American Banker November 2014

November 2014 americanbanker.com

LIVE OAK BANK, PINNACLE FINANCIAL PARTNERS, 1ST NATIONAL BANK, AVENUE BANK, FIRST CITIZENS NATIONAL BANK, FIRST FEDERAL SAVINGS AND LOAN, BELL STATE BANK & TRUST, REDWOOD CAPITAL BANK, CAPITAL CITY BANK, CITY BANK, CHESAPEAKE BANK, VERITEX COMMUNITY BANK, 1ST SUMMIT BANK, COBIZ FINANCIAL, CITY BANK, OLD POINT NATIONAL BANK, SOMERSET TRUST COMPANY, CENTIER BANK, FIRST INTERNET BANK, ST NATIONAL BANK, CITY BANK, FIRST HORIZON NATIONAL CORPORATION, CHARTER BANK, COMMUNITY TRUST BANK, FIRST GREEN BANK, BUSINESS FIRST BANK, BANKPLUS, UNITED COMMUNITY BANK OF WEST KY, CENTRAL BANK, AMER-ICAN SAVINGS BANK, NORTH SHORE BANK, THE MUNCY BANK AND TRUST COMPANY, SQUARE 1 BANK, ZIONS FIRST NATIONAL BANK, BOILING SPRINGS SAVINGS BANK, SECURITY BANK, CITIZENS BANK, BANK FIRST NATIONAL, HAPPY STATE BANK, BRIDGE BANK, ALERUS FINANCIAL, THE BANKERS BANK,ELMIRA SAVINGS BANK LIVE OAK BANK, PINNACLE FINANCIAL PARTNERS, 1ST NATIONAL BANK, AVENUE BANK, FIRST CITIZENS NATIONAL BANK, FIRST

magazine

BESTBANKS WORKFOR WORKto

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WORKFirst Horizon CEO Bryan Jordan

ABM1114 CoverTYPE 8.indd 150 10/14/14 9:31 AM

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NOVEMBER 2014 AMERICAN BANKER MAGAZINE 1

18 The Case for Cultivating CareersFirst Horizon’s Employee Leadership Program, championed by CEO Bryan Jordan, has been described as “life changing” by some of its graduates. It has also helped solidify First Horizon’s status as one of the banking industry’s most employee-friendly companies.

22 The Best Banks to Work ForAmerican Banker Magazine’s second annual ranking of the banks that win highmarks from employees for providing a positive work environment, top-notchbenefits and ample career-advancement opportunities. The perks, like free lattes and subsidized gym memberships, are great too.

November 2014 Vol 124 No 10CONTENTS

American Banker Magazine (ISSN 2162-3198) Vol. 124 No. 10, is published monthly except for February and December by SourceMedia, One State Street Plaza, 27th Floor New York, NY 10004. Subscription price: $120 per year in the U.S; $139 for all other countries. Periodical postage paid at New York, NY and additional U.S. mailing offices. POSTMASTER: Send address changes to American Banker Magazine/SourceMedia, P.O. Box 530 Congers, NY 10920. For subscriptions, renewals, address changes or delivery service issues contact our Customer Service department at (800) 221-1809 or (212) 803-8333; fax (212) 292-5216; email [email protected]; or send correspondence to Customer Service, American Banker Magazine/SourceMedia, One State Street Plaza, 27th Floor, New York NY 10004. Send editorial inquires and manuscripts to American Banker Magazine, One State Street Plaza, 27th Floor, New York, NY 10004. American Banker Magazine is available from the following online services: Information Access (800-877-GALE), Mead Data Center (513-865-6800), and UMI (313-761-4700). For permission to Reprint Published Materials, call (800) 367-3989 or (212) 803-8367. Back issues of the magazine are available for $10 per copy (prepaid) and past articles $6.00 per article (prepaid). Copying for other than personal use or internal use is prohibited without express written permission of the publisher. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax or other professional service. American Banker Magazine is a registered trademark used herein under license. © Copyright 2014 SourceMedia, Incorporated and American Banker Magazine. All rights reserved. www.americanbanker.com.

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2 AMERICAN BANKER MAGAZINE NOVEMBER 2014

More Best BanksTo Your Health 23Some banks have creative strategies for dealing with the rising cost of health care

People Problems 36Recruitment and employee engagement are among the big challenges for human-resources execs

BriefingsBranding on Wheels 9Citigroup’s sponsorsorship of New York’s bike-sharing program is generating serious bang for the buck

History of Capitalism 11Rare books recall the days when the Clearing House ran the banking system

FSOC’s Data Drive 11 The proposals are wonky, but they just may prevent the next banking crisis

November 2014 Vol 124 No 10CONTENTS

Metrics & Measures Loans in Demand 14Bank lending surged in the second quarter. Will the trend continue?

Meet & GreetThe Circuit 42Cybersecurity, M&A and Operation Choke Point were the hot topics at American Banker’s annual regulatory symposium

BankThink 44U.S. companies should aim to have women occupy half of all senior management positions by 2020, writes MUFG Union Bank’s CEO.

Backporch 48Quotes from Daniel Tarullo, Jamie Dimon, Beth Mooney and other notable names from around the industry

IN EACH ISSUE

Editorial Index 4

Editor’s Note 548

42

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magazineVolume 124, No. 11

One State Street Plaza, 27th floor, New York, NY 10004Tel 212.803.8200 Fax 646.264.6800www.americanbanker.com/magazine

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Text is printed on 100% Recycled Paper with minimum 85% Post Consumer Waste

EDITORIAL INDEX

A-CAlerus Financial 38Alta Bicycle Share 10American Savings Bank 34AmericanWest Bank 14Aon Hewitt 23Avenue Bank 4, 25BancorpSouth 14, 42 Bankers Bank 39 Bank First National 38Bank of Fayette County 42Bank of New York Mellon 12BankPlus 23, 32 BAV Consulting 10Bell State Bank & Trust 26Best Companies Group 32Blue Line Media 10BNC National Bank 38Boiling Springs Savings Bank 36Bridge Bank 38Business First Bank 32Capital City Bank 27Center for Responsible Lending 43Centier Bank 23, 29Central Bank (Ky.) 34Citigroup 9Charter Bank 30Chesapeake Bank 23, 28Citizens Bank (Ohio) 36City Bank 27Clearing House Association 11Clearing House Payments Co. 11CoBiz Financial 28Columbia University 11Community Financial Services of America 43Community Trust Bank (La.) 32

D-FDeCoBike 11Elmira Savings Bank 39 Facebook 28, 34Federal Reserve 12, 48Federal Deposit Insurance Corp. 14, 42Financial Crimes Enforcement Network 42Financial Stability Oversight Council 11First Citizens National Bank (Tenn.) 26First Federal Savings and Loan Assoc. of Pascagoula-Moss Point 26First Green Bank 32First Horizon National Corp. 18, 30First Internet Bank 30 First Tennessee Bank 20, 30

H-NHackensack University Medical Center 36Happy State Bank 38Hudson City Bancorp 42JPMorgan Chase 48Justice Department 44Kaspersky Lab 48KeyCorp 48Live Oak Bank 24Matthews, Young Management Consulting 36Memorial Sloan Kettering Cancer Center 21Mitsubishi UFJ Financial Group 44M&T Bank 42 MUFG Union Bank 44Muncy Bank and Trust Co. 34Muncy Valley Hospital 34North Shore Bank 34, 36

O-ROffice of the Comptroller of the Currency 11, 14, 42Office of Financial Research 11Old Point National Bank 29 Percolate 10Permian Basin Rehabilitation Center 36Pinnacle Financial Partners 23, 24 RBC Capital Markets 14Redwood Capital Bank 27

S-ZSecurity Bank 36Smead Capital Management 48Somerset Trust Co. 29SoupMobile 28Square 1 Bank 35Talmer Bancorp 14TCP Capital Corp. 48Treasury Department 12United Community Bank of West Ky. 34United Way 36University of Mississippi Medical Center 23University of North Dakota 38U.S. Bancorp 42Veritex Community Bank 23, 28Visa 28Working Mother 20Zions First National Bank 35, 36

#1st National Bank 25 1st Summit Bank 29

004_ABM_NOV14 4 10/14/14 12:05 PM


EDITOR’S NOTEBy Bonnie McGeer

To execute on that vision of creating a different experience, Avenue is partic-ularly careful about who it hires, putting candidates through multiple rounds of interviews. The bank looks for what Samuels calls “a servant heart,” and other traits that, as it turns out, athletes often possess in great amounts.

Since hiring MTSU’s Mallory Smith — who is now married to the boyfriend she was golfing with that day — Samuels has recruited two more collegiate golf-ers and a few tennis players too.

Lauren Peck, who oversees another one of Avenue’s branches, played golf at Lipscomb University, as did Nathan Mueting, a newly hired concierge bank-er. Peck met Samuels about three years ago while working in the pro shop at a local golf club. She asked about the Avenue Bank hat he was wearing, and he invited her to come in for a visit.

Like the other golfers, Peck initially came on board as a concierge banker (which is Avenue’s term for its universal bankers). In Mueting’s case, one of his college professors recommended him to Avenue.

Samuels says being an athlete tends to train young people in working toward goals, motivating themselves and ef-fectively managing their emotions — all traits that he likes to see in Avenue em-ployees.

“Golf is something that requires high integrity and respect for your competi-tor. You’re responsible for yourself, so you learn early to take accountability. And you have to make judgments. So, it seems to me, the kinds of things that create good employees really are found there,” he says.

“And attitude is number one. They end up with a very positive attitude, which helps the work environment.” □

Ron Samuels, chairman and CEO of Avenue Bank, was on vacation in Florida about four years ago when he struck up a conversation with a collegiate golfer who now manages one of his four branches. He happened to spot an “MTSU” on her golf bag while she was out on the course with her boyfriend and, being from Nash-ville, recognized it as a Middle Tennessee State University logo. So he went up and introduced himself when he saw the cou-ple back at the clubhouse.

“I asked her what year she was. She said she was a senior. I asked if she knew what she was going to be doing and she said no. And I said, ‘Well, have you ever thought about banking?’” Samuels recalls.

He left his card, and she followed up. The timing worked out well, because Avenue needed a concierge banker at the time.

Samuels first told me this story over lunch at the community banking conference that Keefe, Bruyette & Woods hosts in New York every summer. I knew then that Avenue had made our list of Best Banks to Work For, and I learned in that conversa-tion a little about what it takes to be one of those best banks.

Having employees who like the company they work for is not something that hap-pens by accident. Executives at the best banks are cultivating that positivity in ways big and small.

Samuels says Avenue, which opened in 2007, started with a philosophy of “em-ployees being number one.” But he doesn’t think it is perks that ultimately win em-ployees over, so much as it is a sense of being part of a family. He hosts an early morn-ing meeting every Tuesday at the main office that he calls “a family gathering.” About half of Avenue’s 120 employees typically show up to have coffee, note milestones like birthdays and employee anniversaries, and ask questions. There is no agenda, and the meeting, which is not mandatory, is generally over in 15 minutes.

“When you’ve got four offices in a wide area, it gives people a chance to say hello to each other, kind of connect again,” Samuels says. “And it’s not me telling. I’m just there. I’m in charge of the climate control, sort of.”

That’s also another way of saying he’s in charge of culture, which he says is “hugely important” to the bank. Avenue’s very first ad had the headline, “Not another bank,” Samuels recalls. “And in the first line of that ad, I do remember that it said, ‘We’re going to challenge everything you think you know about banks and we’re going to redefine how you experience a bank.’”

Avenue Bank’s Ron Samuels says sports

teach young people to work toward goals and manage their emotions — traits he likes to see

in employees

The Art of Creating A Best Bank to Work For

005_ABM_Nov14 5 10/14/14 11:07 AM


americanbanker.comWhat’s going on

@

New ConnectionsCalling all social media types. We invite you to join our members-only LinkedIn community for women in banking and finance. Just search the group listings on LinkedIn for “American Banker – Women in Banking.”

Video: Beth Mooney on the Rapidly Shrinking Pool of Female Bank CEOsToday only three women helm major U.S. banks, and one of them is about to retire. See what Beth Mooney, CEO of KeyCorp, has to say about the persistent gender gap at americanbanker.com/women-in-banking.

A Powerful EventDid you miss the awards dinner celebrating the Most Powerful Women in Banking and Finance? For coverage of the event – including a video of the rousing speech by HSBC’s Irene Dorner, our Lifetime Achievement winner – go to americanbanker.com/women-in-banking.

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forget billboards and bus shelters. When it comes reaching the masses in New York, Citigroup is getting more bang for its buck sponsoring the city’s popu-lar bike-share program than it is through more traditional advertising.

Citi Bike has generated massive ex-posure for the banking giant and has proven to be a far better payoff than bill-board space or ads in newspapers and magazines, marketing experts say. Citi executives also credit the sponsorship

for helping repair the company’s image following the financial crisis, as riders, and even nonriders, have lauded Citi for helping provide a crucial public service at no cost to taxpayers.

“There are ways to interact with the consumer in the market that go way be-yond the traditional media, which can start to create a change in how they think about the brand,” says Christine DiLandro, Citi’s director of media and in-tegrated marketing. Citi Bike has helped “enable an improvement in trust.”

The company has been so pleased with the results in New York that it is eye-ing expansion in other cities. Next up is Miami, where Citi will take over sponsor-ship of the three-year-old bike-sharing

BRIEFINGSMARKETING

Brand-Building on Wheels

Citi’s sponsorship of a bike-sharing program in New York has been a marketing coup. Can the bank achieve similar success in Miami?

By Chris Cumming

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10 AMERICAN BANKER MAGAZINE NOVEMBER 2014 NOVEMBER 2014 AMERICAN BANKER MAGAZINE 11

impressions, or viewings of the ad. Costs typically range from around $2.50 for In-ternet banner ads to $6 for national mag-azines and as much as $35 for television advertising. Shen estimates that, if Citi’s $41 million bought nothing more than the bicycles, it would still be at the relatively low CPM of $3.62.

Perhaps the clearest indicator that Citi Bike has been a worthwhile invest-ment for the company was the decision by Citi officials to replicate the strategy in Florida.

Miami’s bike-sharing program began in 2011 with 1,000 bikes and 100 stations, and was named DecoBike after the local company that runs it. Until now it has operated only in Miami Beach, but with Citi’s sponsorship, it is being expanded to mainland Miami.

