Stephen Steinour, the chief executive of Huntington Bancshares Inc., came to New York last week to sell investors on his bullish outlook for the Columbus, Ohio, company.
He is commanding more attention after Huntington posted a surprise $39.7 million profit in the first quarter — something analysts weren't expecting it to do until later this year — and is not wasting the opportunity.
Steinour says that Huntington, which booked big losses on bad home loans in 2008 and 2009, should be profitable for the rest of this year. It has a chance to remake itself now that some rivals are gone and others are still bogged down by the recession, he says.
Steinour took over Huntington, with more than 600 branches across the Midwest, in January 2009, aiming to get its credit issues under control. With loan losses falling and Huntington sitting on a huge stockpile of cash, Steinour says its worst problems are over. He's tackling another issue now: Huntington's image.
For years, Huntington has lived in the shadow of better-performing peers like Fifth Third Bancorp and National City Corp., which was bought by PNC Financial Services Group Inc. in 2008. In an interview with American Banker, he discussed overhauling Huntington's brand while doing his part to help heal the Midwestern economy.
The following are excerpts from that talk, edited for length.
Huntington just re-signed the lease on its home office in Columbus and plans to add 500 jobs there. You're the top player there. Why the big push?
STEPHEN STEINOUR: We only have 28% deposit share. We should be doing a lot better. Seriously. Extending our headquarters lease — we didn't have to do it now. It didn't roll until 2014. We felt it was important. We're trying to find ways to be visibly demonstrative of confidence in the economy. You see our press releases [about] hiring this person, that group, investing here or there. We believe it's important to help build confidence. Because, to some extent, we believe that the economy is getting better in our markets. That rate of improvement would accelerate with more consistent confidence. There is sort of a leadership role we're trying to help play by demonstrating that we're confident about the future of the Midwest. We're essentially in the Midwest, in these markets. The better they do, the better we're going to do. We can be a catalyst for the improvement.
Should more bankers be out there projecting confidence?
STEINOUR: These are individual decisions. I don't want to speak on behalf of the industry. I don't know — situations may be different in other institutions. As we said when we did our fourth-quarter earnings, we were confident we identified and addressed, substantially, the problems on the asset side of our balance sheet last year. Anything we could see [we disclosed]. We're very transparent. We were introduced at the UBS conference as being one of the banks who most aggressively identified and dealt with their risks last year. Certainly the activities and actions we've taken have been noted by others. So we're in a position where we can be confident about our future.
How can you thrive in low-growth areas like Ohio and Michigan?
STEINOUR: Here's a way to think about it, that, I think, is directly in parallel. Nothing positive — now I'm generalizing — but nothing positive has happened in Buffalo in over a century. It was the third-biggest city at the turn of the century, I think. M&T [Bank Corp.] has done incredibly well for decades in Buffalo. It's about focus and execution. Sure there are more robust markets than Buffalo. Frankly, most of the U.S. is more robust than Buffalo. But they've done very, very well.
Focus and execution: that's where we are now. We did the turnaround last year. Now it's execution.
Huntington has a reputation as being a perennial No. 2 player. How do you deal with that?
STEINOUR: We talk about it internally as, "When were we last high performing as a bank?" And it goes back several decades. So we see this as opportunity.
Now the corollary is we got through a very tough economic cycle without having liquidity issues, or deposit runs. There is a lot of customer loyalty. When National City went — we viewed NatCity as [our] closest competitor; we didn't have their experience. A lot of good things have been done [here] as well. They may have not translated year in, year out into the best metrics. But some of the companies that had top metrics aren't around anymore. So we see this as opportunity. We need to be better performing in the future. We need to hold ourselves accountable for better performance.
You've hired a new advertising agency. What is that all about?
STEINOUR: [There is] a branding opportunity within the bank.
Think of your better retailers. You know their logo. You know their color. You know their look. One of the things that surprised me when I went to Huntington was we had a wide color palette. We don't have consistency in look. I walked by our ATM not knowing it was there in the Columbus airport for six or nine months. It's right next to one of these big blue Chase machines. They do look nice.
So the guy who put that big blue machine in for Chase is one of our hires, David Clifton. We need to invest in our look; we need to invest in how we present ourselves to the market.