’s not the only source. In fact, many prospective employees for the Southeast come from Fifth Third’s legacy footprint.
"Just as we’ve seen the U.S. population relocating and the economic growth in the Southeast, we see this among our employee base too," says Niehaus. "Often they have family members who have jobs that have relocated them here, so it’s worked out well."
He says that with corporations like Amazon and other ecommerce companies adding warehouses to the region, as well as a Michelin plant opening and Google moving in, the region is drawing people — prospects — too. "Folks are moving there, and so our employees and their spouses are moving there too."
In some locations the mix is 50% from other parts of Fifth Third and 50% from new, local hires, including people from banking, retail and other sources. In other, newer markets the mix is more 60% local.
Niehaus likes to mix experienced Fifth Third people with newcomers because it helps break the latter in more quickly. It’s not just training in procedures, but also transference of attitude.
"Consultative selling skills are a really big deal for us," says Niehaus.
This inculcation isn’t just left to chance. The bank has leaders on Niehaus’ team who train every newcomer.
Retailers and restaurants do this really well when there is a new opening, he explains: "An elite team comes in to train the staff." The bank brings in that team 90 to 120 days ahead of opening. "We work with them to show how to block and tackle, to make sure we’re prepared," says Niehaus, "and then those same leaders are still there to make sure we launch appropriately."
One lesson learned from retail is not to let go prematurely, says Niehaus. Often the "A-Team" sent in to make a splash quickly moves on too soon. "Then the behavior changes, not to where you want it to go," he says. His leaders track things to ensure that a new branch stays on track.
A source of pride for Niehaus is the leading score the bank received in both the 2025 and 2024 J.D. Power Retail Bank Satisfaction Study for the highly competitive state of Florida.
Building Brand Recognition with Time … and Money
Part of the reason Niehaus stresses the need for people who aren’t shy about asking for business out in the community is that a newcomer bank must be proactive.
"If you don’t ask, the community’s going to go to the Truist or the BofA or to a more local player like Regions," says Niehaus. "Almost all of the ‘trillionaires’ are already in the South."
Locals know those names already. Because the trillionaires — the bank’s term for the likes of Chase and Bank of America — are on TV and other media constantly and have national brands, the bank also commits marketing dollars to each beachhead. Fifth Third sees its growth as second only to the uber-aggressive branch network of JPMorgan Chase.
"We give every single branch two full years of marketing on top of our current marketing spend," says the banker, "to make sure we’re getting our name out there and that folks know who we are."
COO Jamie Leonard told analysts that the new southeastern branches will hit profitability when they reach the $30 million level for deposits. He added that once a branch reaches breakeven, the pattern is to see at least seven years of growth at higher rates than the market’s own overall strength.
Read more: Chase Ramps Up Its Community Banking Push. Can Local Brands Compete?
