HBAN Stock Rises on North & South Carolina Branch Expansion

Huntington Bancshares Inc.'s HBAN shares rose 2.5% in yesterday's trading session after the company announced its plans to expand its banking franchise in North Carolina and South Carolina. The bank intends to add more than 350 employees across varied business divisions and launch roughly 55 retail branches within the next five years.

The first branches will be located in Charlotte, Raleigh and Winston-Salem in North Carolina and Charleston, Columbia and Greenville in South Carolina. The bank is currently searching for branch sites, with construction anticipated to begin in 2026.

This move is in alignment with the other banks penetrating the Carolina market, given a rise in the regional population. JPMorgan JPM and Comerica Inc. CMA have expanded into the region to deepen their presence.

HBAN's Expansion History in Carolinas Market

Last year, HBAN announced its plans to expand its commercial banking presence in Charlotte. The move aimed at tapping into the high deposit levels in Carolinas. It planned to add a team of experienced bankers to establish relationships with customers in Charlotte to boost its capital and liquidity.

Since the aforementioned announcement, the bank has established five units and 120 relationships in the Carolinas market with an emphasis on verticals like the middle market, small business administration and health care lending.

Similarly, JPM announced its plans to further strengthen its presence in the North and South Carolina regions by establishing new branches and increasing corporate office space in the region. By 2025, the bank intends to have more than 100 branches across both states. Also, CMA announced its focus on Southeast markets in 2022 through the addition of offices in South Carolina and Georgia.

Huntington's Strategic Rationale Behind This Expansion

The company's expansion will enable clients across the Carolinas to leverage Huntington's expertise and comprehensive range of personal, wealth, business and commercial banking services.

This move furthers the company's presence and investment in the region and supports the bank's strategic plan and long-term growth strategy. The bank aims to capture an estimated $8 billion long-term deposit market.

Huntington's full-scale retail expansion into the Carolinas complements its ongoing multi-million dollar and multi-year plan to expand its banking franchise in numerous strategic markets, including Denver, Minneapolis and Chicago.

Brant Standridge, consumer and regional banking president at Huntington, stated, "The Carolinas is a fast-growing, highly dynamic region and we are proud to deepen our presence and bring our expertise and capabilities to even more customers in this market." He added, "the bank's foray into consumer lending, wealth management and consumer deposits will support continued commercial banking growth in the region."

Final Thoughts on HBAN's Expansion Efforts

This strategic initiative aligns with the company's inorganic expansion strategy to gain market share and enhance its profitability. Such moves will bolster the bank's competitive position. In fact, Huntington is one of the top 20 bank holding companies in the United States and remains focused on acquiring the industry's best deposit franchise.

The bank's total deposits witnessed a compound annual growth rate of 16.4% over the four years ended 2023. The uptrend continued in the first half of 2024.

Strengthening the commercial banking business will further enhance the deposit franchise of Huntington. This makes the ongoing expansion efforts a strategic fit for the company.

Year to date, shares of Huntington have risen 15.3% compared with the industry's gain of 10.4%. 

Image Source: Zacks Investment Research

Currently, HBAN carries a Zacks Rank #2 (Buy).

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