A Regulator Looks Back

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Julie Stackhouse has witnessed a lot of turmoil in the industry since she started her career in 1980 at the Federal Reserve Bank of Kansas City.

An oil-fueled recession made for an interesting start to what became a four-decade career, lastly as executive vice president handling supervision of banks. In the early 1980s, she spent a lot of time in Oklahoma at a bank that failed as a result of the excesses of the time, Penn Square Bank. The Oklahoma City-based bank made a lot of bad energy loans, selling loan participations to big banks like Chase Manhattan Bank, later JPMorgan Chase & Co., and Chicago’s Continental Illinois National Bank & Trust Co. — which failed as a result in 1984, the largest bank to fail at that time.

Banks were overloaded with deposits; Penn Square had to put that money to work somewhere. Shoddy underwriting got deals done faster, and the bank grew rapidly before a run on deposits in the summer of 1982 resulted in its insolvency. Sound familiar?

“There [were] some real cowboys in Oklahoma back in those days,” she recalls. “And you pretty much had to figure out when you were being told what was happening with candor, and maybe when it was just a little bit embellished. And so I learned a lot from that.”

She’s learned a lot through the series of crises that hit the industry and retired on the cusp of another one, the Covid pandemic that hit the U.S. in early 2020. So, she swore she’d never join a bank board — until George Makris Jr. of Simmons First National Corp. persuaded her to join his. Makris, now executive chairman of the $28 billion, Pine Bluff, Arkansas-based bank, served as CEO until his retirement last year. She kept saying ‘no,’ she says. “I will give George credit. He is persistent when he has something in mind.”

But as much as she’s learned from a career regulating banks, it’s the five years she spent as an active stay-at-home mom — where she became deeply involved in improving her local community — that taught her about engagement and leadership.

“Just because I was not getting paid doesn’t mean I was choosing to do nothing,” she recalls. She joined the planning commission in Egan, Minnesota, and volunteered locally. She worked with great leaders, learning lessons she says she never would have learned at the Fed. “To be a great leader, you have to not only have a vision of what you want to accomplish, you have to have the energy and commitment to carry that vision along.”

She takes the same active approach to retirement as she took to motherhood, serving on the planning commission in Fort Collins, Colorado. Stackhouse shares lessons learned from her career as a regulator and weighs in on the industry’s current challenges in this edition of The Slant podcast.

This episode, and all past episodes of The Slant Podcast, are available on Bank Director.com, Spotify and Apple Podcasts. Governance issues like these will be covered during Bank Director’s Bank Board Training Forum in Nashville Sept. 11-12, 2023.

An Outsider’s Perspective on Banking

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In 2021, $26.5 billion Arvest Bank Group hired Laura Merling from Google to lead a multi-year transformation effort at the Bentonville, Arkansas-based bank. 

Merling, Arvest’s chief transformation and operations officer, had never worked in a bank. But she thrives off the challenge to drive change at an incumbent organization with years of history — a familiar effort after starting her career at Ford Motor Co. with an internship in the 1980s. “That’s probably where transformation means the most; it has the broadest impact,” she says. She’s worked at startups, too, but there “you might be transforming an industry or an individual product.” And that’s it. 

But transforming an established bank like Arvest requires rolling up your sleeves to address “people, process and technology,” Merling says. All three components are critical elements as she guides the organization through a five-year map that sets clear but flexible goals for staff. 

A successful transformation effort requires everyone’s involvement; it’s not just a task delegated to IT. At Arvest, Merling blends skills from other outsiders as well as legacy staff with deep experience in banking. But as much as Merling’s role requires execution, it also requires one action that seems so simple: Listening to employees. “Listening gives you a good idea of where to start … And when they see the impacts — ‘you’ve heard me, and then you did something about it’ — [that] makes a big difference.” 

She’s also working with technology partners such as Google Cloud and Thought Machine to modernize the bank’s technology infrastructure. “What it lets us do is create custom products in a more interesting way, and it lets us have that flexibility to define them,” she says. “That will be important as we look forward in the future, both to how we serve customers, but also as new regulations come through.”

