the Beacon Journal editorial board
In purchasing FirstMerit of Akron, Huntington of Columbus gets a strong performer in the banking industry and a company with long and deep ties to this city. That latter aspect may seem to matter less in today’s economy of larger scales. What the Huntington executives should know is that many here responded to the news of the $3.4 billion deal with no small amount of shock and unease.
It’s not that Akron has little awareness of economic turmoil. The city is well acquainted with change. The reaction reflects an understanding that when such mergers take place, outside owners taking control, the risk increases of diminished civic engagement and weakened community trust.
It once worked that regulators weighed these concerns when examining proposed mergers. Now the regulators focus almost entirely on how the new entity will affect the marketplace.
In another way, the purchase is something of a surprise. FirstMerit has been in an expansion mode, most recently acquiring Citizens Republic Bank of Flint, Mich., becoming the sixth largest bank headquartered in this part of the country. Now it will be swallowed in a move that likely will win regulator approval and produce a more competitive banking entity for the long run.
Steve Steinour, the chief executive of Huntington, framed the deal while speaking with Betty Lin-Fisher, a Beacon Journal business writer. “We almost fit hand in glove across the board,” he said. “We are confident that together we have a better future than either does separately.”
These are two high performers, FirstMerit, with a long string of profitable quarters, even through the deep recession. Yet, in a banking industry facing new regulatory regimes and a slower-than-usual recovery, size matters. The combined bank, measured by deposits, will be the largest in the state.
Almost any merger, no matter how perfect the match, involves hardship as the operations combine. In this case, branches will close, and jobs will be lost as efficiencies are gained. Steinour did indicate that in two years, he expects the level of employment in Akron to be where it is today.
That may be so. For now, there will be pain. The community thus should be prepared to hold Huntington to its word. Steinour was reassuring in explaining to Betty Lin-Fisher that Huntington grasps firmly the legacy of FirstMerit in Akron, adding that the bank intends to hold true to that role. He talked about setting up a Huntington Foundation here “to help the community, the city, those in need” and about maintaining a leading presence downtown.
Many of those at FirstMerit will remain, and they surely will sustain their own commitment to advancing the city. Still, as FirstMerit has reinforced over the years, it is most telling when an institution is engaged, the larger interests of the community receiving fitting priority. That is what the city needs and expects from Huntington Bank.