Q&A: Huntington's Stephen Steinour on leadership, the banking industry and new challenges

Stephen Steinour wears a reminder of progress and change on his sleeve.

"These are the old typewriter keys," Steinour says, adjusting his crisp blue cuff to reveal a shift-key cufflink. "It reminds me when I put them on in the morning, I've got to keep shifting my mentality."

Over the course of his 34-year career, Steinour has kept pace with the monumental shifts and global expansion of the banking and finance industry, from both the executive suite and the federal analyst's desk.

Steinour took over Huntington's leadership at the height of the financial crisis in 2009 just as Huntington was recovering from a $3.1 billion loss. Today, the $59 billion bank holding company is thriving in its six-state region, thanks in large measure to Steinour's bold policy choices during a time of industry-wide austerity.

Steinour invited Columbus CEO to his office to discuss the state of the banking industry, his economic outlook and the leadership qualities that lend themselves to success in his volatile line of business.

You becameHuntington's CEO in 2009--a time when the financial industry and Huntington in particular were struggling. What drove you to take on the challenge of turning the bank around?

Huntington has a rich history, a wonderful legacy of being important to Columbus, to Ohio and, I think, to the Midwest. For nearly 150 years my predecessors, going back to the original Huntington family, made huge contributions to the community as well as built a very significant and important financial institution, I think, a great bank.

I had the benefit of inheriting tremendous strengths, including goodwill from our customers for the legacy of being significant in the community, giving back… I've never been in an organization that has so much ingrained expectation and behavior around customer services as Huntington does, and it has for many years.

These strengths were opportunities for us to continue to build from.

Huntingtonin the past few years has really put a push on being consumer friendly. How do you think thoseinitiativeshave influenced your industry?

In 2009, there was the notion banks weren't lending…The unemployment issues (in our lending footprint) were something we felt we had the opportunity to try to address. So we made a major investment in SBA lending. We went from number 15 to number three nationally, even though our lending is only in our footprint. Today we're number one nationally, even though it's only in our footprint.

For our customers, it was trying to define who we wanted to bank. I mean that in a very broad sense, with a focus on trying to be important in the communities and neighborhoods where we live and work-(for) consumers and small businesses and medium-sized businesses.

Where employment gets created, that's where we believed we could add the most impact and, frankly, do good business…(We were) able to do more lending at a time when banks were pulling back.

Another example would be in the auto industry. (When) the bankruptcies at GM and Chrysler occurred, a lot of banks got out of auto lending. We saw it as an opportunity to double down, so we expanded significantly in a moment of crisis. That was our colleagues making suggestions, us looking at them strategically and taking the contrarian approach to how we wanted to build on what was a great bank.

Doesyour SBA lending make Huntington a force for economic development within your footprint?

We're probably, at best, in four states and two adjacencies. But where we are, that SBA lending really matters. That helps small businesses grow or sustain themselves. That, in turn, means employment stability or growth in employment. Very important, particularly these last five years.

You mentionedHuntington'scontrarian approach during the turnaround-what does that mean to you?

Our industry has a reputation of being: Everybody follows and goes in one direction. In 2009, the banks were starting to get a lot of regulation-the CARD Act and subsequently Dodd-Frank. So banks were making decisions that weren't necessarily in their customers' best interests.

They were adding fees, they were changing terms and conditions. They were making it somewhat more negative for the customers. Some banks got out of auto lending. Banks pulled back on lending to small businesses. We saw each of those as opportunities-and thus this contrarian (approach).

We believed there was a moment of need where our stepping into the breach, if you will, would be good business for us; but it would also allow us to grow our customer base.

We've added over 400,000 new checking account households since late 2009. That's (nearly double) the consumer-checking household base we began with. That's a lot of growth in a short period of time.

Going from number 15 nationally in SBA lending to number three-we're currently number one-that's a lot of lending. Our automobile lending (is) very significant. So we've grown in a number of areas. In doing so, I think we've been helpful to the prosperity of the communities we serve.

