Bold approach helps bank survive, thrive

Jobs & the economy
Buckeye Ranch growing on CEO’s watch / D2
Vintner’s operation is more than just grapes / D4
Was T-ball league’s debit card skimmed? / D8
Confidence
is coming
back — if
cautiously
By Michael Kanell
and Craig Schneider
Section D • The Columbus Dispatch • Sunday, June 30, 2013
THE ATLANTA JOURNAL-CONSTITUTION
Q&A / Huntington CEO Steve Steinour
Bold approach helps
bank survive, thrive
By Mark Williams
THE COLUMBUS DISPATCH
W
hen Steve Steinour took over as
CEO of Huntington Bancshares four years
ago, he found himself in the
middle of a banking crisis so
severe that there were worries about whether the bank
founded in 1866 by Pelatiah
Webster Huntington would
survive.
“There is a pride,
a level of support,
a recognition of
the importance of
locally headquartered companies,
and that works
to our great
advantage.”
Like other banks, Huntington
was absorbing losses from bad
mortgages. At the same time, the
nation’s economy was tanking
during the worst recession since
the Great Depression.
Today, it’s a much different story.
The bank is making record profits,
and its stock price is at a four-year
high.
But the approach Steinour, 54,
the former CEO of Citizens Financial Group in Rhode Island,
and the bank took to getting back
on track was far different from
other banks.
Rather than imposing more fees
on customers and shutting down
operations, the bank did the opposite. It has struck deals to add
branch offices in Giant Eagle
stores in Ohio and Meijer stores in
Michigan, it expanded smallbusiness lending throughout its
Midwest footprint and has become more customer-friendly with
its fee-free, no-contingency checking accounts and 24-hour grace
period to cover an overdraft before
imposing a fee.
Because of the turnaround,
American Banker magazine named
See Confidence Page D5
Banking & finance
Big banks’
bankruptcy
plans not
up to snuff
By Jesse Hamilton
and Craig Torres
BLOOMBERG NEWS
WASHINGTON — An increasingly vocal chorus of current and former U.S. regulators
says the biggest banks still have
not provided adequate plans to
safely wind down in bankruptcy
and might need to be restructured to reduce the risk they
pose to the financial system.
Jim Wigand, a Federal Deposit Insurance Corp. official responsible for planning for the
failures of big banks such as
JPMorgan Chase, Goldman
Sachs and Citigroup, said none
has yet been able to draw up
bankruptcy plans that wouldn’t
threaten to detonate the financial system. The plans,
known as “living wills,” were a
core demand of the 2010 DoddFrank Act overhaul of financial
BROOKE LAVALLEY
See Bank Page D3
For Rizwan Peera, the feeling
hit when he spotted “Sold”
stickers slapped on “For Sale”
signs in his Norcross, Ga.,
neighborhood.
Lisa Tilt noticed that she was
hearing fewer “yeah, but” conversations among other smallbusiness owners, conversations
laced with statements like,
“Yeah, we’re getting by, but you
never know these days.”
Maya Miller noticed that the
kids’ party business her husband created while he struggled to find a good job was fully
booked every weekend.
Call them “exhale moments”
— the point at which a person
finally feels a loosening of that
DISPATCH
See Big banks Page D10
Steve Steinour took over as Huntington Bancshares’ president and CEO in 2009.
!"#$% &' ( )* +#,$-
. +. /"#! )* $ )'0 1.!+#" !" !
THE COLUMBUS DISPATCH
BUSINESS SUNDAY, JUNE 30, 2013
D3
Cybersecurity
Rising data breaches expose private data
ware were the cause of almost
60 percent of them, with about
a quarter stemming from loss
or theft of portable devices.
Nationally, businesses dominated the types of organizations that experienced data
loss, led by banks and insurance companies, which had
256 million breached records,
42 percent of the total. Not all
of the breaches resulted in
actual identity theft, but the
breaches are putting more
people at risk of having their
identities stolen for criminal
purposes.
Across the state, a number of
breaches have topped 1 million
or more records. In October, a
portion of the computer network used by Nationwide and
Allied insurance agents was
breached by cybercriminals,
totaling 1 million records.
About 1.4 million records in
DSW Shoe Warehouse’s possession were hacked in 2005 when
credit-card information from
customers in 25 states was
compromised. And in June
2007, a backup computerstorage device containing personal information of every state
worker was stolen out of an
intern’s car, exposing 1 million
records.
