Sharing a few bank-inspired observations from Asheville, North Carolina on a glorious Saturday evening.
One sentence on LinkedIn sparked today’s post.
Yes, a comment shared by a fellow W&L alum, Melissa Sawyer, inspired me. She noted:
“Much attention is being paid to the well-orchestrated CEO transitions at Merck and Amazon this week, which reinforce the important role that thoughtful succession planning and good governance play in corporate America.“
A partner in the law firm of Sullivan & Cromwell, I interviewed Melissa as part of our Looking Ahead series in 2019. Since meeting her, I continue to find her perspectives on governance and regulatory issues timely — and spot on.
So when I saw her take on Kenneth Frazier’s and Jeff Bezos’ career decisions this morning, my mind immediately went to a conversation I had with the former CEO of U.S. Bank about his well orchestrated succession plan.
Filmed in advance of our exclusive Inspired By Acquire or Be Acquired “content pop-up,” Richard Davis provided valuable insight into sharing intelligence to build others up. He also explained the steps he took to position his successor, Andy Cecere, for success. Rather than edit my conversation down to just that clip, here is the full conversation between Richard (now President & CEO, Make-A-Wish Foundation of America), and me.
We start by talking about culture, purposes and values (1:21). Next, how industry leaders can inspire the societies and communities they serve (5:06). We talked about laying the foundation for a well received transition (8:20) before exploring the equation IQ+EQ+CQ (12:22). Finally, how companies become places that employees want to work for (15:49).
*Another dot to connect? Our Editor-at-Large, Jack Milligan, talked with the Senior Chairman of Melissa’s law firm, Rodgin Cohen, as part of this digital program. The two explored the heightened cybersecurity threats facing banks today, his outlook for bank M&A in 2021 and how regulation could change under the Biden Administration. For those with access to Inspired By Acquire or Be Acquired’s exclusive digital content, take a look at An Interview with Rodgin Cohen.
WASHINGTON, DC — It turns out, Bono knew something about banking.
Thirty-four years ago, an Irish band came up with an album that sounded revolutionary for its time. U2’s “The Joshua Tree” went on to sell more than 25 million copies, firmly positioning it as one of the world’s best-selling albums. Hits like “I Still Haven’t Found What I’m Looking For” remain in heavy rotation on the radio, television and movies.
Talk about staying relevant. As it turns out, U2 had some wisdom for us all.
Relevance is one of those concepts that drives so many business decisions. For Bank Director, the term carries special importance, as we postpone our annual Acquire or Be Acquired Conference to January 30 through Feb. 1, 2022. In past years, this special event drew more than 1,300 bankers, bank directors and advisors to discuss concepts of relevance and competition in Phoenix.
While we wait for our return to the Arizona desert, we got to work on a new digital offering to fill the sizable peer-insight chasm that now exists.
The result: Inspired By Acquire or Be Acquired.
Think of this as a new pop-up website, one that disappears after a few glorious weeks. Available exclusively on BankDirector.com, this on-demand package consists of timely short-form videos, CEO interviews, live “ask me anything”-type sessions and proprietary research. Topics range from building value to doing a deal, enhancing culture to addressing competition — and yes, technology’s continued impact on our industry.
Everything within this board-level intelligence package provides insight from exceptionally experienced investment bankers, attorneys, consultants, accountants, fintech executives and bank CEOs. So with a nod towards Paul David Hewson (aka Bono) and his bandmates in U2, here’s a loose interpretation of how three of their Joshua Tree songs are relevant to bank leadership teams.
With or Without You
(The question all dealmakers ask themselves.)
Many aspects of an M&A deal are quantifiable: think dilution, valuation and cost savings. But perhaps the most important aspect — whether the deal ultimately makes strategic sense — is not. As regional banks continue to pair off with their peers, I talked with a successful dealmaker, Bryan Jordan, the CEO of First Horizon National Corp., about mergers of equals.
Where the Streets Have No Name
(Banks can help clients when they need it most.)
