Huntington Inks Branch Deal

The Bank will grow its deposit-gathering base to nearly 500 branches in Ohio.
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Columbus, Ohio (

TheStreet

) -- Following an announcement of a deal to open "seven-day-a-week, full-service branches in at least 103 Giant Eagle supermarkets,

Huntington Bancshares

(BOH) - Get Report

saw its stock decline 1% to $5.69 in early afternoon trading.

The 15-year agreement begins with 26 branches in Ohio to be constructed through 2011, along with two in West Virginia. Huntington will also replace 75 existing in-store branches as those deals expire, and will build branches in any new Giant Eagle supermarkets.

Huntington said the deal would expand its network in Ohio to "nearly 500 branches," putting it ahead of

PNC Financial Services

(PNC) - Get Report

, which had 372 branches in the state in 2009 according to SNL Financial and

Fifth Third

(FITB) - Get Report

which had 372 Ohio branches and

KeyCorp

(FITB) - Get Report

, with 238 branches.

Sandler O'Neill analyst R. Scott Siefers called the Giant Eagle deal a "low-cost expansion opportunity" for Huntington, while adding that "many other banks have had mixed results with in-store branching."

Huntington has come a long way, with shares increasing 58% year-to-date through Tuesday's close. The company has been profitable for the first half of 2010, but still owes the government $1.4 billion in bailout money received through the Troubled Assets Relief Program, or TARP. In an interview with

TheStreet's

Debra Borchardt, CEO Stephen Steinour said Huntington had no specific timeframe in mind to

repay TARP

and would rather focus on growing market share.

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--

Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.