- Bank Director’s 2019 Acquire or Be Acquired Conference takes place next January 27 – 29 at the JW Marriott Phoenix Desert Ridge in Phoenix, AZ. To register, click here.
WASHINGTON, DC — As the last few hours of July tick by, our team continues to build towards next winter(!) and the premier bank M&A event for CEOs, senior management and board members: Bank Director’s annual Acquire or Be Acquired Conference. This special event brings together key bank leaders from across the country to explore merger & acquisition strategies, consolidation trends and financial growth opportunities.
Earlier this year, we welcomed 1,200+ to the Arizona desert — and anticipate a similar audience when we return a week before next year’s Super Bowl. We’ve recently added a lot of new information on January’s program to BankDirector.com; if you’re interested to see what we’re planning, I invite you to take a look.
In addition to Acquire or Be Acquired, I am really excited to host two conferences before we return to the desert. On September 10-11 at the Four Seasons Hotel Chicago, we host our very popular Bank Board Training Forum. This two-day program provides bank directors with the education and training needed to address the issues and challenges facing them in today’s ever competitive, highly regulated and rapidly evolving banking and financial services industry.
From November 5 – 7, at the Four Seasons Resort & Club Dallas at Las Colinas (a short hop from DFW airport), we convene Bank Director’s annual Bank Compensation & Talent Conference to focus on the recruitment, development and compensation of a bank’s most essential talent. While in Dallas, leading advisers share their perspectives on building and supporting the best teams by providing first-hand information on the strategies and plans being used by successful banks today.
If you’re interested in any of these three exceptional programs, you can learn more here.
- A bank’s CEO, Chairman and board of directors face a number of challenges in today’s ever competitive, highly regulated and rapidly evolving financial services industry.
By Al Dominick, CEO of DirectorCorps — parent co. to Bank Director & FinXTech
ATLANTA — Complex regulations, technological innovations and a highly competitive environment that leaves little room for error have placed unprecedented demands on the time and talents of bank boards. Still, no one I’m with today seems interested in pity or sympathy. To wit, I’m in Atlanta, at the Ritz-Carlton Buckhead, as we host Bank Director’s annual Bank Board Training Forum. With us are 200+ men and women committed to strengthening their bank’s performance by enhancing the skills and abilities of their boards.
I’m buoyed by their collective optimism, especially having surfaced myriad governance issues, compliance challenges, audit responsibilities, risk concerns and areas of potential liability. What follows are five takeaways from presentations made today that are growth, risk or team-oriented.
- When it comes to growing one’s bank, an acquisition of another institution certainly helps a buyer achieve operating scale efficiencies, which in turn increases its valuation.
- In addition to traditional M&A as a driver of growth, we are seeing more partnerships with (and outright acquisitions of) non-banks in order to enhance non-interest income and the expansion of net interest margins.
- Personally, I appreciated Jim McAlpin (a partner at the law firm of Bryan Cave) for elaborating on the phrase “Strong Governance Culture.” As he explained, the regulatory community takes this to mean a well developed system of internal oversight and a board culture focused on risk management.
- When it comes to risk, financial institutions face a quite a few. Indeed, Eve Rogers, a Partner at Crowe Horwath, touched on cybersecurity, economic factors, regulatory changes, shrinking margins and fee restrictions. As she made clear, proactively identifying, mitigating, and, in some cases, capitalizing on these risks provides a distinct advantage to the banks here with us.
- In terms of compensation, a good checklist for all banks includes (a) the bank’s compensation philosophy, (b) specific details for how to incorporate a performance plan against a strategic plan and (c) details around how one’s compensation peer group was formed — and when was it last updated.
Tomorrow morning, I share some new ideas for approaching technology in terms of growth and efficiency given the digital distribution of financial goods and services. As I noted from the stage, we’re seeing some banks, rather than hire from the ground up, take a plug-and-play approach for partnering (or acquiring) FinTech companies. While I certainly intend to talk about the culture and team aspects of technology tomorrow, my focus goes to how and where machine learning, RegTech, payments, white labeling opportunities and core providers allow financial institutions to present a cutting-edge looks and feels to its customers under the bank’s brand. (*If you’re interested, click here.)
As the banking industry continues to regain its health, efficiency and productivity are key elements in positioning a bank to grow. Still, the reality remains there is an overcapacity in the US banking industry and the consolidation trend that brought the number of bank charters from over 14,000 to under 7,000 over the last 25 years will continue. So let me sum in up in word letters: OTSS… only the strong survive. Today’s post builds on this idea and offers a few takeaways from day one of the Bank Board Training Forum.
Don’t Cry For Me
Yes, a more demanding regulatory and business environment has placed a substantial burden on bank directors and their boards. However, nearly every conversation/presentation focused on what’s possible — and not what’s broken. Here are a few characteristics of successful “growth” banks:
- They have a history of executing accretive transactions that are supported in the market both post-announcement and in terms of performance over time.
- They tend to under promise and over deliver
While mergers and acquisitions is the principal growth strategy for many of these institutions, don’t sleep on building organically. Indeed, many of the banks in attendance look at M&A as a complement to their growth plans.
An appetite for technology
We welcomed 117 bank officers and directors to the Hermitage in Nashville yesterday (and I’ll be getting up on stage in a few minutes to do so again this morning). We went old school and put pen + paper in front of these men and women and asked a few true/false technology-specific questions. 47% have responded so far and here’s what I’m finding:
- T/F: Our executive team has two people with strong technology understanding/experience… 43 responded true and only 12, false.
- T/F: I would describe my bank as innovative… 40 responded true and 15 false
- T/F: Mobile banking is an important part of our strategy… 46 responded true and 8, false
Growing Through Innovation
I heard one bank is consolidating some 200 different software packages, while another introduced concierge banking. Interestingly, 11 bankers wrote on the survey above that the most innovative “thing” they are doing right now involves mobile banking.
I’ll try to post more later today, as several of the afternoon conversations tied growth into risk and audit concerns, two topics I’ve covered earlier this week. Aloha Friday!