It’s still too early to say how many layoffs or branch closures will happen in the wake of the news that Columbus-based Huntington Bancshares is buying Akron-based FirstMerit Corp.
Huntington plans to acquire FirstMerit for $3.4 billion in stock and cash. The transaction is expected to be completed in the third quarter of 2016.
FirstMerit workers were tight-lipped and worried about their jobs, though several said they awoke Tuesday to find out the news about the acquisition, which was announced late Monday via media reports.
Government officials, including new Akron Mayor Dan Horrigan and Summit County Executive Russ Pry, said they were surprised and disappointed about losing an institution like FirstMerit.
“We don’t want to see any job losses,” said Horrigan, who has been in office for less than a month but already has had to deal with Macy’s and other stores’ decision to leave Chapel Hill Mall.
In conference calls Tuesday, Huntington Chairman, President and Chief Executive Officer Steve Steinour emphasized that all branch employees will have a job with Huntington. Branch consolidations will happen with the overlap of locations. Bank officials said about 65 percent of branches are within 2.5 miles of each other.
Steinour said branch closures — which may be Huntington or FirstMerit branches — will not happen until at least early 2017. Two to three months notice will be given.
But Steinour said it is too early to say how many layoffs there will be in other parts of the company and that all affected employees will get priority consideration for job openings.
“There will be a planning process. Certainly many of them will be offered jobs, but we have not gotten to that level of detail,” he said.
In Akron, where FirstMerit has its downtown headquarters, Huntington is “making a significant commitment to maintaining employment,” Steinour said.
Future of tower
Huntington officials said the Columbus-based banking company will keep a presence in FirstMerit’s recognizable white tower in Akron’s skyline, but it hasn’t been decided yet what will stay.
There are 1,200 FirstMerit employees within the city limits of Akron in both the downtown locations and branches, officials said. Though the company will lose some positions, Steinour committed to still having 1,200 workers in Akron within two years. Huntington currently has 133 employees in Summit County.
FirstMerit Chairman, President and CEO Paul Grieg, 59, who will retire and serve as a consultant when the deal closes, told his employees in a conference call that he had been through four bank mergers in which he was not CEO.
“It is absolutely in human nature to have concerns and misgivings and thoughts that are probably thinking more of the first letters in merger, me. From a personal perspective, I am comfortable with our future,” Greig said. “I hope you’re going to be as comfortable today as I am today as you absorb this change and see the management team.”
Greig emphasized Huntington’s commitment to Akron in another conference call with media outlets in the new eight-state footprint.
“Akron is the most important market for FirstMerit and will continue to be a very important market for Huntington,” Greig said.
Greig applauded Huntington’s commitment to Akron to create a Huntington Foundation and seed it with $20 million or $2 million a year for 10 years to boost the local community. Huntington will offer $5 million in other markets, Steinour said.
Greig said FirstMerit has never disclosed how much it has spent on support in the community, but he was confident in calling Huntington’s $2 million a year “a substantial increase” from FirstMerit’s efforts.
Greig said the Huntington CEO “has plans to move a number of business units to Akron” and this week “talked about Akron being home to one of the major operational and call centers of the new company.”
When asked for details, Huntington spokesman Brent Wilder said there may be a new facility, but the company wasn’t prepared to make any decisions. Wilder said the company is “committed to maintaining an operations hub in Akron” and did acknowledge that FirstMerit already has a call center in Akron.
Reaction to news
Employees flowed in and out of FirstMerit’s downtown headquarters as uncertainty filled the cold air on Tuesday, just hours after they were informed about major changes at their place of employment. When asked, they offered little information other than that they were instructed to keep quiet about the future.
Employees who wished to remain anonymous said an internal memo was sent via email just after midnight Tuesday morning, after the news media already had reported the deal. Temporary employee Heather Kohar found out through the morning news.
“Things were looking good. It’s a very positive move,” she said of the tone of a Tuesday morning staff meeting. “They really are hoping for the best with things.”
Rick Rebadow, executive vice president of the Greater Akron Chamber, chose to take an optimistic stance on the merger while strolling past the headquarters.
“Well, I think we’ve got to see,” he said. “There’s some concern that the jobs aren’t going to be saved. But the reality is the economy is a scale of takeovers. Usually there’s some that stay and some that don’t.
“I think Huntington is a quality organization. ... Our focus is on downtown and rebuilding downtown and increasing the activity, so I’m very positive on what you’ll see transpire in the Main Street corridor. This will be an opportunity.”
Longtime FirstMerit customer Gloria Buwala of Cuyahoga Falls wasn’t as certain, lamenting the impending loss of her familiar bank.
“So, are we keeping their branch, or this branch?” Buwala said as she pointed at a Huntington facility facing a FirstMerit building across State Road in Cuyahoga Falls. “Some of the people that are here have been here for 15, 20 years, which is why I bank here,” she said. “If they go, I may look at going somewhere else. From what the paper said, most of those people will still be around. But you know how that goes.”
Horrigan and Pry said they were concerned about not only what this means for existing banking jobs in Akron, but also losing FirstMerit’s community involvement.
Horrigan and the Huntington CEO met Tuesday afternoon. The mayor described the meeting as a positive one.
“I stressed FirstMerit has a long tradition in the city … and a lot of involvement with foundations and with community development, and we obviously want to see that continue,” he said.
During the discussion, the company pledged to keep the same level of commitment to the community and keep the same number of jobs in the immediate future, the mayor said.
He also told Huntington that he wants Akron to be a good business partner and help the company grow in the community.
“It was a very good discussion,” Horrigan added.
Pry, who has had a FirstMerit checking account since 1976, noted that there aren’t many Huntington branches in the county now.
He also said it will be difficult to see FirstMerit disappear.
“It’s a long-term Akron institution,” he said. “They’ve done a lot of great work here in the community. They’ve been supporters of so many causes.”
FirstMerit has the naming rights for several community structures within its footprint, and Steinour said they would all be honored and changed to Huntington after the closure of the deal.
“Think of it as a marketing and community investment and the benefit of having the standard name Huntington,” Steinour said.
That includes the naming rights purchased from Cuyahoga County in September for the Cleveland Convention Center for more than $10 million — $400,000 annually for 20 years with an inflation adjustment yearly. The convention center will be the media hub for the nearby Republican National Convention this summer.
FirstMerit also has its name on other sites, including the FirstMerit Bank Pavilion at Northerly Island and FirstMerit Bank Stadium Club at US Cellular Field in the Chicago area and the FirstMerit Bank Event Park in Saginaw, Mich. It also sponsors a VIP club at Blossom Music Center and a level at the University of Akron’s InfoCision Stadium.
Staff writers Rick Armon, Katie Byard and Nick Shook contributed to this report. Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ.