Huntington Bancshares didn't emerge from the financial crisis as a stronger, more focused company by playing it safe.
Even as it was dealing with massive credit problems related to its acquisition of Sky Financial, Huntington, under the guidance of CEO Stephen Steinour, began investing heavily in talent, branches and business lines to better position it for growth once the economy turned.
First the Columbus, Ohio, company took advantage of other banks' pullback in automobile lending to expand its car lending outside its six-state footprint, into New England, the Mid-Atlantic and other markets. After nearly doubling the size of its portfolio, it began securitizing and selling some of the loans earlier this year.
Then in early 2010—while many competitors were still in full hunker-down mode—Huntington began hiring dozens of business bankers. Since then it has added 25,000 commercial relationships and has been the country's No. 3 Small Business Administration lender for three years running. (It ranked No. 15 before the hiring spree.)
Perhaps most visibly, the $56 billion-asset Huntington has invested tens of millions of dollars in a range of consumer marketing initiatives that combined have helped it add roughly 250,000 household checking accounts in less than three years.
With many banks still pruning their branch networks, Huntington in the last two years has opened roughly 90 in-store branches in Ohio and Michigan—hardly fast-growing states—and has committed to adding roughly 40 more by mid-2015. It also has bucked industry trends by retaining free checking in the face of costly new regulations, and even enhanced the product with what just might be the most consumer-friendly overdraft program in the country.
The results of what Steinour calls these "contrarian" moves speak for themselves. After losing $3 billion in 2009, Huntington returned to profitability in the first quarter of 2010 and has made money every quarter since, including a record $168 million in this year's third quarter. Meanwhile, nonperforming assets have been steadily declining and
Huntington's capital ratios, and returns on assets and equity, rank among the tops in its asset class.
Huntington executives say that Steinour, who joined the bank at the start of 2009, has been the driving force behind the resurgence. A former regional CEO at the Royal Bank of Scotland's Citizens Financial Group, the big-thinking Steinour came in with an agenda of transforming Huntington into the premier retail bank in the Midwest. He has been laser-focused on that goal ever since, says James Dunlap, a senior executive vice president who oversees commercial and regional banking.
"The company is moving at a pace it's never operated at before," says Dunlap, who has been with Huntington for 33 years. Describing Steinour as "the most actively involved CEO I've ever worked with," Dunlap notes that his boss routinely calls on clients and has made more than 100 visits to the Huntington's 11 regional markets since taking the helm.
Mary Navarro, a 30-year banking veteran who has been with Huntington for the past decade, says Steinour "is different from anyone I've ever worked for. He pushes my thinking beyond where it's been at any other time in my career."
For guiding Huntington through the depths of the financial crisis, returning it to profitability far sooner than anyone expected and positioning it as a retail banking force in its primary markets, American Banker has named Steinour its Banker of the Year for 2012.
Colleagues and business associates describe Steinour as exceedingly humble. Characteristically, he says he gives much of the credit for Huntington's recovery and recent run of success to the bank's "dedicated" employees and its "supportive" board of directors.
"This company has a history of good customer service, and a pride around that, so we had strengths to build from," Steinour says of the bank's growth in household accounts and steady increase in products per household.
And the board, which made the decision to keep Huntington independent when the easiest course of action might have been to find a buyer, signed off on a $70 million branding initiative at a time when the company was losing money.
"Our board is very prepared to think longer term," says Steinour, 54. But to David Porteous, Huntington's lead director, the credit goes to Steinour's leadership.
"I don't know that I've ever met anybody who has a greater capacity for hard work and dealing with multiple issues like Steve," Porteous says.
"He's just extraordinary."
Born and raised in Gettysburg, Pa., Steinour graduated from Gettysburg College in 1980 and began his career as an analyst with the Treasury Department before moving over to the Federal Deposit Insurance Corp. From there he "chased" his wife to Boston, he says, and landed at Bank of New England, where he rose to the level of executive vice president before the bank failed and was taken over by Fleet Financial in 1991.
It was at Fleet where he met Larry Fish, the future CEO at Citizens whom Steinour calls his mentor. When Fish left to join Citizens in 1992, Steinour went with him.