Twenty-three of Ohio’s
breaches, involving 938,000
records, involve companies,
schools and government agencies headquartered in the Miami Valley. Among the local
cases:
In separate incidents over a
period of four years, a criminal
gang tied to the Mafia, a Nigerian scam artist and a group of
young hackers broke into computer systems owned by LexisNexis of Miami Township,
stealing the personal information of 363,000 people. In the
largest of the incidents, five
men between the ages of 19
and 24 breached a Florida police department’s computer
system in a plot that led to the
theft of personal information
on 310,000 people. Among their
reported targets were celebrities, including Paris Hilton and
Arnold Schwarzenegger.
Thieves broke into an office
building of an Aetna vendor in
Dayton and stole computer
backup files containing personal identifiers and medical
claims of 396,000 people.
Officials at Miami University accidentally posted a
report containing nearly 22,000
students’ grades and Social
Security numbers online, where
it remained undetected by the
university for three years.
A laptop belonging to a
state auditor was stolen from
the official’s car while it was
garaged at home, exposing the
Social Security numbers of
almost 2,000 Springfield City
Schools employees.
“Somebody breaking into
your system can be very devastating,” said Junjie Zhang, an
assistant professor of computer
science at Wright State University. “At the same time, the
IT industry is working very
hard to protect data privacy. It’s
sort of a war between the good
guys and the bad guys.”
couple of years have been
mostly good for borrowers and
FROM PAGE D1
not so good for savers.
A: Terrible for savers, terrible
for retirees. This is an uninSteinour its Banker of the Year
tended consequence. There’s
for 2012. The bank also was
been a massive transfer of
selected No. 1 in customer
wealth from elderly to business
service in the Ohio, Indiana,
and some other sectors.
Kentucky, Michigan and West
Virginia region, according to
Q: When you took the job at
the J.D. Power & Associates
Huntington, times were tough.
annual survey of overall cusWas there ever a time when
tomer satisfaction with banks.
you didn’t think the bank
BROOKE LAVALLEY DISPATCH
It is the first time the bank has
would survive?
come in first in the study.
A: There were some anxious
Here’s Steinour’s take on
moments, to be sure; not really
recent events:
Born: July 9, 1958
fearful we wouldn’t get
through. We had great support
Q: What was your reaction
Title: Chairman, president and
in this community. … There is
when you found out that you
CEO, Huntington Bancshares
had been named Banker of the Awards: Named Banker of the Year a pride, a level of support, a
Year?
for 2012 by American Banker maga- recognition of the importance
of locally headquartered comA: I wasn’t looking for it,
zine
panies, and that works to our
didn’t realize it, didn’t expect it.
great advantage. Plus, HuntingAs I thought about it, it’s a great Personal: He and his wife, Patti,
are parents to Kaitlin and Kyle
ton had a legacy of being very
reflection on our colleagues.
good in the community for
This is a tremendous group of
generations of CEOs.
hard-working, dedicated colleagues who show up every day
Q: What was the key to the
and they bring forth ideas, they
turnaround
that has taken
ability for the (political) parties
bring great commitment.
place at Huntington?
to get together and find comQ: What about the J.D. Power mon ground, is restraining
A: The board, to be sure, has
& Associates ranking?
had enormous impact. Our
what otherwise would be a
board made some very difficult
A: Those are big deals when
robust expansion.
decisions in 2009, allowing us
you get 12,000 people working
Q: After the steep recession
to invest in the businesses.
together in a complicated enviMany companies were cutting
ronment that has a lot of regu- and all the problems with
many banks through the reces- expenses in ’09 and 2010. We
latory change and other opersion, the banking industry has
thought it was a moment to go
ating stress. To come through
been hit with plenty of new
on offense, if you will. We had
that with these sorts of awards
regulations. Have regulators
some significant losses to abI think is remarkable, and so
gone too far or are you comsorb. … It took a lot of courage
we’re very proud of our colfortable with it?
in 2009 when we did our strateleagues and so very pleased.
A: There are aspects of this
gic plan to say we’re going to,
These are things you can’t buy.
that have gone too far. There
say, invest $75 million in reQ: Where are we with the
was needed change, to be sure. branding our branches, we’re
economy these days, especially It’s like anything: You get a
going to add hundreds of busihere in Ohio and in Huntingsevere moment and the possiness and commercial bankers
ton’s Midwest footprint?
bility to overcorrect is more
(when) everybody else was
A: There are expectations
likely. I think it will drift back
cutting. We believed in the
that the second half will be
into a normal zone in due
Midwest … The whole notion
better than the first, which we
course.
of fair play allows us to have a
share. Next year and the followdeeper relationship with our
Q: The super-low interest
ing year should be good years.
rates that we’ve had for the past customers, more products,
This brinkmanship, this in-
more services. They feel better
about us and the value we
bring, the quality of what we
do.