Roughly 750 bikes and 75 docking stations will be added in Miami, and the city’s mayor said in October that if the program — to be re-branded as Citi Bike, but still run by DecoBike — is successful downtown it could expand into other neighborhoods. Citi’s sponsorship agree-ment runs for five years. The company did not disclose the financial terms.

The History of CapitalismRare books recall when the Clearing House Association ran the banking system The Clearing House Association was famous for its accuracy and diligence in tracking the country’s payments system when it functioned as the central bank of the United States in the mid-19th and early 20th centuries. In fact, the organi-zation was so confident in the integrity of its numbers that scribes tallied their cal-culations in pen and ink.

Now 42 ledgers tracing the banking system’s response to crises like the finan-cial panic of 1907 are available for all to

BRIEFINGSMARKETING REGULATION & REFORM

program in November. “We now have a lot of experience un-

der our belts,” DiLandro said at Ameri-can Banker’s Financial Services Market-ing and Innovation Symposium in New York City in September, before the Miami sponsorship was announced.

The New York program is far from perfect, as operational problems like broken docks, empty bike racks and mal-functioning card readers have frustrated users. Alta Bicycle Share, which operates the 16-month-old Citi Bike program, has taken most of the blame for these prob-lems, though it’s possible that Citi, as the sponsor, could suffer a public relations hit if the problems linger.

The program, despite its popularity, also has serious financial problems. It was designed to run without public funds, but it has cost more than expected, and now city officials are looking for additional sponsors to help keep it afloat.

Still, as a pure marketing initiative, Citi Bike been a home run for the com-pany, as ridership and media exposure have far exceeded expectations. Roughly 100,000 New Yorkers have bought an-nual memberships, 200,000 people have downloaded the app, and riders have taken some 13 million Citi Bike trips to-taling more than 23 million miles. Local newspapers ran more than 1,100 articles on Citi Bike in its first three months and the program has received substantial na-tional coverage, DiLandro says.

More important for the company has been the effect on public opinion. In polls of New Yorkers three months after the launch, Citi found improvements of 25% in brand preference, 41% in brand consid-eration and 17% in positive impressions of the company, Citi says.

Citi’s brand also improved on a nation-al level, according to BAV Consulting. Its “brand esteem,” a metric created by the

consultancy to assess overall brand health, rose by 5% in the two quarters after Citi Bike was introduced. There was also an increase in the number of people who as-sociate the brand with attributes like pro-gressivism and environmental conscious-ness, says BAV analyst Claire Repp.

Of course, judging from the return on investment for a single marketing cam-paign is notoriously difficult, especially for a company like Citi that advertises through multiple channels.

It is possible, though, to estimate the value of Citi Bike as outdoor advertising — and that estimate suggests that, even apart from the polling numbers and all the good press, Citi got a good deal.

Citi’s five-year sponsorship of the pro-gram cost $41 million, or $8.2 million a year. To put that in perspective, Citi is paying $400 million — $20 million a year for 20 years — for naming rights to Citi Field, the New York Mets’ baseball sta-dium. Citi spends around $2 billion a year on advertising and marketing worldwide.

And outdoor advertising in New York City is expensive. It can cost several mil-lion dollars a year to rent a single bill-board in a commercial center.

There are now 5,400 bikes, each with five Citi logos, and 330 docking stations bearing the company’s name spread throughout the most densely populated neighborhoods of New York. This lets the company cut down its outdoor advertis-ing in the city, DiLandro says. She com-pared the docking kiosks to bus shelters, where it can be expensive to advertise. A bus shelter ad in Manhattan costs be-tween $1,300 and $6,500 for four weeks, depending on the location, according to Blue Line Media, which sells the ad space.

Plus, the 5,400 bikes themselves func-tion as rolling Citi advertisements. Quan-tifying the value of these is tough, but Jason Shen of the marketing-technology company Percolate took a stab at it using a metric called cost-per-mille, or CPM, that is widely used in the marketing field.

This metric gives the cost of each form of advertisement per 1,000 consumer

010_ABM_ABM14 10 10/10/14 11:07 AM


impressions, or viewings of the ad. Costs typically range from around $2.50 for In-ternet banner ads to $6 for national mag-azines and as much as $35 for television advertising. Shen estimates that, if Citi’s $41 million bought nothing more than the bicycles, it would still be at the relatively low CPM of $3.62.

Perhaps the clearest indicator that Citi Bike has been a worthwhile invest-ment for the company was the decision by Citi officials to replicate the strategy in Florida.

Miami’s bike-sharing program began in 2011 with 1,000 bikes and 100 stations, and was named DecoBike after the local company that runs it. Until now it has operated only in Miami Beach, but with Citi’s sponsorship, it is being expanded to mainland Miami.

Roughly 750 bikes and 75 docking stations will be added in Miami, and the city’s mayor said in October that if the program — to be re-branded as Citi Bike, but still run by DecoBike — is successful downtown it could expand into other neighborhoods. Citi’s sponsorship agree-ment runs for five years. The company did not disclose the financial terms.

The History of CapitalismRare books recall when the Clearing House Association ran the banking system The Clearing House Association was famous for its accuracy and diligence in tracking the country’s payments system when it functioned as the central bank of the United States in the mid-19th and early 20th centuries. In fact, the organi-zation was so confident in the integrity of its numbers that scribes tallied their cal-culations in pen and ink.

Now 42 ledgers tracing the banking system’s response to crises like the finan-cial panic of 1907 are available for all to

see — and double-check — at Columbia University’s Rare Book & Manuscript Li-brary. The Clearing House’s 20-pound tomes are on permanent loan, along with meeting minutes and correspondence between Clearing House trustees and bank heads.

These documents, which cover the pe-riod between the Clearing House’s found-ing in 1853 and 1984, show “moments when the Clearing House really rose to the occasion and became the last line of defense before economic collapse,” says Thai Jones, who serves as the American history curator at the Columbia library.

“It’s a behind-the-scenes record of some of the most dramatic moments in the history of American finance and capi-talism,” Jones says, citing the “crucial heroics” of 1907 in which J.P. Morgan, “a major Clearing House figure,” rallied his fellow bankers to step in and lend money to troubled institutions in order to avert a market collapse. “That experience was important in creating the drive for the Federal Reserve” in 1913, he explains.

The records will undoubtedly be of in-terest to economic researchers who need access to historic Clearing House data, according to Paul Saltzman, president of The Clearing House Association (now an advocacy group representing 23 of the largest U.S. banks) and executive vice president and general counsel of The Clearing House Payments Co. Saltzman adds that those with an interest in the workings of private central banking will also find plenty of interest.

“At a time when people are reevalu-ating the appropriate role of the Fed, it will be interesting for historians and poli-cymakers today to see that time period when the Clearing House served as a cen-tral bank,” Saltzman says.

Meanwhile, Columbia’s library was eager to get its hands on the archives as a way to flesh out its historical collections on three of New York’s major industries: publishing, philanthropy and finance.

“The history of capitalism is one of the most important new trending fields

in historical study,” Jones says. “In the last few years since the financial crisis, there’s been a remarkable turn by his-torians to try to really understand what capitalists were doing, with a new sen-sitivity toward working people, women and people of color.”

And while Jones admits that the hand-written ledgers are, to his eye, “utterly inscrutable,” he says they’re easily de-voured by the number-crunching set.

“We had the Clearing House [staff] over to celebrate and reconnect with the materials, and we opened up the ledgers to certain key dates” including Black Tuesday in 1929, Jones recalls.

“Everyone was gathered around this 100-year-old book and began searching through the numbers and doing their own calculations,” he says. “They were immediately able to make sense of the statistics.” —Sarah Todd

FSOC Seeks Better DataThe proposals are wonky, but they just may prevent the next crisisfinancial services regulators agree that they need better data in order to pre-dict and prevent the next crisis.

At an open meeting of the Financial Stability Oversight Council in October, policymakers unveiled two plans to en-hance data collection. One is to further the use of a so-called “Legal Entity Iden-tifier,” aptly described by one official as

MARKETING REGULATION & REFORM

consultancy to assess overall brand health, rose by 5% in the two quarters after Citi Bike was introduced. There was also an increase in the number of people who as-sociate the brand with attributes like pro-gressivism and environmental conscious-ness, says BAV analyst Claire Repp.

Of course, judging from the return on investment for a single marketing cam-paign is notoriously difficult, especially for a company like Citi that advertises through multiple channels.

It is possible, though, to estimate the value of Citi Bike as outdoor advertising — and that estimate suggests that, even apart from the polling numbers and all the good press, Citi got a good deal.

Citi’s five-year sponsorship of the pro-gram cost $41 million, or $8.2 million a year. To put that in perspective, Citi is paying $400 million — $20 million a year for 20 years — for naming rights to Citi Field, the New York Mets’ baseball sta-dium. Citi spends around $2 billion a year on advertising and marketing worldwide.

And outdoor advertising in New York City is expensive. It can cost several mil-lion dollars a year to rent a single bill-board in a commercial center.

There are now 5,400 bikes, each with five Citi logos, and 330 docking stations bearing the company’s name spread throughout the most densely populated neighborhoods of New York. This lets the company cut down its outdoor advertis-ing in the city, DiLandro says. She com-pared the docking kiosks to bus shelters, where it can be expensive to advertise. A bus shelter ad in Manhattan costs be-tween $1,300 and $6,500 for four weeks, depending on the location, according to Blue Line Media, which sells the ad space.

Plus, the 5,400 bikes themselves func-tion as rolling Citi advertisements. Quan-tifying the value of these is tough, but Jason Shen of the marketing-technology company Percolate took a stab at it using a metric called cost-per-mille, or CPM, that is widely used in the marketing field.

This metric gives the cost of each form of advertisement per 1,000 consumer

The N.Y. Clearinghouse Association in 1913

011_ABM_ABM14 11 10/10/14 11:07 AM


BRIEFINGSREGULATION & REFORM

a “barcode for precisely identifying par-ties in financial transactions.” The other is to launch a voluntary pilot program so regulators can obtain more and better information about bilateral repurchase agreements to gauge the threat they may pose to stability of the system.

It “sounds very technical in a lot of ways, but it’s nothing short of having visi-bility into the risks we face in the future,” says Treasury Secretary Jack Lew, the chairman of FSOC. “It’s very important we pay attention.”

Both plans originate from the Office of Financial Research, an agency within Treasury formed by the Dodd-Frank Act to ensure regulators have better informa-tion about systemic risks.

Richard Berner, the head of OFR, says that policymakers need to make more consistent use of LEIs, which are de-signed to help regulators keep track of parties in a transaction. He argues that

the fallout from the collapse of Lehman Brothers in 2008 could have been differ-ent had such identifiers been in use.

“Had LEI been in place in 2008, the industry, policymakers and regulators would have been better able to trace Lehman’s exposures across the system,” he said at the meeting.

Broader use of LEI would also theoret-ically reduce industry burden, making it easier for institutions to report informa-tion. Berner pushed during the meeting for “ubiquitous” use of LEI in all relevant rulemaking by U.S. financial regulators. There are 300,000 LEIs already in use, covering institutions operating in 180 countries, Berner says.

Other FSOC members broadly sup-port the adoption of LEI systemwide. Comptroller of the Currency Thomas Curry says that an interagency working group has already been set up to “better utilize that information in our data ana-

lytics and supervision efforts.” During the meeting, Berner also

talked about regulatory efforts to better understand repurchase agreements. The Federal Reserve Board has raised repeat-ed concerns about repos, warning that institutions that rely on them too heavily for funding can be subject to rapid and debilitating runs. The OFR and the Fed have launched a pilot program to gather more information on the bilateral repo market, with the two agencies to begin data collection next year.

Berner says that regulators have a bet-ter understanding of the tri-party repo markets, in which a settlement is assisted by a clearing bank, such as the Bank of New York Mellon. But information about bilateral repos, which occur without a third party, is “scant,” he says.

“We do know that that part of the market is important,” Berner says.

— Rob Blackwell

012_ABM_ABM14 12 10/10/14 11:07 AM

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METRICS & MEASURESLOAN TRENDS

What’s Driving the Recent Surge in Loan Demand?Bankers feel overwhelmed by new regulations and are frustrated that interest rates have stayed near zero for six years now, but at least one thing has them smiling: customers are borrowing again.

In nearly every category — the exception being home equity lending — banks reported modest to strong loan growth through the first half of this year as consumer spending increased and businesses ac-celerated expansion plans.

There are pockets of distress but, overall, senior bank executives are optimistic that the momentum will continue through the remainder of 2014 and into 2015. Dennis Klaeser, the chief financial officer at Talmer Bancorp in Troy, Mich., says that loan de-mand in the company’s Midwestern markets is “as strong as it’s ever been,” thanks primarily to a re-bounding manufacturing sector. Talmer, founded in 2010 to roll up troubled banks, has seen demand pick up noticeably in such Rust Belt cities as Cleveland and Youngstown, Ohio, and it’s even hiring lenders in Detroit, Klaeser said at RBC Capital Markets’ financial institutions conference in Boston this fall.

Lending is strong enough in some areas that regu-lators are raising concerns about concentration risk. Oil and gas exploration is booming right now, but in its most recent quarterly report on lending trends, the Office of the Comptroller of the Currency cau-tioned banks against loading up on loans in the en-ergy sector.

Another worry is that there are still too many lend-ers chasing too few quality loans, resulting in some banks loosening loan terms to win business. And there are some high-quality business borrowers that simply don’t need loans. Scott Kisting, the chairman and chief executive of AmericanWest Bank in Spo-kane, Wash., said he knows of one company that re-cently built a $54 million factory without borrowing a penny. “A lot of people aren’t borrowing money be-cause they hoarded cash” in the years following the financial crisis, Kisting said at the RBC conference.

Still, loan data from the Federal Deposit Insurance Corp. shows good reason for optimism. In recent years, much of the loan growth banks were reporting came from stealing market share from competitors that had scaled back lending or exited certain sectors entirely. This year may well go down as the turning point when total loan demand finally rebounded.

Between June 30, 2010 and June 30, 2013, banks’ net loans increased by an average of just 2% a year, according to the FDIC data. Between June 30, 2013 and June 30, 2014, net loans climbed 5.3%, to $8 tril-lion — the largest year-over-year increase since 2007.

