Citizens Republic Bancorp Inc.
) is considering a takeover of itself and
Huntington Bancshares Inc.
), might be interested in acquiring it, according to a Bloomberg
According to the report, Citizens Republic is looking for bids
from potential buyers, retained
JPMorgan Chase & Co.
) for this purpose and is said to have gotten in touch with
potential buyers. Notably, the company which suffered substantial
losses since the financial crisis has yet to repay its bailout
money. Also, it has looked for various ways, including equity
issuance, to gather money and payback its dues.
As a matter of fact, according to its recent conference call,
Huntington intends to invest in Michigan and enhance its business
throughout the region. Markets in Lansing and Ann Arbor look
appealing and the company wants to expand its business there.
Recent Huntington Deals in Michigan
Earlier in the year, in an effort to expand its footprint in
Southeast Michigan, Huntington acquired Fidelity Bank in a Federal
Deposit Insurance Corporation (FDIC) assisted deal. The deal added
15 branches to Huntington's network. For Huntington, the deal was a
continuation of its commitment to the Michigan region besides
adding to its competitive edge.
Moreover, in May, Huntington partnered with Meijer to offer
branch offices in several Meijer stores as part of its effort to
increase its presence in Michigan. A 10-year in-store banking
agreement was signed between Huntington and Meijer that would
provide Huntington over 200 branches in Michigan.
This reflects an increase of over 65% in branch offices and more
than 500 job additions in the state. Such deals are a strategic fit
for Huntington, given its intent to deepen its presence in the
We believe that opportunistic acquisitions will help Huntington
gain market share in Michigan and thereby enhance its profitability
in the long run. For Citizens, bids can be expected from a number
of peers of Huntington as well. Besides Huntington,
Fifth Third Bancorp
) also has a solid deposit base in the region.
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.
CITIZENS BKNG (CRBC): Free Stock Analysis
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