In this edition of The Slant podcast, Merling shares her background and how she’s leveraging her outsiders’ perspective at Arvest — and what she’s learned in her 18 months as a newbie banker. She also explains how small achievements help drive progress toward the bank’s ultimate vision to build “the leading community-focused bank serving small and medium business customers.” 

This episode, and all past episodes of The Slant Podcast, are available on BankDirector.com, Spotify and Apple Music.

Finding Your Customer’s Moment of Need

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A banker may think the quote, “You’ve got to take on growth tactics and a growth mindset that’s different than the way you did in the past,” had come from the main stage at Bank Director’s annual Acquire or Be Acquired Conference, an event that focuses primarily on financial institution growth. Instead, it came from a tiny studio six floors up, in a recorded conversation between two non-bankers.

Derik Sutton, chief marketing officer of Autobooks, a payments technology company that provides banks invoicing, accounts receivable and accounts payable solutions for their business customers, owns those words. He believes that community banks are positioned to earn and retain business customer relationships by finding and acting on their customers’ moments of need.

In this episode of Reinventing Banking, a special podcast series brought to you by Bank Director and Microsoft Corp., Sutton describes traditional banking practices that can be reimagined for digital, why convenience is king in the payments space and how asking hard questions could be key to getting ahead.

Instead of discerning what their business customers need from digital reports, it may be time for bankers to lace up their boots and get back on Main Street to find out for themselves.

This episode, and all past episodes of Reinventing Banking, are available on FinXTech.com, Spotify and Apple Music.

The Origin Story of an Unlikely Banker

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David Findlay didn’t set out to become a banker.

After earning a degree in history from DePauw University in Greencastle, Indiana, Chicago-based Northern Trust Corp. hired Findlay as a commercial banker in the mid-1980s. He didn’t take accounting or finance courses in college, and says that he struggled through the company’s training program. At his 90-day review, he was put on probation. Findlay persevered, he adds, because “Northern, where I spent the first 11 years of my career, was an organization much like ours that says, ‘We’re here to help people succeed.’”

Findlay’s gone far since those early struggles: Today, he leads $6 billion Lakeland Financial Corp., in Warsaw, Indiana. Year after year, it’s one of the most successful banks in the country, according to Bank Director’s RankingBanking analysis, consistently ranking among the top 25 public banks in the U.S. 

The reflections on his 38-year career — including his years at Northern Trust — inform a leadership course he teaches at Lake City University, a training program for the company’s subsidiary, Lake City Bank. Any employee can take the class — or any of the classes taught by Lakeland’s executives and leaders. On average, employees participate in these in-person training classes five or six times annually. 

Focusing on his past can be a humbling experience, he says. “Teaching this course helps keep me grounded, to remind me of the challenges that I’ve had during my career,” says Findlay. “It’s sharing our own personal successes and failures — and the failures [are] as important as anything to show that you can work through them and have a career path that you can be proud of when it’s all said and done.”

If that sounds hands-on, that’s just an indicator of Findlay’s leadership style. In previous reporting, executives described him to me as a CEO that values direct connection with the bank’s employees and clients. He’s also developed a flat organizational hierarchy where decisions aren’t concentrated in one individual. Put simply, he trusts his bankers. 

“An organization that places too much emphasis on one decision maker or a small group of decision makers, I think finds it very hard to move forward and be as progressive as an organization as you need to be. People think of banking as a pretty slow-moving, boring business. But it’s a pretty dynamic business,” he explains. “We love to tell our investors that we’re an execution-oriented organization. … We gather information, we assess the circumstances, we make decisions, and then we go, and obviously that’s contributed some long-term, consistent success for the bank.”

In this edition of The Slant podcast, Findlay also shares his views on how commercial banking has evolved, the impact of technology on relationship building, whether it’s harder to be a CEO in today’s environment and his views on the year ahead. He’s looking for a return to normal, he says. Lake City Bank doesn’t rely on M&A to grow; it focuses on growing its customer base and taking market share from competitors. That slowed in the pandemic. 

“We lost that momentum of market share take,” Findlay explains. But he expects business development to pick up. “[It’s what] I’m looking forward to the most; that’s the idea that we are back out calling on our prospects, developing those opportunities.”