Q: You’ve also expanded
operations in Michigan by
buying the defunct Fidelity
Bank in Dearborn and adding
branches in Meijer stores there.
What do you see in Michigan, a
state that has had its share of
tough times?
A: Michigan has gone
through a couple of decades of
challenges, in the auto industry
in particular. … Again, this is a
contrarian moment. Rick Snider, the governor of Michigan,
we thought would be a fabulous leader. He doesn’t care
who gets credit. He is the unlikeliest politician I’ve every
met. He’s very interested in
driving an agenda of change.
Michigan has great resources.
… We were already positioned
in Michigan. That gave us confidence in Michigan. Our Giant
Eagle in-store initiative was an
opportunity to explain to Meijer what an in-store partner
could do to bring value, not
just having another service for
them. Our bank customers buy
more and shop more at Giant
Eagle than their average customer that doesn’t have a relationship with us. The same will
be true at Meijer.
Q: One thing shareholders
are always concerned about is
the quarterly dividend. The
bank has been able to raise it
back to a nickel per share. Do
you ever see the day when you
get the dividend to the 26 cents
it used to be, or will the regulations on capital requirements
imposed on banks keep that
from happening?
A: There’s much more regulation on capital than there
ever was. There’s a bit of con-
straint around 30 percent of
earnings. Historically, banks
have paid 50 to 60 to 70 percent of earnings out. I don’t
think it goes back to 50, 60, 70
percent in the foreseeable
future. It may again some day,
but not for a while. For us, we
had to issue a fair amount of
capital so we have more shares
outstanding. Even though we
have record earnings and we’ll
hopefully continue to have
record earnings as we move
forward, the restraint on the
capacity to pay dividends and
having more shareholders just
means that it’s a bigger hill to
climb.
Q: What’s next in Huntington’s growth strategy?
A: We have to do more with
our existing customers. We
have a credit card coming in
the next quarter for consumers.
We want to deepen our relationships.
Q: The bank just lost its CFO
(Don Kimble) to KeyCorp.
What does that do to the leadership of the bank?
A: Not a lot. He’s a great guy
and he really was helpful to us.
I see it also as an opportunity.
In 2009, it would have been
hard for us to recruit a top
talent … with the challenges
we had. We don’t have those
now. I’m quite optimistic. I
didn’t care to lose him. He’ll do
a good job for Key as he did for
us.
Q: With the turnaround that
Huntington has had since
you’ve been here, have any
banks tried to steal you away?
A: We are thrilled to be living
in Columbus. Our family considers it home. I hope whenever the board says my time’s up
it’s with a retirement move on
my part from Huntington.
[email protected]
By Tom Beyerlein, Ken McCall
and Steven Matthews
DAYTON DAILY NEWS
While the public lately has
focused attention on a fugitive
leaker and the government
mass-surveillance programs he
helped uncover, data breaches
in recent years have exposed
hundreds of millions of records
containing personal information of the type often used by
criminals seeking profit.
And experts say the databreach problem is getting
worse as an increasing amount
of information is stored electronically, some of it living on a
proliferating number of devices, such as laptops and
thumb drives, that are targeted
by ever-more-pervasive malware and easily lost or stolen.
Nobody has a precise count,
but more than 600 million
private records have been
breached in nearly 3,800 incidents since 2005, according
to a database of reported
breaches maintained by the
nonprofit Privacy Rights Clearinghouse of San Diego. The
stolen or lost records often
contain personal identifiers
such as Social Security numbers that can be used for identity theft and private details like
medical claims. Attacks by
hackers and malware, loss and
theft of mobile devices, and
improper disposal of paper
records are some of the ways
records are breached.
“It happens a lot,” said David
Salisbury, associate professor of
information systems at the
University of Dayton School of
Business. “You can read the
news and see the straight-up
breaches are getting worse and
worse and worse.”
A Dayton Daily News analysis
of the Privacy Rights Clearinghouse database shows that
Ohio-based entities, mostly
companies, have suffered 142
breaches of at least 6 million
records collected on individuals. Each breach involved at
least
10 records. Hacking and mal-
Bank
Steve Steinour