Huntington Bancshares to acquire TCF Financial in $6B deal

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

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

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

Huntington has about 40 branches in the Indianapolis area, about 450 area employees and more than $3.6 billion in local assets.

“Together we’re in a position to do things that neither one of us could independently do,” Huntington chief executive Steve Steinour said in an interview. “You get scale.”

Deals among financial-services companies are increasing as U.S. regional lenders bulk up to compete with giants such as JPMorgan Chase & Co. and Bank of America Corp., which are moving into new states and spending billions annually on digital offerings.

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

The 2019 combination of BB&T Corp. and SunTrust Banks Inc. for $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.

Shares of Huntington dropped 3.9%, to $12.43 each, in morning trading, while TCF Financial shares jumped 5.2%, to $36.59.

“Both the groups believe the economy is recovering,” Steinour said. “This is an important inflection moment, and that’s why now was important.”

Goldman Sachs Group Inc. was the financial adviser for Huntington on the deal, while Stifel Co.’s Keefe, Bruyette & Woods represented TCF Financial.