Commercial and industrial lending has been a bright spot for banks in recent years and continues to drive overall loan growth. In the second quarter, C&I loans on banks’ books increased 10% year over year, to $1.66 trillion, in part because of increased demand in such industries as energy and health care. Dan Rol-lins, the CEO at BancorpSouth in Gulfport, Miss., said his company posted the strongest loan growth num-bers in its history during the second quarter.

Small-business lending accelerated noticeably in the second quarter. According to FDIC data, total small-business loans increased by 3.4% year over year, to $298 billion — the highest total in four years.

But even though the dollar volume is up, small-business loans — defined as those under $1 million — as a percentage of total loans has been shrinking. Since mid-2010, the percentage of small-business loans to total domestic commercial and industrial loans has fallen from 31% to 21% at June 30, according to FDIC data. This suggests that banks are focusing on larger credits.

In commercial real estate, multifamily lending con-tinues to be the key driver of growth, but construc-tion lending is making a modest comeback. Total construction and development loans for the second quarter increased 10% from a year earlier, to $223 bil-lion, marking the first year-over-year increase since 2008. — Alan Kline

014_ABM_NOV14 14 10/10/14 4:02 PM

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001_ABM015 1 10/6/2014 10:44:00 AM


LOAN DEMAND ON THE RISE

$10

$9

$8

$7

$6

$5

$4

$3

$2

$1

$0Q2

2010Q2

2011Q2

2012Q2

2013Q2

2014

*Defined as loans of less than $1 million Source: FDIC

$ $ $

$ $ $ $$ $ $ $$ $ $ $

$

$ $ $ $$ $ $ $$ $ $ $$ $ $ $$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $

$ $

$ $

$

$

$

$

$

$

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$7.1 $7.1$7.3

$7.6$8.0

Net loans and leases Loans secured by real estate All commercial and industrial loans$

$4.3

$1.1

$4.1

$1.2

$4.1

$1.4

$4.0

$1.5

$4.1

$1.7

Small-business loans as a percentage of domestic commercial and industrial loans is shrinking.

2Q2010

$1TDomestic C&I loans

$310BSmall-business loans

% of Small-business

loans

2Q2014

$1.4TDomestic C&I loans

$298BSmall-business loans

31% 21%

SMALLER SHARE

Trillions

METRICS & MEASURESLOAN TRENDS

016_ABM_NOV14 16 10/10/14 4:02 PM

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Untitled-1 1 10/6/2014 11:42:21 AM


THE CASE FOR CULTIVATING CAREERS

Bryan Jordan, First Horizon’s chairman and CEO, started its Employee Leadership Program in 2010.

018_ABM_ABM14 18 10/10/14 12:05 PM


A leadership development program – described as

“life-changing” by one of its graduates – helps First Horizon rate as one the industry’s most employee-friendly companies.

PHOTOGRAPHY BY JASON MYERS

BY ALAN KLINE

THE CASE FOR CULTIVATING CAREERS

019_ABM_ABM14 19 10/10/14 12:14 PM


But one area where he believed the Memphis company could do better was in grooming talent. Though it was com-mon for senior executives to mentor junior-level employees, he felt that First Horizon needed a more formal training program to build a stable of potential leaders who could think strategically about changes facing the company and the industry.

So, at Jordan’s urging, the company launched its Employee Leadership Pro-gram, a 10-month course designed for mid-level managers who are seen as hav-ing senior-executive potential.

The roughly 25 employees selected for the program each year take part in webinars, classroom instruction and executive coaching sessions. They also have reading assignments on roughly a dozen topics, including personal brand-ing, leading for innovation, shaping or-ganizational culture and understanding profitability.

Getting into the program is competi-tive, with the final selections based on applications and interviews.

“For us to build the organization over the long term, we need to have capable leaders who can not only get their peo-ple to follow them into tough situations, but who can think expansively about how the banking business is changing,” Jordan says.

Though the program just started in 2010, it is already helping the $24 billion-asset First Horizon and its First Tennes-see Bank unit build bench strength, ac-cording to Jordan. Many of its graduates have moved on to more senior roles.

Ben Hopper called his participation “life changing,” saying the skills he ac-quired and contacts he made through the program helped to earn him a pro-motion to his current role as vice presi-dent of retail strategy.

Joy Bowen’s career trajectory also changed because of the program. She was a private client relationship manager at the time she participated, and though she wasn’t looking to switch roles, her thinking changed after she graduated. The program “enhanced my leadership skills, my cognitive thinking, my per-

jokes Kim Cherry, the head of corporate communications, referring to the popu-lar reality television show.

Cherry joined the company 28 years ago, when Terry was CEO. While that may seem like a long time to stay in one place, Cherry says that’s not unusual at First Horizon.

Hopper is a relative newcomer. He joined from a much larger bank about five years ago and says that the cultural differences between the two institu-tions were noticeable within the first few days. He saw it as such a refreshing change from the more corporate cul-ture to which he was accustomed that he even recruited one of his former col-leagues to join him at First Horizon.

“It’s a very different working environ-ment — more like a family atmosphere,” Hopper says. “You get the feeling that everyone here cares about each other’s family life and personal and professional success.”

That environment fosters loyalty in employees that might be hard to imag-ine at less-enlightened companies. Hop-per says he is “working three times as hard” in his new role just as a way to thank the bosses who took a chance on him.

Jonathan Lewis, a retiree relation-ship manager, says he is grateful the bank let him work remotely from New York City for a time, while his partner, a doctor, did his residency at Memorial Sloan Kettering Cancer Center.

“I’m devoted to First Tennessee for allowing me to do that,” says Lewis, who has been with the bank for a decade.

For his part, Jordan says that treating employees fairly and providing them with opportunities to stretch themselves is not only the right thing to do, it’s good business.

“Having strong employee engage-ment and enthusiasm is vital because that’s what shows up to your customers and, ultimately, drives shareholder re-turns,” he says. □

hen Bryan Jordan took over as chief executive of First Horizon National Corp. in 2008, he found much to appreciate about its culture. He liked that the work-place was collegial and family friendly, that the workforce was diverse and that management had a long history of encouraging — and acting on — employee feedback.

Wsonal skills,” she says. “It really gave me the power to think about career advance-ment.” Bowen is now a vice president in Treasury management.

It’s initiatives like the Employee Lead-ership Program that help make First Ho-rizon such a desirable place to work. At-tractive pay and benefits are a plus, but what employees want, above all, is to feel valued, to feel empowered to make deci-sions and to be given ample opportunity to better themselves professionally and personally, says Hopper.

The company has been scoring high marks for employee satisfaction for de-cades, dating back to the tenure of Ron Terry, its chairman and CEO from 1973 to 1995. Its own research found that its best customers tended to want to do business with longer-tenured employees, so, un-der Terry, the company implemented programs aimed at improving job satis-faction and reducing turnover.

A key initiative is what is now known as Firstpower, a rigorous quality con-trol program that instills in employees how things should be done and empow-ers them to make decisions. Terry was also a strong advocate of encouraging employee feedback and an early cham-pion of flexible hours — a big reason why Working Mother magazine has named the company a top place to work for 20 years running.

But, Jordan says, while the workplace culture is “extraordinarily strong,” it can always use tweaking. Jordan, who was promoted to CEO of First Horizon and its bank unit after serving as chief financial officer for a year, is a strong proponent of communication, so he put in place a program that helps encourage more con-structive feedback between managers and their employees through role paying and other techniques.

Jordan himself routinely meets with employees across the company through informal “brown bag” lunches. “I always say he could never do ‘Undercover Boss’ because he knows every employee,”

020_ABM_ABM14 20 10/10/14 12:05 PM


jokes Kim Cherry, the head of corporate communications, referring to the popu-lar reality television show.

Cherry joined the company 28 years ago, when Terry was CEO. While that may seem like a long time to stay in one place, Cherry says that’s not unusual at First Horizon.

Hopper is a relative newcomer. He joined from a much larger bank about five years ago and says that the cultural differences between the two institu-tions were noticeable within the first few days. He saw it as such a refreshing change from the more corporate cul-ture to which he was accustomed that he even recruited one of his former col-leagues to join him at First Horizon.

“It’s a very different working environ-ment — more like a family atmosphere,” Hopper says. “You get the feeling that everyone here cares about each other’s family life and personal and professional success.”

That environment fosters loyalty in employees that might be hard to imag-ine at less-enlightened companies. Hop-per says he is “working three times as hard” in his new role just as a way to thank the bosses who took a chance on him.

Jonathan Lewis, a retiree relation-ship manager, says he is grateful the bank let him work remotely from New York City for a time, while his partner, a doctor, did his residency at Memorial Sloan Kettering Cancer Center.

“I’m devoted to First Tennessee for allowing me to do that,” says Lewis, who has been with the bank for a decade.

For his part, Jordan says that treating employees fairly and providing them with opportunities to stretch themselves is not only the right thing to do, it’s good business.

“Having strong employee engage-ment and enthusiasm is vital because that’s what shows up to your customers and, ultimately, drives shareholder re-turns,” he says. □

sonal skills,” she says. “It really gave me the power to think about career advance-ment.” Bowen is now a vice president in Treasury management.

It’s initiatives like the Employee Lead-ership Program that help make First Ho-rizon such a desirable place to work. At-tractive pay and benefits are a plus, but what employees want, above all, is to feel valued, to feel empowered to make deci-sions and to be given ample opportunity to better themselves professionally and personally, says Hopper.

The company has been scoring high marks for employee satisfaction for de-cades, dating back to the tenure of Ron Terry, its chairman and CEO from 1973 to 1995. Its own research found that its best customers tended to want to do business with longer-tenured employees, so, un-der Terry, the company implemented programs aimed at improving job satis-faction and reducing turnover.

A key initiative is what is now known as Firstpower, a rigorous quality con-trol program that instills in employees how things should be done and empow-ers them to make decisions. Terry was also a strong advocate of encouraging employee feedback and an early cham-pion of flexible hours — a big reason why Working Mother magazine has named the company a top place to work for 20 years running.

But, Jordan says, while the workplace culture is “extraordinarily strong,” it can always use tweaking. Jordan, who was promoted to CEO of First Horizon and its bank unit after serving as chief financial officer for a year, is a strong proponent of communication, so he put in place a program that helps encourage more con-structive feedback between managers and their employees through role paying and other techniques.

Jordan himself routinely meets with employees across the company through informal “brown bag” lunches. “I always say he could never do ‘Undercover Boss’ because he knows every employee,”

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NOVEMBER 2014 AMERICAN BANKER MAGAZINE 2322 AMERICAN BANKER MAGAZINE NOVEMBER 2014

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THE BEST BANKS TO WORK FOR shower employ-ees with profit-sharing bonuses, funnel them into lead-

ership training programs and otherwise keep them happy. But like all banks, they are hard-pressed to shield employees from the expense of health coverage.

“The cost of health care, the cost of benefits in general, is probably one of our biggest challenges,” says Marie Reed, hu-man resources director at Veritex Community Bank in Dallas.

Even after passage of the Affordable Care Act, that cost continues to climb. Though most banks are unlikely to scratch health insurance from the benefits menu, some are bound to begin talking about it, especially smaller ones that might have trouble managing the price tag, says Karen J. Hartnett, a human resources consultant in Houston who previously worked for regional banks in Texas.

“I fear it’s going to come down to some very hard dollars-and-cents calculation, and the arithmetic is not necessarily our friend,” Hartnett says. “I just don’t know how we’re all going to deal with it.”

For now, more banks are dealing with it by adopting high-deductible health plans. The plans — which promise lower premiums but shift more of the cost of routine care to employees — are offered by half the institutions on Ameri-can Banker Magazine’s list of best banks to work for. In ad-dition to slashing premiums, the plans will help banks avoid the so-called Cadillac tax, a levy expected to take effect in 2018 under the ACA. The tax will apply to plans that cost above a specific amount.

“For many of the banks, their costs are expected to ex-ceed that threshold,” says Erik Bagin, health and benefits consulting practice leader for Aon Hewitt in New York. “So they’re very focused on strategies to avoid the tax.”

Banks have been equally focused on strategies to ensure employees aren’t dismayed by higher deductibles. Chesa-peake Bank in Kilmarnock, Va., went slowly. The bank intro-duced high-deductible plans nine years ago, says Pat Lew-is, its human resources director. But it continued offering traditional plans alongside them for two more years.When Chesapeake switched to high-deductible plans exclusively, it fully funded employees’ health savings accounts up to the deductibles, Lewis says.

Over the ensuing years, Chesapeake slowly ratcheted down its contributions and now matches employee contri-

BANKS ARE COMING UP WITH CREATIVE STRATEGIES TO DEAL WITH THE RISING COST OF HEALTH CARE, FROM ON-SITE CLINICS TO FULL-TIME WELLNESS COORDINATORS

TO YOUR HEALTH

022_ABM_NOV14 22 10/10/14 3:56 PM

NOVEMBER 2014 AMERICAN BANKER MAGAZINE 2322 AMERICAN BANKER MAGAZINE NOVEMBER 2014

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THE BEST BANKS TO WORK FOR shower employ-ees with profit-sharing bonuses, funnel them into lead-

ership training programs and otherwise keep them happy. But like all banks, they are hard-pressed to shield employees from the expense of health coverage.

“The cost of health care, the cost of benefits in general, is probably one of our biggest challenges,” says Marie Reed, hu-man resources director at Veritex Community Bank in Dallas.

Even after passage of the Affordable Care Act, that cost continues to climb. Though most banks are unlikely to scratch health insurance from the benefits menu, some are bound to begin talking about it, especially smaller ones that might have trouble managing the price tag, says Karen J. Hartnett, a human resources consultant in Houston who previously worked for regional banks in Texas.

“I fear it’s going to come down to some very hard dollars-and-cents calculation, and the arithmetic is not necessarily our friend,” Hartnett says. “I just don’t know how we’re all going to deal with it.”

For now, more banks are dealing with it by adopting high-deductible health plans. The plans — which promise lower premiums but shift more of the cost of routine care to employees — are offered by half the institutions on Ameri-can Banker Magazine’s list of best banks to work for. In ad-dition to slashing premiums, the plans will help banks avoid the so-called Cadillac tax, a levy expected to take effect in 2018 under the ACA. The tax will apply to plans that cost above a specific amount.

