Kicking off FinXTech’s Summit

Quickly:

  • Technology continues to transform nearly every aspect of the financial services industry — from mobile payments to peer-to-peer lending to financial management.

PHOENIX — Tomorrow morning, we kick off our annual FinXTech Summit.  As I wrote yesterday, this annual event serves as our “in-person” bridge between banks and qualified technology companies.  Personally, I am so impressed to witness numerous financial institutions transforming how they offer banking products and services to businesses and individuals.  As such, I find myself eager to engage in tomorrow’s conversations around:

  • Partnerships, collaboration and enablement;
  • How and where banks can invest in cloud-based software; and
  • The business potential of machine learning, advanced analytics and natural language processors.

Joining us at the Phoenician are senior executives from high-performance banks like Capital One, Customers Bank, Dime Community Bancshares, First Interstate Bank, IBERIABANK, Mechanics Bank, Mutual of Omaha Bank, PacWest, Pinnacle Financial, Seacoast National Bank, Silicon Valley Bank, South State Bank, TCF National Bank, Umpqua, Union Bank & Trust, USAA and US Bancorp.  Long-time tech players like Microsoft share their opinions alongside strong upstarts like AutoBooks during this two-day program.  So before I welcome nearly 200 men and women to this year’s conference, allow me to share a few of my preliminary thoughts going into the event:

For those with us here in Arizona, you’ll find nearly every presentation explores what makes for a strong, digitally-solid bank.  So to see what’s trending, I invite you to follow the conference conversations via our social channels. For instance, I am @AlDominick on Twitter — and our team shares ideas and information through @BankDirector plus our @Fin_X_Tech platform.  Finally, search & follow #FinXTech18 to see what’s being shared with (and by) our attendees.

Giving Thanks for Great Leadership

We are getting close to that time of year when people start writing their top ten lists, providing year-in-review posts and taking out the proverbial crystal ball.  In this spirit, my post-Thanksgiving piece provides a list of bank CEOs I met this year that impressed me with both their bank’s performance & personal leadership styles.  From the outside looking in, I have to assume shareholders and employees alike appreciate what each has done for their organization.

A few days ago, David Reilly authored a piece in the Wall Street Journal entitled “Wanted: Dance Partners for Bank Merger Ball” (sorry, registration required).  Citing Bank Director’s annual M&A research report, he reminded us that it takes two to tango — and “that is still the issue for investors expecting, or hoping for, a significant pickup in bank merger activity in 2015.”  As we showed in our survey of about 200 bank directors and executives, 47% said they planned to purchase a healthy bank in the next 12 months — but 87% also said they had no intention to sell.  So a steady hand to lead an institution strikes me as imperative for those banks seeking growth through traditional, or acquisition-based, means.  This got me thinking…

Over the course of the year, I am lucky to meet Chief Executive Officers from all over the country.  To build on three posts from earlier this year (my “FI Tip Sheet: Some of Banking’s Best CEOs,” “FI Tip Sheet: Great Bank CEOs” and “FI Tip Sheet: The Top Women in Banking“) here, in no particular order, are nine community bank CEOs that made memorable impressions on me in 2014:

