By Angela Chen
Fifth Third Bancorp named Chief Operating Officer Greg
Carmichael as chief executive effective Nov. 1, succeeding Kevin
Kabat who helped steer the Ohio regional bank through the financial
crisis.
Mr. Kabat, who had served as chief executive since April 2007,
spent 33 years at the company and a predecessor firm. He will
remain executive vice chairman until his retirement next April.
Mr. Carmichael, meanwhile, joined Fifth Third in 2003 in the
information technology division and then became chief operating
officer in 2006. By 2009, his responsibilities expanded to include
leading the retail bank, business banking and all affiliate banks.
He was named president in 2012 and will also join the company's
board.
The Cincinnati-based regional lender had $140 billion in assets
as of March 31 and operated 15 affiliates with 1,303 full-service
banking centers. Like other lenders, Fifth Third has faced pressure
on its mortgage business as prolonged low interest rates have
limited interest income and prompted cost-cutting.
During Mr. Kabat's tenure, Fifth Third's profit increased to
$1.47 billion in 2014 from $1.08 billion in 2007.
Fifth Third, like many other banks, struggled during the
financial crisis, hammered by credit problems, including bad
real-estate construction loans, and its shares traded under $2 in
early 2009. During the crisis, Mr. Kabat sold loans and increased
reserves for troubled loans, and he simplified the bank's
business.
Fifth Third also took about $3.4 billion from the U.S.
government's bailout plan, the Troubled Asset Relief Program, in
2008. It repaid the funds in 2011.
Also Wednesday, Fifth Third's board approved an increase in Mr.
Carmichael's base salary to $800,000. In addition, it increased his
annual incentive award to $1.2 million and his target long-term
equity incentive award for 2015 to $3.5 million.
Mr. Carmichael's salary in 2014 was $709,203, according to a
regulatory filing, while Mr. Kabat's salary was about $1
million.
Mr. Carmichael previously served as chief information officer at
Emerson Electric Co. and in leadership roles in information
technology at General Electric Co. for more than a decade.
In June, Fifth Third said it plans to consolidate or sell about
100 of its branches and about 30 other properties, a move that
comes as mobile and electronic banking grow in popularity.
Since the financial crisis, U.S. banks have been ramping up
mobile and online services and moving away from physical locations
to avoid overlap, and branch numbers have been on a steady decline
as a result.
Shares declined 1.1% in early trading, cutting their
year-to-date gain to 0.6%.
Write to Angela Chen at angela.chen@dowjones.com
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