TCF to merge into Huntington in $22B deal; dual headquarters planned
Detroit-based TCF Financial Corp. will merge into Huntington Bancshares Inc. in a $22 billion all-stock merger that creates one of the largest regional banks in the U.S. with dual headquarters in Detroit and Columbus, Ohio, the companies announced Sunday.
With Huntington, a major player in the industrial Midwest, the acquisition will create one of the top 10 largest regional banks in the country. Once it is complete, the TCF will name disappear, replaced with the Huntington name on its banking centers and ATMs.
The deal is expected to close in the second quarter of 2021 and is subject to regulatory and shareholder approval.
The headquarters for the commercial bank will be in TCF's new 20-story building under construction in Detroit on Woodward Avenue and Elizabeth Street, which will be dubbed the Huntington Tower. Columbus will remain the headquarters for the holding company and the consumer bank, which will represent about 40% of the combined company's business.
Detroit will house the other 60% of the $117 billion in the merger's total loans. It will host every other board of directors meeting. Instead of leasing space in the Detroit tower, Huntington will take over all floors with 800 employees, a workforce that potentially could grow to 1,100. The building is expected to open in the mid-2022.
Huntington CEO Stephen Steinour will remain chairman, president and CEO of the holding company as well as CEO and president of the bank. He will have an office in Detroit as well as in Ohio. TCF executive chairman Gary Torgow will be chairman of the bank's board of directors.
“We started this with a view that this had to be a win-win, or it wasn’t worth doing,” Steinour said on a conference call Sunday night. “This is not a wink and a nod. This is a significant commitment to Detroit and to Michigan.”
The combined entity will have about $134 billion in deposits and $168 billion in assets, placing it among the 20 largest banks in the country, according to a recent list by the U.S. Federal Reserve Bank.
Huntington has $120 billion of assets and a network of full-service branches, including 11 private client group offices, and 1,330 ATMs across Ohio, Illinois, Indiana, Kentucky, Michigan, Pennsylvania and West Virginia.
TCF has $48 billion in assets with 475 branches in Michigan, Illinois, Minnesota, Colorado, Ohio, South Dakota and Wisconsin.
"When Steve and I started to talk, we knew the only way was to have a dual headquarters," Torgow said on the conference call. "We've invested so much in Detroit, Michigan, and Columbus, Ohio. This was an opportunity to highlight two centers of community."
Some branches are expected to close, Steinour said, though the number is not yet clear. The combined company will have more than 20,000 employees.
This is the second tie-up for TCF in as many years after merging with Chemical Financial Corp. in August of last year. That deal created one of the 50 largest regional banks in the United States and a major resident in the city of Detroit. The integration of the bank's services was completed just four months ago.
In late October, TCF CEO Craig Dahl retired. His duties were split between Tom Shafer, TCF Bank chief operating officer and president, and vice chairman David Provost. Steinour said he hopes much of the TCF team will continue at Huntington, though those decisions have not been finalized.
The new Huntington will continue to grow its presence in Detroit and Midland, Torgow said, as well as in Minneapolis. That includes TCF's commitment to add neighborhood branch locations in Detroit.
Huntington expects the transaction to be 18% accretive to earnings per share in 2022. Estimated cost savings of the combined company are approximately $490 million.
The merger also means the TCF Center in downtown Detroit will be renamed the Huntington Center, Torgow said, under a $33 million, 22-year naming rights deal made last year to remove the Cobo name from the conference center.
Both banks have a history of investment in the city, which they promised to expand. On "day one," Huntington will invest $50 million into a fund at the Community Foundation for Southeast Michigan to serve Metro Detroit communities, Steinour said.
One Detroit leader took note Sunday night.
“TCF’s merger with Huntington Bancshares positions Detroit and Wayne County to be a national financial hub that will continue to drive our regions’ recovery," Wayne County Executive Warren Evans said in a statement.
"TCF and Huntington are longstanding corporate citizens in our community and I am happy to see this merger will only strengthen the merged companies’ commitment to the region as we begin the important work of restarting our economy in the wake of the COVID-19 pandemic.”
Both banks already have "adopted" two neighborhoods in the city with $5 million commitments each for Detroit's Strategic Neighborhood Fund. The funds support initiatives in the Grandmont-Rosedale and Warrendale-Cody Rouge communities.
TCF also recently announced a $1 billion commitment over five years to loan to minority- and female-owned small businesses. Huntington brings its own $20 billion commitment for economic inclusion, from access to capital to homeownership. Of that, $5 billion has been dedicated to Michigan. It was $4 billion more than its previous community plan, a commitment lauded by local and state officials.
"What the global health pandemic has taught us is that we need to do more," Sandra Pierce, senior executive vice president and chair of Michigan for Huntington Bancshares, recently told The Detroit News. "Between COVID-19, and the economic fallout because of it, and the social unrest, and the political divisiveness all coming together around the same timeframe, we just knew that we needed to live our purpose more than ever, which is looking out for people. We have to do more, and now is the time."
The deal with Huntington is the third merger of TCF's Torgow's career in the financial sector. He founded Troy-based Talmer Bancorp. and facilitated its merger with Midland's Chemical Financial Corp. in a transaction valued at $1.7 billion in 2016, creating the largest bank headquartered and operating branch offices in Michigan. Chemical moved its headquarters to Detroit in 2018.
Staff Writer Sarah Rahal contributed.