Huntington Bancshares to buy TCF Financial for US$6b

Huntington Bancshares will acquire TCF Financial in an all-stock deal valued at almost US$6 billion, one of the largest regional bank tie-ups this year.

The merger will boost Columbus, Ohio-based Huntington's assets to about US$168 billion, nudging it closer to in-state competitors Fifth Third Bancorp and KeyCorp. The price is about 11 per cent higher than TCF Financial's closing level Friday, according to the company.

Huntington, with a market value of US$13.1 billion and US$120 billion in assets, operates a network with 839 branches across seven Midwest states, the company said in a statement on Sunday. TCF Financial, based in Detroit, was worth US$5.3 billion as of Friday, with US$48 billion in assets. It has a 475-branch network in states including Michigan, Illinois and Minnesota.

"Together we're in a position to do things that neither one of us could independently do," Huntington chief executive officer Steve Steinour said in an interview. "You get scale." Deals among financial-services companies are increasing as US regional lenders bulk up to compete with giants such as JPMorgan and Bank of Americap., which are moving into new states and spending billions annually on digital offerings.

Last month, PNC Financial Services Group agreed to buy Banco Bilbao Vizcaya Argentaria's banking operations in the US for US$11.6 billion, the largest US banking deal this year.

The 2019 combination of BB&T and SunTrust Banks for US$28 billion was seen as the possible start to a new wave of mergers, with the potential to build regional banks into national players. Then the Covid-19 pandemic hit, bringing concerns about a potential surge of loan losses and the prospect of years of prolonged low interest rates weighing on revenue.

Huntington shares trade at 1.2 times book value, compared with 0.96 for TCF Financial. The holding company, along with the consumer bank, will be based in Columbus, while the commercial bank will be headquartered in Detroit. The merger is expected to close in the second quarter, according to the statement.

"Both the groups believe the economy is recovering," Mr Steinour said. "This is an important inflection moment, and that's why now was important." BLOOMBERG