Top Execs at Regionals Reflect on Grueling and Humbling Stretch

The layoffs haunt one of them at night. Another still doesn't utter the word "banker" when strangers ask what he does. One misses the intensity of the hard times. Still another is relieved it's over.

Senior executives at Popular Inc., M&T Bank Corp., KeyCorp and other regional lenders offered these reflections on the financial crisis last week while discussing second-quarter earnings that showed the industry on the mend.

These executives' feelings vary about the toughest stretch of their careers. Bankers who have lost the most money say it's been a humbling, frustrating few years. Those who have done better say they feel vindicated for being conservative, which was unpopular before the crisis.

Most of them are annoyed to be lumped in with the Wall Street crowd. They hope the stigma that bailouts and toxic loans have given their profession fades as fewer banks lose money. They also want people to know that they're not traders.

"I have a lot of respect for the investment banks, but they're not banks," said Ronald Hermance, chairman and chief executive of Hudson City Bancorp Inc. in Paramus, N.J. "They make a mistake, the banks suffer as well. The terminology for a true bank is really changed, and that has hurt."

Richard Carrion, the chairman and CEO of Popular, of San Juan, Puerto Rico, said he and his peers could help themselves by copping to mistakes, too.

"We all screwed up, and we all have to face that. The investment banks screwed up. The commercial banks screwed up. The accountants screwed up. The regulators screwed up. The appraisers screwed up," Carrion said. "I think it is important that we step back and figure out what really happened. I don't think that's been done."

The past three years have been a nightmare for Carrion. Popular is his life. His dad ran it before he did. Carrion's grandfather was a founder in the 1890s. Carrion took the family business into the mainland U.S. in a big way. Too many consumer losses there forced a retreat. Its head count in the U.S. shrank by nearly 900 last year alone.

"The toughest for me is always the people. We expanded too much. We expanded too much at the wrong time," Carrion said. "When you try to go to bed at night, that's what weighs on you. It's the human cost of all these things that [is] painful."

Rene Jones, the chief financial officer at M&T, in Buffalo, has had an easier time. M&T has stayed profitable. It got out early of risky areas like lending to homebuyers with lackluster credit. Profits are rising.

"M&T has maintained a very good reputation," Jones said. "We're doing all right."

He keeps M&T's good standing in mind when people ask him what he does for a living: "I don't say I'm a banker. I say I work for M&T," he said. "Bankers' reputations have not rebounded very much. On the whole, though, I feel pretty good."

Steven Steinour, the CEO of Huntington Bancshares Inc. in Columbus, Ohio, also has reason to feel good. He's winning praise for fixing problems he didn't create. Steinour, who used to run Citizens Financial Group Inc., took over Huntington in January 2009. His predecessor at Huntington lost his job after buying a money-losing subprime lender.

Under Steinour, Huntington has contained that problem. It just booked its second straight profitable quarter after a long spell of losses. Steinour is happy the worst is over. He misses the "action," though. "Last year, there used to be a different fire every day," Steinour said. "I love that stuff. It's much more tame this year. But I'm still having fun."

Eight straight quarterly losses were no fun for KeyCorp CEO Henry Meyer 3rd. The Cleveland company ended that streak last quarter as fewer businesses and consumers missed loan payments than they have in years. That trend has been hastening the recovery at other regionals.

"I've been with this company, in banking, for 38 years. The last two years have been by far the most difficult," Meyer said. "We have 2,600 fewer employees today than we had two years ago. Many of those employees were very good employees that were in the wrong place at the wrong time. It's hard."

Meyer's mentor and predecessor, Robert W. Gillespie, helped create the Midwest giant through a merger in 1994. Shareholders blamed Meyer for nearly destroying it by making too many unsound commercial loans. They called him a "glutton" and "total failure" at last year's shareholder meeting. "When we were getting bashed it was like, 'Bankers are bad people,' and they are not. It was very frustrating to me," Meyer said. "Everyone who is associated with Key felt a little bit of that bashing. … All of my fellow employers were disappointed by how banking became [portrayed as] a greedy business. It's nice that it's over."

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