Detroit-based TCF Financial Corp., parent company of TCF National Bank, Sunday announced it has signed a definitive agreement under which it will combine in an all-stock merger with a total market value of about $22 billion with Columbus, Ohio’s Huntington Bancshares Inc., the parent company of The Huntington National Bank. Terms of the deal were not disclosed.
The merger, which is expected to close in the second quarter of 2021, will create a top 10 U.S. regional bank with dual headquarters in Detroit and Columbus. It was unanimously approved by the boards of both companies. TCF will merge into Huntington, and the combined holding company and bank will operate under the Huntington name and brand following the closing of the transaction.
Upon closing, Stephen D. Steinour of Huntington will remain the chairman, president, and CEO of the holding company as well as CEO and president of the bank. Gary Torgow, executive chairman of TCF, will serve as chairman of the combined bank’s board of directors.
“This merger combines the best of both companies and provides the scale and resources to drive increased long-term shareholder value,” Steinour says. “Huntington is focused on accelerating digital investments to further enhance our award-winning people-first, digitally powered customer experience. We look forward to welcoming the TCF team members. Together, we will have a stronger company better able to support our customers and drive economic growth in the communities we serve.”
The commercial bank headquarters will be in downtown Detroit, where TCF has been building a new headquarters. At least 800 employees of the combined company, nearly three times the number TCF had planned, will be housed at the new location. Columbus will remain the headquarters for the holding company and the consumer bank.
“This partnership will provide us the opportunity for deeper investments in our communities, more jobs in Detroit, an increased commitment in Minneapolis, and a better experience for our customers,” Torgow says. “We will be a top regional bank, with the scale to compete and the passion to serve.”
The pro forma combined company will have about $168 billion in assets, $117 billion in loans, and $134 billion in deposits. Huntington expects the transaction to be 18 percent accretive to earnings per share in 2022. Estimated cost savings of the combined company are about $490 million, or 37 percent of TCF’s noninterest expense.
Through the combination, Huntington will expand its footprint to include Minnesota, Colorado, Wisconsin, and South Dakota. The deal also deepens the organization’s presence in Chicago.
At closing, five current TCF directors will be added to the board of the holding company. David L. Porteous will serve as lead director of the holding company’s board of directors and the bank’s board of directors.
In August, TCF completed an integration with Chemical Bank after announcing the merger in January 2019. In July 2018, Chemical Bank moved its headquarters to downtown Detroit and announced plans to build a 20-story office building in downtown Detroit. TCF is continuing the project.