“For many of the banks, their costs are expected to ex-ceed that threshold,” says Erik Bagin, health and benefits consulting practice leader for Aon Hewitt in New York. “So they’re very focused on strategies to avoid the tax.”

Banks have been equally focused on strategies to ensure employees aren’t dismayed by higher deductibles. Chesa-peake Bank in Kilmarnock, Va., went slowly. The bank intro-duced high-deductible plans nine years ago, says Pat Lew-is, its human resources director. But it continued offering traditional plans alongside them for two more years.When Chesapeake switched to high-deductible plans exclusively, it fully funded employees’ health savings accounts up to the deductibles, Lewis says.

Over the ensuing years, Chesapeake slowly ratcheted down its contributions and now matches employee contri-

butions up to $500 or $1,500 annually, depending on the deductible. “We would not have been a great place to work if we had made that change abruptly,” Lewis says.

Banks also are beefing up wellness programs, in the hope that healthier employees will help offset rising premiums. “You’ve got to have a good benefits package, but you can’t let the costs get out of line,” says Terry Turner, president and CEO at Pinnacle Financial Partners in Nashville.

Pinnacle recently hired a full-time coordinator specifical-ly to encourage participation in wellness activities. Among other tasks, the coordinator organizes events such as the bank’s annual 5K run, and maintains a wellness section on Pinnacle’s intranet.

In another cost-saving move, some banks have opened on-site health clinics, or contracted with third parties to of-fer clinics in off-site locations. The clinics are designed to make routine and preventive care more accessible to em-ployees — and less expensive.

Centier Bank opened a clinic last year at its corporate headquarters in Merrillville, Ind., and has partnered with neighboring employers to offer clinics in other areas where it operates, says Chrisanne Christ, the bank’s senior vice president of human resource development. Centier foots the bill for all employees and any dependents covered un-der the bank’s insurance plans.

BankPlus in Mississippi considered opening an on-site clinic, but instead opted to work with the University of Mis-sissippi Medical Center to create a telehealth option. Starting this fall, employees can use an office webcam to see doctors for ailments such as the flu, ear infections and poison ivy. Visits, as well as certain prescriptions, will be free for em-ployees, and the option is expected to reduce time missed from work. “Education of our employees is going to be key to get them to use it,” says Dianne Pepper, its human resources director. “Hopefully, next year at this time we will have some very impressive numbers to support our decision.”

Like Centier, Veritex offers a high-deductible plan along-side other options. Veritex’s health insurance costs have gone up about 5% a year since 2010, and Reed says it would be more cost-effective for Veritex to drop health insurance and pay the government penalty. But, she adds, “That’s not the right thing to do, and that’s not how we treat our em-ployees.” — Joel Berg

BANKS ARE COMING UP WITH CREATIVE STRATEGIES TO DEAL WITH THE RISING COST OF HEALTH CARE, FROM ON-SITE CLINICS TO FULL-TIME WELLNESS COORDINATORS

TO YOUR HEALTH

023_ABM_NOV14 23 10/10/14 3:56 PM


BEST BANKS TO WORK FOR

the hook? They got you down here. Where’s the hook?’ There was never a hook,” Dooley said. “It was a party. That’s all it was.”

Over the past year, Pinnacle has fo-cused on shining a bigger spotlight on employees. Recently, for example, it produced and distributed videos show-casing the daily work of employees, such as the IT staff, whose contribu-tions can be hard to measure.

The featured employees enjoy the attention, Turner says. So do other employees, who like seeing their col-leagues recognized.

“Everybody wants to feel like they’re making a difference,” Turner says. “So we are pretty intentional about trying to find ways to make sure they can feel that and understand that we do appre-ciate their contributions.”

2


NashvilleAssets: $5.8 billionEmployees: 775President and CEO: Terry Turner

Six months of meetings and phone calls finally convinced David Dooley to join Pinnacle Financial Partners in 2009.

He had to wait three months longer for his orientation. The Nashville com-pany holds sessions for new employees on a quarterly basis, and he had just missed the last one.

It was worth the wait.“I remember sitting there in that

orientation and thinking, ‘This place just keeps getting better and better and better,’” says Dooley, a senior vice presi-dent and financial adviser who works out of a Pinnacle office in Knoxville, Tenn. He was particularly impressed that the bank’s president and CEO, Terry Turner, spent the whole day with new employees.

Dooley had not been looking for a job when Pinnacle came courting — he had been at his previous job for more than three decades. But he was the type of banker Pinnacle seeks to attract.

“We are trying to hire happy and successful people, which sounds a little trite, but the truth is, that is what we are trying to do,” says Turner. The banks also tends to hire only people with at least 10 years of experience.

Like Dooley, those people rarely say “yes” during the first phone call. One recruit took eight years to persuade, Turner says. “It’s a prolonged recruit-ment process.”

But it’s a process that has helped make Pinnacle one of the best places to work among banks of its size. Since its founding in 2000, Pinnacle has grown to 775 employees. They staff more than 30 branches around Tennessee, and enjoy benefits ranging from a bankwide bonus program to an annual anniver-sary party at the Ryman Auditorium, a prominent country music venue in Nashville.

After he was hired, Dooley wondered whether the anniversary event, held in late October, would serve primarily as a spotlight on the company’s top executives. “I kept thinking, ‘Where’s

1LIVE OAK BANK

Wilmington, N.C.Assets: $502 million Employees: 147Chairman and CEO: James “Chip” Mahan 3rd

A meeting would have sufficed for Anne Mino, who just wanted an opportunity to discuss her heavy workload.

But her manager, Micah Davis, was one step ahead of her. Davis had already been asking senior leaders about hiring someone to help out Mino, who is an event marketing manager for Live Oak Bank in Wilmington, N.C.

Three weeks later, the new employee was on board, giving Mino yet another reason to celebrate the job she started

in December. “This is truly the best opportunity

I have ever had in my entire life,” says Mino, who worked as an interior design-er and for an event production company before being hired by Live Oak. “I have never worked for a company that I am so excited about.”

Live Oak does small-business lend-ing nationwide, with a focus on niche industries, including veterinary prac-tices, pharmacies, funeral homes and independent financial advisory firms. It does not operate any retail branches. But it does operate two corporate jets, which are available to employees for business travel.

“Everybody would say that’s the stupidest damn thing in the world,” says James “Chip” Mahan 3rd, Live Oak’s chairman and CEO.

But Mahan believes that spending above the industry average on employ-ees brings above-average results. Perks abound on the company’s campus, which features a gym, a dog park and catered lunches every Friday.

This year, the bank, which opened

in 2008, awarded stock options to all employees after it decided not to go public, instead opting to accept a passive private equity investment.

“I operate from the premise that to create something special, you really just have to make sure that your people un-derstand that every single one of them is special,” Mahan says.

It didn’t take long for the feeling to sink in with Mino. She jumped at the chance to work at Live Oak after meeting Micah Davis, the bank’s marketing direc-tor, at a children’s Halloween party in fall 2013. Their children were attending the same school.

After Mino started, she was impressed with how the people at Live Oak kept their word. For example, managers told her the gym was open for use any time. But Mino wondered if they really meant it, especially if she left her desk in the middle of the workday.

They did mean it and, when she went to the gym, she was pleasantly surprised to find senior executives sweating along-side her.

“It’s not one of those, ‘Do it when you

can fit it in,’ or ‘Do it at 6 a.m. when you’re not on company time,’” she says. “It’s, ‘we really want you to do this.’”

More recently, Mino needed ergo-nomic adjustments at her desk to ease tendinitis she had developed from re-petitive clicking on a computer mouse.

Within two days, a senior manager and a trainer from the gym had evalu-ated her situation and made several changes, including the installation of cutting-edge software that allows her to talk to her computer instead of punch-ing on the keyboard.

“Be careful what you wish for around here, because you’re going to get it all,” Mino says.

024_ABM_ABM14 24 10/10/14 2:57 PM


the hook? They got you down here. Where’s the hook?’ There was never a hook,” Dooley said. “It was a party. That’s all it was.”

Over the past year, Pinnacle has fo-cused on shining a bigger spotlight on employees. Recently, for example, it produced and distributed videos show-casing the daily work of employees, such as the IT staff, whose contribu-tions can be hard to measure.

The featured employees enjoy the attention, Turner says. So do other employees, who like seeing their col-leagues recognized.

“Everybody wants to feel like they’re making a difference,” Turner says. “So we are pretty intentional about trying to find ways to make sure they can feel that and understand that we do appre-ciate their contributions.”

3

1ST NATIONAL BANK

Berlin, Wis.Assets: $349 millionEmployees: 85President and CEO: Tom Jensen

The winter holidays bring deposits of cookies, candy canes and other treats to 1st National Bank. But employees have a powerful incentive to lay off the goodies.

About three quarters of them team up and take part in the bank’s annual holiday weigh-in challenge, which re-wards employees for maintaining their usual weight between Thanksgiving and New Year’s. Prizes have included exercise DVDs, healthy cookbooks and gift cards.

The challenge is part of 1st National’s wellness program, says Jenny Johnson, the bank’s human resources leader. Em-ployees compete in teams of four to six people, who are weighed in November and again in January.

“Very rarely do we see teams that aren’t able to make that challenge,” says Johnson. “Everyone kind of holds themselves accountable during that time period.”

In addition to the weigh-in challenge, employees enjoy a paid day off for birthdays, flexible work schedules, and “Beer-30s,” impromptu celebrations held toward the end of the work day to mark birthdays and anniversaries, or to relax after a busy day.

1st National, founded in 1876, oper-ates eight branches in east-central Wisconsin.

4

AVENUE BANK

NashvilleAssets: $955 millionEmployees: 120Chairman and CEO: Ron Samuels

It’s not called “the back office” at Avenue Bank. It’s called “the heart of the house,” and Avenue’s executives don’t let security workers, loan processors and others who toil behind the scenes forget how important they are to the bank’s success.

Avenue’s operations director regu-larly hosts appreciation events, which include visits from a massage therapist and catered breakfasts and lunches.

“The employee around here is No. 1, and we walk our talk. The execu-tives walk our talk,” says Judith Locke, formerly Avenue’s human resources director and now its executive coach. “We believe that if we treat each other well, then our employees will treat our customers well.”

The belief has guided the bank since its founding in 2007. It operates four branches around Nashville.

Every Tuesday morning, employees gather for a staff meeting led by the bank’s chairman and CEO, Ron Samu-els. They mark anniversaries, relate

Like Dooley, those people rarely say “yes” during the first phone call. One recruit took eight years to persuade, Turner says. “It’s a prolonged recruit-ment process.”

But it’s a process that has helped make Pinnacle one of the best places to work among banks of its size. Since its founding in 2000, Pinnacle has grown to 775 employees. They staff more than 30 branches around Tennessee, and enjoy benefits ranging from a bankwide bonus program to an annual anniver-sary party at the Ryman Auditorium, a prominent country music venue in Nashville.

After he was hired, Dooley wondered whether the anniversary event, held in late October, would serve primarily as a spotlight on the company’s top executives. “I kept thinking, ‘Where’s

in 2008, awarded stock options to all employees after it decided not to go public, instead opting to accept a passive private equity investment.

“I operate from the premise that to create something special, you really just have to make sure that your people un-derstand that every single one of them is special,” Mahan says.

It didn’t take long for the feeling to sink in with Mino. She jumped at the chance to work at Live Oak after meeting Micah Davis, the bank’s marketing direc-tor, at a children’s Halloween party in fall 2013. Their children were attending the same school.

After Mino started, she was impressed with how the people at Live Oak kept their word. For example, managers told her the gym was open for use any time. But Mino wondered if they really meant it, especially if she left her desk in the middle of the workday.

They did mean it and, when she went to the gym, she was pleasantly surprised to find senior executives sweating along-side her.

“It’s not one of those, ‘Do it when you

can fit it in,’ or ‘Do it at 6 a.m. when you’re not on company time,’” she says. “It’s, ‘we really want you to do this.’”

More recently, Mino needed ergo-nomic adjustments at her desk to ease tendinitis she had developed from re-petitive clicking on a computer mouse.

Within two days, a senior manager and a trainer from the gym had evalu-ated her situation and made several changes, including the installation of cutting-edge software that allows her to talk to her computer instead of punch-ing on the keyboard.

“Be careful what you wish for around here, because you’re going to get it all,” Mino says.

At left, Live Oak employees test-drive a BMW as a reward for their hard work. Above, Avenue Bank’s company band, the Hummingbirds, perform in Nashville’s corporate challenge.

025_ABM_ABM14 25 10/10/14 2:57 PM



stories of positive interactions with cus-tomers and share whatever is on their minds. Once, an executive humorously explained how to use the bank’s unisex bathrooms, Locke says.

“It’s like a family gathering,” she says. “You never know what’s going to hap-pen in that meeting.”

5


Dyersburg, Tenn.Assets: $1.2 billionEmployees: 277President and CEO: Jeff Agee

When First Citizens National Bank needed a new title to match a recently revamped role for its branch employ-ees, it didn’t turn to consultants. It asked the employees, as a way to engage them in the process of learning about changes in their responsibilities.

About 75 employees submitted entries, says Kerrie Heckethorn, the hu-man resources officer at First Citizens. The winning entry was “financial expe-rience specialist.”

“They’re the only person a lot of customers see, and their value is very high,” says Heckethorn. “We wanted them to realize how important that position is.”

First Citizens has about 20 branches, serving communities in middle and western Tennessee. Founded in 1889, the bank is celebrating its 125th anniversary, a milestone it is incorporating into events and contests throughout the year.

The employee who coined the “financial experience specialist” title, for example, won $125. So did the win-ner of the bank’s annual mutual funds contest, typically held in the spring. Employees invest play money, and the best return wins a prize.

6

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PASCAGOULA-MOSS POINT

Pascagoula, Miss.Assets: $275 millionEmployees: 54President and CEO: Weldon Perkins

As children, Richard Perkins and Sam Stauter watched the annual Mardi Gras parade in Pascagoula, Miss., from the front steps of First Federal Savings and Loan Association of Pascagoula-Moss Point.

First Federal allowed employees, and their families and friends, to park in the thrift’s lot and throw an informal party as the floats rolled by.

