After Aug. 13, the buck stops here
TRAVERSE CITY – When customers of Old Kent Bank heard it was being bought out by Fifth Third Bank earlier this year, one question was on their minds: What’s up with that name?
There’s a very simple explanation. Fifth Third started out as the Bank of the Ohio Valley in 1858, was bought by Third National Bank in 1871, then merged with Fifth National Bank at the turn of the century. Thus the name, “Fifth Third Bank.”
But here’s an extra tidbit: Bank managers at the time mulled over the idea of calling it Three Fifths Bank, “but this was right around the time of prohibition, so they decided to call it Fifth Third,” noted Tracey Towner, vice-president of marketing of Fifth Third’s northern Michigan affiliate.
Name games aside, Towner said there are plenty of reasons why the conversion to Fifth Third on Aug. 13 will be good for the community. One of the biggest is that the bank will now be in local hands. Customers of Old Kent who grew tired of getting a person–or more likely a voice mail–in Grand Rapids will now be connected with a local person.
“The buck really stops here with the people at the local Fifth Third banks,” said John Pelizzari, president of the northern Michigan affiliate.
Decisions about marketing, lending, investing, philanthropy, and new branch locations will be made locally, not at the corporate level.
Likewise, a local board of directors, made up of seven business leaders from the Traverse City and surrounding areas, will be making decisions and offering a community perspective.
Pelizzari, a local boy who grew up on a cherry farm on the Old Mission Peninsula, joked that there’s one big reason why everything has to run smoothly.
“I’ve got to make it work, because people know me around here,” he laughed. “My mom’s here, and I don’t have any place to run!”
On a more serious note, he added that the conversion from Old Kent to Fifth Third on August 13 is being handled very carefully by everyone involved.
“Our customers will see as little change in terms of how they operate with the bank as possible. And they’re going to see improved services and additional products and services.”
That’s because Fifth Third offers the power of a bank that’s been named number one by Salomon Smith Barney for the ninth year in a row.
With post-merger assets totaling $68 billion ($1.3 billion in northern Michigan alone), the bank is among the top 25 largest bank holding companies in the country.
Based in Cincinnati, Fifth Third Bancorp includes 17 affiliate banks and business subsidiaries in Ohio, Kentucky, Indiana, Michigan, Illinois, and Florida.
They’ve posted positive earnings for 27 years in a row, and operating earnings for the second quarter of 2001 were $338,233,000, up 14 percent for the same period in 2000.
In a press released dated July 16, George Schaefer, Jr., President and CEO, stated, “We are very pleased and encouraged by our financial performance in the initial quarter of our combination with Old Kent Financial Corporation. We promised our shareholders that we would carefully integrate Old Kent to achieve the financial objectives of the acquisition while preserving and accelerating revenue growth. This quarter we took a significant initial step in fulfilling that promise.”
He added, “Progress on Old Kent is ahead of our expectations. These early successes certainly make us optimistic about the second half of the year.”
Philanthropy is a big part of Fifth Third’s mission. Recently named one of the “100 Best Corporate Citizens” by “Business Ethics Magazine,” the bank has managed private trusts and foundation for over 100 years, and was one of the first financial institutions in the country to establish its own foundation.
Towner said each affiliate bank will receive a percentage of charitable funds, based on population, to disperse within their own community. Last year, $17 million was dispersed among all the affiliates.
She added that the northern Michigan affiliate plans to give equally (based on population) among the local banks, including Traverse City, Petoskey, Gaylord, Ludington, Big Rapids and Cadillac.
The foundation is not geared to any specific issue, and any application will be considered. Again, the decisions will be made at the local level, and about 30 groups have already approached the bank for charitable gifts.
The board of directors for the local Fifth Third affiliate includes Robert Goff, president of Village Press, Inc. in Traverse City; Paul Schmuckal, president of Schmuckal Oil Company in Traverse City; Joan Boyd, secretary/treasurer of Ace Hardware Company in Traverse City; James MacInnes, president of Crystal Enterprises, Inc. in Thompsonville; Ronald Dauwe, retired executive of Fifth Third Bank in Harbor Springs and Brookville, Indiana; Timothy Coscarelly, CEO of LaBelle Management in Mt. Pleasant; and Thomas Paine, president of Metalworks Inc. in Ludington.
For more information, visit their Web site at www.53.com. BN