In late January 2023, Findlay will participate in a panel discussion at Bank Director’s Acquire or Be Acquired conference that shares perspectives from the leaders of three top performing banks in the RankingBanking study. 

This episode, and all past episodes of The Slant Podcast, are available on Bank Director.com, Spotify and Apple Music.

A Safecracker Explores the Nature of Security

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Dave McOmie starts every job staring down a locked door.

McOmie has been a safecracker for more than 50 years, having gotten his start watching a local locksmith help out a neighbor. He became the locksmith’s apprentice and quickly discovered the work of safecracking: breaking into vaults and safes for customers that had become inadvertently locked out of them.

That took him into the world of banking. Vaults have been a mainstay feature of bank branches, but anyone who has worked in a branch will know there are other physical safety mechanisms that occasionally lock up: lockers, cash safes, undercounter units and ATMs. He’s worked on all of them and knows the stakes: Whatever is behind that locked door is important, and someone wants it.

“When the bank or credit union cannot get into their vault, that situation tends to escalate quickly,” he says. There’s usually some urgency to the situation: Someone needs a wedding ring, a passport or a will, and there’s a tight timeline. McOmie is under pressure to open the vault. “[I]t’s stressful when you have an entire family sitting in the lobby, waiting to retrieve their passport so they can go to the airport. … You don’t want to be the reason they didn’t make their flight.”

In facing these locked and secured doors, McOmie says it’s key to prepare and research in advance. A mistake can trigger other safety mechanisms in a vault, quickly shutting down his entire progress. He carefully documents his progress and the products he works on to make the next job easier. 

“It’s all about the challenge and the conquest. You’ve got a locked door in front of you. What’s the problem? How can you overcome it? And can you do it efficiently? And quickly?” he says. 

McOmie joins Bank Director to discuss how he became a safecracker, how he approaches a locked door problem and what trends in bank branching mean for vaults, physical security and the future of safe cracking. Listeners interested in learning more about his experience can read his memoir “Safecracker: A Chronicle of the Coolest Job in the World,” which includes his experience opening the musician Prince’s vault at Paisley Park.

This episode, and all past episodes of The Slant Podcast, are available on Bank Director.com, Spotify and Apple Music.

Hitting a Home Run With George Makris

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Sports probably kept George Makris out of jail. 

At least, that’s his telling of it. Makris is now chairman and CEO of Simmons First National Corp, the holding company of Simmons Bank, in Pine Bluff, Arkansas, but he admits he wasn’t a great kid. Thanks to the guidance of his parents and a love of sports, Makris ended up on a more straight and narrow path.

He played baseball and football at Washington and Lee University in Virginia in the 1970s and then transferred closer to home, to Rhodes College in Memphis. He took over running his family’s Anheuser-Busch beer distributorship, which has several parallels to banking. For one, they’re both sensitive to interest rates. Makris says that when interest rates rise, people tend to move from Budweiser to Busch.

While it may seem odd to go from beer to banking, Makris did so gradually. He joined the board of Worthen National Bank, a small bank, in the 1980s. Through consolidation, that bank eventually became a part of Bank of America Corp. He joined Simmons’ board in 1997. Years later, Simmons’ longtime CEO Tommy May had to step down because of illness. 

The board asked Makris to take the top job. Close to a decade later, the bank has grown from under $4 billion in assets to more than $27 billion in assets, mostly through strategic acquisitions. 

He talks in this episode of The Slant Podcast about market share and how lessons from sports can help navigate life and career. Due to technical difficulties, this conversation has been abbreviated.

This episode, and all past episodes of The Slant Podcast, are available on Bank Director.com, Spotify and Apple Music.

Becoming a CEO

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The chief executive officer is usually the single most important person in any organization, but it’s a job that most individuals grow into over time. The transition is often filled with challenges and difficult learning experiences.

Such was the case for Ira Robbins, the chairman and CEO at Valley National Bancorp, a $54 billion regional bank headquartered in Wayne, New Jersey. The 48-year-old Robbins was just 43 when he succeeded long-time CEO Gerald Lipkin in 2018. Lipkin, on the other hand, was closing in on his 77th birthday when he passed the baton to Robbins after running the bank for 42 years.

