The $22 billion merger between Huntington Bancshares Inc. and Detroit-based TCF Financial Corp. should close within two weeks following regulatory approvals.
The banks announced Tuesday afternoon that the merger received approval from the Federal Reserve Board of Governors and the Office of the Comptroller of the Currency after a review by the U.S. Department of Justice’s Antitrust Division.
TCF Financial also said it intends to sell 14 offices in Michigan to Michigan City, Ind.-based Horizon Bancorp Inc.
The merger should close “on or around” June 9, according to the banks.
TCF’s merger into the Columbus, Ohio-based Huntington will result in the closing of 198 branch offices mostly in Michigan, including all of Huntington’s 97 branches at Meijer Inc. stores. The banks say all offices targeted to close are located near an existing branch.
After the merger closes, Huntington will become the 25th-largest bank in the U.S. with $170.8 billion in assets and deposits of $138.0 billion in total loans, according to the Federal Reserve.
In West Michigan, Huntington will become the second-largest bank in the Grand Rapids-area market with $6.7 billion in deposits and a 20.7 percent market share. Huntington would become the third-largest bank in the Kalamazoo-area market with 12 percent of the deposit market, or $646.0 million, according to the Federal Reserve.
Huntington will lead the Battle Creek area with $396.1 million in deposits, or a 33.2 percent market share.
As part of the regulatory approvals, TCF Financial said it planned to divest 14 branches in Michigan to Horizon Bancorp (Nasdaq: HBNC). The branch offices located in the central Lower Peninsula collectively have $976 million in total deposits and $278 million.
The Justice Department required TCF to sell 13 of the 14 offices because the merger would have resulted in Huntington having a market concentration across an area that includes Alpena, Bay City, Saginaw, Cadillac, Gaylord, Gladwin, Midland, Ludington, Roscommon, and Traverse City that exceeds a 35 percent guideline, according to an order the Federal Reserve issued Tuesday approving the deal. The sale is intended “to mitigate the potentially adverse competitive effects” of the merger in those markets, according to the order.
“Banks are a critical part of the American economy,” Richard Powers, acting assistant attorney general for the Justice Department’s Antitrust Division, said in a news release. “Families and small businesses rely on them to keep their money safe and obtain credit for important life purchases and investments. This settlement protects banking customers by ensuring that they continue to have access to competitively priced banking products and services.”
Acquiring the offices will double Horizon Bank’s presence in Michigan. The bank as of last June had 14 offices with combined deposits of $927.1 million, according to the FDIC’s 2020 Summary of Deposits.
TCF’s sale of the offices will also require regulatory approval and should close by the end of the third quarter.
“This financially and strategically attractive transaction is a logical extension of our efficient retail franchise, which is designed to further enhance our low-cost core deposit and funding capability to support loan growth in a recovering economy,” Horizon Bancorp Chairman and CEO Craig Dwight said in a statement.
Donnelly Penman & Partners served as financial adviser and Warner Norcross + Judd LLP was the legal adviser to Horizon on the branch transaction.