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Huntington Bancshares Incorporated -- Moody's continues the review for upgrade of TCF Financial's ratings (Ba1(hyb) preferred stock) as its merger with Huntington progresses

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Announcement: Moody's continues the review for upgrade of TCF Financial's ratings (Ba1(hyb) preferred stock) as its merger with Huntington progressesGlobal Credit Research - 11 Mar 2021New York, March 11, 2021 -- Moody's Investors Service (Moody's) said today that the review for upgrade of the long-term ratings of TCF Financial Corporation (TCF, noncumulative preferred stock Ba1(hyb)) as well as the long-term ratings and assessments, including the baa1 Baseline Credit Assessment (BCA), and the Prime-2(cr) short-term counterparty risk assessment of its lead bank, TCF National Bank (long-term deposits A2), continues as the company's pending merger with Huntington Bancshares Incorporated (Huntington, long-term senior unsecured Baa1) progresses. The review was initiated on December 14, 2020.A complete list of affected ratings and entities within both banking groups can be found in the December 14, 2020 press release:https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_437595RATINGS RATIONALEThe rating review commenced following the banks' announcement that they will merger in an all-stock transaction which will create a top 10 US regional bank with assets of approximately $168 billion. Moody's placed TCF's BCA and ratings on review for upgrade because it believes that TCF's creditors may benefit from the merger. TCF's BCA reflects the bank's solid balance sheet, supported by its large, low-cost funding base, improved liquidity, stable asset quality and adequate capitalization. The BCA also reflects TCF's healthy core profitability despite recent pressure from low interest rates and expenses related to the merger of equals between TCF and Chemical Financial Corporation in August 2019. TCF's above peer-average growth of certain national lending businesses in recent years and its commercial real estate concentration are credit challenges despite generally good asset quality performance.Moody's review is unlikely to conclude until after the deal has received regulatory approvals and the transaction closes. The banks' management team anticipates that this will occur in the second quarter of 2021.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSMoody's review for upgrade will focus on the benefits to TCF's creditors of the proposed combination, specifically the benefits of the increased scale and more diverse franchise. Given the direction of the ratings review, rating downgrades are unlikely over the next 12-18 months.The methodology used in these ratings was Banks Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. Joseph Pucella Senior Vice President Financial Institutions Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 M. Celina Vansetti-Hutchins MD - Banking Financial Institutions Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. 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