Pole vault

14 December 2020 By John Foley Follow @johnsfoley

Huntington’s $6 bln purchase of TCF, a fellow mid-sized lender, promises sizable cost cuts, but investors thumbed their noses. The absence of market enthusiasm is becoming common in bank M&A. It’s unfortunate, because consolidation makes sense for almost everyone involved.

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Mid-sized U.S. banks Huntington Bancshares and TCF Financial said on Dec. 13 that they plan to merge, creating a bank with $117 billion of combined loans and $134 billion of deposits.

Huntington shareholders would own 69% of the new company, which would have dual headquarters in Columbus, Ohio and Detroit, Michigan. They had a combined market capitalization of nearly $18.5 billion at the market’s close on Dec. 12.

The companies said they expect $490 million of annual savings from the merger, equivalent to 37% of TCF’s expenses, excluding interest costs.

Stephen Steinour, chief executive of Huntington, would take the CEO role at the merged bank, while his counterpart Gary Torgow would chair the enlarged lender.

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