  • Jay Sidhu, the Chairman and CEO of Customers Bank, ran Sovereign Bank for nearly 20 years and started Customers Bank from scratch in ’97.  The bank has grown from its original five branches in the suburbs of Philadelphia to 14 offices in three states — Pennsylvania, New York and New Jersey. Thanks to Jay’s disciplined approach to growth, Customers has seen its assets increase to $6.5 billion as of August 25.
  • Down in Texas, Scott Dueser, the Chairman, President & CEO at First Financial, embodies the concept of loyalty — to his employees, his customers and to the First Financial family as a whole (he’s been a part of it for more than 38 years).  Oh, and his bank placed first in the $5 billion to $50 billion asset category in Bank Director’s annual Bank Performance Scorecard — a ranking of the 200 largest publicly traded bank holding companies in the United States based on their 2013 financial data.
  • Up in RedSox country (sorry, CT might be a swing state between Yankees and RedSox fans, but the team from my home town is far superior), Bill Crawford leads United Financial Bancorp, the bank holding company for United Bank and Rockville Bank.  A $5 billion community bank founded in 1858 with 60 branches in New England, Bill’s determination to merge the two proverbial “equals” as seamlessly as possible reflects a real commitment to the combined teams, client bases and cultures.
  • Billed as the “bank for VCs and entrepreneurs,” Doug Bowers, the President & CEO at Square 1 Bank, oversees the NC-based bank with more then $1bn in assets.  As he shared, their focus on banking entrepreneurs and their investors is all that that they do.  Yes, it is 100% of their business.
  • Robin McGraw, embodies “intrapeneurship.”  The Chairman & CEO of Tupelo, MS-based Renasant Corporation, the parent of Renasant Bank, runs the 110-year-old financial services institution.  With approximately $5.8 billion in assets, Renasant operates more than 120 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee, Alabama and Georgia. Under Robin’s watch, the bank made in-sourcing their IT work a priority — which puts them in a favorably competitive position as the world becomes even more digital.
  • I know Daryl Byrd, President & CEO at IBERIABANK Corporation, sees quite a few potential deals cross his desk as he runs the oldest and largest bank headquartered in Louisiana.  The financial holding company operates 280 combined offices and successfully serves a niche commercial and private banking target audience.  Over the past few years, IBERIABANK has been held up as one of the better acquirers in terms of integrating a team/brand into its own — something they will do again with their recently announced acquisition of Old Florida Bancshares.
  • Any time I am able to spend time with Mike Fitzgerald, the Chairman, President & CEO at Bank of Georgetown in Washington, D.C., I come away inspired.  Being a local presence since 2005 — with a great reputation for growing organically — Mike and his team have quickly made this one of the best community banks in the Washington metropolitan area.
  • John Corbett, the President & CEO at CenterState Bank of Florida, runs one of the fastest growing community banks headquartered in the Sunshine State.  Founded in 1999, CenterState Bank has grown to nearly $4 billion in assets.  Just last month, John talked with us about the need to innovate or risk becoming stagnant and losing the ability to compete for exceptional talent.
  • In terms of taking risks, David Brooks, of Independent Bank Group in Texas, can share a story or two.  As I wrote for BankDirector.com in October (Deciding Whether to Sell or Go Public), David was one of the first to take a bank public following the financial crisis, guiding the bank’s 2012 IPO that raised $100 million at 2.2 times tangible book value. The company has announced eight acquisitions since 2010; most notably, with Bank of Houston in a deal that added more than $1 billion in assets to Independent Bank when the deal closed in April.
  • Finally, a tip of my hat to Leon Holschbach, the Vice Chairman, CEO and President of Midland States Bancorp. Leon stands out for his recruitment & retention efforts and has graciously shared how his company develops executives, attracts leadership and approaches compensation in our highly competitive and economically challenging world.

This is by no means a comprehensive list, and I realize there are many, many more leaders who deserve praise and recognition. Click the “+” button on the bottom right of this page to comment on this piece and let me know who else might be recognized for their leadership prowess.

Standing Out on a Friday

Fenway Park's red seatComing off of last week’s Growth Conference, I found myself planning for next year’s program. As we recognized Customers Bank, State Bank & Trust and Cole Taylor Bank for “winning” our annual Growth rankings, I spent some extra time looking at other banks that performed exceptionally well this past year. So today’s Friday-follow inspired post shares a few thoughts and conversations I’ve had about three very successful banks.

(1) While easy to frame the dynamics of our industry in terms of asset size, competing for business today is more of a “smart vs. not-so-smart” story than a “big vs. small.” During one of my favorite sessions last week — David AND Goliath — Peter Benoist, the president and CEO of St. Louis-based Enterprise Financial Services Corp, reminded his peers that as more banks put their liquidity to work, fierce competition puts pressures on rates and elevates risk. My biggest takeaway from his presentation: we all talk about scale and net interest margins… but it’s clear that you need growth today regardless of who you are. It is growth for the sake of existence.

(2) During the afore mentioned presentation, the participants all agreed that you cannot compete with BofA on price. Consequently, the ability to introduce new products (e.g. increasing deposit platforms) is key for many banks today. So from diversification to differentiation, let me turn my attention to San Francisco-based First Republic. Their story is a fascinating one. While not with us in New Orleans, I heard a lot about them yesterday while I was in NYC visiting with KBW. Subsequently, our editor wrote me with some background: Jim Herbert founded the bank in 1985, sold it to Merrill in 2007 for 360% of book, took it private through a management-led buyout in July 2010 after Merrill was acquired by Bank of America, then took it public again in December through an IPO. First Republic is a great bank: it finished 3rd out of 80+ in the $5-$50 billion category in Bank Director magazine’s 2012 performance rankings. But not only is it solely focused on organic growth, it’s also focused solely on private banking.

