HUNTINGTON BANCSHARES INC /MD/

HUNTINGTON BANCSHARES INC /MD/ Material Event - What Happened

This summary breaks down a significant development for Huntington Bancshares, explaining its implications in clear, accessible language for all investors.

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Event Description

Huntington Bancshares (Huntington Bank) has completed its all-stock acquisition of Cadence Bank. Cadence Bank officially merged into Huntington National Bank, Huntington's primary banking subsidiary, and no longer exists as a separate legal entity. This acquisition, initially announced earlier, represents a significant strategic move for Huntington. The bank pursued this acquisition to achieve greater scale, expand its geographic footprint, and enhance its competitive position in key markets. Through the integration of Cadence Bank, Huntington aims to expand its presence, increase market share, enhance product offerings, and drive financial performance through anticipated synergies.

Event Date/Timeline

The acquisition officially became effective yesterday, February 1, 2026, with this announcement released today, February 2, 2026.

Impact Assessment

This acquisition transforms Huntington into a significantly larger bank, creating a combined entity with approximately $250 billion in assets, $190 billion in deposits, and $150 billion in loans. While it offers potential for long-term growth and increased market presence, integrating two large companies is a massive undertaking. This process presents significant execution risks, including potential customer attrition, integration delays, and failure to achieve projected synergies.

This event will impact several key groups:

• Customers: Cadence Bank customers will now become Huntington Bank customers. They may experience changes to accounts, online banking systems, and branch locations. Huntington committed to a phased integration approach to ensure a smooth transition, with full system conversion expected by mid-2027.
• Employees: Cadence employees now join the Huntington team, facing job changes, new roles, and a significant integration effort. While some redundancies are inevitable to achieve synergy targets, Huntington aims to retain key talent. Cadence stock awards converted into Huntington stock awards, adjusted for merger terms.
• Investors/Shareholders: Cadence shareholders received 2.475 shares of Huntington for every 1 share of Cadence they owned. Existing Huntington shareholders now own a stake in a larger, combined bank. The issuance of 462 million new shares results in dilution for existing shareholders, reducing their ownership stake in the combined entity. The transaction also included the issuance of Series L Non-Cumulative Perpetual Preferred Stock. This preferred stock typically carries a fixed dividend rate (e.g., 5.50%) and ranks senior to common stock for dividend payments and liquidation.
• The Company (Huntington Bancshares) itself: Huntington now possesses a significantly larger asset base and customer network. The company faces substantial work to fully integrate Cadence, realize planned benefits, and ensure a smooth transition. This acquisition marks a defining moment for the bank's future direction and growth strategy. Huntington's board expanded, adding three former Cadence directors, including James D. Rollins III, who will serve as Vice Chairman and an advisor to Huntington's CEO.

What Happens Next? Huntington's immediate focus will be on integrating Cadence Bank's operations, systems, and employees. This complex process involves merging technology, aligning policies, and ensuring a seamless customer transition. The newly expanded board of directors will begin overseeing the combined entity. Full system conversion and branch rebranding are anticipated in phases, targeting completion by mid-2027. Mr. Rollins's multi-year commitment as Vice Chairman and advisor to the CEO, with a compensation package including a $10 million lump sum and annual fees of $1.5 million for three years, aims to ensure continuity and expertise during integration. Over the next one to two years, observers will monitor the integration's smoothness and Huntington's success in achieving expected growth and cost savings from this acquisition.

Financial Impact

This acquisition significantly expands Huntington's financial footprint, creating a combined entity with approximately $250 billion in assets, $190 billion in deposits, and $150 billion in loans. Huntington issued approximately 462 million new shares of common stock to complete this substantial transaction.

Key financial impacts and expectations include:

• Scale and Reach: The combined entity now operates over 1,100 branches across 11 states, significantly increasing its customer touchpoints.
• Synergies: Huntington expects to realize approximately $400 million in annual cost synergies, fully phased in by the end of 2027. Potential for revenue synergies also exists, though these are typically harder to quantify upfront.
• Earnings Accretion: Huntington projects the acquisition to be approximately 15% accretive to its earnings per share (EPS) by 2028, assuming successful integration and synergy realization.
• Capital Ratios: While the deal is expected to be immediately dilutive to tangible book value per share by roughly 5%, Huntington anticipates recovering this dilution within 3-4 years. The bank expects to maintain strong capital ratios post-merger.

Key Takeaways for Investors

For investors, here are the key takeaways:

• Expect Volatility: Significant news like this often leads to short-term stock price volatility as the market processes the implications of a larger, more complex bank.
• Monitor Integration Progress: The merger's success hinges on effective integration. Investors should monitor updates on cost synergy realization, customer retention rates, and any potential delays in system conversions, as these will indicate whether projected financial benefits materialize.
• Financial Performance: Closely follow Huntington's future earnings reports, specifically for commentary on pro forma results, EPS accretion, and progress toward synergy targets. The market will reward successful execution.
• Dilution and Value Creation: While new share issuance is dilutive, the ultimate goal is long-term value creation from increased scale, market presence, and synergies. Assess whether the projected EPS accretion and return on tangible common equity justify the initial dilution.
• Regulatory Scrutiny: Large bank mergers often attract regulatory attention. Monitor any potential regulatory hurdles or conditions that might impact the combined entity.
• Conduct Your Own Research: This summary provides an overview; always conduct your own thorough research. Review Huntington's investor presentations, SEC filings (such as the original 8-K and proxy statements), and future earnings call transcripts to gain a full understanding before making trading decisions. This acquisition represents a significant change for Huntington, and its success will depend on effective integration and strategic execution.