Best Corporate Citizen

Best-Corporate-Citizen.pngA.png bank is only as successful as the community it serves.

That’s a philosophy that drove Robert Wilmers, the late chief executive officer of M&T Bank Corp. “[Bankers] know that when our communities succeed, we all succeed. It’s why bankers actively work to make their communities better places in which to live and work,” he said at M&T’s shareholder meeting in 2015. “While such support positions the banker as a leading corporate citizen, he or she also acknowledges a certain ‘enlightened self-interest’ in giving, knowing that the bank can only do well when the community does well.”

Being a good corporate citizen isn’t just ethically good. It doesn’t just benefit the community or build the bank’s reputation. If a rising tide lifts all boats, then strengthening the community makes the bank stronger, too.

To determine which of the ranked banks have the greatest impact in their communities, Bank Director examined philanthropic donations in 2017—both in absolute amount and as a percentage of assets, the latter to reward smaller banks that might be big givers for their size. Some banks are more transparent about this information than others. Six of the banks do not disclose their charitable contributions. For four of these, Bank Director relied on press releases for 2017 to calculate the volume of philanthropic donations. For Sterling Bancorp, the information was sourced through the 2016 IRS filing for its charitable organization. The sixth, First Republic Bank, does not share this information.

Wilmers.pngThe bank’s most recent Community Reinvestment Act score was also included, as that score is designed to assess how well a bank addresses the credit needs of low- and moderate-income areas, how those areas are serviced, and how a bank invests in community development. We also incorporated a score developed by CSRHub, a corporate social responsibility benchmarking firm, that gauges community development and philanthropy based on a number of external data points from sources including Thomson Reuters and Newsweek rankings. Finally, we analyzed community outreach as a cultural value, based on employee volunteer efforts.

Each bank was scored relative to its regional peers. Regional winners were then scored again relative to each other to determine the overall category winner. Due to this second scoring, the overall winner’s final score differs from its regional score.

Wilmers—who served as CEO of M&T from 1983 until his passing in late 2017—would likely be very proud of his bank today. Not only was M&T the best corporate citizen in the Northeast, it also topped the category as the best corporate citizen overall. The numbers don’t lie: $28 million in philanthropic donations, representing 0.024 percent of the bank’s $118 billion in assets. An outstanding CRA score. A solid rating from CSRHub.

“Bob talked the talk, and he walked the walk. To him, the bank was all about the community [it] served,” says Brian Klock, a managing director at Keefe, Bruyette and Woods and former M&T vice president.

M&T employees are given 40 hours of paid time off annually to volunteer in their communities. In 2017, this resulted in 370,000 hours, with employees supporting nearly 4,800 nonprofit organizations across the bank’s footprint.

Darren King, M&T’s chief financial officer, confirms that Wilmer’s legacy of community outreach will live on at the bank as a core value. “We think that it’s important to be a good citizen, that all of our employees are involved in things where they live and where they work that are important to them in their community,” says King.

Fifth Third Bancorp earned the top place as the best corporate citizen in the Midwest, due to its high volume of philanthropic donations, at $22 million, a high rating from CSRHub and an outstanding CRA score. Employees at Fifth Third donated more than 100,000 hours of their time in the community in 2017, and the big regional bank partners with a number of community initiatives, including Project SEARCH, a transition-to-work program for young adults with disabilities that got its start in the bank’s hometown of Cincinnati.

Bank of Hawaii Corp. came out on top for the West. Its $2.8 million in donations represents 0.016 percent of the bank’s assets, and it also earned an outstanding CRA score and a high rating from CSRHub. Its “Bankoh Blue Crew” donated more than 16,000 hours in the community—and considering its workforce is just a bit more than one-tenth the size of Fifth Third’s, that’s something to boast about.

South State Corp. outpaced other Southern banks as a corporate citizen. The bank had a higher CSRHub rating compared to its regional peers, and employees donated more than 3,000 hours of their time by volunteering in the community.

Corporate social responsibility can yield competitive benefits, says Cynthia Figge, CEO of CSRHub. “Millennials and Gen Z [members] are increasingly attracted to [and] reward companies that are aligned with their values,” she says, meaning they’re more likely to purchase from—or work for—a bank they believe is doing good in the world.

How They Ranked: Best Corporate Citizen

      SCORE PHILANTHROPIC DONATIONS CRA SCORE
OVERALL WINNER: M&T Bank Corp. 1.33    
           
Northeast
  1 M&T Bank Corp. 1.00 $28,000,000 Outstanding
  2 Webster Financial Corp. 2.00 $4,500,000 Outstanding
  3 Community Bank System 3.00 $2,478,064 Satisfactory
  4 Sterling Bancorp 3.67 $401,333* Satisfactory
  5 Signature Bank 4.00 $500,000* Satisfactory
Midwest
  1 Fifth Third Bancorp 1.33 $21,700,000 Outstanding
  2 Chemical Financial Corp. 2.17 $4,400,000 Outstanding
  3 Huntington Bancshares 2.50 $12,500,000 Outstanding
  4 Commerce Bancshares 3.67 $1,532,836 Outstanding
  5 Great Western Bancorp 3.83 $2,160,000 Satisfactory
South
  1 South State Corp. 1.50 $800,000 Satisfactory
  2 Bank OZK 2.67 $567,000* Satisfactory
  3 Home Bancshares 2.83 $1,454,173 Satisfactory
  4 BankUnited 3.00 $31,666* Satisfactory
  5 FCB Financial Holdings 4.17 $50,000* Satisfactory
West
  1 Bank of Hawaii Corp. 1.17 $2,800,000 Outstanding
  2 East West Bancorp 2.67 $3,650,000 Satisfactory
  3 First Republic Bank (TIE) 3.00 undisclosed Satisfactory
  3 Cathay General Bancorp (TIE) 3.00 $2,300,000 Satisfactory
  5 Western Alliance Bancorp. 3.67 $2,645,729 Satisfactory

*Indicates alternate sourcing for this data and might not reflect all charitable giving

SOURCES: Federal Financial Institutions Examination Council, CSRHub, bank websites, press releases and other public information