9 Banks I Bet People Will Be Talking About at Acquire or Be Acquired

I planned to write about a number of banks I was excited to see this weekend at AOBA.  But as Steve Jobs once shared “people don’t know what they want until you show it to them.” In this spirit, let me highlight nine banks that I anticipate our attendees will be talking about in Arizona at Bank Director’s annual M&A conference.

In a few minutes, I’ll hop an American flight to Phoenix for this year’s Acquire or Be Acquired Conference.  Before I depart the cold and slush of D.C. for some warmth and sun in the desert, this is my take on the banks I anticipate people talking about when we’re all together:

  • Bank of the West — and not just because their CEO is keynoting this year’s conference.  The bank, with more than 700 branches in the Midwest and Western United States, has long been a personal favorite of mine and competes in markets where many look for inspiration.
  • Bank of North Carolina — because they’ve been wheeling and dealing and are a great example of how an acquirer successfully integrates cultures (*yes, their CEO also speaks at AOBA this year on a CEO panel entitled Finding the Right Partners).
  • United Bank — having picked up a trophy franchise of their own in my hometown (another personal favorite of mine, Bank of Georgetown) they’ve made a number of interesting deals over the past few years and I bet have more on their mind.
  • BB&T — having dealt for Susquehanna in ’14 and National Penn in ‘15, it is fair to ask: who’s next?

By no means are these all of the banks that will come up in conversation; rather, those that are top of mind.

One final thought before hopping my flight west.  The recent volatility in the stock market may be impacting institutions considering a capital raise, IPO or acquisition — but this week’s deal pace is far different then at this time in recent years.  The patterns I’m beginning to see is a concentrated effort to get to over the $5Bn asset mark and into that sweetest of spots: the $5Bn to $50Bn asset class.  A point I’ll elaborate on in an upcoming post/video.

So if you are interested in following the conference conversations via social channels, I invite you to follow me on Twitter via @AlDominick, the host company, @BankDirector, and search & follow #AOBA16 to see what is being shared with (and by) our attendees.  Safe travels to those 930 men & women joining us this weekend!

FI Tip Sheet: Some of Banking’s Best Female CEOs

According to a recent report by Catalyst, 46.9% of the U.S. labor force is female; but only 16.9% of Fortune 500 corporate board seats are held by women and 4.6% of Fortune 500 CEOs are women. This got me thinking about the financial sector and why there are so few… along with wondering who are some of the best. Yes, the number of women serving as chief executives is spectacularly small, and the same is true in the banking industry.  Nonetheless, there are a number that standout and what follows in today’s tip sheet are some of them.


Two CEOs at “Big Brands”
Last month, I wrote how the names and logos of institutions over $50Bn — think M&T with some $83Bn in assets, PNC with $305Bn and US Bancorp with $353Bn – are familiar to most. Leading these massive organizations are some tremendously talented individuals; to today’s focus, Beth Mooney, the CEO of KeyCorp, deserves recognition. The $89 billion Cleveland-based bank operates branches in 14 states from New York to Alaska. Of note, she is the only female CEO running a financial institution included in the S&P 500. So I made immediate note of Ken Usdin’s comments about her success. Ken is the Managing Director of Equity Research for U.S. Banks at Jefferies, and notes “Beth has done a very good job streamlining the organization, improving the business model in retail banking and tightening the focus and integration of Key’s various commercial banking businesses.”

Like Beth, Barbara Yastine, the Chief Executive Officer and President of Ally Bank deserves praise for the role she’s played since assuming the post in May of 2012. Consider that Ally Bank, the direct banking subsidiary of Ally Financial Inc., announced this past year it had crossed the $40 billion threshold in deposits from retail customers.  Quite an accomplishment given its parent company, the former GMAC, was described in an American Banker piece as “a poster child of the financial crisis and could have buckled under the weight of its bad loans without a bailout.” In addition to a portfolio of straightforward products, Ally Bank has introduced popular online and mobile banking tools backed by a robust customer service platform under her care and guidance.

Four CEOs at Strong Community Banks
A dynamo in her own right, Cathy Nash, the former President and CEO at Citizens Republic Bancorp (who orchestrated a great merger deal with FirstMerit last year) pointed me towards Jean Hale of Community Trust Bancorp in Kentucky. Ms. Hale has been CEO since July of 1999 and guides the NASDAQ-listed company with total assets at $3.6 billion.

From the Commonwealth of Kentucky let me move to my first home state of Massachusetts. There, you will find Dorothy Savarese, the president and CEO of The Cape Cod Five Cents Savings Bank, leading 400 employees while presiding over an institution with $2.3Bn in assets. Serving the community since 1855, this is one of those bank logos I always get excited to see come summer vacation.

Separately, I also hear that Melanie Dressel, President and CEO, Columbia Banking System out of Tacoma, Washington, is a female CEO to watch. With the bank’s acquisition of West Coast in 2012, this is one of the largest community banks in the Pacific Northwest: 141 banking offices, including 80 branches in Washington State and 61 branches in Oregon.

