NEW YORK (
) -- While stock performance and compensation are the bottom-line metrics for many investors when it comes to measuring CEO performance, many analysts and industry watchers consider myriad of other factors when measuring success.
Understanding of market conditions, acquisition strategies, regulatory know how, dividend plans, shareholder communications and the ability to foresee economic future are just some of the factors that are taken into consideration.
The following banks CEOs were chosen, rated and ranked on the opinions of several bank analysts, lawyers and dealmakers. Many of the analysts who gave their opinions mentioned other executives that we also could have included in our list if it had been longer. While there may be several other names that deserve to be on this list, these are the strongest performing CEOs, according to many members of the financial industry.
1. Huntington Bancshares' Stephen Steinour
Stephen Steinour, the CEO of
has had a busy year.
The bank's implementation of an aggressive restructuring program came to fruition in 2010 with Huntington reported three profitable quarters in 2010. In addition, the bank issued bond and stock offerings to repay $1.4 billion bailout the bank received from the government's Troubled Asset Relief Program (TARP).
The first offering was $300 million in subordinated 10-year bonds with a 7% coupon on December 16. The second offering was a $920 million stock issue priced at $6.30 a share early in December.
"We were massively oversubscribed in an hour and a half. We had to shut the window, and not every bank
issuing shares has that experience." Steinour told
"Steve is a really good CEO. He got into the weeds of the discussions. He knows everything about the company," said FBR Capital Markets' analyst Paul Miller. "A year ago you didn't know if the company was going to make. Now it has paid back TARP, raised capital and the stock is trading at a three-year high and they are set to roll up the Midwest."
Huntington's share price has increased from three dollars and change at the end of last year to $6.85 by the end of this year.
As part of its restructuring, the bank saw a reduction in the provision for loan-loss reserves, which declined from $193.4 million in the second quarter of 2010 to $119.2 million in the third quarter. That is even a bigger slide from the $475.2 million loan loss reserves from the third quarter of 2009. Huntington's credit quality also improved with net charge-offs at $184.5 in the third quarter of 2010 compared to $355.9 million in the same quarter last year .
"He has really reinforced the entire bank. He raised capital, really improved the risk profile over the year," said Sander O'Neill & Partners' analyst Scott Siefers. "He had been there two years. Almost the entire first year the company was in a defensive mode and mid-year they really moved to offense."
2. U.S. Bancorp's Richard Davis
CEO Richard Davis is all around one of the most strategically focused CEOs, according to analysts.
"You have a guy very detail oriented understands the business and has a clear strategy that he is executing. His bank is bigger. U.S. Bancorp did not take any lost quarters in the period," said Rochdale Securities' analyst Dick Bove.
"They have really done a nice job this year. The credit profile is very strong. They have a strong earnings momentum," said Sandler O'Neill's Siefers. "He is really known as being a good retail operator and knows the nitty-gritty and comes across with a clear and consistent messages for shareholders."
U.S. Bancorp's net income has increased from $908 million in the third quarter of 2010, compared to $603 million in the third quarter of 2009. Overall revenue has also grown 7% to $4.59 billion over the past year.
Last quarter the bank saw its fourth quarter in consecutive credit losses. In addition U.S. Bancorp spent $35 million purchasing
Bank of America
securitization trust administration business, which registers and administers securities backed by residential and commercial mortgages.
The growth over the past quarter has sparked the bank stock to increase from $22 per share to $27 per share over the past year.
Next year analysts foresee a dividend increase and the bank to take advantage of the economic climate by making strategic acquisitions.
3. New York Community Bancorp's Joe Ficalora
New York Community Bancorp's
( NYB) Joseph Ficalora has proven that the bank is committed to its shareholders.
The bank has kept its balance sheet clean and has paid out 70% to 100% of its earnings to shareholders through dividends over the past several of years, according to Matthew Kelley, an analyst at
Sterne, Agee & Leach
"Their strategy is built around creating a high quality franchise and he is one of the few CEOs that has made it through the crisis without cutting the bank's dividend," said Matthew Kelley, analyst at Sterne, Agee & Leach.
This year, Ficalora led two takeovers assisted by the
Federal Deposit Insurance Corp.
with the acquisition of
, putting the bank on the map in put it on the map in Ohio, Arizona and Florida. The bank is now the 22nd largest bank holding company in the nation, with assets of $41.7 billion.
As the bank has grown, Ficalora has given up his rose as chairman to longtime board member Dominick Ciampa.
The stock price increased from $14 per share to $19 per share
"I would anticipate that you are going to see them to do traditional market M&A, given the premium that the market has afforded," said Kelley.
4. First Niagara's John Koelmel
First Niagara Financial Group's
CEO John Koelmel proved this year that acquisition sprees in a downturn can payoff.
