Huntington Bancshares Incorporated HBAN further strengthened its Midwest footprint as it completed the acquisition of Akron, OH-based FirstMerit Corporation.
In its latest release, Huntington noted that the FirstMerit acquisition which enhanced the company’s assets to around $100 billion, has made it “the largest bank in Ohio by deposits”. The acquisition also extended Huntington’s market presence from six Midwestern states to eight states – adding Illinois and Wisconsin – which consequently expanded its network to nearly 1,000 branch locations.
Notably, as of Jun 30, 2016, Huntington had total assets of around $74 billion with about 770 branches.
During the announcement of the $3.4 billion stock and cash transaction in January this year, Huntington noted that, excluding one-time merger-related expenses, the FirstMerit acquisition is likely to be accretive to earnings per share in 2017. Further, upon realization of anticipated merger synergies, the transaction will drive 10% earnings accretion in 2018.
The integration of the FirstMerit and Huntington systems are expected to be completed by first-quarter 2017.
Chairman, president and CEO of Huntington Stephen D. Steinour stated, “Huntington’s acquisition of FirstMerit expands customer convenience, extending our products and services and award-winning customer experience.” He further added, “As we welcome our new customers and colleagues, we look forward to working with them and sharing our brand promise as a bank focused on doing the right thing. We will continue to build on a legacy of strengthening our local communities through commitments extending over more than 150 years.”
Huntington has grown over the years with meaningful mergers and acquisitions. Its strong capital position undoubtedly supports its growth through inorganic routes. Notably last April, the company acquired Australia-based Macquarie Equipment Finance, Inc. The latest acquisition seems to be in line with its expansion strategy. Such moves should help the company gain significant market share and thereby improve its profitability in the long run.
Currently, Huntington carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the finance space include Enterprise Financial Services Corp. EFSC, Credit Acceptance Corp. CACC and Hancock Holding Company HBHC, each sporting a Zacks Rank #1 (Strong Buy).
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