In an effort to increase its presence in Michigan,
Huntington Bancshares Inc.
) has partnered with Meijer to offer branch offices in several
Meijer stores. An in-store banking agreement has been signed
between Huntington and Meijer that will provide Huntington over 200
branches in Michigan. This reflects over 65% increase in
branch offices and more than 500 job additions in the state.
Notably, Grand Rapids, Michigan-based retailer Meijer operates
197 supercenters and grocery stores throughout Michigan, Ohio,
Indiana, Illinois and Kentucky.
The 10-year agreement will allow Huntington to set up
full-service branches in several Meijer stores throughout Michigan
in the years ahead. In the near term, i.e. from May through the end
of the year 2012, new Huntington branches will be constructed in
over 20 Meijer stores in Michigan. The company has also partnered
), the office furniture provider, to design its new Meijer in-store
We believe the deal is a strategic fit for Huntington given its
intent to deepen its presence in the Michigan market. The company
has also recently acquired Fidelity Bank in a Federal Deposit
Insurance Corporation (FDIC) assisted deal to boost its footprint
in Southeast Michigan. The transaction adds over 18,000 Fidelity
Bank customers to Huntington.
Besides augmenting its Michigan footprint, the deal also fits
the company's strategy of building its business on the in-store
branch banking model. The company has already forayed into this
domain by partnering with Giant Eagle Inc. for opening over 100
branches inside the latter's stores in Ohio.
We believe that such efforts will help the company in gaining
market share and thereby enhancing its profitability in the long
run. Notably, following a turnaround phase after the break out of
the financial crisis, Huntington is now focused on capitalizing on
growth opportunities. Strategic initiatives are right on track.
Yet, a sluggish economic recovery and low interest rate
environment coupled with regulatory issues will likely restrict
robust earnings improvement in the upcoming quarters.
Huntington Bancshares shares maintain a Zacks #2 Rank, which
translates into a short-term Buy recommendation.
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