Midwestern banks are going after talent and customers in small and midsize business lending, treasury services, automotive lending and other areas where a lot of competition has disappeared since the recession struck.

Banks like Huntington Bancshares Inc., PNC Financial Services Group Inc., Fifth Third Bancorp and KeyCorp say they're seeing big opportunities in markets that are up for grabs since larger banks and alternative finance companies have pulled back.

"All the shadow banking stuff essentially got wiped out," said Stephen Steinour, the chief executive of Huntington. "The nonbank sector was about half of the finance industry pie when you added it all up. Much of that is gone — that is a lot of pie for the rest of us."

With the Midwest lagging the rest of the country in population growth and median household income, regionals there may be under the most pressure to find new revenue sources. But it also presents opportunities not to be found in other regions particularly with the demand for asset-based and equipment loans.

"The Midwest is still heavily [reliant] on manufacturing," said Bruce Clapp, president of MarketMatch, a marketing firm in Dayton, Ohio. "That is why asset-based lending is going back to being their strong suit."

Small business is an even big ger target.

"There are a whole host of businesses where companies have solved their credit issues. … You are going to see them [lenders] in coming months become more aggressive," said Anthony Davis, an analyst with Stifel, Nicolaus & Co. "Right now the lending sector du jour is small business — everybody wants to go there."

It's appealing because the loans are small and diversified. Small businesses also tend to need a lot of services, so if a bank lands a lending relationship it has a good chance of getting the company's cash management business, too.

But the category is not without risks. Most small companies fail within five years, and some analysts worry that the push into small business mirrors how regional lenders aggressively went after commercial real estate.

"Whenever the next recession occurs … I am willing to make the bet that it will be [because of] small business," said Christopher Mutascio, managing director with Stifel Nicolaus. "That will be the next recession."

Zuheir Sofia, chairman of Sofia & Co. Inc., a financial advisory firm in Columbus, Ohio, said that, while Mutascio's concern is valid, any product line has the potential for big losses if handled poorly.

Banks that get burned will be those that don't "approach it the right way — you don't diversify, you go into one sector of small business, you don't do your homework," he said. "It all comes down to execution and follow-up."

Steinour, whose company has been pursuing small-business clients throughout Ohio and Michigan, acknowledges the risks, saying that small businesses tend to be more vulnerable to economic swings than larger businesses. But the rewards are great, he said.

"It's a law of numbers, there are just many, many, more — thousands, tens of thousands more … small businesses in our footprint" than larger ones, Steinour said. There is "a lot of opportunity. And they have less capital access, so they need banks more."

While historically loyal, small-business owners have become less so since the recession struck.

"We're seeing more companies saying: 'I'm willing to switch,' " said Chris McDonnell, vice president and banking consultant at Greenwich Associates in Stamford, Conn. The banks that are the "first to loosen up a bit and take a little bit of a risk and bet on these companies, they are going to get a massive inflow of new business."

While corporate borrowing remains tepid, it is bound to surge when the economy firms and businesses start hiring and investing in equipment again. That's increased demand for bankers with commercial and business banking experience.

"Our corporate and institutional segment has had a goal of adding 1,000 new customers this year," PNC CEO James Rohr said at a conference Wednesday. "We're focused on being a premier provider to middle-market customers. We're looking to grow and deepen our relationships with these folks."

PNC has posted ads on its website looking for nine business bankers so far this month. KeyCorp has posted ads for five business bankers and relationship managers since May. Fifth Third's website has ads for six business development officers and two treasury management officers in that same time period.

"Our small business and our private banking operations have lower wallet share than they should have. And we're investing in technology and people to stimulate growth in both," Fifth Third CEO Kevin T. Kabat said during a conference last month.

Clapp at MarketMatch said he is skeptical the business lines that Fifth Third and its competitors are going after will deliver long-term growth. He expects most regionals to shift back to commercial and consumer real estate as those markets recover. Small-business and equipment lending tend to have lower returns on capital, he said.

"It's going to be more of a stopgap measure," he said. "They have looked at the landscape on the horizon and said, 'We need to generate lending volume. Where can we place it that has the least amount of risk?' "