Huntington Bankshares agrees to merge with TCF Financial

Together, the banks will have assets of about 170 170 billion, a network of branches that stretches from Pennsylvania to Arizona and is particularly concentrated in Midwestern states such as Illinois and Michigan.

If the deal goes through, Huntington will take over the treasury from its state’s rival, Fifth Third Bankorp FITB. -1.58%

And the key Corpo.

Key -1.49%

, With assets of about 200 200 billion and 170 170 billion, respectively.

TCF’s nine-state network will include about 475 new branches and five states where Huntington does not have a physical presence. Huntington’s 839 branches are spread across seven states.

Huntington’s chief executive Steve Steinor said the joint venture would have two headquarters – one for its large commercial area in Detroit and the other for its customer business in Columbus. He will be the CEO while Gary Torgo will be the executive chairman of TFC. Talks between men who have known each other for decades began in October-October and progressed rapidly, Mr Steinor said.

Huntington has a reputation as an acquisition hound. It bought partner Ohio Bank FirstMarit Corp. in 2016 which significantly strengthened its Midwestern presence. There is no stranger to the transaction of making TCF either.

The merger comes less than two years after closing a deal with Chemical Financial Corp, which has nearly doubled in size.

Bank deals have gained momentum this year, especially among regional banks JPMorgan Chase & Co. And the scale has been sought for better competition with big competitors like Bank of America. Corpo.

With large budgets to develop flashy applications and support a wide network of branches, large national banks are adding customers and expanding into regions dominated by regional banks at one time. Consolidation allows banks to eliminate overlapping costs for things like regulatory compliance and digital investing that often weighs earnings.

Low interest rates are particularly tough on regional banks, which rely more on lending profits than their larger counterparts. Net interest margin, or the difference between what a bank pays its depositors and receives credit, comes in at record lows for commercial banks in the third quarter.

First Citizens Bankshares Inc.

CIT Group agreed to buy Inc.

October There is a deal in October that will create a bank with a net worth of about 100 100 billion. In November, P.N.C. Financial Services Group Inc.

Spain agreed to buy the US arm of BBVA.6 for 11 11.6 billion, a combination that would make it the fifth largest U.S. retail bank with assets of more than fifth 550 billion.

The two largest regional banks, BB&T and Sun Trust, merged last year to become Trieste Financial Corp. Became, the largest bank deal since the beginning of strict rules in the wake of the financial crisis.

“This merger is an ideal opportunity; It encourages us both, “said Mr. Steinor in an interview. “Together we can do things that neither of us can do independently.”

Goldman Sachs Group Inc.

Huntington and Wechtel were financial advisers to Lipton, Rosen and Katz. Cafe, Bruit and Woods were TCF’s financial advisors while Simpson Thatcher and Bartlett LLP were legal advisers.

Write to Cara Lombardo at [email protected] and Orla M Cafery at [email protected]