Huntington unlikely to pursue merger or online-only bank, top executive says

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Huntington Bancshares’ chief financial officer laid out a few growth strategies the Columbus, Ohio, bank would pursue — as well as a couple that it wouldn’t.

The $108 billion-asset bank expects organic loan growth and fee revenue to boost earnings in 2019, CFO Howell McCullough said at the Deutsche Bank Global Financial Services Conference on Wednesday. But though the board will evaluate any strategy it needs to, McCullough also threw cold water on the idea that Huntington would pursue a merger of equals.

“Mergers of equals are different animals. You need to get the culture of the organization right, you need to declare what the culture is going to be and drive that from day one. … You need to always keep in mind the end state of the two companies and how quickly you can get there,” he said. “If you take a look through time, MOEs haven’t been overly successful in our industry. That’s not to say that they can’t be, I just think you have to focus on the right things to make them work.”

There were two major mergers of equals announced at the start of 2019, between Chemical Financial in Detroit and TCF Financial in Wayzata, Minn., and between BB&T in Winston-Salem, N.C., and SunTrust Banks in Atlanta. The pending merger between BB&T and SunTrust, the biggest bank deal in 15 years, has set off speculation about whether other large regional banks will pursue similar mergers to keep up.

Huntington is viewed by some as a potential merger partner, but executives have downplayed merger speculation when asked about it by analysts.

McCullough also said Wednesday that Huntington will likely not pursue an online-only bank to generate either loans or deposits outside of its current footprint, like some of its peers have. The $161 billion-asset Citizens Financial Group in Providence, R.I., for example, has raised $5 billion in deposits through its online bank, Citizens Access, since launching it less than a year ago.

McCullough said Huntington is cautious about going outside of its footprints for new consumer loans, and he highlighted deposit-gathering strategies that have already worked for the bank.

“It seems like it’s a little late in the cycle to invest in a direct bank for deposit gathering,” he said. “We were very successful at this time last year raising CDs through the branch network at a good rate and term, given the environment.”

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