Huntington Bankher Neyres signed a merger deal with TCF Financial

Huntington Bancshares Inc.

HBAN -0.77%

TCF is going to make a deal for a merger with Financial Corp.

TCF -2.50%

In the latest in a recent string of regional-bank tie-ups.

The companies are discussing an all-stock deal that could be announced on Sunday. It would be one of the more recent bank combinations, with Detroit-based TCF valued at about $ 6 billion, or about 11% of its current share price. Columbus, Ohio-based Huntington has a market value of $ 13 billion.

Together, the banks will have assets of approximately $ 170 billion, with a network of branches that stretch from Pennsylvania to Arizona and are particularly concentrated in Midwestern states such as Illinois and Michigan.

“This merger is an ideal opportunity; Huntington CEO Steve Steiner said in an interview, “It affects both of us.” “We would be able to do things together that neither of us could do independently.”

If the deal is completed, Huntington will move closer to its militant state competitors, Fifth Third Bancorp FRSB -1.58%

And key Corp.

The key -1.49%

, With assets of approximately $ 200 billion and $ 170 billion.

TCF’s nine-state network will include about 475 new branches and five states where Huntington lacks physical presence. Huntington has 839 branches spread across seven states.

The combined company will have two headquarters — one for its large commercial segment in Detroit, and one for its consumer business in Columbus, Mr. Steinour said. He will remain CEO while TFC Executive Chairman Gary Torgo will remain Chairman. Talks between the men, who have known each other for decades, began in October and moved forward quickly, Mr. Steinour said.

Huntington has a reputation as a takeover hound. It also established Ohio Bank FirstMerit Corp. in 2016. Was bought into a deal that significantly strengthened its Midwestern presence. TCF is no stranger to making. The merger takes place less than two years after closing on an agreement with Chemical Financial Corp, roughly double its size.

Bank deals have picked up rapidly this year, especially among regional banks seeking scale to better compete with larger competitors such as JPMorgan Chase & Co. and Bank of America. Corp.

With large budgets to develop attractive apps and support a wide network of branches, large national banks are adding customers and expanding into areas that were once dominated by regional banks. Consolidation allows banks to eliminate overlapping costs for things like regulatory compliance and digital investment that often weigh on earnings.

Lower interest rates are particularly difficult on regional banks, which rely more on lending profits than their larger counterparts. The net interest margin, or the difference between what a bank pays its depositors and earns from borrowing, hit a record low for commercial banks in the third quarter.

First Citizen Bancher Inc.

CIT Group agrees to buy Inc.

A bank will be created in October in a deal with assets of about $ 100 billion. In November, PNC Financial Services Group Inc.

The US agreed to buy Spain’s BBVA for $ 11.6 billion, a combination that would create the fifth-largest US retail bank with assets of more than $ 550 billion.

Two big regional banks, BB&T and Suntrust, merged last year to become Trist Financial Corp, the largest bank deal since the financial crisis to begin under strict regulations.

Write Cara Lombardo at [email protected] and Orla McCaffrey at [email protected]

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