Huntington Bancshares' acquisition of TCF Financial is already paying off.© Brooke LaValley/Dispatch Huntington Bancshares reported stronger third-quarter profit, helped by its acquisition of Detroit-based TCF Financial that it closed on earlier this year.
The bank on Thursday reported profit of $377 million for the three months that ended Sept. 30, an increase of $74 million from the same period in 2020, driven by the acquisition of the Detroit-based bank that was completed in June.
The $6 billion, all-stock deal that extends Huntington's Midwest footprint to new markets in Minnesota and Colorado.
Revenue increased 36% from the year-ago quarter to $1.7 billion.
The bank reported profit of 22 cents per share for the quarter, down 5 cents from the 2020 period. Earnings per share fell because the bank issued more shares to finance the TCF deal.
The profit for the quarter would have been bigger, but the bank recorded expenses of $234 million tied to the deal. Without those expenses, Huntington would have earned 35 cents per share, in line with Wall Street estimates.
"It's nice to have them for the full quarter,’’ Steve Steinour, the bank's chairman, president and CEO, said of the TCF staff.
He said the consolidation of TCF operations with Huntington have gone quicker than the bank's last big acquisition, Akron-based First Merit in 2016.
"The enthusiasm of the teams in the branches is off the chart,’’ Steinour said.
Huntington picked up 1.5 million customers in the deal along with new markets such as Minneapolis and Denver.
"It's not just size. We have to get better," he said.
The bank needs to able to offer more information and faster to customers at a time of rapid change in the financial industry driven by new competitors.
"It is period of very significant change in the industry," he said. "It is also one of the reasons why this combination makes so much sense."
Huntington shares were about flat in trading Thursday.
Beyond the completion of the acquisition, the bank said it benefited in the quarter from positive trends in fee income, particularly wealth management, capital markets and card and payment processing.
Huntington received forgiveness payments from the Small Business Administration for about $1.7 billion of Paycheck Protection Program loans during the quarter compared with $3.1 billion during the spring quarter. The PPP loans were one of the programs created by Congress to help businesses through the pandemic.
The bank did eliminate 188 branches during the quarter, mostly in Michigan where TCF and Huntington have a significant overlap.
Huntington had to sell 14 offices to comply with a federal review of the deal. It also closed its branches in Meijer stores in Michigan.
The bank has stepped up efforts to help workers affected by the TCF transaction, either guaranteeing jobs for workers in branches that closed or helping others apply for openings within the bank.
The bank has nearly 21,000 employees and more than 1,200 branch offices.
Steinour said the economy in the region is doing well, but would be better if labor and supply chain issues could be resolved.
Shipping delays, the cost of shipping, labor and inflation are hurting businesses and slowing the recovery from the pandemic, he said.
"The labor shortage is significant," he said. "It is virtually everywhere. It is restraining growth.’’
This article originally appeared on The Columbus Dispatch: Huntington benefiting already from TCF Financial acquisition
Source : https://www.msn.com/en-us/finance/smallbusiness/huntington-benefiting-already-from-tcf-financial-acquisition/ar-AAQ3TT3854