Copyright reuters
SummaryCompaniesDeal to create bank with $276 billion in assetsBanking M&A in 2025 acceleratesCadence shares up 5%, Huntington falls 2.5%Huntington eyes foothold in high-growth markets Oct 27 (Reuters) - Huntington Bancshares (HBAN.O), opens new tab agreed to buy smaller rival Cadence Bank (CADE.N), opens new tab for $7.4 billion in an all-stock deal on Monday, underscoring a broader push by regional lenders to grow their footprint and compete with larger banks. Dealmaking has gathered pace under the Trump administration, which has pledged to simplify and speed up merger approvals, while analysts say the highly fragmented U.S. banking system leaves ample room for consolidation. Advertisement · Scroll to continue Regional lenders are also pursuing mergers to diversify revenue, strengthen balance sheets and expand in faster-growing markets as they strive to compete with larger rivals. The deal will create a bank with assets of $276 billion, deposits of $220 billion and $184 billion in loans and leases. "The combination with Cadence creates a top-ten regional banking powerhouse that is well-positioned to grow in attractive markets and with a powerful platform for further investment," Huntington CEO Steve Steinour said on a conference call with analysts. Huntington said it will issue 2.475 shares for each outstanding share of Cadence common stock. Advertisement · Scroll to continue Cadence shares rose 5% in morning trading. SPOTLIGHT ON DEALS "We had four months of very detailed planning here," Steinour told analysts, referring to the Cadence deal. "We've made a focus of ensuring we understand their markets, their operating model and their people." Huntington's long-time top boss said both companies share similar cultures and is "highly confident" the bank can retain all key Cadence employees through the integration. The lender's shares were last down 2.5% in early trading, paring some premarket losses. "The tangible book value dilution, pausing the buyback until close, and general deal volatility may pressure (Huntington) shares over the near-term," analysts at brokerage Stephens wrote in a note. In July, Huntington agreed to acquire Texas-based Veritex in a $1.9 billion all-stock deal, which closed last week. Ad Break Coming Up NEXT StayNext OffEnglish 180p288p360p480p540p576p720pHD1080pHDAuto (180p) About ConnatixV2122970584 About ConnatixV2122970584 Continue watchingafter the adVisit Advertiser websiteGO TO PAGE Executives at Huntington said the Cadence deal was complementary and added the integration of Veritex was "going quite well". Rival Fifth Third (FITB.O), opens new tab agreed to buy regional lender Comerica (CMA.N), opens new tab in the year's largest bank deal so far, valued at $10.9 billion. EXPANSION DRIVE The deal will see Huntington expand to 21 states in the U.S. with a foothold in high-growth markets, including Houston, Dallas, Fort Worth and Austin. Steinour said Huntington has targeted growth in Texas. The Lone Star State has emerged as a financial services hub in recent years, with lofty ambitions to rival New York as the country's center of finance. Huntington raised its medium-term performance targets, citing expense synergies and enhanced earnings potential from the deal, and now expects return on tangible common equity (ROTCE) of 18% to 19%, up from its previous target of 16% to 17%. ROTCE is a key measure of how effectively a bank is using its core capital to grow profits for its shareholders. "Huntington has been on the path to expanding in Texas and the Southeast and we believe this acquisition fits nicely into that expansion strategy," analysts at RBC Capital Markets wrote in a note. The Wall Street Journal was the first to report the deal, which is expected to close in the first quarter of 2026. Evercore and BofA Securities served as financial advisors to Huntington, while Keefe, Bruyette & Woods advised Cadence on the deal. Reporting by Manya Saini and Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila and Krishna Chandra Eluri Purchase Licensing Rights Manya SainiThomson ReutersManya reports on prominent publicly listed U.S. financial firms, including Wall Street’s biggest banks, card companies, asset managers, and fintechs. She also covers late-stage venture capital funding, initial public offerings on U.S. exchanges, and regulatory developments in the cryptocurrency industry. Her work appears in the finance, markets, business, and future of money sections of the Reuters website. A passionate reader, she loves books across genres, from classics to contemporary fiction. She holds an undergraduate degree in Political Science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.EmailXLinkedin
