(Not) Going to the Chapel

We’ve only just begun to live
White lace and promises
A kiss for luck and we’re on our way

While you may be familiar with the Carpenters’ number-one 1970 hit “We’ve Only Just Begun,” you probably didn’t know that the song got its start as the soundtrack to a bank commercial.

Over wordless, soft-focus, close-up scenes of a young couple getting married in a California country church, the singer croons about the adventures the newlyweds have in store. The ad concludes with the couple driving off into the evening, followed by the words: “You’ve got a long way to go. We’d like to get you there. The Crocker Bank.” Continue reading “(Not) Going to the Chapel”

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Small Business: A Competitive Edge for Community Banks

According to Harvard’s Kennedy School, community banks account for more than half of small business loan volume and nearly half of commercial real estate lending. It’s not an exaggeration to say that the health of hometown economies depends on having healthy community banks engaged in robust, properly underwritten small business loans.

Those community banks face many challenges, from growing nonbank competition to a difficult economic environment that drives looser underwriting standards. But their CEOs are building strategies for success that leverage community banks’ unique strengths to maintain their leadership in the small business lending franchise. Continue reading “Small Business: A Competitive Edge for Community Banks”

Demographic Destiny for Community Banks?

In their best-selling mid-20th century books of U.S. electoral politics, analysts Richard Scammon and Ben Wattenberg were fond of saying that “demography is destiny.” The same is true in the community banking sector.

As populations age in rural areas and shift from suburbia and the country to big cities—and as the baby boomers give way in the workforce to millennials—demographic changes will be felt keenly by community bankers. During a recent roundtable discussion with four top community bank executives, strategies for navigating these changes came to the fore. Continue reading “Demographic Destiny for Community Banks?”

How to Understand and Partner with Marketplace Lenders

Bankers who think they aren’t facing competition from nonbank marketplace lenders should take a closer look, according to bank technology leaders speaking at ABA’s National Conference for Community Bankers in Palm Desert, Calif.

At Boston-based Eastern Bank, chief digital officer Dan O’Malley led an effort to review transaction data from across the bank’s deposit accounts and extract intelligence. “It’s eye-opening to see how many of your customers—both consumers and small businesses—are taking loans from alternative providers” like Lending Club, he says, noting that 5 percent of Eastern’s business customers are making payments to a nonbank marketplace lender and that the rate has been doubling annually. Continue reading “How to Understand and Partner with Marketplace Lenders”

ABA Raises CECL Concerns During Long-Awaited FASB Meeting

During a sometimes-heated roundtable conversation today, ABA staff and member bankers raised important concerns about the Financial Standards Accounting Board’s proposed Current Expected Credit Loss model for loan loss accounting. FASB board members said they would address several of ABA’s concerns as the final standard is issued and implementation proceeds over the next few years.

The roundtable was convened after two years of requests from ABA, which has long argued that the weightiness of the accounting changes envisioned warranted more intensive public discussions. Continue reading “ABA Raises CECL Concerns During Long-Awaited FASB Meeting”

Comfort Food

By 12:30 p.m. on M Street in downtown Washington, D.C., Bub and Pop’s sandwich shop is buzzing. The line to order stretches out the door of the little shop, which is housed in a brightly colored English basement in a converted rowhouse.

At the counter, owner Arlene Wagner takes orders and rings up customers with a smile and no-nonsense speed (plus a special thanks if they pay with cash). Just behind Wagner, her son and co-owner Jon Taub serves up massive, juicy hoagies with homemade potato chips. Diner favorites include a braised beef brisket sandwich with apple-horseradish cream, aged Gouda, and veal jus, or an Italian hoagie topped with four kinds of meat and Jon’s spicy homemade relish. Continue reading “Comfort Food”

Banking in the Sweet Spot

If you had to describe Jim Edwards’ bank, you might say it’s in the sweet spot—in virtually every way.

United Bank is a $1.1 billion bank based in central Georgia. Its footprint stretches from rural farm areas to the Atlanta exurbs. It’s a full-service bank, offering consumer products, mortgages, business loans and services, cash management and investment services, but “we try to do that with that small-bank, high-touch feel,” says Edwards.
United has grown into a classic community bank with a strong future orientation. Edwards’ colleagues and customers agree: as United has grown, Edwards is a model for community bankers in the 21st century. Continue reading “Banking in the Sweet Spot”

Stress Testing: Feeling the Pressure?

In 1928, a pair of heart researchers conducted an experiment. They took several patients with a history of clogged arteries, wired them to an electrocardiograph and asked them to do sit-ups until it hurt. In some cases, the researchers even pushed down on the patients’ chests to make them work harder.

The result: for the first time the ECG showed a clear pattern of reduced blood flow from the heart as the patients worked harder. The ECG allowed the researchers to identify with greater precision just how clogged a patient’s arteries were—and how it would affect his life. It was the first deliberate “stress test,” and it became a fundamental diagnostic tool of cardiology.

Nine decades later, it’s bankers who are wired up and sweating through crunches. Continue reading “Stress Testing: Feeling the Pressure?”

Once Bitten, Twice Shy

Top of mind among anti-money laundering professionals is the “de-risking” trend in which financial institutions drop entire categories of business customers perceived to pose excess risk, such as money transmitters or third-party payment processors.

But less noticeable is how de-risking by larger financial institutions can spread more risk throughout the financial sector. After all, a money services business needs access to the financial system to survive; if it gets turned away by a big bank, it will try to find an easier access point.

Brian Wimpling, SVP and compliance chief at the Tallahassee, Fla.-based Capital City Bank, a $2.6 billion bank with branches mainly in northern Florida and southern Georgia, has “absolutely” noticed an uptick in inquiries from MSBs in the last few years. Continue reading “Once Bitten, Twice Shy”

How Bank Culture Drives Success

Two years ago, Adam Grant became famous with a very big idea: that generosity toward others gets you farther in business than selfishness. Grant’s basic argument is simple: There are three kinds of people in the world, givers, takers and matchers (those whose dominant style is determined by whether they’re dealing with a giver or a taker). Crude intuition suggests that in a cutthroat world, takers get ahead. Grant marshals evidence from psychology and behavioral economics to suggest that on the whole, givers have an advantage—especially over the long run, when true colors eventually show.

At just 31 years old—already the youngest-tenured and highest-rated professor at the University of Pennsylvania’s Wharton School and an instructor at ABA’s Stonier Graduate School of Banking—Grant published Give and Take: Why Helping Others Drives Our Success to wide acclaim. Continue reading “How Bank Culture Drives Success”