Koelmel had the foresight to raise $115 million through a stock offering at the end of 2008 and $380 million in a stock offering in 2009, which allowed the bank to be proactive in making acquisitions while many other banks were suffering.
"The thing that sets them apart is being a first mover," said Matthew Kelley, an analyst at Sterne, Agee & Leach. "While others were watching bank multiples decrease they will able to look back we will see that they created a lot of value in buying while there was increasing stress in the marketplace."
Since 2009 First Niagara has acquired a group of former
PNC Financial Services
Harleysville National Corp.
. The three takeovers have expanded First Niagara into Pennsylvania, Upstate New York and New England. The bank is now $29 billion in assets, $18 billion in deposits and has 340 branches.
The acquisitions have paid off for shareholders who received a 7% hike, or 15 cents per-share in dividends. Net income was $46.9 million in the third quarter, compared to $27.3 million in the third quarter of 2009.
Still, shares have risen little since the beginning of 2010; starting the year just below $14 and ending just above $14. In fact, shares slid down toward $11 after the bank's purchase of NewAlliance, which was the largest unassisted U.S. bank transaction this year, ringing in at $1.5 billion.
Koelmel has said the bank will be growing organically in order to integrate is recent purchases, however analysts believe that the bank will continue to remain acquisitive.
"I would expect that in the next several years they will buy more," said Kelley. "You have this franchise that extends from Buffalo to New England, and you have a giant rectangle that needs to be filled in."
5. Wells Fargo's John Stumpf
John Stumpf has made Wells one of the highest capitalized banks, trumping
this year with a $163.52 billion market cap.
"Wells is so big and diverse. They have done a nice job integrating the Wachovia transaction. They generate the most earnings internally and their capital base is strong so they will be able to be able raise dividend next year," said Sander O'Neill's Siefers.
"I think Wells went into the financial crisis as a smaller company and
Stumpf was able to expand the size of the company in this period. He never took the losses that other banks did and the stock has outperformed the market," said Bove. "He increased his market share he increased the geographic position and maintained a high level of profitability."
Wells made strides this year in its integration of Wachovia. The bank announced during third quarter earnings that they have earned $21 billion in profits since January 2009 due to the merger with Wachovia. In addition the bank has seen its credit quality improving with net loan charge-offs during the third quarter at $4.1 billion, down $1.3 billion, from fourth quarter of 2009.
With its success it is not surprising that this year the bank's share price has risen from $27 to over $31.
In 2011 the bank will wrap up its integration of Wachovia and Stumpf has hinted that the bank could be growing its wealth-management operations this year.
6. First Horizon's Bryan Jordan
Bryon Jordan was dealt a pretty bad hand when he took over as CEO in 2008, but within a very short time he has taken the bank through a turnaround.
"I think First Horizon has been a bank that went from a national focus to a regional focus. He put together an effective restructuring program to exit non-core business," said FBR 's Miller."This is the most transparent bank. I think they have accomplished their turnaround and they have restructured a deal to repay their TARP. They went from defensive to offensive."
First Horizon reported net income of $16 million in the third quarter of 2010, compared to $3 million in the second quarter. This compares to a third quarter loss of $52.9 million in 2009. In addition, the bank's deposits have risen 19 percent since the third quarter of 2009.
Over the past year, the bank's shares have gone from $13.40 to $11.85.
"First Horizon is further down the path in making normalized performance then regional peers. When Jordon took over that company, stock was $3 and now it is $12. He has done a good job getting them focused on their banking business," said Wunderlich Securities analyst Kevin Reynolds.
Analysts believe that now that First Horizon has paid back TARP, the company could possibly make acquisitions, participate in a share repurchase or raise their dividend.
"Over the next year we have an estimate of 52 cents and 90 cents EPS," said Sterne, Agee & Leach analyst Adam Barkstrom.
7. Centerstate Bank's Ernie Pinner
's Ernie Pinner has been on an acquisition spree. The Florida-based bank has scooped up four failed institutions, is finalizing a branch purchase from
Toronto Dominion Bank
and is on the hunt to acquire more this year. The bank has grown from $1.7 billion in assets to $2.1 billion in assets since 2009. Analysts' expectations are that the bank could reach $4 billion -$5 billion in assets in a couple years.
"It is a compelling that bank. It is one of the few banks in Florida of a decent size. He has a lot of investor following and he has raised money. They will be one of the premier florida banks going into next year," said KBW analyst Brady Gailey.
While analysts say that credit quality is still an issue for Centerstate, expectations are that the bank's credit will improve substantially by the second half of next year.
"We are positive on that stock andw e are recommending it. It
Creditwill bounce back next year, and next year they will be back bidding aggressively for FDIC deals," said Gailey.
