Shares of TCF Financial jumped more than 8% on Monday after Huntington Bancshares (HBAN) - Get Huntington Bancshares Incorporated (HBAN) Report said it agreed to buy the regional bank an all-stock deal valued at almost $6 billion -- one of the biggest regional bank tie-ups this year with a total market value of roughly $22 billion.
Under terms of the agreement, Detroit-based TCF will merge into Columbus, Ohio-based Huntington, with the combined holding company and bank operating under the Huntington name and brand following the closing of the transaction. The combined bank will have dual headquarters in Columbus and Detroit.
The merger will boost assets to about $168 billion, lifting it closer to competitors like Fifth Third Bancorp (FITB) - Get Fifth Third Bancorp Report and KeyCorp (KEY) - Get KeyCorp (KEY) Report. Upon closing, Stephen Steinour will remain chairman, president, and CEO of the holding company and CEO and president of the bank. Gary Torgow will serve as chairman of the bank’s board of directors.
“This merger combines the best of both companies and provides the scale and resources to drive increased long-term shareholder value,” Steinour said in a statement. “Together we will have a stronger company better able to support our customers and drive economic growth in the communities we serve.”
Huntington, with a market value of $13.1 billion and $120 billion in assets, operates a network with 839 branches across seven Midwest states. TCF Financial 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.
Deals among financial services companies are increasing as U.S. regional lenders seek to bulk up to compete with giants such as JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. (JPM) Report and Bank of America (BAC) - Get Bank of America Corp Report, which are moving into new states and spending billions annually on digital offerings.
Last month, PNC Financial Services (PNC) - Get PNC Financial Services Group, Inc. Report 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.
Shares of TCF Financial were up 8.25% at $37.65 in Monday trading, while shares of Huntington were down 1.12% at $12.78. Huntington stock has fallen 14% this year, while TCF had dropped 26% year today through Friday.