Huntington Bancshares To Buy Cadence Bank In $7.4 Billion All-Stock Deal: Report

• Huntington CEO Steve Steinour told The Wall Street Journal that the acquisition represents an “important next stage” for the bank. 
• He added that the regulatory environment is “constructive” and there may be more deals in the future.
• The combined company will have approximately $276 billion in assets, according to the report.

Huntington Bancshares (HBAN) has reportedly reached an all-stock deal to acquire Cadence Bank (CADE) for $7.4 billion.

Huntington CEO Steve Steinour told The Wall Street Journal that the acquisition represents an “important next stage” for the bank as it expands its footprint in the South. HBAN’s stock dipped as much as 3.3% in pre-market trade on Monday, with retail sentiment on Stocktwits trending in ‘neutral’ territory over the past day. Meanwhile, CADE’s stock climbed nearly 3% but retail sentiment remained in the ‘bearish’ zone.

Expanding Huntington’s Footprint in The South

According to the report, the combined company will have approximately $276 billion in assets. The acquisition will strengthen Huntington’s reach in high-growth markets such as Texas, where it recently completed a separate acquisition of Dallas-based Veritex Holdings, the report added.

Cadence has approximately 400 locations across the Southern states, the report stated. The addition of this to Huntington’s portfolio would give the bank a top-five deposit market share in Dallas and Houston, it said.

More Deals On The Horizon

Steinour noted that the two banks had been in conversation for nearly four months before the deal was finalized. “I do think there will be more [deals],” said Steinour, adding that the regulatory environment is “constructive”.

According to Jefferies analyst David Chiaverini, who flagged the acquisition of Comerican by Fifth Third Bancorp announced earlier this month, anticipates more mergers in the banking sector. “Sub-scale banks are under pressure from rising tech and branch costs, and M&A offers a path to increased scale and efficiency,” he wrote in a note to clients, cited by Morning Star. 

The Financial Select Sector SPDR Fund (XLF) edged 0.5% higher in pre-market trade. Retail sentiment around the ETF improved to ‘bullish’ from ‘neutral’ over the past day as chatter rose to ‘high’ from ‘normal’ levels.

Read also: Ethereum Outperforms Bitcoin As Retail Sentiment Improves Ahead Of Fed Rate Decision, Trump-Xi Meeting This Week

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