Pardon the dust. After months of strategizing, a restructured Huntington Bank is emerging, and planning to make the most of its Midwest markets.
The demolition of the “old” Huntington began more than a year ago, when Frank Wobst handed over the reins of leadership to Bank One veteran Thomas Hoaglin. While at Bank One, Hoaglin experienced the success of working for the hometown favorite bank, and saw the opportunity to achieve the same results at Huntington.
Within months of taking over, Hoaglin announced his restructuring plan: Sell the Florida operations, close more than 40 branches in the Midwest, cut dividends by 20 percent and create a new corporate culture. And the underlying strategy behind the plan was to leverage Huntington’s hometown team advantage.
So where do things stand as the dust settles?
“We completed the sale of the Florida franchise, reduced dividends and consolidated offices predominantly in Ohio and Michigan,” says Hoaglin. “Other changes that address how we position ourselves and operate going forward — those are a work in progress.”
You can’t change the corporate culture for more than 4,000 employees overnight. But Hoaglin’s vision is clear.
“We decided to become the local bank with national — or more sophisticated — resources,” Hoaglin says.
Part of this cultural change is a renewed dedication to customers.
“We have to dedicate ourselves to our customers’ needs and be responsive and flexible,” says Hoaglin.
To provide that flexibility, Hoaglin is giving managers more autonomy — and accountability.
“Being close to the customer requires you to give decision-making authority to local management,” Hoaglin says.” And with that authority comes accountability. We want managers to apply their skills, run their businesses, but be held accountable to the results.”
This decentralization led Hoaglin to re-examine his leadership team. As a result, the only regional president who wasn’t replaced was Central Region President James Kunk.
Kunk, whose authority and accountability include Central Ohio and West Virginia, says his biggest challenge in the months ahead is to make good on the bank’s new focus.
“We want to make sure all our people deliver and do what we say we’re going to do,” says Kunk. “That means making decisions at the local level and not passing the buck.”
Kunk wants associates to take ownership and feel connected to the customers they serve.
“We want customers — whether they are retail or commercial — to have a personal relationship with our associates,” says Kunk.
This relationship starts with the associate.
“In my experience, happy employees make happy customers,” he says. “Associates are enjoying the new Huntington and their work. They can share ideas in a less formal way. There’s a real esprit de corp, and it’s not about winning. It’s about being a team. And that is reflected back to the customer.”
Kunk cites Hoaglin’s vision as the goal for his region: To make customers feel their branch is the local community bank.
“We are the local bank, and that’s something that we’re proud of and I want to accentuate,” says Kunk.
While there are 43 fewer community branches after the recent closures, Kunk says the customer retention rate has been higher than forecast.
“Initially there was some concern over the closings,” he says. “But I feel good about the customers we’ve retained.”
From the shareholder’s perspective
Huntington’s changes have made associates and shareholders alike happy. Pre-change stock prices (more than a year ago) were around $15.30 a share. The stock was priced at $19.74 as of March 8. Confidence in the leadership team and its initiatives is also on the rise.
“A year ago we had quite a few unhappy shareholders,” says Hoaglin. “I have spent the last year communicating with shareholders, keeping them apprised of our progress. The response has been very positive.”
Hoaglin says that overall, shareholders feel the company is heading in the right direction and look forward to seeing results this year.
“Shareholders are expecting us to deliver results in 2002,” Hoaglin says. “And we are confident we can meet that expectation,” despite the current economic environment.
Hoaglin says while there is no doubt the recession has had a negative impact on the bank’s markets with a weaker loan demand, it is also experiencing stronger deposit growth.
“We’ll do just fine,” Hoaglin says. “The economy is not causing any major concerns.”
And with the changes that have taken place, there won’t be any more any time soon.
“We have our game plan and we’ll be working hard on it. I don’t anticipate any major changes of direction,” he says. “We have the talent and the capability of achieving our goals.”
Huntington doesn’t plan to expand outside its Midwest markets anytime soon. Hoaglin feels strongly that the bank’s success lies in its own backyard.
“I think we’ll do best to keep our focus on the Midwest,” he says. “There may be some expansion opportunities within the Midwest but we will not be expanding outside that footprint.”
Pressing the hometown advantage
To emphasize Huntington’s commitment to its community, the company is partnering with Mayor Michael Coleman to revitalize the city. Huntington is establishing a goal of $275 million for lending and investments over the next five years in low- and moderate-income neighborhoods.
While the majority of loans will be for home purchases and improvements, it will also be used for some small business lending programs.
“It is our intention to be more and more visible in strengthening our community,” says Hoaglin. “We expect to see the mayor focusing in developing the downtown and we will play a leadership role in that initiative. There will be a lot of participants from both the public and private sectors, but we expect to be a visible player in that plan.”
It seems Columbus stands to gain a great deal from the “new” Huntington Bank’s commitment to community. How to reach: Huntington Bank, (614) 480-8300 or www.huntington.com