Huntington Bancshares Inc. intends to close 198 branch offices — about half of which are based in Meijer Inc. stores in Michigan — after completing the proposed $22 billion acquisition of Detroit-based TCF Financial Corp.
The planned closings include the 97 in-store branches located in Meijer locations that will occur after the deal between the Columbus, Ohio-based Huntington Bancshares (Nasdaq: HBAN) and TCF Financial (Nasdaq: TCF) earns regulatory approval and closes this spring.
“All of these branches have an existing traditional Huntington branch very nearby. Even with these consolidations, the combined branch network will be the largest in Michigan,” a Huntington spokesperson wrote today in an email to MiBiz.
In a Friday conference call with brokerage analysts to discuss fourth quarter results, Huntington Bancorp Chairman, President and CEO Stephen Stenour attributed the planned Meijer in-store closings to “just excess distribution in Michigan as a consequence of the combination” that “will allow us to cycle out of the in-store” branches.
“So, we are adjusting that partnership,” Stenour said. “We’ve been well served by the nature of the economics around the in-store branches, but there is a changing distribution, frankly, a thinning of distribution as we move forward. And as we’ve seen over the past year with the pandemic, more and more home goods (are) delivered, including groceries. And so store traffic, while the volumes are up, the revenues are up, traffic is down and preference for doing banking activities in the in-stores is changing a bit.”
Huntington and the Walker-based supercenter retailer Meijer first signed a deal in 2012 for the bank to open in-store branches in Michigan. Stenour said in Friday’s conference call that Huntington had explained the closings to Meijer.
A February 2020 report by S&P Global Market Intelligence detailed how banks have been backing away from in-store branches for a decade.
In-store bank branches across the U.S. have steadily declined from 5,924 in 2010 to 4,082 locations as of last year, even as deposits increased from $66.9 billion to $84.3 billion.
Huntington and TCF both have a significant market presence in the state and each already ranks among the largest banks in the statewide and West Michigan markets for deposits.
As of June 30, 2020, Huntington had 289 offices in Michigan with $19.6 billion in deposits, which ranked seventh in the FDIC’s annual deposit market share report. Across a seven-state footprint in the Midwest, Huntington has 839 offices.
TCF had 243 offices in Michigan as of midyear 2020 with $20.7 billion in deposits, ranking it the sixth-largest in Michigan, according to the FDIC’s 2020 Summary of Deposits.
In announcing the merger in December, executive said that a combined bank, with TCF merging into Huntington, would have about $168 billion in assets, $117 billion in loans, and $134 billion in deposits with dual headquarters in Detroit and Columbus. Operating under the Huntington name, the bank would become a top 10 regional bank in the U.S.
The deal is targeted to close in the second quarter, pending regulatory and TCF shareholder approvals.