Looking Back at 2012's Bankers to Watch

You take a chance any time you roll out a list forecasting people who you believe are going to make news.

Sometimes you draw attention to someone who remains stubbornly low key, or you overlook those who wind up making big headlines. Vikram Pandit's departure from Citigroup (NYSE: C) and Jamie Dimon's challenge addressing a trading scandal at JPMorgan Chase (JPM) were two examples of individual who made unexpected headlines.

This time last year, we highlighted 10 leaders of banks, both large and small, that we believed merited extra attention in 2012. We weren't necessarily watching for success or failure, realizing that either outcome was possible, given the current economy.

For the most part, our recommended leaders delivered.

One of the most notable newsmakers in 2012 was Cathleen Nash, the president and chief executive of Citizens Republic Bancorp (CRBC) in Flint, Mich. Nash helped the struggling company return to profitability in 2011, leading many to wonder if she could keep that momentum going.

Citizens Republic stayed in the black this year, but Nash made a bigger headline in September when she orchestrated the company's sale to First Merit (FMER) in Akron, Ohio. The $912 million deal valued the $9.6 billion-asset Citizens Republic at 1.26 times its tangible book value.

"I had always said to the board that if we chose to do anything, we were going to do it when we were strong, not when we started missing analysts' estimates." Nash said in a November interview that covered the timing of the company's sale. Last month, she was recognized as one of American Banker's three Community Bankers of the Year.

Another banker on last year's list ended up on the seller's side of M&A. Ron Hermance abruptly took a leave of absence as the chief executive of Hudson City Bancorp (HCBK) in February after a physical revealed that he had an unusually low blood-cell count. He returned to work in August — just before the Paramus, N.J., company agreed to sell to M&T Bank (MTB) for $3.7 billion, waving a white flag in its lengthy battle against the interest rate environment.

Other bankers were willing to make moves to grow, as was the case with Joseph DePaolo at Signature Bank (SBNY) in New York. Many industry observers wondered what DePaolo would do to reduce the business bank's reliance on mortgage-backed securities. In March, the company created a unit to focus on specialty finance after hiring a team from Capital One (COF).

Loans now make up more than half of Signature's total assets, compared to 46% in mid-2011 and 35% at the end of 2007. "By bringing on teams, you don't have goodwill and intangible assets on your books," DePaolo said during an October interview. "And you don't have to worry about changing signs, changing systems or changing cultures."

Beth Mooney, the chairman and chief executive of KeyCorp (KEY), also had growth in mind. In January, the Cleveland company agreed to buy 37 upstate New York branches that First Niagara Financial (FNFG) had to divest as part of its own deal with HSBC (HBC). KeyCorp also agreed to buy back its credit card portfolio as part of an effort to issuing its own cards, though Mooney was careful to note that her company was not aiming to become an aggressive consolidator.

"There is no pressure to do deals," Mooney said during a January interview. "The words we consistently use are 'disciplined' and 'opportunistic.' … We are trying to set very much a tone of patience, long-term thinking, strategic vision and a strategy that makes sense to stay the course."

Another opportunistic acquirer was Richard Fairbank at Capital One. A year ago, industry observers were curious if the McLean, Va., company was going to secure regulatory approval for two significant deals: the online bank ING Direct and the credit card portfolio of HSBC.

Fairbank successfully navigated the regulatory process and secured approval for both acquisitions; the company last month rebranded the ING Direct business as Capital One 360.

Finally, there were bankers who ran into walls during the year. John Kanas, the chief executive of BankUnited (BKU) in Miami Lakes, Fla., certainly fit that description.

For half of 2012, Kanas and a top lieutenant were engaged in litigation with Capital One, which had claimed that its former executives had violated a noncompete agreement when they agreed to buy a New York bank. The parties settled the matter in June, with Kanas cutting his former employer a hefty check and agreeing to hold off on New York expansion until early 2013.

BankUnited also found itself in the news in early January, after word leaked that the Miami Lakes, Fla., company had hired an investment bank and was looking to sell itself. The company's brief flirtation with selling ended after a lukewarm response from potential bidders.

"Obviously that was embarrassing and we had to take our share of heat over that," Kanas said in a recent interview.