The thrift, founded in 1955, has a tradition of bringing employees to-gether around food. Mardi Gras is no exception.

Perkins and Stauter, now in their mid-20s and First Federal employees, had the idea to create a more formal event to coincide with the parade, so they approached bank executives, who said yes.

First Federal’s first official Mardi Gras party was held in 2013, says Stauter, a customer service representative. The thrift provided all the food and drink, while Perkins and Stauter secured a commercial smoker, which they used to cook sausage, wings, hot dogs and pork tenderloin.

“When the idea was first mentioned to management, I think Richard and I both were a little surprised that they trusted two young guys to plan the event,” says Stauter. “That’s not to say they didn’t have a watchful eye on what we were planning, but they showed a lot of faith in the younger generation.”

First Federal operates six branches in Jackson County, Miss.

7


Fargo, N.D.Assets: $3.1 billionEmployees: 596Chairman and CEO: Richard Solberg

Comfortable shoes likely are near at hand for the CEO of Bell State Bank & Trust, Richard Solberg.

He personally delivers all year-end bonus checks to the bank’s employees in the locations where they work. As he makes the rounds, he stops to thank employees for their hard work through-out the year.

Believing happy employees result in happy customers, leaders at Bell make an effort to keep workers smiling.

One way they do this is by having professional photos taken of employees with their families at Bell events like baseball games and “Kids Night with Santa.” A photo is generally on each employee’s desk by the next workday.

Hiring anniversaries are treated like a major event. Employees are invited to one of 12 luncheons during the year, based on whichever month they were hired. They also get a call from Solberg, on the anniversary of the day they were hired.

But the biggest smiles of all come from Bell’s “Pay It Forward” program, which distributes money to employees that they then give to individuals, fami-

lies or organizations in need. Full-time employees receive $1,000 each year, while part-timers get $500.

The program, which launched in 2008, recently expanded to allow others in the community to share the experience of paying it forward. Each Bell employee now chooses a customer, vendor or local resident, who then also receives money to donate.

Bell, founded in 1966, operates 20 branches in North Dakota and Min-nesota, as well as wealth management offices in Idaho.

8


Eureka, Calif.Assets: $262 millionEmployees: 51President and CEO: John Dalby

It’s a ritual traditionally reserved for presidents, astronauts and other bigwigs. But the list of people invited to toss out the first pitch at a baseball game now includes employees of Redwood Capital Bank.

The opportunity comes during the bank’s annual picnic, which takes place at a local baseball game. An employee selected in a drawing throws the open-ing ball for the Humboldt Crabs, a sum-mer collegiate team based in Arcata, Calif. Employees’ children join in the

026_ABM_ABM14 26 10/10/14 2:57 PM


7


Fargo, N.D.Assets: $3.1 billionEmployees: 596Chairman and CEO: Richard Solberg

Comfortable shoes likely are near at hand for the CEO of Bell State Bank & Trust, Richard Solberg.

He personally delivers all year-end bonus checks to the bank’s employees in the locations where they work. As he makes the rounds, he stops to thank employees for their hard work through-out the year.

Believing happy employees result in happy customers, leaders at Bell make an effort to keep workers smiling.

One way they do this is by having professional photos taken of employees with their families at Bell events like baseball games and “Kids Night with Santa.” A photo is generally on each employee’s desk by the next workday.

Hiring anniversaries are treated like a major event. Employees are invited to one of 12 luncheons during the year, based on whichever month they were hired. They also get a call from Solberg, on the anniversary of the day they were hired.

But the biggest smiles of all come from Bell’s “Pay It Forward” program, which distributes money to employees that they then give to individuals, fami-

lies or organizations in need. Full-time employees receive $1,000 each year, while part-timers get $500.

The program, which launched in 2008, recently expanded to allow others in the community to share the experience of paying it forward. Each Bell employee now chooses a customer, vendor or local resident, who then also receives money to donate.

Bell, founded in 1966, operates 20 branches in North Dakota and Min-nesota, as well as wealth management offices in Idaho.

8


Eureka, Calif.Assets: $262 millionEmployees: 51President and CEO: John Dalby

It’s a ritual traditionally reserved for presidents, astronauts and other bigwigs. But the list of people invited to toss out the first pitch at a baseball game now includes employees of Redwood Capital Bank.

The opportunity comes during the bank’s annual picnic, which takes place at a local baseball game. An employee selected in a drawing throws the open-ing ball for the Humboldt Crabs, a sum-mer collegiate team based in Arcata, Calif. Employees’ children join in the

fun as bat boys and bat girls.Redwood Capital, founded in 2004,

operates three branches serving com-munities in Humboldt County in north-ern California.

Although the bank is small, it strives to promote from within. To help employees gain the skills needed to step up, Redwood Capital offers several training opportunities.

Four employees have enrolled in the Pacific Coast Banking School. Others take advantage of the bank’s offer to pay for extended education classes at Humboldt State University.

Future employees learn about the bank through an internship program operated by Humboldt State’s business school.

9

CAPITAL CITY BANK

Tallahassee, Fla.Employees: 929Assets: $2.5 billionChairman, President and CEO: William G. Smith Jr.

Management may come naturally to some people. But Capital City Bank doesn’t leave the task to nature.

The bank offers a course to all new managers, as well as some veteran managers, to ingrain its own manage-ment style.

Bank leaders also benefit from Capital City’s Career Camp, a program that brings together employees who demonstrate leadership potential. They spend a year in the program, wrapping up their bankwide training with the presentation of a project to executive management.

Branch employees often hold client appreciation events and celebrate holi-days, such as Halloween and Christmas.

They also suffer through periodic bouts of bad weather, primarily from hurricanes and tropical storms. But when the rain falls and the wind blows, employee can count on Capital City.

If severe weather shuts down the bank’s operations, employees get paid leave without having to use paid time off. If they can’t make it home, the bank picks up the hotel and restaurant tab.

Capital City, founded in 1895, oper-ates more than 65 branches in Ala-bama, Florida and Georgia.

10

CITY BANK

Lubbock, TexasAssets: $2.1 billionEmployees: 553President and CEO: Cory Newsom

Lose weight, gain time off and some extra spending money. It’s proving a reliable formula for the wellness program at City Bank.

In 2013, bank employees and their spouses earned incentives totaling more than $120,000 and more than 4,000 hours of paid time off for exercis-ing, losing weight or maintaining a healthy weight.

Participation is made easier for employees thanks to all of the bank’s efforts to encourage activity. A walk-

Far left, employees at First Federal Savings and Loan enjoy the bank’s annual Mardi Gras parade party. Near left, employees of Bell State Bank and their family members partici-pate in a pep rally.

027_ABM_ABM14 27 10/10/14 2:57 PM



ing track winds through the top floor of City Bank’s headquarters building, and employees can spend 30 minutes a day there while on the clock. Similar options are available for employees in branches and the bank’s call center.

Wellness activities are not the only way to earn time off either. Employees can extend their weekends or vacations by volunteering. More than 150 em-ployees, including the bank’s chairman, Curtis Griffith, take turns delivering meals on wheels in the Lubbock area.

City Bank, founded in 1941 as First Bank of Morton, operates more than 20 branches in Texas and New Mexico. The name changed to City Bank in 1984.

11

CHESAPEAKE BANK

Kilmarnock, Va.Assets: $650 millionEmployees: 196Chairman, President and CEO: Jeffrey Szyperski

Support for local stores is a compa-nywide affair for Chesapeake Bank. As part of a campaign called “It’s All About Community,” the bank offers employees a variety of ways to get involved in efforts to promote their small-business neighbors.

Among the most prominent effort is a semiannual Shop Local day. The bank takes out extensive advertising in sup-port of the event, and supplies shop-ping bags with a Shop Local logo.

Businesses offer discounts during the event, but bank employees have an extra reason to open their wallets. During the most recent Shop Local day, Chesapeake encouraged employees to take photos of themselves while shop-ping, post the pictures on Facebook and then tag the bank’s marketing director. The most creative selfie won a $150 Visa gift card.

Chesapeake, founded in 1900, operates 12 branches in southeastern Virginia, as well as a loan production office in Richmond. A subsidiary in Williamsburg, Va., Chesapeake Invest-ment Group, offers wealth management services.

The bank promotes an open-door atmosphere, in part by having the CEO call employees on their birthdays.

12


DallasAssets: $710 millionEmployees: 122President and CEO: C. Malcolm Holland

Online compliance classes drop to the bottom of many bankers’ to-do lists. But the sessions are quickly checked off by employees of Veritex Community Bank.

If they seem eager, it’s probably be-cause they earn an extra vacation day if they complete all their assigned classes

by the end of February each year.Employees also receive time off to

volunteer with community organiza-tions. But they give on their own time as well.

Once a month, for example, Veritex employees skip their lunch hour and head to Fair Park, a low-income area of Dallas, where they assist a nonprofit called SoupMobile in feeding homeless men, women and children.

Personal touches grace many of the bank’s recognition efforts. On their birthdays, employees receive a hand-written note from the CEO, while the

bank’s birthdays are marked by cakes delivered to branch staff.

Veritex, founded in 2004, operates nine branches, primarily serving areas north of Dallas.

13

1ST SUMMIT BANK

Johnstown, Pa.Assets: $874 millionEmployees: 176President and CEO: Elmer Laslo

Activity to relieve stress/promote fun: An upscale holiday gala includes a cocktail hour, hors d’oeuvres, dinner, dancing, and a dessert bar, as well as gifts for every employee.

Community service initiative: More than 50 employees took part in a shopping event to provide winter clothing, toys and treat bags to 125 children from low-income families. The children also paid a visit to Santa Claus.

14COBIZ FINANCIAL

DenverAssets: $3 billionEmployees: 472CEO: Steven Bangert

It seemed like a small price to pay for not getting an annual physical — $25 tacked on to an employee’s monthly health insurance premium.

But CoBiz Financial announced the price in 2009, a time when employ-ees already were on edge about the

banking industry, according to Sue Hermann, the communications direc-tor for the Denver bank. Amid the country’s wider financial crisis, they did not take kindly to the potential for higher premiums. They wondered what was next.

“It was a reminder that we’re doing things that affect our employees inti-mately,” Hermann says.

The adverse reaction prodded Co-Biz’s leaders to explain the new policy in more detail, and add tweaks to make it more palatable. Employees now can use a paid day to get a physical, and the bank structured its health coverage to ensure the appointment is free.

The potential morale-killer became a springboard for a wellness program enthusiastically embraced by employ-

ees, says Hermann. “What started from the top down has really become a grassroots, bottom-up effort.”

So-called “walking meetings” — with a path that winds through downtown Denver — have become popular at Co-Biz, including some led by the bank’s CEO, Steven Bangert. Other employees are leading yoga and stretching classes, while one started a bicycling group. Some have volunteered to be wellness ambassadors; these employees ensure everyone at CoBiz, no matter which location they work from, has a voice in bank programs.

Moreover, about 95% of employees now undergo a yearly physical exam, Hermann says. And CoBiz has since eliminated costs under its health plan for preventive medications.“We really

Chesapeake Bank CEO Jeffrey Szyperski and employees volunteering at a farmer’s market in May.

028_ABM_ABM14 28 10/10/14 2:57 PM


by the end of February each year.Employees also receive time off to

volunteer with community organiza-tions. But they give on their own time as well.

Once a month, for example, Veritex employees skip their lunch hour and head to Fair Park, a low-income area of Dallas, where they assist a nonprofit called SoupMobile in feeding homeless men, women and children.

Personal touches grace many of the bank’s recognition efforts. On their birthdays, employees receive a hand-written note from the CEO, while the

bank’s birthdays are marked by cakes delivered to branch staff.

Veritex, founded in 2004, operates nine branches, primarily serving areas north of Dallas.

13

1ST SUMMIT BANK

Johnstown, Pa.Assets: $874 millionEmployees: 176President and CEO: Elmer Laslo

Activity to relieve stress/promote fun: An upscale holiday gala includes a cocktail hour, hors d’oeuvres, dinner, dancing, and a dessert bar, as well as gifts for every employee.

Community service initiative: More than 50 employees took part in a shopping event to provide winter clothing, toys and treat bags to 125 children from low-income families. The children also paid a visit to Santa Claus.

15


Hampton, Va.Assets: $856 millionEmployees: 274Chairman, President and CEO: Robert F. Shuford Sr.

Popular with employees: Career advancement opportunities include a year-long management trainee program that prepares future leaders by deepening their understanding of the banking industry.

Activity to relieve stress/promote fun: Full kitchens at all bank locations encourage employees to throw parties and potlucks to celebrate personal milestones, such as birthdays and marriages.

Fitness/wellness program: Old Point employees have access to free mammograms, flu shots and screenings for cholesterol and blood pressure.

16

SOMERSET TRUST CO.

Somerset, Pa.Assets: $874 millionEmployees: 313Chairman, President and CEO: G. Henry Cook

Popular with employees: A caring work environment is key for Somerset Trust.

Activity to relieve stress/ promote fun: Holidays in its branches are celebrated with decorations and clothes appropriate to the occasion. The bank marked National Pet Week by posting a slideshow of pet photos.

Fitness/wellness program: Massage chairs have been installed in its main office and operations complex.

17

CENTIER BANK

Merrillville, Ind.Assets: $2.5 billionEmployees: 678 President and CEO: Mike Schrage

Activity to relieve stress/promote fun: Weiner Fest is a bank event that features grilled hot dogs and brats. It also includes games and the election of a Weiner King and Queen.

Community service initiative: A full-time employee is focused on financial literacy and leads year-round educational efforts, including a seminar series on TV.

Sustainability initiative: Centier’s fleet is made up of hybrid vehicles, and employees are encour-aged to use them when traveling on bank business.

banking industry, according to Sue Hermann, the communications direc-tor for the Denver bank. Amid the country’s wider financial crisis, they did not take kindly to the potential for higher premiums. They wondered what was next.

“It was a reminder that we’re doing things that affect our employees inti-mately,” Hermann says.

The adverse reaction prodded Co-Biz’s leaders to explain the new policy in more detail, and add tweaks to make it more palatable. Employees now can use a paid day to get a physical, and the bank structured its health coverage to ensure the appointment is free.

