Adventures in acquisition

Richard R. Hollington III has been busy as the regional president of the Greater Cleveland Region of Sky Bank, the commercial and retail banking affiliate of Sky Financial Group Inc. He has led Sky Bank’s regional management team in the acquisition of two community banks and announced plans last month to acquire a third.

When Sky Bank acquired Metropolitan Bank and Trust Co. in mid-May 2003, Cleveland became Sky Bank’s eighth operating region. Metropolitan was a $1.3 billion financial institution with 23 offices in the Cleveland area.

Five months later, Sky Financial Group acquired Mentor-based GLB Bancorp Inc. and merged GLB’s wholly owned subsidiary, Great Lakes Bank, into Sky Bank. This gave Sky an additional $209 million in assets and 13 full-service offices in the Cleveland market. Great Lakes Bank converted to Sky Bank’s name, products and operating systems in December 2003.

Last month, Sky Financial Group announced plans for the second quarter 2004 acquisition of Warren-based Second Bancorp and its wholly owned subsidiaries, including Second National Bank, pending regulatory and shareholder approval. Second National is a $2.1 billion bank that operates 33 full-service branches and six loan production offices in nine Northeastern Ohio counties.

“These acquisitions have given us a great opportunity to work in a much larger market to grow our franchise,” Hollington says. “The response that we’ve gotten from the community has been very supportive.”

Hollington left the management-consulting firm McKinsey & Co. in 1996 to join The Ohio Bank, a predecessor of Sky Bank. Between 1996 and 1998, he held several executive positions before becoming COO. After The Ohio Bank merged with Sky in 1999, he established the headquarters for Sky Trust, an asset management organization, in Pepper Pike while serving as its president and CEO.

He also served as executive vice president/corporate director of financial services in 2002, and was responsible for Sky’s trust, investment, private banking and insurance businesses. He was appointed regional president for the Greater Cleveland area in October 2002.

Smart Business spoke with Hollington about his work with Sky Bank and the effect the bank has had on the Cleveland area.

Sky Financial Group is based out of Bowling Green. What caused it to take an interest in Cleveland’s market?

We were very interested in increasing our exposure to major metropolitan markets. We had previously acquired a bank in Pittsburgh and are expanding our presence in Columbus. Cleveland was a natural growth opportunity for us to expand in this area as well.

Cleveland is also very central to the entire footprint of Sky Bank. All of our locations are really run from Adrian in Lower Michigan and Toledo, down to Columbus and across the state. We’re heavily concentrated in Eastern Ohio and in Western Pennsylvania, from Pittsburgh north to Erie. That’s the expanse of our footprint, and Cleveland is very central to that.

Since you were named president of Sky Bank’s new Greater Cleveland Region, how has the bank expanded its presence in the Cleveland area?

We’ve continued to work to retain our existing clients and grow new clients in this market. We do plan to add some new locations in the next 12 months. There might be one to three new locations that we begin to plan for in 2004, probably on the West side of Cleveland.

How have the acquisitions of Metropolitan and Great Lakes Bank changed Sky Bank as a commercial and retail banking entity?

These acquisitions are very complimentary to Sky’s strategy. Both of these acquisitions were historically very regional and community-oriented. Our products and services are very comparable, and our people are very comparable in their desire to serve clients and provide that personal level of service.

We’ve gotten a lot of very good feedback from clients and prospective clients. I think our competitive differentiation is really all about personal service, responsiveness and having great people in the market who can make decisions for clients. I think that is very welcome in this marketplace.

Some of the larger institutions (in the Northeastern Ohio area) have had difficulty in being that responsive, particularly with the smaller clients, middle-market businesses and those companies that have under $100 million in sales. Those clients are our complete focus and target.

In addition to the planned acquisition of Second Bancorp, what local projects have you been working on?

We’ve been working on selling the Metropolitan Bank and Trust Co. headquarters. [Hollington expected to complete this project by the end of 2003.] We’ve been working on the integration of both Metropolitan Bank and Trust Co. and Great Lakes Bank. We’re working on numerous business and real estate loan opportunities in the marketplace to expand our relationships with clients and bring in new ones. So we’ve been busy.

Does Sky Bank have plans to acquire any other Cleveland-based banks in the near future?

Sky Bank has been an institution that has grown through acquisition, and we’re constantly talking with community banks that may have a desire to sell. If there’s a strategic fit, then we’ll work with them to try to have them join Sky Bank. We’re constantly looking for those opportunities.

It’s been a very smooth transition (acquiring Metropolitan Bank and Trust Co. and Great Lakes Bank.) I think the employees have really embraced the new Sky Bank culture that they have joined. Our retention of clients has been very high, and we think that the clients have been very satisfied with the expanded range of products and services that Sky Bank offers. The community leaders have been very supportive.

What services does Sky offer that Metropolitan and Great Lakes Bank did not?

Both Metropolitan and Great Lakes Bank had more limited product offerings. Metropolitan was a savings and loan, and therefore, they had very limited commercial product offerings, so we added significantly to their ability to serve small business clients.

Great Lakes Bank lacked services like Internet banking and cash management services. Finally, neither of those institutions had well-developed trust and wealth management businesses or insurance businesses, all of which Sky offers. HOW TO REACH: Sky Bank, (216) 206-6000,