AGRICULTURE is considered by many analysts to be a bright spot in an otherwise troubled economy.
Ohio-based Huntington National Bank is betting on the future growth of the industry, announcing that it will launch a major food and agribusiness initiative targeting food producers and processors.
Huntington said it decided to make a bigger move into the sector because the industry accounts for nearly 20% of jobs nationally, the bulk of which are "even more concentrated across Huntington's markets as a major portion of overall Midwest economic activity."
In the bank's home state of Ohio, for example, agriculture is considered the top industry, accounting for one in seven jobs.
Huntington appointed veteran agricultural banker Peter Arendt as managing director of the new venture. Arendt had been with Bank of Oklahoma, a division of the $27 billion BOK Financial, where he developed a similar food, agriculture and commodity business. Prior to his tenure at BOK, Arendt managed development of Wells Fargo's food and agribusiness efforts in the eastern U.S.
Arendt "has a long and successful history positioning food and agriculture businesses for growth," said Richard Remiker, executive vice president and senior managing director of specialty banking at Huntington. "Over the last three years, we have seen the need for increased expertise to help drive cross-sell and additional customer acquisition. Peter is intimately familiar with mitigating commodity risk, challenges surrounding food safety and the need for increased capital in today's environment."
Arendt told the Columbus Dispatch that 60% of Bank of Oklahoma's agribusiness deals last year were in Huntington's six-state market: Ohio, Michigan, Pennsylvania, Indiana, West Virginia and Kentucky.
In Huntington's announcement of its new initiative, the $56 billion bank holding company said Arendt will build a team with experience in providing increased capital and delivering risk management solutions that protect margins in an increasingly volatile business sector.
"Right now, there's a need for superior financial expertise in what continues to be a dynamic and changing industry," Arendt said. "Managing risk is paramount, as is the ability to anticipate and manage trade and currency issues. These are major areas of focus at Huntington."
A former Huntington insider who spent several decades in its agricultural lending efforts told Feedstuffs that the move is "significant" because the bank had never operated a formal agribusiness banking enterprise.
"Anything ag related was handled by the larger corporate bankers because the view was that we didn't have enough business like that in Ohio," the insider explained. "Now that Key Bank, Rabobank and Wells Fargo have similar roles, I'm not surprised Huntington has stepped up."
The food processing sector in states in Huntington's footprint have seen growth in recent years. Ohio alone is home to a $24 billion food and beverage sector, including established brands such as Bob Evans Farms, Campbell Soup and Dannon Yogurt, and also to a number of smaller regional and local processing entities.