The potential morale-killer became a springboard for a wellness program enthusiastically embraced by employ-

ees, says Hermann. “What started from the top down has really become a grassroots, bottom-up effort.”

So-called “walking meetings” — with a path that winds through downtown Denver — have become popular at Co-Biz, including some led by the bank’s CEO, Steven Bangert. Other employees are leading yoga and stretching classes, while one started a bicycling group. Some have volunteered to be wellness ambassadors; these employees ensure everyone at CoBiz, no matter which location they work from, has a voice in bank programs.

Moreover, about 95% of employees now undergo a yearly physical exam, Hermann says. And CoBiz has since eliminated costs under its health plan for preventive medications.“We really

have some concrete ways that we’re encouraging wellness, and removing barriers to being well,” Hermann says.

The bank’s flexible approach has roots in its founding 20 years ago, she says. CoBiz, which serves business customers in Arizona and Colorado, initially hired senior bankers who brought in clients, and then gave them freedom to do business as they saw fit.

Although the bank has grown, it has continued to prioritize employee en-gagement and involvement in decision-making. “You can only do loans and deposits so many ways,” Hermann says. “But the people that we put in front of our customers, that’s our . And if we have engaged, passionate employees, that’s how we grow our company.”

Chesapeake Bank CEO Jeffrey Szyperski and employees volunteering at a farmer’s market in May.

029_ABM_ABM14 29 10/10/14 2:57 PM



18

FIRST INTERNET BANK

IndianapolisAssets: $866 millionEmployees: 121President and CEO: David Becker

Popular with employees: When the weather outside is bad, First Internet brings lunch to the office.

Community service initiative: A bank program provides each employee with up to $300 that they can give to a nonprofit organization of their choice.

Fitness/wellness program: A recent fitness campaign encour-aged healthy eating and exercising during the holidays, and paid out a cash incentive to participants.

20

CHARTER BANK

Eau Claire, Wis.Assets: $580 millionEmployees: 60President and CEO: Paul Kohler

Community service initiative: Half of Charter’s employees took part in the Eau Claire Marathon, either as runners or volunteers. The bank sponsored the event, and encouraged race participation by paying half of each employee’s registration fee.

Fitness/wellness program: Employees who do not use any sick days in a year receive a recognition award.

Bonus/incentive program: Monthly monetary rewards are given to employees based on whether the bank is meeting or exceeding goals for net income.

19FIRST HORIZON NATIONAL CORP.

MemphisAssets: $24 billionEmployees: 2,456Chairman, President and CEO: Bryan Jordan

Jamie Herron assumed she would have a tough sell when she sought to enroll in a program designed to groom up-and-coming community leaders.

After all, she was a branch-level financial services representative. Her employer, First Tennessee Bank, a unit of First Horizon National Corp., typi-cally paid only for higher-level employ-ees to join those kinds of programs.

But the bank gave Herron a green light, and she remains grateful a year after she graduated from Leadership Donelson Hermitage.

“To me, it was a game changer,” says Herron, who now is a market manager overseeing two branches in a western suburb of Nashville. “It was, ‘They’re going to invest in find-ing money for me. I’m going to be their representative out in this area. People are going to know where I’m from. They’re going to know that I’m proud to work there.’”

Herron has her eye on other leader-ship programs too, including First Ten-nessee’s emerging leaders program.

About 25 of the bank’s mid-level pro-fessionals, such as branch managers, commercial relationship managers and operational leaders are selected to participate in the program each year. Then they get to run through

what amounts to a 10-month MBA program.

“It’s very competitive,” says John Daniel, the chief human resources officer at First Tennessee.

The program launched in 2010 in response to employee feedback, he says. “Our employees said to us that they wanted to make sure that we were developing people from within, and that we had a robust, diverse pool of candidates.”

So far, employees who have gone through the program are being pro-moted at a rate nearly double that of their peers, Daniel adds.

The bank’s attention to the future is complemented this year by a focus on the past. Founded in 1864, First Tennessee is celebrating its 150th anniversary.

The celebration has taken numer-ous forms throughout the year. The bank sponsored a fundraising contest to benefit 150 nonprofits. It also passed out stovepipe hats to employ-ees, reminding them that the bank was founded when Abraham Lincoln was U.S. president.

Other historical highlights include the efforts of one employee, book-keeper Charles Q. Harris, to keep the bank open during a yellow fever epidemic in Memphis in the 1870s.

“We’ve spent a lot of time this year talking about our culture in the context of 150 years of growth and support for our communities,” says Bryan Jordan, the bank’s chairman, president and CEO. “We talk about what the country has seen over that period, and what we’ve done in terms of building our business.”

Execs ringing the closing bell at the New York Stock

Exchange on January 7.

030_ABM_ABM14 30 10/10/14 2:57 PM

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23

BUSINESS FIRST BANK

Baton Rouge, La.Assets: $683 millionEmployees: 89President and CEO: David “Jude” Melville

Popular with employees: Business First’s “Dollar for Dollar” program provides up to $250 in matching donations to charities supported by employees.

Community service initiative: Employees at each bank location are empowered to select people or groups from their communities, whether clients or not, and reward them with thank-you gifts and donations.

Bonus/incentive program: Annual bonuses based on the profitability of each location and the bank overall average 10% of salary. Spot bonuses are given to employees who go above and beyond on projects.

24

BANKPLUS

Ridgeland, Miss.Assets: $2.4 billionEmployees: 771President and CEO: William A. Ray

Popular with employees: Bank-Plus’ health insurance program offers premium discounts to employees who complete four wellness-related activities.

Community service initiative: The bank’s CreditPlus program is a low-interest, small-dollar loan alternative to payday lenders and check-cashing services. Participants are invited to attend financial literacy seminars.

Fitness/wellness program: Filtered water and scales are provided at all facilities, encouraging employees to drink more water and check their weight.

22

FIRST GREEN BANK

Mount Dora, Fla.Assets: $288 millionEmployees: 68Chairman and CEO: Kenneth LaRoe

Activity to relieve stress/promote fun: First Green marks the start of summer with a week of themed days, including Thirsty Thursday, when employees bring in beverages.

Sustainability initiative: A Green Commuter program reimburses employees up to $50 per month if they carpool, walk, bike or use mass transportation to get to work.

Employee recognition/apprecia-tion program: The Mission Minded award goes to an employee who has demonstrated increasing enthusiasm for the bank’s environmental focus over the previous year.

21


Ruston, La.Assets: $3.4 billionEmployees: 610President and CEO: Drake Mills

Popular with employees: Annual holiday parties held in each market region feature food, drinks and dancing.

Community service initiative: Project Enrich provides each employee with up to 20 hours of paid time each year during work hours to volunteer with approved charitable organizations in areas served by Community Trust.

Career development/training program: A website for employees illustrates potential career paths and provides articles about careers within the bank, job descriptions and a manager’s guide to career planning.

METHODOLOGY:AMERICAN BANKER’S BEST BANKS TO WORK FOR study is performed with the Best Companies Group, which generates the rankings based on reviews of employer reports on benefits and policies, along with extensive employee surveys.

Companies must opt in to be considered; there is no fee to participate. To be eligible, applicants must be commercial or retail banks, or the commercial or retail banking units of diversified financial services companies, and they must have at least 50 employees working in the United States.

The employer questionnaire captures information about workplace policies and practices. The employee survey, typically conducted online, consists of approximately 80 statements that employees respond to on a 5-point agreement scale. The survey also includes two open-ended questions and seven demographic questions.

For companies with fewer than 200 employees, all employees are surveyed. At larger companies, Best Companies Group randomly selects between 250 and 400 employees to participate, depending on the company’s size. In both cases, the targeted response rate is 65 percent or more, although companies with lower response rates may still be considered.

Both data sets are analyzed to determine the ranking. An Employee Feedback Report is available for purchase by participating banks. To be considered an American Banker Best Bank to Work For, an institution must meet certain criteria set by American Banker and Best Companies Group. Not all eligible applicants may qualify for the ranking.

For information on applying to next year’s ranking of American Banker’s Best Banks to Work For, please visit www.bestbankstoworkfor.com. If you have further questions about the program, please send an email to American Banker Magazine Executive Editor Bonnie McGeer at [email protected].

032_ABM_ABM14 32 10/10/14 2:51 PM

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produce delivery is offered at various bank locations to promote local farming.

29

THE MUNCY BANK AND TRUST CO.

Muncy, Pa.Assets: $370 millionEmployees: 82President and CEO: Daniel Berninger

Activity to relieve stress/pro-mote fun: An interior-window decorating contest held in December allowed employees to show off their creativity.

Community service initiative: The bank is a sponsor of the Muncy Valley Hospital Lawn Party, an annual fundraiser for the local hospital. Many bank employees volunteer at the event, with several having served as commit-tee chairs.

25


Morganfield, Ky.Assets: $221 millionEmployees: 52President and CEO: Garland Certain

Activity to relieve stress/promote fun: Whenever the calendar strikes Friday the 13th, the 13th customer of each teller is showered in confetti and handed $13.

Community service initiative: United Community established a community fund that allows employees to host fundraisers throughout the year and donate the proceeds to groups and organizations they choose.

Fitness/wellness program: A nurse from a local hospital visits each office once a month to check employees’ blood pressure, conduct screenings, hand out educational materials and answer questions.

26

CENTRAL BANK

Lexington, Ky.Assets: $1.9 billionEmployees: 505Chairman, President and CEO: Luther Deaton

Popular with employees: Wellness and self-help classes take place during work hours and employees are paid to attend.

Sustainability initiative: Customers can choose to use biodegradable bags when leaving deposits in the night depositories.

Bonus/incentive program: All Central employees who are not officers receive an annual Christmas bonus of $1,250.

Career development/training program: Employees can job-shadow their colleagues to learn about positions that interest them so they are ready to apply when there’s an opening.

30

SQUARE 1 BANK

Durham, N.C.Assets: $2.7 billionEmployees: 241President and CEO: Doug Bowers

27


HonoluluAssets: $5.4 billionEmployees: 1,187President and CEO: Richard Wacker

Activity to relieve stress/promote fun: Occasional contests encourage employees to work together on a project and challenge one another. A recent gingerbread house contest, for example, attracted 80 teams. Winners enjoyed a pizza party.

Fitness/wellness program: American Savings’ corporate office features a dedicated “LifeBalance” room, which offers a variety of fitness classes throughout the week. The room also houses exercise equipment, a shower, and a TV and DVD player that employees can use to play fitness videos on their own.

Sustainability initiative: On-site

28NORTH SHORE BANK

Brookfield, Wis.Assets: $1.8 billionEmployees: 496Chairman and CEO: James McKenna

Margie Brusa isn’t one to scroll through Facebook. But she has warmed up to a social networking site created by her employer, North Shore Bank.

The site, which launched in May, serves as a single hub for all the vari-ous ways bank employees can recog-nize each other, whether to celebrate a

birthday, mark a work anniversary or express thanks for an extra effort.

“We can’t always walk up to some-one else’s desk and say, ‘Congratu-lations! I heard you did something good,’” says Brusa, who manages the branch at North Shore’s headquarters in Brookfield, Wis. “It’s an easier way to communicate.”

It’s also an easier way to hand out incentives. When recognizing good work electronically, managers have the option to give out points, which employees can save and redeem to buy electronics, furniture and other items.

“It’s basically like shopping on Ama-zon,” says Molly Schissler, North Shore’s vice president of human resources, who recently used the system to reward two employees for referring job candidates. “There’s quite the variety of things that people can choose from.”

Much like Facebook, the bank’s site also allows employees to create pro-files, which Schissler says is part of its appeal. “It’s been fun seeing individual photos and profiles,” she says.

Another benefit of the online reward system is its visibility. With the old system, known as NSBThanks.com, praise was visible only to the givers and the recipients, Schissler says. But with the new system, dubbed Seymour Salutes, the recognition can be seen by everyone, and is open to com-ments, another similarity to Facebook. Seymour is the name of the bank’s mascot, a seagull.

034_ABM_ABM14 34 10/10/14 2:51 PM


31


Salt Lake CityAssets: $17.5 billionEmployees: 2,518President and CEO: A. Scott Anderson

When they want to talk with someone about advancing their careers, employees at Zions First National Bank don’t have to squeeze in yet another meeting during the workday.

They have their own version of a col-lege fair, known as a “career university night,” hosted by the bank’s human resources department.

The events allow employees to discuss their career goals with senior officers and explore educational oppor-tunities with representatives from local universities.

If employees decide to head back to the classroom, they can expect some help with the cost. The amount depends on the number of applicants and the types of degrees, but Zions typically awards $2,500 per school year for employees pursuing an undergradu-ate degree and $6,000 for those in an MBA program.

Among employees’ favorite activi-ties is a four-week wellness competi-tion dubbed “March Madness.” The

produce delivery is offered at various bank locations to promote local farming.

29

THE MUNCY BANK AND TRUST CO.

Muncy, Pa.Assets: $370 millionEmployees: 82President and CEO: Daniel Berninger

Activity to relieve stress/pro-mote fun: An interior-window decorating contest held in December allowed employees to show off their creativity.

Community service initiative: The bank is a sponsor of the Muncy Valley Hospital Lawn Party, an annual fundraiser for the local hospital. Many bank employees volunteer at the event, with several having served as commit-tee chairs.

Career development/training program: Employees can job-shadow their colleagues to learn about positions that interest them so they are ready to apply when there’s an opening.

30

SQUARE 1 BANK

Durham, N.C.Assets: $2.7 billionEmployees: 241President and CEO: Doug Bowers

Popular with employees: A lounge area in Square 1’s Durham office provides an opportunity for employees, known as “Squares,” to break up their day with a video game or a game of pool or ping pong.

Fitness/wellness program: Employees who complete 125 credits through the online wellness portal of the bank’s health insurer receive a 25% rollback on their insurance premiums for the second half of the plan year.

Career development/training program: The bank’s Every1Gets1 program supports employees in attending at least one training or career development course each year.

birthday, mark a work anniversary or express thanks for an extra effort.

“We can’t always walk up to some-one else’s desk and say, ‘Congratu-lations! I heard you did something good,’” says Brusa, who manages the branch at North Shore’s headquarters in Brookfield, Wis. “It’s an easier way to communicate.”