A flood of new small businesses emerged in 2020. In the third quarter 2020 alone, more than 1.5 million new business applications were filed in the United States, according to the U.S. Census Bureau, nearly double the figure for the same period the year before. Small businesses need help from banks as they wander the streets of their new ventures. So, I asked Dorothy Savarese, the Chair and CEO of Cape Cod 5, how her community bank positions itself to help these new business customers. One part of her answer really resonated with me, as you’ll see in this short video clip.
Running to Stand Still
(Slow to embrace new opportunities? Don’t let this become your song.)
With the rising demand for more compelling delivery solutions, banks continue to find themselves in competition with technology companies. Here, open banking provides real opportunities for incumbents to partner with newer players. Ideally, such relationships provide customers greater ownership over their financial information, a point reinforced by Michael Coghlan, the CEO of BrightFi.
These short videos provide a snapshot of the conversations and presentations that will be available February 4. To find out more about Inspired By Acquire or Be Acquired, I invite you to take a longer look at what’s on our two-week playlist.
WASHINGTON, DC — Over the past few months, I’ve shared several transformative technology deals in the financial sector on this site and in virtual presentations. From Visa acquiring Plaid to MasterCard picking up Finicity, big name players paid big time premiums to acquire technology companies to boost their games with consumers. As CEOs and their boards wrestle with competitive pressures and explore new paths to remain relevant, a huge announcement in the health space caught my attention. In fact, it reminds me of a recent bank M&A deal.
Why This Deal Matters: The Changing Competitive Landscape
Much as last year’s deal between SunTrust and BB&T — which resulted in Truist — reflected the pressures of our digital-first world, so too does one struck in another heavily regulated (and also incredibly important) industry. This one, between Livongo and Teladoc, impacts the whole digital healthcare market, creating a combined entity worth $38 billion.
As shared on CIO.com, Teladoc already has a significant presence in hospitals, many of whom are white-labeling the Teladoc platform for providing telehealth services, often using the Teladoc physician network to complement their network of doctors within the system.
In parallel, Livongo’s success in remote management of chronic care appears a natural complement to that business. Indeed, their whole-person platform empowers people with chronic conditions to live better and healthier lives.
As the merger release makes clear, “the highly complementary organizations will combine to create substantial value across the healthcare ecosystem, enabling clients everywhere to offer high quality, personalized, technology-enabled longitudinal care that improves outcomes and lowers costs across the full spectrum of health.”
Here, two words stand out: technology-enabled.
Put another way, we are talking about digital transformation, which, as I recall, anchored SunTrust/BB&T’s deal.
Another Example That Scale Is Good — But How You Leverage It Is Key
Last February, BB&T and SunTrust Banks’ all-stock transaction (valued at $66 billion) was the largest U.S. bank merger in over a decade. It spawned Truist, the sixth-largest bank in the U.S. by assets and deposits. In the initial press release, both banks’ CEOs cited the desire for greater scale in order to invest in innovation and technology to create compelling digital offerings.
While Teladoc and Livongo have both been acquiring smaller startups to expand their capabilities in virtual care and digital patient engagement, it appears both are falling in Truist’s steps. Together, the new organization promises to offer a broader set of digitally-enabled services and capabilities across an individual’s health journey.
Given the incredible size of the combined digital health entity, I am reminded of a special episode of Looking Ahead with Keith Pagnani of the law firm Sullivan & Cromwell and Andrew Rymer of the investment bank Centerview Partners. Filmed last year at Nasdaq’s MarketSite, the three of us talked about what’s driving healthcare deals and what the regulatory process looks like for transactions. While we focused on the combination of CVS and Aetna, I think you’ll find the rationale applies for Teladoc and Livongo.
*If you’re interested in M&A and IPO activity in the health sector, our DirectorCorps team recently introduced “The Deal on Healthcare.” A bi-monthly communique, it rounds up the most notable announcements. To sign up for this free newsletter, click here.
- Next year’s Acquire or Be Acquired Conference takes place January 27-29, 2019 at the JW Marriott Desert Ridge. Registration, if you can believe it, opens today.
PHOENIX, AZ — Well, that was fun! Bank Director’s Acquire or Be Acquired Conference wrapped up on Tuesday evening, and with the benefit of a day to reflect on a jammed-packed experience, a few personal highlights from our time at the Arizona Biltmore.
I am SO proud to work with such a great team that truly embodies our #1 core cultural value of helping to make other’s successful.
