How New Regulations Are Reshaping Regional Bank M&A Deals

On December 22, 2025, Huntington Bancshares announced that it has obtained all regulatory approvals, particularly from the Office of the Comptroller of the Currency, to finalize its merger with Cadence Bank. This regulatory green light follows shareholder votes on January 6, 2026, where both Huntington and Cadence shareholders overwhelmingly approved the merger terms. With no remaining major regulatory hurdles, the parties expect the merger to close February 1, 2026, subject to customary closing conditions.

Strategically, this acquisition positions Huntington as a more geographically balanced regional powerhouse. The addition of Cadence’s ~390 branch locations across the Southern U.S.—notably Texas, Alabama, Arkansas, and Mississippi—increases Huntington’s footprint from its Midwest base into high-growth Sun Belt markets. The combined bank will operate across 21 states and within twelve of the country’s 25 largest metropolitan statistical areas. Market share rankings will meaningfully improve: Huntington will gain top-5 deposit share status in Dallas and Houston, top-10 in Texas statewide, and emerge as either the top bank or among the leaders in deposit share in Mississippi, Alabama, and Arkansas.

From a financial standpoint, the all-stock deal values Cadence at approximately $7.4 billion. Cadence shareholders will receive 2.475 shares of Huntington common stock for each share of Cadence held, which equated to roughly $39.77 per Cadence share at announcement, representing an approximate premium of single digits. The acquisition is expected to deliver a 10 percent accretion in Huntington’s EPS upon closing. However, there is dilution in regulatory capital (modest), and tangible book value per share is expected to be diluted by ~7 percent—both effects to be offset over roughly three years inclusive of transaction costs.

However, risks are elevated. Moody’s downgraded its outlook on Huntington in light of the deal, citing execution risk from integrating Cadence and recently acquired Veritex in quick succession, increased exposure to commercial real estate (CRE), and capital ratio pressures. The regulatory profile post-deal shifts, triggering more stringent requirements under Category III designation. Litigation and disclosure risk have arisen around the joint proxy statement and valuation assumptions; Huntington and Cadence provided additional disclosures in response.

Open questions remain: How well and quickly Huntington can execute on integrating two large acquisitions (Cadence and Veritex) without significant customer attrition or operational disruptions; how the CRE concentration and exposure profile will evolve amidst rising interest rates and potential regional economic stress; to what degree cost synergies will manifest and whether the ~7 percent tangible book dilution really will be earned back in three years; and how regulatory capital ratios will adjust in the near term, especially under heightened regulatory scrutiny.