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Published in Economic Development

M&A Awards: Huntington-TCF merger creates second-largest banking operation in Michigan

BY Sunday, February 27, 2022 06:56pm

The 2021 merger of Detroit-based TCF Financial Inc. into Columbus, Ohio-based Huntington Bancshares Inc. created the second-largest bank operating in Michigan.

TCF Bank and Huntington Bank were already among the market leaders in Michigan, ranking sixth and seventh, respectively, in deposit market share as of 2020.

Krista Flynn, Huntington Bank’s regional president for the West Michigan market. COURTESY PHOTO

Combining the two banks in a $22 billion deal that closed June 9, 2021, elevated Huntington Bank to second statewide in the Federal Deposit Insurance Corp.’s 2021 Summary of Deposits, with $40.81 billion in Michigan deposits as of midyear for a nearly 13.1-percent market share.

The TCF-Huntington merger was named the winner in MiBiz’s 2022 M&A Deals and Dealmakers of the Year Awards in the Finance/Banking category.

In an October conference call with analysts to discuss quarterly results, Huntington Bancshares Chairman, President and CEO Steve Steinour said the bank had “density in Michigan that’s significant to us,” although the merger did lead to the closing or consolidation of numerous redundant branches.

Even with the office consolidations, plus the sale of 14 branches that federal regulators required as a condition for approving the deal, Huntington still has the largest branch network in Michigan with more than 300 offices.

finance/banking

HUNTINGTON BANCSHARES INC.

Top executives: Steve Steinour, chairman, president and CEO; Krista Flynn, West Michigan regional president

Annual sales: $1.29 billion in 2021 net income

Total Michigan employees: 1,500

Company description: Regional bank

Advisers on the deal: Goldman Sachs & Co. LLC (financial) and Wachtell, Lipton, Rosen & Katz (legal) to Huntington. Keefe, Bruyette & Woods Inc. (financial) and Simpson, Thacher & Bartlett LLP (legal) to TCF

“From an access standpoint, we are everywhere,” said Krista Flynn, Huntington Bank’s regional president for the West Michigan market. “Now it’s like you can’t really go too many miles without seeing a Huntington branch. Having access for our clients, I do think the coverage map matters.”

Huntington gained stronger positions particularly in rural markets in Michigan where TCF formerly had offices, Flynn said.

In the Grand Rapids area, which is Michigan’s second largest market, Huntington solidified its position as the second-largest bank with $5.88 billion in deposits for a nearly 19.5-percent market share.

The combination with TCF also made Huntington Bancshares (Nasdaq: HBAN) a top-25 bank in the U.S. with $174 billion in assets and $143.2 billion in deposits at the end of 2021. Following the merger, Huntington operates today with dual headquarters, with commercial banking operations based in Detroit and consumer banking headquartered in Columbus.

The merger, which closed six months after it was publicly announced in December 2020, extended Huntington’s footprint further across the Midwest to 12 states and introduced new services — particularly digital banking products — to TCF customers, and small business lending backed by the U.S. Small Business Administration.

“Huntington brings an expanded set of capabilities to these markets and to the TCF customer base, including middle market and corporate banking with specialty verticals, treasury management, capital markets, trust and investment and insurance products in addition to our No. 1-in-the-nation SBA lending program,” Steinour said in a July conference call with analysts.

The merger has been “a great complement and (provided) great additive features to a lot of our clients that are now exposed to an ability to invest more in digital and that sort of thing,” Flynn said.

Through the merger, Huntington can better spread the costs to invest in technology, she said. The deal enabled Huntington to invest an additional $170 million in digital banking technologies and services.

“In the banking industry, there really is something to be said about scale. It just allows us to spread those investments across a much larger client base,” Flynn said. “Bigger for the sake of bigger is not what it’s all about. It’s having the resources to invest and spread those investment costs out.”

A week after the merger closed, Huntington announced a five-year, $40 billion Community Plan to address social, racial, environmental and economic inequities in the markets it serves.

Given Huntington’s new market size in the state, and after an integration period to bring TCF into Huntington, Flynn doesn’t see another merger coming that will affect the bank’s Michigan market. The merger into Huntington came together less than 18 months after TCF, formerly based in Minneapolis, merged with the former Chemical Financial Corp., which had gone through a series of mergers and acquisitions over the years.

“Overall, it’s a big change for clients that have been through a number of mergers, and we think from an overlap standpoint and in the Michigan market, this should be our last one,” Flynn said. “There is some stability that they won’t have to go through another systems change, for example. I think it’s comforting to our clients that now they’re in a bank of size, they won’t have to worry about what’s next.” 

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