"Ernie deserves to be there because it is one of few banks in Florida that was there before the downturn and was able to survive," said Kevin Reynolds, an analyst at Wunderlich Securities. "What they did is last year is they raised capital and used it to raise their position above their other Florida peers."
Overall share price dropped for 2010 from about $10.50 per share to $8.
Analysts believe that this should not reflect poorly on the bank. Reynolds explains that there was an $18 million loan sale that occurred last quarter and took shareholders by surprise. He adds that many investors have wanted the bank to take on more FDIC deals, but the deals were not there at the time.
"The stock went to $14 before they put the acquisitions on the table. It is not that that they performed poorly, it was just that the market wanted them to do something beyond their control. They didn't do the acquisitions as quickly as the investors wanted them to do because the failed bank deals weren't coming in as quickly as expected," said Reynolds.
Expectations are that the bank will recover in credit quality in 2011 and will make more strategic acquisitions.
8. Citigroup's Vikram Pandit
After almost three years of constant criticism,
CEO Vikram Pandit finally has proven he was the right man to restructure the bank.
Once known as the,
Pandit has managed to bring the bank to profitability. This year the bank has had three quarters of consecutive profitability, sold $100 billion in toxic assets from Citigroup Holdings and exited from the U.S. government's $45 billion bailout, with the government pocketing a profit of $12 billion.
"I think he did a phenomenal job because he restructured the company overall. He separated the good from bad business, reallocated the fund flow, restructured capital, restructured things like technology and rebuilt the structure of the company," said Rochdale Securities' Bove.
Pandit's strategy to return the bank to back to the basics and take apart the financial supermarket that it once was has been key to his success. Bove
that Citigroup is likely to earn $21 billion in 2010 and 2011.
In addition, Citigroup has seen its shares rise from $3.30 to about $5 in 2010. Weather Citigroup can hold at $5 or pull above
is a question may analysts and investors are debating.
In the past Pandit has had his differences with FDIC's Sheila Bair, but he is likely to outlast her reign as she plans on
leaving the agency next year.
Due to his success, it is likely that Pandit will remain CEO of Citigroup for a while.
9. JPMorgan Chase's Jamie Dimon
It has actually been a relatively quiet year for JPMorgan's CEO Jamie Dimon considering the role he and his bank have played in the banking industry over the last two years digesting the acquisitions of
This past year Dimon has had to face challenges including the issues with foreclosure filings and credit losses. It is inevitable that all banks face problems during a year, but it is how they are handled that is key to many analysts such as Bove.
"I think he is one of the smartest banker in America," Bove said. "His company is bigger. It is dealing with some pretty sizable problems, especially in the mortgage sector, but he has been effective in communicating his message and making improvements."
Despite problems in the mortgage sector, Dimon communicated to shareholders and regulators his position on the foreclosure investigations and froze foreclosures to verify paperwork.
Besides his thoughts on the impact of the foreclosures, Dimon has also been an aggressive spokesman for the industry, especially when it comes to the impact of the Dodd Frank Act this year.
"I would have to say that Jamie Dimon is the one I would put at the top of the list because not only did Jamie run J Morgan in a way that it survived the financial crisis, and in a way that is survived most banks, but he has emerged as a very strong spokesman in the industry," said analyst David Hilder of
Susquehanna Financial Group
Overall the bank has had consistent strong results in investment banking, net income for the third quarter increased 23% since 2009, card sales increased by 7% and credit card net charge-offs improved. As a result, JPMorgan's shares have remained consistent in price throughout the year at about $40 per share. The shares were up 1% for the year overall.
Over the next year analysts expect continued progress in profitability, continued growth in its capital markets provisions and declines in loan loss provisions.
"I would also hope that we would see some progress in JPMorgan's attempt to build out its non-U.S. institutional banking franchise," added Hilder.
10. Bank of New York Mellon Corp.'s Robert Kelly
Bank of New York Mellon
's Bob Kelly has opened up communication between bank management and shareholders.
In fact, most recently Kelly gained the confidence of
, who picked up $52 million in Bank of New York Mellon. With forecasts that the bank's growth is expected in the double digits, things are looking very positive. In addition, Kelly said he would like to increase dividends in 2011.
"Interest rates are so low but that is not in his control. He has done a very good job," said Thomas McCrohan, an analyst at Janney Montgomery Scott. "Post Mellon the communication is much better. The human resources function went up and the communication is the biggest thing that Bob Kelly did."
The stock has increased from $28 to $30 per share this year.
The only analyst doubt about Kelly are the reports that he was interviewed by the board to take a job at
Bank of America
"I expect them to restore the accretive acquisitions in asset management and asset services," said McCrohan. "I believe they will restore the dividend to a higher level. If I were to guess, I would say there would be a 30 percent payout ratio."
--Written by Maria Woehr in New York.
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