Stephen Steinour, Huntington Bancshares Inc.'s new chief executive, said Tuesday that the Columbus, Ohio, banking company could be poised for an acquisition spree after getting its financial "house in order."

"I believe the bank's in a very good strategic position to be a consolidator in the Midwest," Mr. Steinour said during a conference presentation Tuesday in New York. "We love the sort of options, not just in Ohio but in [our] six-state footprint. There are thousands of banks to think about … . In this cycle there will be bank failures in our footprint."

Mr. Steinour, who was named this month as chairman, president, and chief executive of the $54 billion-asset Huntington, said his experience in making acquisitions could come into play as his company hunts for deals in its core markets of Ohio, Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia.

Speaking at the Citi 2009 Financial Services Conference, he said that government-assisted deals are an option. He was involved in such transactions during his time at Citizens Financial Group Inc., where he worked for 16 years and resigned as CEO in 2008. He started his career in the Federal Deposit Insurance Corp.'s division of receiverships and resolution from 1980 to 1983. Mr. Steinour said he remains familiar with his "contemporaries" who today hold senior posts at the FDIC.

However, before doing any deals, Mr. Steinour said, his priority is a turnaround for Huntington, which lost $417.3 million, or $1.20 a share, in the fourth quarter, after reporting a loss of $239.3 million, or 65 cents a share, a year earlier. Huntington's fourth-quarter results were hurt by $561 million of loan losses as it gave up on collecting 5.4% of its loans. About $423 million of these were owed by the Jersey City subprime mortgage lender Franklin Credit Management Corp. Huntington spent the quarter reducing its exposure to Franklin Credit, a lending relationship acquired when it bought Sky Financial Group of Bowling Green, Ohio. And Mr. Steinour said at the conference that his company expects to amortize its $650 million in total exposure to Franklin over five years.

Mr. Steinour said Huntington will have to "earn the right to acquire" by focusing on organic growth, increasing deposits and customers, and reining in expenses.

Jeff Davis, the director of research at Howe Barnes Hoefer & Arnett Inc., called Mr. Steinour an "optimistic man" for projecting that his company would be in position for dealmaking as the recession plays out.

It is unlikely that Huntington has the strength to make an outright acquisition of another bank, Mr. Davis said. It is more probable that it would participate in a government-assisted deal, in which it pays a small premium to take over another institution's deposits and branches. It is also possible that Huntington could be a potential target for a larger player like U.S. Bancorp, he said.

"It's clear that the Ohio market still has substantial consolidation to occur," Mr. Davis said. "I think it's much murkier whether Huntington is a consolidator or if it's going to be consolidated."

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