Acquisition expands Huntington’s presence in Southeast Michigan
Huntington Bancshares Incorporated (Nasdaq: HBAN) announced today that it has purchased Fidelity Bank from the Federal Deposit Insurance Corporation (FDIC). Fidelity Bank was closed earlier this evening by the Michigan Office of Financial and Insurance Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver.
Subsequently, the FDIC sold the 15-branch bank to Huntington. Effective Saturday, March 31, 2012, all of Fidelity Bank branches will open as Huntington branches. Huntington currently has 50 banking offices in Southeast Michigan, more than 115 in Michigan and more than 600 branches throughout the Midwest. As of Mar. 9, 2012, Fidelity Bank had approximately $0.8 billion in assets and $0.7 billion of deposits.
The acquisition of the banking operations of Fidelity Bank is structured as an assisted whole bank purchase and assumption transaction without a loss share agreement. Huntington has completed due diligence on more than half of the loan portfolio, resulting in an acquisition asset discount of approximately $150 million. In 2012, the transaction is expected to be over 2% accretive to earnings per share, less than 1% accretive to tangible book value, and very modestly dilutive to Huntington’s capital ratios. Due to the fill-in nature of Fidelity Bank’s branch network, the transaction is expected to exceed internal hurdles for financial returns.
“We are pleased to welcome the more than 18,000 customers of Fidelity Bank to Huntington, which has been a leader in investing in Michigan,” said Stephen D. Steinour, chairman, president, and chief executive officer of Huntington. “Our new customers will now have access to a broader range of products and some of the highest rated customer service in the industry.”
Customers will be able to sign up for Asterisk Free CheckingTM - an account that has no minimum balance requirement and comes with 24-Hour Grace® overdraft protection, identity theft protection and platinum debit cards, among other features.
Starting tomorrow, the former Fidelity Bank customers will continue to conduct banking business at their existing banking offices with familiar employees. Then beginning on April 13, 2012, customers will have access to Huntington’s entire 1,300 ATM network throughout the Midwest, with no service charge, including the 52 ATMs in East Michigan. Then in late June, their existing accounts will be converted to Huntington's systems.
“Our new customers can be assured we will communicate details as soon as they are available, and we will work hard to make certain the transition is as smooth and seamless as possible,” added Steinour.
Today’s announcement is a continuation of Huntington’s ongoing investment in Michigan. In June 2011, the bank committed $2 billion in lending to Michigan businesses. More than $1 billion of the money has already been lent. Earlier this month, the bank committed $100 million to affordable housing in Michigan that is aimed at helping families throughout the state.