It’s also an easier way to hand out incentives. When recognizing good work electronically, managers have the option to give out points, which employees can save and redeem to buy electronics, furniture and other items.

“It’s basically like shopping on Ama-zon,” says Molly Schissler, North Shore’s vice president of human resources, who recently used the system to reward two employees for referring job candidates. “There’s quite the variety of things that people can choose from.”

Much like Facebook, the bank’s site also allows employees to create pro-files, which Schissler says is part of its appeal. “It’s been fun seeing individual photos and profiles,” she says.

Another benefit of the online reward system is its visibility. With the old system, known as NSBThanks.com, praise was visible only to the givers and the recipients, Schissler says. But with the new system, dubbed Seymour Salutes, the recognition can be seen by everyone, and is open to com-ments, another similarity to Facebook. Seymour is the name of the bank’s mascot, a seagull.

Brittany Dahlke, a video teller super-visor, says she rarely used NSBThanks. But she is a regular visitor to Seymour Salutes. “I’m probably on the site at least once a week to recognize other employees, or just kind of look around and check up on recognitions.”

Dahlke, who works in the Brook-field office, has been with the bank about three years. “What I like most about North Shore Bank is kind of the family feel,” she says. “And it’s a very community-minded bank.”

North Shore, founded in 1923, has 47 branches in eastern Wisconsin and northern Illinois.

Employees in the Pewaukee, Wis., office of North Shore Bank help out at the Taste of Lake Country event.

Square 1 employees prepare to serve breakfast during a volunteer shift at Urban Ministries of Durham.

035_ABM_ABM14 35 10/10/14 2:51 PM



34

CITIZENS BANK

Sandusky, OhioAssets: $1.2 billionEmployees: 321Chairman and CEO: James Miller

Popular with employees: Citizens matches employees’ monetary pledges to United Way, and offers a day off with pay to employees who make pledges at a certain level, based on hourly pay.

Communication tool/practice: When attending training sessions or a group meeting, employees are encour-aged to stop by to see the bank’s president, human resources director or other members of senior management.

employees divide into teams, and each team competes for titles based on minutes spent on financial, physical, spiritual and mental wellness activi-ties. In this year’s four-week competi-tion, 1,293 participating employees logged more than 3.8 million minutes. That works out to a 56% increase in the average number of minutes per employee per week compared with last year.

Exercising should get more conve-nient for those at the corporate office in Salt Lake City, with the addition of an on-site fitness center. The bank also of-fers its far-flung employees discounted rates to fitness centers in their area.

Zions First National Bank, founded in 1873, is the lead bank of the $54.6 billion-asset Zions Bancorporation, a multi-bank holding company that oper-ates more than 500 offices across 10 Western states.

32


Rutherford, N.J.Assets: $1.4 billionEmployees: 186President and CEO: Robert E. Stillwell

Fitness/wellness program: An employee activity committee coordi-nates in-house workshops featuring presentations by medical professionals from Hackensack University Medical Center. Topics include nutrition, diet, stress and heart health.

Employee recognition/apprecia-tion program: During Employee Appreciation Week in October, senior officers greet employees at the door. Employees also are treated to pizza, ice cream and other goodies.

Family-friendly benefit/practice: This year, Boiling Springs Savings provided identity-theft insurance to employees and qualified family members for free.

33

SECURITY BANK

Midland, TexasAssets: $820 millionEmployees: 143CEO: Jim Smitherman

Popular with employees: A paid day off in exchange for 100 hours of volunteer service.

Community service initiative: Every year, Security’s branches sell raffle tickets to raise funds for Permian Basin Rehabilitation Center. Employees also volunteer at the center’s telethon.

Bonus/incentive program: All employees are eligible to receive a year-end bonus.

PLENTIFUL PEOPLE PROBLEMSWHEN THEY’RE NOT FIGURING OUT HOW to keep health insurance affordable, bankers are wrestling with a slew of other human-resources challenges.

Topping the list are recruitment, leadership development and employee engagement, accord-ing to executives and consultants in human resources. Banks also face tougher competition for talent, not just from each other, but from other types of businesses.

“It’s not like I’m having mass groups go out to other industries, but it’s definitely been on the rise,” says George Myers, human resources director at Zions First National Bank in Salt Lake City. “More and more companies are seeing our bankers as viable candidates.”

Those companies consider bankers to be experts in helping businesses know when they need additional funding, what funding options to consider and how to maximize the return, My-ers says. “They’re often a strategic partner with a business, so those businesses say, ‘Why don’t you come work for me full time?’”

Bankers can return the favor by raiding other industries for talent, especially as they eye replacements for senior executives who are close to retirement, says J. Timothy O’Rourke, president and CEO of Matthews, Young Management Consulting in Hillsborough, N.C.

“Even if they haven’t been able to afford to have four or five people in the wings inside the bank, at least they will know people outside,” says O’Rourke.

Banks also face recruiting challenges at the entry level, driven by the switch to a universal banker model, in which branch employees are expected to work as both tellers and customer service representatives. “The goal is fewer, better-trained, cross-trained employees who can do a little bit of everything in the branch,” O’Rourke says.

Banks will need to adjust their recruiting strategies to target people who have strong inter-personal and math skills, but also are good at problem-solving and sales, he says. Salaries are apt to climb as branch employees do more work requiring greater skill.

“The challenge is trying to find a good mix of professionalism while also realizing that these entry banking jobs may not turn into a longer career for tellers and universal bankers,” says Molly Schissler, vice president of human resources for North Shore Bank in Brookfield, Wis.

In cases where North Shore can’t find enough strong candidates in a given location, it has adapted, for example, by hiring video tellers to work out of the bank’s main office. – Joel Berg

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per month for fitness memberships.Sustainability initiative: The bank is

rebuilding and remodeling many of its branches to be more environmentally friendly. It is using LED lights, energy-efficient boilers and carpeting made from recycled rubber tires, for example.

36

HAPPY STATE BANK

Happy, Texas Assets: $2.4 billionEmployees: 578Chairman and CEO: J. Pat Hickman

Popular with employees: Happy State gives employees the freedom to act like an owner when it comes to taking care of customers. If a customer is upset, tellers also can hand out a $5 bill with a sticker

Employee recognition/apprecia-tion program: Supervisors recognize retail employees for exceptional work and nominate them for paid time off as a reward.

35

BANK FIRST NATIONAL

Manitowoc, Wis.Assets: $1.1 billionEmployees: 176President and CEO: Michael Molepske

Popular with employees: Bank First National provides opportunities for bonuses at all levels of employment, along with other financial perks like tuition reimbursement.

Fitness/wellness program: Employees are reimbursed up to $25

that reads, “We’ll make you happy.”Community service initiative: The

bank teamed up with Snack Pak 4 Kids, whose goal is to end weekend hunger for school children. Employees “raised” 154,567 Pop-Tarts, a contribution valued at $26,200.

Fitness/wellness program: Once a year, the bank hosts a mobile mammog-raphy coach, which offers digital mammographies to employees, saving them a trip to an imaging center.

37

BRIDGE BANK

San Jose, Calif. Assets: $1.6 billionEmployees: 237President and CEO: Daniel Myers

38ALERUS FINANCIAL

Grand Forks, N.DAssets: $1.5 billionEmployees: 589President and CEO: Randy Newman

Alerus Financial scooped up several failed institutions in the aftermath of the financial crisis. While the acquisi-tions enlarged the bank’s footprint, they also stretched its employees, who put in long hours to ensure the successful addition of new customers.

So, after striking a deal with BNC National Bank in Scottsdale, Ariz., at the end of 2010, to take on some of its business in two states, Alerus execu-

tives wondered how they could moti-vate and reward employees during yet another conversion. The acquisition brought loans and deposits in Arizona and Minnesota, as well as a branch in Scottsdale. “There’s a lot of stress and a lot of last-minute things to consider and take care of and act on,” says Teresa Wasvick, the human resources director at Alerus. “We wanted a way to show employees our appreciation for all that work.”

The bank settled on a series of fun, stress-relieving activities dubbed “Con-version Madness.” The name reflected the event’s timing; it coincided with college basketball’s “March Madness.”

Though Mallory Berdal logged extra hours during the week and over the weekend, she enjoyed the special ac-tivities. They included chair massages, meals served up by the bank and theme days. On Sports Day, Berdal wore a Chicago Bulls shirt she’s had since high school. Others wore jerseys

from the University of North Dakota.“It just brings some excitement to

come in that day and look around and see everybody participating,” says Berdal, who was managing the bank’s call center at the time.

When the next conversion came around, this past summer, Alerus tried some new ideas based on employee feedback. Chief among them was the introduction of a cubicle stocked with treats, rewards and supplies. On Hawaiian Day, employees grabbed colorful leis. On Silly Co-Worker Day, employees walked around the office in fake mustaches and beards.

The conversion — following the acquisition of Private Bank in Minne-apolis — took place in mid-July. Berdal, now the bank’s deposit operations manager, is looking forward to what-ever madness accompanies the next transaction. “We’re a growing bank, so I know there’s more to come in the future,” she says.

Popular with employees: A coffee cart circulates through the office on the last day of each month, bringing lattes, mocha and other specialty drinks.

Fitness/wellness program: Lunch sometimes features meditation classes.

Employee recognition/apprecia-tion program: Under the bank’s spot recognition program, all managers are handed a sizable budget to reward employees at their own discretion.

39

THE BANKERS BANK

Oklahoma CityAssets: $243 millionEmployees: 64President and CEO: Don Abernathy

Activity to relieve stress/promote fun: Massages are available on staff

038_ABM_ABM14 38 10/10/14 2:51 PM


that reads, “We’ll make you happy.”Community service initiative: The

bank teamed up with Snack Pak 4 Kids, whose goal is to end weekend hunger for school children. Employees “raised” 154,567 Pop-Tarts, a contribution valued at $26,200.

Fitness/wellness program: Once a year, the bank hosts a mobile mammog-raphy coach, which offers digital mammographies to employees, saving them a trip to an imaging center.

37

BRIDGE BANK

San Jose, Calif. Assets: $1.6 billionEmployees: 237President and CEO: Daniel Myers

from the University of North Dakota.“It just brings some excitement to

come in that day and look around and see everybody participating,” says Berdal, who was managing the bank’s call center at the time.

When the next conversion came around, this past summer, Alerus tried some new ideas based on employee feedback. Chief among them was the introduction of a cubicle stocked with treats, rewards and supplies. On Hawaiian Day, employees grabbed colorful leis. On Silly Co-Worker Day, employees walked around the office in fake mustaches and beards.

The conversion — following the acquisition of Private Bank in Minne-apolis — took place in mid-July. Berdal, now the bank’s deposit operations manager, is looking forward to what-ever madness accompanies the next transaction. “We’re a growing bank, so I know there’s more to come in the future,” she says.

Popular with employees: A coffee cart circulates through the office on the last day of each month, bringing lattes, mocha and other specialty drinks.

Fitness/wellness program: Lunch sometimes features meditation classes.

Employee recognition/apprecia-tion program: Under the bank’s spot recognition program, all managers are handed a sizable budget to reward employees at their own discretion.

39

THE BANKERS BANK

Oklahoma CityAssets: $243 millionEmployees: 64President and CEO: Don Abernathy

Activity to relieve stress/promote fun: Massages are available on staff

appreciation days.Fitness/wellness program: This

year, the Bankers Bank is challenging employees to walk a distance equivalent to traveling from California to Maine

and back.Employee recognition/apprecia-

tion program: The CEO gives coin proof sets and Ghirardelli chocolates to employees every year.

40ELMIRA SAVINGS BANK

Elmira, N.Y.Assets: $517 millionEmployees: 123President and CEO: Tom Carr

Popular with employees: Elmira Savings’ annual Halloween contest has

employees compete for branch and individual awards, with winners snagging a trophy and bragging rights for the year. Heavy participation in a recent contest was rewarded with an additional day of paid time off for all employees.

Sustainability initiative: The bank installed solar panels at a branch in Ithaca, N.Y.

Employee recognition/appre-ciation program: Employees receive a $2,500 award for earning a bachelor’s degree, and $1,000 for an associate’s. The bank also pays half the cost of earning the degree.

039_ABM_ABM14 39 10/10/14 2:51 PM

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reputation theme, reminding bankers that weak anti-money-laundering controls will almost surely hinder their ability to make acquisitions. Curry advised buyers to be sure that their bank and the banks they are planning to acquire are in full compliance with all Bank Secrecy Act re-porting requirements.

Regulators are taking an increasingly tough stance on BSA enforcement and it’s a virtual guarantee that they will delay — and delay some more — any deals whose participants have is-sues in that area. BancorpSouth this summer withdrew applications for two planned acqui-sitions after drawing regulatory scrutiny of its BSA compliance, and M&T Bank Corp. is in the midst of overhauling its anti-money-laundering controls as it tries to complete a deal for Hudson City Bancorp that’s been pending for two years.

Calvery refuted bankers’ frequent claims that the suspicious activity reports they file each year fall into a “black hole,” arguing that the reports are crucial to helping law enforcement

initiate cases or expand existing cases. She said that, from March 2013 to April 2014, 34% of the

FBI’s investigations of organized crime and drug trafficking sprung from suspicious activity reports filed by financial insti-tutions. She added that, in the month prior to her speech, FBI investigators had come across 2,500 reports that were directly relevant to more than 1,000 ongoing cases.

Still, filing those reports is a burden for banks, especially small ones. In a panel discussion, McCall Wilson, the CEO of the Bank of Fayette County in Moscow, Tenn., questioned why banks like his face the same reporting requirements as larger ones. He said that community bankers know their customers well enough to recognize whether a transaction looks suspi-cious. “It has gone so far out of whack,” said Wilson. “The pa-perwork is not worth the effort we are putting into it.”

Remember the days when bankers were uneasy about buying other banks because they worried about what problems might be lurking in the seller’s loan portfolio? That’s so 2008.

These days, buyers worry far less about credit risk than they do about compliance risk, accord-ing to Richard Davis, the chairman and chief ex-ecutive at U.S. Bancorp.

Speaking at the American Banker Regula-tory Symposium this fall, Davis said evaluating a seller’s loan portfolio is relatively easy, because bankers understand the fundamentals of credit risk and because credit quality is generally pris-tine nowadays. Much harder to assess is whether any missteps occurred in, say, the filing of suspi-cious activity reports or the modifications made to home loans — violations that might not be dis-covered until years after the fact. And it can be impossible to spot outright fraud.