Robbins is deeply respectful of Lipkin but shares that one immediate challenge he faced was changing a culture that hadn’t kept pace with the bank’s growth over the years. He said Valley National was a $20 billion bank that operated as if it was still a $5 billion bank. Changing that culture was not easy, and he had to make some very difficult personnel decisions along the way.

Robbins is thoughtful, introspective and candid about his growth into the CEO role at Valley National. His reflections should be of great interest to any banker who hopes to someday become a CEO.

This episode, and all past episodes of The Slant Podcast, are available on Bank Director, Spotify and Apple Music.

Tales From Bank Boardrooms

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If anyone in banking has seen it all, it’s Jim McAlpin. 

He’s sat in on countless board deliberations since he got his start under the late Walt Moeling, a fellow Alabamian who served as his mentor at Powell, Goldstein, Frazer & Murphy, which later merged with Bryan Cave in 2009. 

“That’s how I started in the banking world, literally carrying Walt’s briefcase to board meetings. Which sometimes was a very heavy briefcase,” quips McAlpin. Moeling made sure that the young McAlpin worked with different attorneys at the firm, learning various ways to practice law and negotiate on behalf of clients. “He was my home base, but I also did lending work, I did securities work, I did some real estate work. I did a lot of M&A work” in the 1990s, including deals for private equity firms and other companies outside the banking sector.

But it’s his keen interest in interpersonal dynamics and his experience in corporate boardrooms, fueled by almost four decades attending board meetings as an attorney and board member himself, that has made McAlpin a go-to resource on corporate governance matters. Today, he’s a partner at Bryan Cave Leighton Paisner, and he recently joined the board of DirectorCorps, Bank Director’s parent company. 

“I’ve gone to hundreds of meetings, and each board is different. You can have the same set of circumstances more or less, be doing the same kind of deal, facing the same type of issue or regulatory situation,” he says. “But each set of people approaches it differently. And that fascinates me.”  

McAlpin’s a consummate storyteller with ample anecdotes that he easily ties to lessons learned about corporate governance. Take the time he broke up a physical fight during the financial crisis. 

“During that time period, I saw a lot of people subjected to stress,” he says. “There are certain people who, under stress, really rise to the occasion, and it’s not always the people you think are going to do so. And then there are others who just fall apart, who crumble. Collectively as a board, it matters.”

Boards function based on the collection of individual personalities, and whether or not those directors are on the same page about their organization’s mission, goals and values. McAlpin’s intrigued by it, saying that for good boards, the culture “permeates the room.”

McAlpin experienced the 1990s M&A boom and the industry’s struggles through the financial crisis. On the precipice of uncertainty, as interest rates rise and banks weather technological disruption, he remains bullish on banking. “This is a good time to be in banking,” he says. “It’s harder to get an M&A deal done this year. So, I think it’s caused a lot of people to step back and say, ‘OK, what are we going to do over the next few years to improve the profitability of our bank, to grow our bank, to promote organic growth?’. … [That’s] the subject of a lot of focus within bank boardrooms.”

McAlpin was interviewed for The Slant podcast ahead of Bank Director’s Bank Board Training Forum, where he spoke about the practices that build stronger boards and weighed in on the results of the 2022 Governance Best Practices Survey, which is sponsored by Bryan Cave. In the podcast, McAlpin shares his stories from bank boardrooms, his views on corporate culture and M&A, and why he’s optimistic about the state of the industry. 

“People Who Look Like Me.”

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In this podcast, Ebony Thomas, who oversees Bank of America Corp.’s $1.25 billion, five-year program to drive racial equality and economic opportunity for people and communities of color, talks about the work she does, her personal journey from secondary education to banking, and why it’s empowering for women and people of color to see role models in the workplace who look like them.

Additional episodes of The Slant Podcast are now available on Spotify and Apple Music!

 

The Road Ahead

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In this podcast, John Asbury, president and CEO of Atlantic Union Bankshares, is both very analytical and someone who spends a lot of time thinking about the future and how that will impact his $20 billion asset regional bank. In this conversation, he describes the bank’s approach to strategic planning, the rise of inflation, and whether the Atlantic Union would pay a ransom if hit with a ransomware attack.

Additional episodes of The Slant Podcast are now available on Spotify and Apple Music!