Huntington Bancshares in Columbus, Ohio, is already back in the M&A game, agreeing to buy Cadence Bank in Tupelo, Miss.
The $210 billion-asset Huntington, which just closed its purchase of Veritex Holdings in Dallas, said in a press release that it will pay $7.4 billion in stock for the $53 billion-asset Cadence. The deal, which is expected to close in the first quarter, priced Cadence at 170% of its tangible book value.
“This is an important next phase of growth for Huntington,” Steve Steinour, Huntington’s chairman, president and CEO, said in the release. “This partnership will extend the reach of our full franchise to 21 states—stretching from the Midwest to the South to Texas — and into new, high-growth markets for which we have a powerful playbook. Today’s announcement represents a significant step on our journey to be the leading people-first, customer-centered bank in the country.”
Dan Rollins, Cadence’s chairman and CEO, will join Huntington as vice chairman. Two other Cadence directors will join Huntington’s board.
The transaction is expected to be 10% accretive to Huntington’s 2027 earnings per share. It should take three years for Huntington to earn back an estimated 7% dilution to its tangible book value.
Huntington plans to cut about 30% of Cadence’s annual noninterest expense, or roughly $365 million. Huntington expects to incur $555 million of merger-related expenses.
Evercore, BofA Securities and Wachtell, Lipton, Rosen & Katz advised Huntington. Keefe, Bruyette & Woods and Sullivan & Cromwell advised Cadence.