Huntington Bancshares Inc. and FirstMerit Corp. have signed a merger agreement, under which Ohio-based FirstMerit will merge with Huntington in a $3.4 billion transaction, the banks announced this morning.
Huntington Chief Executive Steve Steinour said the two banks’ loan and deposit products compliment each other. “We share core interest in consumer products … and indirect auto loan space, and we will continue to operate in those areas,” he said during a conference call this morning.
Besides operating in the indirect auto loan space, First Merit has presence in “niche” markets, such as RV and marine, which is an “interesting entry” for Huntington, Steinour said during the call.
Auto loans comprised 19% (about $9.6 billion) of Huntington’s portfolio, and 10% (about $1.6 billion) of FirstMerit’s, respectively. Post-merger, the overall share of auto loans stands at 17% — $11.3 billion — of the $66.4 billion merged portfolio.
The transaction is expected to close in the third quarter of 2016, following a five-stage integration process. Integration of auto finance business is marked as the second stage, and is expected to be completed in the first 60 days post-merger, according to Huntington’s statement. FirstMerit will operate under the same brand and management, with four directors joining Huntington’s board, Steinour said.
Huntington recently announced a 14% year-over-year growth in auto originations in the fourth quarter of 2015.
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