Columbus, OH-based Huntington Bancshares Inc. (HBAN) completed the acquisition of 24 branches of Bank of America Corporation (BAC) in Michigan, which was announced earlier this year. According to the terms, Huntington assumed deposits worth around $750 million. However, the deal does not include loan balances.
The deal enabled Huntington to increase the number of branches in the state and cater to the new markets in Monroe, Saginaw and Flint. Notably, Huntington now will operate through 184 branches in Michigan, including 40 branches in Meijer stores. The completed deal will enable Michigan customers to bank more conveniently and new customers will be able to access innovative Huntington products and services.
The acquisition is a part of Huntington's strategy to boost its footprint in Michigan, which is believed to be a lucrative market for the company. Apart from a series of public-private alliances in Michigan, the company initiated a strategic collaboration in 2012 with Meijer, Inc., a retail chain based in Michigan, in order to establish in-store locations. The company is currently running 40 in-store branches and aims to set up more than 80 branches in Meijer's Michigan stores by 2020.
For a major regional bank like Bank of America, the deal seems to be an effort to shed a number of branches to save costs. Notably in Jan 2014, the company inked a deal to vend around 23 branches located in Arizona and Nevada to Washington Federal Inc. (WAFD).
On Huntington’s part, a strong capital position should help it continue such acquisitions going forward.
Huntington currently carries a Zacks Rank #3 (Hold). MidWest One Financial Group, Inc. (MOFG) is a better-ranked Midwest bank with a Zacks Rank #2 (Buy).
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