Huntington Bank officials say they will not be laying off branch workers after they merge with Akron-based First Merit. The new company will have nearly $100 billion dollars in assets, and be the largest by market share and deposits inside Ohio. Ideastream’s Mark Urycki reports . . .
Eight months ago Huntington CEO Steve Steinour called FirstMerit CEO Paul Greig and started talking about a merger. They are similar banks in that they tend to loan to individuals and small and medium sized businesses.
Both have branches in Ohio, Michigan, and Pennsylvania. Huntington is also in Indiana, Kentucky, and West Virginia. FirstMerit is in Wisconsin and Illinois. Steinhour finds some benefits in their similar footprint.
“Our branch distribution has much overlap. The capitalized value of the cost savings is approximately $2Billion dollars which is substantial in relation to the size of this transaction.”
In Ohio 39% of Huntington’s branches are within one mile of a FirstMerit branch. Steinour expects they can achieve 40% cost savings by consolidating branches.
“We’ll look at this thoughtfully because sometimes a mile is a different community or a neighborhood of importance.”
Steinour says all FirstMerit branch workers will be offered a job.
“In northern Ohio,” he says, “we’ll have the number one market share in Akron, Canton, Toledo, and Youngstown with number two share in Cleveland. “
While Huntington will remain based in Columbus, Grieg says it will maintain an important position in Akron, where FirstMerit has 1200 employees.
“Steve and I have talked and although he’s not prepared to make any announcements at this time I know he has plans to move a number of business units into Akron and yesterday talked about Akron being the home of one of the major operational centers and call centers for the new combined company.”
Huntington recently updated its core processing capabilities, a benefit, says Steinour, to the FirstMerit branches.
“Both Paul and I recognize that we have to increase investment in both digital and mobile over the next few years as trends – consumer and business trends- use those channels. So this just makes sense in terms of getting to scale for that reason alone.”
When asked about merging with economic clouds on the horizon, Steinour said he sees a disconnect between Wall Street and Main Street. Then he pointed out that FirstMerit not only managed to get through the Great Recession without losing money, it’s posted 67 consecutive quarters showing a profit.