Steve Steinour has been involved in more than 30 mergers and acquisitions over the course of his career.
During each one, he’s tried to learn from it, to continuously improve. Steinour works to impart that same continuous improvement into the DNA of Huntington Bancshares Inc.
“No matter what we did last year, or previously, we want to improve upon it,” says Steinour, Huntington’s chairman, president and CEO. “And if our colleagues are striving to do that, that means better and better customer service, and better, faster, easier ways for the customer to work with us.”
Huntington’s acquisition of FirstMerit Corp. last year for $3.4 billion was the largest in the bank’s history. The due diligence period alone involved 500 people over the course of six weeks. But Huntington had been building toward the acquisition on a high level for years, Steinour says.
“We had been putting our IT infrastructure in shape for our company to be a lot larger. We had been building risk management capacities with that in mind, including our due diligence resources, databases, things of that nature,” he says. “We were investing in advance of this wonderful opportunity.”
It all started with a call to FirstMerit CEO Paul Greig, after Steinour noticed a number of executive retirements were scheduled to happen at the bank.
“It seemed to me that there might be a window to try and do something,” Steinour says.
He called Greig in May of 2015. The acquisition was announced in January 2016 and closed in August. The FirstMerit branches were converted to Huntington over President’s Day weekend.
Alignment and adjustment
With a merger or acquisition, the cultural alignment is important. You want to understand the culture and therefore the amount of change that the company has to go through in the context of an acquisition, Steinour says.
FirstMerit was a well-run, high performing company based on relationships, and Steinour knew Greig to be very thoughtful around risk and risk management.
“We felt that there were a lot of similarities between the two companies, from a distance,” he says.
Throughout the due diligence period, Steinour says the resounding theme he heard after Huntington employees had the chance to interact with the team at FirstMerit was “they are just like us” or “we’re just like them.”
“In this case, the cultures were very similar. That made the change management and expectations around that much more aligned, much easier for our new colleagues coming from FirstMerit,” he says.
Huntington got the benefit of a dedicated, motivated workforce that didn’t need massive retraining.