As the Southwest Florida market experiences tremendous population growth, Fifth Third Bank plans to keep pace and shift its presence here as it evolves to meet local needs.
“What’s happening, and the reason why you see us building branches here is we have essentially been thinning out our branch networks in legacy markets to match the density that’s supported by the population and by our customer needs and, then, redeploying the expense associated with that to add brick and mortar to markets like Southwest Florida, where we have a strong initial presence but where there’s more of the market for us to continue to grow into,” said Tim Spence, president and CEO of Fifth Third Bank.
The president of the Cincinnati-based bank since 2020, Spence took on more responsibilities with the additional title of CEO, effective July 5, as Greg Carmichael transitions from CEO and chairman of the board to executive chairman.
Although Fifth Third maintains 1,100 branches across 11 states, the company knows brick-and-mortar offices are less relevant today as transactional centers than they were in the past. But, although the bank’s mobile app enables people to send payments, deposit checks, open accounts and check account balances, it can’t meet every need.
Tim Spence, Fifth Third Bank CEO
“I think what hasn’t changed is the desire that our customers have to be able to engage with a person when they have a critical decision to make or when they’ve got an issue they need to work through, whether it was an issue originated by the bank or just in their broader financial life,” Spence said. “That more than anything else has made bank branches remain relevant, I think, long beyond when people first started declaring their death.”
Of course, that doesn’t mean that today’s bank branch stays the same. The layout and staffing of branch offices have changed rapidly, Spence said.
“The original branch for Fifth Third in the Naples market back in 1991 was over 5,000 square feet on the ground floor, not to mention the second and third floors of the building,” he said. “The branches that we’re building in most parts of Southwest Florida now are between 1,900 and 2,200 square feet.”
While the central feature of a legacy bank branch would have been the teller line to serve the more than 75% of customers who came in to make a deposit or withdraw cash, Fifth Third’s NextGen branch design embraces the next generation.
“Today, the branches are much more oriented around supporting advisory conversations, conversations with specialists like investment advisers or mortgage loan officers or business bankers or otherwise,” Spence said. “So, they’re smaller in aggregate and the square footage is dedicated to totally informal to quasi-informal seating areas where people are able to get together and congregate and work through issues that are customers want to bring to us.”
As some might believe, though, new branches are not being built for aging demographics but, ironically, millennial customers, Spence said.
“The bank has done a nice job of keeping pace with the individual generations and, if you look at the fastest-growing segments of our customer base, it’s actually the millennials. We are growing millennial customers faster than any other population. On average, millennial customers are more likely to have visited a branch in the last 90 days than the folks that we have who are older demographically,” he said. “I think what happens is that interaction with an individual is most relevant the first time you encounter a problem or the first time you have to make a big decision. I know from my own financial life, the first mortgage that I took out I think I spent an hour at the closing table reading every page and, subsequently, became more aware of and confident in my ability to navigate those decisions. So, as we see more millennials move from renting to homeownership the last handful of years as the millennial generation has moved into sort of peak accumulation in terms of their ability to build wealth and otherwise, that just creates a new host of financial opportunities or needs and we are very focused on developing bankers who are able to help them with those things.”
Southwest Florida, of course, is one of Fifth Third’s fastest-growing markets. Collier and Lee counties account for 34 branches, slightly more than 3% of Fifth Third’s total branches, said James Weiss, the regional president of Fifth Third Bank.
“It’s just an important market to us,” Weiss said. “This still continues to be a market where we continue to invest significant resources. We see this as a tremendous opportunity to drive growth for Fifth Third across the organization out of the Southwest Florida region.”
Three more branch locations will be coming online before the end of the year in Naples-Fort Myers market. “We’ve got one at Corkscrew right there at Miromar (Outlets) just in the shadows of the Hertz Arena in a partnership that we have over there with the Everblades. We have the one in North Naples on Immokalee. The third location we have coming on board is the Fifth Avenue office,” Weiss said. “And, then, we have an additional probably seven or eight branches we will be bringing online in South Florida next year with several of those here in the market.”
Instead of razing a former retail strip at Ninth Street and Third Avenue South, as originally planned and reported, Fifth Third will be moving into the former Iberia Bank building that Hoffmann Family of Companies recently acquired on the other side of U.S. 41 in downtown Naples between Fourth Avenue South and Fifth Avenue Parkway. They had difficulty getting a drive-thru approved by the city for the original property.
“It’s critical for us for our customer base to have that drive-thru capability,” Weiss said.
In February, Fifth Third launched a drive-thru branch office at Gulf Gate Plaza on the corner of Bayshore Drive and U.S. 41 East in East Naples and recently started construction on a new North Naples drive-thru branch office on the northwest corner of Immokalee Road and Health Park Boulevard.
“The bank continues to look at the geographic trends and the growth trends in the communities that we serve and make sure we’re putting our financial centers in places where we can support that growth in the community,” Weiss said. “We reevaluate literally about every six months. We get new heat maps showing where that growth is and reevaluate where we want to put future branch locations based upon where that growth’s occurring. If that continues, we want to be a part of that and will be positioning branches appropriately.”
Fifth Third will relocate existing financial centers to better locations if opportunities materialize, CEO Spence said. “You’re going to see us on an ongoing basis prune legacy branches in the Naples market that are less convenient and relocate to another place. It just is, again, making sure we are where people are.”
Fifth Third branches proposed in the area are new, ground-up projects as opposed to conforming to existing spaces. “It goes back to the way the branches are being used today,” Spence said. “Occasionally, we find property that we can refit, but more often than not, if you’re buying a legacy bank branch, you’re buying 4,000 or 5,000 square feet where what we need today is 1,900 to 2,200 square feet. And, the location strategy is different, to be totally honest. I think that we’re able to put branches in locations that are far more visible and easier to access to a broader range of the population using the NextGen format than we were able to do when we were trying to build much larger buildings.”
Between the demographic growth in the market and the robustness of business banking, Spence said Southwest Florida is an excellent place to do business and Fifth Third is thankful to be here. “This is a fabulous market for us. It was the first entrée into the Southeast for Fifth Third. We entered the market in 1991 and celebrated our 30th anniversary a year late last year, thanks to the pandemic. If you look at our major competitors, they’re all national banks in the market so we pride ourselves in some ways of being the bank of Southwest Florida in terms of having more of a local focus.”
