Stephen Steinour, chief executive of Huntington Bancshares in Columbus, Ohio, has pursued a risky strategy of taking losses in exchange for adding new customers, the Cleveland Plain Dealer reported.
Steinour's business plan for the $71 billion-asset Huntington has included expensive moves, such as giving customers a 24-hour grace period to cover overdrafts and avoid fees. That policy has cost Huntington millions of dollars in revenue, the Plain Dealer said.
Huntington has also given away about 32 million ballpoint pens to customers over the past six years, instead of chaining pens to desks to prevent customers from taking them home. The bank did not provide the cost of its pen giveaway.
Another costly move was Huntington's decision to stop high-to-low reordering of transaction processing, a policy that benefits customers but cost Huntington $28 million in its first full year of implementation.
Steinour has also opened new branches, when other banks have been closing them by the dozen. He also expanded auto lending when car sales had been slumping.
"We choose to put revenue at risk," Steinour told the Plain Dealer.
Huntington has also taken a chance on small businesses that have gone through recent struggles, committing $4 billion of loans to small businesses in the Midwest over a three-year period. Huntington provided a credit line of an unspecified amount to Specialty Fitters, a pipe manufacturer in Elyria, Ohio, after its yearly sales fell to $2 million from $4 million and it lost a credit line from another bank. Since obtaining the Huntington loan, Specialty Fitters' business has rebounded and it's rehired workers it had terminated.
Huntington announced in January that it had agreed to buy the $26 billion-asset FirstMerit in Akron, Ohio, for $3.4 billion.