Other than blue FirstMerit signs coming down and green Huntington signs going up, bank customers might not notice much difference when the proposed sale of Akron’s historic bank goes through.
They’ll still see some familiar faces at bank branches, even if the locations are reshuffled. And much of FirstMerit’s flagship — the white, 28-story, art-deco tower completed in 1931— will remain dedicated to banking, at least for now.
But local banking and economic development observers said changes are coming for an area that has for generations depended on FirstMerit and its many iterations for more than 100 years.
The demise of FirstMerit, they said, could affect everything from high-wage jobs and economic development to the arts and homeless shelters.
William Mahnic, who teaches banking and finance at Case Western Reserve University’s Weatherhead School of Management, said cities like Akron with bank headquarters benefit in several ways.
Employees with the highest paid jobs are usually based at headquarters, spending some of their money in the city and kicking a portion of their wages to its tax base.
Hiring also happens at the headquarters, with local university graduates “probably getting preferential treatment.”
And corporations seek out bank headquarters, trying to locate their operations where they have access to a big bank headquarters because that’s where decisions are made.
Akron is losing all that swagger.
“So if I’m a company choosing between Columbus and Akron, Columbus now gets the edge because that’s where the bank headquarters is,” Mahnic said.
Akron can still lure businesses, he added, but leaders must come up with inventive ideas — like offering a streamlined permitting process or zoning changes — to make up for a missing bank headquarters.
Yet the FirstMerit sale could have an effect on existing businesses, too, said Ziona Austrian, director for the center of economic development at Cleveland State University.
“How much of FirstMerit’s procurement is done in Akron?” Austrian asked. “If FirstMerit uses Akron printers or advertisers or lawyers or accountants, all of those could now lose business to Columbus.”
The fallout also extends to Akron’s civic involvement, she said.
Huntington said it plans to set up a $20 million foundation in Akron, budgeting $2 million for each of the next 10 years to help the city and people in need. But Austrian said the executives of Huntington likely won’t serve on the boards and commissions of Akron-area groups like FirstMerit executives have.
“They live in Columbus, so that’s the air they breathe, what they will know,” she said.
Mahnic agreed, adding that Huntington “will do a lot more in Akron than many might think, but they’ll never do what FirstMerit did.”
On Tuesday, as news of the proposed sale settled across Akron on a gloomy winter day, James Thomson, chairman of finance at the University of Akron’s business college, pondered the fallout.
He uses FirstMerit as an example in his classes because most students have a connection to it.
“This is sort of a historic banking name around here,” he said. “There’s a lot of customer loyalty to that name.”
Huntington, he said, doesn’t want to jeopardize that loyalty.
That’s what Huntington’s charitable foundation is about, he said. So is its pledge to have the same level of Akron employment — 1,200 jobs — two years from now as FirstMerit has today.
“But the big question is will those jobs continue to pay $100,000 or $150,000, or will they be replaced with $30,000 jobs,” Thomson said.
“Huntington wants customers to think the sale is nothing more than a name change,” he said.
But Thomson and others interviewed for this story say it’s much more than that.
Amanda Garrett can be reached at 330-996-3725 or firstname.lastname@example.org.