Three timely (and paraphrased) comments
When it comes to identifying banks to buy… core deposits are more important than loans — David Zalman, Chairman & CEO, Prosperity Bancshares Inc.
Earnings accretion is answer 1,2,3,4 and 5 out of five possible answers to the question “what is most important in bank M&A” — Robert G. Sarver, Chairman & CEO, Western Alliance Bancorporation
If you sell your bank for cash, you’re truly selling your bank. If you sell your bank for stock, you’re really investing in another’s future — Bill Hickey, Principal, Co-Head, Investment Banking, Sandler O’Neill + Partners, L.P.
Best comment (unintentional comedy)
On Monday, during the Prioritizing Risk & Reward session that she moderated, our President, Mika Moser, brought the house down. John Allison, the Chairman of Home BancShares just shared that he’d made a whole lot of millionaires at his bank when Mika deadpanned, “you gotta any available teller positions?” Great stuff Mika!
Is this really a case to partner with FinTechs?
I’ve seen estimates that some 90% of FinTech startups will fail — for a variety of reasons (e.g. no one wants the product, cash shortage, etc). So, when I do the math and consider that we have some 5,000 FinTechs looking to make it big, only 10% have a realistic chance. Out of these 500 or so companies, only the ones capable of consolidating and expanding across niches will acquire a significant enough footing in the market to ensure resilience and sustainable long-term growth. Banks, start your engines…
In case you missed it, we shared a number of videos on BankDirector.com this week. The page with all videos can be found here: The Pulse of Acquire or Be Acquired. To get a sense of what these short videos look like, here is an example from Sunday.
_ _ _
If you missed the daily recaps shared on LinkedIn, Twitter and BD.com, here is a thumbnail with all the videos created. To playback the conference conversations via our social channels, I invite you to take search #AOBA18 to see what was shared by our attendees.
- Technology continues to reshape what it means to lead, to innovate and to offer in terms of financial goods and services.
WASHINGTON, DC — It is no secret that financial institutions are in a race to figure out how and where innovative technologies can help win and keep loyal customers, improve operational efficiencies and enhance their overall cyber-security measures. While we might disagree on how fast changes will occur, can we all agree that the ever-expanding expectations for the digital delivery of products and services will dramatically impact banking’s future?
I put this not-quite-rhetorical question out in advance of our annual Acquire or Be Acquired Conference at the Arizona Biltmore. Indeed, the technological shifts taking place in this industry are significant, and I anticipate quite a few conversations about what our “digital future” might look like. In the spirit of sharing information and ideas prior to this Sunday’s presentations, this video surfaces a few areas I think a bank’s board needs to pay closer attention to.
If you’re interested in following conversations that focus on issues like these during Acquire or Be Acquired, I invite you to follow me on Twitter via @AlDominick, check out what the team shares through @BankDirector plus our @Fin_X_Tech platform and search & follow #AOBA18 to see what the social shares with (and by) our attendees.
*This video — which is normally available only through our special bank membership program — foreshadows several presentations at Acquire or Be Acquired. It also tees up our FinXTech Annual Summit. Held the past few years at the NASDAQ’s MarketSite in NYC, we’ve partnered with Promontory Interfinancial Network to best explore opportunities to generate top line growth and bottom line profits through partnerships, collaboration and investments. Held at The Phoenician in Scottsdale, AZ on May 10th and 11th, I invite you to take a peek at the recently updated agenda.
- Last week, Bank Director held its 23rd annual Acquire or Be Acquired Conference at the JW Marriott Phoenix Desert Ridge Resort & Spa.
- 686 bankers comprised the 1,076 registered attendees — a figure that reflects the participation of 379 financial institutions.
- 24 of our awesome team were on-site hosting this year’s event — all are celebrating what we affectionately refer to as “AOBA Day” by taking today off as a company holiday.
_ _ _
This has become something of a sharing tradition… a look back at a phenomenal week in Arizona. New this year? The welcome video we arranged to introduce our team to our guests on Sunday morning.
