A seismic shift is underway in regional banking as Huntington Bancshares agreed to acquire Cadence Bank in an all-stock transaction valued at approximately $13.7 billion. This move marks one of the largest bank mergers of 2025, continuing the consolidation trend reshaping America’s financial sector.
The acquisition price represents roughly a 10% premium over Cadence’s market value before the announcement, according to financial data from Bloomberg. Huntington’s willingness to pay this premium signals their strategic conviction that Cadence’s southern footprint perfectly complements their existing Midwest and Great Lakes presence.
“This is precisely the type of disciplined expansion we’ve been envisioning,” said Stephen Steinour, Huntington’s Chairman and CEO, during yesterday’s investor call. “It creates a powerful super-regional franchise spanning 17 states with minimal overlap and significant opportunities for revenue synergies.”
The financial markets responded with cautious optimism. Huntington shares initially dipped 3.2% on the announcement, while Cadence stock jumped nearly 9% as investors digested the news. By mid-day trading, Huntington had recovered about half its losses, suggesting the market is warming to the strategic rationale.
The merger continues a pattern of regional banks combining forces to compete against national giants like JPMorgan Chase and Bank of America. According to Federal Reserve data, the top 10 U.S. banks now control approximately 60% of the industry’s assets, up from roughly 35% two decades ago.
For context, this acquisition follows PNC’s $11.6 billion purchase of BBVA USA in 2021 and U.S. Bancorp’s $8 billion acquisition of MUFG Union Bank in 2022. The Huntington-Cadence deal represents a continuation of this consolidation trend, albeit at a larger scale.
Dan Tarullo, former Federal Reserve governor, told me during a phone interview that “the economic pressures driving consolidation remain powerful. Regional banks face intense competition from both larger institutions with massive technology budgets and nimble fintechs challenging traditional banking models.”
The complementary geographic footprints stand out as particularly valuable. Huntington gains immediate scale in high-growth markets across Texas, Georgia, Alabama, Florida, Tennessee, and Mississippi. Meanwhile, Cadence customers will gain access to Huntington’s broader product suite and technological capabilities.
Cost synergies are projected at approximately $500 million annually, primarily through operational efficiencies and technology integration. However, Steinour emphasized that branch closures would be minimal given the limited geographic overlap.
“We’re not pursuing this to simply cut costs,” Steinour noted. “This is about creating a stronger combined institution with enhanced capabilities to serve our customers and communities.”
The merger faces regulatory scrutiny at a time when federal agencies have shown increasing skepticism toward bank consolidation. The Federal Reserve and Office of the Comptroller of the Currency must approve the transaction, a process expected to take 9-12 months.
Karen Petrou, managing partner at Federal Financial Analytics, notes the regulatory landscape has evolved significantly. “Post-2023 banking turmoil, regulators are applying heightened scrutiny to large regional bank combinations,” she explained in a recent research note. “The agencies will examine not just competitive considerations, but also the resulting institution’s complexity and risk profile.”
Analysts from Keefe, Bruyette & Woods estimate the combined entity would hold approximately $250 billion in assets, placing it just below the $275 billion threshold that triggers enhanced regulatory requirements. This strategic positioning may help facilitate regulatory approval while avoiding additional compliance burdens.
The human impact warrants consideration as well. The banks collectively employ over 18,000 people, and while executives promised “minimal disruption,” integration typically involves some workforce reduction. Huntington pledged to implement any staffing changes “thoughtfully and transparingly,” with a focus on natural attrition where possible.
From a customer perspective, the merger potentially offers expanded services and technology. Huntington’s highly-rated mobile banking platform and innovative products like 24-Hour Grace® overdraft protection would become available to Cadence customers. Meanwhile, Huntington gains Cadence’s expertise in specialized commercial lending.
Community groups have already voiced concerns about potential branch closures in underserved communities. The National Community Reinvestment Coalition called for public hearings and a strong community benefits agreement as conditions for regulatory approval.
“These mergers often leave vulnerable communities with fewer banking options,” said Jesse Van Tol, NCRC’s President and CEO. “We’ll be watching closely to ensure commitments to underserved areas remain intact.”
Looking beyond this specific transaction, the merger represents the continuing evolution of American banking. Mid-sized regional banks face growing pressure to achieve scale as technology investments become increasingly necessary and regulatory costs mount.
Financial industry consultant Bert Ely observes, “Regional banks find themselves in a challenging middle ground – too small to absorb the massive technology investments of national players, yet too large to occupy the specialized community bank niche. Consolidation offers a path forward.”
The transaction’s announcement timing is noteworthy, coming just after both banks reported solid quarterly earnings. Cadence posted a 5% increase in loan growth and improved credit quality metrics, while Huntington reported expanding net interest margins despite the challenging rate environment.
For investors, the merger represents a significant bet on the future of regional banking. The combined institution would rank among the top 15 U.S. banks by assets, with a market capitalization exceeding $20 billion and operations spanning much of the eastern United States.
“Scale alone doesn’t guarantee success,” cautions Mike Mayo, veteran bank analyst at Wells Fargo Securities. “The execution risk in bank mergers remains substantial. Cultural integration and technology conversion challenges have derailed otherwise promising combinations.”
As we witness this latest chapter in banking consolidation, the ultimate verdict will depend on execution. Can Huntington successfully integrate Cadence’s operations while maintaining customer relationships and realizing projected synergies? Will regulators view the combination favorably? These questions will shape not just this specific merger, but potentially the trajectory of regional banking for years to come.