Finally, Scott Winslow at RFi applauded Julie Thurlow at Reading Co-op Bank in Massachusetts as “smart, gracious and very focused on leading her team of folks to the right decisions for the bank and her community. One of the sharper CEOs I have met in the community banking world.”

Four I Want to Learn More About
As I prepared for today’s piece, I looked at various analyst reports, stories authored by our team, performance rankings and research notes. I took note of four CEOs — and their institutions — that I am curious to learn more about. For example, Sheila Mathews at Four Corners Community Bank. I also want to learn more about the work Peyton Patterson is doing up in Connecticut as Bankwell’s CEO. Finally, Bank Director’s own CEO, Joan Susie (a woman herself), told me that Diane Dewbrey at Foundation Bank in Bellevue, WA is really smart and interesting and that Laurie Stewart, president and CEO of Sound Community Bank in Seattle, is impressive.

Even with all this snow on the ground, let me close with a very warm Aloha Friday!

What you learn at a puppet show

Hank Williams "walking" the red carpet in Nashville

I wrapped up a fairly intense period of travel with a day trip to NYC on Monday and a subsequent overnight in Nashville on Tuesday & Wednesday. While in the Music City, our Chairman invited me to join him at a puppet festival (yes, you read that right). The show, a musical chronicle of the history of country music, benefitted the Nashville Public Library Foundation and the Country Music Hall of Fame. Laugh if you will, but I will tell you, it was amazingly creative. As I mingled with various benefactors of both institutions, I found myself engaged in conversation with the former managing partner at Bass, Berry & Sims. Having led one of the preeminent law firms in the Southeast, his perspective on how dramatically the legal profession has changed in the last fifteen years struck a nerve. The parallels between his profession and the banking space were immediately apparent. So with Patsy Cline playing in the background, we talked about the future of banking, professional services firms and relationship building in general. As we did, I made a mental note to share three thoughts from this week that underscore how things continue to change in our classically conservative industry.

(1) First Republic’s founder and CEO, Jim Herbert, shared some of his Monday morning with me while I was in NYC. Jim founded the San Francisco-based bank in 1985, sold it to Merrill Lynch in 2007, took it private through a management-led buyout in July 2010 after Merrill was acquired by Bank of America, then took it public again this past December through an IPO. For those in the know, First Republic is one of this country’s great banking stories. Not only is it solely focused on organic growth, it’s also solely focused on private banking. While my conversation with Jim was off-the-record, I left his office convinced its the smarts within, not the size of, a bank that will separate the have’s from the have not’s in the years ahead. Clearly, as new regulations and slim profit margins challenge the banking industry, the skills and backgrounds of the employees who work in banking must change.

(2) Speaking of successful banks that have successfully navigated recent challenges… KeyCorp’s Chief Risk Officer, Bill Hartman, joined us last week for Bank Director’s annual Bank Audit Committee Conference in Chicago. Bill is responsible for the bank’s risk management functions, including credit, market, compliance and operational risk, as well as portfolio management, quantitative analytics and asset recovery activities. While I shared some thoughts about that program last week, I thought to elaborate on how KeyCorp divides the roles and responsibilities of its Audit and Risk Committees. Some still think you “retire” to the board; as he showed, that is definitely not the case – especially not at an institution that counts 2 million customers, 15,000 employees and assets of $89 Bn. In terms of Key’s Audit Committee, members oversee Internal Audit, appoint independent auditors and meet with the Chief Risk Officer, Chief Risk Review Officer, and of course, for financial reporting, the CFO. I thought it was interesting to note their Audit Committee met 14 times in 2012 — twice as often as the institution’s Risk Committee convened. With many smaller banks considering the creation of such a committee, let me share the focus of their Risk Committee. Strategically, it is responsible for:

  • Stress testing policy;
  • Dividend and share repurchases;
  • Modeling risk policy;
  • Asset and liability management; and
  • Setting tolerances, key risk indicators and early warning indicators

For those thinking about introducing a Risk Committee into their bank, take a look at what some of our speakers shared leading up to last week’s Audit Committee conference for inspiration.  For a recap of the event, our editor shares his thoughts in today’s Postcard from the Bank Audit Committee Conference.

(3) Yesterday, I was pleased to learn that ConnectOne’s CEO, Frank Sorrentino, agreed to participate in our annual Bank Executive & Board Compensation Conference in November. In addition to being one of the more active bankers I follow on Twitter, I’ve written about his bank going public in a previous post. Today, it’s a WSJ piece that shows U.S. regulators grilling banks over lending standards and “warning them about mounting risks in business loans” that has me citing the NJ-based bank. This particular article quotes the CEO of the Englewood Cliffs, N.J. bank in terms of lending standards (yes, a subscription is required). He reveals that regulators recently asked what he is doing to ensure he isn’t endangering the bank by making risky loans. His response: “the bank is trying to offset the lower revenue from low-interest-rate commercial loans by cutting expenses.” While I get the need for oversight, I do wonder how far the regulatory pendulum will continue to swing left before sanity/reality sets in at the CFPB, FDIC, OCC, etc. I’ll stop before I say something I regret, but do want to at least encourage a Twitter follow of Frank and his “Banking on Main Street” blog.

Aloha Friday!

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