As I shared in a Sunday afternoon post (Trending at Acquire or Be Acquired), the best way to understand this event’s popularity is to look at this picture from Sunday morning at 8:16 AM (e.g. one minute after I turned the stage over to our first speaker, the CEO of KBW, Tom Michaud). Already, we had 900+ in their seats for this 2.5 day program. Let me say that one more time… 900+ in their seats on a sunny Sunday Arizona morning.
So with that in mind, take a look at some of the photos shared by our on-site photographer, Keith Alstrin (Alstrin Photography).
If you’re interested in what is being discussed for the present + future by some of the industry’s most influential executives, I invite you to follow me on Twitter via @AlDominick along with @BankDirector and its @Fin_X_Tech platform. To take a further trip back and see what was being shared with (and by) our attendees at Acquire or Be Acquired, we encouraged the use of #AOBA17. We are excited to do this again next year and hope you’ll save the date!!
Highlight: as executives grapple with a fast-changing operating environment that requires partnerships and collaboration, many wrestle with where they want to be vs. where they need to be.
In this video, I share my thoughts on growing through partnerships (between traditional banks and financial technology firms), becoming “data richer” and enhancing the customer experience you’re delivering.
FWIW, this video lives on FinXTech.com, a site designed to provide authoritative, relevant and trusted content to a hugely influential audience, specifically:
- Fintech companies who view banks as potentially valuable channels or distribution partners;
- Banks looking to grow and/or innovate with fintech companies’ help and support; and
- Institutional investors, venture capitalists, state & federal regulators, government officials and academicians helping to shape the future of banking.
As a platform powered by Bank Director, FinXTech connects this hugely influential audience around shared areas of interest and innovation. FinXTech specializes in (1) bringing valuable bank relationships to fintechs, and (2) offering banks valuable relationships with fintechs in a way no one else does.
Some of the most visible innovations in the banking world today are platform-based, data intensive and capital light. Personally, I’m just as encouraged by “incumbent” institutions supporting new fintech entrants — with infrastructure and access to services — as I am creative new companies (like Nymbus, nCino, etc.) providing smaller and mid-sized banks with sophisticated new capabilities.
This video, filmed during Bank Director’s annual FinTech Day in New York City at the Nasdaq Marketsite, is but one of eight videos we’ve shared on BankDirector.com. To see what industry leaders from Silicon Valley Bank, the Fintech Collective, BizEquity, Daon, Deloitte Consulting and the World Bank’s IFC think are the challenges & opportunities facing traditional banks, I invite you to take a look at this compilation of videos FinTech Day Recap: Rapid Transformation Through Collaboration.
Al Dominick is the President & CEO of Bank Director, a privately held media & publishing company designed around strategically important business issues that a CEO, executive and/or board member(s) need to know — and be prepared to address. An information resource to the financial community since 1991, we publish Bank Director magazine, host conferences like “Acquire or Be Acquired,” conduct board-level research, provide board education & training programs, run BankDirector.com… and recently launched FinXTech.
As we head into the final day of Acquire or Be Acquired, its clear to me that there are some great opportunities for community and regional banks to compete effectively and recapture market share in 2016.
*Thanks to our keynote speaker, J. Michael Shepherd, Chairman & CEO, Bank of the West and BancWest Corporation for inspiring today’s title and video.
Thanks to our keynote speaker, J. Michael Shepherd, pictured above. The Chairman & CEO, Bank of the West and BancWest Corporation, he inspired quite a few with both his wit and wisdom.
Over the past few days at Bank Director’s annual Acquire or Be Acquired conference, various speakers have touched on a number of key strategic growth issues. From exploring an acquisition to growing loans, controlling expenses to managing capital, the discussions hit the “timely and relevant” standard that we consider essential. They also reinforced my sense that more boards and their management teams are seriously considering an acquisition as their primary growth plan than at this time last year.
As our editor-in-chief opined, the heightened level of interest could certainly be explained by the continued margin pressure that banks have been operating under for the last several years. For those thinking about buying another, my short video recap from the mid-way point of AOBA offers a heads up about a pre-deal consideration not to be overlooked.
As we prepare to kick off this year’s Acquire or Be Acquired conference, I offer my take on one theme I anticipate being brought up early — and discussed often: the return of regional acquirers who are positioning themselves to challenge the true big guys in banking.