“The public, which evaluates brand repu-tation, doesn’t remember who bought what,” Davis said in a question-and-answer session with reporters following his speech. “That’s got to weigh heavily because you protect your brand first and foremost.”

Davis wasn’t alone in stressing the importance of protecting the brand at the two-day conference. In keynote after keynote, panel after panel, speakers kept coming back to the message that reputation is everything.

In the opening speech, Federal Deposit Insurance Corp. Chairman Martin Gruenberg urged banks’ to be vigilant about cybersecurity, suggesting that lax policies could damage their reputations. In her speech on day two, Jennifer Shasky Calvery, the director of the Financial Crimes Enforcement Network, or FinCEN, stressed that a strong anti-money-laundering policy not only helps avoid a large fine, “it saves your institution’s reputation, which is something you can’t put a price on.”

Comptroller of the Currency Thomas Curry also hit on the

MEET & GREETTHE CIRCUIT

Wary of Making One False Move Regardless of whether the topic was M&A or cybersecurity, speakers at a recent regulatory sympo-sium kept coming back to the same message: reputation is everything. Alan Kline reports.

4th Annual American Banker Regulatory Symposium When: Sept. 22-23

Where: Westin Arling-ton Gateway, Arlington, Va.

For: Bankers, regula-tors, legislators and lawyers

Attendees: 150

Key themes:

• Reputation risk

• Bank Secrecy Act enforcement

• M&A hurdles

Host: American Banker

Calvery, though, wants bankers to think of BSA compliance not as a nuisance, but as their civic duty. And creating a “culture of compliance,” as she put it, starts at the top. “First and foremost, leadership should be engaged,” she said. “The commitment of an organization’s leaders should be visible, as such commitment influences the at-titudes of others within the organization.”

She added that compliance “should not be compromised by revenue interests,” noting that some BSA enforcement actions have come as a re-sult of top bank officials withholding information from employees whose job is to report suspicious activity to FinCEN. ”Information-sharing is impor-tant because being a good corporate citizen and complying with regulatory responsibilities is also good for a company’s bottom line,” Calvery said.

The conference was a civil affair, though things did get testy during a panel discussion on a Justice Department probe known as Operation Choke Point. Choke Point’s aim is to prevent fraudulent merchants from accessing the payments system, and its mere existence has prompted many banks to stop doing business with payday lenders and other businesses that may be seen as unsavory, such as gun dealers and porn shops. Depending on who you ask, the probe is either a legitimate attempt to protect consumers from fraud or an example of egregious government overreach that has essentially spooked banks into cutting ties with perfectly legal businesses.

It was the most lively panel of the conference,

Who’s Talking...

Martin Gruenberg FDIC

042_ABM_NOV14 42 10/10/14 4:44 PM


reputation theme, reminding bankers that weak anti-money-laundering controls will almost surely hinder their ability to make acquisitions. Curry advised buyers to be sure that their bank and the banks they are planning to acquire are in full compliance with all Bank Secrecy Act re-porting requirements.

Regulators are taking an increasingly tough stance on BSA enforcement and it’s a virtual guarantee that they will delay — and delay some more — any deals whose participants have is-sues in that area. BancorpSouth this summer withdrew applications for two planned acqui-sitions after drawing regulatory scrutiny of its BSA compliance, and M&T Bank Corp. is in the midst of overhauling its anti-money-laundering controls as it tries to complete a deal for Hudson City Bancorp that’s been pending for two years.

Calvery refuted bankers’ frequent claims that the suspicious activity reports they file each year fall into a “black hole,” arguing that the reports are crucial to helping law enforcement

initiate cases or expand existing cases. She said that, from March 2013 to April 2014, 34% of the

FBI’s investigations of organized crime and drug trafficking sprung from suspicious activity reports filed by financial insti-tutions. She added that, in the month prior to her speech, FBI investigators had come across 2,500 reports that were directly relevant to more than 1,000 ongoing cases.

Still, filing those reports is a burden for banks, especially small ones. In a panel discussion, McCall Wilson, the CEO of the Bank of Fayette County in Moscow, Tenn., questioned why banks like his face the same reporting requirements as larger ones. He said that community bankers know their customers well enough to recognize whether a transaction looks suspi-cious. “It has gone so far out of whack,” said Wilson. “The pa-perwork is not worth the effort we are putting into it.”

Wary of Making One False Move Regardless of whether the topic was M&A or cybersecurity, speakers at a recent regulatory sympo-sium kept coming back to the same message: reputation is everything. Alan Kline reports.

EVENTSFor upcoming events and seminars, go toamericanbanker.com/conferences

Calvery, though, wants bankers to think of BSA compliance not as a nuisance, but as their civic duty. And creating a “culture of compliance,” as she put it, starts at the top. “First and foremost, leadership should be engaged,” she said. “The commitment of an organization’s leaders should be visible, as such commitment influences the at-titudes of others within the organization.”

She added that compliance “should not be compromised by revenue interests,” noting that some BSA enforcement actions have come as a re-sult of top bank officials withholding information from employees whose job is to report suspicious activity to FinCEN. ”Information-sharing is impor-tant because being a good corporate citizen and complying with regulatory responsibilities is also good for a company’s bottom line,” Calvery said.

The conference was a civil affair, though things did get testy during a panel discussion on a Justice Department probe known as Operation Choke Point. Choke Point’s aim is to prevent fraudulent merchants from accessing the payments system, and its mere existence has prompted many banks to stop doing business with payday lenders and other businesses that may be seen as unsavory, such as gun dealers and porn shops. Depending on who you ask, the probe is either a legitimate attempt to protect consumers from fraud or an example of egregious government overreach that has essentially spooked banks into cutting ties with perfectly legal businesses.

It was the most lively panel of the conference,

Who’s Talking...

especially when Kenneth Edwards, the vice presi-dent of federal affairs at the Center for Responsi-ble Lending, and Dennis Shaul, the CEO of a trade group that represents storefront payday lenders — the Community Financial Services of America — squared off over the probe’s impact on pay-day lending. Shaul complained that, as a result of Choke Point, many legal, licensed payday lenders have had their accounts closed by banks and now have nowhere to keep their deposits.

As Edwards sees it, that’s not a bad thing. Pay-day loans “lead to an evisceration of personal wealth,” he said. If banks and third-party proces-sors do business with high-risk businesses like payday lenders, then it is appropriate for regula-tors to “bear down” on them, he argued.

But Shaul disagreed that payday lenders pose a risk to banks. “Contrast the 20-year history of pay-day lending accounts and most of the banks that have discontinued this, and ask yourself: Where was the safety-and-soundness question? Where was the infamous incident that led someone to say, ‘Gee, this is a reputational risk?’ It’s nonex-istent,” he said.

Shaul also worries that Choke Point will wind up forcing banks to cut ties with businesses they view as morally questionable. “Everywhere I go, people come up to me and give me more exam-ples. Last year it was career education, sometimes it’s commercials on TV, sometimes it’s ammuni-tion sellers,” he said. Ultimately, Choke Point af-fects “much more” than just payday lenders. □

Martin Gruenberg FDIC Jennifer Shasky Calvery FinCEN McCall Wilson Bank of Fayette County

043_ABM_NOV14 43 10/10/14 4:44 PM


has set a goal of filling 30% of manage-ment positions with women by 2020, I believe there should be a target of 50% of women in upper management in the United States.

This belief stems from my work at the Bank of Tokyo, where my experiences with women in management under-scored the importance of gender equal-ity. And while the Bank of Tokyo was more progressive than its competitors, there was still work to be done.

Thus, I established a department specifically to “career path” women forward, which sent the clear message that if the company needed to create a special initiative to advance women, they weren’t doing enough through normal channels. That department has been renamed and is now the Diversity and Inclusion Office at MUFG in Tokyo, headed by a senior female manager.

But the financial services industry is just one piece of the global corporate puzzle. This step cannot be taken alone. We must see this through together as a company, as a nation and across

the world. Only then can we expect more women in the upper echelons of leader-ship in every facet of our society — from

corporations to government leadership.When this happens, it will be com-

monplace to anticipate, not hope, that our daughters, nieces and granddaugh-ters, will not only break through the glass ceiling, but destroy it along with the notion of any self-imposed limita-tions. I look forward to that day. □

Having worked with inspiring women throughout my career, I firmly believe that more women should occupy senior positions and be represented at every level of responsibility at every business, not just in banking, but across the board. It isn’t just about fairness; it’s about surviving in a global marketplace.

When I began my career with The Bank of Tokyo, a predecessor to the current Mitsubishi UFJ Financial Group, there were many women in management positions, including several who were general managers. Working in that environment gave me a deep respect for more equal representation in the workplace.

This respect was further strengthened while I was in Hong Kong overseeing banking operations throughout Southeast Asia. There, I met many female executives, govern-ment officials, and heads of state, and found that countries like Malaysia, Singapore, the Philippines, and others in the region were leading the world in gender diversity.

Thailand currently has the highest number of female CEOs at 49%, well above the global rate of 24%. By contrast, the G7 economies, including the United States, have just 21% of senior roles filled by women; Japan is at the bottom of the list at 7%.

In order to achieve real progress, more countries need to include women in every rank in business. The entire global mindset must change and environments must be established and supported to create equal opportunities for women as a matter of course, not as a novelty.

This will be no easy task, and part of the solution is to emphasize the economic as well as social reasons why this kind of environment must become the norm and not the exception.

We are seeing some progress across the United States, with a record 24 women helming Fortune 500 companies. But considering that women represent nearly 51% of the U.S. population, there is much room for improvement.

On a more encouraging note, the 7.8 million women-owned businesses as of 2007 represent a 20% increase from 2002, ac-cording to the National Women’s Business Council.

As the number of women-owned firms climbs, the way we do business must reflect this emerging trend. For example, in today’s marketplace, an exclusively male team meeting with a company headed by a woman can’t expect to win her banking business. Corporations — and in my case, the bank – must reflect modern society.

To achieve a more equitable work environment, the first step is to set specific tar-gets and be committed to reaching them. Just as Japan’s Prime Minister Shinzo Abe

Don’t Just Count Women, Make Sure They Count

By Katsumi Hatao

BANKTHINK

Katsumi Hatao is the president and CEO of MUFG Union Bank and CEO for the Americas at parent company Mitsubishi UFJ Financial Group. M

ICH

AE

L H

OE

WE

LER

OPINION For more viewpoints on industry issues, visit the BankThink page on AmericanBanker.com

044_ABM_ 44 10/10/14 10:17 AM

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2014 EVENTS DATE LOCATION

eSignRecords2014Nov.12-13

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18th Annual SmallBusiness BankingConference

Nov.19-21

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Federal Reserve Governor, speaking at an Institute of International Finance meeting in Washington

BACKPORCH

BARRY BARKER“The threats were unreal. They said they were going to send the sheriff to my house within 24 hours.”A Florida biologist, describing how a payday lender reacted when he closed his bank account to stop automatic debits

ROSS HOGAN“People get fired over things like this, people lose sleep over things like this and organiza-tions, from a morale perspective, sometimes never recover.”Kaspersky Lab’s global head of fraud prevention, on the some-times crippling emotional and human toll of data breaches

BETH MOONEY“I don’t run my career on karma.”KeyCorp chairman and CEO, reacting to Microsoft CEO Satya Nadella’s comment that it is good karma for women to wait for a raise rather than ask for one

DANIEL TARULLO“I don’t know that I personally at least would declare ‘too big to fail’ ended. In fact, I know I would not.”

JAMIE DIMON“Do you want to move the payments system out of banking? Do you want to move the deposit system out of banking?”JPMorgan Chase’s chairman and CEO, saying regulators must be careful not to drive too much risk into the shadow banking sector

Co

rbis

NEIL WOODFORD “The size of any potential fine is unquantifiable, so this represents an unquantifiable risk.”Highly regarded fund manager, on his view that bank stocks are too risky because recent fines have been far larger than the infractions warrant

WILLIAM SMEAD“Absolutely no one wants to create a big bank and put up with all this crap.”Smead Capital Management’s CEO, arguing that bank stocks are a good investment now because, thanks to harsh regulators, the likelihood of new competitors is low

RAJ VIG “Clearly there are some banks taking deals and doing things that they haven’t done since the crisis.” Managing partner at TCP Capital Corp., on the conces-sions he’s seeing in loan terms and rates for middle-market corporate borrowers

048_ABM_Nov14 48 10/14/14 10:58 AM

When the fi rst climbers reached the 29,035-foot pinnacle of Mount Everest in 1953, they did so under the expert guidance of Sherpa Tenzing Norgay. Widely lauded as the quiet power behind the team’s success, Norgay went on to serve as the fi rst fi eld director of the Himalayan Mountaineering Institute —and to help hundreds of other parties reach new heights in the Himalayas.

When you clear and custody with National Financial, we do. We’re committed to supporting your business with deep industry experience, personalized service, operational expertise, and innovative technology.

Tell us your story

Visit go.fi delity.com/strongertogether and tell us about the person who’s helped guide you to greatness.

For investment professional use only. Not for distribution to the public as sales material in any form.The registered marks referenced herein are the property of FMR LLC.National Financial Services LLC, Member NYSE, SIPC200 Seaport Boulevard, Boston, MA 02210© 2014 FMR LLC. All rights reserved.673853.1.0

A Fidelity Investments Company

027_ABMMar14 6 2/7/2014 9:47:25 AM

THE LETTERS CRC AFTER A CREDIT PROFESSIONAL’S NAME SPEAK VOLUMES.

In today’s rapidly changing fi nancial services industry, credit and lending professionalsplay a critical role in shaping the risk profi le of their respective institution. Th rough earning their Credit Risk Certifi cation (CRC) from RMA, the only recognized professional designation for credit and lending professionals, they prove they have the knowledge and skills necessary to master a myriad of credit risk situations.

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Take control of your career. Learn more at www.rmahq.org/americanbankercrc. Or call 215.446.4013

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CRC Ad AmerBanker 100314_NOV_PRINT.indd 1 10/6/2014 11:48:43 AMUntitled-1 1 10/6/2014 1:39:08 PM

American Banker November 2014

Business

Transcript of American Banker November 2014