(3) Finally, as we move our attention from growth to risk in advance of our annual Bank Audit Committee conference, I started to think about the challenges facing banks of all sizes. Admittedly, I started with Fifth Third as their Vice Chairman & CEO will be joining us in Chicago as our keynote speaker. Yes, I am very interested to hear his perspectives on the future of banking. Quite a few small bank deals have recently been announced, and I have to believe many sales came together thanks to escalating compliance costs and seemingly endless regulation. For larger institutions like Fifth Third, it will be interesting to see what transpires over the next few years and where he thinks the market is moving for banks of all sizes. If you’re interested, take a look at our plans for this year’s event.

Aloha Friday!

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About today’s picture:

I’m a die-hard Boston RedSox fan, and for anyone whose been early to, or stayed late at, Fenway Park, you’ve probably seen one red seat in the right field bleachers (Section 42, Row 37, Seat 21). Did you know it signifies the longest home run ever hit at Fenway, one struck by the great Ted Williams on June 9, 1946? While a nice chance for me to share my love for the RedSox, I thought the visual made a lot of sense when writing about standing out from the crowd… -AD

Dass de Thing

photo (10)

Today’s Friday Follow-inspired column takes a decidedly cajun turn (I tink dats rite) with a look back on time spent at the Ritz-Carlton in New Orleans. Fancy, for sure. Financially focused? Absolutely, thanks to Bank Director’s inaugural Growth Conference.

The slow economic recovery continues to challenge banks ability to grow as businesses both large and small reduce their leverage. Additionally, tepid growth (or in some cases, continued decline) in real-estate values presents challenges in the growth of consumer and commercial mortgage portfolios. Layer on the increased focus of larger banks on growing their C&I and small business lending portfolios due to increased regulatory pressure on consumer products and you understand how challenging it is for community or regional bank CEOs and boards to devise effective growth strategies. These obstacles did not, however, deter a crowd of nearly 200 bankers and industry executives from sharing their insight and opinions earlier this week.

(1) For example, Josh Carter from PwC covered what some of the fastest growing community banks are doing, both those who have grown through M&A, as well as digging a level deeper into those who are successfully growing organically. In his address, he noted a few bright spots have given the banking industry hope that economic and financial recovery is just around the corner (e.g. consumer confidence continues to improve, unemployment is on the decline and the home price index continues to tick up). As such, he believes there are five key areas that community banks should focus on to drive growth in their respective markets:

  • Emphasize productivity over efficiency;
  • Sharpen your business model; that is, serve niche segments, provide tailored offerings, excel at service quality, etc.;
  • Innovate within your business model, as banks that succeed most often are the ones that continually evolve and out-innovate their peers;
  • Pursue opportunistic M&A deals; and
  • Broaden your product portfolio.

(2) Preceding Josh was Jay Sidhu, the Chairman & CEO at Customers Bank. If you’re looking for a bank that is leading the field in terms of core income, net loans/leases and core non-interest income, look no further than his bank, which is expanding its business in three states — Pennsylvania, New York and New Jersey. Jay captivated his peers with a look at the changing face of banks in the United States and the role of a board and CEO in positioning bank to take advantage of this changing environment. Tops for him: an “absolute clarity of your vision, strategy, goals and tactics; there must be absolute alignment between board and management… (along with a) passion for continuous improvement.”

(3) Bank 3.0Finally, Brett King and Sankar Krishnan explored the “end-game” in the emergence of the mobile wallet and what it means for the “humble bank account.” With more than 60% of the world’s population without a bank account and the ubiquitous nature of mobile phone handsets and the increasingly pervasive pre-paid ‘value store’ – the two openly considered will banks still be able to compete. I’ll have more on this session in a subsequent post that combines Brett’s presentation with one made by John Cantarella, President, Digital, Time Inc. News and Sports Group. For now, let me suggest a trip to Amazon to check out Brett’s latest book, Bank 3.0: Why Banking Is No Longer Somewhere You Go But Something You Do.

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A big shout out to the entire Bank Director team who made this first conference such a success. Laura, Michelle, Mika, Kelsey, Jack, Misty, Jennifer, Daniel, Naomi, Joan, Bill… way to go!

Aloha Friday!!