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Huntington (HBAN) Closes TCF Financial Merger, Expands Footprint

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Huntington Bancshares Incorporated (HBAN - Free Report) winded up its merger with TCF Financial Corporation to form one of the top 25 U.S. bank holding companies.

The deal received the regulatory nod by the Federal Reserve and the Office of the Comptroller of the Currency, with input from the United States Department of Justice's Antitrust Division on May 25, 2021.

Specifically, each share of TCF common stock was converted into the right to receive 3.0028 Huntington shares of common stock. Also, TCF shareholders will receive cash instead of fractional shares, per the merger agreement. Moreover, customer accounts at TCF will be converted to Huntington's systems in fourth-quarter 2021.

Markedly, the merger facilitated Huntington’s debut in markets of Minnesota and Colorado, and across new businesses, including inventory finance lending. With this, Huntington now operates more than 1,100 total branches, excluding the previously announced sale of 14 Michigan branches and the consolidation of 189 branches in Michigan and Ohio.

This positions Huntington well to capture market opportunities and boost the client base. Moreover, the company’s expanded scale, technological advancement and increased product offerings will help capitalize on its market share. Hence, the merger is a strategic fit.

Stephen D. Steinour, chairman, president and CEO of Huntington, noted "This is a significant step forward for Huntington in our vision to build the leading People-First, Digitally Powered bank in the nation."

Also, the combined company has around $175 billion in assets, $142 billion in deposits, and $116 billion in loans according to balances as of Mar 31, 2021. Accordingly, the combination offers scope for enhanced profitability and scale, top-line growth, and notable cost synergies.

Our Take

Propped by a robust liquidity position, Huntington has been making steady investments on the back of acquisitions to expand its customer base and geographical presence. Such efforts will not only enhance its profitability over the long run but will also come in handy to dodge the heightened costs of regulatory compliance and increased investments in technology prevailing in the banking sector.

So far this year, shares of Huntington have gained 18.6% compared with the industry's growth of 24.8%.


Zacks Investment ResearchImage Source: Zacks Investment Research


Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar to Huntington, several other financial firms have been undertaking efforts to expand operations. United Bankshares, Inc. (UBSI - Free Report) has entered an all-stock merger deal worth $303.3 million with the parent company of Essex Bank, Community Bankers Trust Corporation.

Also, M&T Bank Corporation (MTB - Free Report) and People’s United Financial Inc.  announced a merger deal in early 2021. The all-stock deal worth $7.6 billion is expected to close in the fourth quarter of 2021, subject to regulatory approvals.

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