Huntington Bank is proposing to sell off some of FirstMerit’s Canton-area branches to meet regulatory approval of its proposed acquisition of FirstMerit Bank.
Huntington says it would need to sell FirstMerit branches worth $600 million in deposits in its Canton market and branches worth $50 million in its Ashtabula market, according to its recent federal merger application to the Office of the Comptroller of the Currency. The exact branches have not been selected and would be up to regulators, in conjunction with bank officials, said Huntington spokesman Brent Wilder. Employees of the branches that are sold would become employees of the new bank, Wilder said.
The sale of branches is in addition to the 107 Huntington and FirstMerit branches in five states — 20 in the Akron area alone — that the bank said last week in a filing that it is proposing to close or consolidate as part of its proposed merger. Columbus-based Huntington is acquiring Akron-based FirstMerit in a deal worth $3.4 billion in stock and cash. The bank hopes the deal will close by the third quarter of this year.
Even with the sale of $600 million in deposits in the Canton market, according to market share data from the Federal Deposit Insurance Corp., Huntington would still have Canton’s largest market share. Currently, Huntington is No. 1 with $1.7 billion in deposits in the Canton market and FirstMerit is No. 2 with $1.6 billion.
In its filing, Huntington said its Canton market share is so large because of one large branch at 220 Market Ave. S. That branch had $792 million in deposits alone as of June 30, and is about one half of the bank’s deposits in the entire Canton market. That branch is also more than eight times larger than Huntington’s next largest branch in the Canton area and has grown by 51 percent in the last five years — 14 percent last year alone. It is also three times larger than the second-largest competitor branch in the market, the bank said. The Canton Metropolitan Statistical Area includes Stark and Carroll counties.
Regional headquarters
Wilder said Canton will still serve as a regional headquarters.
“We’ve made clear what our proposed network is going to look like, but we have had to acknowledge all along that we have to look at the potential for divestiture. Unfortunately, because there is so much overlap in Canton, the likelihood some need to be divested is fairly high. However, even though no decisions are final, a divestiture provides an opportunity for branches to continue to be operated in a community even through they are operated by another institution,” he said.
As part of the proposed branch closures announced last week, one FirstMerit branch in Stark County, at 832 W. Maple St. in Hartville, and four Huntington branches — two in North Canton, one in Canton and one in Canal Fulton, were included.
When asked why a FirstMerit branch was included in the proposed closures if Huntington would also be selling off some FirstMerit branches, Wilder said the closures and consolidations identified were “completely separate from any divestiture activity.” He reiterated that “any divestiture would not result in a closing. It would result in that branch being held by another institution.”
When asked whether any discussions are ongoing with any potential bank suitors for the branches, Wilder said “those discussions would have to be in conjunction with regulatory guidance.” The time frame has not been set for when the sale of the branches would take place, but Wilder said it would likely coincide with merger activities. Similarly, the bank has said the closures of branches would not happen until the new year.
The Canton and Ashtabula markets are the only ones that need divestiture for regulatory approval to meet guidelines of the new proposed bank’s size, according to the 645-page document filed last week. The document was just made available to the public in recent days. A separate filing with the Federal Reserve Bank was also filed last week, but it has not yet been released to the public.
Also in the filing, the bank says that the Akron market is safe and not in need of any sale of branches. “The combined bank would continue to face competition from numerous national, super-regional and regional banks and local community banks and thrifts,” the filing said.
Huntington has said it will keep a regional headquarters in Akron and create a call center or operations center, but there will be layoffs at the downtown headquarters — though no details have been provided. The company has pledged that it will again employ 1,200 — FirstMerit’s current Summit County employment — within three years, and hopes to grow. The bank has also said that no workers will lose their jobs as a result of the announced branch closures.
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty.