Fifth Third Bancorp in Cincinnati buys Provide, a fintech that lends to healthcare professionals and in which the bank is already an investor.
Fifth Third’s $ 207 billion asset first invested in Provide in 2018 and began funding loans through its platform last year, he said in a press release announcing the ‘deal Tuesday night. Fifth Third did not disclose the financial terms of the acquisition.
Healthcare has been a hot niche for the banking industry. KeyCorp in Cleveland, for example, recently launched a national online bank for healthcare professionals. Synchrony Financial in Stamford, Connecticut recently bought a healthcare-focused consumer lender and also created a new health and wellness division as part of a larger reorganization. Bank of America recently made technology investments in payment processing services for healthcare providers, and Zions Bancorp in Salt Lake City also recently announced that it will be expanding its own lending business nationwide.
“The healthcare industry is one of the largest and fastest growing segments of the US economy. Over the past decade, the Fifth Third healthcare team has expanded its presence and expertise to become one of the leading healthcare banking platforms for mid-market and corporate clients, ”said Greg Carmichael, President and CEO of Fifth Third, in a press release.
Fournir specializes in practice lending to healthcare professionals looking to develop or establish their own practice. Its clients include dentists, veterinarians, optometrists or other small or solo providers. These borrowers tend to be early in their careers and also often have hundreds of thousands of dollars in student debt.
Key to the deal will be the ability for Fifth Third to offer banking services to Provide borrowers, Fifth Third said in a regulatory filing. Provide will retain its name and continue to operate nationwide. Fifth Third currently holds around $ 400 million in loans from Provide and will retain all of its new origins. The fintech has made around $ 1 billion in commercial loans since 2016.
The deal is expected to add around $ 6 million in revenue and $ 14 million in expenses in 2021, Fifth Third said on a public record.