At the time, was thatcontrarian approach risky foryou as CEO?

It was more risky in some respects. There were times when what we were doing would be questioned by the investment community (and in) some cases by our regulators. Certainly our board did an amazing job. They're a wonderfully committed group of individuals who took the time to understand what we were trying to do or were suggesting doing.

With their guidance, we pursued a variety of decisions that were different, were contrarian and helped reposition the bank.

In terms of revenue and market share in your region, how does the company's performance in 2009compare to 2014?

Our revenue would be up about 25 percent, about $500 million, and that's at a time when our margins are crimped. (They're) lower because of what the Federal Reserve has done, and we've chosen to forego certain revenue.

When we announced 24-Hour Grace, it cost us $35 million or thereabouts. The fees from the Durbin amendment to Dodd-Frank cost us about $60 million, going from memory.

We've had some decisions on our part and some regulatory or legislative requirements that have caused us to reduce our revenue. We've got good growth and we think we're very well positioned for the long term.

What challenges do you anticipateHuntingtonfacing over the next decade?

Huntington has a lot of assets, we've invested a lot, so our opportunities now are to make sure we continue to align ourselves with our customers, continue to invest.

There's a lot more, for example, that we want to do with digital, mobile apps, things of that nature. I believe in the next five to ten years you'll see a lot of changes as a consequence of mobile.

Nationally, you can see branch traffic reducing about 4 percent a year throughout the industry. Our branch traffic has essentially stayed flat because of our rate of customer growth. If that trend continues, and I think it will, that will put more pressure on branch delivery systems in the industry. That may be an opportunity for us.

How have you seen yourindustry change over the course of your career?

The industry's changed dramatically. When I started, you couldn't have banks that did business across state lines. In some geographies, you couldn't have banks that did business beyond accounting. Now, you have national and global banks. You didn't have commercial banks and large investment banks combined, which we have today.

There's been a lot of change. Technology has rapidly accelerated change and will, I think, continue to do so.

How did your work in theU.S.Treasury and the FDIC inform your work in the private financial sector?

My time at Treasury was during an extraordinary period of change. It's when monetary policy changed, and as a result the prime interest rate went from, I think it was, 5 percent to 18 percent. That was an interest-rate shock to break inflation. It's the complete opposite of what we have today when we have low inflation (and) relatively high unemployment combined with underemployment.

A much different set of circumstances, but that was an extreme moment and was, frankly, a good time to enter the workforce from my perspective. I was able to learn a lot. These last few years have had a few extreme moments.

Anytime you work with a government entity, I think there's always key learning insights into just how they work. Seeing how a bank regulator functions up close through that employment has helped me, (both) here and previously.

Do youthink you possesscharacteristics that help you weather those extreme moments?

I have, like many people, some foundational beliefs. I learned from watching my parents.

We're fortunate: We've got a lot of hard-working colleagues here at Huntington. They've certainly persevered.

These have been a very extraordinary five years, or maybe a little more for my colleagues here at Huntington, but we've come a long way, and the company's gotten better as a consequence of that.

How would you describe your leadership style?

I expect a lot of the colleagues that I work with. I don't expect them to do things I won't do. There's a lead by example. There's an expectation that there's an intensity in which they're going to deliver in their jobs and hopefully have fun along the way.

I take my work seriously and I want my colleagues to. So I look to them to come in every day with an energy and enthusiasm and create good results for our shareholders.

What do you find most rewarding about your work?

I feel very fortunate to do what I'm doing. There are lots of rewards.

It's really thrilling to me to get a note or a call and have somebody reference that this person in that branch, or this individual really helped them. I feel a lot of pride in what we do in the community. We're meaningful, if not important, to the community here in Columbus, as we are in our other markets.

I think there's an exciting future for Ohio and especially for Columbus.

There's this wonderful civic, business (and) community set of dynamics and leadership that are extraordinary here. I haven't seen this in other places that I've lived. It's much more robust (here).