A Handcrafted Banking Turnaround

The year was 2011, and Blaine Jackson faced a tough choice. The then-34-year-old and his young family were seeking to relocate from Atlanta’s northwestern suburbs to Charlotte, N.C. Jackson was the chief financial officer at a struggling community bank in Woodstock, right in the “ring of death,” as the circle of failing banks around Atlanta was known in the years shortly after the financial crisis. … Continue reading A Handcrafted Banking Turnaround

Pillar of Her Community

Dorothy Savarese tells a story about a humbling discovery she made shortly after moving to Cape Cod and how it reflects the heart of community banking.

She already had 16 years of experience in economic development and at a large regional bank in the Midwest. She had taught credit analysis on a national basis. So when she arrived on the Cape and started work as a commercial lender at the Cape Cod Five Cents Savings Bank, “I looked at the credits here and the way they had been written up in the past, and they certainly didn’t meet my standards of documentation or credit underwriting,” she says—noting that they were short on financial analysis and long on character analysis.

“One of the things they had used long before I arrived to judge the creditworthiness of a customer was how neat their woodpile was,” she says. “If they did not have a neat woodpile, they would not make a loan to that customer.”

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How Banks Drive Growth in American Manufacturing

Manufacturing is having a moment. From custom 3-D printed cars to bandages that can provide health readings to photonics technology that is making Hollywood sci-fi fantasies real, manufacturers are deploying cutting-edge technology to improve their processes, offer better products and boost the productivity of the American economy. This revolution in manufacturing, which has emerged as the industry has recovered a million jobs post-recession and charged … Continue reading How Banks Drive Growth in American Manufacturing

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”

Risky Business

Do fear and safety go hand in hand?

Consider air travel. An estimated one in 15 Americans has a crippling fear of flying, and a quarter of the U.S. population reports being nervous about flight.

Of course, aviation is just about the safest mode of travel in the world. The average American is 1,330 times as likely to die in a car wreck as in a plane crash. But all the statistics in the world can’t dislodge the deep anxieties many feel about flight. In Greg Ip’s widely covered new book, Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe, the Wall Street Journal economics columnist explores why that sense of risk heightens the safety of air travel. Continue reading “Risky Business”

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”

The Birth of the American Bankers Association

A massive construction bubble, driven both by speculative investments and government subsidies. Investment houses with excessive leverage in that very same construction bubble. A stock market crash, a spike in unemployment, global panic, a wave of domestic bank failures and resounding political consequences.

If this scenario recalls to you the past several years, then you’ll well understand the drama into which the American Bankers Association was born in 1875.

The construction bubble had been in railroads, whose growth had been jumpstarted by the completion of the first transcontinental line in 1863 and the need for rebuilding after the Civil War. From 1868 to 1873, more than 30,000 miles of new track were laid, and speculators piled into railroad stocks.

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